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Implications of the New USMCA Trade Agreement on Energy Flows

Explore the main oil and gas provisions of the USMCA agreement and how they impact energy flows between the US, Canada, and Mexico. Learn about investment protections, market access, tariffs, and more.

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Implications of the New USMCA Trade Agreement on Energy Flows

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  1. The New U.S. –Canada- Mexico Trade Agreement Implications for Energy Mexico City January 29, 2019 Lucian Pugliaresi Energy Policy Research Foundation, Inc. Washington, DC eprinc.org

  2. Main Oil & Gas Provisions of USMCA Agreement Does Not Shift Energy Flows Substantially – but Sound Policies Still Matter • Investment protections to which all countries commit • Eligibility for Investor-State Dispute Settlement for US oil and gas companies investing in Mexico • Continued market access and no tariffs for US natural gas and oil products • A requirement that Mexico retain at least its current level of openness to US energy investment • Additional flexibility allowing US customs authorities to accept alternative documentation to certify that oil and gas entering the US have originated in Canada or Mexico

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  4. US Associated Gas Needs a Home – or Oil Output Suffers Source: EIA, Raymond James

  5. VALUE OF US PETROLEUM TRADE WITH MEXICO billions of USD -- 2007-2017 Source: EIA

  6. SUSTAINING THE BENEFITS OF USMCA FIRST ORDER OF BUSINESS: TAMING POPULIST SENTIMENT IMPORTANCE OF EDUCATING POLITICAL LEADERSHIP ON BENEFITS ON INTERCONNECTED ENERGY FLOWS ADDRESS MEXICO’s ENERGY SECURITY CONCERNS (real and imagined) ADDRESS INFRASTUCTURE BOTTLENECKS: ALL MEMBERS OF USMCA HAVE A STAKEIN Canadian, US, and Mexican Regulatory Risks ACCESS TO MEXICAN GAS MARKET IMPORTANT FOR SUSTAINING US CRUDE OIL OUTPUT GROWTH

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