President Loses Energy Reform Vote in Congress
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President Loses Energy Reform Vote in Congress

Photo by:   Alejandro Moreno on Twitter
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María José Goytia By María José Goytia | Journalist and Industry Analyst - Tue, 04/19/2022 - 17:54

After months of political discussion and delays regarding its vote, President López Obrador's energy reform was rejected in Congress this Sunday. Bolstered by the political polarization that surrounded the initiative, the opposition achieved its mission to protect the legal status quo by avoiding the qualified majority needed to approve the constitutional reform.

After a sudden delay until this past Easter Sunday, the Mexican Congress met to discuss and vote on President Lopez Obrador's energy reform, which sought to return the monopoly of the electricity sector to CFE at the expense of private participation.

The vote had been scheduled for Monday, April 11, before the Easter break. However, MORENA, the president's party, used its majority to postpone the vote until Easter Sunday in what some analysts saw as an attempt to reduce parliamentary attendance at the time of the vote.

If this was the case, the efforts were in vain, as congress reported a near-perfect attendance of 498 legislators. Legislators of the opposition alliance Go for Mexico, consisting of PAN, PRI and PRD, spent the night in their San Lazaro offices to avoid setbacks due to the scheduled demonstrations in favor of the reform at the Congress building’s entrance.

The discussion began on Sunday morning and lasted until 23:00 hours. During the discussion, both MORENA and its allies, PT and PVEM, as well as the opposition parties spoke at the podium, leading to an at times rather heated discussion.

The session experienced a tense start, when MORENA Deputy Andrea Chávez requested that PAN Deputy Margarita Zavala not participate in the vote due to an alleged conflict of interest. However, the President of Congress, MORENA’s Sergio Gutiérrez, rejected the request: he held that there were no arguments to suspend Zavala’s vote.

The attempts from the ruling parliamentary coalition to add votes from the opposition were shown to be ineffective. They managed to sway only one vote from Carlos Miguel Aysa Damas. Deputy for Campeche, PRI. Analysts pointed out a conflict of interest in this case: by announcing his vote in favor of the reform, as well as his switch to MORENA, Aysa assured the appointment of his father as ambassador, an issue that depended on the ratification of the Senate, where MORENA holds a majority. However, the opposition added one vote from Andres Pintos Caballero, a PVEM Deputy who announced his change to MC to vote against the reform.

The vote’s result was 275 votes in favor of the reform and 223 against, remaining far from the qualified majority of 334 votes necessary for the approval of the constitutional reform. The opposition block remained united, with its 223 legislators voting against, plus one added vote from Rocío Alexis Gamiño García, Deputy, PVEM who disagreed with the official position of her party. Since the reform was rejected in general terms, its particular terms received no votes and will not be discussed in the Senate.

The failed reform is President López Obrador’s first major legislative defeat. Between 2018 and 2021, the president's party and its allies maintained a qualified majority in Congress, which allowed them to pass constitutional reforms without the support of the opposition. However, this qualified majority was lost during the 2021 midterm elections, where the opposition promised to remain united as a counterweight to the current government.

Due to the insufficient support for his reform, President López Obrador announced that his government already had a "Plan B" to strengthen CFE in case the reform was not approved. On the same Sunday of the vote, the President revealed his initiative to reform the Mining Law, with which he seeks to nationalize lithium and its exploitation.

Since adapting the Mining Law does not require a constitutional change, its modification requires only a simple majority, easily obtained by the ruling parliamentary coalition. The amendment to the Mining Law was voted through during the session on Monday, April 18.

In response to his parliamentary defeat, the President described the opposition bloc as traitors to the country. "Instead of defending the interests of the nation, they became outspoken defenders of foreign companies that busy themselves with plundering. These deputies backed the looters. It is very regrettable, albeit not expected," declared the president during his morning press conference.

In addition, the president assured that for the remaining part of his administration, he will no longer send any more initiatives on energy matters to Congress. Instead, López Obrador requested the future presidential candidates to continue insisting on his proposal, since this type of reform must be approved through democratic means.

The end of López Obrador's energy reform returns a small degree of certainty to the energy sector. Nevertheless, the president's nationalist policy regarding energy issues has not been taken off the table. The Supreme Court's decision not to declare the Electricity Industry Law (LIE) unconstitutional continues to maintain tension in the sector, as does the nationalization of lithium through the new Mining Law. Therefore, private investment in the energy sector will likely not experience a new boom until 2024.

Photo by:   Alejandro Moreno on Twitter

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