We need more energy markets, not fewer
Oklahoma’s energy blessings far exceed our own state’s needs and demand, which is why we have long sought markets beyond our borders.
We typically export our state’s largest commodities, especially natural gas, and we have become optimistic about global markets opening up to help take some of the massive over-supply that the American shale renaissance has helped create. A fight with our neighbors in Mexico is not good for Oklahoma, our economy or the promise of moving past the current recession that has gripped our state.
Since 2009 to now, U.S. pipeline exports of natural gas everywhere have doubled and almost all of that growth has been from exports from the U.S. to Mexico. In fact, since 2015, Mexico accounts for more than one-half of all U.S. exports of natural gas. Daily average pipeline exports now exceed 3.5 billion cubic feet per day, which is 85 percent above the previous five-year-period average, according to the U.S. Energy Information Administration.
Much of Mexico’s growth in natural gas consumption has been attributed to the growth in Mexico’s domestic electricity demand and the fact that Mexico, like the United States, has been choosing cleaner-burning natural gas for its power plants. Northern Mexico is particularly growing and the demand is expected to continue. In fact, Mexico announced in 2015 a five-year plan to significantly increase its pipeline infrastructure with 12 new pipelines over 3,200 miles, to allow for greater importation of American natural gas for its energy needs. As of today, contracts have been awarded on seven of the 12 pipelines, including a 2.6-billion-cubic-feet-per-day capacity pipe from southern Texas to Mexican states along the Gulf of Mexico.
We should want these markets to grow and we should want this infrastructure to access the massive supply available here in America. Those two things can directly benefit Oklahoma and the many producers who call Oklahoma home, regardless of where they produce.
This month USA Today ran an article that described how “six of the eight top oil-pumping states hit recession,” and the article quoted S&P saying about Oklahoma, “even modest economic softness could have prolonged negative effects.”
We already know that our state budget and economy are in peril because of the massive downturn in oil and gas commodity prices, which have led to serious drops in tax revenues. It is suggested that the 2018 budget will be off another 12.6 percent less spending capacity from even this year’s reduced budget.
Now is not the time to play political games with a neighbor and customer that accounts for such significant growth in our ability to export American and Oklahoma energies. Our economy and our national security are both better served by growing foreign markets for American goods.
Or as President Ronald Reagan said on May 16, 1987: “We should be trying to foster the growth of two-way trade, not trying to put up roadblocks, to open foreign markets, not close our own.”
Let’s throw that idea up against the proverbial “wall” and see what sticks today.
Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.