Fox administration questioning Mexico's energy policies

The new administration of President Vicente Fox is questioning some traditional elements of Mexican energy policy. An official with the office of Mexico�s secretary of energy, said "several inconsistencies in Mexico�s energy policy" require changes.


By Sam Fletcher
OGJ Online

HOUSTON, Feb. 14�The new administration of President Vicente Fox is questioning some traditional elements of Mexican energy policy, a Cambridge Energy Energy Research Associates conference in Houston was told.

Jose Luis Aburto, a former deputy energy minister who now is with the office of Mexico�s secretary of energy, said "several inconsistencies in Mexico�s energy policy" require changes.

Although Petroleos Mexicanos and the Federal Power Utility (CFE) have previously �fulfilled expectations to a large degree,� he said, they �now lack elements� necessary for Mexico�s energy growth, particularly in providing natural gas to fuel energy power plants. �In many ways they have become a burden,� said Aburto.

�In order to correct the limitations we have in Mexico, we need capital, technology and skills. The only way we�re going to be able to solve these problems in time to satisfy demand is to open up to private investment in a much more effective way than we have in the last decade,� he said.

Rafael Alexandi, a member of the energy secretary�s office in Mexico, said electric industry reforms are the priority, and gas industry changes would follow after that.

"As for upstream gas operations, the government is considering not submitting any changes until the electrical proposal goes to Congress and is passed. After that is when the government will be considering changing the rules and regulations and constitutional changes for the private sector to participate in the dry gas production,� he said.

Sen. Benjamin Gallegos said congressmen in Fox's National Action Party are trying to forge alliances with members of the Institutional Revolutionary Party to privatize electric power generation.

Gallegos, the Senate's energy commission secretary, said, �It�s under discussion now whether to change the constitution to remove restrictions.�

The focus is to open only electric power generation to outside investors, not electrical transportation and distribution systems, Gallegos said.

However, he said that unless Mexico can develop the natural gas supplies to fuel new power plants, no one will invest in power generation.

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