We have commented before in this space about President López Obrador’s relentless campaign to dismantle the previous administration’s energy sector reform that cleared the way for participation by private companies. For us, the historic reform was akin to throwing open the door to an attic that had been locked for years with a dead body inside (Pemex, in this case) to finally let in fresh air. Most of the ham-fisted maneuvers by the president and his enablers in the Mexican Congress have been at least temporarily blocked by legal challenges, including at the Supreme Court level. Undeterred, Mr. López Obrador (AMLO) launched his latest and most ambitious salvo this past week, ramming through the Chamber of Deputies via fast-track a reform of the current electricity law granting advantages to the state-owned former monopoly Federal Electricity Commission (CFE) at the expense of privately financed electricity generation plants. Continue reading Retrograde electricity reform upsetting the neighbors
A Mexico City District court last week accepted requests by environmentalists to suspend implementation of a regulatory change that would allow up to 10% ethanol in automotive gasoline in Mexico. As Mexico Business Blog reported in July and August, Mexico’s Energy Regulatory Commission (CRE) published modifications to the country’s fuel quality standard, NOM-016-CRE-2016, in June permitting the increase in ethanol content. Environmental groups oppose the change arguing it will worsen air quality, and other groups with vested interests also raised objections. Last week’s granting of an injunction suspending the rule change for the moment reverts the NOM back to its previous language permitting up to 5.8% ethanol content, although ethanol-mixed gasoline is not currently sold in Mexican gas stations. In the wake of the latest injunction, both the CRE and its adversaries on the topic have a number of legal maneuvers open to them but local analysts are opining that the issue will remain tied up in the courts at least until next year.
Local media are reporting this week that multiple requests for injunctions have been filed before Mexican courts to suspend the changes to NOM-016-CRE-2016, which regulates gasoline quality in the country. As we posted last month, Mexico’s Energy Regulatory Commission (CRE) updated the NOM in June to allow up to 10% ethanol content (E10) in automotive gasoline, provoking high fives in the ethanol industry and rending of garments among environmental groups. Apparently the latest injunction request was filed by Gabriel Quadri – environmental consultant, erstwhile presidential candidate and ajonjolí de todos los moles medioambientales – who noted that other individuals and civil society organizations also have filed injunction requests (other sources cited the Mexican Center for Environmental Law (Cemda) and Consumer Power (EPC) as having filed prior injunction requests). Quadri’s legal filing demands specifically that national oil company Petroleos Mexicanos (Pemex) and other oil companies be prohibited from selling ethanol-blended fuel in the country, according to the reports in multiple media.
As per local custom, details on the whole affair are fuzzier than a baby hedgehog. The reports say a response from Mexico City’s Administrative Tribunal is expected next week, but we will not be holding our breath on that one. Nonetheless, considering that the CRE requested and received an exemption to the requirement of submitting a Regulatory Impact Statement (MIR) from the Federal Regulatory Improvement Commission (Cofemer) in order to increase the permitted ethanol content, one would think there could be grounds for granting the injunction. Quadri and other injunction-seekers are calling for a systematic process of scientific and technical analysis of the environmental and health impacts of E10 gas before any changes are approved to the NOM. We will continue to report on this topic as further information becomes available.