President Donald Trump disagreed with executives of major oil and gas companies Thursday about the importance of keeping binding dispute settlement procedures in a renegotiated North American Free Trade Agreement, according to a person familiar with the discussion.
“Without that protection, you look at future investments in Mexico very differently and you may decide that because of that added risk you’re not willing to make those investments,” said Dennis Arriola, an executive vice president of Sempra Energy, which owns natural gas facilities and renewable power assets in Mexico. Arriola did not attend the White House meeting.
A White House representative did not immediately respond to questions about Trump’s Nafta comments, but the administration said in a statement that the president “met with members of the American Petroleum Institute to discuss the important role natural resources play in our energy sector.”
The petroleum institute said in an emailed statement that members of its executive committee used the meeting to highlight “a host of the industry’s priority issues, including the importance of trade policies that recognize the integrated nature of North American and global markets.”
Pipeline Exception?
The meeting came a week after Trump decided to slap a 25 percent levy on steel imports, and a 10 percent tariff on aluminum. Pipeline companies that rely on special grades and types of steel not made in the U.S. plan to ask the Trump administration for an exception.
But targeted relief for pipeline operators wouldn’t directly help oil companies that focus on extracting crude or the companies seeking to liquefy natural gas so it can be shipped on tankers around the world. Analysts say the tariffs will increase the cost of wells, raising the break-even price for extracting oil and gas from dense rock formations nationwide.
The executives in Thursday’s meeting represented the nation’s biggest oil companies. Among them: Darren Woods of Exxon Mobil Corp., John Minge of BP Plc., Mike Wirth of Chevron Corp. and Al Walker of Anadarko Petroleum Corp.
Nafta was a focus of the discussion. The oil industry leaders outlined their support for the accord and highlighted the country’s extensive energy trade with Canada and Mexico. Mexico accounts for 60 percent of total U.S. natural gas exports and is the largest export destination for U.S. petroleum products.
Some industry leaders have emphasized a virtuous cycle, where investment in Mexico’s energy infrastructure helps build demand in the country for U.S. oil and gas.
“If we’re not building infrastructure and the future there, somebody else is going to,” Arriola said. “And if somebody else does, they’re probably going to be selling their services and products and commodities into the market.”
