How will shale gas development in Mexico be smart regulated?

This work in progress article identifies the conditions under which shale gas development in Mexico can, or cannot, be smart regulated. On 2 March 2018 Round 3.3 for Conventional and Unconventional Terrestrial Areas was announced by the Secretariat of Energy. This is the first competitive bidding for shale gas development.

Following a qualitative analysis of the regulatory setting, challenges and perspectives, the answer to this question is that this development can be smart regulated. Further, there are some valuable attempts in this direction implemented by the regulators. Smart regulating Mexico’s shale gas development is needed because conventional solutions are not enough to address such a major regulatory challenge. The complementarity of the regulatory and policy tools, which would indicate its ‘smartness’, is yet to be proven in practice. Tailor made smart regulation alongside best regulatory practice is necessary to lessen environmental impacts associated with shale gas development.

However, under the current above ground and regulatory conditions environmental impacts are likely even if smart regulation and best regulatory practice are implemented.