Friday, June 21, 2024

Energy projects worth US $35bn on hold as government withholds permits

Energy sector projects worth more than US $35 billion are stalled because they haven’t been granted government permits, according to a high-ranking official with Mexico’s most powerful business lobby.

Roger González, president of the Business Coordinating Council’s energy commission, said that 128 projects – among which are gas, fuel storage and electricity generation projects – are ready to start but can’t due to a lack of permits.

Speaking at an energy forum on Tuesday, González blamed the delays on government changes to energy policy.

He said the energy sector – which the government is attempting to overhaul to favor the state-owned Federal Electricity Commission and the state oil company Pemex – is facing legal uncertainty that has forced private sector companies to defend their interests in court when they should be building infrastructure, creating jobs and growing the economy.

“The objective of the private sector is not to dedicate itself to seeking injunctions or to be in legal battles,” González said.

However, private energy companies have had to file some 250 injunction requests and 80 applications for definitive suspensions of government policies, he said.

The business leader said that if the 128 stalled projects were granted approval, between 100,000 and 150,000 jobs would be created in the space of just two or three months.

“But they’re on pause and they extend across all of the country’s energy industry sectors,” González said.

He asserted that progress was made as a result of the 2013 energy reform, which opened up the sector to private and foreign companies for the first time in almost 80 years, but the momentum has now come to a halt.

For his part, the president of the Confederation of Industrial Chambers’ energy commission questioned why the government is still favoring the use of fossil fuels when much of the world is shifting toward the use of clean, renewable energy sources. Regulo Salinas said Mexico runs the risk of having tariffs imposed on its exports because it is not complying with its international climate commitments.

President López Obrador has said that he is committed to fighting global warming but proposals he presented at a world leaders’ climate summit last month were criticized by many environmentalists.

Three environmentalists who spoke to the Reforma newspaper said the president’s proposals were not serious, based on ideology more than reality and harked back to decades past.

Source: Dinero en Imagen (sp) 

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