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López Obrador Outlines Three Reforms, Energy is One of Them

By Cas Biekmann | Wed, 06/16/2021 - 16:00

President López Obrador did not manage to reach a supermajority in the lower house during last week´s mid-term elections, as opposition parties managed to create a bit of a comeback, nevertheless, Mexico’s executive has said he would present reforms to congress, one of them aiming to strengthen state-owned utility CFE.

With an electoral turn out rate above 52 percent, the highest for a midterm election since 2000, the election on June 6 was one of the largest ever held.  Preliminary results gave López Obrador’s coalition 279 seats divided among MORENA (197), PVEM (44) and PT (38). This is 53 seats short of a qualified majority in congress that would have allowed the administration to fast-track initiatives like amending the Constitution. Industry insiders from the energy, mining, oil and gas sectors told Mexico Business News that this would bring a greater balance to the lower house now that the ruling coalition would need allies outside of its own partnership to enact changes to the constitution.

Whether the President will look for support in opposition parties like  the PRI, PAN, PRD and MC remains to be seen. Despite his coalition’s loss following what he praised as smooth and fair elections, constitutional reforms remain on the table. "If they are necessary, I will present them even if they do not pass or are rejected," López Obrador said  in regards to the reforms, hinting that the damage to CFE that could occur after such a rejection would then be on the opposition’s hands. The President remained adamant that CFE needed to be rescued, whether the coalition had lost seats or not. Earlier this year, the executive pushed a bill through congress favoring CFE’s power plants of privately generated power, among other benefits to the state’s utility. After being met with injunctions, the bill’s constitutional validity remains to be reviewed by the Supreme Court, which has invalidated governmental measures with similar goals earlier on.

The new proposal promises to leave projects currently operated at peace, but aims to restrict the total amount of private participation in the energy sector.  "Companies already in operation in the country will not be affected, but their participation in the market will be limited to 46 percent," said López Obrador.

The other reforms the president was referring to is one aimed to reshape Mexico’s electoral processes and make the National Guard an integral part of the country’s Ministry of Defense.

"I hope I can present this initiative before the end of the year, or in early 2022," explained López Obrador about the timeframe in which the initiatives for reforms would take place.

The data used in this article was sourced from:  
El Financiero, S&P, MBN
Photo by:   Wikipedia Commons
Cas Biekmann Cas Biekmann Journalist and Industry Analyst