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Market News

 July 25, 2007
North American ministers sign energy pact

 Victoria, Canada -- Energy ministers from Canada, Mexico and the United States have signed what they have termed the 'the first-ever trilateral agreement on energy science and technology', designed to boost energy security and environmental protection. Ministers also pledged to further align energy efficiency standards for consumer products.

Canadian Minister of Natural Resources Gary Lunn was joined by his counterparts Ms. Georgina Kessel, Secretary of Energy for Mexico, and U.S. Secretary of Energy Samuel W. Bodman for meetings in Victoria where the deal was signed.

The Trilateral Agreement for Cooperation in Energy Science and Technology is described as a framework to stimulate innovation and share capacity for energy research in all countries.

The agreement follows principles established at a meeting of national leaders in March 2006. At that meeting, leaders identified North America's energy security as one of five key priorities and noted that collaboration in the areas of innovation, energy efficiency and technology development, as well as moving these technologies to the market, promotes energy security.

The deal builds on previous cooperation established by the North American Energy Working Group (NAEWG), founded in 2001.

According to the officials involved, a more formal framework for collaboration was needed to address issues such as ownership of intellectual property rights and to provide the proper legal foundation for funding joint, projects in science and technology. Included in the new pact are provisions for bilateral and trilateral cooperation in research, development and deployment on a range of energy technologies, including renewable energy, energy efficiency, nuclear energy, fossil fuels and electricity. Specific areas identified were low or zero-emission energy production and end-use technologies; low carbon fuels (including biofuels and gas hydrates); carbon dioxide capture and storage; hydrogen and fuel cell technologies; "clean coal" and electricity transmission; and technologies to enhance the security of energy infrastructure.

Avenues of cooperation could include joint studies, the exchange of information, and the exchange of scientific and technical personnel. These could involve government agencies, universities and research institutions as well as private sector firms.

The North American energy market represents approximately $150 billion in trade between the three countries, and ministers indicated clear support for continued development of a single continental market for energy, oil and gas. No formal position was taken on development of offshore petroleum resources in British Columbia, and the issue of tanker traffic in northern Canadian waters was also left to a current voluntary agreement.

The agreement will be in force for an initial period of five years and will renew automatically every five years afterward if all parties agree.

Harmonization of standards

The ministers also reconfirmed their commitment to further aligning energy-efficiency standards on key consumer products, building on recent harmonization of energy performance standards for refrigerators, air conditioners and large electric motors. The officials agreed to increase cooperation on motor vehicle fuel efficiency and "standby power" consumption, and identified seven additional energy-using products as potential candidates for harmonization.

Regarding "standby power" - the electricity consumed by common products such as televisions, computers, and others when not in use - the ministers agreed to support a trilateral workshop that will be held in Mexico City in September to explore possible joint approaches. Canada announced new domestic standards for standby power consumption for certain products concurrently.

Further discussions on energy will be held at the North American Leaders' Summit on August 20 and 21 in Montebello, Quebec.



For More Information: Natural Resources Canada