Thanks to geography, SE Arizona could easily become a major transit corridor to the Pacific via the Mexican Baja, avoiding the Panama Canal and contentious, congested West Coast ports. The economic implications for the region are staggering.
This development would be built around 2 huge, emerging (and self-sustaining) business models: plentiful Permian natural gas exports, and much faster & more secure mid-continental rail access; both bypassing the Panama Canal.
Arizona borders the US state knowledgeable energy insiders are now calling the ‘American Saudi Arabia’ of natural gas: New Mexico. Their fabled Permian Basin has seen its natural gas production steadily climbing to almost 20% of all US output, with the longer-term potential to become a gigantic energy export-model.
The Permian’s usefulness to Asian customers has become a major national security issue for American interests in the Pacific. It helps offset our obscene, trade Un-balance-of-payments, and provides critical supply competition with Russian natural gas to our Pacific allies.
Back in Southeast Arizona, for the poor, largely Latino communities, what is happening in next door NM presents an absolutely extraordinary opportunity. One that comes along once or twice in a century. It could be a boon to new manufacturing growth, good family-wage jobs, and the lifting of decades of generational hardships. Not to mention give the region, including Tucson, dramatically lower residential natural gas prices year-round. The additional natgas spur-lines potential for local municipalities and job-creation is off the charts.
For some time the Permian Basin was thought to contain a limited amount of oil and natural gas, and only attracted the smaller, less capitalized, 2nd and 3rd tier exploration and production companies. Not any longer; the advent of environmental closed-loop fracking and methane recapture, and what was discovered about the Basin’s prolific geology “pay zones” have changed all that. It is now being compared to Saudi Arabia’s gigantic Ghawar Field, and the original wildcatters & smaller operators have been replaced by the global giants of the oil and gas industry.
Currently over 95% of the natgas pipelines originating out of the Permian Basin flow eastward, towards the Texas and Louisiana gulf coasts, to be processed & loaded onto LNG carriers that either have to book passage thru the Panama Canal, or go around South America in order to serve customers in Asia.
Yet earlier in 2024, the Mexicans commenced a new major-size pipeline, being built from the Permian Waha natgas hub in Pecos County, Texas, through the mountains of the Mexican states of Chihuahua & Sonora. Yes, thru mountains, and done partly to avoid Tucson’s rabid environmental community.
Meanwhile, Japanese & Singapore interests are to construct a $14-15 billion LNG (liquefied natural gas) pipeline, processing port, and tanker terminal at Puerto Libertad, appx. 145 km. north of Bahia Kino, Sonora. It will be supplied by this incredibly expensive and ecologically destructive pipeline, same one the Mexicans are building from the Permian Basin (i.e. still US natural gas), traversing northern Chihuahua & Sonora, and the pristine Sierra Madre Occidental mountain range.
All to avoid Arizona’s environmental, legal-lawsuit shakedown artists, Tucson’s notorious ‘Center for Bio-Diversity’ (CBD). **Let that sink in**, they avoid an easy & nondescript NM & Arizona terrain, and destroy far more natural treasure in the mountainous regions of NW Mexico, just to avoid Tucson’s giant poverty-machine, the Center for Bio-Diversity.
Pipeline planning engineers have concluded a route due west through southern NM, parallel to Interstate 10 and then southwest, avoiding the Chiricahua Mountains in AZ, and on into N. Sonora would be massively less destructive of the natural environment, while continuing its route further south to the Baja ports. In fact, compared to New Mexico and West Texas, there would be significantly less pipeline footprint in that small corner of SE Arizona; orders of magnitude less. This will be the first of many other Permian-Pacific pipeline projects to come.
Switching to the rail aspect: Recently, Union Pacific RR suffered a derailment (10/11/24), and partial sulfuric acid spill (1 tanker) on its Tucson-to-Nogales line outside Green Valley. Federal investigators, looking closely at this anomalous event for evidence, have not ruled out environmentalist sabotage.
UP also owns 25% of Mexico’s major western railroad, FerroMex, which services the north-south axis cities of Nogales, Hermosillo (Capital of Sonora), and the Port of Guaymas.
Guaymas is where the Mexican Federal government plans to expand containerized freight portage to Asia. Further north 270 km, their Army Corps of Engineers is currently building a complete railroad bypass to the FerroMex line that now runs through downtown Nogales, in both Sonora & Arizona, while still maintaining access to the UP line.
Enviro-zealots have realized the general idea is a connect-up terminal with Union Pacific’s line back into Tucson, and UP’s own giant East-West network thru the Old Pueblo. One that will shortly include Mexican-border trackage rights for BNSF rail, now building its own multi-billion $$ logistics/intermodal facility on thousands of acres in NW Phoenix.
And then locally in Santa Cruz County, with Union Pacific on its side of the border, now planning a Nogales municipal rail spur to the twin-cities’ eastern flank, and a major border inspection-crossing station miles from downtown. The idea that Sonora Mexico would seek to maximize its access to both the Pacific and the Western United States, terrifies the CBD environmental poverty machine. But it’s a major foreign & economic policy objective of the Mexican federal government in complete alignment with Sonora’s state government.
In addition, the US Department of Defense is studying the concept of shipping critical military materials to the Pacific through Arizona and Sonora. It tackles a number of key logistics problems, including avoiding the length, exposure, and potential choke-point of the Panama Canal, and massively improves the speed with which shipments can take place from western bases like Ft. Bliss, Ft. Carson, Ft. Huachuca, Ft. Riley, Ft. Sill, even Ft. Cavavos (Hood) in central Texas.
With all this possible, and the pieces of the puzzle coming into form and function, I am still not optimistic that an entirely atavistic, insular, and xenophobic Tucson can act in its own best interests here. This will take serious, civic visionary leadership. It’s like cleaning-up the morbidly obese, glacially slow and uncompetitive monstrosity of the University of Arizona. No leadership = No consensus = Doom Loop ahead.
Also, the same bunch of local environmental zealots, Tucson’s CBD, just delayed a powerline 14 years….not a road, pipeline, canal, airport, mountain tram, or railroad….but a friggin’ electrical powerline, from wind-powered sources in eastern NM and West TX, to Pinal County outside of Casa Grande. This was just the planning & permitting, fourteen years; the rest of the world is laughing their asses off at America’s gullibility to such $$$ shakedowns. Which is exactly what they are. The Brazilians, Indians, Chinese, Russians, or Koreans would have this entire project completed in 14 months. Watch how quick the Mexicans get that Nogales RR bypass completed.
Yet, this is what you always get when you listen to people possessed of an almost religious, messianic fanaticism about the environment. They always deliver one thing for sure: POVERTY.
Sellers is a Southpark, Roosevelt-Republican (TR) living in incorporated Oro Valley; his background is federal technology commercialization, and administers the private group, Tucson E-P-T News, on Facebook
