In this piece, Joseph Dukert, a leading independent energy consultant, reveals what has been hidden in plain sight: that in North America, we are well on our way towards a single, integrated market for energy. It is not only that Canada is the top source of imported petroleum for the United States, another reality that is not well known in the U.S.; rather, it is the fact that all three countries produce highly-valued sources of energy (oil, natural gas, hydro) and also consume one another’s energy exports.

In one evocative example, Dukert points out that Mexican electricity generators are powered by U.S. gas, then re-export the electricity they produce back across the border. Transborder pipelines and power lines also are emblematic of the level of trilateral cooperation which, in this issue area, borders on European levels of policy coordination and common standards. Moreover, the patterns of interdependence are not dominated by the asymmetrical pull of a power-hungry U.S. draining the supplies of its more dependent neighbors. There is variation across Canadian provinces, and Mexico’s plans for more pipelines could benefit its own product as well as its consumers.

Following a typically North American pattern – lack of top-down direction and institutionalization following de facto integration – North America’s energy markets have linked up without any supranational coordination or machinery. Dukert is most insistent on the innovative and underappreciated nature of North American energy cooperation. In terms of institutions, in addition to the summits of ministers in the North American Energy Working Group, there is also the North American Electricity Reliability Council (NERC), which Dukert notes is a hybrid public-private forum but is itself a unique non-governmental organization.

Even a series of setbacks – the Enron scandal, the 2003 blackout, etc. – have not derailed this movement towards an integrated continental market for, and policy regime regarding, energy. Citizens of all three countries benefit in terms of efficiency gains and joint environmental standards, but also through the joint management of energy and the security of supply it guarantees throughout the continent. And it should be noted, Dukert says, that this cooperation happens despite the different regimes of ownership of energy resources and energy companies across the three NAFTA countries.

Rather than looking for a single North American energy policy per se, what we see is a series of convergences and “conscious parallelism,” driven by convergences in national political and economic interests. Politically, this is driven by regional groupings of governors and provincial premiers; there is also impetus towards greater integration coming from the private sector, both energy and non-energy (the latter looking for cheaper inputs). Dukert thinks the final piece will be trilateral meeting of legislative leaders, who may also line up in regional groupings to press for more efficient and integrated energy markets to benefit their constituencies and, at the same time, benefiting the continent as a whole.