Mexico’s decision to snatch control of the oil sector to American and British companies is taught in schools and celebrated every year. That is why the nationalization of 1938 It is a source of pride for millions of Mexicansincluding President Andrés Manuel López Obrador.
16 years ago the president led a fight against energy reforms that sought to attract private investment to the enormous state oil company Petróleos Mexicanos (Pemex).
This year, presidential candidate Claudia Sheinbaum chose the anniversary of the oil expropriation to announce your energy proposals; These include the maintenance of large-scale crude oil production by Pemex, the limitation of private investment in electricity generation and the commitment to renewable energies but mostly from the State.
Despite the difficulties faced by Pemex, Mexico remains one of the largest oil producers in the world. Even No presidential candidate has talked about limiting crude oil production. in the country.
In parallel, the Morena candidate also seeks to ensure that the Federal Electricity Commission (CFE)controlled by the government, covers most of the electricity demand of companies and homes with its energy generation, a position that President López Obrador has defended throughout his six-year term that will end next September and that will hinder their commitments on climate change.
Nearly two thirds of the plants of the CFE companywhich has maintained a monopoly on the transmission and distribution of electricity since 1937, runs on fossil fuels and the remaining 33 percent have carbon-free technologies.
Commitment of Mexico is that 43 percent of the energy generated comes from non-polluting sources in 2030. But currently, only around 22 percent of the electricity produced in our country comes from clean sources, according to estimates by the Mexican Institute for Competitiveness (IMCO).
Sheinbaum’s position does not surprise analysts. IMCO’s energy and environment coordinator, Oscar Ocampo, stated that for the government candidate “it would be costly to move away from that official line.”
In fact, the former head of Government of CDMX has committed to continue increasing refining capacity of Pemexa recipe that does not contribute to the reduction of fossil fuels by a scientist turned politician.
In the second presidential debate, although Sheinbaum wanted to highlight his scientific knowledge on climate issues, barely mentioned superficially reducing emissions that cause climate change as part of an energy transition process.
In addition, he defended that the large refinery that López Obrador built will help reduce the importation of gasoline and criticized that the opposition Xochitl Galvez wants to privatize Pemex, something that the candidate already denied. Faced with the strategy of the ruling party, the opposition’s commitment to the private sector.
In that same debate, Gálvez declared that Renewable energies were key for the country. “There are those who believe that these put the national electrical system at risk,” he said, referring to Sheinbaum. “I propose 50% renewable energy by 2030,” he defended. And, to do this, he said that he would have greater participation from private investment.
Years before, Xóchitl Gálvez had promoted reforms in the energy sector that forced greater openness to the private sector. Those reforms opened the industry to private contracting in the services sector, but Pemex maintained its monopoly on exploration, pipelines and gasoline distribution.
The opposition candidate has said that she wants improve Pemex’s efficiency and finances, which is why he has proposed closing two refineries that lose money. While the candidate Jorge Álvarez Máynezfrom the small Citizen Movement, has also proposed closing two refineries.
Remembering how Mexicans are taught about oil expropriation since primary school, Julia González Romero, advisor to the local law firm González Calvillo and specialist in regulatory, environmental and energy issues, stated that it is understandable that in the midst of the electoral campaign The discussion arises about the participation of private parties and the State in the energy business.
“It is in the DNA of our policy to discuss how much the private sector should participate in the sector,” said González Romero.
During the López Obrador government, a reform was promoted to give preference to the CFE over private renewable energy and natural gas generation plants, despite the fact that many state facilities burn polluting fuels such as fuel oil, coal or diesel.
Said 2022 reform was later blocked in the courts and the Mexican president decided to buy 13 power plants – most of them natural gas – from the Spanish one last year. Iberdrola for almost 6 billion dollars, what he called the “new nationalization,” ensuring that the public company CFE will generate most of the country’s electricity.
Even lClimate-related policies retreated during López Obrador’s six-year termaccording to the independent scientific project Climate Action Tracker, which tracks countries’ commitments to limit warming.
“Mexico’s greenhouse gas emissions continue to increase—despite the brief drop caused by the COVID-19 pandemic—and are expected to continue increasing until 2030,” says a report from that scientific initiative.
In her campaign, the candidate Sheinbaum has assured that the energy transition will be one of the “hallmarks” of his administration and has spoken of leaving the door open to private companies. But Ocampo estimates that there is “a fundamental difference in the magnitude of participation” of the private sector between the Sheinbaum and Gálvez proposals.
On the other hand, the opponent, Xóchitl Gálvez, prefers to trust the private sector to promote investments in renewable energy and launched a proposal to make it easier to install solar panels in homes and small businesses across the country. The technology entrepreneur has also stated that Pemex should focus on geothermal energy.
He also wants to recover the energy auctions that arose in 2016 to stimulate private participation in the development of renewable energy generation plants and that the López Obrador government suspended.
Besides, Sheinbaum wants Pemex to expand into lithium production and electricity generation geothermal. The CFE developed geothermal energy generation years ago. In 2022, Mexico nationalized lithium mining and extraction and a state company will have exclusive rights to extract the metal used in lithium batteries. electric cars and other devices.
For his part, lawyer Edgar Olvera believes that the private sector could bring more investment to exploit Mexico’s natural resources, but he also recognized that what they generate would go abroad.
“It is a very delicate issue, very, very delicate, because we know that the government also does not do the right things 100 percent. “It is a double-edged sword,” he added.
