Mexican Energy Production Trends

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How The Energy System Is Structured

The energy sector in Mexico is managed by the Ministry of Energy. It is divided in two subsectors: hydrocarbons and electricity. Both are operated through the whole productive chain by two state-owned companies, called “productive state enterprises.” PEMEX (Mexican Petroleum) is in charge of the hydrocarbons; electricity is mainly handled by the Federal Commission of Electricity (CFE) (1 & 2). These institutions are financially autonomous as well as independently managed from the Federal Government. They are allowed to associate with private producers, as well as to import or export energy from/to other countries (2). The Government has established several agencies in order to regulate different parts of the energy sector. Some examples are: National Commission of Hydrocarbons; Energy Regulation Commission; National Center of Energy Control; National Center of Natural Gas; Safety, Energy and Environment Agency; National Commission of Nuclear Safety and Security; Mexican Institute of Petroleum; National Institute of Nuclear Research; Institute of Electrical Research; and National Commission for the Efficient Use of Energy (1).

Policies in Mexico demonstrate strong contradictions inside the government concerning energy production and climate change mitigation and reduction. On the one hand, it keeps promoting the production and use of non-renewable energies, through laws such as the Law of Mexican Petroleum, the Industrial Energy Law, or the Law for the Exploitation of Renewable Energies and Funding for the Energetic Transition. This last law works under a regime where the CFE is compelled to acquire the cheapest option of electric energy on the market, which is not renewable (3). Many other examples present in those laws are inconsistent with Mexico’s INDCs, and are bound to slow our advance on the reduction of greenhouse gas emissions related to the energy sector.

Source of Energy

According to the Ministry of Energy of Mexico, by 2014, roughly 92.4% of the energy produced in Mexico came from non-renewable sources, and only 7.6% from renewable (4), as shown in Figure 1. By 2015, the percentage of energy from renewable sources increased to 13.7% (5). Although most official statements indicate that by 2015 the percentage of renewables in Mexico was about 25%, further reading demonstrates that that is the effective generation capacity, not the net produce of energy (5 & 6).


Figure 1. Primary Energy Production 2014.

Profiles of Leading Energy Companies

PEMEX:  In Mexico, the leading company in non-renewable energy is PEMEX, which is one of the few companies of the world that runs through the whole productive chain: exploration, production, transformation, logistics, and commercialization. It produces about 2.436 million barrels per day and more than 6 billion cubic feet of natural gas (7 & 8). The size of its operations has made it one of the biggest contributors to the country’s economy, since it accounts for one third of the income of the public sector and it contributed to 6% of the GDP in 2013 (9).

Founded in 1938 by president Lázaro Cárdenas through the nationalization of petroleum from all the private companies, it remained under the same corporate structure until 2013, when president Enrique Peña Nieto promoted the Energetic Reform (10). Since then, new laws and the amendment of existing ones have allowed PEMEX to incorporate third parties and private investors (11), with the creation of seven subsidiaries: Pemex Exploration and Production, Pemex Industrial Transformation, Pemex Drilling and Services, Pemex Logistics, Pemex Cogeneration and Services, Pemex Fertilizers, and Pemex Ethylene.

Since 1980, PEMEX has seen a decline in production and consequently, in income. The Government expects that for the next year, production will fall below 2 million barrels per day (12). This trend is negatively impacting both the company and its clients. Businesses in the north of Mexico with intensive use of electrical energy have opted out of developing their own electricity production projects in the face of the volatile costs of state produced energy, while the income from gasoline sales, PEMEX’s main revenue, has dropped by 29% compared to 2014 (12 & 13).

The new corporate scheme of PEMEX reflects the concern over declining production of the company, and establishes a political agenda that looks to increase the production and use of oil and gas, with a goal of 3 million barrels a day of crude oil by 2020 (5).

Iberdola: Iberdola is the leading company in renewable energy production in Mexico. A private corporation from Spain, Iberdrola’s main client is Mexico’s CFE (14), the public sector institution in charge of providing electricity to the country (15). According to Iberdrola’s CEO in Mexico, they produce 15% of the energy of the country, with an installed capacity of 15,000 MW in wind farms (other sources indicate a capacity of 5,082 MW between co-generation and mixed cycles (16)). Besides the CFE, Iberdrola also acts as a supplier of 100 private clients, which in total brings them an income of $1.5 billion a year (14). Iberdrola’s investments in Mexico will continually increase for the next 5 years. However, they will be focusing on the conventional energy branch, with the renewable part receiving only 10% of the financial input (14).

Submitted by Climate Scorecard Country Manager Raiza Pilatowsky


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