(Courtesy of: www.iflr.com)

In the last six years—during the administration of President Felipe Calderón—Mexico’s energy sector witnessed many transformations propelled by the 2008 Energy Reform.  This reform was pushed forward by Calderón’s administration but much to the dislike of the opposition party, the Partido de la Revolución Democrática (PRD). President Calderón pushed for incentive-based contracts for deepwater exploration, involvement of the private industry in the construction of refineries and a deep change to Pemex’s corporate structure that would give it more autonomy while remaining part of the government. Nevertheless, the PRD was against even the slightest involvement of the private sector in the oil and gas industry because the Mexican Constitution states that the petroleum industry is the exclusive property of the state.

Finally, after what felt like years of back and forth political debate, Calderón’s administration was able to push the 2008 Energy Reform forward with the support of the PRI—the recently elected party led by President-elect Enrique Peña Nieto—and it attempted to regulate and promote the use of renewable energy resources with the introduction of two new laws.

Calderón’s energy reform received a lot of international criticism stating that it did not accomplish as much as it was set up to but, even though it was watered down by members of the opposition party, it still managed to put the idea of energy reform on the table and this was nothing less than a very big step for Mexico.

Now, as the country faces a political transition, Peña Nieto must continue on the path set up by Calderón’s government and propose a new, comprehensive package of reforms in the early stages of his administration.  During an interview with Time Magazine, Mexico’s new President said:

“Mexico urgently needs a series of structural reforms that will detonate its true economic potential and generate more public welfare. Energy, labor, tax and social-security reforms are imperative.”

During his presidential campaign, Peña Nieto proposed a constitutional amendment to allow private and foreign investment in Pemex stating that this would augment its production capacity without “losing the Mexican state’s proprietary stake.”

With regard to the inclusion of renewable energy in the new reform, Peña Nieto has not been very elaborate. He agrees that the right move is to push for a diversification of Mexico’s current energy portfolio but he has not been very specific about the issue.

At the moment, Mexico does not invest nearly enough resources into renewable energy research as other countries throughout the world; however, even though Mexico’s energy mindset still revolves around oil production, the importance of renewable energy is growing and technology development in this sector is improving.

With this in mind, there is no better moment for Mexico to take a chance on sustainable energy production and design a future where the use of hydrocarbons for energy production is replaced with the use of renewable energy sources. Peña Nieto must take advantage of the momentum created by the General Law on Climate Change and take a positive stance on the subject of renewable energy to show the rest of the world that Mexico really is moving towards a modern outlook.

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