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Controversial energy bill debated in Mexico

Reuters reports that a new energy bill was introduced by Mexico’s ruling Institutional Revolutionary Party (PRI) and opposition conservative lawmakers (the National Action Party, PAN) on Saturday, that Senate committees debated it on Sunday, and that the debate on the bill will resume today. “Outside the Senate, hundreds of protesters beat rocks and spoons against barricades covered with graffiti assailing the energy reform, as riot police looked on.”

“(The bill) would open up the world’s 10th-biggest oil producer to private investment (and) let private firms partner with (the) state oil firm Pemex. …The draft marks a major break with tradition in Mexico, where assets of foreign oil companies were expropriated in 1938 to create Pemex…”

“Once they sign off on the bill, it heads separately to the full Senate and lower chamber for votes. …(Mexican President) Pena Nieto hopes to pass the reform before Christmas (as early as Dec. 15) but lacks a majority in Congress. He needs the support of conservatives to push the bill through after the leftist Party of the Democratic Revolution (PRD), which opposes opening the oil sector, pulled out of talks.”

Bloomberg adds, “Allowing other companies to explore and drill for gas and oil in Mexico requires a constitutional amendment that could only pass with a two-thirds majority in both the lower house and senate. The PAN, PRI and Green Party have enough votes to approve a charter change.”

Senate protest. Photo by Tomas Bravo/ Reuters.
Photo by Tomas Bravo/ Reuters.

And Bloomberg notes, “Mexico’s failure to boost output contrasts with a production boom in the U.S., where companies such as Chevron are tapping reserves trapped in shale rock deposits with technology such as hydraulic fracturing, or fracking.”

Mexico has the fourth largest reserve of shale gas in the world, an estimated 681 trillion cubic feet of it.

Last March, the Inter Press Service reported, “Mexico plans to expand shale gas exploration this year, but it could run into a shortage of water, which is essential to (fracking). …Since 2011, Pemexhas drilled at least six wells for shale gas in the northern states of Nuevo León and Coahuila. And it is preparing for further exploration in the southeastern state of Veracruz… (Pemex) plans to drill 20 wells by 2016… It projects operating 6,500 commercial wells over the next 50 years. …According Mexico’s Energy Regulatory Commission, …fracking takes 7.5 million to 30 million litres of water per well to release the gas, while a field of 10 wells would need between 25 million and 40 million litres of water. …(Pemex) has not clarified where the water comes from (for its shale gas wells) or what is being done with the waste.”