Time to change energy sector, say Mexican officials

Sam Fletcher
OGJ Online

HOUSTON, Nov. 1 -- Mexico must change its judicial and perhaps its constitutional framework "to separate what can be done by government and what can be done by the private sector" in developing and expanding its energy industry to meet future needs, a Mexican legislator said Thursday at an energy conference in Houston.

Speaking through an interpreter in a keynote speech, Sen. Juan José Rodríguez Prats, a member of Mexico's National Action Party (PAN), said he feels "more and more each day" that reform of Mexico's judicial system is necessary to help promote foreign investment in that country's energy sector.

Mexico's federal government hasn't the necessary funds to develop fully all aspects of the country's energy resources, he said. "It's not necessary or desirable to fund every energy program from the national purse," said Rodríguez Prats at the afternoon session of the conference, which extends through Friday. That meeting of industry representatives from both sides of the border was organized by the Center for Business Intelligence.

While the US through out its history has embraced and promoted the concept of individual ability, said Rodríguez Prats, "Mexico has a deep tradition of stateism," going back to the early conquistadors who came as representatives of the Spanish crown.

That country's energy sector is considered "a national security issue" in some areas, and has long been characterized by nationalism and government control, he said.

The US and Canada will resolve their energy problems "with the help of others or by themselves," said Rodríguez Prats.

"It's up to Mexico to take part" in the full development of North American energy resources and markets, he said.

William S. Garner Jr. of Petrie Parkman & Co. told conference participants that Mexico might follow Saudi Arabia's example in getting major international oil companies to help fund and develop its natural gas resources and markets.

If not, he said, proposals to build a pipeline that will carry natural gas from Alaska's North Slope to the Lower 48 states should stabilize the US gas market in 2010-2020 and free up gas that could then be sold into the Mexican market.

Meanwhile, Commissioner Raul Nocedal of the Comision Regulatoria de Energia (CRE), said that group is looking at several proposals for a new legal framework -- with or without a change in the Mexican constitution -- to encourage foreign investment in Mexico's electricity sector.

In the end, he said, the people best qualified to judge which reformation program is best will be the investors.

Contact Sam Fletcher at [email protected]