magazine

“When reaching out to those in the Bakken,
I found that we were using similar research
and strategies to manage and develop in our
respective states.
Continued from page 51
rich in Mexico, the challenges faced by
America’s southern neighbors in exploiting
this resource are far different than what is
experienced in the United States’ EFS and
the play in the Bakken.
The primary roadblock that hampers
Mexico from benefiting from the formation
is that, at present, there is virtually no
oil or gas production being pursued at the
EFS in that country.
“The production activity literally stops
at the United States-Mexico border at the
Rio Grande,” says Dr. Thomas Tunstall,
research director at the University of Texas
at San Antonio’s Institute for Economic
Development. “In fact, the only place that
unconventional oil and gas production of
any significance, whatsoever, is occurring,
is here in the United States.”
There are several issues associated
with the potential for recovering oil and
gas from the Mexican portion of the EFS
through unconventional production. One
issue is related to gain-sharing and to what
sort of terms the federal and provincial
governments will grant energy companies
looking to invest in the Mexican side of
the EFS. Will the industry be paid out in
cash, which is less preferable, or in oil and
gas, which is more desirable?
Additionally, there is the question
about whether or not private companies
will be required to work or subcontract
with PEMEX, a very large, state-owned,
entity with over 150,000 employees and
little experience with competition. If PE-
MEX will be involved with every new venture,
the process may prove to move slower
than they otherwise expected, especially if
there should there be greater competition.
Another issue relates to the guarantee
of safety for both staff and property operating
in the region. Already, Mexican drug
cartels are making their presence known in
the EFS by using the industry’s own network
of private roads to illegally cross the
border with contraband; the further south
you go, the more it seems that these cartels
operate with open audacity. However, this
concern is mitigated by the fact that energy
companies operate all over the world and,
as such, are not completely unaccustomed
to working in areas with security issues.
The third, and perhaps most pressing,
issue is the availability of a suitably-skilled
workforce on the Mexican side of the
EFS. The kinds of technology needed to
Get to Know Our Experts
develop shale formations are still relatively
specialized to regions within the United
States, where we are years ahead of Mexico
in the skills needed for both development
and production.
“The combination of hydraulic fracturing
and horizontal drilling is a relatively
new technology, with still relatively few
experts from a global perspective,” says
Tunstall. “It’s not clear that any country
Continued on page 55
Gilbert Gonzalez
Gilbert Gonzalez served as deputy undersecretary and
acting undersecretary for the United States Department of
Agriculture (USDA) Rural Development mission area in
Washington, D.C. He managed Rural Housing Services,
Rural Utilities Service and Rural Business-Cooperative Service
and oversaw efforts related to minority home ownership,
broadband, renewable energy, small business and faithbased
programs.
On September 1, 2009, Gonzalez joined the University
of Texas at San Antonio Institute for Economic Development
to serve as director of the Rural Business Program
(RBP). He manages the Rural Business Program (RBP), with major emphasis on rural community
capacity-building and business development casework within the South-West Texas
Border SBDC Network.
Thomas Tunstall
Thomas Tunstall, Ph.D., is the research director at the
Institute for Economic Development at the University of
Texas at San Antonio. He was the principal investigator
for the Economic Impact of the Eagle Ford Shale studies
released in May 2012 and March 2013. Tunstall has spent a
significant portion of his career on workforce and economic
development assignments overseas in locations such as Azerbaijan,
Afghanistan, Kenya and Zambia.
Tunstall’s background includes work in economic research,
statistical analysis, forecasting, strategy development
and operational implementation. He holds a Ph.D. in economics and public
policy, and an M.B.A. from the University of Texas at Dallas, as well as a B.B.A. from
the University of Texas at Austin.
BASIN BITS | Spring 2014 53