Mexico's New Energy Reform
Thirteen years later, the much-debated reform has come and gone and Mexico has a new energy model. This new model has been controversial in Mexico’s polity, but widely celebrated around the world. Between August and December 2013, the Mexican Congress debated and then approved a Constitutional Reform that allowed private and foreign investment across the energy values chain for the first time in 75 years. In August of 2014, the Congress approved secondary or implementing legislation and a new legislative and regulatory framework was created that has allowed for a level playing field for all actors in the sector. Since then, Mexico has witnessed a profound and rapid opening of its oil, gas and electricity sectors, as well as attempts to reform the national oil company, Pemex, and the national electricity utility, the Comision Federal de Electricidad or CFE.
But the reform is far from complete, and important adjustments should be made to fully realize the benefits of an open and competitive Mexican energy sector. Of critical importance are modifications to regulations and to one of the key regulators, to ensure that Mexico’s market remains competitive and that the independence of the regulatory institutions is strengthened.
The volume that has been assembled here is an attempt by foreign-based analysts, experts in their respective fields, to provide an unbiased evaluation of the reform. After this introduction and a history of the reform process, each of the chapters asks the following questions:
- What has been successful in the reform process?
- What is still incomplete in the implementation of the reform?
- What needs to be changed or modified to take full advantage of the reform?
- What will take more time to develop into a success?
Mexico’s energy reform continues to be a bone of contention between analysts and politicians, between international investors and those who seek greater national control of the country’s energy wealth. But few would deny that the reforms were truly historic, profound and highly ambitious. In passing them, and then seeking their rapid and effective implementation, the Mexican government has shown what is possible when crisis threatens and when political stars align. Now we must evaluate what the political future holds for the reform and those who have invested so heavily in it.
About the Authors
Guillermo José García Sanchez
Leticia A. Abad
The Mexico Institute seeks to improve understanding, communication, and cooperation between Mexico and the United States by promoting original research, encouraging public discussion, and proposing policy options for enhancing the bilateral relationship. A binational Advisory Board, chaired by Luis Téllez and Earl Anthony Wayne, oversees the work of the Mexico Institute. Read more