Congressman Gonzalez Leads Letter to President Trump on Barriers to Market Access for U.S. Energy Companies in Mexico

WASHINGTON – Today, Congressman Vicente Gonzalez (TX-15) and Senator John Cornyn (R-TX) sent a bipartisan, bicameral letter to President Donald Trump to raise awareness about Mexico’s efforts to undermine the U.S.-Mexico-Canada Agreement (USMCA) and substantial U.S. investments in energy infrastructure on both sides of the border. It has been widely reported that the Mexican government is giving preferential regulatory treatment to Petróleos Mexicanos (PEMEX) to the detriment of U.S. operators.

A recently leaked memo from the President of Mexico directs Mexican authorities to use all available resources within its regulatory framework to protect PEMEX and the Comisión Federal de Electricidad (CFE).

In response, the bipartisan Members of Congress have called on the President to resolve this issue: “These efforts violate and contradict the spirit, if not the letter, of the USMCA, an agreement among whose primary objectives are to promote growth among the participant countries. Therefore, we are deeply concerned that these actions demonstrate a pattern of obstruction and urge you to find a resolution with the Government of Mexico to keep the current market conditions that the Energy Reform regulatory framework provides, along with certainty and fairness for U.S. companies operating and competing in Mexico.”

In addition to Congressman Gonzalez and Senator Cornyn, the letter was signed by Senators Bill Cassidy (R-LA), Ted Cruz (R-TX), James M. Inhofe (R-OK), James Lankford (R-OK), and John Kennedy (R-LA) and Representatives Filemon Vela (TX-34), Will Hurd (TX-23), Robert E. Latta (OH-05), Bruce Westerman (AR-4), Jim Costa (CA-16), K. Michael Conaway (TX-11), David Schweikert (AZ-6), Henry Cuellar (TX-28), Xochitl Torres Small (NM-2), Michael Burgess (TX-26), Pete Olson (TX-22), J. Luis Correa (CA-46), Marc Veasey (TX-33), Kelly Armstrong (ND-AL), Garret Graves (LA-6), Randy Weber (TX-14), Roger Williams (TX-25), Ken Calvert (CA-42), Brian Babin (TX-36), Veronica Escobar (TX-16), Carol D. Miller (WV-3), Chip Roy (TX-21), Lizzie Fletcher (TX-7), Kevin Hern (OK-1), Kendra Horn (OK-5), Jeff Duncan (SC-3), Guy Reschenthaler (PA-14), Jodey Arrington (TX-19), Kevin McCarthy (CA-23), Steve Scalise (LA-1), Jackie Walorski (IN-2), Michael Cloud (TX-27), Bill Flores (TX-17), Eddie Bernice Johnson (TX-30), Colin Allred (TX-32), and Lance Gooden (TX-5).

 The letter can be found here and below.

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Dear Mr. President,

We write today to bring to your attention concerning actions by the Government of Mexico that threaten U.S. energy companies’ investment and market access and undermine the spirit of the United States-Mexico-Canada Agreement (USMCA).

As you know, Mexico is the largest export market for U.S. petroleum products and is a growing market for natural gas exports. In fact, U.S. exports of refined products to Mexico have tripled over the past decade. An integrated North American energy market benefits U.S. fuel manufacturers, workers, and ultimately Mexican consumers.

Following Mexico’s 2014 constitutional reforms allowing private participation in the Mexican energy sector, U.S. companies invested billions of dollars to develop energy infrastructure in Mexico and in the United States to import fuel from our refineries to satisfy Mexican demand. These investments resulted in positive factors, such as infrastructure development and employment generation on both sides of the border.

Despite this progress, recent reports indicate that the Mexican government is providing preferential regulatory treatment for Petróleos Mexicanos (PEMEX) and delaying or cancelling outright permits for U.S. energy companies. These anecdotal experiences have recently been given additional credence by a leaked memo from the President of Mexico, Andres Manuel Lopez Obrador, directing Mexican authorities to use all available resources within the regulatory framework to protect PEMEX and the Comisión Federal de Electricidad (CFE). Additionally, members of the governing party, MORENA, have presented constitutional initiatives that would roll back the historic 2014 Energy Reform and seek to relinquish all contracts currently in force.

These efforts violate and contradict the spirit, if not the letter, of the USMCA, an agreement among whose primary objectives are to promote growth among the participant countries. Therefore, we are deeply concerned that these actions demonstrate a pattern of obstruction and urge you to find a resolution with the Government of Mexico to keep the current market conditions that the EnergyReform regulatory framework provides, along with certainty and fairness for U.S. companies operating and competing in Mexico.

We appreciate your consideration of this request.

Sincerely,

/S/