Page 5 - LatAmOil Week 20 2021

LatAmOil COMMENTARY LatAmOil

As a result, Pemex has been turning out more the country’s north-eastern region might be
refined petroleum products than the country able to cover as much as 30% of the country’s
can consume, and it is dealing with the surplus need for electricity with solar and wind gener-
in ways that are definitely not in line with the ation. Speaking at a virtual forum organised by
IEA’s net-zero scenarios. El Instituto Mexicano de Ejecutivos de Finan-
For example, as Bloomberg reported ear- zas (IMEF), he said that the states of Coahuila,
lier this week, it is encouraging the national Nuevo Leon and Tamaulipas had “enormous
power provider CFE to use high-sulphur fuel oil potential” but could not realise it because of the
(HSFO) – a type of heavy fuel that is no longer restrictions that Mexico’s central government
eligible for use as shipping fuel, according to the has placed on private-sector power companies.
International Maritime Organisation (IMO) –
for electricity generation. Fossil fuels still the main focus
True, this is not Pemex’s only option for this Nevertheless, Mexico is likely to continue
type of fuel in the long run. As mentioned else- emphasising fossil fuels over wind and solar
where in this issue of LatAmOil, the NOC is energy for the time being.
looking to build a coking plant at the Tula refin- Despite her show of interest in renewable
ery so that it can process residual fuel oil into energy, Ortiz Mena has indicated that her com- Mexico is likely
lighter products such as gasoline and diesel. pany sees natural gas as its main priority and as
Once again, though, this project will inevitably a bridge towards cleaner power. She referred to to continue
involve more carbon emissions than the IEA gas as a bridge fuel during the Columbia sum-
would like to see. mit earlier this week, and she has described the emphasising
Energía Costa Azul (ECA) LNG project as IEn-
Different views ova’s main focus. fossil fuels over
In all likelihood, this is not a major consideration Likewise, Mexican regional officials are not wind and solar
for Mexico’s current presidential administration, just focused on renewables. Speaking at the
which appears to be much more interested in same IMEF forum where Montemayor Seguy energy for the
protecting state-run companies such as Pemex mentioned solar and wind generation, Cesar
and CFE than in falling into step with a mul- Cardenas, the president of the state of Nuevo time being
ti-lateral organisation that is calling for radical Leon’s energy cluster, made a case for stepping
change. However, some organisations appear to up exploration and development work at the
have a different view. country’s gas fields. He also argued in favour of
One of these is IEnova, the Mexican subsid- hydraulic fracturing (fracking), a practice that is
iary of US-based Sempra Energy. Tania Ortiz disdained by most climate activists, saying that
Mena, the CEO of the privately owned company, the technology would help unlock unconven-
said at a summit organised by Columbia Uni- tional hydrocarbon reserves in the north-east-
versity earlier this week that the energy transi- ern part of the country.
tion advocated by the IEA and other backers of “The supply of natural gas is paramount for
net-zero solutions represented an opportunity the country’s security ... [and the] only way of
for Mexico. The country should look for ways obtaining those resources is by using fracking,”
to integrate more renewable projects into its he declared.
energy mix, she said, adding that energy com- Under these conditions, the IEA should
panies had a responsibility to acknowledge the not expect to see Mexico rush to implement
role that fossil fuels played in climate change. its suggestions in the near future – and not
Meanwhile, some regional officials are talk- just because the country’s president is such an
ing up the potential of renewable energy and enthusiastic backer of Pemex. Industry experts
criticising Mexico City’s efforts to boost the are also convinced that Mexico needs to build up
public sector. Rogelio Montemayor Seguy, the its conventional generating capacity in order to
president of an energy cluster established in the be able to expand energy access enough to make
state of Coahuila, asserted earlier this week that the switch to renewables less risky. ™

IEnova still views the ECA LNG project as its main focus (Photo: Sempra Energy)

Week 20 20•May•2021 www. NEWSBASE .com P5