Natural gas industry n Mexico and South America - Outlook - Case Study Example

Energy Information Administration 1-57). This reserve of natural gas was valued at 688 trillion cubic feet. Mexico and South America are the major exporters of natural gas and mainly the United States imported natural gas from these regions. However, the United States has now developed its own reserve of natural gas and crude oil and thus, domestic production has become a substitute of its imports. Almost 80% of the total natural gas that is produced in the region of Mexico and South America is generally circulated to the neighboring nations in terms of exports and imports through pipelines (U.S. Energy Information Administration 1-57).

The rest is traded domestically in the form of Liquefied Natural Gas (LNG). With the increase in Shale gas in these regions, it is expected that exports of natural gas would increase. There are also propositions to expand the Panama Canal and this would help to distribute LNG efficiently. The easy availability of resources concerning hydrocarbons and the feasibility to use advanced technology has enable the increase in natural gas production. Investment by companies in natural gas has also increased.

Countries which are more open to foreign investments and have less restrictions and regulation related to foreign taxes and business operations, invite and encourage more companies for investment (U.S. Energy Information Administration 1-57). Brazil in South America has an investment friendly environment for the foreign companies and Mexico is on the process of adopting energy policies that would encourage foreign investment. Massive investment in these regions has been made by China (Economides and Wood 1-13).

The above figure shows the natural gas reserves and resources of the various regions of America. The area of interest in this study aims to throw light on the trends and pattern in Mexico and South America. Countries like Venezuela, Argentina, Colombia and Ecuador helps to