Citing a "profound opportunity in Latin America," Department of Energy (DOE) Secretary Rick Perry said the U.S. government would partner with the Overseas Private Investment Corporation (OPIC) and invest $1 billion in Mexico's energy sector over the next three years.
The joint initiative, officially the "Partnership to Power the Americas," was announced Thursday on the sidelines of the World Gas Conference in Washington, DC. Both Perry and OPIC CEO Ray Washburne said the initiative would help American energy companies working throughout the Western Hemisphere.
Specifically, OPIC, a self-sustaining agency of the federal government, would provide financing and insurance when it is unavailable in the private sector. Perry said the initiative would "fund some projects that maybe wouldn't otherwise get done.
"Our goal here is to create solutions that utilize the expertise, goods and services of our businesses in order to increase energy access, strengthen energy security and ultimately affect prosperity and opportunity in this Western Hemispheric region. We're in a great position right now to do that, thanks to our U.S. energy abundance and the technical ingenuity that resides in the U.S. There is an enormous potential in Latin America."
Washburne added that the partnership "will help establish a seamless process for bringing the best of U.S. energy technology and expertise to places in Latin America where it is needed most."
Perry said recoverable shale and tight gas in the entire Western Hemisphere, which includes the United States and Canada, could potentially make up approximately 40% of the world's reserves. "Yet the private sector incentives are needed to foster the development of infrastructure that we're going to be needing for those greater business opportunities," he said.
"OPIC is going to be prioritizing assistance to those companies seeking to expand in Latin America when private resources are unavailable or insufficient. In turn, we at DOE will be providing the connections, the expertise. We'll help identify technology areas and sectors where U.S.-based companies have the potential to excel in these markets but lack the capital to do so."
'Complete Confidence' In Mexico's Next President
Perry said that whomever wins Sunday's presidential election in Mexico, he had "complete confidence" that the winner would ultimately work closely with the United States to develop that nation's energy infrastructure. Andres Manuel Lopez Obrador, a frequent critic of energy reforms enacted under President Enrique Pena Nieto, is expected to prevail.
"Regardless of your political leanings, you're going to need resources to address the needs of your country and your citizens," Perry said. "The most powerful and expeditious way to address resources coming into the country is through the energy sector. I think Mexico is going to be very willing to work with private sector partners, with the United States."
The DOE-OPIC joint initiative will "most likely" assist American companies working to develop oil and natural gas pipelines and associated infrastructure throughout Mexico.
"We see Mexico continuing as a good neighbor," Perry said. "We see Mexico as an economic partner. To help build their foundational economy, energy will play a very important role. We look forward to meeting with the new administration, whoever that individual may be, and finding ways that we can help the citizens of both the United States and Mexico together."