Mexican Congress rejects constitutional energy reform

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The Chamber of Deputies of Mexico rejected on Sunday night in a special plenary session the constitutional reform proposal on the energy sector presented by the government and which provoked a heated debate about the possibility of reversing the opening of the market carried out in 2013.

The reform sought to guarantee the State the generation of at least 54% of the electricity that the market needs, that is, to give an advantage to state companies, with mostly highly polluting plants, over private companies, which have focused on renewable energies. and natural gas. His detractors claimed that this violates free competition and international agreements signed by Mexico.

Morena, the party of President Andrés Manuel López Obrador, and its allies did not achieve the qualified majority to carry out the changes in the Magna Carta and only obtained 275 votes of the 332 that were needed. A total of 223 legislators voted against. There were no abstentions.

The opposition had declared itself totally against it and most of its deputies spent the night in the Chamber on Saturday to avoid setbacks or that pro-government protesters would block their access on Sunday morning.

The debate was marked by disqualifications and a very harsh tone. There were banners, little flags of Mexico and crossed cries chanted with raised fists in which officials and opponents accused each other of being traitors to the country.

The constitutional reform also included considering lithium a strategic mineral that can only be exploited by the government. Without waiting for the vote, the president launched his plan B and sent Congress a proposal for changes to the mining law on Sunday night to guarantee the measure on lithium. The House will debate it on Monday. In this case, the government does have enough votes to carry it forward.

“Whatever happens, we are already armored against treason,” the president wrote on his Twitter account on Sunday night.

The Institutional Revolutionary Party, the National Action Party and the Democratic Revolution Party, united in the opposition coalition “Va por México”, planned to present a new text with which some consensus could be reached.

The understanding is expected to be complicated, but giving legal clarity to a sector mired in uncertainty is one of the demands of the private initiative and also of the United States government – the country of origin of many of the investors in the sector – which has already predicted more litigation in both national and international forums.

The current Electricity Industry Law, modified in 2021 along the same lines as the constitutional reform, is being appealed in court because, among other points, it provides for the review or annulment of contracts already signed.

In parallel, the Supreme Court debated the issue this month and although the majority of magistrates criticized the initiative, the necessary votes were not achieved to declare it unconstitutional.

The Chamber of Deputies of Mexico rejected on Sunday night in a special plenary session the constitutional reform proposal on the energy sector presented by the government and which provoked a heated debate about the possibility of reversing the opening of the market carried out in 2013.

The reform sought to guarantee the State the generation of at least 54% of the electricity that the market needs, that is, to give an advantage to state companies, with mostly highly polluting plants, over private companies, which have focused on renewable energies. and natural gas. His detractors claimed that this violates free competition and international agreements signed by Mexico.

Morena, the party of President Andrés Manuel López Obrador, and its allies did not achieve the qualified majority to carry out the changes in the Magna Carta and only obtained 275 votes of the 332 that were needed. A total of 223 legislators voted against. There were no abstentions.

The opposition had declared itself totally against it and most of its deputies spent the night in the Chamber on Saturday to avoid setbacks or that pro-government protesters would block their access on Sunday morning.

The debate was marked by disqualifications and a very harsh tone. There were banners, little flags of Mexico and crossed cries chanted with raised fists in which officials and opponents accused each other of being traitors to the country.

The constitutional reform also included considering lithium a strategic mineral that can only be exploited by the government. Without waiting for the vote, the president launched his plan B and sent Congress a proposal for changes to the mining law on Sunday night to guarantee the measure on lithium. The House will debate it on Monday. In this case, the government does have enough votes to carry it forward.

“Whatever happens, we are already armored against treason,” the president wrote on his Twitter account on Sunday night.

The Institutional Revolutionary Party, the National Action Party and the Democratic Revolution Party, united in the opposition coalition “Va por México”, planned to present a new text with which some consensus could be reached.

The understanding is expected to be complicated, but giving legal clarity to a sector mired in uncertainty is one of the demands of the private initiative and also of the United States government – the country of origin of many of the investors in the sector – which has already predicted more litigation in both national and international forums.

The current Electricity Industry Law, modified in 2021 along the same lines as the constitutional reform, is being appealed in court because, among other points, it provides for the review or annulment of contracts already signed.

In parallel, the Supreme Court debated the issue this month and although the majority of magistrates criticized the initiative, the necessary votes were not achieved to declare it unconstitutional.

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