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Mexican President Uses Texas Freeze To Push For Energy Independence

Mexican President Andrés Manuel López Obrador is using the Texas Freeze to cut the country’s dependence on U.S. gas imports and to garner support for rolling back the energy sector’s reforms that his predecessor passed.

Mexico’s dependence on U.S. natural gas imports became painfully evident last month when plummeting natural gas exports from the United States to Mexico amid the Arctic cold spell. The resulting gas demand surge caused blackouts in northern Mexico, leaving some 4.77 million households and businesses without power in mid-February.

This has fueled López Obrador’s rhetoric that strong state involvement in the energy sector would bring about “energy independence” and will not send Mexico’s oil and gas riches in the hands of foreign companies.

The Mexican president is now working to scale back the energy reform from 2013 of his predecessor Enrique Peña Nieto, who opened Mexico’s oil and gas industry to private investment for the first time in seven decades.

“I will send an initiative to reform the constitution, because I cannot be an accessory to theft, robbery, I cannot accept that individuals harm the public treasury,” López Obrador said last week, according to Bloomberg.

Analysts, however, see the president’s plan as nothing more than nationalistic rhetoric. Energy sector laws passed this year, according to analysts, are only alienating foreign companies from Mexico, while state oil giant Pemex—strongly supported by the government—is focusing on boosting oil production and is not really succeeding in this. 

At the same time, the Mexico chapter of the International Chamber of Commerce (ICC) expects a wave of international arbitrations and lawsuits in the coming weeks after Mexico enacted this month a new law that favors state-owned electricity generation companies over private power firms.

Meanwhile, Mexico’s natural gas dependence on Texas is growing.


U.S. exports of natural gas to Mexico, almost all of which are transported by pipeline, rose in the first nine months of 2020, EIA data shows, while exports of natural gas to Mexico by pipeline are the largest component of U.S. natural gas trade, accounting for 40 percent of all U.S. gross natural gas exports in 2019.

By Tsvetana Paraskova for Oilprice.com

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