The current Mexican government marginalizes direct private investment in energy and tries to demolish the energy reforms of the previous administration, substituting them with backward-looking, unworkable plans. In this context, one of its goals is to achieve self-sufficiency in gasoline.
According to President Andrés Manuel López Obrador, in year 2024 state-run oil firm Petroleos Mexicanos (Pemex) will be processing 1.5 million barrels of crude oil per day in its refineries, that is, in the six existing plants, to be rehabilitated, plus the new Dos Bocas refinery. This would imply more than doubling current fuel production, which seems impossible to achieve, given foreseeable investment levels and the short time frame.
Most likely, Dos Bocas will not be completed in this government term, perhaps never, and the other six will not greatly improve their operating conditions. Moreover, if semi-obsolete processing plants are forced to operate in sub-optimal conditions, there will be a risk of causing more fires and releases of sulfur-thick emissions, as has occurred frequently at Pemex in recent times.
Self-sufficiency in energy sounds attractive, but it would be more practical and realistic to pursue another goal, which is energy security, creating conditions that would guarantee access to high-quality energy for all Mexicans, even if part of consumption has to be met by imports.
There is very wide access to gasoline, gas and other fuels in international markets and, indeed, it is cheaper to import them than to have Pemex produce them. Reducing the price of gasoline to consumers is not a synonym of supporting Pemex.
But the government applies policies that put energy security at risk. In different ways, it discourages and cancels private investments to expand capacity to supply, distribute and store gasoline and other kinds of energy in Mexico.
Instead, it seeks a kind of self-sufficiency that implies keeping coal-fired power plants operating, and also those that burn heavy fuel oil, while vetoing renewable energy. It seeks to reduce imports of gasoline and gas, instead of ensuring long-term supply through agreements and contracts with private operators.
For a role model the Mexican government should look to Great Britain, a former coal-industry bastion, which decades ago took the tough decision to close all of its coal mines, shut down coal-fired power stations and phase out its most polluting refinery plants, as well as inviting private companies, particularly foreign firms, to invest in its energy industry
Today, Britain is an example of a country that puts clean energy first and boasts a very low-carbon energy matrix. It did so without supposedly intractable problems of reliability or intermittency, and it also solved labor and social problems related to energy projects. And it did so without loss of national sovereignty.
The biggest global car manufacturers, such as General Motors, Nissan, Volkswagen Renault, as well as Tesla, are currently in the midst of an intense race to launch dozens of electric vehicle models as fast as posible, according to the lead story in The Wall Street Journal on the 19th of July.
In Norway more than 30 percent of vehicles on the road are now electric or hybrid. In France, it is 10 percent and growth is exponential. Great Britain expects to have very few vehicles running on gasoline in year 2030 and it has a law that would prohibit them from 2035 on.
These are trends that will come to Mexico. But the López Obrador government is driving in the opposite direction and seeks to unplug the country from global trends and from the clean energy aspirations of the new generations. What will Mexico do with so much gasoline it hopes to produce, when demand for it begins to fall? If our government continues to look to the past, then it will have to prohibit electric cars. That is all we need!
