Berliner Boersenzeitung - Mexico's energy reforms test relations with US

EUR -
AED 4.26841
AFN 80.362394
ALL 97.542216
AMD 446.735356
ANG 2.080099
AOA 1065.794205
ARS 1481.767207
AUD 1.776887
AWG 2.092071
AZN 1.980459
BAM 1.954642
BBD 2.348809
BDT 141.226338
BGN 1.956132
BHD 0.43834
BIF 3466.946195
BMD 1.162261
BND 1.493215
BOB 8.038238
BRL 6.486005
BSD 1.163311
BTN 100.147673
BWP 15.618748
BYN 3.807045
BYR 22780.325028
BZD 2.336716
CAD 1.596076
CDF 3354.287055
CHF 0.932981
CLF 0.029194
CLP 1120.296341
CNY 8.342655
CNH 8.346165
COP 4674.330945
CRC 587.052233
CUC 1.162261
CUP 30.799929
CVE 110.199718
CZK 24.634179
DJF 206.947405
DKK 7.463699
DOP 70.258379
DZD 151.514244
EGP 57.439973
ERN 17.433922
ETB 161.636047
FJD 2.620788
FKP 0.864949
GBP 0.86668
GEL 3.150183
GGP 0.864949
GHS 12.127816
GIP 0.864949
GMD 83.106172
GNF 10094.020343
GTQ 8.931709
GYD 243.385819
HKD 9.121487
HNL 30.445964
HRK 7.532663
HTG 152.739518
HUF 398.923459
IDR 18977.696027
ILS 3.908598
IMP 0.864949
INR 100.127437
IQD 1523.897249
IRR 48945.741055
ISK 142.354235
JEP 0.864949
JMD 186.029797
JOD 0.824089
JPY 172.932309
KES 150.300962
KGS 101.640213
KHR 4662.238109
KMF 491.989694
KPW 1046.046309
KRW 1616.942576
KWD 0.355234
KYD 0.969426
KZT 620.152624
LAK 25087.138481
LBP 104232.653
LKR 350.972086
LRD 233.241828
LSL 20.596898
LTL 3.431856
LVL 0.703041
LYD 6.327252
MAD 10.519168
MDL 19.788278
MGA 5176.933206
MKD 61.523554
MMK 2439.678938
MNT 4168.013035
MOP 9.404829
MRU 46.275587
MUR 53.119698
MVR 17.903172
MWK 2017.205016
MXN 21.777182
MYR 4.935007
MZN 74.338683
NAD 20.596898
NGN 1779.387897
NIO 42.814637
NOK 11.838157
NPR 160.236077
NZD 1.94976
OMR 0.446995
PAB 1.163311
PEN 4.140847
PGK 4.817146
PHP 66.377189
PKR 331.310933
PLN 4.244785
PYG 9003.666265
QAR 4.229694
RON 5.072695
RSD 117.080642
RUB 91.375869
RWF 1681.00418
SAR 4.36165
SBD 9.64543
SCR 17.082281
SDG 697.942292
SEK 11.245095
SGD 1.492813
SHP 0.913355
SLE 26.62005
SLL 24372.046713
SOS 664.806172
SRD 43.245469
STD 24056.466061
STN 24.485495
SVC 10.17897
SYP 15112.803405
SZL 20.592801
THB 37.628259
TJS 11.196867
TMT 4.079538
TND 3.419874
TOP 2.722137
TRY 46.947496
TTD 7.897322
TWD 34.181766
TZS 3030.404801
UAH 48.58252
UGX 4168.530579
USD 1.162261
UYU 46.882227
UZS 14725.276806
VES 135.943958
VND 30404.760344
VUV 138.92149
WST 3.080055
XAF 655.568644
XAG 0.030448
XAU 0.000347
XCD 3.14107
XCG 2.096558
XDR 0.815317
XOF 655.568644
XPF 119.331742
YER 280.163552
ZAR 20.586499
ZMK 10461.752209
ZMW 26.785133
ZWL 374.247723
  • CMSC

    0.0900

    22.314

    +0.4%

  • CMSD

    0.0250

    22.285

    +0.11%

  • RBGPF

    0.0000

    69.04

    0%

  • SCS

    0.0400

    10.74

    +0.37%

  • RELX

    0.0300

    53

    +0.06%

  • RIO

    -0.1400

    59.33

    -0.24%

  • GSK

    0.1300

    41.45

    +0.31%

  • NGG

    0.2700

    71.48

    +0.38%

  • BP

    0.1750

    30.4

    +0.58%

  • BTI

    0.7150

    48.215

    +1.48%

  • BCC

    0.7900

    91.02

    +0.87%

  • JRI

    0.0200

    13.13

    +0.15%

  • VOD

    0.0100

    9.85

    +0.1%

  • BCE

    -0.0600

    22.445

    -0.27%

  • RYCEF

    0.1000

    12

    +0.83%

  • AZN

    -0.1200

    73.71

    -0.16%

Mexico's energy reforms test relations with US
Mexico's energy reforms test relations with US

Mexico's energy reforms test relations with US

Relations between the United States and Mexico are under strain as the Mexican government pushes ahead with planned energy sector reforms that have alarmed Washington and foreign investors.

Text size:

President Andres Manuel Lopez Obrador wants to strengthen the state-owned electricity provider and roll back the effects of liberalization under previous governments that he says favored private companies.

That has prompted warnings that Mexico is in danger of violating its commitments under a North American trade deal with the United States and Canada by prioritizing state-run entities heavily dependent on fossil fuels.

In November, Lopez Obrador's ruling party pushed back its deadline for the approval of a constitutional reform bill until April, following a backlash from the United States, Canada and foreign investors.

The next few months "will be critical," a US diplomatic source in Mexico told reporters on condition of anonymity.

A row between the neighboring countries would have potential consequences for wider cooperation in key areas such as trade, migration and fighting drug cartels.

The reforms would ensure that the state-owned Federal Electricity Commission (CFE) has at least 54 percent of the electricity market -- compared with 38 percent now -- and the private sector no more than 46 percent.

The government says the move is to prevent soaring power prices -- a hot-button political issue given inflation has hit a 20-year high above seven percent.

The reforms also aim to move towards a state monopoly in the exploration and mining of lithium, a vital material in the production of electric car batteries.

In January several US Democratic party senators urged President Joe Biden's administration to "more forcefully express concerns about President Lopez Obrador's detrimental fossil fuel agenda."

The blunt call came in a letter to Secretary of State Antony Blinken and Secretary of Energy Jennifer Granholm from Senate Foreign Relations Committee chairman Bob Menendez and three other members of Congress.

"If enacted, the Mexican government would cancel renewable energy permits, contracts, and certificates," they warned.

The legislation would "threaten at least $44 billion in private investment in Mexico's energy sector, will negatively impact US private sector investment in Mexico, and is antithetical to the historically strong US-Mexico economic relationship," they said.

- Investments at stake -

"One of the most controversial points of the reform has been its proposal to cancel all the contracts that were signed with private companies for the generation and supply of electricity," said the Mexican branch of the international auditing and consultancy network Deloitte.

"This possibility is worrying different players in the market, because the private sector has invested a large amount of resources in the construction and start-up of modern facilities capable of producing cleaner and cheaper electricity," it added.

Following suggestions that the changes could even amount to a form of indirect expropriation, Mexico's Energy Minister Rocio Nahle said this week that "not a single screw will be expropriated."

The United States has found itself fighting on the same side as domestic opponents of the reforms, which must be approved by two-thirds of the members of Congress.

They include Senate ruling party heavyweight Ricardo Monreal, who wanted the bill to be amended, as well as the governors of northern states such as Baja California and Sonora bordering the United States.

Baja California wants to stay connected "to the fourth largest economy in the world, which is California," said the US diplomatic source.

Washington says it is also concerned that the reform will favor polluting coal-based energy, to the detriment of renewable energy.

Nahle has dismissed such suggestions as a "lie," saying that only three percent of Mexico's electricity comes from coal, compared with some 20 percent in the United States and more than 50 percent in China.

"Each country adapts to the resources it has, and on this point we are not going to criticize others," the minister said, in what was seen as a jab at Washington.

(U.Gruber--BBZ)