Mexican demand for natural gas remains strong. That has allayed some fears that related energy law practices, particularly in South Texas, will falter amid the Trump administration’s appointment bottleneck and its previous fiery talk about the United States’ southern neighbors.
“We have a lot of projects. We have seen pipeline activity greatly increase,” said Lara Pringle, a partner in the Houston office of Jones Walker.
In the first days of the new administration, the president’s staunchly nationalist vision sparked client fears that Mexico and other nations would shun American suppliers. For the lawyers, there were concerns that deal work could dry up, Pringle and others said.
But Pringle said the worried talk has stayed all talk for now, and the pipeline business itself is booming.
James Bowe, a partner in the D.C. office of King & Spalding, said it probably hasn’t hurt that Trump has eased off his “America First” language somewhat.
“A bunch of the anti-Mexico rhetoric that you heard from the president has now faded as he has begun to learn what’s actually true on the ground,” Bowe said. “You can assume any changes to [the North American Free Trade Agreement] are going to be very minor.”
Some major pipeline projects moving gas from Texas to Mexico are already underway. In 2015, PEMEX, Mexico’s national oil company, announced that two U.S.-based investment banks would help it finance the second phase of a pipeline that carries natural gas from the San Antonio region’s Eagle Ford shale to cities far south of our two nations’ borders. And in May 2016, the Obama administration approved permits for two pipelines, owned by Energy Transfer Partners, to send Texas-fracked natural gas to Mexico.
White House appointment delays, however, have not been resolved, and they still present potential problems for future pipeline projects. Trump has not yet named officials to open seats on the Federal Energy Regulatory Commission, which issues permits for natural gas pipelines.
“Although for a month now the rumor mill has consistently reported that the Trump administration plans to name three individuals to the three open FERC seats, at least as of last week no names had been sent up to the Senate Energy & Natural Resources Committee, which will hold hearings on the nominations,” Bowe said. (Bowe cited Kevin McIntyre, co-head of Jones Day’s energy regulatory practice, as a possible candidate for the FERC chairman post.)
Until Trump makes the nominations and the Senate confirms them, and a FERC quorum is established, no commission votes will be cast about contested projects, such as major new gas pipelines, which usually draw protests.
“I am not holding my breath for quick action,” Bowe said. “My best guess is that we won’t see the new FERC commissioners take their seats until June at the earliest.”
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