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LibreOrganize 0.6.0 - Documentation

Mexican Oil and Gas

from the Nov. 24, 2021 Bulletin

economy & economic reform environmental issues

The writer, playwright, and freelance journalist Kurt Hackbarth analyzes Mexican politics from a left perspective, providing a welcome antidote to the “news” we read in the mainstream US and Mexican media. A naturalized Mexican citizen born in the United States, Hackbarth writes in both English and Spanish. Hes currently coauthoring a book on the 2018 Mexican election. His most recent article, a look at México’s far-right, appears in the Jacobin magazine.


Everyone in México needs to turn on their lights, drive their cars, and plug in their cellphones. What sort of energy resources can México tap?

Kurt Hackbarth:  México is blessed or cursed with an abundance of oil and gas. New oil fields have been discovered just in the past few years. México also has one of the world’s largest deposits of lithium, “the new oil,” an element essential to the production of everything from batteries and computers to cars and pacemakers. México has other strategic minerals as well.


In México’s southeast, hydroelectric dams can provide enough energy for the whole region. The Isthmus of Tehuantepec offers one of the world’s most promising areas for wind power. And the government is now making investments in solar, with a large windfarm project in Sonora and an urban solar installation in México City. 


Let’s focus on oil. Given its abundance in México, do the Mexican people have what they need at an affordable price?


Foreign oil companies gained an early foothold in México. But President Cárdenas nationalized the oil sector in 1938 and created Pemex, a publicly owned and operated entity. This move enjoyed huge support from the Mexican people and still remains a point of national pride.


But Mexico’s neoliberal governments have since then deliberately sabotaged Pemex. The Pemex CEO from 2012 through 2018, Emilio Lozoya, has even been charged with organized criminal activity. Before heading Pemex, Lozoya served as former Mexican President Enrique Peña Nieto’s campaign manager. Prosecutors are charging him with accepting millions from the Brazilian construction and petrochemical giant Odebrecht. In return for pay-offs, Odebrecht won lucrative contracts. Lozoya’s now in pre-trial detention, a poster boy for the corruption that AMLO has vowed to fight.

The sabotage also included raids on Pemex funding and a refusal to do adequate refinery upkeep. This entire mess became the excuse for privatizing Pemex. In 2013, President Peña Nieto welcomed foreign companies back, opening up the entire industry. The resulting leeching of resources required the raising of gasoline taxes — called gasolinazos in the press — to plug the Pemex budget hole. Under Peña Nieto, the price of gas at the pump jumped up by more than a third. This triggered mass protests on a number of occasions.

ProtoplasmaKid / Wikimedia Commons / CC-BY-SA 4.0

AMLO wants to bring back national/public control. What’s the current situation?


AMLO has made valiant attempts to get Pemex in order. He has repaired six refineries and is building a new refinery, Dos Bocas, in Tabasco. AMLO’s administration has also refurbished hydroelectric stations, and his new constitutional reform proposes to nationalize the lithium industry while strengthening the role of the Federal Electricity Commission. A key legislative vote on these reforms will likely take place before Christmas.


But isn’t AMLO also going to increase fossil fuel production to the detriment of attempts to restrain global warming?


We’ve seen an international attempt to paint AMLO as a lover of dirty energy. His opponents are trying to build opposition from environmentalists to Mexico’s nationalization of its energy sector. But all this amounts to a public-relations scam. Don’t fall for claims that US and European energy interests represent “green energy” while México represents fossil fuels!


Biden’s stance here has actually been even more interventionist than Trump’s. His ambassador to México, Ken Salazar, is acting as a shill for US energy interests and engaging in unseemly meddling in Mexico’s internal affairs by publicly lobbying against AMLO’s energy reform. And, by the way, the reform wouldn’t amount to a complete “nationalization. Some 54 percent of energy going into the grid would be from publicly owned sources and up to 46 percent from private. Under AMLO’s plan, energy generated in the public sector would go into the grid first, reversing the neoliberal counter-reforms of 2013, moves that required the government to buy from private companies first and leave its own production capacity idle.


México has only a ten-day reserve supply of gasoline — thanks to the decay of its refining capacity — and now has to import fossil fuels. AMLO is aiming to get México self-sufficient in energy as a way to underpin national sovereignty. That doesn’t mean México isn’t making an effort to go green. In any case, for the global north to lecture the global south on being “green” really rates as rather rich. The global north has generated the vast bulk of greenhouse gas emissions, and Biden is just now opening up millions of acres for new drilling in the Gulf of Mexico.


What else can México do while going green to attain energy self-sufficiency?

México needs national control of the nation’s energy resources. But, to be truly successful, AMLO’s energy reforms need to embrace the democratization of energy throughout Mexico, along the line of a constitutional reform on indigenous and Afro-Mexican rights currently pending.

Onergia Cooperative, Puebla MX

This reform would allow community groups to become sujetos de derecho público, bearers of public rights, offering legal protection to autonomous forms of government and extending to indigenous and Afro-Mexican peoples the right to control their own natural resources and mineral wealth. On top of these steps, México needs to encourage the community generation of renewable energy everywhere. Reforms like these would distribute power — electric and otherwise — to all of México’s people.