US wants answers on Mexican energy aims: Granholm

Clean energy cooperation and questions over Mexico's proposed power reform topped the agenda during a meeting between President Andres Manuel Lopez Obrador and US energy secretary Jennifer Granholm in Mexico City.

"We see a great opportunity to work together on clean energy, to work together towards decarbonization as a North American block," Granholm said about the meeting yesterday at an event with women in the energy industry today. "But we also expect questions around the electricity reform to be resolved."

Ahead of the meetings, US senators called on Granholm to confront Mexico about inaction on climate change and emissions reductions as well as the threat to US investments posed by the electricity reform being debated in congress.

As Biden is pushing a net-zero greenhouse gas emissions target by 2050 and a global leadership role on climate change, Lopez Obrador's government has largely rejected renewable energy development, instead championing fuel oil and coal use and building the 340,000 b/d Olmeca refinery.

But Mexican energy minister Rocio Nahle defended Mexico's ambitions on the energy transition today, confirming it was a priority but that it "cannot happen overnight."

Lopez Obrador sent a constitutional electricity reform bill to congress on 1 October that would restore state-owned power utility CFE's market dominance by prioritizing its dispatch and capping private-sector participation at 46pc.

The reform would revoke all private-sector generation permits — some 40,924MW, or 48pc, of Mexico's installed capacity — and threaten at least $44bn in private investment and potentially violate the US-Mexico-Canada free trade agreement (USMCA).

But Lopez Obrador characterized the meeting with Granholm as a success, saying she "understood that our mission was to end corruption and to show that we are open to dialogue."

Lopez Obrador confirmed that Mexico was open to negotiating "case by case" with US and Canadian companies affected by the power reform.

"Where they believe an injustice has been made, we can reach an agreement," Lopez Obrador said.

A handful of US and Canadian companies such as Sempra Infrastructure operate in Mexico's power market but Lopez Obrador accused European companies such as Iberdrola of scaremongering about the reform.

"They should be embarrassed, talking about expropriation and power cuts, saying Mexico is Venezuela and that we have communist ideas," Lopez Obrador said.

CFE argues that self-supply rules that pre-date the 2014 energy reform and allowed large companies to generate power on site at preferential transmission rates have been abused, costing the utility $347mn/yr.

By Rebecca Conan