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⚡"The Future Of Mexico’s Energy Transition"

Columbia Energy Exchange

Photo by Jorge Aguilar / Unsplash

Table of Contents

Host: Jason Bordoff
Guest: Leonardo Beltrán Rodríguez | Former Mexican Deputy Secretary for Planning and Energy Transition
Category: ⚡Renewable Energy

Podcast’s Essential Bites:

[6:15] “[At the beginning of the 20th century] private sector companies were present across the board in the energy sector in Mexico. However, […] it seems that the whole development of the industry was dependent upon foreign companies. So in the 1930s, the administration […] started to look at […] the opportunities and the threads for the development of the economy overall, and in particular, the energy sector. So he spotted that first the ownership of the different assets, power as a source of development for economic activity, and of course, the hydrocarbon resources that were present and are present in Mexico. We enjoyed a large endowment of natural resources, including crude oil, natural gas and now of course, we do enjoy a vast amount of renewable resources.”

[7:48] “At the time, all the possible options that he took a look at were the nationalization of the industry. […] So he nationalized the energy industry. And from that point onwards, there was a scar for private sector participation in the energy sector. […] Certainly, the following years, probably the next two to three decades, were fundamental in Mexico's development. We enjoyed a period of an increasing development of economic activity, many of the different industries started to thrive in Mexico, because of a lot of different circumstances […]. And then innovation certainly took a prominent role in that development. But for the energy sector, the inward looking of the activity was present over the following decades. And certainly at some point in time, after 2000 that model started to decay. […] In 2004, Mexico was producing over 3.5 million barrels per day of crude oil. And today we are less than half of that amount.”

[10:43] “In 2006 [the former president reflected on] the development of the country, but also on how to replenish those needs for the sector, and how to envision a more modern, more developed country that was consistent with a vision that was shared worldwide. A private sector, that would be complementing the investments of the public sector, but also creating the conditions for talent development, for attracting technical and skilled workers across the board, and how to develop the energy sector as a labor for economic growth. So in that sense, former President Calderon actually created part of the conditions to observe the opportunity that would pose the energy sector.”

[27:22] “The downstream [fuel sector] was an envisioned opportunity to create economic development, regionally. However, infrastructure was needed. And given that infrastructure was not present and that there were not enough conditions to actually promote the development of downstream, the focus was on promoting upstream opportunities. And the upstream opportunities, of course, it's a very productive market, not only in Mexico, but worldwide […]. And if Mexico would want to continue to enjoy that net exporting capability, then public sector resources would not be enough to actually sustain that condition. And that was another of the components to lean towards an energy reform that would complement the development efforts of the country, the government, with fresh private sector resources that would enlarge the opportunities and create that regional development. And certainly, in terms of priorities, upstream was the top priority, then midstream and downstream. […] But today, certainly the priority is focused on downstream. And the opportunities for private sector participation are slightly present, but certainly given that the preference of the current administration is more focused towards public sector driven development, the opportunities are less clear and less forthcoming with this administration.”

[35:25] “[Renewable energy] was the third pillar of the energy reform. So we would like to have economic growth, we would like to have regional development. But that economic growth and regional development would not be attained, if there was no source or fuel to power those needs. So if we were to power and support those economic growth needs and regional development needs, we needed to have a sustainable energy sector. And in the end, […] one of those 13 words that were changed in the constitution was to include sustainability as the vision for the energy sector.”

[37:45] “We have the same conditions or capacity, equality of wind resources as offshore Europe or in the US. We have one of the largest solar irradiation worldwide. In terms of geothermal resources across Mexico, it passes something called the Ring of Fire, which creates the perfect conditions to take advantage of the heat of the core of the earth. […] So wherever you see in terms of renewable resources, you have something present there. So if you were to develop a model, that would democratizing the opportunities for the entire nation, renewables would be the cornerstone, because it's widely available wherever you go.”

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🎙️ Full Episode: Apple | Spotify
🕰️ 1 hr 10 min | 🗓️ 09/08/2021
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