Duncan Holds Hearing on North American Energy Opportunities

Duncan Holds Hearing on North American Energy Opportunities

Washington, D.C. – Today, WASHINGTON, D.C. –- (RealEstateRama) — U.S. Congressman Jeff Duncan (R-SC-03), Chairman of the House Committee on Foreign Affairs’ Subcommittee on the Western Hemisphere, delivered the following opening statement at the Subcommittee hearing entitled, “Energy Opportunities in North America”:

Over the past few years, this Subcommittee has prioritized the issue of energy very intentionally. We have taken time to examine opportunities in the region and consider how the U.S. can increase energy cooperation with our neighbors to pursue greater economic growth, create jobs, lower gas prices, and increase our energy security. Today’s hearing on North American energy opportunities follows legislation that I authored in the 113th Congress to approve the U.S.-Mexico Transboundary Hydrocarbons Agreement, which became law; three Subcommittee energy hearings last Congress; a Government Accountability Office (GAO) study on North American energy that Ranking Member Sires and I requested, which is currently ongoing; and a hearing on South American energy potential last month. In my view, energy holds a very important key to unlocking untapped potential for the hemisphere, and I believe the Trump Administration has an incredible opportunity now to increase U.S. energy engagement with the region – to the benefit of U.S. interests as well as to the region as a whole.

After all, the United States is the largest energy producer in the Western Hemisphere, producing over 12 million barrels of oil and 27 trillion cubic feet of dry natural gas per day. Collectively, as of 2015, North America accounted for 72 percent of Western Hemisphere oil production and 85 percent of natural gas production. Tight oil and shale gas in the United States, Canada’s oil sands, and Mexico’s energy reforms and offshore oil prospects create circumstances for a far more highly integrated and interdependent North American energy market. A stronger North American energy partnership would expand the size of our energy market, lead to more jobs, reduce costs for consumers, and enhance North American energy security and independence. Of course, global oil prices will continue to impact U.S. energy interests. However, the U.S. would likely experience less impact from the volatility in the Middle East, attempts by OPEC to regulate energy output and prices, and even Venezuela’s energy production freefall if we relied less on these sources of energy and instead built a stronger North American energy market to lower our risk and meet our needs more effectively.

Consequently, I believe that the Trump Administration has an excellent opportunity now in efforts to improve NAFTA to include energy issues in any future deal. The energy landscape has changed substantially since NAFTA was first negotiated and thus warrants closer examination and potential inclusion, in my view. In addition, the Trump Administration has another opportunity with the recently concluded negotiation of the U.S.-Mexico “Section 123 Agreement” to consider how U.S. nuclear exports to Mexico might assist our southern neighbor with its stated objectives to reduce the use of fossil fuels and carbon emissions through nuclear power. This agreement awaits White House consideration and submission to Congress for review. According to U.S. industry, if this “Section 123 Agreement” moves forward, Mexico plans to construct two new nuclear plants, which could potentially generate more than $2 billion in direct U.S. exports and support more than 10,000 jobs in more than 20 U.S. states if U.S. firms end up constructing those new plants.

Let’s consider for a moment the recent energy developments in North America that have brought us here today. The U.S. has experienced the greatest natural gas supply transformation of any country in the world in recent years due to shale. Today, Canada is the fifth-largest energy producer in the world and our largest foreign supplier of energy. It also has the world’s third-largest proved oil reserves and is one of the largest producers of dry natural gas. Likewise, Mexico is a major producer of petroleum in the world and is the fourth-largest in the Americas. Several recent discoveries of oil and natural gas in Mexico, the development of unconventional resources, and considerable shale resources near the U.S.-Mexico border offer additional promising opportunities. Furthermore, Canada’s privatized oil sector and Mexico’s 2013 reforms opening its energy sector to private investment make further energy cooperation with these non-OPEC members more critical to U.S. national interests.

In conclusion, the collective value of the energy trade between the U.S., Canada, and Mexico exceeded $140 billion in 2015. More can be done, and President Trump’s “America First Energy Plan” is an important blueprint for achieving greater U.S. energy security and independence. However, I believe that in order for that Plan to maximize its potential, we need to expand North American energy cooperation. Currently, our trilateral trade in crude oil, natural gas, refined products, and electricity is joint and integrated in many ways. Our neighbors are major buyers of petroleum products refined in our country, and energy products cross our borders multiple times. Natural gas originating in Canada is often exported into the U.S. in one part of the country and then re-exported back to Canada in another part. Over 50 natural gas pipelines link the North American energy market, six oil pipeline systems link the U.S. and Canada, and over 30 major electricity transmissions connect the U.S. and Canada. Yet, we have substantial room to improve and grow our energy partnership, especially with Mexico. I look forward to hearing from our witnesses on how the U.S. can work with our neighbors to build a stronger North America. I turn now to Ranking Member Sires for his opening remarks.

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