News Article

In Memoriam: Edgar René Rangel Germán

Wed, 01/20/2016 - 12:45

Q: Why was CNH established, and which role did you play in the process?

A: The National Hydrocarbons Commission (CNH) started as a sort of back office of the Ministry of Energy, let us call it CNH beta, and I wrote the first charter of this commission in 2005 under the title Consejo Tecnico de Producción y Extracción de Hirocarburos, which was one of my first assignments at the Ministry of Energy. The idea was to strengthen the Energy Regulatory Commission (CRE) and create a new regulatory agency for upstream to participate in strategic parts of the 2008 Energy Reforms such as the opening of refining, deepwater, and transborder fields. At that time, Francisco Salazar was President of CRE, and he provided a great deal of support in working with the legislative powers. Having been involved since its inception, I feel like the godfather of this organization and am very proud that it is now maturing.

The first real manifestation of CNH, CNH 1.0, emerged following the 2008 Energy Reform. In my humble opinion with respect to other ideas, the creation of CNH was the only aspect of the 2008 Energy Reform that created real value for the country. Initially, CNH’s operations consisted of a type of simulation, with CNH regulating PEMEX, both of us being part of the Federal Government and reporting to the Ministry of Energy, while the Ministry of Energy simultaneously acted as the president of the board of PEMEX. This helped in training us how to establish regulations, how to avoid overregulation or abuse, and how to comply with certain rules. CNH 2.0, which exists since December 2013, is the real one, the independent, autonomous, technical agency.

Since I had been working on the creation of CNH for many years, I wanted to be a Commissioner. The first regulation that we issued focused on gas flaring, followed by project sanctioning. We were very few, with only five Commissioners and a staff of five people, and we were growing very slowly because we were part of the Ministry of Energy. After we had our first meeting, we received correspondence from various organizations, including the Senate and PEMEX board members to request advice on topics ranging from Chicontepec and deepwater to PEMEX’s exploratory strategy. We started creating documents that were very uncomfortable, which is why we were constrained since it became apparent that if we were given more money and more people we would be reporting on more problems. Nowadays, the situation is very different, and we are a different entity. We are creating important units dedicated to exploration, extraction, the administration of entitlements and contracts, and the National Center of Hydrocarbons Information (CNIH).

Dr. Edgar René Rangel Germán passed away on March 23, 2016, leaving an impressive legacy in the country’s energy sector in the short time that he was given. Before graduating with a Ph.D. in Petroleum Engineering from Stanford University, he became the only student to score a perfect 10 in UNAM’s Petroleum Engineering program. After returning to Mexico, Dr. Edgar René Rangel Germán subsequently worked at PEMEX, the Ministry of Energy, and the Ministry of Finance and Public Credit before becoming a Founding Commissioner of CNH. He took great pride in being its second employee, and was an exceptional ambassador of the Energy Reform, as well as the CNH’s technical center of gravity. His passionate contribution to the development of the Mexican oil and gas industry was greater than the recognition he received, and his legacy is destined to transform the country he loved.