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 WASHINGTON, Oct. 5 /PRNewswire/ -- As the debate over the North American Free Trade Agreement (NAFTA) continues in Washington and throughout the country, the Natural Gas Supply Association (NGSA) has renewed its call for NAFTA approval. Following are NAFTA's positives and negatives, as seen by the companies that produce and market 90 percent of domestic natural gas:
 The Positives
 -- NAFTA gives U.S. companies increased rights and increased benefits in Mexican exploration and production contracts. Today's limited participation in arrangements like contract well drilling will be replaced with negotiated incentive bonuses that mimic ownership rights.
 -- NAFTA gives U.S. customers the perception that there are increased resources to draw on. The expanded resources of the entire continent counter the image of U.S. shortages in the 1970s.
 -- The price regulation agreements in NAFTA prohibit any of the three participating governments from imposing minimum or maximum export or import prices on natural gas. Also, suppliers will be able to negotiate the price for the sale of natural gas with the consumer; PEMEX, the state-owned petroleum company, will no longer be the only potential Mexican customer for U.S. companies.
 -- The agreement will open all North American government procurement contracts to U.S. bidders. This is significant for companies interested in entering technology agreements or that have equipment subsidiaries.
 -- U.S. companies will be able to increase natural gas exports to Mexico, at least in the short term. Markets should be readily available as Mexican companies convert to cleaner fuels as a way to improve local air quality.
 -- NAFTA promotes closer ties between U.S. and Mexican companies in secondary markets. By relaxing restrictions in petrochemicals, permitting U.S. and Canadian investments in Mexican electricity production facilities, and fostering technology agreements and exploration partnerships, NAFTA invites increased communication that can gradually build stronger relationships between all North American companies.
 The Negatives
 -- U.S. corporations will not be able to exercise ownership rights to Mexican natural gas resources. Thus, the close ties between U.S. and Canadian companies will not be available between U.S. and Mexican companies.
 -- The proposed treaty does not contain an energy security arrangement.
 Comments on NAFTA by Robert Hauptfuhrer, chairman and CEO of Oryx Energy and chairman of NGSA:
 "Free trade can be difficult for all competitors. We have only to look at the tensions Canadian natural gas caused over the last few years, when U.S. producers experienced a surplus. But the positives far outweigh the negatives.
 "NAFTA is a promising first step toward a North American gas market. It will prohibit any of the signatories from imposing minimum or maximum export or import prices on natural gas. And it offers the promise of increased exports of gas to Mexico, at least for the short term.
 "Longer term, the new corporate relationships that can be put into place under NAFTA should foster trust and should lead to further relaxation of current restrictions.
 "The fate of the North American gas market is not wholly dependent on NAFTA. The process of forming the agreement was valuable in itself. It demonstrated to industry leaders in both Mexico and the United States that we already had a lot of common ground.
 "Many in the industry are cautiously optimistic about the improving trade relationships with the Mexicans. Granted, it will take the industry some time to heal old wounds of the past. But a number of companies are committed to doing just that. In fact, they've already begun."
 The Natural Gas Supply Association represents companies that produce and market over 90 percent of the domestic natural gas consumed annually. Established in 1965, NGSA encourages expanded use of natural gas and a regulatory climate that fosters competitive markets.
 -0- 10/5/93
 /CONTACT: Charlotte LeGates of the Natural Gas Supply Association, 202-452-6546 or, home, 202-775-2632/

CO: Natural Gas Supply Association ST: District of Columbia IN: OIL SU: EXE

MH-IH -- DC003 -- 8732 10/05/93 09:22 EDT
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Publication:PR Newswire
Date:Oct 5, 1993

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