North American Energy Security Conference

April 1, 2004 Monterrey Mexico

Charles Matthews Commissioner The Railroad Commission of Texas

U.S. Import and Export Trade with Mexico

140 120 100

Billion $

80 60 40 20 0 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003
Exports Imports
Source: U.S. Census Bureau, Foreign Trade Division

U.S. Total Trade with Mexico

300

250

200

Billion $

150

100

50

19 85

19 87

19 89

19 91

19 93

19 95

19 97

19 99

20 01

Source: U.S. Census Bureau, Foreign Trade Division

20 03

Texas Top 5 Export Destination Countries 2003

45 40 35
Billion $

30 25 20 15 10 5 0
Mexico Canada South Korea China Taiw an

2003 Average Daily Domestic Oil Imports

1,800 1,600 1,400 1,200

MB/D

1,000 800 600 400 200 0

iA ra b M ia ex Ca ico V e na ne da zu e Ni la ge ria Un Ir ite A aq d ng Ki ol ng a do Ku m w No a it O Co rw a th e r l om y C ou bi a nt rie s

Source: U.S. Energy Information Administration.

Sa ud

U.S. Imports of Crude Oil from Mexico

1994-2003
1,800 1,600 1,400 1,200

MB/D

1,000 800 600 400 200 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: U.S. Energy Information Administration.

U.S. Exports of Natural Gas to Mexico

1994 - 2003
350
Billion Cubic Feet (bcf)

300 250 200 150 100 50 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: U.S. Energy Information Administration.

U.S. Natural Gas Imports from Canada

1994-2003
4.0 3.5 3.0 2.5

Tcf

2.0 1.5 1.0 0.5 0.0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: U.S. Energy Information Administration.

Pipeline infrastructure is a key to developing this relationship

Ongoing efforts between RRC and CRE to

streamline regulatory processes Four Texas state agencies and six Federal agencies are involved in permitting cross border pipelines MOU for Texas agencies streamlining state-level permitting processes

Existing Pipeline Interconnections Between the U.S. and Mexico

Existing Exit Points Otay Mesa, CA Calexico, CA Douglas, AZ El Paso, TX Clint, TX Eagle Pass, TX Alamo, TX Hidalgo, TX Penitas, TX McAllen, TX Mier, TX Algodones, AZ Eagle Pass, TX Ogilby, CA Estimated Capacity Pipeline (MMcf/d Sempra Energy 300 SoCalGas 25 El Paso Nat Gas 35 Norteno Pipeline 90 Samalayuca 212 West Texas Gas 38 Tennessee Pipeline 220 Texas Eastern 350 PG&E Texas 400 Coral Mexico Pipeline LLC 300 Kinder Morgan Energy Partners 375 Sempra Energy 300 Reef International 60 North Baja 516 Total: 3,221

Conclusion
There is enormous shared economic opportunity for Mexico, Canada, and Texas Beneficial to develop ways to facilitate cross border projects Open and free competition will improve efficiency in energy sectors Benefits consumers and business in all three countries