The Mexican Senate approved the most far-reaching oil reform in 75 years on Tuesday, opening up Mexico’s $95 billion-a-year oil industry to private capital. In a building ringed by thousands of security forces, the ruling PRI party and the opposition PAN voted to pass the politically controversial reform, overriding the strong opposition by the leftist PRD party lawmakers who displayed a gigantic banner in the center of the hall reading: “NO TO PEMEX’S PRIVATIZATION.” Pemex is Mexico’s state-own oil monopoly.
Just hours after Senate passage, Congress’ lower house on Wednesday began a floor debate on legislation that would open Mexico’s state-run oil industry to private investment, rejecting an effort by leftist opponents to first have committees review the bill.
The House of Deputies voted 354-134 to give general approval to the proposal late Wednesday, but continued in session for what was likely to be hours and hours of debate on hundreds of challenges to individual sections of the bill before a final vote.
Financial Post, 12/4/2013
Both Brazil and Mexico’s traditional and renewable energy sectors are expected to grow, if they can continue to make positive policy reforms and attract the necessary investment. In 2012, Latin America and the Caribbean claimed only 6% of the world’s investment in renewable energy – the majority of which went to Brazil and increasingly Chile – but analysts at the Inter-American Development Bank claim that the region is the “new frontier“ for clean energy investment.
If the region is to live up to these high expectations, its energy-rich countries must raise capital to the tune of $430 billion to fully develop its clean energy resources. They must continue to pass reforms that will make private investment more lucrative, and thus more attractive, to hesitant energy companies – who have the capital and the expertise the region needed to develop their shale and deep-sea reserves, as well as their green energy.
Global oil majors from Exxon Mobil Corp. to Chevron Corp. are about to get the clearest indication yet of how far Mexican lawmakers will go to lure them into the largest unexplored crude area after the Artic Circle.
Senate committees will begin debating a bill to end a seven-decade state oil monopoly as soon as today. On the agenda is a proposal by members of President Enrique Pena Nieto’s Institutional Revolutionary Party, or PRI, and the National Action Party, or PAN, to extend a profit-sharing model unveiled in August by also allowing production sharing or a license model used in Brazil, said two people with knowledge of the talks.
USA Today, 12/1/2013
But Peña Nieto’s anniversary arrives amid a growing pessimism as the economy slumps, his agenda of structural reforms encounters resistance, and the security situation remains the same or worse in many places — prompting fed-up citizens in some areas to grab guns and organize vigilante groups.
Mexico’s oil industry is in a bad way. The country’s once massive petroleum reserves have basically been sucked dry. Production is plummeting, and the state oil monopoly, Petróleos Mexicanos (Pemex) is hemorrhaging money. Unless something is done soon, for the first time in decades Mexico could fall from its coveted spot among the world’s top 10 oil producers.
At the same time that classic oil drilling is stalling, the country is sitting on top of fuel sources that are harder to tap: massive amounts of shale oil and gas, as well as deep-water reserves in the Gulf—just like the ones the United States drills. (What, you thought those geological formations stopped at the border?) So why isn’t Mexico going after the same resources that have been so lucrative for its northern neighbor? According to President Enrique Peña Nieto, there’s just one thing standing in the way of Mexico’s rightful petroleum renaissance: the country’s constitution. So he’s asked the government to change it.
Mexico Institute Director Duncan Wood spoke to Jeremy Martin, Energy Program Director at the Institute of the Americas, about Mexico and energy. Listen to the podcast here.
Dr. Emmett Brown takes banana peels, leftover beer, and some other pieces of garbage from the trash to charge his car — a DeLorean equipped with the Mr. Fusion Home Energy Reactor. Although in this scene from the movie Back To The Future (1985), the technology was invented in 2015, energy generated from garbage can now be seen in real life, and right here in Latin America.
The system, called biodigestion or anaerobic digestion, generates electricity from gases produced by different organic materials. While Chile and Argentina have just discovered this type of energy source, Peru and Mexico have been using it for the past for 30 years. In fact, the Monterrey subway in northern Mexico operates with electricity from garbage.
Mexico’s “Radical Economic Transformation” due to Energy Reform, Rescued Kidnapping Victims, and Electoral ReformOctober 4, 2013
The Mexico Institute’s “Weekly News Summary,” released every Friday afternoon summarizes the week’s most prominent Mexico headlines published in the English-language press, as well as the most engaging opinion pieces by Mexican columnists.
What the English language press had to say…
This week a Forbes article defined Mexico’s Energy Reform as a “radical transformation”: Not only will it be bigger than the revolution in shale drilling and fracking in the United States, it will be the most “significant change in Mexico’s economic policy in 100 years”. But the Reform will come at a high price for the ruling Institutional Revolutionary Party (PRI). According to the New York Times, Mexico’s conservative National Action Party (PAN) has signaled it is ready to compromise over demands for electoral reform that risk impeding a government bill to liberalize the oil industry. The PAN proposed an electoral reform that seeks to curb the power of the PRI, which has dominated Mexican politics for most of the past century.
Prices for natural gas over the border in Texas are at historic lows, so what happened earlier this month at the Gulf of Mexico port of Altamira, Mexico, might seem to defy market logic.Huge tankers arrived from distant Yemen and Nigeria to offload liquefied natural gas at a price four times the market rate for natural gas in the United States.
At Mexico’s two other liquefied natural gas terminals, on the Pacific coast, the same phenomenon occurs, with expensive liquefied gas arriving from Peru, Indonesia and even Africa. It’s a sign of Mexico’s enormous energy crisis, even as oil remains the mainstay of the country’s economy. Mexico has huge natural-gas reserves, yet those reserves are largely untapped, and the nation is a net importer of the fuel.Abundant supplies of natural gas at low prices lie just across the border, but U.S.-Mexico pipelines are already handling all they can.