Lopez Obrador Seeks to Change CFE, Ban Fracking, Curb Mining

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Mexican President Andrés Manuel López Obrador plans to introduce a constitutional reform before the end of his mandate. He plans to change the status of state-owned public utility Comision Federal de Electricidad (CFE), ban fracking, and halt open-pit mining licenses.

Lopez Obrador told Mexico's Parliament on Monday that he will introduce 20 constitutional reforms, including the abovementioned, before the June presidential elections. The rejection of fracking has been part of Lopez Obrador's environmental agenda since taking office in 2018, despite his support for the development of Mexico's energy industry and Petroleos Mexicanos (Pemex) (Mexico City).

Lopez Obrador briefly mentioned the banning of open-pit mining concessions, with little elaboration. But it also is part of his environmental agenda.

The proposed change in the status for CFE would make it a strategic public company that would focus on benefits for Mexicans and local consumers. Currently, the CFE has the status of a "productive company of the state," which seeks to generate revenues for Mexico.

Under his mandate, Lopez Obrador has been trying to grant the CFE a larger share of the electricity market and reduce the private sector's role in the industry.

In 2021 and 2022, Lopez Obrador pushed a reform to grant favoritism to CFE's power generation over that of private companies. However, Mexico's Supreme Court deemed the law unconstitutional, ending his hopes of moving ahead with the process.

During his speech, Lopez Obrador criticized the neoliberal policies pushed by his predecessors, highlighting that they have hurt state companies such as Pemex and CFE.

These reforms must be approved by the Parliament to be enacted. However, Lopez Obrador's party does not have the two-thirds majority required to be passed. It seems unlikely that the reform will find the required votes in the legislative branch.

Nevertheless, this raises new doubts about the policies that Claudia Sheinbaum, who is part of Lopez Obrador's party and the favorite to win the presidential contest based on recent polls, could pursue.

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