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John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

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Leading U.S. Oil Supplier Mexico to Embrace Renewable Energy?

Leading U.S. Oil Supplier Mexico to Embrace Renewable Energy?

When two of the leading oil exporters to the U.S. begin considering embracing renewable power, it is a development that all but the most ardent fossil fuel advocates should notice.

Last month Saudi Arabian Prince Turki Al Faisal Al Saud, told an audience at the Global Economic Symposium in Brazil that he hoped that Saudi Arabia’s domestic energy needs might be met entirely by low-carbon energy renewable sources within his “lifetime,” adding that Saudi Arabia wants to use its vast reserves of hydrocarbons to produce other goods rather than use them solely for power generation, stating, "Oil is more precious for us underground than as a fuel source. If we can get to the point where we can replace fossil fuels and use oil to produce other products that are useful, that would be very good for the world. I wish that may be in my lifetime” before adding, “but I don't think it will be."

Now Mexico seems poised to follow suit.

At the October Border Energy Forum XIX held in Hermosillo in Mexico’s Sonora state, Mexican President Felipe Calderón, who leaves office at the end of his six-year term on 1 December, told his audience of his ambition for Mexico to be using 30 percent energy from renewable sources by 2020 and 50 percent by 2050, up from its current level of 7 percent. Sonora Governor Guillermo Padrés opened the conference. Padrés announced that Sonora would soon host the Centro Mexicano de Innovación en Energía Solar solar research and production facility, to be staffed by 16 Mexican universities, plus the University of Arizona. In addition, 11 Mexican technological institutes, 15 research facilities and 19 private companies will participate, including the multinational Spanish corporation Abengoa S.A. Sonora state has also invested about $25 million to land the solar facility.

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The Border Energy Forum now draws an annual crowd surpassing 300, usually evenly divided between Americans and Mexicans. Border Energy Forum sponsors included: the Texas General Land Office; the Comisión de Cooperación Ecológica Fronteriza (the Border Environment Cooperation Commission, COCEF/BECC); the North American Development Bank (NADB/BDAN); the Energy Council; the U.S.-Mexico Chamber of Commerce; the U.S.-Mexico Cultural and Educational Foundation; El Gobierno del Estado de Sonora (the Sonora state government): Secretaría de Economía del Estado de Sonora (the Sonora State Economic Secretariat); Comisión de Energía del Estado de Sonora (the Sonora State Energy Commission); Secretaria Técnica del Ejecutivo del Estado de Sonora (the Sonora State Executive Technical Secretariat);  the Center for Legislative Energy and Environmental Research (CLEER); the Sonora Energy Group Hermosillo; Frontera Renovable S de RL de CV; ABB México, S.A. de C.V.; López Rubio & Asociados; FRV; Energyas; SolFocus PECOM Electricidad y Telecomunicaciones; Grupo México; Capín, Calderón, Ramírez y Gutiérrez-Azpe, SC; Solarscape de México, SA de CV; the U.S. Agency for International Development; the U.S. Environmental Protection Agency; the U.S.-Mexico Border 2012 Program; Alliance Magazine; BizNews North Mexico; Círculo Verde; EIN News; Expansion Solutions Magazine; Petróleo & Energía; Revista RECONVERSION and Palabra Empresarial.

A number of conference participants discussed Mexico’s potential to expand its renewable power capacity to 12 gigawatts (12,000 megawatts) by 2020. The prediction was made by Pablo Gottfried Blackmore, a member of the directors council of the Asociación Mexicana de Energía Eólica (the Mexican Association of Wind Energy), the country's national wind trade group," Blackmore said, "Our goal is 12 GW, and the Energy Secretariat already has adopted that number. Studies we have analyzed seem to agree that there is 20 GW of wind potential in Mexico that would be competitive with gas prices. It is critical to bring in the small producers to reach this goal, however."

Mannti Cummins, the wind energy director for American Shoreline Inc., was even more bullish, telling his audience, "We should be adding 4,000 MW of capacity over the next four to five years. This will be the Saudi Arabia of wind."

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What makes the development particularly fascinating is its proximity to the U.S., and the fact that energy became a topic in the recent presidential debates, with the Obama administration supporting the development of renewable energy, while the Republican candidate Mitt Romney remained firmly committed to hydrocarbons, coal and nuclear power. In its “The Romney Plan For A Stronger Middle Class: ENERGY INDEPENDENCE,” released on 22 August, “renewable” energy was mentioned a mere three times in 21 pages.

But some of Romney’s concepts may yet survive, if not in the way the former presidential candidate intended, particularly its concept of “partnering with our allies Canada and Mexico to achieve energy independence on this continent.”

And American companies are already taking part in Mexico’s green revolution. The San Antonio-based North American Development Bank (NADB) director of project development Jose Ruiz noted, "We can provide 55 percent to 70 percent of the cost of a project, with the rest coming from equity investors, the EPC contractors and the equipment providers. We have several more wind projects in the works." Among its other tasks, the NADB is mandated to support renewable energy development along the U.S.-Mexico border under the terms of the North American Free Trade Agreement.

So, Romney’s proposed “North American Energy Partnership” may eventually come to pass – but it will contain a significantly greater renewable energy component than the white paper envisaged.

And, in the meantime, according to the U.S. Energy Administration, the United States will continue to import 1.319 million barrels per day of Mexican crude, making it America’s second largest source of imports.

By. John C.K. Daly

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Leave a comment
  • Randy on November 12 2012 said:
    " while the Republican candidate Mitt Romney remained firmly committed to hydrocarbons, coal and nuclear power. In its “The Romney Plan For A Stronger Middle Class: ENERGY INDEPENDENCE,” released on 22 August, “renewable” energy was mentioned a mere three times in 21 pages."

    So lemme see if I got this right.

    1) Anyone who jumps on a pedestal and announces to the world that 'renewable energy' is our panancea, despite its COST, reliability and practicality, will be considered FORWARD THINKING by energy pundits.

    2) Anyone who suggests that traditional energy resources should be exploited until that time when 'renewable energy' is cost effective, reliable and sustainable will by considered BACKWARD THINKING by same energy pundits.


    By the way, how are those Germans doing with their windmills these days? No more nukes. No more coal. In a few years they'll have the highest energy costs in the EU. That should do wonders for their economy, not to mention the rest of the EU as well. Marching to the cliffs....

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