The sources of energy are electricity, which depends on other primary energy sources such as gas, hydrocarbons, water and others, the hydrocarbons themselves, air, solar, hydrogen and nuclear power, to name a few.
The availability required to confirm our energy sovereignty is proportional to the needs of the population and the economy.
It definitely cannot be said that the current energy availability is sufficient for Mexico’s needs. Electric energy production and transmission capacity in the country are already showing signs of inadequacy, reflected in long waiting times for new industries; including unscheduled power outages in various parts of the country.
If we analyze the primary energy sources used to produce electrical energy, the outlook is worrying. Mexico suffers from enormous vulnerability associated with its dependence on gas imports. This input generates more than 60 percent of the electrical energy produced in the country. The gas required for this and other purposes is almost entirely imported.
Transport takes place in gaseous form via pipelines or in liquid form by ship, rail or road. Mexico’s ability to import gas in liquid form is very limited; The expansion requires significant investment and time. In addition, the price of LPG is two to three times higher than the price that arrives via the pipelines.
Mexico imports most of its gas through pipelines, mostly from Texas. This situation puts Mexico in a situation of great vulnerability. Any disruption to this flow, for whatever reason, causes severe damage to the economy and homes. We already saw this in the winter of 2021, when there was a severe cold snap in Texas, freezing pipelines and interrupting the flow of gas for a few days. This had serious consequences in the country, as power generation and industrial and household energy needs are practically dependent on daily gas flows due to a lack of storage capacity. Many businesses had to stop, there was a lack of electricity in homes and high costs were incurred.
The current government has wrongly equated energy sovereignty with self-sufficiency in petrol and diesel. This is wrong because these fuels are a commodity and there are many sources from which to import them if needed. Therefore, dependence on imports of this energy is not really a serious problem.
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The government does not see it that way and is concentrating its energy policy on fuel self-sufficiency. The aim was to increase crude oil production, improve existing refineries, build a new one and buy one in the US, in which Pemex already had a 50 percent stake.
The reality is that not much progress has been made and it is not true that we are close to energy sovereignty, even if it is accepted that this proximity is measured by our ability to produce our fuels.
Crude oil production has not increased, neither have proven hydrocarbon reserves, refining capacity has not improved significantly, the new refinery has not yet been completed and its cost will be excessive, almost three times higher than originally estimated; Pemex’s situation is becoming increasingly precarious, limiting its ability to invest in exploration and transformation. Finally, fuel imports remain very high; In the period January to July 2023, an average of about 375 barrels per day was imported, about half of what is consumed.
In order to talk about energy sovereignty, a second and very important prerequisite must be met: sustainability. This is about the sustainable use of our natural resources and promoting the development of renewable energy sources such as sun, wind, biomass and water; use less polluting fossil sources, such as gas, which is much cleaner than oil; draw on research and technological development to reduce the negative impact of fossil fuels on the environment. None of this is being done in the country.
This administration has favored the use of fossil fuels, and given the limitations of our refining system, national refineries produce almost as much fuel oil as gasoline, which has resulted in CFE being required to burn that fuel oil to generate electricity because there is no such thing external market for this fuel, which has a negative impact on the environment as it is very polluting.
Furthermore, the momentum that renewable energy projects had between 2014 and 2018 was suddenly stopped by the government’s explicit decision; Dozens of photovoltaic and wind projects (27 in Coahuila alone) were halted as the CFE’s power auctions and permit issuance were suspended.
A successful energy policy that brings us closer to sovereignty in this matter must be based on three pillars:
-Efficiency: Less and less energy is required per product unit.
-Electrification: Shifting all uses to electrical energy: transport, household, industry.
-Environmental sustainability: transition to a cleaner energy matrix, to energy based on non-fossil sources such as air, sun, hydrogen; in less polluting fossil sources such as gas; and in technology to mitigate negative impacts.
None of this is being done in the current government. His energy policy was a disaster for the country. Efficiency is not sought, nor is electrification promoted, nor is ecological sustainability sought.
Consequently, Mexico has never been so far from achieving energy sovereignty and also more vulnerable on energy issues than now: public energy companies are in a terrible financial and operational situation; there is a growing dependence on gas imports; Pemex lacks the technological capacity to exploit deep water resources; There is an increasing risk that energy shortages will slow down employment and economic growth.
What the President claims is absolutely false. We are no closer to energy sovereignty. On the other hand.
