Extreme weather events are rewriting the rules of the North American natural gas market, according to CFE International (CFEi) Vice President of Risk Jenifer Madrid.

At a Glance:

• Power demand outruns resource additions
• LNG, exports drive supply growth
• ERCOT faces mounting weather risks

“Weather is no longer just a seasonal consideration,” Madrid said at the Mexico Gas Summit in San Antonio, TX. “It is now a major factor shaping energy demand, infrastructure needs, and natural gas market conditions across North America.”

CFEi is the US natural gas marketer for Mexican state utility CFE, sourcing natural gas to send it south of the border to feed the country’s power plants. Madrid highlighted how Mexican grid stability was directly related to cross-border energy flows.

Madrid pointed to record US natural gas production for growing LNG and Mexican exports. Infrastructure projects are expected to relieve Permian Basin bottlenecks and stabilize cross-border flows. However, Madrid warned that capacity alone was insufficient.

Peak power demand trends have been outpacing new resource additions, making the Electric Reliability Council of Texas (ERCOT), which powers roughly 90% of the US state, and Mexico’s CENACE vulnerable to extreme weather anomalies, she said.

Earlier this year, Winter Storm Fern knocked out 120 Bcf of natural gas production in the United States between late January and early February, putting it firmly in the top-three worst freeze-off events of the past decade. Unlike Winter Storm Uri in 2021, Mexico managed to get off unscathed.

“The real challenge is no longer only how to respond when the pressure arrives … It’s whether the region is building the infrastructure, storage, technical discipline, and long-term conditions needed before those moments happen,” Madrid said.

She added, “The main takeaway is that it’s no longer about any single private market or event. It is about understanding how many forces are shaping the energy market across this region.

“For many years, the gas market was often understood in isolation … But as systems become more connected and as intraday market conditions become more volatile, planning must also be more precise, more coordinated, and more resilient.”

Transparency and information sharing was crucial to this effort, she said.

“Stronger reporting is not only a compliance issue. It is also a tool for stronger management, better internal discipline, and better preparation for market and operational changes.”