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Abstract

An increase in global reliance on fossil fuels has prompted greater discussion on energy security. For the United States, interest has focused on ensuring that countries in the Western Hemisphere, which currently supply roughly half of U.S. imports of crude oil and petroleum products, remain stable sources of energy. While concerns have focused on political instability and a rising interest in the hemisphere's energy resources by China and India, the conversation centers on a hemispheric trend toward resource nationalism. Resource nationalism is exemplified by the global trend of placing the world's oil reserves under the control of national oil companies and out of reach of the international oil companies, except on a low-margin, service-contract basis. This trend is prompting some Latin American countries to make deliberate attempts to limit foreign investment in their energy sector. For countries that continue to welcome foreign investment, other legal policies, such as rules governing international arbitration, are hampering foreign investment. Deliberate or not, these policies lead investors to locate multimillion dollar energy investments elsewhere.