Page 5 - LatAmOil Week 16 2022
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LatAmOil                                     COMMENTARY                                            LatAmOil


                         Nevertheless, he did bring the draft measure   In practical terms, this might take the form of
                         to the floor, thereby bringing the matter of his   more special instructions to government agen-
                         energy policy to the public’s attention. In so   cies concerning the issuance of permits, the
                         doing, he has attempted to reinforce his image   conduct of audits and other administrative mat-
                         among voters as a populist – that is, a cham-  ters. This has already been done and has already
                         pion of state-owned companies, social welfare   caused trouble for a number of foreign investors,
                         programmes and impoverished people and an   and there is no reason to believe that it will end
                         opponent of out-of-touch elites, greedy corpo-  before Lopez Obrador leaves office.
                         rations and faceless foreign investors.
                           He has also sought to showcase himself as a   Political legacy
                         fighter, willing to go to battle for his voters, for   Again, the president will not always succeed
                         his country and for his principles. Before the   when he brings his energy policy up for discus-
                         vote in the National Congress, he emphasised   sion in the public square.
                         this point by announcing that he was ready to   Sometimes his legislative initiatives will fail,
                         introduce another measure providing for the   as they did on Easter Sunday. Sometimes they
                         nationalisation of the lithium sector, which   will be struck down by the Supreme Court,
                         plays a key role in renewable energy projects, if   which has blocked some of his previous bids
                         the electricity reform failed. (He also pointed out   to enshrine CFE’s privileges in law. Sometimes  Lopez Obrador’s
                         that this plan would only require a simple major-  they will draw criticism from Mexico’s trading   approach does
                         ity vote to pass, as it would not involve amending   partners.
                         the constitution.)                     It’s worth noting, for instance, that US   have the potential
                           After the vote, he did so in a more blunt fash-  Trade Representative Katherine Tai has raised
                         ion by labelling opponents of the reform bill as   questions about whether Lopez Obrador’s bid   to keep the
                         traitors.                            to make sure that CFE always took first place
                                                              in the domestic power market might violate   discussion going
                         Implications for oil and gas         the terms of the US-Mexico-Canada Agree-  on his terms
                         These actions may be a sign of Lopez Obrador’s   ment (USMCA) signed in 2020 to replace the
                         willingness to treat Mexico’s oil and gas industry   1994 North American Free Trade Agreement
                         in a similar fashion. That is, they may indicate   (NAFTA).
                         that the president is ready to debate his policies   Nevertheless, his approach does at least have
                         in the public square – even when he knows he   the potential to keep the discussion going on his
                         has little chance of winning the argument.  terms – to keep people talking about his ideas
                           This might not happen in a legislative sense,   and his desire to keep CFE and Pemex at the
                         as Lopez Obrador has so far been more reluctant   forefront of Mexico’s energy industry. That will
                         to try amending the constitution with respect to   have limited benefit for Lopez Obrador person-
                         Pemex, the national oil company (NOC), than   ally, as Mexican law limits him to a single term
                         with CFE. But it might mean that the adminis-  as president. But it will help shape his political
                         tration continues to take every possible step to   legacy and could prove beneficial to MORENA
                         promote the interests of Pemex and limit the   going forward by defining the party’s stance on
                         opportunities available to private companies. (It   energy.
                         might also do the same for Cenagas, the opera-  It will also make for a bumpy road in Mexi-
                         tor of Mexico’s natural gas pipeline network, and   co’s oil and gas sector, which will have to wait for
                         for CFE with respect to its role as a major gas   the next presidential election to see whether the
                         importer.)                           investment climate changes. ™





























                                       Lopez Obrador has championed state-owned energy companies (Photo: LopezObrador.org.mx)



       Week 16   21•April•2022                  www. NEWSBASE .com                                              P5
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