Mexico Set to Reshape Power Sector to Favor the State - The New York Times - 0 views
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MEXICO CITY — President Andrés Manuel López Obrador has never been short of criticisms about his predecessor’s legacy. But he has reserved a special contempt for the sweeping overhaul that opened Mexico’s tightly held energy industry to the private sector.
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The measure, which was recently approved by Mexico’s Congress with the forceful support of Mr. López Obrador, would also limit the participation of private investors in the energy sector. Both effects are central to his long-held aim of restoring energy self-sufficiency and safeguarding Mexican sovereignty.
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Opponents of the legislation say that it would not only fail to resuscitate the energy sector or help achieve energy independence but that it would also violate Mexico’s international commitments to reducing carbon emissions, run afoul of trade agreements and further chill foreign investment in Mexico just as the nation is struggling to regain economic momentum amid the pandemic.
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has faced almost universal criticism from opposition legislators, environmentalists, industry analysts, Mexican and international business groups and even Mexico’s antitrust watchdog.
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But the new legislation effectively restores preferences for state-run, fossil-fuel-driven plants that generate power at higher costs and produce greater carbon emissions.
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“I think the impact of this reform is a major reversal,” said Lourdes Melgar, who was a top energy official in the administration of Mr. López Obrador’s predecessor, Enrique Peña Nieto. The Mexican president, she said, “has had a very nationalistic view of how to utilize resources.”
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Gas-fired plants generate more than half of Mexico’s power; the vast majority of the natural gas is imported, with most of it coming from the United States, according to the Mexican government.
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“This doesn’t have any economic logic,” said Víctor Ramírez Cabrera, spokesman for the Mexico, Climate and Energy Platform, a research group in Mexico City. He called the new model for power sourcing “absurd.”
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“There is no way to comply with the Paris Agreement under these conditions,” Mr. Ramírez said. “Just give it up for dead.”
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“Investment levels are dropping, and nobody wants to invest here,” said Israel Tello, a legal analyst at Integralia, a Mexico City-based consultancy group. “Legal uncertainty is the most lethal weapon against investment.”