Vultures Gunning for Mexican Energy Sector, and AMLO

Feb. 7 , 2021 (EIRNS)—With President Donald Trump out of the way, the assault against Mexico’s energy sovereignty and its President, Andrés Manuel López Obrador, has begun in earnest. The City of London, Wall Street rating agencies and press organs, the “climate crisis” mafia, the U.S. Chamber of Commerce, and others of this ilk have joined the energy multinationals in threatening President López Obrador, that if he proceeds to reassert the government’s predominant role over energy production and supply, economic warfare will be unleashed against Mexico.

Expectations have been high that the Biden government would back the foreign private interests, unlike President Trump, who ignored such demands. In an editorial today (“Mexico’s Dangerous Addiction to Fossil Fuels; López Obrador Has an Outdated, State-Led Vision for the Energy Market”), the Editorial Board of London’s Financial Times ordered the Biden team to get moving. “The Biden administration should lose no time in reminding Mexico of its international obligations on trade and climate change,” they wrote.

The first shot of the offensive was fired on Jan. 31, by Wall Street Journal Americas hatchet-woman, Mary Anastasia O’Grady, who labeled AMLO a “strongman” and “demagogue” comparable to Venezuela’s Hugo Chávez, out to “centralize power.”

The pile-on then took off when AMLO sent to Congress the next day his long-announced bill to roll-back the provisions of the 2014 energy privatization reform which forces the Federal Electricity Commission to prioritize purchase from highly-subsidized foreign wind and solar companies over the more reliable electricity produced by state-owned hydroelectric, oil and gas, and nuclear plants.

A Fitch Ratings analyst told a regional debt webinar this week, that the bill, if passed, would be considered a “negative risk factor” for rating Mexican government bonds. HR Ratings suggested that passage would be a “source of potential conflict” with the U.S. government, and thereby threaten access for Mexican exports to the U.S. market.

U.S. Chamber of Commerce’s Senior VP of the Americas Neil Herrington denounced the “deeply troubling” electricity bill, claiming it would open the door for a “monopoly in the electricity sector ... directly contravene Mexico’s commitments under the U.S.-Mexico-Canada Agreement ... limit access to clean energy ... [and] undermine the confidence of foreign investors in the country at the precise moment enhanced foreign direct investment in Mexico is needed more than ever.” Mexico’s rightwing Business Coordinating Council (CCE) charged that the bill would lead to a monopoly and “indirect expropriation of private plants.”

Associated Press attacked the bill for favoring “dirty fuel,” over “green-energy.” The VP for Strategy and New Initiatives at Washington, D.C.’s quasi-governmental Wilson Center, Duncan Wood, said it will “weaken confidence in the economy ... [and] weaken Mexico’s commitment to reducing emissions.” The neoliberal Mexican Institute for Competitivity in Mexico City protested that it will lead to “noncompliance with the Paris Accords.”

With AMLO’s party holding a majority of votes in both chambers of the Congress, the bill could pass. This outcome was complicated by Mexico’s Supreme Court ruling midweek, overturning regulatory changes made by the Federal Electricity Commission last year along the lines of the now-introduced bill. The court ruled that prioritizing reliability over cheapest price as criteria for fuel purchases, is anti-constitutional and anti-competitive.