The Non-Energy Uses of Hydrocarbons and the Energy Transition

There are many products obtained from the processing of oil and natural gas that we use every day, even when we do not recognize them as derivatives of hydrocarbons. They are in the asphalt of roads, industrial lubricants, the synthetic rubbers in tires, the coatings that protect infrastructure, the insulation of electrical cables, adhesives, resins, and medical materials. In many of these cases there are alternatives, but they do not necessarily offer the same performance, durability, or cost.

This introduces a difficulty that is often left out of the discussion about the energy transition. We can replace a growing share of the gasoline, diesel, or gas used to generate electricity, but stopping the burning of hydrocarbons does not mean that we stop needing the molecules that we obtain from them. A solar panel or a nuclear reactor can produce the energy necessary to manufacture a polymer, but they do not produce the carbon that forms part of that material.

The problem becomes more complex because oil and gas are not processed only to obtain the products that we want to preserve. A refinery separates and transforms crude oil into different streams and, although it can partially adjust its yields, it cannot produce only lubricants, asphalt, or petrochemical raw materials and eliminate the rest. Gasoline, diesel, and jet fuel currently represent a large part of the volume and of the revenues that sustain the extraction, transportation, and processing of oil.

This means that considerably reducing fuel consumption also changes the economics of non-energy products. If demand for gasoline and diesel decreases, producing the relatively small quantities of derivatives that we still need could become more expensive, because infrastructure and processing costs would have to be distributed over smaller volumes and some production chains would no longer have a sufficient market.

In that sense, we could currently be close to a point of greater economic efficiency, in which practically all the fractions obtained from oil find a market and contribute to sustaining the joint cost of extraction and processing. This leads us to consider that the transition should not consist only of proportionally reducing oil production, but also of preserving the fraction that is still useful and its economic costs.

In the short term, one possible response is to invest in processes to convert a much larger proportion of the barrel directly into petrochemical raw materials instead of first producing large quantities of fuels. It is a relevant adaptation because it anticipates a market in which the value of oil could gradually shift from energy toward its material uses.

In the longer term, the solution would have to go even further and also replace fossil carbon. Research exists to produce industrial molecules from captured CO2, biomass, waste, and recycled plastics, in addition to processes that combine CO2, hydrogen, and clean electricity to synthesize hydrocarbons again. The necessary chemistry exists at different degrees of development, but bringing it to costs, scales, and levels of efficiency comparable with current chains continues to be the main obstacle.

For this reason, the energy transition faces two different problems. The first, much more visible, consists of replacing the hydrocarbons that we burn. The second will be to find a competitive source of the inputs that we still need to produce other products that we use in our everyday lives. As we advance in the first, the economy that today makes many of those products cheap will also begin to change and could especially affect lower-income households.

This article was originally published by La Prensa OEM.
Date: August 20, 2026
Link: https://oem.com.mx/la-prensa/analisis/opinion-de-paul-alejandro-los-usos-no-energeticos-de-los-hidrocarburos-y-la-transicion-energetica-31654320 [Online]

What Do We Want to Produce Natural Gas in Mexico For?

This week, the Forum: A Multidisciplinary Approach to Hydraulic Fracturing (or Fracking) was held at the Chamber of Deputies. Geological, environmental, social, water-related, economic, and regulatory arguments were presented and, although there was no consensus, it is worth understanding the main opposing positions.

The first argues that Mexico can do without the development of gas and replace it through an accelerated expansion of renewable energies. The second argues that dependence on imports constitutes, in itself, a vulnerability incompatible with energy sovereignty.

Renewable energies must grow, but their expansion depends on conditions that Mexico has not yet built. In Mexico, the current electricity policy has limited private investment, maintains lags in transmission and distribution, and concentrates expansion decisions in public companies with financial restrictions.

Banning fracking under the assumption that renewables will cover the difference does not resolve those institutional limitations nor does it automatically turn solar and wind potential into available electricity. The objective is the right one, but the period of time is not necessarily the appropriate one. For example, China, which is by far the largest producer of renewable energy in the world, still depends on coal for 54% of its electricity generation, although, certainly, 20 years ago it was almost 80%.

The argument of sovereignty also requires greater precision. The trade of natural gas with Texas has been an economic advantage for Mexico, because it allows access through pipelines to one of the markets with the highest production and lowest prices in the world. Other countries depend on liquefied natural gas transported by LNG carriers, subject to higher costs and more volatile international prices. Although dependence may imply operational and geopolitical risks, replacing cheap gas from Texas with a more expensive source in Mexico does not strengthen the national economy, much less contribute to energy sovereignty.

But, beyond these arguments, there is indeed a fundamental difference between importing gas and producing it in Mexico. The gas that arrives from the United States through pipelines is mainly dry gas, used as fuel in power plants and industrial processes. National production of wet gas, on the other hand, can also generate liquids such as ethane, propane, and butane, essential inputs for different areas of the petrochemical industry. Intermediate products used in plastics, resins, adhesives, solvents and numerous industrial goods, ammonia, and fertilizers depend on them.

The decline in national production, therefore, has not only increased imports of the fuel used to generate electricity, but has also reduced the availability of petrochemical raw materials, weakened the operation of industrial complexes, and expanded dependence on products with greater added value.

In the end, the discussion focused too much on the extraction method and left the purposes of an eventual natural gas policy in the background. Before deciding how much to produce and through what technology, Mexico would have what we want to produce natural gas in Mexico for. Without that definition, sovereignty and the energy transition will continue functioning as political arguments around an industrial strategy that does not yet exist.

This article was originally published by La Prensa OEM.
Date: July 24, 2026
Link: https://oem.com.mx/la-prensa/analisis/opinion-por-paul-alejandro-para-que-queremos-producir-gas-natural-en-me-xico-31369441 [Online]

We Are Missing Data from the Energy Sector

Since the end of 2024, the Mexican energy sector has undergone a profound institutional reorganization, but one of its less-discussed effects has been the loss of public information. Today, we do not know precisely what the updated level of the country’s oil and natural gas reserves is; the latest publication corresponds to January 1, 2024, while the Hydrocarbons Information System records its most recent update in January 2025.

This absence is directly related to the disappearance of the National Hydrocarbons Commission (CNH), the regulatory body that was responsible for integrating and publishing the national reserves, as well as information on production by field, wells under development, exploration activities, and unutilized natural gas. The transfer of its functions has not been accompanied by an equivalent publication mechanism, so the institutional reorganization ended up weakening one of the sector’s main sources of technical information.

Something similar occurred in the electricity system. Data such as operational alerts, the reserve margin, and other indicators regarding system conditions disappeared from the public area of the Market Information System. This information made it possible to observe more clearly whether a power interruption was related to a lack of capacity, grid saturation, the unavailability of power plants, or some regional contingency. CENACE, operator of the market and of the National Electric System, justified the restriction on the grounds of national security, but the indicators were not published again.

Another fundamental instrument is the National Energy Balance, whose latest publication appeared on February 10, 2024. This document integrates the production, import, and export of primary energy, its transformation in refineries, processing plants, power plants, and other facilities, and finally energy consumption in the industrial, transportation, agricultural, commercial, and residential sectors.

Added to these documents were the production and consumption outlooks for oil, petroleum products, natural gas, liquefied petroleum gas, electricity, and renewable energies. For years they were published annually, stopped being updated regularly after 2018, and had an additional edition on April 3, 2024, with projections for the 2023–2037 period. Since then, no new version has been presented, despite the regulatory, institutional, and investment changes that have occurred in the sector.

Binding planning has acquired a central role in the new energy model, under the premise that the State must define the needs for infrastructure, production, and system expansion. However, planning that cannot be contrasted with public information runs the risk of becoming an administrative decision that is difficult to evaluate. SENER still has the task of rebuilding a data system that allows simple queries, coverage of the entire industry, and certainty regarding its periodicity. Before linking investments to government planning, it will be necessary to link that planning once again to sufficient, current, and verifiable data.

This article was originally published by La Prensa OEM.
Date: July 24, 2026
Link: https://oem.com.mx/la-prensa/analisis/opinion-por-paul-alejandro-nos-faltan-datos-del-sector-energetico-31262033 [Online]