SENER Tried to Protect PEMEX from Flaring Policies

According to Reuters, Mexico’s Ministry of Energy (SENER) tried to block stricter flaring policies at the beginning of 2022. PEMEX would have been strongly affected by the new regulations coming from regulator CNH, argued SENER.

According to internal documents Reuters requested, SENER urged CNH and the interior ministries not to publish the new regulation since it could harm an already weakened PEMEX. The documents hold conversations from February 17 to June 17, 2022. SENER tried to block the approval of stricter flaring policies that aimed to restrict how companies managed and quantified natural gas emissions, making it more difficult to justify flaring and giving more power to CNH to supervise it. CNH presented these policies in November 2021, and published them on June 23, after SENER and CNH reached an agreement.

According to one of the documents, SENER Officer Jorge Arévalo requested to not proceed with the publication of these policies due to instructions from “superiors” since it could greatly affect PEMEX’s worn infrastructure. Arévalo argued that the rescue of PEMEX was an important part of the government’s strategy to develop Mexico. CNH is an autonomous, independent regulatory body, so SENER cannot block or delay laws from being published. In trying to do so, the energy ministry may have overstepped its boundaries. This could be qualified as an abuse of power, reported Reuters based on two legal experts it consulted.

The rescue of PEMEX has become a political benchmark for President López Obrador. Pressured to meet production goals, PEMEX seemingly has been running the risk of financial consequences. Despite fines and mounting environmental damage, the company continued its production without addressing flaring issues. However, it seems that the NOC has been increasing efforts to improve these conditions in recent weeks.

The company announced that it will gradually stop flaring at the Ixachi field. According to PEMEX CEO, by December 15, 2022, the Papan Measurement and Control Station (EMC) will be able to process 150MMcf and by January 15, 2023, its capacity will increase to 300MMcf, thus stopping flaring altogether. The NOC has been widely criticized for excessive flaring necessary due to the lack of infrastructure to process all the gas it extracts and for causing environmental harm. This announcement also aligns with other government promises to protect the country’s environment, such as the compromises acquired at COP27.