North American Energy in the Crossfire

Abstract

North America is the beating heart of global energy markets un-dergoing a terrible energy crisis that threatens to upend both the economy and global security. The clearest path out of this global crisis is increasing energy supplies from North America, which can restore energy security and drive a transition to cleaner energy sources. The U.S., Mexico, and Canada have abundant and varied resources to surmount this challenge but are in dire need of stronger cooperation across borders, and between private and public actors to achieve this goal. This Article shows how energy law changes in the U.S. and Mexico present under-studied dangers to cross-border en-ergy trade and sets an agenda for legal reform to enable mutually beneficial fuel and power trade.

The United States has recently emerged from history’s biggest oil boom, and along with its neighbors, is becoming the crossroads for an increasingly global two-way trade in oil and gas. The U.S., Mexico, and Canada are major global energy producers and consum-ers, and their different balance of products creates important trading opportunities. The United States and Mexico, in particular, have much to gain from expanded energy trade. Yet there is an increasing danger that this potential will be squandered. Growing movements against eminent domain, infrastructure permits, and energy exports in the United States, and moves to re-nationalize the energy sector in Mexico are making energy companies increasingly wary of investing in the future of U.S.-Mexico energy trade. Ironically, politicians on both sides of the border accuse each other of being the source of un-certainty for the future of the North American energy industry. This Article uncovers the fault lines undermining North America’s energy potential and proposes principles for an energy agreement that could be adopted either by the United States Mexico Canada Agreement (USMCA) partners or by direct negotiations between the U.S. and Mexico to secure the benefits of increased energy trade and increase cooperation in energy and climate policy.

Keywords: U.S.-Mexico Energy, U.S.-Mexico Relations, International Energy law, International Dispute Resolution, International Economic Law, USMCA, NAFTA, Energy Governance, Energy Investments