Mexico’s presidentelect promises to clean up the environment
MEXICO CITY - Gloria Gonzalez considers herself left-leaning and socially minded. She has marched in protests, supported environmental causes and voted three times for President- elect Andres Manuel Lopez Obrador - the left-leaning populist and nationalist who overwhelmingly won the July 1 election.
Gonzalez, 50, doesn’t own a car. But she hopes Lopez Obrador keeps key campaign promises: to freeze the price the gasoline and build an US$ 8 billion refinery.
“When the price of gasoline goes up, the price of food goes up, too. Bus fares go up. The price of everything goes up,” she said. “He wants to build refineries. He wants them to benefit the people (with) a lower price of gasoline.”
Lopez Obrador - who also goes by his initials, AMLO - campaigned on curtailing crime, corruption and poverty. He also promised to clean up the environment, releasing a campaign document called “Naturamlo,” which pledges to protect water resources, plant 1 million hectares of trees, consult with indigenous communities on development and stop the slayings of environmental defenders.
But any environmental agenda intersects with Mexico’s complicated relationship with petroleum. In 1938, the state seized nearly all the assets of foreign- owned oil companies, effectively nationalising the industry. Patriotic Mexicans donated everything from the family jewels to chickens to help the government get rid of the foreign companies.
That history has left many Mexicans with a sense they should benefit from petroleum by paying less at the pump. It has also prompted Lopez Obrador to promise he will “rescue” the energy sector.
Lopez Obrador, a native of oilrich Tabasco state, has obsessed for years over the price of gasoline and opposed a 2014 constitutional change that allowed foreign companies to invest in the oil and gas industry.
He compared the change to treason and wrote a letter warning then-ExxonMobil CEO Rex Tillerson that any investment in Mexican oil would be tantamount to “piracy” - although he toned down his rhetoric in the pre- election period.
Lopez Obrador has proposed freezing the prices of gasoline, diesel and electricity for three years, then lowering prices as new infrastructure comes online.
He also proposes building a new refinery in Tabasco and increasing production from Mexico’s six underperforming refineries. He sells it as a solution to Mexico having to import approximately 60 per cent of its gasoline - nearly 600,000 barrels per day - from the United States. (The US Gulf Coast refineries are well- equipped to handle heavy, low- quality crude, including some produced in Mexico.)
In a meeting with business leaders in Monterrey on Tuesday, Lopez Obrador said the refinery, located in Dos Bocas in Tabasco, would cost US$ 8 billion and would produce 600,000 barrels of gasoline per day.
The refinery is part of his ambitious, US$ 9.2 billion investment plan for Mexico’s state-run oil and electricity companies. The investment aims to boost petroleum production, which has fallen 43 per cent since peaking in 2004, refurbish neglected refineries operating below capacity and bolster electricity generation.
Lopez Obrador’s transition team did not respond to requests for an interview. The presidentelect has said he will ban fracking, and in the presidential debates he proposed combating climate change by planting 1 million hectares of trees and increasing hydroelectricity production.
His transition team has also pledged to respect Mexico’s international climate commitments and promote the use of renewable energy, according to clean- energy consultants.
Analysts say increasing refining capacity makes sense after decades of underinvestment by the state petroleum company, Pemex.
Environmentalists express mixed opinions on the incoming administration. Most are taking a wait-and-see approach.
“We have some mixed signs,” said Andres Flores, director of climate change and energy at the World Resources Institute in Mexico. “They’ve announced new refining capacity, investments in oil and gas, and on the other hand they’re also saying they would comply with the commitments that Mexico made in the Paris [climate change) agreement.”
Outgoing President Enrique Peta Nieto passed energy reform early in his administration to boost oil production, attract investment and take advantage of oil giants’ expertise in exploiting deep-water petroleum. —