Mexico's President Claudia Sheinbaum announced a plan to more than double the country's natural gas production by tapping vast unconventional reserves, a dramatic shift from her predecessor's environmental stance. 141bn cubic feet of reserves, typically accessed through fracking, will be exploited subject to environmental approval. This move aims to reduce Mexico's heavy reliance on US imports, which cover about three-quarters of domestic demand. Sheinbaum framed the decision as necessary due to soaring global energy costs, particularly following the Iran war. The plan signals a reversal for the leftwing Morena movement, which had previously attempted to ban fracking outright.

Environmental concerns remain significant, with opposition groups warning of water scarcity, pollution, and seismic risks. Mexico currently exploits minimal unconventional gas despite having substantial reserves. The government is exploring less harmful extraction methods and will spend two months determining feasibility, costs, and implementation. 5.8bn cubic feet per day by 2035 could be produced from these reserves, up from current 2.3bn cubic feet. This potential boost comes as Mexico's conventional fields decline and Pemex struggles with falling output and massive debt.

Business implications are substantial. The energy industry welcomes the plan, with analysts noting Mexico's proximity to US shale infrastructure could ease development. However, success hinges on Pemex's ability to adapt, as the state-owned monopoly has failed to arrest oil output declines. Analysts warn the government must allow more private investment, as López Obrador restricted such participation. Pemex's lack of agility in developing the sector could determine whether Mexico's fracking strategy succeeds or becomes another abandoned initiative.