Achieving U.S. energy independence with our “neighbors” oil

[ The main U.S. interest becoming more energy independent by getting oil from our “neighbors” Mexico, Colombia, Venezuela, Brazil, and Canada, while at the same time minimizing growing Chinese and Russian attempts to get their oil and other natural resources.

Alice Friedemann  author of “When Trucks Stop Running: Energy and the Future of Transportation, 2015, Springer]

House 114–12. February 3, 2015. The strategic importance of the western hemisphere defining U.S. interests in the region. 114th congress House of Representatives. 81 pages 

Jeff Duncan, South Carolina

Venezuela’s unstable situation, deteriorating economic conditions with major shortages and inflation at over 60 percent, declining oil production and human rights abuses also require sustained U.S. attention.

Energy opportunities abound in the region today. I am excited about the potential for U.S. energy exports from our neighbors in the hemisphereI believe we can do so much more on the energy front. The Western Hemisphere is home to nearly a third of the world’s oil and the region has nearly 337 billion barrels of estimated recovery in oil, and 20 percent of the world’s proven oil reserves.

The abundance of U.S. reserves in oil and natural gas and shale gas resources, the capability to export, liquefy and compress natural gas and the administration’s recent announcement of offshore drilling in the Atlantic, the U.S. has many reasons to partner with like-minded countries who seek to spur economic growth, achieve energy security, and reduce energy cost.

In the 113th Congress, I authored legislation to implement the Outer Continental Shelf Trans Boundary Hydrocarbon Agreement between Mexico and the United States.

Venezuela’s dire situation, resulting impact on its Petrocaribe program, has caused 18 Central American and Caribbean nations that receive its oil on preferential terms to look elsewhere for energy security. The U.S. is a natural partner for these policies.

On January 27th, the ranking member and I co-hosted an event with Members of Congress and Caribbean leaders who were in Washington for the Caribbean Energy Security Summit. We discussed ways to deepen energy cooperation to assist Caribbean nations in achieving energy security. Given current circumstances and the additional potential for offshore resources—resource exploration that Aruba, the Bahamas, the Dominican Republic and Trinidad are considering, U.S. businesses have a significant opportunity to engage.

Similarly, the potential for cooperation with Canada through the Keystone Pipeline and Mexico’s energy sector reforms could truly take us a long way toward becoming North American energy independent if we work together to achieve that goal. Likewise, energy opportunities in Argentina, Brazil, Colombia, and Peru could also make our hemisphere even more energy independent.

I remain deeply concerned about Iran’s actions in the Western Hemisphere with evidence of a growing presence of China, North Korea, and Russia here in the Americas. We must remain ever vigilant.

While our attention is often captivated by events in Asia, Europe, the Middle East, and North Africa, I do not believe that crises and firefighting should determine the level of a region’s priority for the United States. I have travelled extensively in the region—Argentina, Brazil, Canada, Colombia, Mexico, Paraguay and Peru both in my private life and also through official duties.

I also firmly believe that U.S. should pay more attention to countries in the Western Hemisphere. These countries by virtue of proximity, trade, travel or culture have the ability to truly influence the United States and our lack of focus on issues right here in our own neighborhood is a disservice to the American people and to our committed partners within the region.

U.S. disengagement, evidenced by unsustained U.S. attention and tactical rather than strategic approaches in the region, has enabled other actors to step into the vacuum of leadership. While countries in the Western Hemisphere do not experience the same level of chronic instability as others around the globe, this region is unique by virtue of its geography. With no ocean separating the Americas, both threats and opportunities in Canada, the Caribbean, and Latin America have a greater potential to impact the United States homeland and the American people as well as American businesses. Therefore, we must remain vigilant and truly engaged.

Over 68,000 unaccompanied children crossed the U.S.-Mexico border last summer. This subcommittee will work to keep the administration accountable to securing the U.S.-Mexico border and preventing a second surge of migrants from Central America through wise use of American tax dollars.

Since coming to Congress in 2011, I have had 3 simple priorities summarized by the acronym JEFF—create jobs for the American people, promote U.S. energy security and exports and return to the wisdom of our Founding Fathers.  I believe that we must recall the wisdom of our Founding Fathers. In 1793, George Washington warned a young America that a reputation of weakness could lead to a loss of America’s rank among nations and that if we desire to secure peace it must be known that we are at all times ready for war.

Albio Sires, New Jersey.  In 2015, Mexican President Enrique Pena Nieto was the first leader—the first head of state to visit Washington. With oil prices falling and the economies of oil-exporting nations like Venezuela hurting, the U.S. hosted a Caribbean energy summit that could help the region diversify their dependence from Petrocaribe.

In spite of an increasing Chinese presence, U.S. trade with the region was more than 3 times that of China in 2013. Canada is our number one trading partner and Mexico is a close third. Today, we are witnessing a global economic adjustment with a decline in oil and commodity prices. China’s economy is cooling and with it is demand for natural resources from key markets in South America.

Ron DeSantis, Florida. We have some important things that we need to tackle, most recently with what the administration has done with Cuba policy. Here you have a regime that was really struggling with their patrons in Moscow and Caracas, roiled by lower energy prices, and this is essentially a unilateral concession, a huge lifeline to the Castro government. I think it was a major mistake. We worked very hard on this committee last Congress to stand up for the people in Venezuela who were chafing under the Maduro regime. I think the administration has had a tepid response to that. Finally, there has been some action taken in the last few days but I think we have got to unequivocally stand with those freedom fighters in Venezuela.

And finally, we do have to be concerned with the rise of rogue state actors in our hemisphere and we have seen that with Iran. We have seen it with North Korea and we also have, of course, rival states like Russia and China who are seeking to have a foothold here.

Shannon K. O’Neil, PhD, senior fellow for Latin America studies, Council on Foreign Relations 

Home to nearly 500 million people living in three vibrant democracies, North America today is an economic global powerhouse. At over $20 trillion, the three nations of Canada, Mexico, and the United States account for over a quarter of global GDP.

I want to talk about two opportunities in particular that stand out for areas of cooperation and these are energy and economic competitiveness. Starting with energy—never before have the energy prospects of these three nations been so dynamic as they have been transformed by new energy finds in the three nations, by new technologies and by new rules, particularly in Mexico, that are together unleashing an unanticipated potential. An increasing energy production so far has brought jobs, it has boosted economic growth and it has lowered prices for industrial and individual consumers in all three nations. Now, as each of these 3 countries undergo their own changes and transformations, energy should become a fundamental pillar for the North American partnership. Greater regional cooperation and integration will boost economic, geopolitical, and environmental benefits for these three nations. To truly harness North America’s energy promise, the United States should work closely with its neighbors to integrate North America’s energy markets. So this will involve significant investment in resources, in cross border infrastructure and electricity grids, so physically linking North America’s energy fields, refineries and markets. It will also mean developing regional energy strategies and environmental standards, coordinating on issues such as regulations, safety procedures, energy efficiency guidelines and technologies for lower carbon energy.

Over the past two decades North America’s economic ties have deepened dramatically by virtually all measures. Today, each of these nations is the others’ largest trading partners with intra-regional trade of over $1 trillion a year, and as important is the changed nature of this trade, reflecting the rise of a truly regional production platform. So rather than sending each other finished products the United States, Mexico and Canada today trade in pieces and parts. So this back and forth along assembly lines, between plants and between these countries in the making of every car, every plane, every flat screen TV or computer it means for every item that is imported from Mexico to the United States, 40% of its value on average, was actually made in the United States and for Canada the number is 25%.

It also means prioritizing and completing free trade agreements with which the United States, Canada, and Mexico are all part, specifically today the Trans-Pacific Partnership, and it should mean incorporating our North American neighbors and other free trade agreements we consider including the Trans-Atlantic Trade and Investment Partnership, or TTIP, with Europe. Now, the costs of not engaging our neighbors are even higher than they have been in the past. In a world of regional blocs, deepening U.S. ties with its economic allies and particularly its neighbors will help maintain our national competitiveness, and America’s dream of energy self-sufficiency depends, too, on its neighbors, on linking energy and electricity grids to ensure safe, stable and resilient supplies.

Bonnie Glick, Senior VP, Global Connect division, Meridian International Center

Colombia’s oil giant, Ecopetrol, is a company that is well managed with revenues of nearly $38 billion. The current downturn in oil prices has certainly impacted Ecopetrol, but its asset base and reserves will allow it to weather the economic storm.

Brazil has the largest offshore oil discovery on Earth. The deep water offshore exploration and production will continue and expand in the decades to come. Brazil’s oil industry, with the opportunities for investment by American oil companies, means that U.S. oil can diversify their holdings and can weather global economic storms with less risk.

Chile remains a financial and mining industry giant in the region, but the newly returned presidency of Michelle Bachelet has many an industry seeing the return of more socialist tendencies that are less business friendly. The new tax regime will be the first test of the global business community’s patience with Chile.

I wish to highlight the four challenges in Latin America and the Caribbean—organized crime, Russia, Islamic radicalism, and China. The passage of drugs, immigrants, and illicit goods through the region to the United States continues to fuel criminal organizations, deepening the crisis violence and the lack of opportunity in those societies. El Salvador’s facilitation of a truce between Mara Salvatrucha and Barrio 18 in 2012 and the Guatemalan President Otto Perez Molina’s appeal to legalize drugs to reduce the violence and criminality in his country shows just how desperate the situation has become. Trans-Pacific crime also merits more attention. Recent examples include the sourcing of precursor chemicals by the Sinaloa cartel from Chinese mafias, metal ore shipments to China from cartelcontrolled parts of Michoacan and the use of Chinese banks to launder money by the Brazilian gang First Capital Command.

Evan Ellis, Ph.D. Author. Russia is the external actor which has most openly challenged the United States in Latin America. Since 2008, it has repeatedly deployed military aircraft, warships, and submarines close to the United States including three port calls in Havana by the signals intelligence ship Viktor Leonov most recently on January 20th, the day before our U.S. Government team headed toward Havana to meet with Cuban officials. Russia’s defense minister, Sergei Shoigu, said last February that his country seeks to resupply and maintain its warships in Nicaragua, Cuba, and Venezuela; to operate its military aircraft from their airfields, and possibly to reopen the Cold War era surveillance facility at Lourdes, Cuba. Last November, Minister Shoigu further said that Russia would send long-range bombers to fly patrols near the U.S. including in the Caribbean and the Gulf of Mexico.

Latin America is also a source of terrorist financing including the narco trafficker Chekry Harb and the money launderer Ayman Joumaa, who channeled part of their drug earnings to Hezbollah and other terrorist organizations. Terrorists also conduct operations in the region. Just 3 months ago, for example, Hezbollah operative Muamad Amadar was arrested near Lima, Peru, stockpiling explosives for use in that country.

China—the PRC has most significantly impacted the region’s security environment although not openly challenging the United States. Of the more than $100 billion it has loaned to the region since 2005, three-quarters of that have gone to the ALBA regimes in Argentina, helping to keep governments like Venezuela’s solvent so that they could continue to operate as bases for criminals and as entry points for other actors who would do us harm. China has also chosen CELAC, which excludes the United States and Canada, rather than the Organization of American States as its preferred vehicle for building its relationships with the region.

The PRC has expanded its military activities in Latin America, undermining U.S. efforts to remain the security partner of choice. In October 2013, while Washington was distracted by the budget crisis, a PLA naval flotilla for the first time conducted combat exercises with our allies in Chile as well as with Brazil. Chinese companies sell military aircraft, helicopters, satellites, trucks and armored vehicles to both U.S. partners and its adversaries in the region and possibly sales to Argentina of the FC–1 fighter, the P–18 Corvette, the X–11 helicopter and the V–1 armored personnel carrier.

Eric Farnsworth, VP, Council of the Americas and Americas society. 

I would submit to you today that strategic U.S. interests in the Western Hemisphere are as profound as our interests almost anywhere else on the globe. The region is directly connected to our own day to day well-being from economic prosperity and growth to national and energy security


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