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Organized byNorth American Forum on Integration (NAFI)Escuela de Graduados en Administracin Pblica y Poltica Pblica del Tecnolgico de Monterrey (EGAP)Mexican Council on Foreign Relations (COMEXI)

Abstracts

NORTH AMERICAN ENERGY REFORMS: WHAT ARE THE OPTIONS?

Friday April 2, 2004Room Continental - 10:30 a.m. to 12:00 p.m.

Energy reforms are currently being discussed or implemented in North America. What scenarios havebeen considered to date? How will these reforms impact on the two other countries?

CHAIR

Michelle MICHOT FOSSExecutive Director, Institute for Energy, Law and Enterprise, University of Houston

Dr. Michelle Michot Foss is the Executive Director of the IELE (a multidisciplinary business and public policyprogram on energy and associated environmental issues) and assistant research professor, University of HoustonLaw Center. The IELE is a centre for excellence on commercial frameworks for energy development across theenergy value chains. At the IELE Dr. Foss directs and conducts research; advises U.S. and international energy

companies; and provides public commentary and testimony to governments. She is the 2003 president of the IAEE;a member of the Council on Foreign Relations; and was selected to Key Women in Energy-Americas for 2003.

SPEAKERSPatrick Henry WOOD, IIIChairman, Federal Energy Regulatory Commission

On April 30, 2001, Patrick Henry Wood, III was nominated to the Commission by President George W. Bush andconfirmed by the Senate. In February 1995, Wood was appointed to the three-member Public Utility Commissionof Texas by then Governor Bush to regulate the states telecommunications and electric power industries. Woodserved as Chairman of the Commission. A native of Port Arthur, Texas, Wood received a B.S. in Civil Engineeringfrom Texas A&M University and a J.D. from Harvard Law School. He has worked as an engineer with Arco Indonesia

and as an attorney with the Baker & Botts law firm in Washington, DC.

ABSTRACT

Security of gas and power supplies requires a regulatory framework for investment and oversight. Thisframework includes balanced rules, sufficient infrastructure, and vigilant monitoring and enforcement.

Each of these components must be coordinated across the borders of nations, regions, and states. While

we have debates about U.S. energy policy, this regulatory framework and the institutions and processesthey utilize have remained sufficiently intact, allowing for steady investment.

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With an energy bill under discussion and a busy FERC agenda, there are a few reforms that may impact

Canada and Mexico. To develop our common need for natural gas, since 96 percent of the worlds gasreserves are outside of North America and the continent consumes almost 30 percent of the worldsannual production, we are working on a few reforms to bring in more LNG. The proposed energy bill

would enhance FERCs ability to efficiently site LNG plants. FERC has also acted to remove barriers thatexisted in FERC open access regulations. The proposed energy bill would also increase continental gas

supply by providing a loan guarantee for pipeline capacity out of Alaska and by authorizing expeditedcertification and permitting of a pipeline to transport natural gas from Alaska to markets in the

continental United States.

Since we have a common interest in price accuracy and transparency, I am pleased to report very positiveprogress in this area as a result of active engagement by Congress, FERC, and the CFTC. The proposed

Energy Bill has provisions which would strengthen authorities in this area. Price reporting is alreadysignificantly improved and at higher volumes, and I am confident that by next year these indices will be

fully trustworthy.

The proposed energy bill also has important reliability provisions which create an Electric Reliability

Organization. We look forward to working with Canada and Mexico in advance of and with or withoutsuch legislation because greater reliability oversight is critical after our August 14 blackout in the U.S. and

Canada.

FERC is also actively pursuing Regional Transmission Organizations. Some of these include activesupport and participation of Canadian entities, like Manitoba Hydro in the Midwest ISO. The regional

coordination and planning provided by RTOs promise to increase the reliability and efficiency of ourcommon grid.

These reforms are consistent with the basic investment framework in the U.S.. This framework includesprivate investment, transparent prices, open access to monopoly transportation facilities, rate-regulated

monopoly transportation, transparent and trustworthy price signals, timely siting approval of necessary

infrastructure, free trade and increased interconnectivity. This framework has resulted in significantinvestment particularly in power generation and gas pipelines and we are working to increase investment

in power transmission and LNG, where the regulatory framework has needed clarification.

Francisco SalazarDiputado, President of the Mexican Camara de Diputados Energy Commission

ABSTRACT

No abstract available at the moment

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