Mexico’s Energy Reform: A Major First Step on a Very Long Journey

Mexico’s Energy Reform: A Major First Step on a Very Long Journey

Mexico’s recently enacted energy reform bill marks an important first step on the long path of transforming the country’s energy sector. Now that the constitutional changes have been ratified by a majority of states, the real work of drafting the enabling legislation, creating new institutions and profoundly changing many existing ones now begins. All of this will take time, and there will be much to debate along the way. The reform’s ultimate success will depend on maintaining political support while managing public expectations during the long slog of implementation.

While Mexico’s challenges in implementing the reform are complex and many, it is imperative that they be overcome as quickly as possible. Investment in new power plants and gas pipelines will slow as investors wait for further details regarding the new rules of the game. Demand for electricity and natural gas will continue to grow, however, putting increasing strain on Mexico’s ability to deliver. This creates a small and closing window to implement the planned market changes.

The reform affects the entirety of Mexico’s energy value chain, from power generation, transmission and distribution through the storage, transportation and distribution of natural gas, oil, oil products and petrochemicals, not to mention the exploration for and production of oil and gas resources. The rules and permits authorizing private sector investment and contracting across each of the segments must be established. Standards regulating third-party access to pipelines, power transmission and other logistical infrastructure must be created. Regulations and tariffs affecting hydrocarbon first-hand sales and electricity transmission and distribution must be set. It is a monumental task.

Keep reading for free!

Get instant access to the rest of this article by submitting your email address below. You'll also get access to three articles of your choice each month and our free newsletter:

Or, Subscribe now to get full access.

Already a subscriber? Log in here .

What you’ll get with an All-Access subscription to World Politics Review:

A WPR subscription is like no other resource — it’s like having a personal curator and expert analyst of global affairs news. Subscribe now, and you’ll get:

  • Immediate and instant access to the full searchable library of tens of thousands of articles.
  • Daily articles with original analysis, written by leading topic experts, delivered to you every weekday.
  • Regular in-depth articles with deep dives into important issues and countries.
  • The Daily Review email, with our take on the day’s most important news, the latest WPR analysis, what’s on our radar, and more.
  • The Weekly Review email, with quick summaries of the week’s most important coverage, and what’s to come.
  • Completely ad-free reading.

And all of this is available to you when you subscribe today.

More World Politics Review