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Lay 1AC

Renewable Energies are “green technology” which can be used as a safe alternative to gasoline and electricity. Similar to electricity these renewable energies provide a safe and green alternative to this. Increased investment in Mexico’s Renewable Energy will prove to be advantageous in helping end the fight against poverty and prevent the horrible famine of the people in poverty of Mexico. To prevent these atrocities impacts we present the following plan:

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1AC – PlanThe United States federal government should substantially increase its investment in renewable energy production and cross-border electricity transmission infrastructure toward Mexico.

However there are several “roadblocks” in our process to implement this plan. We call these inherent barriers. Our inherent barriers are…

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Inherency

Mexico has a wealth of renewable energy resources available – but increased investment and coordination is essential to unlocking their full potentialWood 12 (Duncan Wood, 5/20/12 Department of International Affairs, Instituto Tecnológico Autónomo de México, Senior Advisor, Mexico Institute Renewable Energy Initiative, “RE-Energizing the Border: Renewable Energy, Green Jobs and Border Infrastructure Project,” Wilson Center, http://www.wilsoncenter.org/sites/default/files/RE_Energizing_Border_Wood.pdf)The potential for renewable energy (RE) development in Mexico has become a subject of growing interest inside and outside of the country in recent years. A number of important studies l ed by governments and academia2 have emphasized the incredible diversity and richness of renewable energy resources in Mexico and have called on business, government and civil society to work toward a more effective exploitation of this potential. In the north of the country, the issue of RE exports from Mexico to the United States has attracted interest from both the public and private sectors. Focused primarily on wind power generation in northern Baja California, it has become clear

that Mexico has natural endowments and structural factors (especially low land and labor costs) that make the

cross-border trade in RE an exciting and potentially highly profitable sector. Though significant barriers still

exist to the large-scale development of this potential, the effective coordination of efforts from both the private sector and governments operating at all levels (federal, state, municipal) would provide a much needed

boost. The U.S. and Mexican governments, both individually and jointly, have noted the possibilities for making a positive impact on the border through mutually beneficial RE projects. USAID-sponsored work, in conjunction with efforts from Mexico’s Secretaría de Energía (SENER), have identified investment opportunities in both geothermal and wind energy sectors for exporting clean energy to the Californian market, where unsatisfied demand for renewable energy exists thanks to the Renewable Portfolio Standard (which mandates one-third of California energy come from RE by 2020). The Border Governors Conference (BGC) has identified RE development as a central component of their Strategic Guidelines for the Competitive Sustainable Development of the United States-Mexico Transborder Region. Energy firms from the United States, Mexico and Europe are already involved in developing RE resources at

the border in the expectation that demand will continue to rise. There is an obvious interest in this work; what is lacking is a comprehensive strategy to both integrate these efforts and identify the most effective paths forward. Key stakeholders in the energy sector have suggested that a focus on renewable energy in the border region requires much more than a focus on the potential for exporting green energy to the United States. Instead, a more in-depth understanding of how renewable energy projects impact on the short, medium, and long-term prospects for development in local communities will improve the chances for sustainable growth in, and community support for, RE projects. Linking RE generation to economic development in Mexico requires a focus on value chain creation for providers and services. Information needs to flow from developers to universities and authorities to develop training and

certifications for technicians and engineers. Local enterprises have already responded to an expanding market, but with effective coordination, there is far greater potential.

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Energy Poverty Adv.

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1AC

Our first advantage is energy poverty. There are people in Mexico who do not receive sufficient energy in their lives. This leads to horrible conditions leading eventually to death of millions of innocent people. Fortunately plan solves, helping bring green tech to the poor. These cards state this fact let’s start with…

A) Mexico has massive renewable energy potential – but a lack development is contributing to “energy poverty” in rural areas

Robert Donnelly, 6/28/10, News Security Beat, "US-Mexico cooperation on renewable energy: building a green agenda," http://www.newsecuritybeat.org/2010/06/u-s-mexico-cooperation-on-renewable-energy-building-a-green-agenda/#.Uc0T9vbwJV4

Mexico has large untapped areas of geothermal, wind, and solar potential , according to Duncan Wood, author of the Wilson Center report and chair of the Department of International Relations at the Instituto Tecnologico Autonomo de Mexico (ITAM).

Already, the country is the world’s third-largest producer of geothermal energ y, and has large geothermal deposits

in Baja California near major U.S. markets, such as San Diego and Los Angeles.¶ Mexico also offers great promise in wind power, with an estimated potential output of 1,800 to 2,400 megawatts for Baja California and 5,000 megawatts for southern Oaxaca state. Though Oaxaca is far from the U.S. border, it will soon be able to export electricity to U.S. markets, once Mexico’s mainland electrical grid is

connected to the United States.¶ Wood also pointed out that Mexico is rich in solar energy , which could be marketed to the United States—particularly from the Baja California peninsula, which is the only part of the Mexican grid currently connected the United States. In biomass, he added, little investment has been made so far.¶ Opening New Avenues for Collaboration¶ With Mexico’s oil fields experiencing long-term and, in some cases, precipitous declines, the country is plotting a “future as a green nation,” shifting its policy focus toward alternative energy development, said Wood. In addition, Mexico’s renewable sector does have not the blanket prohibitions on private ventures that exist in the hydrocarbons sector, and regulatory adjustments over the past few administrations have enabled a more robust private stake in electricity generation and transmission.¶ A U.S.-Mexico taskforce on renewables was recently formed—an announcement timed to coincide with President Felipe Calderon’s April 2010 state visit to Washington—and there has been high-level engagement on the issue by both administrations. Collaboration between Mexico and U.S. government agencies through the Mexico Renewable Energy Program has enabled richer development of Mexico’s renewable resources while promoting the electrification and economic development of parts of rural Mexico.¶ Joe Dukert, an independent energy analyst affiliated with the Center for Strategic & International Studies, pointed out that U.S.-Mexico collaboration on renewables is a little-acknowledged area of bilateral cooperation, and stressed the economic complementarities that exist between the two countries on the issue. He noted, for example, that Mexico was well-positioned to furnish power to help California meet its Renewables Portfolio Standard (RPS) by 2020.¶ “Mexico can help them reach these [renewable energy] targets,” Dukert said. Yet at the same

time, he said that Mexico needs to do more to enhance its profile as a renewable-energy supplier , and specifically suggested that energy attaches be assigned to the embassy and consulates.¶ Johanna Mendelson Forman, a senior associate with the Americas Program at the Center for Strategic & International Studies, emphasized the linkages connecting climate change, energy, and

economic development. Forman warned that Mexico’s inadequate energy stocks are a problem for the United States, adding that “ energy poverty is a real issue in Mexico. ” Energy development and climate change—which are perceived as less polemical than other issues—are good entry points for a broader U.S.-Mexico dialogue, she remarked.

B) Energy poverty perpetuates the poverty cycleIEF 9International Energy Forum, “Reducing Energy Poverty through Cooperation & Partnership”, IEF Symposium on Energy Poverty, December 8-9 2009, www.ief.org/_resources/files/content/events/ief-symposium-on-energy-poverty/background-paper.pdf LN

The 11¶ th ¶ International Energy Forum (Rome, 20¶ -¶ 22 April 2008) noted that “over two billion people ¶ do not yet have access to modern energy services. This perpetuates the poverty cycle and inhibits ¶ economic development, availability of clean water and food, while preventing training and ¶ acceptable health

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standards¶ .”¶ Ministers at t¶ he Forum called for the ¶ solidarity of IEF countries and a ¶ step change in the collective efforts of all relevant international organizations to help achieve the ¶ Millennium Development Goals by halving poverty rates by 2015.¶ The same message was echoed a¶ t ¶ the Jeddah Energy Meeting ¶ (22 June 2008), ¶ where ¶ Ministers noted that “oil price rises and the ¶ underlying volatility, will have an impact on the economies of the consuming and producing ¶ countries alike, especially in the least¶ -¶ developed countries.¶ ”¶ The

Jeddah Joint Statement ¶ recommended that “development assistance from national, regional and international finance and aid institutions be intensified to alleviate the consequences of higher oil prices on the least-developed countries ¶ .¶ ” Further still, participants¶ a¶ t the London Energy M¶ eeting (19 December 2008) ¶

noted that “high or volatile prices for oil and other energy sources had a serious impact on low-income countries ” and agreed on the importance of multilateral measures to mitigate this effect.

C) Poverty is on-par with an ongoing nuclear war – it kills millions a yearMumia Abu-Jamal, 9-19-1998, “A Quiet and Deadly Violence,” www1.minn.net/~meis/quietdv.htmWe live, equally immersed, and to a deeper degree, in a nation that condones and ignores wide-ranging "structural"

violence, of a kind that destroys human life with a breathtaking ruthlessness. Former Massachusetts prison official and writer, Dr. James Gilligan observes; "By `structural violence' I mean the increased rates of death and disability suffered by those who occupy the bottom rungs of society, as contrasted by those who are above them. Those excess deaths (or at least a demonstrably large proportion of them) are a function of the class structure; and that structure is itself a product of society's collective human choices, concerning how to distribute the collective wealth of the society. These are not acts of God. I am contrasting `structural' with `behavioral violence' by which I mean the non-natural deaths and injuries that are caused by specific behavioral actions of individuals against individuals, such as the deaths we attribute to homicide, suicide, soldiers in warfare, capital punishment, and so on." -- (Gilligan, J., MD, Violence: Reflections On a National Epidemic (New York: Vintage, 1996), 192.) This form of violence, not covered by any of the majoritarian, corporate, ruling-class protected

media, is invisible to us and because of its invisibility, all the more insidious. How dangerous is it -- really? Gilligan notes:

"[E]very fifteen years, on the average, as many people die because of relative poverty as would be killed in a nuclear war that caused 232 million deaths ; and every single year, two to three times as many people die from poverty throughout the world as were killed by the Nazi genocide of the Jews over a six-year period. This is, in

effect, the equivalent o f an ongoing, unending , in fact accelerating, thermonuclear war , or genocide on the weak and poor every year of every decade, throughout the world." [Gilligan, p. 196]

D) Renewable energy funding key to solving energy poverty, now is keyUNIDO 9United Nations Industrial Development Organization, “Mexico Forum: renewable energies key to solving developing world’s energy poverty, sustainable development”, October 7 2009, http://www.unido.org/news/press/mexico-dev.html LN

LEON, Mexico, 7 October 2009 – Swift global action is needed to address energy poverty in the developing world, and renewable energies should be part of the planet’s sustainable future and sustainable industrial development, said participants at an international Forum in León which was opened today by President Felipe Calderón.¶ The three-day Global Renewable Energy Forum was organized by the Mexican Ministry of Energy (SENER) and the United Nations Industrial Development Organization (UNIDO). It brought together over 1000 participants from different parts of the world, including representatives of

governments, international organizations, academia, civil society, and the private sector.¶ “The level of energy poverty in the developing world is unacceptable and requires focused global action. Renewable energies are an inescapable part of our planet’s sustainable future and sustainable industrial development ,” said UNIDO Director-General, Kandeh K. Yumkella.¶ “The technology to change the situation exists, the money exists, the needs of the people are clear.

Attacking this issue needs a focused approach with myriad benefits to development, equity, peace and security . Renewable energy should be the foundation and driving force of these efforts.” ¶ The world's 20 largest cities with a population over 10 million each use up 75 per cent of the planet's energy. By 2030, worldwide energy consumption is

projected to grow 44 per cent. Yet some 1.6 billion people in the developing world still have no access to electricity, and one-fifth of the world population lacks access to electricity , thermal energy for heat and cooking, and mechanical power for productive uses . ¶ The UNIDO Director-General commended President Calderón’s role in promoting green economic activities in the Latin American and Caribbean region, saying that environmental initiatives will help “seal the deal” at the Copenhagen Summit in December. “A deal in Copenhagen would provide a framework for refining and redirecting energy markets towards low-carbon solutions. The world is moving to an energy-efficient and low-carbon growth path. This is a fact,” he added.¶ Participants called for coordinated action on energy and related issues – climate change and poverty - and pointed to the need to scale up successful small-

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size renewable energy projects and programmes. They also said it was important to increase the competitiveness of industries by reducing industrial energy intensity, to slash the impact on the climate system by reducing the carbon emissions of industries and by promoting renewable energy technologies, and to increase the viability of enterprises, particularly in rural areas, by augmenting the availability of renewable energy for productive uses.¶ “It is possible to have sustainable development without slowing down economic growth or reducing the quality of life. This would need to be underpinned by smart energy policies and practices and substantively changed production and

consumption patterns. We must produce more with less material and energy intensities and consume less of our non-renewable resources,” said Yumkella.

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Econ Adv.

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1ACThe wavering econ in Mexico is taking a toll on poor people of Mexico. In Mexico, many people are dying from famine and malnutrition. Many people go hungry as they don’t have enough money to pay for food and other things.. They are beaten and raped just to get a little money to feed their family. Boosting the economy however will stop the inhumane famine that is occurring. . Fortunately plan solves econ helping take a stand for the starved people of Mexico. Our cards restate this exact idea beginning with….

A) Domestic Mexican energy production is falling rapidly and a shift to reliance on US imports is unsustainable. Mexico needs a new and reliable source of power

Petroleum Economist 7/18 “Mexico relies on US as oil supply falls and gas demand rises,” Petroleum Economist, 7/18/2013, http://www.petroleum-economist.com/Article/3232708/Mexico-relies-on-US-as-oil-supply-falls-and-gas-demand-rises.htmlAs its oil production keeps falling , Mexico is turning to natural gas to diversify its energy supply and fuel economic growth. Increasingly, it is relying o n booming US supplies to do the job. According to the World Bank,

Mexico's economy grew at an impressive 3.9% in 2012 and is on track to post growth of 3.5% in 2013. Yet 52 million people - almost half of the population - live in poverty. Another 11.7 million, or 10%, live in 'extreme' poverty� ,

earning less than $76 per month. President Enrique Peña Nieto took office in December 2012 promising to increase living standards. But falling oil production , historically the mainstay of the country's export revenues, is threatening his ambition. In 2010, oil accounted for 14% of export earnings and 32% of government revenues, according to the Mexican central bank. Rising crude prices have offered some relief. The value of Mexican oil exports to the US has doubled in the past eight

years, to $35.7 billion in 2012. But the export and production data tell a different story. Oil output has fallen to 2.5 million barrels a day (b/d) from a peak of 3.4 million b/d in 2004. Crude exports to the US have fallen by a third, to 970,000 barrels per day (b/d) in 2012 from 1.48 million b/d in 2004, the first time since 1994 that annual shipments to the US have fallen

below 1 million b/d. The country's share of total US oil imports has plummeted, too, from 16% a decade ago to 11% in 2012, according to the Energy Information Administration (EIA). Production of heavy oil from the Cantarell and Ku-Maloob-Zaap offshore oilfields - which supply grades favoured by US Gulf Coast refineries - fell 46% or 1.1 million b/d from 2004 to 2012. This was partially offset by a

200,000 b/d increase of light oil in the same period, but the trend is well established by now. The question facing policy makers is whether the country can afford to maintain a nationalist energy stance . Mexico nationalised its oil industry in 1938 and its constitution continues to prohibit foreign ownership in the strategically vital oil and gas sector. In 2008 Mexico's congress passed limited energy sector reforms in a bid to address declining production and attract much needed foreign technical expertise, but the efforts failed. Pemex, the state oil company, retains ownership of all crude oil produced in the country, but has entered into partnerships with foreign

companies through multiple services contracts. But major international oil companies have stayed away. Nieto aims to introduce further reforms in September aimed at increasing private investment. But this is sure to run into opposition from those opposed to opening the country's energy sector. However, if Mexico's energy sector continues down the path it is on the country risks becoming a net oil importer by the end of the decade. This is already the case in natural gas. Mexican imports of US gas have increased 92% since 2008 as production has fallen by 15% and demand has risen sharply. Mexico now imports 2 billion cubic feet a day from the US, or 3% of Lower 48 production. At least six new pipelines have been proposed from southern US unconventional gasfields like the Eagle Ford to meet surging demand in Mexico. Imports could reach 7 billion cf/d, or 10% of US gas production, by the end of the decade. On 5 May, US pipeline operator El Paso announced long-term agreements to extend its Wilcox lateral from Arizona, adding 185 million cf/d of incremental capacity for Pemex Gas and Mexican de Cobre, one of the world's largest copper producers. The US drilling boom couldn't have come at a better time for gas-starved Mexico. Mexico's proved gas reserves have fallen to 17 trillion cf from more than 60 trillion cf a decade ago, largely as a result of under-investment in the upstream. In the same period, Mexico's gas consumption has risen 160%, to 2.36 trillion cf per year, or 6.5 billion cf/d, driven by fuel switching in the electricity sector. In 2000, gas supplied a fifth of Mexican power generation. By 2007, this had risen to half. Consequently, Mexican gas imports have doubled since 2003, to 767 billion cf per year. It will keep growing: plans are afoot to add 28 gigawatts of new generating capacity, most of it to be fuelled by gas. Mexico's energy secretariat forecasts that gas demand will grow at a rate of more than 3% annually through 2016. In June, Gdf Suez Mexico and GE Financial unveiled plans to extend the Mayakan pipeline to the Yucatan Peninsula, adding an incremental 300 million cf/d of supply under a contract with Mexican power producer CFE. But it's not just pipelines that have seen growth. In 2012 the country completed the $900 million Manzanillo liquefied natural gas import terminal, a partnership of Pemex, South Korea's Kogas, Mitsubishi and Samsung on the Pacific coast.

Full capacity of 3.8 million tonnes per year is expected online later this year. At this point, it makes sense for Mexico to import cheap US gas to fuel its economic growth. But the surge in demand is expected to increase

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North American natural gas prices. Henry Hub futures have inched higher in recent months to more than $4 per million British

thermal units (Btu), although lower demand in the summer eased levels back to $3.63 on 17 July. Longer term rises in prices will eventually force Mexico to decide whether it wants to depend on foreign supplies or open its upstream to

investors that could unlock more domestic energy.

B) That spells certain doom for the Mexican economy – oil revenues are critical to public spendingVillarreal ’12 M. Angeles Villarreal, Specialist in International Trade and Finance @ CRS, “U.S.-Mexico Economic Relations: Trends, Issues, and Implications,” Congressional Research Service, 8/9/2012, http://www.fas.org/sgp/crs/row/RL32934.pdfMexico’s long-term economic recovery and stability partially depend upon what happens in the oil industry. In 2010, Mexico was the seventh-largest producer of oil in the world and the third largest in the Western Hemisphere. 39 The Mexican government depends heavily on oil revenues , which provide 30% to 40% of the government’s fiscal revenues, but oil production in Mexico is declining rapidly. Many industry experts state that Mexican oil production has peaked and that the country’s production will continue to

decline in the coming years . 40 The Mexican government has used oil revenues from its state oil company, Pétroleos Mexicanos

(Pemex), for government operating expenses, which has come at the expense of needed reinvestment in the company itself. Because the

government relies so heavily on oil income, any decline in production has major fiscal implications . In 2008, the

government enacted new legislation that sought to reform the country’s oil sector, which was nationalized in 1938, 41 and to help increase

production capability. The reforms permit Pemex to create incentive-based service contracts with private companies. Some analysts contend, however, that the reforms did not go far enough and that they do little to help the company address its major challenges. 42 Mexico’s President-elect Enrique Peña Nieto of the centrist Institutional Revolutionary Party (PRI) has vowed to convince his party, which nationalized the industry and has blocked previous attempts at reforming the energy sector, and the PRI-aligned oil workers’ union, to allow further energy reforms to move forward. The narrow margin of Peña Nieto’s victory and his coalition’s apparent failure to capture a majority in either chamber of the Mexican Congress, however, may make it difficult to reform the energy sector. Another issue that may block energy reforms from moving forward is the nationalist left’s strong showing in the July 1, 2012, elections. The leftist coalition led by the Party of the Democratic Revolution (PRD) has the second-largest bloc in the lower house of the Mexican Congress and remains staunchly opposed to increasing private involvement in Pemex. 43 Most experts contend that Pemex has only the capacity to produce in shallow waters and needs to bring in new technologies and know-how through private investment to allow the company to successfully

explore and produce in the deep waters in the Gulf of Mexico. 44 The lack of further reforms is reportedly keeping Mexico from allowing much-needed foreign investment for oil exploration . Though the performance-based contracts are

expected to increase production and reserves, Pemex faces serious challenges in finding new, productive wells and also lacks resources for investment in increasing engineering capacity and exploration. C) Economic collapse causes famineMahder 8 (Ethiopian Development Website, “Addressing the root cause of famine and poverty in Ethiopia,” September 27, 2008,http://mahder.com/pdf/Addressing_the_root_cause_of_famine_and_poverty_in_Ethiopia..pdf, AD: 7-6-9)It is well established that there is a strong correlation between famine and economic development or growth. Economic growth leads to development and reduction in poverty and famine. Real economic growth embracing and benefiting all the citizens of a country produces safety mechanisms which are of vital importance in alleviating or avoid ing displacements and live destruction emanating from famine . The

suffering and significant loss of lives resulting from persistent famines which are hitting Ethiopia could not be avoided or even

mitigated owing to the shrinking economy or increasing poverty in the country. On the other hand, one can can not avoid but face the irony of Ethiopia failing to be self sufficient and feed its population despite possessing all the potential to do so. Thus a critical examination of the major stumbling block or factor acting as a bottleneck and preventing the country from eradicating or even coping with famine is necessary.

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D) FORTUNATELY PLAN SOLVES IT BOOSTS MEXICO’S ECONOMY Wood 12 (Duncan Wood, 5/20/12 Department of International Affairs, Instituto Tecnológico Autónomo de México, Senior Advisor, Mexico Institute Renewable Energy Initiative, “RE-Energizing the Border: Renewable Energy, Green Jobs and Border Infrastructure Project,” Wilson Center, http://www.wilsoncenter.org/sites/default/files/RE_Energizing_Border_Wood.pdf)Economic spillover: It is clear that the development of renewable energy projects brings economic benefits to the

areas in which they are located, not merely through the generation of electricity or the production of fuel, but also through the spillover effect in terms of employment, infrastructure spending, services, and the potential for creating industries focused on manufacturing equipment and components. Renewable energy technologies tend to create more jobs per unit of energy generated than their conventional energy counterparts. This is because the RE sector tends to create jobs not only in the generation of electricity and fuel and in the manufacture of equipment and parts , but also indirectly in the form of maintenance, repairs and services. It is estimated that more than three million people are employed in the RE secto r worldwide , and in Mexico the government has suggested that the sector could employ up to 100, 000 people if it were

implemented alongside a complementary industrial policy.3 A second level of economic benefit stems from the potential for energy cost savings for local authorities who decide to purchase their electricity from renewable energy sources . In Mexico, for example, the lower cost of wind energy in relation to power generated through conventional means by the Comisión Federal de Electricidad (CFE), has encouraged municipal authorities to purchase wind energy for public lighting and buildings . These cost savings mean that the government has the opportunity to use those funds for other public purposes. If public authorities such as state

governments are themselves partners in green energy generation projects, the resulting profits may be employed as a way of providing subsidies to the local population . This will help to secure local approval of RE projects. Lastly, we should point to the significant infrastructure investments that often accompany renewable energy projects . As wind and solar plants are often located in remote areas, it may be necessary to build roads and bring in water supplies to make them viable. Of course transmission lines will also be needed to transport the electrons generated to market. All of this infrastructure spending is another potential source of employment and income for local citizens and businesses, but also implies a potential obstacle due to financing limitations.

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1AC – Solvency

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1AC

The plan fosters cooperation over critical energy issues to bolster renewable industry – now is critical to ensure Mexican approval Wood ’13 (Duncan Wood, the Director of the Mexico Institute at the Woodrow Wilson International Center for Scholars, “Growing Potential for U.S.-Mexico Energy Cooperation”, Wilson Center of Mexico Institute, January, 2012, http://wilsoncenter.org/sites/default/files/wood_energy.pdf)Looking ahead to the next six years of interaction between governments of Mexico and the United States, there is the potential for an enormous ly fruitful relationship in energy affairs. Much of this depends on two key factors, political will and the internal changes that are underway in Mexico’s energy sector. In the past, political sensitivities concerning U.S. involvement in the Mexican hydrocarbons industry have limited the extent of collaboration in the oil and gas sectors. This continues to be a cause for concern in any U.S.-

based discussion (from either the public or private sectors) of Mexican energy policy and the potential for collaboration, but in recent years there has been a relaxation of sensitivity in this area. Partly in response to the perceived need for international assistance in resolving Mexico’s multiple energy challenges, and partly as a result of a productive bilateral institutional relationship between federal energy agencies, there is now a greater potential for engagement than at any time in recent memory. We can identify three main areas in which bilateral

energy cooperation holds great promise in the short-to medium-term. First, given the importance of the theme for both countries, there is

great potential in the oil and gas industries. This lies in the prospects for investment, infrastructure and technical collaboration. Second, we can point to the electricity sector, where the creation of a more complete cross-border transmission network and working towards the creation of a market for electric power at the regional level should be priorities for the two countries. Third, in the area of climate change policy, existing cooperation on renewable energies and the need for a strategic dialogue on the question of carbon-emissions policy are two issues can bring benefits for both partners. Underlying all three of these areas are broader concerns about regional economic competitiveness and the consolidation of economic development in Mexico. The first of these concerns derives from the hugely important comparative advantage that the North American economic region has derived in recent years from low-cost energy, driven by the shale revolution. In order to maintain this comparative advantage, and to ensure that the integrated manufacturing production platform in all three countries benefits from the low-cost energy, the gains of recent years

must be consolidated by fully developing Mexico’s energy resources. With regards to the second concern, economic development, a number of commentators, analysts and political figures in Mexico have identified energy reform as a potential source for driving long-term economic growth and job creation, and the potential opportunities for foreign firms are considerable. While the United States cannot play an active role in driving the reform process, the implementation of any future reform will benefit from technical cooperation with the U.S. in areas such as pricing, regulation and industry best practices.

US collaboration and investment is key – broadly increases demand for renewables and enhances energy production and transmission efficiencyWood ’13 (Duncan Wood, the Director of the Mexico Institute at the Woodrow Wilson International Center for Scholars, “Growing Potential for U.S.-Mexico Energy Cooperation”, Wilson Center of Mexico Institute, January, 2012, http://wilsoncenter.org/sites/default/files/wood_energy.pdf)Mexico’s electricity sector has gone through significant changes over the past twenty years since the passing of the 1992 Ley de Servicio Publico de Energia Electrica, in which private electricity generation was permitted under certain

circumstances. During that time the private sector has become responsible for around 30% of installed capacity in the country, although the Comisión Federal de Electricidad (CFE) remains the dominant player in the market through its monopoly over

transmission and distribution. Electricity prices remain high in the country, particularly for commercial customers,

and this is widely seen as a limiting factor on Mexican business competitiveness. At the same time, although

97% of the Mexican population is connected to the national grid, this means that almost 5 million Mexicans still do not have reliable access to electricity. At the present time Mexico is a net exporter of electricity to the United States, with around 600 gigawatt hours (GWh) of power exported from Baja California to California in 2010and around 150 GWh of power exported from Texas.

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However, demand for electricity in Mexico is growing fast: according to SENER, demand grew from 157,204 GWh in 2001 to

200,946 GWh in 2011. Much of that growth in demand has come from the residential sector, but it is big business that has led the way as demand is tied directly to economic growth. This suggests that, as Mexico’s economy continues to grow at a rate higher than its NAFTA partners, we should expect the country’s electricity demand to increase at a similar rate. This projected growth means that Mexico will either have to add further generating capacity or increase its electricity imports. Both scenarios present opportunities for

the U.S. In the first, new installed capacity will likely be in the form of combined cycle natural gas plants, to take advantage of the historically low price of natural gas due to the shale revolution. As pointed out above, Mexico is already looking to import more gas from the United States, and new electricity generating capacity will increase that even further. The second scenario would directly benefit the electricity producers,

most likely in Texas, which has seen and rapid growth in capacity in recent years. In order to get electricity from Texas to Mexico, however, some major investments must take place in the area of transmission. At the present time the cross-border transmission infrastructure is highly limited and talks between the two countries aimed

at facilitating new cross-border projects have achieved little real progress since 2010. Nine cross-border interconnections exist at the time of writing, with new transmission capacity last added in 2007, with the opening of the Sharyland McAllen-Reynosa 150MW connection. Of course transmission not only affects the prospects for electricity imports into Mexico from Texas, but also exports from Baja California to California, particularly of electricity from renewable sources such as wind (see below). Mexico and the United States will need to deepen their cooperation in the area of transmission if these projects are to be brought to fruition. As noted above, to date the cross-border transmission discussions between the two countries have not yielded very much of substance, and it should be a priority of both governments to try to inject the process with more vigor and enthusiasm. In part the slow movement of the talks so far is a result of the fact that neither side has attached much importance to them; on another level, however, the differences between the two countries’ systems has run into cultural barriers. Because the CFE is run as a federal government agency, rather than as a business, it has been noted that the organization thinks not in terms of business opportunities, but rather of fulfilling its mission of providing electricity as a public service. This cultural obstacle to progress must be

overcome, however, if the true potential for electricity trade is to be realized. One final issue on which the two countries can and should cooperate in the years to come is that of upgrading Mexico’s national electricity grid and making it a truly “Smart grid ”. As Mexico’s economy and electricity market mature, and as a more market-oriented pricing structure emerges, the use of smart grid technologies will become of increasing importance to manage supply issues, and to allow for flexible responses to unexpected jumps in demand. One issue that the government hopes to solve through smart grid technology is that of electricity distribution losses, which run as high as 17% at the national level. At the present time the CFE is only just beginning to install a small number of smart meters in the selected areas of the country, but in August of 2012 the Comisión Reguladora de Energía (CRE)announced that it has begun developing a smart grid plan for the country. Early research for the plan was financed in part by a US$405,000 grant from the US Trade and Development Agency, and the two countries should continue to cooperate on the development of the grid, creating significant opportunities for private firms from both sides of the border.

the invasion of Afghanistan.