DALLAS--While U.S. shale plays have recast the country’s oil- and gas-supply outlook some 90 degrees to the right, all of North America may take the leading role in the world’s energy powerhouse as Mexico’s hydrocarbon-law reform brightens its outlook.

Deborah Byers calls it regional independence. “It’s not just U.S. [energy] independence; it’s also Canada and Mexico,” she told attendees in Hart Energy’s recent A&D Strategies and Opportunities conference. Byers is U.S. oil- and gas-practice leader for Ernst & Young. “You really have to look at the impact of Mexico—not only for its [outlook for] increased production.”

Mexico is securing U.S. natural gas for power generation. John Walker, CEO of EnerVest Ltd. and executive chairman of EV Energy Partners LP (NASDAQ: EVEP), said in a presentation prior to Byers’ that 17 U.S. pipeline expansions to Mexico are planned to provide natural gas to 42 power plants. Currently, the U.S. exports 2.3 billion cubic feet (Bcf) of natural gas a day to Mexico. This winter, another 3.2 Bcf is to begin moving across the border daily.

Walker expects gas exports to Mexico could reach 9.6 Bcf/d in the coming few years. “Mexico will have as much impact as (U.S.) LNG exports by 2020,” he said. He expects LNG exports to total 9.2 Bcf/d by then.

There are more projects pending both phases of approvals by the U.S. Department of Energy, he noted. “I think the number will get higher but I don’t think it will get into 30-plus Bcf [that the permit-applications total].”

Canada is a net exporter of both crude oil and natural gas. The U.S. is decreasingly a net importer of crude oil and exported some 400,000 bbl/d in June, primarily to Canada, according to the U.S. Energy Information Administration. Mexico is decreasingly a net oil exporter and increasingly a net natural gas importer.

Byers said, “It really is a regional story. It is a great story of North America. Just as the majors pivoted back to the U.S. a few years ago, we’re seeing a lot of inquiry being put into North America. When people are looking at their strategy to invest back into the U.S., they are also looking at Canada and saying, ‘Wow, look at Mexico.’”

Opportunity for growing an oil and gas portfolio in South America continues to exist, she added. “But they have geopolitical issues that, hopefully, are not there in Mexico [as new hydrocarbon law is rolled out]. I think it is a [North American] story.”

Natural gas at Henry Hub closed Sept. 5 at $3.8397 per million British thermal units (MBtu). At Chicago, in the Rockies and on the West Coast, it closed at roughly that, according to a Simmons & Co. International Inc. round-up on Sept. 8. At the New York City Gate (Tetco M3), however, it was $2.0922, it added.

Walker, who operates a growing gas-production profile in the Utica Shale play in Ohio, noted a “tremendous” gas-price differential in the U.S. Northeast. But, considering forecasts for increased industrial, power-gen, transportation and export demand for U.S. gas, “I think natural gas demand in that timeframe [2018 to 2022] could outpace natural gas supply” at the current rate of dry-gas production, which was some 70 Bcf/d in June.

Bill Marko, a managing director for investment banker Jefferies LLC, said, “You see gas assets trading [again] now, which I think is encouraging.”

Byers said, “Suddenly people are getting back into gas. What is everyone’s strategy? For [some] investors … they’re making bets in terms of their priorities and trading activity in Asia. They are looking to hedge in gas. I think we’ll see some more activity in gas.”

Walker said, “People show up in my office [for natural gas]. They come in from China with 20 people. We’ve had some really interesting discussions.”

Byers is in favor of federal support of greater use of natural gas in U.S. power generation and transportation “even though that might mean there is a decline in demand for [gasoline]. We can export refined products.”