House Panel Debates North American Energy Trading

A House Energy & Commerce subcommittee Dec. 13 heard various views on whether and how to revise the North American Free Trade Agreement, and specifically about ramifications to trade in natural gas, electricity and crude oil between the U.S., Canada and Mexico.

“Energy trade and regulatory alignment have allowed the three countries to reduce their dependency on energy from other regions, reduce energy and electricity costs, and affordably mitigate environmental impacts,” Alan Krupnick, Resources for the Future senior fellow, told the panel.

The committee hearing largely focused on existing and proposed revisions to trading fossil fuel commodities over the objections of Rep. Frank Pallone (D-NJ).“We should prioritize expansion of renewable energy technologies and how they can benefit the North American electricity grid,” he said.

Strengthening cross-border electricity trading improves grid reliability and the ability to tap into clean energy resources.

Pallone noted there are several large-scale transmission projects that would bring renewable power across the U.S. borders with Canada and Mexico, which he called “critical to the overall future of energy development in North America.”

Mexico, for example, has considerable levels of cheap hydropower and solar energy resources that could be imported to the U.S, Krupnick noted. “It’s better to build solar projects in Mexico than in New England,” he pointed out.

Last year, the U.S. imported 73.1 million MWh from Canada and 1.5 million MWh from Mexico, while exporting 9.3 million MWh and 2.3 million MWh to those countries, respectively, according to the committee analysis.

“Although the electricity trade among the United States, Canada, and Mexico is small, it is important regionally,” pointed out Karen Harbert, US Chamber of Commerce president.

There are more than 30 major transmissions connections between the U.S. and Canada, and 11 electrical connections between the U.S. and Mexico.

The Wednesday hearing was held in response to the Trump Administration’s efforts to renegotiate the terms of NAFTA with Canada and Mexico, which began in August.

“The massive growth in trade with Canada and Mexico” in the oil, gas and electricity sectors from NAFTA, launched in 1994, has benefitted “manufacturers big and small throughout the United States, supporting millions of good-paying jobs,” said Allen Burchett, ABB’s global head of strategic projects. — Elizabeth McCarthy

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House Panel Debates North American Energy Trading

William J. Kelly

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