Mexican Energy Reform Bill Introduced By Lawmakers; Leftist Parties Denounce 'Betrayal Of Country'

A demonstrator holds a placard that reads 'Homeland is not for sale, Pemex is for Mexico' during a protest against the energy reform bill outside the Senate building in Mexico City December 6, 2013.
Image Reuters

Mexican lawmakers will vote Monday on a bill which would overhaul the country's energy industry by way of changes to three articles in the Mexican constitution.  The reform would allow for foreign oil firms to exploit petroleum - including shale gas and deep-water deposits for which Pemex, the state oil company, does not have the technology necessary to access it - by way of shared-risk contracts of various types.  The plan has the support of enough lawmakers in the governing center-left PRI and conservative PAN parties to pass, but the leftist minority has been biting back fiercely against the involvement of foreign interests in the oil industry, denouncing it as a "betrayal of the country".

In some nine hours of debate on Sunday, senators from the Party of the Democratic Revolution (PRD) and the Work Party, part of the leftist Progressive Movement coalition, criticized the bill in harsh terms, saying that the proposed reforms would mark a return to pre-1938 Mexico - the year its president Lázaro Cárdenas nationalized the assets of Standard Oil and Royal Dutch/Shell and put their operations under the charge of the state after the two companies refused to abide by a federal court's ruling in a labor dispute.  Manuel Bartlett, head of the Work Party, accused those who plan to vote in favor of the reform of "betraying the country", a charge which many on the left have leveled at President Enrique Pena Nieto since he first sketched out plans for a partial privatization of oil extraction in August.

Layda Sansores, a senator with the Citizens Movement party, took a page from novelist José Saramago, infuriating PRI and PAN lawmakers when she told them, paraphrasing Saramago, "you all want to privatize and you're in the spirit of new ages; so go on and privatize dreams, law, justice, but if you really want to go all the way with the privatizations, go ahead and privatize the whore who gave birth to you.  That would be the best thing you could do, because at least she's yours.  This country doesn't belong to you, you're not worthy of it."

Senators with the PRI and PAN have spurned the description of the reform as a "privatization" of the country's oil resources, and in fact, the bill's proposed amendment to the constitution specifically rules out the granting of concessions to foreign firms.  Petroleum and other energy found below earth on Mexican soil, it says, "are property of the Nation and must be affirmed as such in the assignments or contracts" which the reform would allow the state to grant to companies.  But many on the left point to a section of the bill which allows for the granting of "licenses" - not just service and shared-production contracts - as paving the way for the de facto concession of below-ground deposits.  Others worry that the endemic problem of corruption in Mexico could lead to fraud on massive levels for the benefit of foreign oil interests.

Mexico, whose government gleans about one-third of its budget from oil revenues, is expected to hit peak oil before the end of the decade, and as of yet, engineers in the state oil research institute have been unable to develop technologies to access the large shale and deep-water deposits.  A handful of foreign firms do possess that technology, though the safety of it is still in doubt - the extraction of shale, which is carried out "fracking" or injecting water into rock at high pressures to drive out the gas deposits in it, was recently found by scientists to leave fault lines vulnerable to earthquakes after the process set off tremors in the UK in 2011. 

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