"Mexico Energy: Socialism for the Elite, Poverty for the Masses"

Source:

https://www.masterresource.org/mexico-energy-policy/mexico-energy-socialism-2021/

“Following prior attempts to preclude private investor participation in the energy sector through Congressional legislation

… President Andrés Manuel López Obrador, submitted to the Mexican Congress a Bill to

… undo the Constitutional changes that opened the market for private investment and intend to limit / preclude private sector participation.”

... Private oil and gas has accrued to the general good in a way that socialized oil and gas throughout the world has not.

Guillermo Yeatts has stressed the general benefits of private mineral ownership, as have other posts at MasterResource.

Yeatts’ primary takeaway was summarized by the present writer in the the foreword for what became Subsurface Wealth:

The Struggle for Privatization in Argentina (FEE: 1997).

Slightly edited, it read:
     There is a general economic maxim: public (government) resources are really private, owned and exploited by a political elite, while private resources are really public, owned and managed by a multitude.

Government-owned resources do not ‘belong to all of the people’ and allow ‘self determination;’ they belong to none or a very few.

Mexico: More Energy Socialism

When desperate, the sleeping hydrocarbon giant Mexico flirts with foreign investment for its woefully undercapitalized oil and gas sector.

The Mexican energy reforms of 2013-14, associated with the current president’s “Pact for Mexico,” allows foreign companies greater participation in Mexican oilfields.

Since Mexico’s nationalization of oil and gas deposits in 1938, only service contracts were allowed with foreign companies, and state-controlled PEMEX had the monopoly over all oil resources.

Some reform toward private participation was made, but the socialist / Marxist influence has, once again, reared its ugly head.

Most recently, president Andrés Manuel López Obrador, (“the Mexican Hugo Chavez“), is going full Socialist.

This summary comes from the law firm Foley & Lardner, LLP:

... As stated in the Bill’s legislative intent, the same seeks to undo the Constitutional changes that opened the market for private investment and intend to limit/preclude private sector participation.

 ...   Key changes of the Bill include the following:

A.  Private Sector – Cancellation of Prerogatives

    Cancellation of all power generation permits and power purchase agreements entered into with the private sector.

    Cancellation of all Clean Energy Certificates.

    Power generation originating from (i) Self-Supply Generation Permits granted under the former Electric Energy Public Service Law (Ley del Servicio Público de Energía Eléctrica), also known as the “old regime”,

will be allowed only to the extent that the Federal Electricity Commission (Comisión Federal de Electricidad, or CFE) deems the operation of such permits as “authentic”1;

and (ii) the excess power generation from Independent Power Producers (IPPs) shall not be recognized nor purchased by CFE under the new regime.

    Private sector participation would be limited to a maximum of 46% of total power market generation (IPPs and “authentic” self-supply regimes are included within this percentage).

Currently, the Bill acknowledges that the private sector generates 62% of all available power.

The Bill is unclear on the parameters to measure private sector power generation (e.g., month, peak hours, etc.).

... C.  Dissolution of Regulators

The Energy Regulatory Commission (Comisión Reguladora de Energía, or CRE) and the National Hydrocarbons Commission (Comisión Nacional de Hidrocarburos, or CNH) will be dissolved.

Their authority and structure will now be integrated into the Ministry of Energy.

This means that there will be no independent and autonomous regulator for the electricity and the hydrocarbons industries.

D.  Lithium

The Bill intends to nationalize lithium deposits by disallowing further concessions to explore and mine this mineral by private parties.

Concessions granted and exploited prior to the Bill will not be affected.

The Bill also opens the door to block “Other Strategic Minerals” from being mined by private parties.

For approval to occur, the Bill requires a two-thirds majority of both houses of Congress and the majority of the State Congresses (32 Mexican states).

Currently, the President does not have the necessary support to reach the required majority, making approval of the Bill uncertain.

If approved, private investors will need to determine which legal remedy provides the most expeditious defense to protect their investment." ...