December 17, 2014
By Duncan Wood, Director, Mexico Institute
In February 2014, the leaders of the three North American nations met in Toluca, Mexico, and determined a range of measures to enhance regional competitiveness, including new initiatives on transportation infrastructure, borders and research cooperation. Furthermore, the leaders agreed that, before the end of 2014, a North American Energy Ministers Meeting should take place to “define areas for strong trialteral cooperation on energy.” What these areas might be is still unannounced, but with the successful passage of energy reform legislation through Mexico’s Congress in December 2013, and secondary legislation in August 2014, many of the previously existing barriers to cooperation on oil and gas markets have now disappeared.
The prospects for an energy abundant North America are compelling. Combined, the three countries’ oil production compares favorably with those of the Middle East. As the United States surpassed Saudi Arabia as the world’s largest producer, and with both Mexico and Canada on the verge of significant increases in production, North America’s long-standing position as a hydrocarbons importer will then be reversed. The outlook for North American energy is therefore bright, and the transformation in the regional energy paradigm has been dramatic. However, to achieve the full potential of this newly discovered regional energy wealth, it will be necessary to more fully integrate the three countries’ energy markets. This paper argues that, in order to make North American energy independence a reality, there are several main areas that require attention from the three governments, working together, to make the transition to an integrated North American energy system.
Read the report here.
December 12, 2014
12/12/2014 Duncan Wood and Rachel Bronson via Forbes.com
North America is fast becoming the epicenter of a transformation in global energy. Canada, Mexico and the United States are bringing to market huge new energy resources that were too expensive or politically risky to exploit until recently. According to the Energy Information Administration, North American oil and gas growth is expected to exceed all of OPEC’s over the next decade.
But despite North America’s huge energy potential, the United States, Mexico, and Canada all face serious obstacles in getting their energy resources to market. Skills gaps and low public support for energy infrastructure stand in the way of a potentially rich North American energy future. As the three North American energy ministers prepare to meet in Washington on December 15th, they must develop innovative policy solutions to overcome these barriers and create the necessary support structure to fully realize North America’s emerging energy boom.
December 8, 2014
11/26/14 Wilson Center REWIND
Increases in energy production in Canada and the U.S., combined with promising reforms in Mexico, are creating what some describe as a “North American energy renaissance.” The world’s energy equation is changing, with more developments on the way. What are the implications of traditional energy producers becoming consumers and consumers becoming producers? That’s the focus of this edition of REWIND.
Click here to watch the video.
To see video from the Wilson Center’s First Annual North American Energy Forum, click here.
David Biette, Director, Canada Institute, moderator
Charles K. Ebinger, Senior Fellow and Director, Energy Security Initiative, The Brookings Institution
David L. Goldwyn, President, Goldwyn Global Strategies LLC, former State Department Coordinator for International Energy Affairs, and Co-Editor, Energy & Security: Strategies for a World in Transition
Robert (“RJ”) Johnston, CEO and Director, Global Energy & Natural Resources, The Eurasia Group
Jan H. Kalicki, Wilson Center Public Policy Scholar and lead, Regional and Global Energy Issues; Co-editor, Energy & Security: Strategies for a World in Transition
Shirley Neff, Senior Adviser, US Energy Information Administration, former Senior Adviser, US Commission on the BP Oil Spill
Andrew Selee, Wilson Center Executive Vice President and Senior Advisor to the Mexico Institute
October 2, 2014
10/01/14 Wall Street Journal
In the wake of an energy overhaul that ends Mexico’s state oil monopoly, a new exploration and production company was born with the name Sierra Oil & Gas, which Chief Executive Ivan Sandrea says already has a wealth of global expertise. “We’re pretty big for a baby,” he said on Wednesday. Sierra said last month it had secured equity commitments of $525 million from U.S.-based private-equity firms Riverstone Holdings LLC and EnCap Investments, along with Mexican private-equity fund Infraestructura Institucional. Mr. Sandrea said his team has a combined 350 years of experience, and most of its members have worked in the industry in Mexico. They are currently preparing for Mexico’s first bidding round for oil and gas blocks, set for next year.
October 1, 2014
09/30/14 Wall Street Journal
Mexican officials launched a special fund on Tuesday that will capture income from oil and gas activities and distribute the money to the federal budget and a long-term savings account as part of a broad energy overhaul that will open the industry to private players. The fund will be administered by the Bank of Mexico, the country’s central bank. Finance Minister Luis Videgaray said three other funds also were created to promote the participation of local contractors in the energy industry, to bring electricity to far-flung rural areas, and to help small savers with investment opportunities that will come from Mexico’s energy reform.
September 24, 2014
09/23/14 Financial Times
Wanted: sharp new image for septuagenarian Mexican company with loyal following and the kind of brand recognition many companies would kill for. It sounds like an advertising agency’s dream. But the company in question is widely believed to be bloated, corrupt and inefficient. Its ability to maintain its market share in future is by no means guaranteed, and though it faces immediate challenges, it will not be able to deliver results overnight. The company is Pemex, the state oil producer, which is facing competition for the first time since its creation in 1938, under a landmark reform pushed through by Enrique Peña Nieto, Mexico’s president. Legislation that will open the sector to private investment was passed in August. Private oil companies, including foreign groups, are expected to start piling in next year.
September 18, 2014
MEXICO CITY – When Mexican President Enrique Peña Nieto signed into law the enabling reforms for his country’s energy sector last month, it marked the fulfillment of a campaign promise two years in the making. Although Mexico’s Congress last year agreed in principle to the reforms, the secondary laws passed last month actually define the parameters for the reshaped energy sector. Their passage is effectively the green light for private investors—both foreign and domestic—to enter the Mexican energy market. So what happens next?