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Green power to the people

18 June 2022

Over the last few months, English language media (i.e. US and it’s satellite states) has been carping on Mexico’s alleged sins of omission when it comes to dealing with climate change. And… claiming some sort of dictatorship in the making, evidenced by such horrors as reviewing contracts with some Spanish and US “clean energy” providers that did little or nothing when it came to providing promised low cost energy, and much to do with evading taxation and maximizing profits. Even generally pro-Mexican (or, left-leaning) media mentioned the Mexican state as less than ideal when it came to environmental issues. Which is true… but…

… while the biggest US “concern” has been that under new energy regulations here, the US companies complained it was unfair they couldn’t get into the market (basically meaning they couldn’t … as the Spanish firms were doing… producing energy at lower cost, but not paying or underpaying transmission costs (transmission lines being property of the state electrical company, CFE) that lowered the energy costs for their alleged “partners” but inflated their profits.

The complicated scam was based on a “loophole” in the previous energy regulations that allowed for private energy cooperatives, something more like a small solar farm serving a rural community. Instead, what you had were massive wind farms — which did produce power at a lower cost than other sources — adding their load to the CFE transmission lines, but charging their “partners” (including the country’s largest chain of convenience stores) their rates, as if the electricity in each of the several thousands of shops around the country were all getting their electrical power from that specific wind farm.

That, and plants along the border, were not producing electricity, as promised, for the country, but to supply needs, mostly in California.

Both of which were, in the US view (pushed, most amusingly, by Ted Cruz, the Senator from the state known for mismanaged electrical power systems) unfair, and… somehow (I don’t get it)… a violation of the “new NAFTA” USMCA treaty.

All making AMLO some sort of anti-green guy. Add in that he wouldn’t go to the recent Summit of (some of) the Americas, in part in protest against Venezuela’s exclusion, fueling fears that Mexico was going in the “wrong” direction (i.e. out of the US orbit) and two things that we should have noticed were overlooked. The first was that US had dispatched John Kerry to lobby AMLO to attend. A former Secretary of State made some sense on the face of it, but Kerry’s present position is ” United States Special Presidential Envoy for Climate”. And… with gasoline prices rising and consumer/voter worries about shortages looming, the Biden administration appeared to be bowing to the inevitable and at least offering to loosen some sanctions on the Venezuelan government, if… please, please, please, it would start selling its oil that the US itself had done everything in its power to prevent the Venezuelans from selling anywhere.

Could it be that… while AMLO wasn’t going to budge when it came to attending that Summit… Kerry wasn’t really shuttling back and forth to Mexico City to talk about that? Or. that the outreach to the Venezuelans is just about sanctioning Russian oil?

The president of Mexico, Andrés Manuel López Obrador, announced this Friday a series of agreements that guarantee US investment in the energy sector. After months of discreet diplomatic work, meeting were held two weeks ago between the Government and 17 U.S. solar and wind power companies.

López Obrador anuncia acuerdos para garantizar inversiones de EE UU en energías limpias” (El País, 17 June 2022). My translation

The deal was kept under wraps until the “Major World Economies” virtual forum met Friday, which … in addition to opening the Mexican energy market to those 17 companies (one of which has already announced a solar farm in Sonora which will be providing electricity to California as well as locally), Additionally, the Mexican president announced that PEMEX, the state oil company was investing two billion (thousand million) US dollars in reducing methane emissions by 98% in the oil and gas production industry; upgrading 16 hydroelectric plants; and speeding up the time table for converting to renewable energy sources, to 35% by 2024.

Earlier this week, Lopez Obrador had crowed that by next year, Mexico would be self-sufficient in producing gasoline and oil products. Although previous administrations had promised to build new refineries but never did, this one bought out one in Texas, and has another (Dos Bocas, in Tabasco) nearing completion, and a couple more in progress. This means by next year, oil exports will be being cut back, which would affect the US supply (depending on the month, Mexico is the third or fourth largest foreign source for US oil) and, although it had only been seen as something happening in the theoretical future, maybe Mexico will simply stop exporting oil altogether, sooner rather than later. Which, as much as any European war, would make the sudden (so far feeble) attempt to play nice with Venezuela make sense.

One Comment leave one →
  1. Rebecca Ore permalink
    21 June 2022 12:19 am

    I hope that Mexico isn’t doing any kind of public/private partnership with Union Fenosa. Nicaragua stopped trying private public and just nationalized the grid and may or may not have turned it over to the Chinese, but things are better.

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