Tag Archives: amlo

Politics, Petroleum, and the Environment:How to Doom Your Country’s Climate Targets

By Deborah Van Hoewyk

About last month: Did you emerge from the mental fog induced by St. Patrick’s Day on March 17 in time to face the festivities of March 18? Completely missed it? March 18, what’s that?

Mexico’s Oil Belongs to Mexico – via PEMEX

In Mexico, March 18 is “Expropriation Day,” the anniversary of President Lázaro Cárdenas’ 1938 nationalization of the country’s oil fields and production facilities. It seemed like “a good idea at the time,” and many Mexicans think of the expropriación petrolera as a second Mexican Revolution, one that liberated Mexican workers from low wages and oppressive working conditions imposed by the foreign companies that dominated the oil industry in Mexico. It is taught in schools as a story of resistance to American imperialism, a source of great national pride.

Before expropriation, there were 17 international firms producing oil in Mexico, dominated by the Mexican Eagle Company (a subsidiary of the Royal Dutch/Shell Company, now just “Shell”) and various U.S. firms (Jersey Standard, a branch of Standard Oil, and Standard Oil Company of California, SOCAL, now Chevron); together the Dutch and the Americans (basically, the Rockefellers) controlled 90% of the production of Mexican oil; Gulf Oil added another 5%.

Under Cárdenas’ plan, the Mexican government would control the production and commercialization of all petroleum resources derived from Mexican territory, significantly increasing government income while shoring up public finance and the social benefits it provided. To do this, he created a government corporation, Petróleos Mexicanos – that would be PEMEX, for those of us who drive in Mexico.

PEMEX was designed as a country-wide monopoly, jointly owned by the state and the Sindicato de Trabajadores Petroleros de la República Mexicana (petroleum workers’ union). It was tasked with all phases of oil and gas production in Mexico: exploration, development, transportation, refining, storage, distribution, and sales. It was designed to partner with the Comisión Federal de Electricidad, known far and wide as CFE, which had been set up in 1937.

Mexico as Petrostate

And what has 84 years of government control of the oil and gas industry done for Mexico?

International oil companies had been encouraged to come to Mexico by President José de la Cruz Porfirio Díaz Mori, who ruled Mexico in dictatorial style from 1877 to 1911 (with a four-year hiatus due to term limits, which he canceled after his re-election). Porfirio Díaz was overthrown by the Mexican Revolution (officially fought from 1910-17). In 1917, there were 440 oil production companies working in Mexico, they produced 55 million barrels a day, and Mexico was the world’s second-largest producer of crude oil.

In 1917, Mexico voted in its Constitution, which restored national control of the oil industry. Foreign companies could produce oil from Mexican wells, but needed to obtain official government concessions, which the largest companies refused to do. Both sides succeeded in ignoring the tensions, but oil production began slipping away to Venezuela, where it was cheaper to extract the crude.

Two decades later, the event that brought on expropriation was a labor strike against the international petroleum companies; after a year of negotiating, the petroleum workers’ union walked off the job for 11 days, and the government sent the contract to federal arbitration, which defined a new contract. The international companies refused to accept it, expropriation had been established by law in 1916, and there you go – Mexico took it all.

Over time, that hasn’t worked out all that well. The greatly simplified explanation is that, had the motivations for expropriation, the establishment of PEMEX, and tying it to CFE, been strictly economic, all might have been well. But the public monopoly was also intended to support Mexico’s socioeconomic programs – health, housing, education, recreation, retirement. (PEMEX revenues also funded Mexico’s repayment of loans incurred during the financial crisis of the late 1970s.) Ultimately, PEMEX has been used to pay for everything but financing the company itself: there has been little exploration for new sites, there is no infrastructure to develop them, and lack of maintenance has produced huge oil spills, particularly into the Gulf of Mexico. Moreover, PEMEX has been heavily subsidized by the government to keep retail prices low, thus obscuring real production production costs, so there is no government or public appetite for “remodeling” PEMEX to do a better job.

Back to the Future in the Oil Industry

Every so often, especially when the petroleum industry teetered and later as NAFTA was being negotiated (1994, renewed 2020), figures in the Congreso de la Unión (the federal legislature) or various presidents would make noises about letting international oil companies return. Between 2004 and the beginning of the presidential term of President Enrique Peña Nieto (2012-18), oil production had dropped from 3.4 to 2.5 million barrels a day, and continued to drop, but the nation’s budget depended on PEMEX for a third of its revenues.

If the nation’s oil industry were left to PEMEX on its own, “Much of Mexico’s estimated 30 billion barrels of oil and 500 trillion cubic feet of natural gas” would “simply remain locked in the ground” (Forbes, October 30, 2013). PEMEX was hamstrung, without “sufficient technical expertise” for exploration, and was legally denied the ability to acquire the expertise. Even if PEMEX could have brought in outside expertise, “big oil” wouldn’t come without financial guarantees, which PEMEX of course could not provide.

In 2013, Peña Nieto managed to amend the Mexican constitution to permit private international investment in oil, gas, and electricity production and distribution, including in the retail fuel market. Mexico auctioned off blocks of deep and shallow water exploration concessions, and welcomed international gasolineras – indeed, those of us who drive in Mexico saw BP (née British Petroleum), RepSol (Spain), and Gulf (U.S.) stations on our southbound treks to Oaxaca.

Not So Fast!

Many – notably, future presidential candidate Andrés Manuel López Obrador (AMLO) – opposed the constitutional reform on the grounds that oil and gas were a treasure of Mexico’s national heritage. “Treason,” said AMLO. When AMLO won the 2018 election on the basis of his populist nationalism, cloaked in the language of the left, he immediately set out to dismantle Peña Nieto’s energy sector reforms and restore PEMEX and fossil fuels to a position of pride – although not necessarily productivity, and certainly not to the benefit of the environment.

However, AMLO’s approach to Mexican energy – restore PEMEX/CFE and achieve self-sufficiency, the environment be damned – has brought on sharp criticism from analysts concerned with environmental protection. Combined with the environmental impacts of other AMLO strategies in tourism and economic development, Mexican energy policy is raising alarms at home and abroad; the policies are seen as detrimental, if not disastrous, in a country as “mega-biodiverse” as Mexico.

Mexico is party to the 2015 Paris Agreement, a UN-sponsored international treaty that records voluntary “nationally determined contributions,” or NDCs, from its signatory nations to meet targets for (1) reducing greenhouse gas emissions and (2) adapting to climate change through developing sources of alternative energy. Mexico was the first “developing country” to submit a plan for participating in the Paris Agreement, including an NDC of cutting emissions 22% by 2030 and obtaining 35% of its energy from alternative sources by 2024.

Countries are supposed to boost those targets every five years; new targets were announced in October 2021 at COP26, the second UN-sponsored climate change conference (Glasgow, Scotland, October 2021). Despite a visit from U.S. climate envoy John Kerry in advance of COP26, Mexico – along with Russia and Brazil – said it would work on increasing targets, but would not raise them. Mexico is the 14th-largest emitter of greenhouse gases in the world, and the 2nd-largest in Latin America, bested only by the Brazil of Jair Bolsonaro, who promotes “land use change” in the form of slash-and-burn conversion of jungle to agriculture and industry. Climate Action Tracker, an international research partnership, finds that, given its policies and performance, Mexico’s emissions will rise, not fall, and the Mexico’s targets are “not at all consistent with the Paris Agreement’s 1.5 degrees Celsius temperature limit.”

AMLO and the Environment

It would, of course, be difficult to lower emissions when you are “pouring money into PEMEX, at the environment’s expense” as Bloomberg analysts put it in January 2021. In search of an energy-independent Mexico, AMLO has also made regulatory changes that “cut the knees off a booming renewables market” by ordering regulatory agencies to favor PEMEX/CFE by means of over-regulation of about 200 wind farms, solar arrays, natural gas plants, and other private projects.

AMLO is promoting two major infrastructure projects. First, to shore up oil production, he is building an $8 billion US mega oil refinery at Dos Bocas in his home state of Tabasco, on what was a protected mangrove forest. The refinery has been opposed by both business and environmentalist groups, and has been prejected to fail on financial grounds. In addition, AMLO has asked PEMEX to increase output at the country’s six current refineries, which burn highly polluting fuel oil. CFE is using high-sulfur fuel oil, and has bought tons – 2 million tons – of coal as a further source of fuel.

And then there’s the (in)famous Tren Maya, a tourism initiative that is laying over 1,550 kilometers of rail tracks across Tabasco, Campeche, Yucatán, Quintana Roo, and Chiapas – right through the rainforest that is home to the endangered Mexican jaguar. The price tag is now $200 billion mxn (about $9.8 billion US); in a bid to add utility to the Tren Maya, freight capacity has been added to the original vision. The Tren Maya is opposed by both indigenous and environmentalist groups.

AMLO’s strategies for meeting Mexico’s NDCs are to plant trees and update 60 hydroelectric plants. The Sembrando Vida (Sowing Life) program, funded at $3.4 billion US, pays farmers to plant trees for fruit and timber production. Intended to bring income-producing agriculture to degraded land, the program actually encourages farmers to clear the jungle (that would be slash-and-burn again) to plant the program-provided trees.

Modernizing the hydroelectric plants receives high marks from agencies and experts in general, but in the first quarter of 2019, hydroelectric produced 6.4% of Mexico’s power, other alternatives (wind, nuclear, solar) produced 9.6%, and fossil fuels produced the remaining 84%. Hydroelectric power is much more expensive to produce than wind or solar; all the plants involved are over 50 years old, and modernization will be complicated and expensive. Many areas of Mexico face drought conditions, and dammed water is diverted to agricultural use rather than the hydroelectric plant. Promoting hydroelectric power with these improvements is a policy with only minor benefits.

When his policies and programs are criticized on environmental grounds, AMLO is dismissive, conspiracy oriented, and attacks the opposition: “There’s a lot of deception. I would tell you that they have grabbed the flag of clean energy in the same way they grab the flag of feminism or human rights. Since when are conservatives concerned about the environment?”

When he was elected, AMLO said he would have a mid-term review of his presidency. On April 11, 2022, he is holding a consulta de Revocación de Mandato, a consultation with voters on whether to “revoke his mandate.” The ballot question is carefully awkward, if not confusing, in its wording; it conflates the issues of whether or not a voter approves of AMLO’s policies with whether AMLO should stay in office. Given a general social bias towards continuity, AMLO is likely to win in a landslide.

Sembrando Vida – Seeding Life?

By Julie Etra

Sembrando Vida in Mexico

On October 8, 2018, President Andrés Manual López Obrador (AMLO) kicked off a new program, Sembrando Vida (Sowing Life), in the hope that it would achieve two parallel purposes. The program encourages sustainable communities through cultivating trees with commercial value – fruit-producing (mango, cinnamon, soursop) and timber (mahogany, cedar, rubber, cocoa) trees. It also combats rural poverty and environmental degradation; planting trees combats environmental degradation because they uptake carbon, a greenhouse gas, thus fighting climate change.

By paying residents of rural areas to plant the trees, along with garden crops for their own use, the government hopes to “rescue” rural areas, reactivate local economies and regenerate the social fabric in communities. The program works by turning communal land into a strategic tool for developing the countryside, increasing the productivity of rural areas, and thus reducing the economic and social vulnerability of farm families in remote areas. Inaugurated in 2019, Sembrando Vida has been adopted in 20 of Mexico’s 32 states.

Sembrando Vida will end up costing the Mexican government between 12 and 15 billion pesos; growers receive 4,500 pesos a month in addition to the value of what they grow. Many of these people participated in a program fielded by the previous administration, through which communities were paid to protect and maintain the jungle and its ecosystems. Sembrando Vida replaces that program, with the unfortunate result that, in order to provide land to qualify for Sembrando Vida, farmers have chopped down or burned the same jungles they had been protecting. This is not encouraged by Sembrando Vida, of course, which intended to reforest/replant “degraded land.”

Sembrando Vida and the World

But this unintended consequence (among others) is not why Sembrando Vida is in the news in 2021. In April, at U.S. President Biden’s virtual Leaders Summit on Climate, AMLO promoted Sembrando Vida as a tool to resolve the dual continuing crises of Central American migration north to the United States through Mexico, and climate change. AMLO claimed that planting three billion trees in southern Mexico and Central America would create 1.2 million jobs, which in turn would cut down on northward migration to the U.S.

The U.S. would pay for the expansion from Mexico into Central America. Reuters reported that AMLO also suggested that the “U.S. government could offer those who participate in this program that after sowing their lands for three consecutive years, they would have the possibility to obtain a temporary work visa” to the U.S., followed by U.S. residency or citizenship.

Most analysts consider the Sembrando Vida program to be naïve, simplistic and unlikely to substantially curb the violence and poverty that has fueled immigration from Central America. According to the Mexican newspaper Reforma, the U.S. responded a little more clearly: “The United States is not interested in President Andrés Manuel López Obrador’s proposal to link an extension of the Sembrando Vida program to Central America with a plan that offers work visas to Central Americans.”

If you check out the official government webpage for Sembrando Vida, it makes no mention of Central America (www.gob.mx/bienestar/acciones-y-programas/programa-sembrando-vida). It’s been suggested by Carolina Herrera, a writer for the U.S. nonprofit Natural Resources Defense Council (NRDC), that AMLO was “attempting to distract from Mexico’s failure to advance a clean energy transition.”
In his presentation at the Leaders Summit, AMLO offered two other proposals – first, Mexico would limit crude oil production to domestic use and refine it locally, and second, Mexico would modernize existing hydroelectric plants to displace the use of fossil fuels. Given that Mexico has made few efforts on the federal level to curb greenhouse gases and encourage renewable resources, the first proposal demonstrates AMLO’s intention to support PEMEX, the state-owned petroleum company, over working on renewable energy options. Modernizing hydro plants supports the state-owned electric company CFE at the expense of solar and wind.

AMLO’s proposals, Herrera argues, will “essentially ensure that Mexico will not meet its international climate commitments and clean energy targets” for the international Sustainable Development Goals set for 2030.

Mexico’s Green Energy -Potential, Promise, Problems

By Randy Jackson

POTENTIAL

Few countries on earth have such an abundance of green energy potential as Mexico. The geography and geology of Mexico provides three substantial sources of green energy: solar, wind and geothermal.

Solar: Potential energy from solar projects seems obvious, with much of the country bathed in sunlight for a good portion of the year. Also, the lower the latitude, i.e., the lower the distance from the Equator, the higher the energy concentration of the sun. The northwest area of Mexico has the highest average number of days of sunlight in the country. The sunniest spot on earth is just north of Mexico, in Yuma, Arizona, and the surrounding areas stretching well into Mexico have a very high average number of days of sunshine. Days of sunshine, concentrated by lower latitudes, end up in a measurement called “insolation.” Insolation is a measurement of kilowatt hour per square meter, essentially a measurement of sunpower at a given location. All this leads to the calculation (using existing solar panel efficiency) that just 25 square kilometers of solar panels, were they located in the Sonoran Desert or the state of Chihuahua, would be sufficient to provide 100% of Mexico’s electricity demand.

Wind: Many of us who are familiar with Huatulco and the surrounding area know of the substantial wind energy facilities in the narrower part of the Isthmus of Tehuantepec. The Eurus Wind Farm in Juchitán de Zaragoza is the largest wind farm in Latin America. In Mexico overall, the states of Oaxaca, Yucatán and Tamaulipas all have locations with average wind speeds greater than 28 km/hour – 15 Km/hour is the minimum average speed normally required for a wind farm. Average wind speed is one determining factor for wind farms; the other is air density. Sea level locations, as at the Eurus Wind Farm, have higher air density when compared to higher elevations. This means the air has more mass, essentially giving the wind more power to turn a wind turbine. REVE, the Spanish wind energy magazine, reports that Mexico has wind energy potential of about 70,000 MWH (megawatt hours), about the total current electrical generating capacity in all of Mexico.

Geothermal: Mexico has 48 active volcanoes, a testament to the high degree of tectonic activity below the earth’s surface in Mexico (has anyone not experienced an earthquake in Huatulco?). Geothermal resources are most often found along tectonic plates where the earth’s magma is closer to the surface. This superheats rock that can be easily drilled into from the surface; water is then injected and the resulting steam drives turbines to create electricity. The world’s second largest geothermal power station is located in the state of Baja California, near the city of Mexicali. This location, known as Cerro Prieto, sits atop of a unique geological fault usually only found under the oceans. The Mexican ministry of energy envisions 1,670 MWH of electricity from geothermal plants by 2030.

PROMISE

Before hosting the 2010 United Nations Climate Change Conference in Cancún, Mexican President Felipe Calderón set out goals for Mexico to reach one-third of its energy from renewables by 2024. Some reforms and laws were initiated in Calderón’s term of office to move towards these renewable energy goals. In Mexico, energy is state owned and controlled.

Energy resource ownership, particularly oil but also electricity generation, is a sensitive national concern for Mexico. However, in 2013, President Enrique Peña Nieto was able to pass a reform that allowed private companies to participate in the energy sector, with the control, transmission and distribution of energy remaining exclusively within the control of the state. This initiative, followed up with specific regulations, allowed private investments in renewable energy projects to recover their investments over time, by selling electricity to the state owned CFE (Comisión Federal de Electricidad) under negotiated contracts.

These reforms and Mexico’s abundant green energy potential allowed many Mexican and international companies to step forward to propose and develop green energy projects. To facilitate these projects under state control, Mexico held three auctions to purchase renewable electricity under long term contracts; 41 projects were selected under the auction process. Solar energy projects accounted for 4,867 MW, wind energy 2,122 MW and geothermal 25 MW. In 2017 private investment in renewable energy in Mexico was $6.2 billion USD. Mexico seemed to be off to a good start towards its green energy goals.

PROBLEMS

In 2018, President Andrés Manuel López Obrador (often referred to as AMLO) was elected. Shortly after taking office, AMLO cancelled any future auctions to purchase green electricity by CFE. Then, in early 2020, under the guise of COVID-19 measures, Mexico changed the rules of how wind and solar projects could access the electrical grid. The new policy imposes a new requirement on developers of wind and solar projects to obtain a generation permit. These permits are subject to further regulations that prioritize CFE electrical generation from oil and gas electricity plants. These changes have raised international concerns regarding regulations that effectively cancel existing legal contracts. The European Union sent a letter to Mexico’s Energy Minister, Rocío Nahle García, saying the new rules would negatively impact 44 renewable energy projects and jeopardize $6.4 billion (USD) in renewable energy projects from EU companies. Bloomberg News reported March 16 of this year that the Canadian government expressed concern to the Mexican Economy Secretary, Tatiana Clouthier Carrillo, about stranding a potential $4.1 billion (USD) in renewable projects by Canadian companies. These concerns have also been expressed by the US and other countries using diplomatic channels.

The arguments made by the current Mexican administration in defending their change to regulation regarding private investments in the electrical energy grid are numerous. AMLO has suggested that corruption was involved in awarding some of the contracts to purchase electricity. He has also argued that the sporadic nature of renewable energy destabilizes the electricity grid. He also said there is just too much bureaucracy overseeing the energy sector in Mexico, and more central control is needed.

Some of these regulatory changes are currently being challenged in Mexican courts, so the final outcome is yet to be determined. However, the substantial green energy potential of Mexico is out there, available, awaiting the right political conditions for it to be harvested.

Hits, Blows and Coffins

By Kary Vannice

There has been much talk in the news over the last year about the financial “hit” many Mexicans have suffered as a result of the Coronavirus lockdown and economic downturn. Countless businesses took a “blow” as they were forced to close their doors. And for many, that put the final nail in the coffin of their business.

However, there is another equally important story, not making headlines, also connected to the Coronavirus outbreak. This story too is full of hits, blows and coffins. But, in this story, they are not financial, they are physical.

Less than a month after social distancing measures took effect in Mexico, domestic-violence-related 911 calls increased by 60% and federal authorities estimated that violence against women and girls had gone up between 30% to 100%. And that was in just the first three weeks of the pandemic.

Now, nearly a year later, the statistics on violence against women in Mexico during the pandemic are gruesome and, in all likelihood, don’t even come close to telling the full story, as many women are too afraid to file an official report and the ones who try often report that authorities urge them not to.

Even if a report is filed, odds are it will never result in a conviction. According to the government’s own data, 93% of all crimes in Mexico went unsolved in 2018; according to U.S. researchers, 98% of violent crimes go unsolved – which is a very sad reality for the families of the thousands of women who are killed in Mexico each year.

On average, 10 women a day are murdered in Mexico. In the early months of the pandemic, that number rose by more than 20%. Ten women a day might not sound like many in a country 127 million, but multiply that by 30 days and you have 300 women a month and multiply that by 12 months and you have 3,600 women murdered each year.

And for every one woman or girl murdered, there are countless others that suffer physical violence. Statistics report that two-thirds of all women in Mexico have experienced some form of violence, 44% of which is at the hands of a domestic partner.

Domestic violence is now referred to as the “shadow pandemic” in Mexico and throughout Latin America. One civil rights group said, “The so-called ‘shadow pandemic’ is characterized by a lack of information, incomplete data, and a culture of silence. How are national governments and support services supposed to respond to such an intimate and private, but also urgent, issue?”

Well, here in Mexico, quite poorly, as it turns out. When asked at a press conference about the startling numbers of domestic violence reports in the early days of the pandemic, Mexico’s President Lopez Obrador replied, “90% of calls to domestic abuse hotlines are fake.” But neither he nor his administration could provide any evidence that this statement was true. His failure to substantiate these literal cries for help as factual does nothing to change the culture of oppression and control over women’s bodies in Mexico.

A few weeks later, perhaps as damage control, the administration unveiled a new public service campaign aimed at addressing the rising domestic violence problem. The campaign depicted men and boys starting to get angry with women and girls in the home and advised them to “Take a breath and count to 10.” It then showed them smiling and waving a white flag of peace and surrender.

However, that same month, the AP reported that the Mexican government proposed cutting funding to women’s counselling centers in rural and indigenous areas, at a time when they knew they were needed more than ever.

It is unlikely that simply counting to 10 is going to change a deeply machismo culture, especially when the country’s own president “blames violence against women on the neoliberal policies of his right-wing predecessors and dismissed Mexico’s growing feminist movement as a plot orchestrated by his right-wing opposition,” as one news outlet reported.

Where does this leave Mexico’s women?

Well, unfortunately, we are back to the hits, blows and coffins. With the Coronavirus pandemic still ongoing, victims of domestic abuse have fewer support resources available to them than ever before and they are less likely to report their abuse due to the fact that they have to queue up outside of civil offices in full view of community members and potentially their own aggressors.

The Coronavirus has contributed to a spike in domestic violence in Mexico but is by no means its root cause. The root of it is a deeply misogynistic culture, which Cornell University philosopher Kate Manne defines as, the “policing of women’s subordination” in patriarchal societies, or the way people condemn women who don’t adhere to social expectations.

Until social expectations evolve in Mexico so women are seen as having rights equal to those of men, domestic violence and femicide will continue. Many, many more women and girls will suffer the consequences, as they continue to go unprotected in their own homes and often unaccounted for when they disappear.