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Let your imagination run wild at Villa Felicidad’s stone fairyland

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At Villa Felicidad, the waters of Río de las Ánimas are clean and refreshing.
At Villa Felicidad, the waters of Río de las Ánimas are clean and refreshing.

Tala is a small town located 30 kilometers due west of Guadalajara, best known these days for its large, government-operated sugar refinery. Two thousand years ago, however, Tala was a large metropolis with a population of some 60,000 inhabitants: the people who constructed the famed Guachimontones, or “circular pyramids,” whose ruins dot hilltops all over western Mexico.

Perhaps those pyramid makers decided to settle in Tala because adjacent to it lies a fairyland of pine and oak trees, bizarre volcanic rocks and clean, ice-cold rivers. In recent times, a local entrepreneur was charmed by the strange beauty of this area and decided to create a housing development there, which he named Villa Felicidad, or Happiness Villa.

The rocks of Villa Felicidad come in a wonderful variety of fantastic shapes. This is a place where you can let your imagination run wild. You’ll see rocks that look like long, meandering walls; stairs leading nowhere; elephants; Easter-Island-type giant heads; the Cookie Monster — you name it.

Felicidad, of course, means happiness, and this is indeed a happy place for naturalists but not for the people who bought land here years ago, since a good number of them lost their shirts — along with their money — when the developer of the fraccionamiento (neighborhood) ended up in jail after allegedly misspending the funds he had collected.

One Sunday, as we drove through Villa Felicidad, we came upon the present-day owner of the land, Hugo Castellanos. Sitting on his motorcycle on the side of the road, he would chat with the drivers of each carful of visitors that came along, always ending with, “… and remember not to leave any garbage!”

Crossing the Ghostly River in search of swimming holes.
Crossing the Ghostly River in search of swimming holes.

Castellano’s efforts seem to have paid off because Villa Felicidad is remarkably clean considering its proximity to a town.

The great variety of curiously shaped rocks at Villa Felicidad is probably due to the result of ancient pyroclastic flows blanketing an area of lakes and rivers. Among the variety of rocks here are many that resemble stone columns, which experts say were created when steam bubbled up through the fallen tephra. These particular phenomena are called fossil fumaroles, and you can see them all over Villa Felicidad, where they very much resemble tree stumps made of stone, which for years we referred to as “fairy footstools.”

Never did we suspect that those “stumps” were merely the tips of very long, perfectly straight columns of rock until one day we found a road cut that exposed what was hidden beneath the surface.

The process by which these fossil fumaroles, or pipes, are formed is well-known thanks to an eruption followed by a volcanic ash flow that took place in 1912 in what is now known as The Valley of Ten Thousand Smokes in Alaska’s Katmai National Park.

The “smokes” were actually steam. Some theorize that the rising bubbles carry away finer particles of ash with the result that — thousands of years later — that column, now compacted into solid rock, is harder than the material surrounding it.

On one of our many visits to this fascinating area, we discovered a hidden-away swimming hole and waterfall after following a river known as El Río Zarco. The word zarco, by the way, means something like cloudy, referring to mineral content in the water of a stream or pool, but in no way suggests that the water is unfit to drink.

Hundreds of “fairy footstools” resembling tree stumps are scattered throughout Villa Felicidad.
Hundreds of “fairy footstools” resembling tree stumps are scattered throughout Villa Felicidad.

During most of its route, the Río Zarco runs along the bottom of steep slopes. We followed it for hours, and all along our route we kept bumping into strange rock formations: “This one resembles the mouth of a snake; that one is a frog … and this looks just like a man-made wall.”

We even found a few perfectly rectangular “stone blocks,” but close examination always revealed that what we were looking at was nature’s handiwork.

After an hour’s walk, we reached a lookout point from which we could see far below us a turquoise pool of water fed by a frothy white waterfall. Hugo’s Heavenly Pool, we named it. We clambered down and soon found ourselves on a little beach.

The mini-lagoon turned out to be a lot bigger and deeper than it appears from above, and the water much colder than I would have guessed. This glowing green pool even comes with a little sandy beach where you can lie back and contemplate the funny-looking rocks looking down on you.

While few people know of El Río Zarco, there is another cool, clean and much bigger river at the east end of Villa Felicidad: El Río de las Ánimas is born deep inside the Primavera Forest, and after it skirts Tala, it flows into nearby Lake La Vega. I used to call it “The River of Souls” until I learned that there are two words for soul in Spanish: alma and ánima.

The former refers to the souls of living persons as well as those who have made it to heaven or that other place. An ánima, however, has not yet reached its final destination. This word covers the souls in Purgatory as well as those said to wander about cemeteries and haunted houses.

A natural formation in a small cave alongside El Río de las Ánimas.
A natural formation in a small cave alongside El Río de las Ánimas.

So, I am now calling it The River of Ghosts, a name it might possibly have received long ago by someone who noticed the above-mentioned bizarre rocks and fossil fumaroles found along its banks.

If you head upstream, you’ll quickly come to a spring where clean, warm water gushes out of the hillside and cascades over a small waterfall into the river. Three hundred meters upstream from here, there’s a small, natural bathing pool next to a wide meadow perfect for camping, at the edge of which you’ll find several fossil fumaroles of extraordinary size.

We measured one at 1.2 meters in diameter, surely one of the bigger examples of such formations to be found anywhere in the world.

Nowadays a four-lane highway bisects Villa Felicidad. This is the new bypass around the city of Guadalajara, locally known as the megalibramiento. At first, I feared this toll road would cut off access to Villa Felicidad, but they actually built an overpass just for the rough dirt road leading from Tala to the River of Ghosts.

To get to a parking spot from which you can walk to Río de las Ánimas, you need to follow two steps. First ask Google Maps to take you to “Calle Luis Rojas, Tala, Jalisco.” Once you are there, ask for “M84V+25 Tala, Jalisco.”

Google Maps will show you two routes; one goes straight east, and the other makes a big northerly loop. I have found this loop impossible to follow, so take the other choice: keep going east on Luis Rojas, and you will soon be crossing Villa Felicidad.

Taking a moment of reflection among some mini "stumps."
Taking a moment of reflection among some mini “stumps.”

The road is rough but you don’t need four-wheel drive. When you reach the parking spot, walk downhill, heading east again, and after 400 meters you will reach the Ghostly River.

The writer has lived near Guadalajara, Jalisco, for 31 years and is the author of A Guide to West Mexico’s Guachimontones and Surrounding Area and co-author of Outdoors in Western Mexico. More of his writing can be found on his website.

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Mexico should bet on education rather than oil: Bill Gates

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Bill Gates
Bill Gates: Mexico's educational institutions have a long way to go.

If Bill Gates was in charge in Mexico, he’d bet on its people as its greatest resource, not its oil.

The Microsoft founder told the publication Forbes México in an interview that he would urge President López Obrador to invest in education rather than fossil fuels.

Mexico’s educational institutions have a long way to go to reach the levels that will give Mexicans a better quality of life, he said.

“Undoubtedly, the education system is the primary key to developing a country or the intelligence of its people,” Gates said. “Mexico has places like the Technological Institute of Monterrey, in which they train world-class engineers. But speaking in more general terms, the education system in Mexico is quite weak …”

In addition, Gates said, Mexico isn’t turning out enough teachers.

“Having a good education system is much more important than taking petroleum out of the ground,” he said, adding that more informed citizens are happier ones.

Gates recognized that the world’s nations are still dependent on fossil fuels as a fundamental part of their economies but argued that reducing oil and natural gas consumption for the good of the environment is crucial.

“We only have 30 years to go before we get to 2050 and we still depend on gasoline for people to get to their jobs, to move the economy,” he said. “How quickly can we reduce our consumption of gasoline?”

Ultimately, he said, how much of the world’s dependence on fossil fuels can be reduced by that 2050 deadline is not clear, but nations need to try to “let go of the expectation of making so much money by selling petroleum or natural gas.”

It will be a challenge, he admitted, “for Russia, for Nigeria [and] for Mexico,” he said.

Source: Forbes México

Pemex lost nearly half a trillion pesos last year, faced ‘worst crisis’ in its history

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pemex gas station
Pemex was hit by a steep fall in fuel consumption.

Pemex on Friday reported a loss of almost half a trillion pesos in 2020 as the state oil company faced what CEO Octavio Romero described as the “worst crisis” in its history.

The company reported a loss of 480.96 billion pesos (US $23 billion), a 38.2% increase compared to its 2019 loss.

Industrial transformation losses contributed to 45.6% of the overall loss and exploration and production losses contributed 41.9%, the company’s annual report said.

Presenting the report, Romero said that Pemex faced the “worst crisis in its history” in 2020 as demand for oil slumped due to the coronavirus pandemic and associated economic restrictions.

“The unprecedented combination of low prices for crude and petroleum products” and a “steep fall in fuel consumption eroded the cash flows of all oil companies,” he said.

Pemex CEO Octavio Romero.
Pemex CEO Octavio Romero.

Pemex’s total revenues fell 32% last year to US $42.47 billion. However, the oil company recovered in the second half of 2020, recording net profits in the third and fourth quarters.

The profit in the October-December quarter was 124.21 billion pesos (US $5.9 billion), a vast improvement compared to the fourth quarter of 2019 when the company lost 171.54 billion pesos (US $8.2 billion).

Romero highlighted that it was the first time in more than four years that Pemex recorded net profits in two consecutive quarters.

He said that oil extraction costs declined 20.7% in 2020 to US $11.15 per barrel compared to $14.06 in 2019. Transparency practices and the eradication of corruption generated savings of approximately 40.54 billion pesos (US $1.9 billion), Romero said.

The CEO said that another “fundamental achievement” was that average petroleum production in 2020 increased by 4,000 barrels per day (bpd) to 1.705 million. He said the production increase ends a 15-year period of year-over-year declines.

Romero said that average daily output would have been 1.73 million bpd had Pemex not agreed to cut production last May and June as part of an agreement with the 23 oil-producing OPEC+ nations to reduce supply in order to stabilize prices amid the coronavirus-induced downturn in demand.

He said the production increase can partially be attributed to the incorporation of oil from new fields whose development began in the first half of 2019.

“In record time for the industry, less than two years, Pemex managed to incorporate production from these new developments,” Romero said.

Despite its huge loss, Pemex transferred 598.33 billion pesos (US $28.6 billion) to the federal government last year in “direct and indirect contributions,” he said. In the first two years of the current government, Pemex transferred 1.47 trillion pesos (US $70.3 million) to the government for the social and economic development of the country, Romero said.

The transfers were made despite Pemex being heavily indebted and requiring significant government support to stay afloat. Just last week, President López Obrador announced a new agreement to reduce Pemex’s tax burden and the government has injected large amounts of cash into the firm.

“The Federal Electricity Commission and Pemex will continue to be supported with public financing … In the case of Pemex, another agreement will come into force, a decree to reduce its tax payments to the Finance Ministry,” he said February 18.

Source: Sin Embargo (sp), El Financiero (sp) 

Not so fast: governments put brakes on private schools’ plan to reopen

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delfina gomez
Education Minister Gómez: only her ministry can authorize the reopening of schools.

The Ministry of Education (SEP) has pushed back against a recent call by a national private school association to reopen their schools starting March 1.

Education Minister Delfina Gómez, as well as Mexico City Mayor Claudia Sheinbaum, spoke out this week, saying that only the education ministry has the ability to authorize a return to in-person classes.

Sheinbaum asked families and teachers to be patient, predicting, “It won’t be much longer. Now there is a vaccine; there is a vaccination process.”

The National Association of Private Schools called upon the nation’s 8,190 private schools to reopen on Monday, saying that to keep them closed was violating Mexico’s students’ constitutional right to education.

“All sanitary precautions will be taken, both in homes and in schools,” the association said in a statement on its website last week.

The association said the move was necessary not only for students but also for the schools, many of which are completely closed or at the point of bankruptcy. If those schools were to close permanently, it would leave millions of children without schooling and would overwhelm the public system with new students.

It also accused SEP and the federal government of not working hard enough to get the nation’s children back into classrooms.

SEP officials said this week that they would listen to concerns and proposals from educators, but at the same time Gómez also issued a statement warning that the return to in-person classes is dependent on the nation’s coronavirus stoplight system and on local authorities, not on private schools’ desire to reopen.

“[The return to in-person classes] will be safe, orderly, gradual and careful,” she said, “and only when the coronavirus stoplight is at green …”

The statement was a reiteration of SEP’s policy since the spring, when the nation’s public and private schools closed and students went to distance learning classes at home. At the time, SEP officials said that schools would not be authorized for in-person classes until the entire nation was at green on the stoplight system.

Sources: El Financiero (sp), Uno TV (sp)

Foreign residents assured of vaccine eligibility in CDMX

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covid vaccination

Foreigners who live in Mexico City are eligible to receive the Covid-19 vaccine even if they don’t have an ID card proving residence, a Mexico City government official says.

Eduardo Clark offered the assurance after reports surfaced of foreigners having been rejected for vaccination.

Health officials kicked off a multi-day campaign Wednesday for people over 60 in the Iztacalco, Xochimilco and Tláhuac boroughs. An earlier campaign for seniors in the same age category finished up the week before in Milpa Alta, Cuajimalpa and Magdalena Contreras.

“We want to apologize if there were persons who could not get access to the vaccine. We are now modifying the process, with the aim of verifying documents with the goal of having clarity that people are eligible, not just foreigners but also people who don’t have identification [proving residence in] the neighborhood,” Clark said. “Everyone has the right to a vaccine.”

As of Friday, Mexico’s vaccination information website still tells vaccine candidates that “in order to expedite the process” they should bring evidence of a CURP (a citizen identification number) “if you know it.”

The vaccination site also says evidence of residence in one of the neighborhoods is also required, either government-issued ID or secondary documents that serve as a comprobante de domicilio (proof of address). These are items such as a bank statement or a recent bill from a utility and must be in the name of the candidate for vaccination or in the name of a family member who shares the same surname.

Clark said that foreigners can bring government-issued documents that prove their age and current address. This could be a passport and/or driver’s license, for example. He also suggested bringing a comprobante de domicilio.

“Present whatever you can to allow us to identify that you are a resident of one of the neighborhoods,” Clark said.

He did not specifically address the issue of the CURP, a requirement that has been called into question after some Mexican-born seniors proved not to have one because they never registered for it when the nationwide identification system was introduced in 1996.

Expats who registered on the vaccination website should also supply documentation showing who they are and where they live. More proof in Mexico for anything is generally better than less.

Vaccinations in Iztacalco, Xochimilco and Tláhuac are being prioritized by last name. The days for surnames beginning with letters A–D were February 24 and 25 but anyone who didn’t get vaccinated on their assigned day can show up for a vaccine at one of their neighborhood’s vaccination centers on March 5 and don’t need to register in advance. The centers are administering the Sputnik V vaccine.

The remaining schedule is as follows, with the letters indicating the first letter of candidates’ surnames:

  • February 26: E, F, G;
  • February 27:  H, I, J, K, L;
  • February 28: M;
  • March 1: N, Ñ, O, P, Q;
  • March 2: R;
  • March 3: S, T, U;
  • March 4: V, W, X, Y, Z;
  • March 5: anyone who failed to get vaccinated on their assigned day for whatever reason.

Candidates for vaccination may go to any of the vaccination centers assigned to their neighborhood. Each site is only able to administer a few thousand vaccines per day, and there have been lineups.

Iztacalco:

  • Palacio de los Deportes Pabellones. Enter via Puerta (Gate) 5
  • Escuela Nacional de Educación Física

Daily vaccination limit: 5,400

Tláhuac:

  • ISSSTE Hospital General Tláuac
  • Bosque de Tláhuac

Daily vaccination limit: 3,600

Xochimilco:

  • Escuela Nacional Preparatoria 1 “Gabino Barreda” de la UNAM
  • Deportivo Xochimilco

Daily vaccination limit: 4,200

Addresses for the vaccination centers can be found here. They are open from 9 a.m. to 6 p.m.

Sources: El Financiero (sp), Marca (sp)

Chihuahua priest found guilty of sexual abuse of 8-year-old girl

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aristeo baca
Priest Aristeo Baca, whose victim was an altar girl at a church in Ciudad Juárez.

A Catholic priest was found guilty guilty by a court in Chihuahua this week of the violation and sexual abuse of a minor.

Evidence from more than 20 witnesses, official experts’ reports and documentary evidence showed that the victim was sexually abused by Aristeo Baca, now 78, at least three times between 2015 and 2018.

Prosecutors said “the accused broke the relationship of trust and took advantage of the access he had to the victim, who served as an altar girl in the church where he celebrated Mass.”

Baca was arrested in Ciudad Juárez and subsequently suspended in 2019 when the family of the victim noticed her aversion to Baca and she finally spoke out about the abuse.

Initially many parishioners came out in support of Baca, and the family of another victim received threats from his supporters and were forced to leave their home after the accusations were made public.

Elia Orrantia, director of an organization that supports victims of sexual abuse, said Baca’s conviction was significant as it was the first in which a priest had been brought to trial on sexual abuse charges in Ciudad Juárez. She acknowledged the bravery of the victim and her family for speaking out against the priest.

Baca will be sentenced on March 1.

Source: Milenio (sp) El Universal (sp)

Texas freeze heats up López Obrador’s energy self-sufficiency plans

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cfe and pemex
AMLO's instruments of energy self-sufficiency.

Crazy as it sounds, the Texas freeze — which earlier this month stopped gas exports to Mexico, shutting off power to 4 million consumers and bringing car factories and manufacturing plants to a halt — was manna from heaven for President López Obrador’s nationalistic energy ambitions.

Because Mexico imports 65% of its petrol and 86% of its natural gas from the U.S., López Obrador was able to use the days-long supply shock to illustrate the perils of over-reliance on a foreign supplier and provide it as proof that Mexico needed to be self-sufficient in energy.

As is often the case with López Obrador, it was the right diagnosis but the wrong remedy.

“Unfortunately, he’s doubled down on his diagnosis as a result of Texas. He thinks in electricity, as in oil, Mexico should be self-sufficient and has resources and that by changing the structure of the market, he’s trying to secure that,” said Graham Stock, emerging markets sovereign strategist at BlueBay Asset Management.

This week, legislators heeded the president’s call not to change a comma of a sweeping electricity reform bill that would dramatically alter the electricity market in favour of state utility CFE. The bill still has to pass the Senate in the coming month, but the market expects approval will be a done deal.

fracking
Self-sufficiency in natural gas? Not without fracking, says analyst.

If so, out goes the principle of dispatch into the national grid based on cost, and in comes priority for CFE.

Under current rules, renewable energy is dispatched first. The law would promote CFE’s hydropower plants to the front of the queue, followed by all of CFE’s thermal generation (including coal and fuel oil) followed only then by renewables and finally by all other private generation.

Julio Valle, spokesman for the Mexican Association of Wind Power, said the average cost last year for generation contracted under wind auctions, which López Obrador has halted, was 650 pesos/MWh (US $32/MWh) compared with $69/MWh on average for CFE.

Ana Laura Magaloni, a lawyer and one-time Supreme Court judge candidate, said the bill was “blatantly unconstitutional” since it echoed parts of a previous initiative that the Supreme Court struck down this month.

If passed by the Senate, it is certain to trigger injunctions and constitutional challenges.

However, López Obrador has made clear he will not give up on an issue he considers central to his vision of Mexico — even if it does face legal challenges. Meanwhile, analysts say it would deal the biggest blow yet to investor confidence in the government.

It would also put Mexico on a collision course with Joe Biden’s clean energy plans. The U.S. has long complained of Mexico’s attempts to change the rules in the electricity market.

For all its trouble, will López Obrador’s plan ease Mexico’s dependence on Texas? No, said Stock.

Mexico has vast shale gas reserves but López Obrador has ruled out fracking and “without fracking, there’s no gas,” Stock said. Ironically, the Mexican president’s plans overlook one peril of self-sufficiency, he added: “Texas’ problem was that it wasn’t connected to the U.S. grid.”

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Monarch butterfly numbers down 26%; climate change, logging blamed

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monarch butterflies
The butterflies covered an area of 2.1 hectares this season, 0.73 less than last winter.

Illegal logging and climate change contributed to a 26% reduction in the number of monarch butterflies overwintering in Mexico in 2020-2021, according to the World Wildlife Fund (WWF) and the National Commission of Natural Protected Areas (Conanp).

Monarchs, which migrate to Mexican annually from Canada and the United States, covered an area of 2.1 hectares in the pine and fir forests of México state and Michoacán in December, a reduction of 0.73 hectares compared to the same month of 2020.

Conanp regional director Gloria Tavera Alonso told a press conference Thursday that nine butterfly colonies were identified – seven in México state and two in Michoacán. That’s a reduction of two compared to last winter when Conanp counted 11 colonies.

WWF México said in a statement that joint studies it carried out with Conanp and the National Autonomous University found that almost 20.3 hectares of forest in the Monarch Butterfly Biosphere Reserve were cleared between March 2019 and March 2020. The quantity of deforested land was four times higher than the previous year when five hectares of forest were cleared.

WWF México director Jorge Rickards said the main cause of deforestation in the reserve was illegal logging. The most affected areas were the Cresencio Morales ejido (cooperative) in Michoacán, the area surrounding the community of San Felipe de los Alzati in the same state and indigenous-owned land in the municipality of Nicolás Romero, México state.

Wind and drought were also cited as factors in the degradation of forests.

The WWF statement also said that climate change had a “considerable impact” on the monarch butterfly’s migration process.

“During the spring and summer of 2020 the climatic variations in the south of the United States were not favorable to the flowering of milkweed and the development of eggs and larvae. This limited the reproduction of the population of monarchs, with an impact on the migrant generation, which caused a reduction in the population of this insect in all of North America and as a consequence lower occupation in Mexican forests during their hibernation,” the organization said.

Rickards called on authorities in Mexico, the United States and Canada to work together to seek solutions to the problems monarch butterflies face. He said the insect itself is not at risk of extinction but its migration process is under threat.

Two years ago, monarch butterflies clustered in pine and fir trees covering 6.05 hectares, almost triple the area they covered this year, and in the late 1990s they spread across areas as great as 19 hectares.

However, the area covered by the black and gold-winged insects declined 53% last year and an additional 26% this year. The reduction compared to the winter of 2018-2019 is 65%.

Source: Infobae (sp) 

At least 8 dead, 2 missing after community attempts to repel armed attack

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Soldiers arrived in Hacienda de Dolores after residents issued pleas for help.
Soldiers arrived in Hacienda de Dolores after residents issued pleas for help.

At least eight men were killed and two women were abducted during clashes on Thursday between residents of a Tierra Caliente municipality in Guerrero and members of a criminal gang.

A resident of Hacienda de Dolores, a community in the municipality of Coyuca de Catalán, told the newspaper Reforma via the messaging service WhatsApp that townsfolk repelled an armed attack by a cell of the Familia Michoacana drug cartel and killed five of its members.

During the incursion, cartel members kidnapped two women who were still missing on Thursday afternoon, he said.

The resident told Reforma that there were other confrontations on a local highway and in the mountains and that Familia Michoacana members killed at least three men.

The bodies of the slain cartel members remained in the streets of Hacienda de Dolores late on Thursday, Reforma reported. Residents have requested that state and federal security forces be deployed to the town to ward off a return by the attackers.

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An official from Los Guajes de Ayala, another small town in Coyuca de Catalán, said the Familia Michoacana wants to seize control of local communities because they want to log forests in the area. Javier Hernández said residents of Los Guajes had prevented an attempted incursion into their town and he has been calling for state and federal security support since last Sunday.

Women from the community of El Pescado posted a video to social media on Thursday in which they pleaded for government help in the face of a potential armed attack.

“We’re children and women here, … [the gang] took control of Hacienda de Dolores, kidnapped women and they’re threatening us that there will be gunshots today, tomorrow, every day,” one woman said.

She said that the approximately 40 men who live in the community had deployed to its outskirts to protect it from a possible attack. “We’re very afraid and we hope you help us,” the woman said.

After her appeal, soldiers arrived in El Pescado in an army helicopter on Thursday afternoon, Reforma reported.

Guerrero Governor Héctor Astudillo met virtually with state and federal security officials on Friday and said on Twitter that a joint strategy to attend to the problems in communities adjoining Michoacán – Coyuca de Catalán borders that state – had been established.

The Tierra Caliente region of Guerrero is notorious for opium poppy production, drug trafficking and cartel-related violence.

Source: Reforma (sp) 

US urges Mexico to heed private sector concerns over electricity market overhaul

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Secretary of State Blinken, Economy Minister Clouthier and Foreign Minister Ebrard
Secretary of State Blinken, Economy Minister Clouthier and Foreign Minister Ebrard have virtual meetings scheduled for Friday.

The United States has urged Mexico to listen to the concerns of the private sector with regard to the proposed overhaul of the electricity market to favor the state-owned Federal Electricity Commission (CFE) over private companies, many of which have invested in renewable energy.

During a call with reporters on Thursday to outline United States Secretary of State Antony J. Blinken’s “virtual travel” to Mexico and Canada on Friday, acting assistant secretary Julie J. Chung of the State Department’s Bureau of Western Hemisphere Affairs was asked whether she expected Blinken to address the proposed changes.

“Yeah, there are a whole host of issues related to USMCA implementation that’s ongoing,” Chung responded.

“In terms of the electricity and energy issues, that’s another area that we’ll be discussing in the medium term and long term because there are many aspects that we’re hearing from the private sector about their concerns. But this is where we encourage Mexico to listen to the stakeholders, to listen to the private sector companies and really provide that culture, the atmosphere of free investment and transparency so that companies will continue to invest in Mexico.”

Several analysts said this week that the proposed reform to the Electricity Industry Law would scare off foreign and domestic  investment in the energy sector, especially renewables. The United States Chamber of Commerce warned earlier this month that the bill, which passed the lower house of Congress on Tuesday, contravenes Mexico’s commitments under the USMCA.

The electricity bill appears set to be one of several issues to be examined during bilateral talks on Friday.

Chung indicated that there will be a broad range of topics up for discussion at separate virtual meetings Blinken will attend with Mexico’s Foreign Minister Marcelo Ebrard and Economy Minister Tatiana Clouthier.

After “traveling” virtually to the border crossing between El Paso, Texas, and Ciudad Juárez, Chihuahua, Blinken will speak with Ebrard, Chung said, adding that it will be the third time the two men have spoken since the new United States government took office in January.

“They’re expected to speak about continued collaboration on shared concerns such as migration issues, including the winding down of the MPP, the migration protection protocols,” she said, referring to the the United States policy introduced by the Trump administration that forces migrants to remain in Mexico as they await the outcome of their asylum claims in the U.S.

Chung said that Binken and Ebrard are also expected to discuss “Covid-19 security, regional economic competitiveness, climate change, and other issues of mutual interest.”

She said that the secretary of state and Clouthier “are expected to discuss various economic topics, including how to strengthen even further our deep and dynamic trade and investment relationship.”

mexico and us flags

The State Department said in a statement that the United States and Mexico “enjoy a strong partnership, and this trip reinforces the importance of that relationship under the Biden administration.”

It said the bilateral trade relationship, shared security challenges, regional migration, climate change, and other issues of mutual interest will be on the agenda at Blinken’s meetings.

But the statement made it clear that the United States’ relationship with Canada is the closer one.

It observed that the United States and Canada are “neighbors, friends, and allies” but didn’t refer to Mexico in such glowing terms. Blinken will also meet virtually with Canadian Prime Minister Justin Trudeau but President López Obrador, who has a clear preference for domestic issues over international ones, will not be involved in Friday’s talks.

The Mexican president did, however, weigh in on the electricity bill issue on Friday, calling on the United States to respect Mexico’s energy sovereignty.

“They believe that we should act in a certain way, that’s OK because freedom has to be guaranteed not just in one country but as a universal principle. But we must respect each other in … the management of electricity policy,” López Obrador told reporters at his regular news conference.

He emphasized that Mexico is a free and sovereign nation and doesn’t get involved in the affairs of other countries. Mexico follows a policy of non-intervention in order to avoid foreign countries meddling in its affairs, López Obrador said.

In a letter sent to Biden in December, the president issued what could be construed as a subtle warning to the United States.

“We are certain that with you as president of the United States it will be possible to continue applying the basic principles of foreign policy established in our constitution, especially that of non-intervention and [the right] to people’s self-determination,” López Obrador wrote.

Miguel Ángel Mateo, partner at the international law firm Hogan Lovells, predicted that Friday’s meetings won’t have any bearing on the Senate’s vote on the electricity bill – the ruling Morena party leads a coalition with a majority in the upper house – but they will provide a forum for the United States to air its grievances.

He told the newspaper El Financiero that investors who will be affected by the expected approval of the bill will take legal action in an attempt to nullify or blunt its effect.

“The investors who feel affected by the law will seek injunctions and suspensions,” Mateo said.

Jeremy Martin, energy vice president at the Institute of the Americas, said the United States’ appeal to Mexico to listen to private sector concerns marks the beginning of a difficult bilateral relationship with regard to commercial issues.

“In my opinion, it is dangerous terrain in terms of commercial relations,” he said. The approval of the electricity reform will have serious consequences for private energy firms, Martin added

“There will be damage to the energy sector and private companies, … as a reference we only have to look at the cost of canceling the [previous government’s] airport,” he said, apparently referring to a retracted Federal Auditor’s Office finding that scrapping the partially built facility will cost more than three times what the government said it would.

Meanwhile, the rating agency Moody’s has warned that the CFE’s credit rating could be downgraded due to investment uncertainty and other impacts related to the expected approval of the electricity market reform.

Roxana Muñoz, assistant vice president-analyst at Moody’s, noted that the utility’s current rating, and Mexico’s sovereign rating, is Baa1, the agency’s third lowest investment grade rating.

“There is a probability that CFE’s rating will go down in the next 12 to 18 months,” she said.

Among the challenges the state-owned company faces, Muñoz said, are a lack of storage capacity for natural gas and other energy-generation sources, a lack of diversity in power generation sources and a lack of investment in the electricity grid that hinders the incorporation of renewables.

The analyst also noted that the CFE’s operating costs have increased 4%.

“While this can be compensated through [electricity] rates or with increases to the subsidy the CFE receives from the federal government, these mechanisms are not immediate so the CFE will have to finance this increase by depleting its capital,… which could have a negative credit impact,” Muñoz said.

However, she expressed doubt that the company will be able to find the resources to fund its increased operational costs.

“We believe that the company’s own resources are insufficient for the additional funding as the same levels of private investment are not expected given the uncertainty in the sector…” Muñoz said.

Source: El Financiero (sp), Reforma (sp)