NAFTA: Overhaul or Tune-Up?
“World Oil” reports that in spite of the rhetoric of the recent presidential campaign, the Trump administration is now striking a conciliatory tone with its NAFTA partners, especially on energy issues. Donald Trump has stated that he wants the U. S. to become a dominant player in global energy markets. Duncan Wood, Director of the Mexico Institute at the Woodrow Wilson International Center for Scholars, considers this a pipe dream in the short term if we act unilaterally. However, working in conjunction with Canada and Mexico, it becomes feasible.
When NAFTA was first negotiated, the U. S. was dependent on Canada and Mexico for oil imports. Now we are a major importer and exporter of oil and natural gas with both nations. While we are becoming less dependent on imported energy, an increasing percentage of our oil imports are now from our adjacent neighbors. In 2010, 34% of our oil was imported from our NAFTA partners. In 2016, that had increased to 49%. Last year, we exported 1.6 billion barrels of crude and products to Canada and Mexico, while importing 1.4 billion. In 2016 we exported 2.1 trillion cubic feet of natural gas to our partners while importing 2.9 trillion. In fact, we export more LNG (liquefied natural gas), 20% of the total, to Mexico than to any other nation.
Clearly, the North American energy market is highly integrated and co-operation benefits everyone. Fortunately, Energy Secretary Rick Perry and his counterparts realize this. Perry recently declared, “I think we have a unique opportunity in this country to develop a North American energy strategy that will pay great dividends for Canadians, for Mexicans, for Americans, as we go forward.” Canadian Natural Resources Minister, Jim Carr, and Mexican Energy Secretary, Pedro Joaquin Coldwell, also realize the importance of cooperation, given the highly integrated nature of the North American energy market.
Energy relations with Canada in particular have improved since Trump approved TransCanada Corp.’s Keystone XL Pipeline project to bring crude oil from Alberta to the Gulf Coast.
While there are issues in other areas of trade between the NAFTA partners, energy seems to be an area of common understanding.
To read the article in its entirety, please go to http://www.worldoil.com/news/2017/6/27/perry-seeks-energy-pact-with-mexico-canada-as-nafta-talks-near .
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