Page 7 - NorthAmOil Week 04 2021

NorthAmOil COMMENTARY NorthAmOil

Donald Trump that Lopez Obrador’s energy to establish its own energy policy through con-
policies contravened provisions of the United stitutional reforms and new legislation. But it
States-Mexico-Canada Agreement (USMCA), also stated that Washington and Ottawa were
the new bilateral trade deal signed last year. extending this recognition “without prejudice
They described the president’s policy course as to their rights and remedies” under USMCA.
“a pattern of obstruction” that could harm US According to Lopez Obrador, then, the crit-
energy companies working in Mexico. Addi- icisms of current trends in Mexican energy
tionally, they expressed interest in preserving policy have mostly consisted of wilful misun-
Peña Nieto’s energy reforms, which promote derstandings premised on the assumption that
competition in the oil and gas sector. US oil and gas companies have the right to pref-
And on January 11, Pompeo and other cabi- erential treatment in other countries. On the US
net officials sent a letter to their counterparts in side, however, there is concern that Mexico is
the Mexican government, saying they remained wilfully putting itself in a position of being una-
concerned about US oil and gas interests. “We ble to uphold its commitments under USMCA
have been concerned by reports of a July 22 by taking this approach to domestic policy.
memo, followed by a September 22 meeting
with regulators who were allegedly instructed Expectations and priorities The new
to block permits for private-sector energy pro- As noted above, these competing perspectives
jects and to exercise their regulatory authority did not lead to much in the way of concrete administration’s
to favour state-owned energy companies,” they action under the Trump administration. climate policy
wrote. “If true, this would be deeply troubling As such, Biden, who has been so critical of
and raise concerns regarding Mexico’s commit- Trump, is now expected in some quarters to may raise
ments under the USMCA.” take a different tack and work more diligently
to support US oil and gas operators investing in questions in
Competing perspectives Mexico. It remains to be seen, though, whether
None of the letters referenced above drew much those expectations are realised. Washington about
in the way of response from Trump. This cha- In the near term, Biden is likely to be whether to go to
grined industry executives and legislators repre- focused mostly on urgent domestic issues,
senting oil- and gas-rich US states, but it wasn’t such as efforts to mitigate the damage that the the aid of oil and
necessarily surprising. After all, the former pres- coronavirus (COVID-19) pandemic has done
ident got along rather well with Lopez Obrador. to the US economy and public health. As such, gas operators.
The relationship between the two was good, per- US fossil fuel interests in Mexico are likely to
haps in part because of the former’s decision to be a much lower priority – unless an unantici-
make a concession in order to secure the latter’s pated event brings trade issues to the forefront.
pledge to sign USCMA. And even in that case, the new administration’s
That concession was outlined in Chapter 8 climate policy may raise questions in Wash-
of the new trade agreement. It stated that both ington about whether to go to the aid of oil and
the US and Canada recognised Mexico’s right gas operators.™

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