Mexico’s President, Andrés Manuel López Obrador, plans to buy nearly 2 million tons of thermal coal from small producers and to reactivate a pair of coal-fired plants on the Texas border, which were being phased out as natural gas and renewables took a more prominent role in Mexico’s energy mix. Further, López Obrador is curtailing Mexico’s deployment what many think of as “clean” energy. Mexico’s president believes in energy sovereignty, in which state-run bodies–the oil company Pemex and the Federal Electricity Commission–produce oil and generate electricity. The state-owned Federal Electricity Commission has been told to buy electricity from its own coal generators before they buy electricity from the privately-owned renewable generators. Private players, which are heavily invested in “clean” energy, are secondary because the technologies are less reliable and carbon emissions and climate commitments have less political salience south of the border. Mexico’s energy strategy has similarities to that of China.
The Federal Electricity Commission’s current investment plan forgoes clean energy projects. López Obrador’s government plans to refurbish the agency’s hydroelectric installations, which would allow Mexico to meet its climate commitments of generating 35 percent of its electricity via renewables. The Mexican government points to the lack of dependability of intermittent renewables, indicating that solar and wind energy are unreliable and are given preference over hydroelectric projects by the current President’s predecessors. The Federal Electricity Commission blamed a December electricity outage that resulted in a blackout for 10.3 million customers on record levels of renewable energy overloading the power grid. Renewable energy was running at a peak of 28 percent and the system was too unstable to recover, causing the blackout.
President López Obrador vowed to put at least 80 percent of the budget into fossil fuels. He is pouring funding into Pemex and is continuing construction on a massive $8 billion oil refinery. Mexico is the sixth-largest oil producer in the world. Coal mining almost ground to a halt in 2019 when the Federal Electricity Commission stopped purchasing coal amid a planned transition to cleaner energy sources. About 10,000 miners lost their jobs. Coal produces about 9.5 percent of Mexico’s electricity.
López Obrador policies are in stark contrast to those of the Biden administration, which has declared that the climate crisis poses an “existential threat” and unveiled a number of policies to decouple the U.S. economy from fossil fuels. President Biden instructed the U.S. government to “pause” and review all oil and gas drilling on federal land, eliminate “fossil fuel subsidies” and transform the government’s vast fleet of cars and trucks into electric vehicles, in a set of climate executive orders. Alongside the review of public lands, the Biden administration will install climate as an “essential element” of U.S. foreign policy and national security, craft a strengthened national emissions reduction target, and set a new goal of conserving 30 percent of American land and oceans by 2030. Biden hopes to pass a $2 trillion “clean” energy package through Congress.
Conclusion
Mexican President Andrés Manuel López Obrador is pursuing a strategy of fossil fuel realism. He recognizes the value of energy security by promoting the development of the country’s domestic resources and is wary of pushing renewable energy, which is dangerously dependent upon sourcing from China.
