On the night of July 18th, PAN made its first public stance on the energy reform. Using a presentation with seven general guidelines and objectives on the issue, some of the trademarks of this potential initiative were unveiled. The party’s pro-openness position regarding the hydrocarbon sector unleashed reactions of several politicians, such as Cuauhtémoc Cárdenas, who criticized it for being incomplete when it comes to taxing, or Manlio Fabio Beltrones, who welcomed it and insisted on the disposition of his party’s Deputies to discuss it. With this announcement, PAN established its position towards the government, setting out the table for President Peña to present an initiative that, taking advantage of what already exists, may be regarded as centrist, therefore allowing the inclusion of openness in the sector.
The PAN’s initiative draft proposes the openness of all hydrocarbon markets. Among its guidelines, it was stated that the property of hydrocarbons and the oil revenues derived from it, as well as the whole of the PEMEX Company would remain as property of the nation. Regarding the use of hydrocarbons as public domain goods, a regime of concessions would be awarded to the oil company, through the Energy Secretariat, and a plan to solve its working liabilities would be created. The National Hydrocarbon Commission (CNH) would be strengthened as the regulatory agency set out in the Constitution. The draft concludes with a clear conditioning of the energy reform towards the political one, under the premise that democratic normality is the basis for economic growth and sustainable social development.
The PAN’s energy reform (at least the one backed by the party’s leader, Gustavo Madero) lays out more liberal economic measures in what is thought the federal government will do with its future proposal. For instance, concessions – a more aggressive step in comparison with risk contracts – was expressly forbidden in Lázaro Cárdenas’ 1940 Constitutional reform, and still is one of the largest taboos within the antique rhetoric of oil nationalism. On the other hand, beyond some specific technical faults such as mixing hydrocarbon transportation and distribution as well as using some outdated data on the diagnosis, there are several missing points in the PAN proposal. For starters, the future PEMEX tax regime is not outlined and neither is the legal structure that would rule it, despite the fact that it does establish that the company will still remain as property of the nation. It’s not clear how energy policies and CNH could interact with each other, given that the latter is the institution that guarantees the maximization of oil reserves in the long term. Likewise, a major importance is given to renewable energies and there is no mention of the necessary reforms to the troublesome Mexican electricity sector. On the other hand, the proposal claims that power costs would drop, but it doesn’t say how…
Regardless of all the technical talk, what is PAN gaining by presenting this proposal? With the large interest from the federal government in advancing in the energy and tax matters, PAN has a great opportunity to boost its own agenda. It could be the ideal moment to demand reforms that interest the party’s hardcore basis, that is to say, those tied to historical democratizing claims. As of now, the energy intitative seems a sort of wink to the federal government, even with the political conditioning included in it. If PAN cannot manage to play its role as a linking force, it can say goodbye to doing it during the rest of the administration. For this to happen, the handling and relations of PAN leadership with opposition legislators at the Senate will be crucial.
CIDAC
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