Contradictions and tensions in the way the USMCA regulates energy.

This article analyzes how the United States–Mexico–Canada Agreement (USMCA) regulates the energy sector within North America, highlighting its fragmented approach to issues such as resource entitlements, energy transactions, public policies, environmental externalities, and dispute resolution. The USMCA recognizes state sovereignty over hydrocarbon resources, safeguards energy-related investments—particularly for U.S. investors in Mexico—and promotes non-discriminatory trade and infrastructure access between the U.S. and Canada, while also incorporating essential security exceptions and rules governing state-owned enterprises. Environmental provisions emphasize national sovereignty and enforcement of domestic laws but do not explicitly address climate change or carbon reduction, relying instead on multilateral environmental agreements and dispute mechanisms. The agreement lacks a unified regional energy policy, leaving tensions among differing national priorities to be resolved through various dispute settlement processes involving investor–state, state–state, and environmental claims.