Communication, Collaboration Key for Energy Autonomy

On March 18, 2023, the government of Mexico celebrated the 85th anniversary of the expropriation of the oil industry in Mexico  with a message from the preponderant actors responsible for the public policies related to the energy sector, who explained the importance of sovereignty, self-sufficiency, and autonomy both in the hydrocarbons sector and in the electricity sector in our country. From the context of the message, we must understand the importance of the strategic role that this represents for Mexico. The preponderant projects in the hydrocarbon, renewable, electricity and other sectors, such as the exploitation and production of lithium, will be fundamental for potential development and the role that this will represent for Mexico in the next six to 10 years. 

From the trench of the private sector, the implementation of public policies, strategies, plans and specific objectives on the part of the government will be essential to establish and implement the necessary foundation for sustained growth, which will guarantee the availability of energy in our country. I fully agree with the projection of the strategic plans and their implementation; in the end, the priority is surely to bet on self-sufficiency and autonomy in production, generation, distribution, transportation, and storage in all branches of the energy sector in Mexico and for its end users. Although it seems that the message may be ambiguous or in some cases difficult to understand, if we take into consideration that expectation versus reality seems to be far apart, in the end, having good communication and coordination will be fundamental for both the public and private sectors for these projects to be fruitful and have an impact in the long term.  

Strategic projects like those  mentioned in public speeches are already underway and will begin generating and producing energy from different sources and means in the coming years ( the Puerto Peñasco photovoltaic project, the Olmec Refinery, natural gas quinquennial plans and Oaxaca’s Transisthmic project). Certainly, we cannot anticipate the impact or result of these projects on all strategic areas, such as the oil and gas and electricity industries in Mexico. Surely and given the nature of the current projects and investments already underway, as mentioned by Minister of Energy Rocío Nahle, they will be essential and crucial with the respective relevant impacts for the electricity, oil and gas, and renewables industries in our country. The message is clear, and it is necessary to understand which policies and strategies within the sector will be maintained in the medium and long term. Therefore, there must be a clear and concise commitment between the parties (government entities responsible for the implementation of these projects and the key private players). With the same consideration, the private sector will have to do its part. The impact of the message from the minister of energy is clear and consistent, I think, with the understanding of the key players within the energy sector in Mexico. Therefore, the preponderant actors within the energy industry must take the corresponding measures to contribute what is necessary for these projects to come to fruition.

It is impossible for these projects to coexists if there are no clear and consistent rules and no public policies in place from the government and private energy investors in Mexico. If the message is clear, there will be more and more participation and, eventually, this will set the foundation for a coordinated effort to increase direct and indirect involvement to consolidate the industry. It is more than understandable that strategic participation within all branches of the energy sector by private industry is and will be essential in the coming years. In one way or another, the correlation between the strategy and the scope of the projects converges within the same sphere, although in some cases different barriers or strategies persist, including the fact  that each segment of the energy industry in Mexico operates differently. At the end of the day, both projects in the electricity or hydrocarbons sectors are intertwined within the same sphere. Regardless of the complexities and barriers within the respective areas of the energy sector in Mexico, we must not lose focus so that together we can carry out the implementation of all active primary and secondary projects, which are not minor, to meet the demand for energy in our country. Examples include those strategic natural gas infrastructure projects in the southeast or northwest, or the construction projects of LNG liquefaction plants or everything related to interconnection throughout the route of the Isthmus of Tehuantepec, or the consolidation and growth of electricity distribution networks and other strategic projects and plans. 

From the perspective and trench of the private sector, especially the oil and gas sector, I believe that today more than ever, we must bet on better communication, understanding, openness and consolidation between both the governmental strategies and the strategic participation of the private sector., effectively seeking the alignment and achievement of all those primary and secondary projects, which will be strategic in the long run and indispensable to increase the installed capacity to cover the demand of energy so important and necessary in this country. Although the political message from March 18 seemed to focus merely on energy autonomy and self-sufficiency, we cannot lose sight of the fact that for this to be achieved and carried out by the government, the private sector must always participate actively, consolidating as key participants and strategic role-makers. 

The long-term vision cannot be different or be traced in separate ways, and, of course, the message of autonomy, sovereignty and self-sufficiency is important. Mexico has a high potential to consolidate itself gradually  in the years to come as a country with the necessary self-sufficiency and capacity to continue covering its energy demand. But it is important to understand that it will always be subjected to  external factors and macro and geopolitical issues, and, of course, that the road to achieve this won't happen in the blink of an eye; it will take a lot of resilience and openness from the parties involved to have a clear and concise path drawn in the coming years, and there will have to be a strategic opening by the government, so that the private industry and investors will continue investing hand in hand in each of these secondary and primary projects. Clearly, the message given by the preponderant participants on March 18 must not affect the global strategic vision and active participation of the private sector in the coming years in Mexico. On the contrary, more than ever, the private sector must raise its hand to continue participating and contributing in the consolidation of the message given on this anniversary.