DOE Secretary Perry in Mexico Calls For Streamlined Cross-Border Infrastructure Permitting
Natural Gas Intelligence (NGI)
NGI’S MEXICO GAS PRICE INDEX
July 13, 2017
Department of Energy (DOE) Secretary Rick Perry told his Mexican counterpart on Thursday that he wants to streamline the permitting process for cross-border energy infrastructure, including natural gas pipelines, calling them “absolutely vital facilitators of energy trade.”
Speaking alongside Mexico Secretary of Energy Pedro Joaquin Coldwell at a bilateral meeting in Mexico City, Perry said the two countries have started discussions to create a North American energy strategy that would include Canada. The former Texas governor also lauded Mexico, which is the United States’ second-largest energy trading partner after Canada.
“Mexico is a crucial and a very important partner for the United States” in efforts to promote comprehensive energy and economic security for North America, Perry said. He added that a tripartite agreement is a “top priority” for the country. “The strategy will guide our collaboration on shared energy interests, including the development of North America’s vast, untapped energy resources, diversifying our energy supplies, supporting the growth of our domestic energy industries.
“It will also help our countries face a number of common challenges, whether it’s safeguarding our independent systems from cyberattacks, to expanding our energy infrastructure so that we can support the massive new volumes of energy that are going to flowing throughout North America.” Perry also called for “hardening our infrastructure” from both natural and man-made attacks.
During his comments, Coldwell remarked on the energy trade issue, pointing out that cross-border energy trade reached $39 billion last year.
“Mexico is also the fourth largest exporter of crude to the United States, mainly heavy oil that is suitable for the U.S. refineries located in Texas and Louisiana,” Coldwell said. “Fifty-eight percent of the gas exports and 40% of the oil exports from the U.S. are destined for Mexico.
“Both countries have together built a sizeable cross-border energy infrastructure that has the potential for further expansion to strengthen the interconnection of our energy markets, increase trade flows and promote the stability and continuity of energy supply.”
Coldwell said that in the hydrocarbons sector there are 17 existing gas import pipelines, with two additional pipelines under development. Meanwhile, the United States and Mexico traded 3,781 GWh of electricity in 2016 through 11 electricity transmission lines that cross the border.
“However, this trading is still in an incipient stage, particularly when comparing it to the hydrocarbons exchanges between the two countries,” Coldwell said. “To incentivize electricity sales between the two countries in the long run, we must work to modify our market rules and increase the electrical interconnections between the two countries.”
Perry said an agreement between the North American countries would focus on three core areas: Accelerating development of the continent’s vast, untapped energy sources; promoting energy trade and economic development; and enhancing the security, reliability and resilience of North America’s energy systems.
“As an example, to further our joint interests in carbon capture utilization storage technology, we could expand the North American carbon storage atlas and long-term staff exchanges,” Perry said. “We can also streamline the permitting process for cross-border energy infrastructure projects…We also need to improve and update our approach to cybersecurity, expand our collaboration on security and resilience, increase technical engagements with the North American Electric Reliability Corp., and other stakeholders…
“Increased energy trade and bilateral investment will increase North America’s self-sufficiency. It will reduce our reliance on energy imports from outside the continent. Obviously, it will create jobs — a lot of jobs, good jobs — and bring down energy cost for consumers.”
The Mexican energy secretary added that Mexico and the United States “have identified important investment opportunities for companies in both countries, the same opportunities that we promoted through the Mexico-U.S. Energy Business Council, via information exchanges between the public and private sectors and via a series of recommendations to facilitate the development of new energy projects.
“In the first five oil and gas tenders and the two long-term electricity auctions, carried out under the framework of the energy reform, investments by U.S. companies who won in these processes have reached $7.5 billion, and we hope that amount will continue to grow in subsequent tenders.”