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Coming Ever Closer? North American Energy Security

Aug 13, 2013

From a joint statement by the members of Business Roundtable (BRT), the Canadian Council of Chief Executives (CCCE), and Mexico’s Consejo Mexicano de Hombres de Negocios (CMHN). CEO members of the group met at BRT's Washington offices on Sept. 20, 2012:

[North] America is blessed with an abundance of energy resources.  While our three nations have a history of close cooperation on many energy matters, more can be done to reduce regulatory burdens that inhibit the quest for growth and North American energy self-reliance.

Canada has certainly embraced this regulatory philosophy, working aggressively to develop and export its vast oil and natural gas reserves, supporting its mining industry, and promoting investment in "clean energy" like wind, nuclear power and hydroelectricity.

And now big news from Mexico. From The Wall Street Journal, "Mexico Moves to Overhaul Oil Industry ":

MEXICO CITY—Mexico moved to end the country's 75-year-old monopoly on oil and gas production, potentially opening up some of the world's biggest remaining untapped oil reserves to private companies and setting the stage for a new energy boom on the U.S. doorstep.

The government on Monday unveiled a bill to change the constitution to let it partner with private companies to find and produce oil and gas in a country that is the third biggest supplier of crude to the U.S. and has the world's fourth biggest reserves of shale gas.

McClatchy, "Mexico unveils plan to open energy sector to competition":

Flanked by much of his Cabinet, Pena Nieto said the plan would revitalize the oil and gas industry without selling out the giant state oil company to foreign interests.

“Mexican families will feel in their pocketbooks the benefits,” Pena Nieto said, “of our economy returning to faster levels of growth than at any time in decades.”

The proposal was narrower in scope than some in the energy industry had sought. It offers foreign companies the chance to sign profit-sharing contracts to explore for and produce oil and natural gas, but it bars them from keeping some production for themselves.

New York Times, "In Move for Economy, Mexican President Seeks Foreign Investment in Energy":

Mr. Pena Nieto’s goal, like those of presidents before him, is to recharge Mexico’s economy by tackling areas that analysts agree hinder its expansion, which has averaged just 2.2 percent a year since 2001, according to the Organization for Economic Cooperation and Development.

Perhaps the worst of those is the creaky energy sector. Demand for energy in the country is growing so fast that Mexico could turn from an energy exporter to an energy importer by 2020, the government says.

Meanwhile, U.S. energy production -- at least of oil and natural gas -- is soaring because of investment and new technologies being applied on privately held lands.

U.S. progress comes largely despite numerous federal government obstacles. From the testimony of  Douglas Holtz-Eakin, President of the American Action Forum, Feb. 28, 2013, to the House Committee on the Judiciary, Subcommittee on Regulatory Reform, Commercial and Antitrust Law (his own views).

[Regulatory] initiatives can have a profound impact on U.S. competitiveness, namely for our manufacturing sector. In a report issued earlier this month, AAF identified at least $359 billion in regulatory burdens imposed on manufacturers during the last ten years.6 In addition, there were nearly 100 economically significant regulations issued during that time from EPA, and the Departments of Energy and Labor alone, chief regulators of the manufacturing sector. The recent Unified Agenda offers little hope for relief, as regulators have outlined an additional $9.2 billion in costs for manufacturers.

As we move toward North American energy independence, Canada, increasingly Mexico and U.S. industry are doing their part. Were there only greater contributions from others.

P.S. In the interest of completeness, we note this new summary from Pepper Hamilton LLP, "United States: DOE Announces Record U.S. Wind Energy Production, New Study On Solar Land Requirements." The federal government does have a role.

P.P.S. And in the interest of FULL completeness, an op-ed by National Mining Association President and CEO Hal Quinn, "Regulations hurt coal and consumers alike."

P.P.P.S. Keysone XL Pipeline. That is, if you want to be serious about North American energy independence.

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