US Senate urges Biden to oppose Mexico's electricity reform

US Senator Robert Menéndez, who signed the letter on the electrical reform in Mexico, photographed in a hearing on July 30, 2020. POOL (Reuters)

The Committee on Foreign Relations of the United States Senate sent a letter to the White House on Tuesday asking that the Administration “act with force” against the plans that the Mexican president, Andrés Manuel López Obrador, has for favoring companies State energy companies and exclude from the sector private companies that are committed to renewable sources. This month, the Congress in Mexico will resume the discussion around a controversial electricity reform that gives 54% of the electricity market to the state Federal Electricity Commission (CFE).

"Public reports indicate that President López Obrador interprets the relative public silence of the Biden Administration on this issue as indifference or tacit approval of his Government's decision to prioritize the development of fossil fuels over renewable energy," four say in the letter. Democratic Party lawmakers, from President Joe Biden. The letter is addressed to Anthony Blinken, Secretary of State, and Jennifer Granholm, Secretary of Energy, who is visiting Mexico this week, according to the Mexican president on Monday.

In November, when the president sent his proposal to Congress to concentrate the energy market in state-owned companies, the US ambassador to Mexico, Ken Salazar, expressed "serious concerns." "We appreciate Ambassador Salazar's public expression of concern and commitment on this issue and urge the Biden Administration to more forcefully express its concerns about President López Obrador's harmful fossil fuel agenda," the senators state in the letter. “We strongly encourage both of you to make this a priority topic of discussion during this important year for climate action, and we especially urge Secretary of Energy Granholm to raise this issue with her Mexican government counterparts during her visit to Mexico”, they add.

US lawmakers also point out that the commitment presented by Mexico, as part of the Paris Agreements to reduce carbon emissions, is "woefully poor." At the same time, they argue, their intentions to limit private investment in the energy sector negatively affect 44,000 million dollars in private investment, and contravene the free trade agreement with the US and Canada, known in Mexico as the T- MEC. Mexico recently opened a dispute against the US within the framework of that agreement, arguing that the country is violating the rules of import and export of cars and auto parts.

This is the last of several letters that legislators and labor and trade associations send to the US government, asking that the country's investments in Mexico be defended. On Monday, at a press conference, the Mexican president said that Secretary Granholm's visit this week will be "above all [to] report on the reason for the electricity reform, if it is necessary and if she wants to know my opinion, she will I will give with pleasure”.

At the end of last year, legislators from the president's party, Morena, postponed the discussion of the electricity reform due to lack of support and will resume it in the coming days. The initiative includes the cancellation of all existing contracts and the renegotiation of the terms by CFE. In addition, it eliminates autonomous regulators from the market and classifies lithium, a key mineral in electrical technologies that would replace fossil fuels because they are less polluting, as "strategic", putting it under the control of the Government.

“Perhaps more detrimental to the priorities of the Biden Administration, this legislation would prohibit concessions to extract strategic minerals such as lithium and copper,” the letter says.

"This policy would contradict the T-MEC's ​​prohibition of new investment restrictions and would exacerbate national security concerns related to the critical shortage of minerals," the legislators pointed out.

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