A US withdrawal from the North American Free Trade
Agreement could create an additional delay for projects
seeking to export US natural gas to Mexico, dealing an unnecessary blow to the Trump administration’s goal of establishing US energy dominance, an American Petroleum
Institute official warned during a Jan. 16 discussion at the
The US Department of Energy would need to certify that
each gas export project to Mexico is in the US national interest because the country no longer would be part of a
free-trade agreement with the US, explained Aaron Padilla,
API’s senior advisor for international policy.
“We need provisions that make US companies confident in investing in Mexico,” Padilla said, adding that such
cross-border investments represent 19% of the foreign
commitments in 31 upstream blocks leased there since the
country’s energy reforms began in 2014.
New Mexico has taken the lead in increasing energy exports across the southern US border, noted Daniel Fine, associate director of the Center for Energy Policy at the New
Mexico Institute of Mining and Technology in Socorro.
“The biggest surprise was Mexico’s demand for gas and
power increase as American geoscience produced the first
shale gas and, later, shale oil,” Fine said. “Our goal is to
move more of New Mexico’s gas into Mexico. But if trade
between our two countries goes off the rails, companies
from France and elsewhere are ready to step in.”
Producers in northern New Mexico’s San Juan basin are
having trouble competing with those in Pennsylvania and
elsewhere in the East, Fine said. Mexico imported 7 bcf of
gas in 2013 and expects to need 25 bcf by 2022, largely to
generate electricity, he said.
‘Border is not a wall’
“The border with Mexico is not a wall. New Mexicans and
Texans export gas to Mexico, but much of it goes directly to
Mexico City and bypasses Juarez and the state of Chihua-
hua,” Fine said. “We have become continentalists, whether
we like it or not, because of NAFTA. The center of a resource
isn’t simply a nation anymore.”
Policymakers previously treated domestically produced
energy as something which needed to be protected, observed
the discussion’s moderator, Nicolas Loris, a Heritage Foun-
dation energy and environmental policy fellow. That attitude
was challenged with the growth of free trade in the US, par-
ticularly with Canada and Mexico through NAFTA, he said.
“Our trade agreements encourage other countries to mod-
ernize and create more open markets,” said a third speaker,
Bryan Riley, who directs the Free Trade Initiative at the Na-
tional Taxpayers Union. “This has been particularly true of
Mexico’s energy sector, which changed for the better under
The treaty could have been renegotiated quickly during
the Trump administration’s first year, but preoccupations in
some parts of the White House with the US trade balance
and other factors prevented this, Riley said. “Actually, US ex-
ports to Mexico equal 20& of its economy. US imports from
Mexico represent 2% of this country’s economy. It’s not an
appropriate comparison,” he said.
US House committee passes
bill aimed at streamlining
The US House Natural Resources Committee approved a
measure that aims to streamline offshore oil and gas producers’ applications for incidental harassment authorizations
not directly related to exploration and production. H.R.
3133 passed by voice vote on Jan. 10 after two amendments
proposed by Democrats on the committee were defeated.
The bill, which Rep. Mike Johnson (R-La.) introduced on
June 29, 2017, would amend portions of the 1972 Marine
Mammal Protection Act. It specifically would exempt an authorized taking—the accidental killing of a fish or mammal—from prohibition under Section 9 of the 1973 Endangered Species Act.
“Washington bureaucrats should never have the author-
NAFTA exit could hamper US gas
exports to Mexico, speaker warns