Page 7 - NorthAmOil Week 03 2022

NorthAmOil COMMENTARY NorthAmOil

Washington is not
likely to throw much
weight behind oil and
gas companies affected
by Lopez Obrador’s
preference for Pemex.

the Federal Electricity Commission (CFE), Menendez, Brian Schatz, Tim Kaine and Jeff
dominates the national power market. (The Merkley, all members of Biden’s Democrat
proposed constitutional amendment has been Party. “It would also threaten at least $44bn in
submitted to the Mexican legislature and will private investment in Mexico’s energy sector,
come up for a vote in April.) will negatively impact US private sector invest-
ment in Mexico and is antithetical to the histor-
Change of approach ically strong US-Mexico economic relationship.
Granholm’s critique does represent a shift in the Co-operation with Mexico on clean energy
Biden administration’s approach to Mexican development, including the cultivation of crit-
energy policy. It appears to indicate that Wash- ical minerals, is essential to advancing compe-
ington is ready to speak up in favour of US inter- tition with China and to ensure cost-efficient
ests, US investors and the kind of energy market energy generation for the people of Mexico.”
access outlined in the US-Mexico-Canada
Agreement (USMCA) signed by Trump in 2020 For renewables, but not O&G
– but for renewable energy, not for oil and gas. Going forward, then, it seems likely that Gra-
Speaking with Mexican Foreign Minister nholm and other members of Biden’s team are
Marcelo Ebrard after her meeting with Lopez likely to press Lopez Obrador on matters of
Obrador, Granholm noted that the US gov- energy policy when renewables are involved but
ernment was worried that the proposed con- perhaps not as far as oil and gas are concerned.
stitutional amendment favouring CFE would In other words, for the current US admin-
prevent US companies from investing in renew- istration, this isn’t just a matter of free trade in
able energy projects. “Mexico has such an envi- principle or about the provisions of the USMCA
able, an amazing series of clean resources that that guarantee Mexico autonomy in the area of
we want to talk about. And like all friends, there domestic energy policy. It’s a matter of ensur- Granholm’s
may be issues we’re also going to work on, on ing that free trade and the USMCA are made to
electricity reform,” she said. work in the service of the right kind of energy critique does
In a post on Twitter, Ebrard quoted her as say- – which is, of course, renewable energy and not represent a shift
ing that US investors were keen on participat- fossil fuels.
ing in the “enormous opportunity for renewable This is unfortunate for the US oil, gas and fuel in the Biden
energy in North America.” companies that have been harmed by the cur-
rent Mexican government’s approach to energy administration’s
Under pressure policy, as they are likely to continue being side-
Granholm was not speaking in a political lined or paralysed by administrative measures approach to
vacuum. and permit delays. Lopez Obrador is now trying Mexican energy
She travelled to Mexico City after four mem- to introduce a constitutional amendment that
bers of the US Senate said in a letter to her and would give Pemex the same type of privileges policy.
Secretary of State Antony Blinken that they that he wants to give CFE – and he may not do
were concerned that Lopez Obrador’s consti- so, given that he does not have a large enough
tutional initiative was designed to favour state- majority in the legislature to secure a win. How-
owned fossil fuel producers such as Pemex at the ever, he has promised that his government will
expense of the renewable energy industry. use every legal means within its power to give
“President Lopez Obrador’s policy agenda state-owned companies an edge in the energy
prioritises carbon-intensive, polluting and sector, and there is no reason to disbelieve him.
more expensive energy sources simply because For US investors, then, there are likely to be
the output is state-owned,” wrote Senators Bob more battles ahead.™

Week 03 20•January•2022 www. NEWSBASE .com P7