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NGI’s Mexico Gas Price Index, a leader tracking Mexico natural gas market reform, is offering the following question-and-answer column as part of a regular interview series with experts in the Mexican natural gas market.
NGI: What are your thoughts on the first year of the administration of President Andrés Manuel López Obrador, particularly in regard to natural gas and the changes in the energy industry?
López Mestre: I think this year has been landmarked by politics. That’s normal for a new administration, particularly one that has come in with a very ambitious program. Therefore, the new administration has tried to come in strong politically, and they have done so with a series of symbols and movements. I think some of the things that we’ve seen in the first year of this presidency will change as the administration moves along.
López Obrador is a very pragmatic leader and understands the importance of public and private investment in energy and the industry for Mexico and its economy. That said, politics sometimes take the forefront, both in Mexico and in the U.S. When this happens, the dialogue between regulation, competition, technical policy and plain politics doesn’t flow. That’s why it’s been a very intense and difficult year for investments -- largely because of the discourse and the symbols presented in the administration’s language, which have generated some uncertainty and that mainly respond to the political base and its needs, not to policy, investments and regulation.
Some of the language used has not been very encouraging for some sectors regarding investment. We see a lot of examples of that, like the threat of taking the natural gas contracts to international arbitration. It finally had a favorable solution, but the whole ordeal was more of a message or symbol to show “we’re the new guys on the block and we’re coming strong,” I believe.
To read the full article and gain access to more in-depth coverage including natural gas price and flow data surrounding the rapidly evolving Mexico energy markets, check out NGI’s Mexico Gas Price Index.