{"id":3630,"date":"2021-03-01T23:14:20","date_gmt":"2021-03-02T05:14:20","guid":{"rendered":"http:\/\/accesstomexico.mx\/blog\/?p=3630"},"modified":"2021-04-01T23:17:00","modified_gmt":"2021-04-02T05:17:00","slug":"mexicos-president-pushes-nationalist-agenda-after-texas-gas-disruption","status":"publish","type":"post","link":"https:\/\/accesstomexico.mx\/blog\/mexicos-president-pushes-nationalist-agenda-after-texas-gas-disruption\/","title":{"rendered":"Mexico\u2019s president pushes nationalist agenda after Texas gas disruption."},"content":{"rendered":"\n
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WORLD OIL<\/a><\/p>\n\n\n\n

The deep freeze across the central U.S. last month didn’t just darken 4 million homes in Texas. It also left millions of people across the border in Mexico in the dark for days, disrupted water supplies, forced schools and businesses to shut, and knocked out service to about 800 manufacturing facilities that depend on U.S. shale gas for energy.<\/p>\n\n\n\n

Since then, President Andres Manuel Lopez Obrador has turned the crisis into a rallying cry for more energy independence, weaponizing it to advance a nationalist agenda that has implications beyond natural gas imports and threatens tens of billions of dollars of investments in renewable energy by U.S., Canadian and European energy companies. On a large screen behind his press-briefing podium, he called up the image of a recent Wall Street Journal article showing how the power-market deregulation in Texas cost utility customers billions of dollars.<\/p>\n\n\n\n

\u201cWhen they had the issue of the freeze in Texas, it became clear that the energy policy in place in that state and other states in the American union doesn\u2019t work well,\u2019\u2019 the 67-year-old president, widely known as AMLO, told reporters last month as he pointed to the article, which he also cited in other occasions.  \u201cThey paid an extra $28 billion in Texas because of the privatization of the electricity industry.\u201d<\/p>\n\n\n\n

The jabs at Texas provided fresh fodder for AMLO\u2019s long-standing crusade to return the country\u2019s electricity to the hands of the state in a throwback to decades of monopoly that left old power plants in bad shape and unable to meet growing electricity demand. His policies are putting him on a collision course with the U.S. and other nations that worry about assets held by NextEra Energy Inc., Sempra Energy, Canadian Solar Inc., Spain\u2019s Iberdrola SA and Italy\u2019s Enel SpA. While the president claims that private-sector investors are ransacking Mexico\u2019s energy riches, some critics say that all he has achieved is to stall power generation projects that would actually help Mexico cut gas purchases from north of the border.<\/p>\n\n\n\n

The government has \u201cthis fantasy that they can reduce their use of natural gas,\u201d said Rosanety Barrios, an independent energy analyst and former energy ministry official in the previous administration of Enrique Pena Nieto. \u201cWe don\u2019t have a strategy to reduce the risk of import dependency, that\u2019s the reality.\u201d<\/p>\n\n\n\n

The president argues that the state can make the country more energy-independent by building new hydro dams and other power plants. It\u2019s hard to fathom, though, how the cash-strapped national utility Comision Federal de Electricidad and oil producer Petroleos Mexicanos could at the same time reduce Mexico\u2019s reliance on gas from Texas, sideline internationally owned solar and wind projects, and do all that without the help of private enterprise and foreign capital. CFE struggles to maintain its existing power plants, and Pemex can\u2019t produce gas as cheap as Texas does, so it focuses almost entirely on crude.<\/p>\n\n\n\n

Energized by public outrage over last month\u2019s outages that he blames on the previous administration\u2019s policies, his piecemeal moves to give the state more control over the electricity market are gaining some traction.<\/p>\n\n\n\n

This month, the president managed to pass a bill that gives CFE priority over solar and wind plants when selling electricity on the grid. The law is now stuck in a court battle, and that\u2019s just prodding him further: He has pledged to amend the constitution to dial back on the reforms that opened up the country\u2019s energy industry to the private sector in 2013 and 2014.<\/p>\n\n\n\n

 \u201cI will send an initiative to reform the constitution, because I cannot be an accessory to theft, robbery, I cannot accept that individuals harm the public treasury,” AMLO said last week.<\/p>\n\n\n\n

In practice, Mexico\u2019s economy has continued to become increasingly reliant on the U.S. under AMLO, who rose to power in 2018 on pledges to reduce that dependence.  Rising exports to the northern neighbor and money sent home by Mexican expats have been a major boost to the economy during the pandemic. Meanwhile, gas imports from the U.S. have nearly tripled in five years to about 6.5 billion cubic feet a day.<\/p>\n\n\n\n

Instead of helping Mexico diversify its electricity generation, his policies have mostly alienated the renewable energy developers that came to the country following the past administration\u2019s reforms and are already producing about a 10th of the country\u2019s electricity. They\u2019ve invested almost $30 billion in renewables and energy storage over the past decade, and potential power generation projects over the next 30 years could bring roughly $150 billion more, according to BloombergNEF.<\/p>\n\n\n\n

But AMLO is putting all that in limbo. His government has sought to favor the state utility in the power market even before this month\u2019s contentious bill. About 200 energy projects have been stalled, while competitive bidding rounds for new energy investments have been suspended.<\/p>\n\n\n\n

Jaguar E&P, a Mexican upstart that has half of the privately operated onshore gas fields in the country, is hoping that private explorers will be able to thrive alongside the two state energy companies and help the country reduce dependence on imports.<\/p>\n\n\n\n

\u201cWhat happened in February highlights the risk that we have associated not just with relying on gas coming from the U.S. but specifically gas coming from one state,\u201d Jaguar Chief Executive Officer Warren Levy said in an interview. \u201cYou combine the very heavy import dependency, lack of storage capacity, lack of domestic supply, and what you get is that when you have a shortfall of gas, there\u2019s a very high risk for the Mexican economy.\u201d<\/p>\n\n\n\n

Even if AMLO\u2019s approach can\u2019t realistically bring Mexico closer to energy self-sufficiency, it gets votes. After four years of a Donald Trump presidency that wasn\u2019t very friendly towards his country, AMLO\u2019s combination of charisma and tough nationalistic talk has helped him sustain high levels of popularity. And with over 60% of Mexico\u2019s electricity generation relying on gas that comes mostly from north of the border, it\u2019s also easy to see how his supporters are willing to overlook flaws in his policies in the name of more independence.<\/p>\n\n\n\n

It also didn\u2019t help that Texas Governor Greg Abbott, at the height of the crisis on Feb. 17,  banned sales of power and gas to customers outside the state. The move was bound to have serious implications to Mexico, as Javier Lopez Ramos, the chief executive officer of Pemex\u2019s gas-trading unit, pointed out in a letter to the Texas energy regulator that same day.<\/p>\n\n\n\n

\u201cThe loss of export volumes from Texas cannot readily be offset with Mexican production, such that human deprivation will almost certainly result,\u2019\u2019 he said in the letter.<\/p>\n\n\n\n

While Mexico\u2019s outages weren\u2019t as bad as in Texas, where 57 people died because of the freeze, grid operator Cenace announced rolling blackouts that lasted for three days, with as many as 4.7 million customers losing electricity at some point. The northern states of Baja California, Sonora, Chihuahua, Coahuila, Nuevo Leon and Tamaulipas were the worst hit. Manufacturing and export firms lost about $200 per hour during the outages, according to Luis Manuel Hernandez, the president of the National Council of the Maquiladora and Export Manufacturing Industry. But he\u2019s not blaming the U.S.<\/p>\n\n\n\n

\u201cIf the government had anticipated the problem, we wouldn\u2019t have had three days without electricity,\u201d he said over the phone from Tijuana.<\/p>\n\n\n\n

Amy Stillman and Sergio Chapa. (2021). Mexico\u2019s president pushes nationalist agenda after Texas gas disruption. USA. World Oil<\/em>. Recuperado de <\/strong><\/p>\n\n\n\n

https:\/\/www.worldoil.com\/news\/2021\/3\/26\/mexico-s-president-pushes-nationalist-agenda-after-texas-gas-disruption<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

WORLD OIL The deep freeze across the central U.S. last month didn’t just darken 4 million homes in Texas. It also left millions of people across the border in Mexico in the dark for days, disrupted water supplies, forced schools […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3630","post","type-post","status-publish","format-standard","hentry","category-uncategorized","clearfix"],"_links":{"self":[{"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/posts\/3630","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/comments?post=3630"}],"version-history":[{"count":1,"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/posts\/3630\/revisions"}],"predecessor-version":[{"id":3632,"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/posts\/3630\/revisions\/3632"}],"wp:attachment":[{"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/media?parent=3630"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/categories?post=3630"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/tags?post=3630"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}