The USA produces more oil than ever before. Currently, it produces more oil than any other country on the planet. America also produces natural gas, coal, solar, wind, hydropower, and nuclear power.
Energy is by its very nature a global trade. The best we can hope for is energy security, which means assurance that no hostile power can prevent us from reaching a sufficient supply of energy. Even with all our current abundance of energy, the best way to do that is in coalition with our neighbors in North America. And for Canada and Mexico to a coalition would be best.
Two stories from last week underline the economic, environmental and strategic advantages of energy cooperation with North America.
The Central Maine Power Co. is looking to build a new project to bring power from Quebec dams to Massachusetts customers. The project will bring 1,200 megawatts to the most populated state of New England. This would be a new nuclear power plant’s equivalent power output but it can be done at a small fraction of the cost. Also, it avoids the dangers of a nuclear accident, no matter how small.
The Northern United States and Canada’s electrical grids are fairly intertwined. This may well be best illustrated when the lights go out. A major outage was initially caused in the summer of 2003 when tree branches struck power lines in Ohio. Electricity consumers from Massachusetts to Michigan and up to Ontario were potentially affected. This interconnection is generally positive because we also share the burdens and help each other to supply.
Mexico has traditionally been more protectionist regarding its energy industries. In the 1930s, Mexico nationalized all of its subsoil resources, meaning all oil, gas, and mineral rights were taken over by the government. The Mexican government threw out foreign energy companies that were operating in Mexico at the time. Mexico has recently become a little more open to international cooperation. In fact, a US company, Talos Energy, has discovered a reserve of 670 million barrels of oil off Mexico’s coast.
Under NAFTA, when it came to energy, Mexico was highly favored. NAFTA included all kinds of energy incentives and exemptions that the US and Canada did not get for the Mexican government. For example, U.S. and Canadian cogeneration plants in Mexico were forced to sell excess electricity to Mexico at whatever price the government would pay, and only Mexico could ban oil exploration