Almost four months have passed since President Peña sent his energy reform initiative to the Senate. A few days from the ordinary session period in Congress comes to an end (December 15th) and after a lot of political maneuvers, it seems that changes proposed to the 27th and 28th Constitutional articles will finally see the light. Nevertheless, there are still some uncertainties regarding potential factors that might prevent the approval of the reform until 2014. The best example of the aforementioned is not the protests made by followers of Andrés Manuel López Obrador outside the Senate, but a call from influential PAN leader, Diego Fernández de Cevallos to be cautious about the content of proposals being discussed. The energy reform is not only subordinated to the essential industry’s opening issued on the original Presidential initiative. There are crucial matters whose deliberation should not be overlooked nor endangered by mixing them up with confusing political negotiations.
Delaying the Constitutional energy reform until 2014 would have major implications both for the federal government as well as the country. Although it may be too much to ask for, the ideal scenario would involve having the detailed content of the reform, whether it is in transitory articles or regulatory laws before the end of the year (if necessary, an extraordinary session period would not be a bad idea). The economic credibility of Mexico would be endangered in a context where the implementation of the reform is not initiated by the first half of next year, due to a lackluster economic growth in 2013. It is not exaggerated to point out that the success of Enrique Peña Nieto’s administration is inextricably linked not only to the approval of a trampled reform (like most of the initiatives that have gone through in the past few months) but to the appliance of a scheme where the maximum potential of the energy sector is truly boosted. This is not the task of a perfectly written law but of an adequate operation.
To legislate in the nick of time hinders a serious debate amongst Congressmen. Although a previous agreement on the reform to approve exists, it could leave behind essential issues such as the rampant corruption in PEMEX as well as all the legal problems inside the aforementioned company, that is to say, both its morally bankrupt trade union regime and its alarming liabilities. The latter represents 64% of PEMEX’s assets and it could prevent the relation of the company with potential investors. In other matters, the lack of clarity on how the State will administer oil revenues ought to be explained. The discussion about oil contracts as well as the question of whether the industry will be privatized or not have cast a shadow on the energy reform’s rockiest issues. Will the electricity sector be opened to private investors and if so, in what conditions? Will regulation bodies be strengthened or will the Executive Power focus all these controls through the Secretariat of Energy? It should be noted that a reform that aims to open the sector without the appropriate regulatory framework will prevent the country from obtaining the same benefits that the government has talked about previously and will focus the wellbeing of many in only a few.
In sum, the energy reform is not only in need of a satisfactory political agreement but to a technical, operational and long-term view vision that will make worth the effort – and let it be said, the collateral paraphernalia – of breaking one of the longest-standing taboos of Mexican nationalism. The question is whether it will be possible to achieve such a landmark. Everything suggests that, sooner or later, the Constitutional reform will be approved. However, it is not equally obvious that this proposal of reforming the secondary legislation might be necessary, might not be modified along the way by all interests that are currently benefiting from the status quo or that the promised (or threatening) referendum (with no legislation to make it operational) will manage to derail it, at least in due time. It is all up in the air.
CIDAC
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