Does AMLO really believe that by “rescuing Pemex he is rescuing the nation”?
Experts have several concerns about this move in a 21st Century context. They think that by halting the privatization of Mexican oil, highlighting the golden age of energy nationalization, Mexico’s energy does not have a clear environmental, social, and governance (ESG) strategy, unlike many other oil-rich states.
This has led activists from across the country to protest for energy reform in front of the Supreme Court of Justice.
Last year, rating agency Sustainalytics gave Pemex a score of 56.7 for ESG, suggesting it presents “severe” risks in this area. It is currently placed at 253 out of 261 countries in the ranking. Experts suggest that Pemex could substantially improve its reputation in the international oil and gas space by introducing better ESG measures. But without an increase in funding or the political will, this is unlikely to happen
Mexico has faced further criticism for its poor performance in renewable energy. Over the last decade, it seemed likely that Mexico would welcome the new era of green energy as it established several solar projects in the north of the country. However, under the AMLO administration, numerous renewable energy developments have been canceled and funding for oil and gas projects, including a new $9 billion refinery, has risen.
In 2021, the government introduced legislation that required the energy grid to use power provided by state-run facilities, mainly coming from crude oil and coal sources. This has sent many workers back into coal projects that were previously abandoned. AMLO believes that years of privatization led several foreign companies to exploit Mexico’s resources and take funds out of the country. His push for nationalization aims to rectify this situation.
But many renewable energy firms and climate activists are staunchly against the return to fossil fuels, highlighting the favorable weather conditions Mexico has, needed to produce green energy and the successful development of several existing renewable projects. In fact, until recently, Mexico was seen as one of the global leaders in the combat of climate change. It adopted climate legislation in 2012 and quickly agreed to the Paris Agreement’s aim of lowering emissions.
While Mexico has the natural resources to significantly develop both its fossil fuel and renewable energy industries, the lack of funding and the drive to nationalize has meant that state-owned Pemex has been performing poorly both in terms of output and in its environmental practices. Meanwhile, Mexico appears to be going back on its climate promises by halting green energy projects and reopening the doors to its coal mines.
Source: El Financiero