House panel begins US-Mexico trans-boundary treaty discussions

Congressional approval of the 2012 US-Mexico Trans-Boundary Hydrocarbons Treaty would produce significant benefits for both countries, witnesses told a US House Natural Resources subcommittee.

The Energy and Minerals Subcommittee on Apr. 25 examined legislation to accomplish that.

“We are encouraged by the accelerating pace of interest and movement on implementing this agreement,” Carlos Pasqual, special envoy and coordinator for international energy affairs at the US Department of State, told the subcommittee.

He said that HR 1613, which committee member Jeff Duncan (R-SC) introduced a day earlier, would provide “a much needed mechanism to facilitate the responsible and efficient exploration and development of hydrocarbon resources along the US–Mexico maritime boundary.

“As many House Members have stated, it is a ‘win-win’ for the United States and Mexico, and also a winner for North American energy security because it fosters stronger relationships in the development of our shared energy resources,” Pasqual said.

Tommy P. Beaudreau, acting assistant US Interior secretary for land and minerals management, said the bill would make nearly 1.5 million offshore acres now under moratorium under the 1997 Western Gap Treaty available immediately available for leasing.

It also would amend the federal Outer Continental Shelf Lands Act by giving the US Interior secretary power to implement the trans-boundary agreement’s terms, and authority to implement any future trans-boundary hydrocarbons agreement’s terms and establish an approval process for approving such agreements, he noted.

Measure could boost E&D

Beaudreau called the bill “a much-needed mechanism to facilitate the responsible and efficient exploration and development of hydrocarbon resources along the US-Mexico maritime boundary.”

He said it would provide opportunities for US companies. The treaty also provides incentives for Petroleos Mexicanos, Mexico’s national oil company, and US-qualified operators to enter into voluntary commercial agreements to unitize trans-boundary reservoirs, but does not change existing laws or alter current standards, he said.

DOI’s two agencies that regulate offshore oil and gas activity—the US Bureau of Ocean Energy Management, and the US Bureau of Safety and Environmental Enforcement—would assume their respective responsibilities to implement the agreement as authorized, he added.

US Rep. Doug Lamborn (R-Colo.), the subcommittee’s chairman, said the agreement would be a rare opportunity to expand US energy production, create new US jobs, and help grow the economy grow by opening areas for offshore oil and gas development.

Lamborn also said he was disappointed that the Obama administration took more than 1 year since the treaty was signed to transmit something to Congress for consideration.

“We must approach this hearing remembering that approval of this agreement sets an important precedent for similar trans-boundary hydrocarbon agreements we may arrive at with other nations,” Lamborn said. “It is important that we get it right.”

Rep. Rush D. Holt (D-NJ), the subcommittee’s ranking minority member, said Democrats generally support approving the treaty, but added they would like to similar attention given to increasing offshore oil spill liability limits and fines.

API: HR 1613 provides ‘legal certainty’

Three witnesses on a second panel also supported HR 1613, while a fourth expressed qualified approval.

Erik Milito, the American Petroleum Institute’s upstream and industry operations group director, said, “Importantly, this agreement will provide legal certainty to US companies, which will encourage them to invest in new energy development, creating jobs and spurring economic growth.”

The bill also would exempt any related oil and gas development activities in the trans-boundary area from resource extraction reporting requirements under Section 13(q) of the Exchange Act, he continued.

The provision requires companies which the US Securities and Exchange Commission regulates to report payments to foreign governments, sub-national governments, and the federal government on a project-by-project basis, Milito said. API believes the rule puts US companies at a disadvantage to their foreign competitors and should be vacated, he added.

Daniel R. Simmons, regulatory and state affairs director at the Institute for Energy Research, said the treaty’s Article 20 potentially could create a conflict with Section 13(q) if Mexican confidentiality requirements forbid disclosure of such information.

“Because much of the trans-boundary area is deepwater, it would require multi-billion dollar investments to produce the hydrocarbon resources,” he observed. “Any legal uncertainty brought about by disclosure law could easily dissuade American companies from undertaking what is already an expensive decision, in turn reducing opportunities for new jobs for Americans.”

Trans-boundary vs. Law of Sea

Steven Groves, a senior research fellow at the Heritage Foundation, sand the trans-boundary hydrocarbons agreement would be better than the Law of the Sea Treaty, which also awaits congressional ratification, because it’s designed to promote, instead of compel, cooperation between Mexico and the US.

“There is hope within the petroleum industry that the agreement could also lead to needed reforms in Mexico,” he said. “Its dispute resolution procedures are designed to stimulate, rather than stymie, development of trans-boundary reservoirs.”

Athan Manuel, lands protection program director at the Sierra Club, said the environmental organization has mixed feelings about both the bill and the treaty. “We support the idea of increased inspection of rigs operating in US waters. However, we do not support the expansion of drilling into new areas,” he explained.

The Sierra Club also supports energy projects which create new jobs, but believes jobs from renewable energy technology development and increased energy efficiency would be more beneficial than fossil fuel industry employment, he added.

Manuel said the group approves of reforms Salazar instituted at the US Department of the Interior following the Macondo deepwater well accident and blowout in 2010, but is concerned that BOEM and BSEE won’t have adequate funding to do a good job because of pressure to reduce federal government costs. API wrote a letter to the Obama administration expressing similar concerns, Milito said.

Contact Nick Snow at nicks@pennwell.com

Related Articles

EPA suggests DOS reconsider Keystone XL climate impact conclusions

02/03/2015 The US Department of State might want to reconsider its conclusions regarding potential climate impacts from the proposed Keystone XL crude oil pip...

Obama’s proposed fiscal 2016 budget recycles oil tax increases

02/02/2015 US President Barack Obama has proposed his federal budget for fiscal 2016 that he said was designed to help a beleaguered middle class take advanta...

So much for cooperation

02/02/2015 Congressional majority leaders and the Obama administration came into 2015 pledging to at least try to be less combative and more cooperative in ru...

Woodside gets NEB approval for British Columbia LNG exports

02/02/2015 Woodside Energy Holdings Pty. Ltd. has received approval from Canada’s National Energy Board on its application for a 25-year natural gas export li...

Data refute Lew's claims about taxes paid by producers

02/02/2015

On the subject of taxation, administration officials count on the public to believe anything.

Kerry expects to receive other agencies’ Keystone XL reports soon

02/02/2015 US Sec. of State John F. Kerry said he expects to receive other federal agencies and departments’ reports soon on the proposed Keystone XL crude oi...

Iran yields to Russia in talks over Caspian resources

02/02/2015 Iranian acquiescence to Russia, to which the Islamic Repubic increasingly turns in response to pressure from the West, has become a standard featur...

US oil, gas industry eager to build on past successes

02/02/2015 The US oil and gas industry entered 2015 optimistically as a dramatically improved US supply outlook's economic and security benefits became increa...

The ANWR blitz

02/02/2015 Deception begins with a 58-sec video on the White House web site in which President Barack Obama says he'll ask Congress to make the whole Arctic N...
White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST



On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected