Mexico: Energy Policy According to the Candidates

19 February 2024

On October 1, 2024, the first female president of Mexico will almost certainly take office, since the two leading candidates are Xóchitl Gálvez and Claudia Sheinbaum. Much like the electoral coalitions that nominated them, their energy policies, will likely diverge in multiple ways.

Let’s start with the candidate offering continuity: Claudia Sheinbaum. She majored in physics at the National Autonomous University of Mexico (UNAM) and has a PhD in Energy Engineering from UNAM. Sheinbaum has to carry out a careful balancing act on her energy proposals, since her mentor and biggest supporter, current president Andrés Manuel López Obrador (AMLO), has enforced a nationalist energy policy and turned away private investment on both the electricity and oil & gas sectors. However, when Sheinbaum has met with foreign companies, she’s tried to reassure them that she will at least allow some sort of private investment in the energy sector. She has also tried to emphasize that an energy transition is needed towards a cleaner energy matrix (currently about 70% of Mexico’s power generation depends on fossil fuels), and that she wouldn’t sabotage energy efficiency initiatives from the private sector. Finally, on February 5, 2024, AMLO sent 20 bills to Congress which included amendments to articles 25, 27, and 28 of the Mexican Constitution, with the intent of ensuring the national electric utility’s (the Federal Electricity Commission, CFE) preeminence over private electricity companies, dissolving the regulators of the energy sector (National Hydrocarbons Commission, Energy Regulatory Commission, and the Efficient Energy Use Commission), and banning fracking.  Sheinbaum’s response to this remains to  be seen.

The opposition candidate, Xóchitl Gálvez, majored in Computer Engineering at UNAM, and she would radically change the current energy policy mix. For starters, Gálvez would enforce the current legislation and allow private companies’ participation in the generation and sale of electricity, as well as in exploration & production, transport, storage, distribution, and retail of oil, natural gas, and fuels. She has emphasized that the regulatory bodies would recover their autonomy, and enforce their mandate of creating competitive energy markets for the sake of consumers. In her rallies, Gálvez has repeatedly mentioned the need to diminish electricity generation from fossil fuels, while increasing the generation from wind and solar power. Summarizing, Gálvez would restart the market opening reforms started in 2013 and halted in 2019, while trying to address the tenuous financial positions of national oil company (Pemex) and the national electric utility (CFE), both of which have remained in the red during AMLO’s tenure.  At least from the energy perspective, Mexican voters will have different flavors to choose from.