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LibreOrganize 0.6.0 - Documentation

Climate Change and México’s Energy Re-Nationalization

from the April 12, 2023 Bulletin

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Sean Sweeney directs the International Program on Labor, Climate & Environment at the City University of New York’s School of Labor and Urban Studies. He also coordinates Trade Unions for Energy Democracy, a global network of 102 unions from 32 countries that’s developing an independent trade union approach to energy transition and climate protection. TUED member unions are advocating for democratic control and social ownership of energy resources, and México’s electricity reform efforts, as Sweeney lays out in this New Labor Forum analysis, could set an enormously important precedent in the ongoing global struggle for climate protection.

AMLO’s efforts to re-nationalize the energy sector — ongoing since 2019 — haven’t been supported by the international left. Why?


We on the left have opposed neoliberal reforms privatizing prisons, schools, health care and so on, but we’ve been MIA on privatizing energy. México stands as perhaps the only major country that’s been calling attention to the failures of energy privatization. That has, of course, raised the ire of the neoliberal US government and the private companies it represents. Many on the left, unfortunately, have joined with them in an unholy alliance.


Why? Because groups on the environmental left have become infatuated with renewable energy companies. They love public subsidies going to those private companies supposedly on track to save the planet.


In the economy overall, the left has opposed “structural adjustment” programs that open public sectors to private market forces that impoverish people at the bottom and concentrate astronomical wealth at the top. But many on the left don’t see that injecting private multinational renewable energy companies into power systems amounts to a “green structural adjustment,” an approach to climate protection both socially regressive and ecologically ineffective.

Mexican President Cárdenas in 1938 expropriated foreign oil companies and nationalized the energy sector, an extremely popular move. How did oil and electricity get re-privatized in México and fall back under foreign control?

In the 1980s and 1990s, the IMF and the World Bank decided they would no longer fund public energy systems unless they were moving toward privatization.


Electricity systems have three components: generation, transmission, and distribution. To have an efficient electrical system, these three elements must work together. But the privatization push broke these three elements up. In privatized systems, corporations sell electricity and make profits, but public dollars must fund and maintain power grids and distribution to the people.


Under Peña-Nieto, the president of México who preceded AMLO, lawmakers enacted some 20 legislative changes and three constitutional amendments that allowed non-Mexican companies to own and invest in México’s energy resources — and not just oil. Peña-Nieto welcomed foreign renewable energy companies into México and guaranteed their profits. These changes, all done in the name of “climate protection,” deliberately misled the Mexican people and had environmentalists buying into his reforms.

The most immediate and obvious result would be soaring electricity and gas prices, called the gasolinazo. Demonstrations against the price increases popped up all over México. Enraged people even sabotaged and tapped gas lines!


It’s no wonder that the Mexican people massively support AMLO’s effort to re-nationalize energy. But that doesn’t mean that the Mexican people don’t care about the environment.

Price of fuel increase sparks mass protest/Photo

The Western press says AMLO’s oil policies — taking control of oil exploration and production, as well as building a giant oil refinery — reflect his addiction to oil and cavalier attitude toward climate change. A just criticism?


Some countries in the Global South do take a nationalistic stance. We didn’t cause global warming, these nations say, and we shouldn’t have to pay the price for solving it. So don’t tell us we can’t continue to use coal and oil.


Let’s be clear here: AMLO does not take that position. The transition away from fossil fuels, AMLO believes, requires a planned pathway to a clean energy future. Not every fossil fuel can be abandoned willy-nilly. México wants a carefully planned and coordinated transition to an efficient and socially just low-carbon system. México can only accomplish this transition with public ownership of the entire energy system.

We need to see questions about ownership and sovereignty as central here: If a country doesn’t control its own energy, that country can’t control its own economy. It remains dependent on imperial colonial powers. Electrification will always be vital to national development. But privatized systems don’t provide universal access to electricity. They can’t make profits bringing electricity to remote rural areas. So they leave those rural areas out, just as privatized health and broadband systems have left those rural places out. 

AMLO at the Dos Boas refinery site/Presidencia

Those private companies leave it up to the public sector to find the funding to provide services for all. 

AMLO put a moratorium on renewable energy auctions. Isn’t bringing in more renewable energy a good idea?


AMLO is focusing on ownership. His message: “I’m not against clean energy, I’m against dirty business!” Environmental groups did get upset when he closed down the “capacity auctions” that allowed foreign renewable companies to enter the energy marketplace. But those power purchase agreements locked in profits for the companies, and that meant higher electricity prices for consumers.

The standard energy market structure guarantees renewable companies their money first, a guarantee known as “priority of dispatch.” But if the sun isn’t shining or the wind isn’t blowing, then burning gas to generate power has to kick in. This means that the federal electrical stations, under the public CFE agency, have to turn on and off, and powering up and down goes hard on the grid. 

México City now has the world’s largest urban solar project, a facility all publicly funded./Central de Abasto CDMX

With money paid first to the private companies, the cost of maintaining the grid becomes prohibitive. The electrical stations go into a death spiral. With private renewables, energy generation becomes the enemy of energy transmission!


Should we all be concentrating on just a call for “green jobs”?


I used to think that way. But then I got to do a study for the UN Environmental Program on the impact of shifting jobs from the carbon-based to the renewable energy sector. Our research showed that without public ownership of the renewable sector, green jobs alone don’t solve rising emissions and climate instability.

In 2012, the Rio +20 Earth Summit saw a fight between unions from the Global South and unions from Europe and the United States. Unions in the South saw green jobs programs as neo-colonial projects, with private renewable companies gaining control of energy in their countries, under the guise of “saving the planet.” 

Photo: TUED

Some US unions, meanwhile, would support any project — be it in the carbon sector drilling for oil or a wind farm in the renewables sector — that delivered a good deal for their members, without considering the project’s effect on the working class as a whole.


In México, the electrical workers union, the SME, and the Technical and Professional Petroleum Workers both support AMLO’s re-nationalization plans.


If México succeeds in creating a public, sovereign energy system, what will the effect be on other countries, particularly those of the Global South?


What México is doing can be revolutionary. Many countries want to do what México is doing but face their own political constraints. AMLO is loudly declaring that we must consider energy a universal common good, not merchandise. To save the planet, yes, we must de-carbonize, but we must also re-nationalize, de-commodify, and democratize!