Christie In Mexico: Approve Keystone Pipeline Now

Excerpts from New Jersey Governor Chris Christie's remarks in Mexico yesterday:

“Mexico and the United States have a special relationship. If world events over this summer of turmoil have taught us anything, it is the tremendous benefits of having as a neighbor a key and friendly partner with whom we share an extensive trade relationship and a deeply shared cultural heritage. Today, here and now, we should add to the long list of blessings jointly shared by the U.S. and Mexico by taking full advantage of the tremendous economic opportunity ahead of us.

“It is striking in looking at events around the world, with turmoil throughout much of the Middle East, with Europe struggling to generate economic growth coming out of the recession, to consider, perhaps as a model, what we are trying to build here in North America.

“We are, as I said, fortunate to be in a peaceful neighborhood – blessed by strong, deep, and cooperative relations with the governments and more importantly the peoples of both Mexico and Canada.

“But beyond that, we have together created a model that features deep economic and cultural integration, while still respecting national sovereignty.

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“Too often, our neighbors in Mexico and Canada have felt that they were an afterthought in U.S. foreign policy – my view is that they should be our first thought.

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“So today, I would like to speak to you about the North American energy renaissance, and what I believe must be done to allow it to reach its full potential.

“In the United States, new technology – especially advances in directional drilling and hydraulic fracturing – have radically changed our energy picture.

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“Here in Mexico, the energy picture is also poised for dramatic change, because of the historic reforms launched by President Peña Nieto. While oil production has fallen over the last decade, these dramatic reforms have the potential to unleash a wave of capital investment in Mexico’s energy sector.

“The president’s concept of allowing Pemex to enter into commercial contracts, while preserving and respecting Mexico’s historical ownership of subsurface assets; to open up the mid- and downstream segments to investment; and to reform the electricity sector and CFE, have the potential to attract both tens of billions of dollars and new technology.

“I believe that the result will be to modernize Mexico’s infrastructure and production technologies, to better tap the potential that exists in deepwater, in mature oil fields, in heavy oil, and perhaps in the future in shale – and at the end of the day to increase production and create jobs in Mexico. At the same time, increased investment in midstream infrastructure can bring more U.S. gas to Mexico, reduce electric power costs, and contribute to the growth of manufacturing jobs.

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“For make no mistake: the dramatic change in the energy landscape in North America has made all of us better off and will continue to do so.

“For the United States, it means that our country now produces domestically 84% of the energy it uses, up from 69% just nine years ago.

“It has changed the strategic equation, making our continent less vulnerable to imports from the Middle East or unstable sources elsewhere.

“For both the U.S. and Mexican economies, the production boom in gas and associated lower costs have contributed to “re-shoring,” a return of manufacturing jobs that had been migrating to Asia before.

“For all of North America, the energy revolution has improved our strategic and competitive position.

“But the revolution remains in its infancy. And whether North America realizes the full potential of its energy opportunity will be the result of more than just luck and natural bounty, it will also be driven by the policy choices and investments we must make.

“So let me turn to those things we must do to make the renaissance a reality.

“First, to fully realize the potential of the North American energy renaissance, all three countries will need to significantly ramp up investment in infrastructure.

“Here in Mexico, I know the government has pledged to do this in its five-year plan – encompassing not only energy but roads, railways, and telecommunications as well. Under the plan, the energy sector alone is targeted for a quarter-trillion dollars of new infrastructure investment.

“But the need to invest in infrastructure, in particular pipeline infrastructure – and to clear regulatory and political impediments to its construction – is not confined to Mexico.

“In the United States, we have over 2.2 million miles of pipelines. The safety of these pipelines is demonstrated; and their necessity to get product to market is not debatable. Canada, too, has tens of thousands of miles of pipelines with a 99.99% safety record.

“My view is that we are missing an enormous opportunity when we delay development of the Keystone XL Pipeline. Not only is Keystone a major job creator, delays in its approval sends an unfortunate signal on multiple fronts.

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“Approving Keystone would actually drive down the price of oil and help consumers in all North American countries. It should be done today.

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“With respect to Mexico, a forward-looking American infrastructure strategy would also prioritize the approval of natural gas pipelines bringing product to Mexico. There is a strong likelihood in the wake of Mexico’s reforms of increased Mexican demand for U.S. gas. Fast tracking this infrastructure can grow the U.S. gas trade with Mexico, to the benefit of both countries. A recent report by the Atlantic Council makes this point clearly.

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“A second key step to help realize our energy potential would be to open the global market for United States crude and take steps to develop and promote the capacity for LNG exports from the United States.

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“The long-term benefits of open markets for U.S. Energy exports are also worth considering in light of the response, particularly in Europe, to Russian aggression in the Ukraine. In the short and even medium term, Europe will remain heavily dependent on imported Russian gas and energy. But in the long term, the strategic value of reducing this dependence is now clearer than ever.

“A third component of a strategy to harness the benefits of the North American energy renaissance is not to radically limit those benefits through foolish regulation.

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“The gas industry must also do its part – on the one hand, ensuring the proper handling of the chemicals used in fracturing, minimizing surface disturbance, ensuring well integrity, and disposing of and recycling water in an intelligent and safe way. And on the other, continuing to measure and ultimately capture methane emissions from oil and gas production in a cost-effective way.

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“So we must recommit to the integration process and work to adopt new policies that will harmonize regulations, improve the efficiency of supply chains, and work toward a more smoothly functioning and ultimately cost-effective energy supply network across borders on this continent. This is the path to increased competitiveness, enhanced economic growth, and greater job creation in all three countries – Canada, Mexico, and the U.S.”