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MEXICO CITY – The Mexican government said Thursday it is working to overturn Texas Governor Greg Abbott’s order to restrict natural gas exports, as part of the state’s efforts to resolve power outages widespread that left millions of Texans without power in the midst of a deadly winter storm.
Mr Abbott’s order has increased tensions between the two countries, with senior Mexican officials protesting the governor’s decision to cut gas supplies as Mexico struggles to resolve its own mass blackouts due to freezing weather.
“We are doing our diplomatic job so that this does not happen,” Mexican President Andrés Manuel López Obrador said at a press conference Thursday, referring to Mr. Abbott’s order. “It would not only affect Mexico – it would also affect other states in the Union.”
Governor Abbott on Wednesday ordered Texas producers who export natural gas out of state to sell to state power producers instead until February 21.
The fallout south of the border from Mr. Abbott’s measure underscored how much Mexico depends on the United States for much of its power, even as Mr. López Obrador campaigns for greater Mexican energy sovereignty.
Gas-fired power plants produce about two-thirds of Mexico’s electricity. In 2019, 96% of natural gas imports came from the United States, according to the US Energy Information Administration.
The arctic climate in Texas has frozen gas pipelines between the two countries, according to Mexican energy officials, which, coupled with increased demand for gas in the United States, has disrupted energy production in the north. from Mexico and left nearly five million customers in Mexico. without electricity earlier this week.
The mass blackouts affected not only private homes but also industry, with major manufacturers like General Motors and Volkswagen being forced to shut down operations, resulting in losses estimated at $ 2.7 billion, according to Reuters.
On Thursday, the Mexican state energy company, the Federal Electricity Commission, or CFE, said it had restored electricity to all users by producing power from other sources, including hydroelectric and coal-fired power stations.
This latest blackout follows one in December which briefly left around 10 million people without electricity.
Mexican authorities were quick to blame this week’s blackout on the country’s northern neighbor, as López Obrador retaliated against criticism from the national energy company.
“Even if the problem comes from the United States, Texas to be precise, all the criticisms are directed at the Federal Electricity Commission, at the government of Mexico,” the president said Thursday.
Mexican Minister of the Economy, Tatiana Clouthier, said on twitter that she had spoken to Roberta Jacobson, a high-level administrative aide to Biden for the Southwestern border, regarding the issues facing Mexico and the United States as a result of the “emergency facing Texas is facing ”and said the two countries were looking for“ immediate solutions ”.
Energy experts said the latest blackout will add ammunition to Mr López Obrador’s desire to overhaul the energy sector and ensure Mexico’s energy independence, regardless of the cost to users. or investors.
“Right now it’s easy to point to Texas, the United States, dependence on gas imports,” said Adrián Garza Patiño, senior analyst at Moody’s, the rating agency . “And even more with the reaction of the Texas government itself.”
Mr López Obrador, who has made the reconstruction of CFE and state-owned oil company Pemex a central pillar of his political and economic agenda, this month sent a bill to Congress that could stifle the competition from private renewable energy plants by making state-owned factories, many of which run on fossil fuels, in the first place to supply the country’s electricity.
The proposal has sparked an outcry from business groups and environmentalists, with the changes likely to significantly delay Mexico’s commitment to cut emissions by prioritizing coal and petroleum power plants over renewables funded by the government. private sector.
Mr López Obrador’s political party, Morena, has a majority in both houses of Congress, but the future of the bill remains uncertain. Mexico’s antitrust watchdog on Monday urged lawmakers not to approve the proposal, saying the reforms would severely stifle competition.
Later in the week, the finance committee of the Chamber of Deputies, the lower house, said the reforms could lead to increases in electricity prices and risk violating Mexico’s obligations under the states trade agreement. -United-Mexico-Canada, local media reported.
Even if the bill fails to gain traction, Mr. López Obrador’s efforts to dismantle the energy changes that opened the country to private investment under the previous administration could have a lasting impact on the Mexican economy, according to analysts.
“The private sector and foreign investors are concerned about the investment conditions, or legal insecurity in Mexico,” Garza said. “Investors are planning to leave the country, or at least stop investing more, which is a critical part of economic growth.”
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