Nafta

With the North American Free Trade Agreement (NAFTA) as well as the Canada/United States Free Trade Agreement firmly in place, Canadian producers said North America as a whole must come together and continue to work toward a reliable supply of gas and oil to quench the appetite of the North American energy markets. It is critical, they said, that Canada and the United States develop additional global strategies to address energy production and consumption, especially with the constantly growing interdependence of the countries’ economies.

With the North American Free Trade Agreement (NAFTA) as well as the Canada/United States Free Trade Agreement firmly in place, Canadian producers said North America as a whole must come together and continue to work toward a reliable supply of gas and oil to quench the appetite of the North American energy markets. It is critical they said, that Canada and the United States develop additional global strategies to address energy production and consumption, especially with the constantly growing interdependence of the countries’ economies.

The current North American Free Trade Agreement (NAFTA) tariffon gas imports into Mexico is holding up pipeline development fromthe U.S. to northern Mexico, said consultant George Baker of Baker& Associates. “The only people that have to pay this tariff arethe private industry who would contract with a U.S. gas supplier.If they buy [gas] from Pemex [Petroleos Mexicanos], however, it’s arolled-in price and they don’t pay it.” The tariff, originally 10%in 1991, is rolled back 1% a year and currently stands at 5%.That’s still too high for the private sector to feel confident itcan make money shipping gas to Mexico, Baker told attendees Tuesdayat the conference portion of Houston Energy Expo ’98, formerlyknown as Gas Fair. “That’s an important delay, and the origin of itis largely Pemex’s wanting to say, ‘we’re not ready for competitionyet.’ Some people say, ‘have you ever heard of a state monopolythat has acknowledged that it’s ready for competition yet.’ Mostpeople say no.”