Fossil fuel subsidies have allowed energy exporting countries to distribute resource revenue, bolstering legitimacy for governments, many of which are not democratically elected. But subsidy benefits are dwarfed by the harmful consequences of encouraging uneconomic use of energy. Now, with consumption posing a threat to long-term exports, governments face a heightened need to raise prices that have come to be viewed as entitlements. While reforms of state benefits are notoriously politically dangerous, previous experience shows that subsidies can be rolled back without undermining government legitimacy — even in autocratic settings — given proper preparation.

Kenneth B. Medlock III, James A. Baker, III, and Susan G. Baker Fellow in Energy and Resource Economics, testified about crude oil production and energy trade policy before the Committee on Foreign Affairs of the U.S. House of Representatives.

Mexico’s 2013–2014 energy reform promises to bring the country’s economic drivers and regulatory institutions in line with the global practices of free market democracies. If successful, this development would be a 180-degree turn. The accomplishment of such realignment is hardly assured, however.

On Monday, three committees in Mexico’s senate — constitutional issues, energy and legislative studies — voted to bring an energy reform bill to the chamber’s floor for debate. The legislation would provide international oil companies the opportunity to participate in profit-sharing contracts and concession-like licenses for energy operations in Mexico, and it is expected to become law by the end of the legislative session Dec. 15.

A paper that briefly examines the current situation and outlook for
 shale gas in China, and explores existing and potential 
avenues for international cooperation. Published by the International Shale Gas and Oil Journal Subscription required.

To access the full paper, download the PDF on the left-hand sidebar.

Executive Summary

Key Findings

• Resolution…

This testimony was delivered before the U.S. Senate Committee on Energy and Natural Resources on February 12, 2013.

 

…

Testimony of Kenneth B. Medlock III James A. Baker, III, and Susan G. Baker Fellow in Energy and Resource Economics, and Senior Director, Center for Energy Studies James A. Baker III Institute for Public Policy Rice University To the Senate Committee on Energy and Natural Resources Washington, D.C. February 12, 2013