By Andres Oppenheimer
Latin American governments are pursuing many ridiculous policies, but perhaps none is more absurd that Mexico’s President Andres Manuel Lopez Obrador’s bet on his country’s state oil monopoly at a time when the world is increasingly embracing clean energies.
Lopez Obrador, a nationalist populist who celebrated his second anniversary in office last week, has vowed to spend more than $24 billion on his country’s inefficient Pemex oil monopoly and its refineries, including $8 billion in the Dos Bocas refinery in a swamp in his home state of Tabasco.
I have talked with more than a dozen oil experts, and I couldn’t find a single one who says that Mexico’s bet on oil makes sense. Most big oil producers have been reducing their oil dependence in recent years, and the trend is likely to accelerate after U.S. President-elect Joe Biden’s inauguration on Jan. 20.
Biden has promised to rejoin the Paris Climate Accord on his first day in office, which would reinvigorate the 189-country agreement to reduce fossil-fuel emissions that cause climate change.
In another sign that Biden will make the environment one of his top priorities, he has appointed former Secretary of State John Kerry — one of the Democratic Party’s most influential figures —as his special envoy for global climate, with Cabinet-level status.
The Biden administration is expected, among other things, to demand that Mexican companies abide by stricter environmental regulations under the recently signed U.S.-Mexico-Canada USMCA trade agreement.
Biden’s promise to support solar and wind energies at home and abroad is in line with what most of the world is doing, despite President Trump’s open disregard for the climate crisis.
Oil-rich Saudi Arabia is carrying out a “Vision 2030” development plan aimed at reducing its dependence on oil production. Abu Dhabi has unveiled plans to generate a third of its power from clean energies in four years. European countries are also moving toward clean energies, as are leading oil companies.