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News Article

Constitutional Energy Reform Appears to Be Off the Table

By Cas Biekmann | Tue, 06/08/2021 - 17:05

Preliminary results in Mexico’s mid-term elections are telling: President López Obrador will be holding his majority in the lower house and Morena, his political party, will pick up many desired governor positions. Nevertheless, the results obtained are not what López Obrador had dreamed: opposition parties managed to make a bit of a comeback, denying the ruling coalition the two-thirds majority necessary to push constitutional reforms to the energy sector through Congress.

Even with the political deck reshuffled, it is difficult to tell how this new spectrum will influence Mexico’s energy sector. Preliminary results still show an outline of what is to come. The National Electoral Institute (INE) expects López Obrador’s coalition to win between 265 and 292 lower house seats, out of a total of 500. Morena itself could win between 190 and 203 seats. A two-thirds majority of at least 334 seats is necessary to push constitutional amendments through Congress. Ergo, a constitutional change to return the energy sector to seems unlikely. The President hinted at such a changes that could be  real options after his measures to rescue state-owned companies PEMEX and CFE by turning back parts of the 2014 Energy Reform were met with legal suspensions. López Obrador’s administration has often taken aim at private participation in the energy sector, arguing that the companies themselves are the only ones that really benefit from operating in Mexico.

Whereas Peña Nieto’s administration formed a broad coalition in Congress to push through the Energy Reform in 2013, the breach between coalition and opposition is deeper this time. Carlos Bravo, Political Analyst at CIDE told the Wall Street Journal that such an alliance would be an unlikely strategy to begin with: “Far from coming to grips with having to work with opposition parties to push through his agenda, I see the possibility that he resorts to other means to push his agenda, by going after the judiciary, for instance,” he said.

Sunday’s elections were widely seen as a form of referendum on López Obrador’s policy direction.  Voter turnout was just above 51 percent, a high number compared to previous mid-terms. The President spoke about the elections in his daily press conference, saying that he was very happy about how smooth and fair the process turned out. Even though many analysts see the results as a loss for the “Fourth Transformation” movement, López Obrador said that his efforts to transform Mexico were still alive and moving forward. The President’s approval rating remains around 65 percent, as many Mexicans still believe in his mission to “help those most in need” and fight rampant corruption in the country, despite concerns regarding Mexico’s struggling economy and its strategy to fight the COVID-19 pandemic.

López Obrador will have meetings with US and Canadian top officials, where Mexico’s northern neighbors will likely challenge the President’s efforts to curb private participation in the energy sector. How this could influence the direction taken remains to be seen.

The data used in this article was sourced from:  
Wall Street Journal, INE, AP
Photo by:   Pixabay
Cas Biekmann Cas Biekmann Journalist and Industry Analyst