Mexico’s nationalization of its oil sector in 1938 is a point of pride for millions of Mexicans, including President Andrés Manuel López Obrador. The current presidential front-runner, Claudia Sheinbaum, recently announced her energy proposals, which include maintaining large-scale petroleum production by the state-run oil company, Pemex. Sheinbaum, along with the other candidates to replace López Obrador, aims to limit private energy involvement and continue favoring state-owned companies. However, experts warn that this approach may hinder Mexico’s ability to meet its climate change commitments.
Despite Pemex’s struggles, Mexico remains one of the world’s largest oil producers, and none of the candidates are discussing reducing production. The country has committed to sourcing 43% of its energy from non-contaminating sources by 2030, but currently only about 22% of electricity production comes from clean sources. The candidates have not addressed reducing Pemex production, suggesting that the room for change lies in the government monopoly’s electricity sources.
Candidates such as Xóchitl Gálvez and Jorge Álvarez Máynez have proposed improving Pemex’s efficiency and profit, with Gálvez suggesting the closure of two money-losing refineries. Gálvez has emphasized a preference for the private sector driving renewable energy investments and has proposed bringing back energy auctions that López Obrador suspended. The debate between public and private involvement in the energy sector is deeply rooted in Mexican politics, with a historical emphasis on nationalization.
Sheinbaum’s proposals include expanding the state-owned energy sector into lithium production and geothermal electricity generation. She also aims to increase refining capacity at Pemex and keep CFE as the primary electricity generator in Mexico, despite the country’s desire to reduce its contribution to global warming. The candidates’ proposals differ in the magnitude of the private sector’s involvement, with Gálvez leaning towards utilizing private companies for renewable energy investments.
The energy transition in Mexico faces challenges in balancing public and private involvement in the sector. López Obrador’s administration has faced criticism for reversing climate-related policies, leading to increased greenhouse gas emissions. While the private sector could bring more investment to exploit Mexico’s natural resources, there are concerns about foreign influence and government accountability. The debate over Mexico’s energy future remains heated, with the upcoming presidential elections shaping the country’s energy policies for years to come.
