Lagniappe
Allan
Wall:
Players in Mexico’s
mounting
oil & energy reform
debate
“All
the world’s
a stage, And
all the men and women merely
players.” William
Shakespeare, As You Like It, Act 2, Scene 7.
The Mexican government is gearing up for a big debate over PEMEX,
the Mexican state-owned oil monopoly. Who are the players in
this upcoming debate, and what are they likely to do?
Nobody
can deny that PEMEX is in big trouble. It’s heavily-indebted,
its biggest crude oil source (the Cantarell Field) has peaked,
and the company lacks the money and expertise to get at offshore
oil in deeper waters. According to PEMEX’s March 25 report,
the company has 9.2 years of proven oil and gas reserves.
It’s obvious that reform is needed. But what shape would
such a reform take? To borrow another Shakespearean expression, “ay,
there’s the rub” (Hamlet, Act 3, Scene 1).
As a former Energy Secretary, Mexican President Felipe Calderon
is well-aware of the PEMEX problem, and has warned that the alternative
to PEMEX reform is catastrophe.
The
administration’s point man for energy reform is Secretary
of the Interior Juan Camilo Mouriño, who has been the
target of criticism.
Mouriño’s family owns PEMEX gas station concessions
and a gasoline transport business. In 2001 and 2003, Mouriño
signed contracts representing the family business while simultaneously
serving on an energy committee as a Mexican congressman. Then,
in 2004, Mouriño signed a similar contract while serving
as Deputy Energy Secretary. To opponents, these actions invite
charges of conflicts of interest.
Georgina
Kessel is the administration’s Secretary of Energy,
and she has stated that, if the Mexican people reject private
money in PEMEX, the government will honor that rejection.
Meanwhile,
Mexican Treasury Secretary Agustin Carstens has pointed out
that Mexicans are “addicted to petroleum,” and
that government finances have been petrolizadas (petroleumized).
Carstens is absolutely right, as about 40% of the Mexican budget
comes from oil, which in turn takes funds away from PEMEX that
could be used for oil exploration, exploitation and processing.
Party politics have a lot to do with any proposed energy reform.
As no party has a majority in Congress, such a reform can only
be brought about by negotiation.
Ideally the three major parties, the PAN (National Action Party),
PRI (Institutional Revolutionary Party) and PRD (Party of the
Democratic Revolution), would sit down and hammer out some kind
of agreement that they all three could live with.
But,
if the PRD won’t get on board it’s possible
that the PAN and the PRI could approve an energy reform. Or,
and this is also a possibility being explored, the PRI and the
PRD could pass an energy reform.
The FAP (Broad Progressive Front), a coalition of the PRD and
two other leftist parties, opposes private investment and is
calling for a national dialogue on PEMEX to include NGOs, universities
and special guests.
The
PRD itself is divided, in the midst of a leadership dispute.
However,
opposition to a PAN/PRI energy reform could – pardon
the pun – energize the party and get feuding party leaders
working together to organize street demonstrations against oil “privatization.”
A
coalition of governors of oil-producing states (Tabasco, Veracruz,
Campeche,
Chiapas and Tamaulipas) has announced they’d
like to make their own reform proposal.
And
PEMEX’s
powerful union has to have a say in the matter.
The
major opponent to reform is AMLO, Andres Manuel Lopez Obrador,
who
barely lost the 2006 presidential election and still refuses
to recognize the Calderon administration. AMLO is threatening
to direct his scorched earth policy against any sort of PEMEX
reform that doesn’t meet his exact specifications, calling
forth thousands of protestors.
But
what exactly is AMLO’s position anyway? AMLO is against
privatization of PEMEX, but that’s not really in the cards
anyway, and nobody is proposing it.
AMLO
is on record as opposing any infusion of private money, foreign
or
even domestic, into PEMEX’s coffers.
So
what’s his alternative? That’s the problem – AMLO
isn’t even offering a viable alternative, and he show’s
no evidence of having thought through the problem.
But opposition to energy privatization is always a great cause
in Mexico for calling forth multitudes of protestors. However,
do the rank and file demonstrators understand and appreciate
the issues? I doubt it.
Consider such a demonstration I read about several years ago.
In
a protest against electrical privatization, protest leaders
had manipulated
poor Mexicans whose homes didn’t even have
electricity into demonstrating against electrical privatization!
Is that bizarre, or what?
Allan
Wall, is
a MexiData.info columnist, recently returned from a tour of
duty
in Iraq. He currently resides in Mexico, where
he has lived since 1991. Petroleumworld
does not necessarily share those views
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