Image credits: Jack B on Unsplash
News Article

Initiative to Reform if Rescue of CFE and PEMEX Fails

By Cas Biekmann | Fri, 09/25/2020 - 12:38

President Andres Manuel López Obrador said he would present an initiative to reform and make changes the Constitutional articles that make up the 2014 Energy Reform if the government does not manage to save PEMEX and CFE under the current regulatory framework.

“It would be irresponsible for me not to. I do not want the energy sector to be privatized, because if we do not have independence in our energy, we cannot guarantee our sovereignty as an independent country,” he explained, according to El Financiero. The concept of sovereignty in general, with a focus on energy in particular, has long been a focal point of the president’s policy direction.  López Obrador explained that if PEMEX and CFE cannot be rescued under the mantle of the Energy Reform, he would move with an initiative to revise it. His main grievance with the reform is that he considers it only benefit individuals, making the project a “resounding failure”. In order for Mexico to benefit from its national resources, the state companies need to be brought back to their former glory.

Importantly, the president clarified that the Mexican government will continue to incorporate the participation of the private sector, even when state production companies are being given priority.

The president outlined his vision toward the importance of CFE: “The plan in the neoliberal period was to close down the CFE plants. Now the energy production is 50-50, whereas before the total energy production belonged to CFE. With the privatizations that began with former president Salinas, independent producers and individuals began to grow. Currently, half of the energy produced in the country is being generated by individuals,” he said. If he had not interfered , López Obrador predicts that CFE would merely produce 20 percent of Mexico’s energy by the end of his six-year term.

The government’s ongoing efforts to reestablish CFE as the main player in the market have created many concerns in Mexico’s private sector. María José Treviño, Country Manager of Acclaim Energy Services, wonders what the government’s tendency to focus on its state resources means for the development of renewable energy, a trend in high demand globally. “Mexico, are we preparing to join the growing global tendency or are we staying on the sidelines to watch investments and multinationals look for new countries to invest in?” she asks.

The data used in this article was sourced from:  
El Financiero, MBN
Photo by:   Jack B on Unsplash
Cas Biekmann Cas Biekmann Journalist and Industry Analyst