Could Trump’s position on NAFTA upend natural gas?
By NICK WINCHESTER
MARFA — With the Trans-Pecos Pipeline not even three months in service, one of Trump’s campaign-trail favorites – the renegotiation (or withdrawal) of the North American Free Trade Agreement (NAFTA) – could threaten its future.
In April, Trump indicated his intentions to renegotiate NAFTA via his preferred avenue of communication: Twitter. “I received calls from the President of Mexico and the Prime Minister of Canada asking to renegotiate NAFTA rather than terminate,” Trump wrote. “I agreed, subject to the fact that if we do not reach a fair deal for all, we will then terminate NAFTA.”
Because the production of natural gas in the U.S. far exceeds its domestic demand, natural gas companies survive by selling a great deal to their largest customer, Mexico, according to The New York Times. This reliance could cost the energy industry billions if the NAFTA agreement is messily renegotiated or withdrawn completely.
In Mexico, where more than a quarter of electricity is powered by American natural gas, the threat of no longer receiving a supply from across the border has prompted officials to seek out other sources. Following Trump’s recent threats to NAFTA, Mexico began to explore importing liquid natural gas from countries like Peru, the Times reports.
The Trans-Pecos Pipeline takes natural gas from Pecos County and transports it to Mexico, crossing the Rio Grande near Presidio.
Both NAFTA and natural gas are important to the Texas economy, and Texas lawmakers have made their concerns clear about the administration’s proposed renegotiations.
“NAFTA is vitally important to the state of Texas, with free trade adding billions of dollars to our economy annually,” Texas U.S. Senator John Cornyn said in May.
Representative Will Hurd, whose district lines the border from just outside El Paso down to Laredo and includes Far West Texas, said, “Trade is the lifeblood of many communities in my district. The U.S., Mexico and Canada are not competitors, but partners who build things together. It is now more important than ever that we strengthen our relationship as allies and partners, so we can work together to increase economic opportunities on both sides of the border.”
The energy industry will be thankful to have former Texas Gov. and now Energy Secretary Rick Perry on their side. Perry was on the board of Energy Transfer Partners (ETP), a position he left in January to take up his position in the administration. When Perry announced his Presidential campaign, his biggest donor was ETP’s Kelcy Warren. ETP owns and operates the Trans-Pecos Pipeline.
With Perry, and the state of Texas behind it, it’s unlikely the administration will undergo NAFTA renegotiations without keeping natural gas in mind. But Trump will have to tone down his Twitter-diplomacy if only to keep Mexico from seeking their supply elsewhere.
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