Ruminations of a Taco-Obsessed Philly Native

Since coming into office, President Donald Trump has been making rumblings about the North American Free Trade Agreement, commonly known as NAFTA. The President has suggested everything from getting rid of NAFTA completely to renegotiating key terms of the pact.It has industry leaders in various sectors of the economy on edge, including those in the gas, oil and exploration industries. That includes Talos Energy officials. Talos is based in Houston, Texas, and explores for oil in the Gulf of Mexico. Talos experts believe energy production will be the key that will keep NAFTA trading partners together.

The bottom line is this: Talos Energy and most energy companies think it’s in the best interests of all NAFTA parties to simply make no changes at all. Since NAFTA was enacted in 1994, the flow of energy between the three signatories – Canada, Mexico and the United States – has created a condition of maximum success for all. Especially in terms of energy, NAFTA has clearly been a win-win-win situation.That’s not to say the energy landscape hasn’t changed dramatically in the past decade. Energy production in the U.S. has soared, thanks to advances in hydraulic fracturing and horizontal drilling. America is now the world’s second largest producer of oil. It is among the top producers of natural gas.

While American energy booms, Mexico’s energy sector has been struggling. Even though Mexico is an oil-rich country, its output has actually gone down in recent years. Canada has been dealing with similar production problems. All this means that the U.S. enjoys a position of strength in the NAFTA arrangement as it is.The prospects for Mexico are looking up, however. In fact, Talos Energy recently partnered with Mexico and a British energy company to become the first foreign entity to drill for oil in Mexican territory in more than 80 years. Mexico nationalized its oil industry in 1938, but allowed Talos and it British partner in to explore for oil for the first time in 2017.If Mexico starts producing more oil, NAFTA – in its current form – becomes more important than ever.