Page 5 - LatAmOil Week 16 2022

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