By Roger F. Noriega and Felipe Trigos
The enactment of the “secondary legislation” to implement Mexico’s energy reform is an impressive step forward. That country’s economic future could be fundamentally transformed, if Mexico’s leaders follow through on a transparent, sustained effort to modernize the oil, gas, and electricity sectors and keep government spending and interference from undermining prosperity.
For the first time in 80 years, Mexico has opened the door to private investment in the energy sector, leaving behind years of anachronistic resource nationalism that has contributed to the decline of the state-owned oil company, Pemex, and the Federal Electricity Commission (CFE).
Insufficient investment in exploration and infrastructure, over-taxation, political interference, union influence, and corruption all have contributed to the decline of Pemex. From 2001 to 2013, oil production in Mexico fell more than 30 percent. Meanwhile, the CFE has lost almost a billion dollars in 2012 and 2013 for similar ... Read More