Mexico’s energy sector is undergoing a major transformation, announced on the 87th anniversary of the original oil expropriation by President Lazaro Cardenas. The new “leyes secundarias” will significantly change the direction set by the 2013 energy reforms, which opened the sector to private and foreign investment. Under former President Enrique Peña Nieto, the government aimed to modernize infrastructure, lower costs, and improve efficiency by inviting private companies into oil, gas, and electricity production. However, this approach clashed with the nationalist vision of his successor, Andrés Manuel López Obrador (AMLO), who viewed foreign involvement as a threat to Mexico’s sovereignty. Under the current President Claudia Sheinbaum, the country is solidifying AMLO’s legacy with new secondary laws that return control of energy back to the state, strengthening national oil giant Pemex and the Federal Commission of Electricity (CFE).
The most significant change is the return of state dominance in energy production and distribution. Pemex has gained greater control over joint ventures, allowing it to partner with private companies while retaining decision-making power within the government. At the same time, CFE’s role in electricity generation has been bolstered, with new rules mandating that at least 54% of Mexico’s electricity come from the state utility. This move ensures that CFE’s supply takes priority over private producers, including those using renewable energy, despite market competition. These changes dismantle the competitive energy market created in 2013 and ensure that the state remains in charge, regardless of the costs.
A controversial part of the reforms is the elimination of independent regulators like the Energy Regulatory Commission (CRE) and the National Hydrocarbons Commission (CNH). These agencies were created to ensure fair competition and transparency by overseeing both state and private energy players. With the reforms, these responsibilities will be absorbed by government ministries, raising concerns about potential corruption and inefficiency. While the government argues that this will reduce costs and speed up decision-making, critics warn that it could undermine oversight and increase political interference in energy policy.
An intriguing aspect of the reforms is their approach to renewable energy. Unlike AMLO, who focused mainly on oil and gas, President Sheinbaum presents herself as an environmental advocate and wants Mexico to expand its wind, solar, and hydroelectric energy capacity. However, under these new laws, CFE—not private companies—will lead this shift. While this ensures state control, it could also slow innovation and investment in the renewable sector. With uncertain regulations and fewer incentives for private renewable firms, it remains unclear whether Mexico’s green energy potential will be realized.
The central question is whether these reforms will benefit Mexico in the long run. The government argues that restoring state control protects the country’s resources from foreign exploitation and ensures that profits benefit the Mexican people. However, critics suggest that removing competition and transparency could lead to inefficiencies, higher costs, and unreliable energy supply. Investors are already showing caution, with some reconsidering their involvement in Mexico due to the unpredictable regulatory environment. The success of this bold shift in energy policy will depend on how well the government manages state-run companies, energy demand, and the transition to renewables. One thing is certain: Mexico’s energy future has taken a dramatic turn, and the global community is watching closely.
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