Energy free trade under NAFTA good for all North Americans

August 02, 2017 - Calgary, Alberta
Energy free trade under the North American Free Trade Agreement (NAFTA) has been good for the people of Canada, the United States (U.S.) and Mexico, keeping energy on the continent more affordable and reliable for citizens and the economy, according to a joint paper released by the Canadian Association of Petroleum Producers (CAPP), the American Petroleum Institute (API) and Mexican Association of Hydrocarbon Companies (AMEXHI). 

The creation of NAFTA has been and continues to be mutually beneficial to all three trading partners – Canada, the U.S. and Mexico. The integrated and interdependent North American market that NAFTA created maintains energy self-sufficiency and improves industry competitiveness in North America and worldwide.  
Under the NAFTA renegotiation, there are opportunities to update the agreement but any changes that disrupt energy trade across North American borders or revert to high tariffs and trade barriers could put long term investments, national prosperity and jobs at risk as they depend on these deep trade relationships. As such, the joint paper recommends support for market-oriented policies and opportunities for commercial growth and job creation under NAFTA.

The CAPP, API and AMEXHI joint paper can be found here

The Canadian Association of Petroleum Producers quotes: Tim McMillan, president and CEO 

  • “The creation of NAFTA has been and continues to be mutually beneficial to the economy and people of all three trading partners – Canada, the U.S. and Mexico.” 
  • “Since NAFTA’s inception in 1994 our three economies have become interconnected and integrated. Supporting a free trade zone is more compelling today than ever before.” 
  • “NAFTA provides the continent with energy self-sufficiency and security and has the potential to create new opportunities in the future to enhance our trade relationships with the U.S. and Mexico.” 
  • “As America is Canada’s largest trading partner, policy changes in the U.S. – on trade, energy and the environment – will greatly affect Canada’s oil and natural gas sector.” 

The American Petroleum Institute quote: Jack Gerard, president and CEO 

  • “The natural gas and oil industry across North America is united in our support for NAFTA and the significant consumer, economic and security benefits it generates.” 
  • “As the energy flows between our countries continue to grow, it’s important to highlight the critical role NAFTA has played in facilitating cross-border trade and investment in energy.” 
  • “The positions we put forward today reinforce our commitment to the energy trade alliance under NAFTA, which supports jobs and manufacturing in energy, helps to make energy more affordable, and enhances our energy security.”

Mexican Association of Hydrocarbon Companies (AMEXHI) quotes: Alberto de la Fuente, president

  • “After Mexico’s Energy Reform, NAFTA itself enabled much of the investment attraction, infrastructure development and a more intensive commercial exchange.” 
  • “The synergy between NAFTA and the Energy Reform in Mexico is essential to attract investments, develop integrated value chains and increase North America’s economic competitiveness.”

Supporting information

  • The upstream petroleum industry remains the largest private investor in Canada and among the largest source of export revenue.
  • The U.S. is the largest export market for Canadian oil and the only market for Canadian natural gas.
    • America is Canada’s No. 1 energy customer – about 99 per cent of our oil and natural gas exports go to the United States every day.
  • CAPP forecasts Western Canadian oil supply will grow to 5.4 million barrels per day by 2030, an increase of 1.5 million b/d from today.
The Canadian Association of Petroleum Producers (CAPP) represents companies, large and small, that explore for, develop and produce natural gas and crude oil throughout Canada. CAPP’s member companies produce about 80 per cent of Canada’s natural gas and crude oil. CAPP's associate members provide a wide range of services that support the upstream crude oil and natural gas industry. Together CAPP's members and associate members are an important part of a national industry with revenues from crude oil and natural gas production of about $120 billion a year. CAPP’s mission, on behalf of the Canadian upstream crude oil and natural gas industry, is to advocate for and enable economic competitiveness and safe, environmentally and socially responsible performance.

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