Big Oil Cheers Trump's 'New NAFTA' But Mexico Could Complicate Things
By Steve Horn
While the oil and gas industry has lauded the new trade deal that may soon replace the North American Free Trade Agreement (NAFTA), a provision added by Mexico, along with its new president's plan to ban fracking, could complicate the industry's rising ambitions there.
The new agreement, known as the United States–Mexico–Canada Agreement (USMCA), has faced criticism as being tantamount to NAFTA 2.0—more of a minor reboot that primarily benefits Wall Street investors and large corporations, including oil and gas companies.
Mercilessly critiqued by then-candidate Donald Trump during the 2016 presidential campaign, NAFTA is now the second major trade deal kicked to the curb by now-President Trump. The other, the Trans-Pacific Partnership (TPP), was canceled days into Trump's presidency.
After the most recent deal's announcement, the oil and gas industry offered praise for USMCA. The White House even pointed this out in a press release, highlighting a quote given by the U.S. industry's major trade group, the American Petroleum Institute (API).
"We urge Congress to approve the USMCA. Having Canada as a trading partner and a party to this agreement is critical for North American energy security and U.S. consumers," said Mike Sommers, president and CEO of API. "Retaining a trade agreement for North America will help ensure the U.S. energy revolution continues into the future."
In its own press release declaring its support for USMCA, API further spelled out the parts of the deal it supports.
Those include "continued market access for U.S. natural gas and oil products, and investments in Canada and Mexico; continued zero tariffs on natural gas and oil products; investment protections to which all countries commit and the eligibility for Investor-State Dispute Settlement (ISDS) for U.S. natural gas and oil companies investing in Mexico; requirement that Mexico retain at least current level of openness to U.S. energy investment; additional flexibility allowing U.S. customs authorities to accept alternative documentation to certify that natural gas and oil have originated in Canada or Mexico upon entering the U.S.-Mexico Provision."
Mexico's New NAFTA Energy Stance
Within Mexico, too, things look promising for the oil and gas industry. Unlike the U.S. and Canada, Mexico has yet to experience a major oil and gas pipeline expansion or unconventional oil and gas extraction boom, a la hydraulic fracturing ("fracking") or tar sands production.
That could change, however, under Mexico's recently privatized energy market, and USMCA appears to have shored up the gains the oil and gas industry won when in 2013 Mexico's Congress voted to open up its energy market to international investment. Those energy reforms were pushed by the U.S. Department of State under then-U.S. Secretary of State Hillary Clinton.
Duncan Wood, director of the Mexico Institute at the Washington D.C.-based Wilson Center, explained how the USMCA would affect Mexico's new energy reality in an interview with the San Diego Union-Tribune.
"Mexico has come out of this with pretty strong protections for investors in the oil and gas sectors, as well as in telecom infrastructure, and that's good news for the future of the energy reform," explained Wood. "That's good news, even more so for those companies that have already invested in Mexico."
Mexico's recently elected president, Andrés Manuel López Obrador, has yet to comment on the USMCA's energy-related provisions. But he recently reiterated that he will implement a ban on fracking during his time in office.
And Mexico landed a provision within USMCA saying that the country has "direct and inalienable ownership" of its hydrocarbons, which could complicate the multinational industry's expansion into the country going forward.
"The Mexican State has the direct, inalienable, and imprescriptible ownership of all hydrocarbons in the subsoil of the national territory, including the continental shelf and the exclusive economic zone located outside the territorial sea and adjacent thereto, in strata or deposits, regardless of their physical conditions pursuant to Mexico's Constitution," reads USMCA's provision on this issue.
Andrés Manuel López Obrador as president elect of Mexico speaks during a press conference at Salon D'Luz on July 5, 2018 in Mexico City. Carlos Tischler / Getty Images
For its part, API believes it can potentially change López Obrador's mind on the issue. Aaron Padilla, senior adviser for international policy at API, told The Washington Post that like the wind, political will often changes directions.
"The new president in Mexico has expressed some skepticism about energy reforms he has inherited from his predecessor," said Padilla. "Our member companies are looking to work constructively with him, but they are looking at the long term and understand politics can change in any country."
U.S. exports of natural gas to Mexico, though, will likely continue apace and expand under the new NAFTA. That is because, as Inside Climate News reported, the deal assumes exports of petroleum products into Mexico from the U.S. are in the public interest, which would expedite their approval on a de facto basis.
Climate Change Unmentioned
The words "climate change" barely get a mention in the report, as well. As The HuffPost reported, the word "climate change" does not appear at all within the 31 pages of the deal's environmental section.
Doug Norlen, who does watchdog work on trade issues for the environmental advocacy group Friends of the Earth, has decried the deal.
"The agreement continues to give polluting transnational companies greater rights than governments and citizens. This agreement is an attack on our ability to hold Big Oil and Gas accountable for the damage they cause to our communities," said Norlen in a press release from the organization. "If this trade agreement moves forward, citizens in all three countries must continue our fight to protect the very food, air, and water our communities need to survive."
USMCA is not a done deal, however, and still must be approved by the legislative bodies in all three North American countries. If it goes into effect, the deal impacts $1.2 trillion worth of economic assets.
How NAFTA Is Making Our Food and Water Much Less Healthy https://t.co/TCSqAEJmPA @DeSmogBlog @Public_Citizen @SunFoundation— EcoWatch (@EcoWatch)1516659009.0
Reposted with permission from our media associate DeSmogBlog.
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For centuries, the delicate silver dove has been a symbol of love and fidelity.
Biodiversity and Habitat Loss<p>Their near extinction is a symbol of the <a href="https://www.dw.com/en/global-biodiversity-outlook-targets-extinction-summit-new-york-pledge/a-54932895" target="_blank">biodiversity crisis</a> in the UK, largely driven by habitat destruction. Britain is now one of the countries with the most <a href="https://www.wwf.org.uk/future-of-UK-nature#:~:text=The%20UK%20is%20one%20of,than%20half%20are%20in%20decline" target="_blank">depleted nature</a> in the world according to the World Wildlife Fund. Half its plant and animal species are in decline and more than <a href="https://www.rspb.org.uk/about-the-rspb/about-us/media-centre/press-releases/let-nature-sing-wales/#:~:text=a%20natural%20tragedy.-,Over%2040%20million%20birds%20have%20vanished%20from%20UK%20skies%20in,unaware%20of%20the%20impending%20danger" target="_blank">40 million birds</a> have vanished in just half a century.</p><p>"[Turtle doves] are the canary in the [coal] mine because there are all these other species before it and after it," said Tree. "It's an umbrella for all the other species that are heading that way."</p><p>Turtle doves migrate south through Europe to sub-Saharan Africa between July and September, ending up in dry woodland and farmland areas of countries like Mali and Senegal for winter. </p><p>Droughts in West Africa and the Sahel region are believed to have contributed to the fall in turtle dove species recorded in northern Europe, with low rainfall reducing supplies of the seeds and insects the birds rely on for energy for the long journey home.</p>
Conservation and Farming<p><a href="https://www.operationturtledove.org/" target="_blank" rel="noopener noreferrer">Operation Turtle Dove,</a> a partnership project of charities including the Essex Wildlife trust, works with landowners and farmers to actively build turtle dove habitat.</p><p>Outten works with <a href="https://www.ebws.org.uk/birdsites/blue-house-farm-ewt-north-fambridge" target="_blank">Blue House Farm</a>, a 660-acre nature reserve in the UK county of Essex, where they have replicated weedy fallow plots. </p><p>"We work on it every year to make sure it's in the condition it needs to be with plants such as clovers and black medic," Outten said. "These plants are native to the landscape and produce the seed the birds feed on." </p><p>The birds eat a wide range of seeds from various plants that would have been abundant 50 or 100 years ago, added Guy Anderson, program manager for species recovery with The Royal Society for the Protection of Birds (RSPB). </p><p>"But it's simply true that with the gradual process of <a href="https://www.dw.com/en/farming-without-pesticides-how-can-we-make-agriculture-greener/a-52216796" target="_blank" rel="noopener noreferrer">intensifying our agricultural production</a>, the availability of those seeds has dropped and dropped," said Anderson.</p><p>Part of the project includes supplementary feeding — providing sources of food in the form of seed or grain. Under the Countryside Stewardship Scheme in England, farmers can receive financial support to create a turtle dove habitat. </p><p>Though they haven't recorded an increase in doves across the sites in the four years of working on the project, Outten said they are seeing improvements in how landowners and farmers manage habitat for the birds. </p>
A Turtle Dove Haven<p>The 3,500-acre Knepp Estate in West Sussex is another project taking a different approach and one of the few places where turtle dove numbers are increasing.</p><p>Isabella Tree and her husband Charlie Burrell converted their intensively farmed land into a rewilding project almost 20 years ago. They have let the land return to nature.</p><p>Just one year after they'd finished <a href="https://www.dw.com/en/uks-most-talented-architects-are-not-human/a-35952128" target="_blank">rewilding</a> the southern part of their property, they heard turtle doves for the first time. It's now a breeding hotspot for the birds with an estimated 19 pairs. Knepp is also home to <a href="https://www.rewildingbritain.org.uk/rewilding/rewilding-projects/knepp-estate" target="_blank" rel="noopener noreferrer">2% of the UK's population</a> of nightingales. </p><p>Tree is critical of supplementary feeding schemes that, in her view, are short term. She questions the chances of turtle doves getting to feed on scattered seeds before other mammals eat them first.</p>
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