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News Article

Sweeping Energy Reform’s First Step is a Matter of Votes

By Cas Biekmann | Thu, 10/07/2021 - 17:30

To pass his far-reaching constitutional changes, President López Obrador needs a supermajority in congress, which he does not have. After losing some ground in this year’s mid-term elections  the ruling coalition only needs more outside support, and some opposition parties show they are willing to negotiate. Now that alliances could shift, the outcome of a voting process that could put the state once again firmly in charge of the country’s energy sector remains unclear.

A quick look at the mathematics begins by looking at the status quo in Mexico’s Chamber of Deputies, the lower house of Mexico’s bicameral Congress of the Union. Here, 500 seats are divided between 7 political parties. Following June’s mid-term elections, the ruling coalition consists of López Obrador’s MORENA party, with 201 seats, the Ecological Green Party of Mexico (PVEM) with 43 seats and the Labor Party (PT) with 33 seats. In total, they have 277 seats. Since the ruling coalition needs a two-thirds majority to pass the electric reform proposal, and obtain a total of 334 seats. As such, it would require 57 additional votes, assuming that the entire governing coalition is on board with the reform; analysts point particularly toward the Green Party, who might not support a reform that puts green energy at risk. Nevertheless, outside parties have not ruled out their support. Because the proposal also includes the potential nationalization of lithium resources, and as such, further interests come into play.

From the opposition parties, the PAN is the biggest as it gathered 114 seats. The PRI has 71 seats, the relative newcomer Movimiento Ciudadano (MC) has 23 and the PRD 14.

Before the mid-term elections, PAN, PRI and PRD joined forces against the ruling parties, a move that turned out to be successful: it won 63 seats, just two less points than the ruling coalition. Since people vote on individual parties too, Morena managed to keep its majority. A potential supermajority, however, was lost. Based on these alliances and the seats behind, analysts felt that the constitutional provisions established in the 2014 Energy Reform were less likely to be altered. The results of the mid-term elections were also received positively by Mexico’s private energy industry participants. Many argued that a more balanced congress meant that there would be a bigger counterweight against radical reforms. To enact strong-worded reform, Morena would need allies and therefore find more compromise, an idea welcomed by MBN experts.

Nevertheless, a possible change in alliances has rattled this panorama. After the electric reform proposal was presented to congress PAN and PRD were quick to say they would vote against it, but their ally PRI remained silent. MC also stated it would not vote for the proposal, citing its commitment to the environment and to clean energy. One day after the PRI released a statement saying it would be open for a debate, PAN presented the PRI with an ultimatum: if the proposal is passed, their coalition would be terminated. PRI’s president, Alejandro Moreno, maintained on Wednesday that the PRI would vote based on a consensus. To form this block, the PRI would not be pressured, not even by the president: “Imagine, those who need the votes give us deadlines… This concerns a constitutional reform,” he told the press. Moreno confirmed that the official party stance is to analyze the process and then define how to vote. As such, comments by PRI members that said they would vote against it, as suggested by Senadora Claudia Ruiz Massieu, are of their own opinion. Nevertheless, Moreno emphasized it would throw out its alliance with PAN and PRD so suddenly. Because much will depend on how the PRI decides to vote, the energy sector will watch the developments more than closely. In any case, the voting is to take place before December 15, when Congress concludes its work for the year.

The data used in this article was sourced from:  
El Universal, Reforma, Animal Politico
Cas Biekmann Cas Biekmann Journalist and Industry Analyst