President Enrique Peña Nieto proposes energy reform, August 12, 2013

Energy reform and the privatization of Mexico´s oil and gas industry is a controversial issue in Mexico and  has been in the national debate for many years.  The main point of contention being whether Mexico needs to open up the state run monopolies of energy to private investment to allow much needed funding for upgrades, infrastructure and drilling.  Not everyone agrees it is a good idea and many think of it as a selling off of Mexico´s patrimony.

Attorney, Gustavo Calderon, gives us a quick wrap up about what is going on:

On Monday, Mexico´s President Enrique Peña Nieto revealed his Energy Reform plan, that in order to be implemented will require constitutional amendments that would impact the oil and electricity monopolies of Pemex and CFE in Mexico.  A few weeks earlier, PAN, Mexico´s main political party of the right, presented their proposal, one that was more open than the current one proposed by President Peña.  Peña´s plan is more liberal than one currently in place, but more conservative than the one proposed by PAN.

The reform platform could be promoted  by both the right leaning PAN party, and the central (and ruling party) of Peña Nieto, the PRI.  However, there are strong indications that to do so will cause  public protests, followed by rejection campaigns conducted mostly by left leaders. The left party, the PRD, is seriously divided on accepting the necessity of a reform, to the extreme of claiming that there is no need for reform.  Former Presidential Candidate Manual Andres Manuel López Obredor, who now is trying to set up his own party, might be the major representative of this resistance to reform. The following days will be interesting and the news will not likely be following  anything besides this so called Energy Reform.  Debates on this topic are airing on almost every network of the Country.

Whatever happens, the impact to Mexico will be dramatic, as almost one third of Mexico’s yearly budget comes from the oil industry, while electricity in Mexico is more expensive than the average around the world and of poor quality.  Whatever the outcome will be, most agree modernization in this sector is essential for the growth of Mexico.   We look forward to the dialogue, and the debate and constructive criticism that will come from all sectors of Mexico.