Resisting Energy Reform in Mexico: the Next Grito

Manifestacion-MexicoI have been writing away here in San Cristobal, but this is my first published piece in several months. It is also on the Black Sheep Journal.  Stay tuned for more in coming weeks.

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Today is Independence Day in Mexico, marking the day in 1810 when Hidalgo’s “grito” (shout) called for rebellion, and the Independence War began. Leading up to the festivities here in San Cristóbal de las Casas, Chiapas, brass bands practiced late into the night, red, white and green lights illuminate the central plaza, and vendors are out in force, selling Mexican flags, sombreros, streamers, and… model PEMEX trucks. This oddity is a window into the fierce national pride surrounding Petróleos Mexicanos, or PEMEX, Mexico’s national oil company and the heated debate over President Enrique Peña Nieto’s “energy reform” plan.

The energy reform, which would further open PEMEX to foreign investors and ownership, goes far beyond the question of economic competitiveness which Peña Nieto makes it out to be. It strikes at the core of Mexico’s anti-imperial history and values. A strong resistance movement has emerged in recent months to counter the wave of privatization is bearing down on PEMEX.

The Mexican oil industry was long dominated by Dutch and American countries. In 1938, citing Article 27 of the Constitution, President Lázaro Cárdenas nationalized the industry and created PEMEX. Cárdenas expropriated resources and facilities to build PEMEX. Despite foreign boycotts, it grew to be one of the largest oil companies in the world and helped Mexico become a major oil-exporter (currently 5th worldwide).

Yet in recent years production and profits have dipped from a peak in 2004 of 3.4 million barrels a day. Mexico is still the world’s largest oil producer at 2.5 million barrels a day. Peña Nieto argues a lack of capital and technological expertise is causing the decline and that the energy reform will provide the financial lift needed.

The reform would open PEMEX for the first time to shared risk contracts with Mexican and foreign private companies and allow private companies to produce electricity for the Federal Energy Commission (CFE). Peña Nieto says the reforms would increase production to 3 million barrels a day in 2018 and 3.5 million in 2025. Natural gas production would sky-rocket from 1.7 million cubic feet now to 8 million cubic feet in 2015. The President refutes that the reforms would represent the privatization of PEMEX, pointing out that private companies already have contracts for aspects of production. However, the reforms would allow for the first time profit-sharing with private companies. Between support from the National Action Party (PAN) and the Institutional Revolutionary Party (PRI), Peña Nieto’s party, the reform is expected to have enough support to get through Congress.

Mexicans have been mobilizing across the country in opposition to the reform. On September 1 in Mexico City, thousands of people flooded downtown streets, along with striking teachers unions, in opposition to the energy reform. Cuauhtémoc Cárdenas, son of President Cárdenas and founder of the center-left Party of the Democratic Revolution (PRD) called for the rally, along with prominent figures including Bishop Raúl Vera and historian Adolfo Gilly.

Protestors do not refute that corruption and inefficiencies exist in PEMEX. Yet they challenge that foreign investment and profit-sharing are the answers to PEMEX’s woes.

Mexico was one of the first countries to feel the disastrous impacts of free trade policies, accepting a World Bank-IMF-US Treasury bailout in 1984 that would become known as the first package of neoliberal structural reforms. Budgetary austerity, privatization, reorganization of the financial system, opening markets to foreign investment, lowering tariffs and reducing labor regulations have been the order of the day ever since, notably through the North American Free Trade Agreement (NAFTA). Waves of liberalization are followed by crises, allowing international financial institutions to pounce and sink in their claws through bailout deals. Income inequality has soared. And perhaps more than any other country, Mexico has learned that while under “free trade” goods and capital can move freely, the labor force is denied the same liberty. Millions of urban and rural Mexicans have been forced to migrate north to the United States, largely without documentation.

The defense of PEMEX as a Mexican company for the benefit of Mexicans represents another stand against the failed free market policies that have benefited the upper class and foreign interests, while impoverishing the vast majority of citizens.

Yet PEMEX faces distinct challenges from the original conditions in the 1930s. Today climate change and peak oil confront the historical legacy of PEMEX. Climate change already manifests in Mexico in droughts, flooding, reduced crop yields and stronger hurricanes, which hit campesino and indigenous communities hardest. The energy reform, which would increase fracking, is clearly a net loss for the climate. In addition, whether or not the reform goes forward, peak oil approaches. Production is not falling just due to poor management; easy-to-access reserves are being tapped out. Mexico will continue to face falling profits and the introduction of more experimental and ecologically-damaging extraction methods (a process underway in Canada’s tar sands) in coming years.

The answers to these challenges will come from the grass-roots. Communities are already experimenting with alternative energy sources and resisting the imposition of land-grabbing clean energy projects. Defending PEMEX’s legacy is worth getting out in the streets for. Yet in the energy reform fight can’t look just to the past, but must focus on innovative solutions to the climate and energy struggles on the horizon.

Each Independence Day, government officials deliver the “Grito de Independencia” or Shout of Independence, harkening to the Independence War when Hidalgo rang the bell of his church to call for rebellion. Today many who see the national government as corrupt and beholden to foreign interests before its own people have begun to hold “El grito alternativo.” The alternative grito re-claims the revolutionary spirit of Mexico for the people, who from pre-Hispanic times onward have fought for justice in the face of colonization, imperialism, dictatorship and, now, neoliberalism. The struggle to defend PEMEX is another “grito” in Mexico’s revolutionary history.

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