WATCHING GOVERNMENT THE EDITOR’S PERSPECTIVE
Campaign rhetoric notwithstanding, the North American Free Trade
Agreement is worth preserving, and
energy is both the biggest reason
why and the best tool for persuading
skeptics, experts agreed during a
Mar. 23 discussion at the Bipartisan
Policy Center in Washington, DC.
NAFTA matters because it clearly
has helped Canada, Mexico, and
the US, said Gary Clyde Hufbauer,
Reginald Jones Senior Fellow at the
Peterson Institute for International
Economics. Unfortunately, it also has
begun to symbolize all the grievances
people associate with growing global
trade, he added.
The biggest threat now is US
President Donald J. Trump’s order
to buy US-produced materials,
Hufbauer said. “This could destroy
many good standards that have
been created, and be unnecessarily
counter-productive,” Hufbauer said.
Border taxes also could be devastating because materials and products
move freely both ways across borders now, he said.
The situation clearly changed
once Mexico began major policy
reforms and opened more of its energy industry to foreign investment.
“For 20 years, we could not sit at an
energy discussion table with Canada
and the US. Now, our imports of
natural gas and refined products
from North American suppliers
have grown,” said Lourdes Melgar,
a former Mexican deputy energy
secretary for hydrocarbons who now
is a Robert E. Wilhelm Fellow at Massachusetts Institute of Technology’s
Center for International Studies.
Reforms are moving beyond
Petroleos Mexicanos, the country’s
national oil company, Melgar said.
“We’ve set up a model where all
companies compete and can be part
of a North American energy hub
that trickles benefits south to Central
America nations,” she said.
“I like the idea of modernizing,
not renegotiating, NAFTA. There
were several elements we didn’t
consider when it was signed that we
need to consider now,” Melgar said,
adding that now would be a good
time to look hard at restrictive US
laws such as the Jones Act.
‘Avoid doing damage’
Laura Dawson, who directs the
Canada Institute at the Woodrow Wil-
son Center International for Scholars,
said, “Canada expected that it would
be the only game in town when it
came to exports back then. Then
the US discovered shale gas and
became a competitor. Now, we both
need to examine ways to distribute
all this energy efficiently. Basically,
we need to avoid doing damage to
something that already is working.”
The discussion’s moderator, David
L. Goldwyn, a former US Depart-
ment of State international energy
security coordinator who now chairs
the Atlantic Council’s energy advisory
board, said, “I believe private voices
have been supportive while public
voices have been quiet. There are
US independent producers and
refiners who would lose substantially
Where NAFTA and energy meet
Keystone XL nod
welcome, but antioil
by Bob Tippee, Editor
Overdue approval of the Keystone XL pipeline
border crossing solves half the problem.
US President Donald Trump did his part by
issuing the presidential permit denied by his
However welcome, Trump’s move doesn’t
guarantee the project will proceed. An eminent-domain challenge lingers in Nebraska. Advocacy groups will sue.
Still, solutions have moved into view for
Keystone XL’s permitting problem.
The unsolved remainder is the fanaticism
that has hitched pipeline opposition to the
campaign against hydrocarbon energy.
“If we’re going to prevent large parts of this
earth from becoming not only inhospitable
but uninhabitable in our lifetimes,” former
President Barack Obama said when he rejected
Keystone XL in November 2015, “we’re going
to have to keep some fossil fuels in the ground
rather than burn them and release more dan-
gerous pollution into the sky.”
Before laying this offering on the environ-
mental altar, Obama dared to acknowledge,
“The United States will continue to rely on oil
and gas as we transition—as we must transi-
tion—to a clean energy economy. That transi-
tion will take some time.”
Rejection of Keystone XL nevertheless
turned pipeline proposals into targets of an
obstructionist strategy with no patience for
The opposition doesn’t confine itself to oil
pipelines. It also impedes work on gas lines
needed to debottleneck huge potential of the
Marcellus and Utica shales.
Because gas development has done more
than anything to moderate emissions of carbon
dioxide, resistance to it exposes the thoughtlessness of antipipeline politics.
The mere promise of new supplies of oil,
gas, or coal provokes protests by groups demanding immediate conversion to carbon-free
That impulse is impracticable but firmly in
place. While too costly to succeed, the agenda
it propels can hobble projects and distort
Trump has shoved antioil fanaticism to the
political margin. But the movement won’t stay
there forever. It has to be discredited.
Correction of Obama’s policy errors is im-
portant and necessary. But it does not address
an intellectual contest the industry has to win.
(From the subscription area of www.ogj.com,
posted Mar. 24, 2017; author’s e-mail: bobt@