A bipartisan group of House members from Texas is seeking to boost capital for a binational financial institution that ultimately could have authority to fund cross-border energy distribution and consumption projects aimed at enhancing the energy security of the United States and Mexico.
House Resolution 132, filed by Rep. Henry Cuellar (D-Laredo) earlier this month, would boost U.S. funding for the San Antonio, TX-based North American Development Bank (NADB), which would give the financial institution the means to fund cross-border natural gas pipelines and gas-fired power plants. The increase in funding would come from an additional 150,000 additional shares of the bank’s capital stock to be purchased by the U.S. Treasury.
“The North American Development Bank has been a cost-effective investment for American taxpayers and provides essential services on our southern border,” Cuellar told NGI. “I look forward to continuing to work with NADB representatives from both the U.S. and Mexico, and border officials, to further our commitment to improving the well-being of our communities.”
House Reps. Will Hurd (R-Helotes), Filemon Vela (D-Brownsville) and Rep. Vicente Gonzalez, (D-Edinburg) are co-sponsors of the bill. All serve communities in South and West Texas.
The bill also wants the NADB to develop and implement efficiency improvements to streamline and accelerate project certification and financing. To achieve this, the measure outlined initiatives including single certifications for revolving facilities, certifying similar groups for small projects, expanding internal authority to approve qualified projects below certain monetary thresholds and expediting certification for public sector projects subject to lender bidding processes.
Hurd, who represents 29 counties and the longest stretch along the U.S.-Mexico border at more than 820 miles, said NADB has helped fund several infrastructure projects “that are critical to the public health and safety of South and West Texas communities, particularly for those in rural areas.
Hurd said he wanted the NADB to “continue to provide for folks I represent and will continue to work with my colleagues on both sides of the aisle to deliver real results back home.”
Although most of NADB’s previously funded projects are weighted to water services, the proposed bill would give the bank authority to fund natural gas projects, and it would come at a time U.S. pipeline exports to Mexico continue to grow. Last summer’s high temperatures led to record U.S. exports to Mexico in August.
In its latest Short-Term Energy Outlook, the Energy Information Administration said U.S. gas pipeline exports to Mexico, which reached 4.6 Bcf/d through the first 10 months of 2018, "should to continue to increase as more natural gas-fired power plants come online in Mexico and more pipeline infrastructure within Mexico is built.”
In 2010, Mexico imported only 0.8 Bcf/d from the United States, according Raymond James & Associates Inc. Analysts expect imports to increase to 6.2 Bcf/d in 2020.
"I've seen estimates all over the board,” said NGI’s Patrick Rau, director of Strategy & Research. “Some are calling for peak exports to reach 6.4 Bcf/d by 2020, others 7.6 Bcf/d by 2023. It all depends on by when delayed pipeline projects come on in Mexico, and when domestic Mexican natural gas production starts to increase, which would crowd out some of those U.S. exports.”
Any eligible projects that fall under NADB’s jurisdiction must be about 62 miles (100 kilometers) north of the international boundary in Arizona, California, New Mexico and Texas, or 186 miles (300 kilometers) south of the border in the Mexican states of Baja California, Chihuahua, Coahuila, Nuevo León, Sonora, and Tamaulipas.