I'd argue with anybody that Mexico is the U.S.'s most important bilateral relationship in the world. Mexico is our fast growing neighbor and ally, and from drug trafficking to immigration to energy, events in Mexico will continue to impact us more than events in any other nation. Full disclosure, Mexico is my "home away from home," and I've traveled throughout the country as much as anybody you'll meet. Sadly, far too many Americans, including those with Mexican heritages themselves, vastly underestimate the greatness and beauty of our most vital emerging partner.

Mexico is in the midst of a population and economic boom, and a much more powerful future looms on the horizon. About 30% of Mexicans are under the age of 15, compared to 19% for the U.S. Thus, Mexico has more kids under 15 than our largest trading Canada has people. As for those obsessing over aging Europe, speaking from experience, a day trip to Tijuana will have you seeing more kids than a 10 day trip to Spain.

Even though personal income rates are just 15-30% of those of other members, Mexico is considered an industrialized country and is therefore part of the Organization for Economic Co-operation and Development. Mexico, however, still shows many characteristics of a developing country: rising urbanization, age structure, and economic growth centered in cities.....to name a few.

Mexico's economy is rapidly growing, and the country's debt has been upgraded. Mexico is the 2nd largest economy in Latin America and now has an employment rate of just 4.4%, compared to 7.5% for 1st place Brazil. Looking forward, the U.S. Department of Agriculture projects that Mexico’s GDP will grow by over 80% by 2030.

Not long ago, Mexico was projected to be the world's 5th largest economy by 2050, against the 15th largest today. Mexico though is a still a land of great contrasts between extreme wealth and desperate poverty, with a an overly high GINI index.

In the energy sphere, President Nieto helped pass historic reforms in December 2013 to open some of the country's oil and gas fields to foreign investment, breaking up powerful Mexican business monopolies that had become stagnant due to a lack of competition. Energy, telecommunication, financial, and labor are the four reforms that are "unlocking Mexico's manufacturing sector."

Mexico is a Rapidly Emerging Economy

Source: JTC; USDA

Especially in countries that are still developing, the positive correlation between economic growth and electricity demand is well established, with a 1 to 1 ratio common. For Mexico, more economic growth leading to more power consumption is assured because the country still has a relatively low GDP per capita and electricity use rate compared to the other more developed OECD members.

Per person, Mexico now demands just 2,100 kWh to generate just $10,000 in real (2010$) GDP, versus the U.S. using 13,200 kWh to generate $51,000. The average American uses more electricity for air conditioning than a Mexican does in total. No wonder then that Mexico's electricity consumption is expected to rise about 4-5% per year through 2030.

The residential sector consumes about 25% of total electricity use nationwide, versus 60% for medium/large industries. Today, around 99% of Mexicans have access to electricity, up from 94% in 2000.

But, the power build-out must continue. Since 2000, although Mexico has upped it's power generation capacity from about 40,000 MW to 65,000 MW, this is still just half of Canada's capacity, even though Mexico has nearly four times as many people.

State-owned Federal Electricity Commission (CFE) controls 80% of installed generating capacity, with a monopoly on electricity transmission and distribution. Mexico has made noteworthy gains to its energy efficiencies and cost structures. CFE has been retooling its power grid to run on natural gas, instead of the previously widely available petroleum (a designated fuel for transport, not electricity, in the OECD nations) the country relied on.

The energy reforms will keep CFE from granting licenses or production/profit sharing contracts for the transmission and distribution of power, but "all other activities in the electricity industry are open to contracts with private entities."

The hope is that the reforms will draw crucial investors to develop Mexico's conventional oil reserves today and huge shale oil and gas deposits later on, with an immense 115 billion barrels potentially "up for grabs."

Compared to the U.S., despite a much lower standard of living, Mexican power rates for the industrial sector have been 120-150% higher and household rates have been 50% or more higher. But now, electricity rates for industrial customers in some places have fallen about 35% since Spring 2014.

Mexico's falling power rates is attractive for manufacturers, especially given the rising costs in China (see here, here, here). Just ask Ontario and California how quickly anti-fossil fuel policies equaling higher electricity prices can decimate a manufacturing sector. In fact, the IMF has found that "electricity prices...have the largest quantitative impact on manufacturing output."

Driven by the Maquiladora industry and NAFTA, Mexican manufacturers are now bringing back many of the contracts that were lost to China over the past 10-15 years. Domestic growth and a 2,000 mile border with the U.S. (remember, the U.S. is STILL the 2nd largest market for new cars in the world) makes Mexico an attractive place to "make things," such as heavy equipment, vehicles, and appliances.

BMW, Kia Motors, Nissan, Daimler , Ford, and Audi are just some of the car companies putting new billion dollar plants in Mexico. From 2011-2014, Mexico attracted about $11 billion in foreign direct investment from the automotive sector.

Mexico's Electricity Demand Can Only Increase - Substantially

Sources: EIA; JTC

Historically, Mexico turned to oil and hydro for electricity because they were readily available, and less prevalent coal and natural gas plants required more costly overseas equipment. And fuel oil became the focus since facilities were easier to construct, and Mexico became a top 5 global oil producer 10-12 years ago.

But in recent years, given Mexico's decreasing oil production with the peaking of Cantarell oil field in 2004, combined with the lower priced domestic gas that's linked to plummeted prices in the U.S. from the shale revolution, natural gas has become the obvious fuel of choice.

It simply makes more sense for Mexico to generate electricity with natural gas, while using petroleum for rising domestic transport needs (vehicle sales hit a record high in September) and/or exporting it abroad. As the energy reforms come more into play, natural gas production, stagnant at about 4.7 Bcf/day since 2007, must and will eventually increase. In 2000, natural gas was just over 20% of electricity generation, but today it's 55% and projected to rise to nearly 70% of all power by 2030. And since 2007, overall domestic gas demand has risen almost 40% to 7.4 Bcf/day.

Thus, Mexico's natural gas imports from the U.S. are booming. This past Summer, Mexico took in over 3.4 Bcf/day from the U.S., compared to 2.4 Bcf/day in Summer 2014 and just 1 Bcf/day back in 2008. By 2020, imports from the U.S. could easily race past the previously projected 5-6 Bcf/day. And "the increased use of imported U.S. gas reduces generation costs and allows regulated power prices to decrease [and]....privatized competitive generation lowers prices and increases efficiency."

Numerous companies are making major investments to advance pipeline expansions into Mexico, such as PEMEX (Mexico's state-owned oil company), Kinder Morgan, Sempra Energy, and Energy Transfer Partners. Pipeline connections from the U.S. to Mexico added 2.7 Bcf/day in capacity last year to total 8.5 Bcf/day. Some 11 pending projects alone would install more than 17,000 km and require $30 billion of investment.

And in Mexico, like everywhere else, renewable sources will play a growing role in the energy mix but we must remain realistic. Kipling's "If you can dream, and not make dreams your master" is essential advice that all "environmental" groups and "green politicians" must heed. In short, their widening "impracticalism" (I'm not even sure that's a word) and flat out disregard for the physical and financial limitations of wind and solar hurt renewable energy development most.

Ernst & Young now ranks the country 19th in its “Renewable energy country attractiveness index," which is much lower than fellow Latin American giants Brazil at 8th and Chile at 9th. Mexico has submitted its Intended Nationally Determined Contribution (INDC) to the UN convention on climate change, looking to reduce GHG emissions 22% below business-as-usual levels. And natural gas will be leaned on most.