We read in Morning Brew today that the International Energy Agency (IEA) is projecting that renewables will surpass coal as the primary source of energy generation by 2025. The Brew item actually says solar but the original Reuters story it links to says renewable sources. Either way, the growing importance of solar and other renewable energy sources combined with the tenuous outlook for fossil fuels continues to cast a dark shadow over President Andrés Manuel López Obrador’s campaign to prop up Mexico’s insolvent state oil company, Petróleos Mexicanos (Pemex). The entire world is innovating and expanding generation capacity in clean, renewable energy, and the Mexican government is out here trying to get people to use more diesel. Absolute face palm.
Since ascending to power in December 2018, President López Obrador (AMLO) has relentlessly sought to block the advance of wind and solar generation projects, driven by his personal conviction that the energy industry in Mexico should be controlled completely by state agencies and enterprises. The vast majority of wind and solar generation plants in the country have been built or are currently under development by private companies, therefore the administration is moving to slow the advance of renewables in order to shore up the state enterprises’ preponderant role in the energy industry. At the same time, AMLO has introduced measures to boost the consumption of oil, diesel, fuel oil and natural gas in order to drive more demand for Pemex’s products. While we share the president’s concern for the poor and desire a more equitable economy for all, we do not agree with him that manipulating the energy industry to increase dependence on fossil fuels and shaking down businesses for money to cover Pemex’s massive debts is the way to achieve these goals. It is horrendous public policy and Mexico will pay a steep price in lost years of development and wasted public resources. We have elaborated on this topic before and we will surely revisit it before long.