According to a report in the Financial Times, a majority of a panel of judges voted against some of the central provisions of the proposed new energy law — but the majority did not reach the eight votes needed to repeal the bill. The purpose of the proposed energy reforms is to restore government-controlled entities as virtual monopolies in the Mexican energy market. This is part of the effort to strengthen state control in all sectors. However, energy reform could put $ 22 billion worth of wind and solar projects on the shelf. All of these projects are managed by large foreign companies, including the Spanish Iberdrola and the American Sempra Energy, bringing Mexico into conflict with foreign governments, most notably its northern neighbor. The energy bill could lead to the cancellation of some of these renewable energy projects, as it prioritizes the development of hydroelectric, nuclear and gas-fired power: capacity managed by the state Comision Federal de Electricidad. The government wants to increase its market share to over 54 percent from a current share of 38 percent. The private sector has already accused the government of jeopardizing billions of dollars in investment by pushing for reforms, saying it also violated trade conditions and would lead to more polluting and more expensive electricity. “Apart from the politics and political uncertainty that affect business confidence, this decision adds an element of legal uncertainty that companies will have to deal with,” Carlos Peterson, senior analyst at Eurasia Group, told FT. “This will probably discourage investment.” The United States has said it opposes planned reforms, with Climate Envoy John Kerry visiting Mexico three times in the past five months to make the difference known to those working for reform. U.S. Trade Representative Kathryn Tai has warned that up to $ 10 billion in US investment is threatened by the reform. By Charles Kennedy for Oilprice.com More top readings from Oilprice.com:
