Opposite Direction






If on a highway all cars are coming in the opposite direction, we probably have to reflect on whether our car is not the one going backwards. In our national energy sector, it is evident that we need to stop and reflect on why we are going in a different direction from the rest of the world.

But first, it is true that we interrupt our usual programming, and I do not forget that we still have pending to talk about dark energy in the universe, the continuation of our previous installment, to talk about more banal topics but that are of great interest to all Mexicans in our day to day: the future of the national electric industry that is about to be defined, at least for the next four years.

This first of February, holiday due to the advance of the 104th anniversary of the Day of the Promulgation of the Political Constitution of the United Mexican States of 1917, the news woke us early, as has been customary, that on Friday the 29th the President of the Republic signed and delivered to the Congress of the Union a preferential initiative to modify the Electric Industry Law.

This is the most recent of a series of attempts that the federal government has made to return the electric sector to a state not only prior to the energy reform, but further back, to 1960 when then-president José Adolfo Mateos nationalized the entire electric industry to turn it into a monopoly operated by a state company, the Federal Electricity Commission (CFE).

In fact, in December 2019, CFE presented a list of demands that outlined this plan and that began with modest actions and omissions, particularly by the Energy Regulatory Commission (CRE) and the National Energy Control Center (Cenace), so that CFE would have a “level playing field,” a euphemism with which it is intended to return to the monopoly. Needless to say, currently, the state company controls more than 80% of the country’s electric generation, more than 80% of consumers; enjoys the monopoly of transmission and distribution, has one of the most important gas pipeline networks in Mexico and receives direct capital injections from the Mexican government.

In times of poor economic performance —in part because of the COVID-19 effect on our lives and because of a series of economic decisions of the current federal administration—, where countries seek to stimulate businesses and companies through support for spending on electric energy; where economic recovery is sought, attracting investment and generating jobs, and where it is sought to paint it as a green recovery, the actions derived from this preferential initiative place us in the opposite direction of the world.

The probability that this course of action will lead us to an imminent collision with other automobiles (countries) or that we come out with permanent damage (loss of competitiveness and country credibility) is high. On the one hand, the statement of reasons clearly dictates, without euphemisms, that the reform to the Electric Industry Law is carried out to strengthen CFE. This goes against the principle of free competition and free concurrence protected in constitutional article 28. Since 2013, generation and commercialization were removed as exclusive monopolies of the State in the Magna Carta to be considered economic activities under the regime of free competition.

Faced with a practice that violates the principles of economic competition that strengthen a State company, we could not rule out that American and Canadian companies are planning to take this issue to a controversy within the T-MEC. With a new government in the United States that actively promotes global decarbonization and the energy transition, then a crash is imminent caused by a vehicle, Mexico, that goes in the opposite direction, thinking that all the others are going in the opposite direction.

The problem is that not only has the driver not realized it, but he thinks that everyone else is the one going backwards. We return to our usual programming next week.

This article was originally published by Business Insider México.
Date: February 3, 2021
Original Link: https://businessinsider.mx/sentido-contrario-cfe-reforma-ley-industria-electica-paul-alejandro-sanchez/ [offline]
Archived Link: https://web.archive.org/web/20221205005654/https://businessinsider.mx/sentido-contrario-cfe-reforma-ley-industria-electica-paul-alejandro-sanchez/ [Archived]

Time and Energy






Time is one of those most primeval, complex, relative, abstract, subjective concepts and in some strange way known by all of us in some form. It is present before us, pardon the redundancy, all the time and it is complicated even to begin to talk about it.

At the origin of everything is the origin of time and I cannot stop asking: if before time, would there be time? In the ontological discussion of time, in the beginning, was everything empty? As if a stopwatch at zero were ready to begin running, waiting for that spark of energy that gave origin to the original movement of the universe. The link seems almost natural, time and energy go together or are they the same thing?

For our earthly scope we think of time in seconds, minutes and hours. The International System of Measures uses the ephemeris second as the basis of the measurement of time in the world and it is equivalent to one in 86,400 seconds that make up a solar day.

Regardless of the society, time has been measured —perhaps with less precision— in the seasons, position of the sun, lunar phases and other mechanisms.

But returning to our analysis, now in more cosmological terms, time and energy are intimately related —it even makes one want to say that they can be the same thing. Some years ago, scientists realized that the universe does not expand at a constant speed, but rather accelerates. For a body to accelerate it requires additional energy to the initial energy. What gives energy to the universe?

One of the most revolutionary discoveries of Galileo Galilei, between 1589 and 1592, was that, regardless of their mass and without resistance, objects fall with the same acceleration product of the force of gravity that gives speed to bodies. That is, that gravity acts as the source of acceleration over bodies.

One hypothesis is that what accelerates the expansion of the universe is something called dark energy, of which we will speak next week, and which is very related to time. Following the postulates of the second Law of Thermodynamics, while time advances the amount of disorder in the universe will increase; given that disorder will increase after something happens, that means, then, that time travels in only one direction.

This is known as the arrow of time and is the basis of the theory that explains that time travel is possible as a jump forward, but never backward. Considering these restrictions, and without entering the field of quantum physics or wormholes, the invention of a time machine would not mean that we could travel to the past, as in “Back to the Future”; but it would be possible to jump in time forward as in “Planet of the Apes.”

Space, and time, run out; however, we will continue next week with these reflections on the nexus of energy and time, exploring the concept of dark energy, and also that of dark matter, which makes up close to 70% of the total energy of the observable universe.

Undoubtedly, we know only the tip of the iceberg of energy in the universe.

This article was originally published by Business Insider México.
Date: January 26, 2021
Original Link: https://businessinsider.mx/tiempo-energia-opinion-energia-circular-paul-alejandro-sanchez/ [offline]
Archived Link: https://web.archive.org/web/20240714005655/https://businessinsider.mx/tiempo-energia-opinion-energia-circular-paul-alejandro-sanchez/ [Archived]

The Tax on Energy in the Future






In a very reductionist way, the origin of States implies a social contract where citizens choose to form a government that maintains order and fulfills other obligations for their benefit. To achieve this, human and material resources are required that must be covered with economic resources. Said in another way, governments need money to fulfill their tasks.

Governments have very limited ways of obtaining money. The most important and central one is taxes. That is, the imposition of participatory quotas on citizens, whether as individuals or as corporations, to maintain the actions of the government. The greater the tax burden, the more activities the government can develop optimally. However, it is a widely accepted consensus that citizens do not like paying taxes.

Another way in which governments can obtain income is through public debt, which is nothing other than obtaining money in advance that, in the end, will have to be paid with the government’s own income in the future. Debt is also very unpopular and dangerous because resources are committed in the long term to maintain payment to creditors.

In Mexico, however, an important part of public spending depends on two sources: oil revenues from the product of the sale of crude oil and taxes on fuels. As part of flexibility strategies, the Mexican government established a strategy based on establishing incentives when the price of gasoline was high, which were absorbed, in some way, by oil exports.

In recent years, the price of oil had remained relatively low —below 50 dollars per barrel— so, to maintain public revenues when the price of crude oil was low, the incentive to gasoline was reduced. This helped maintain the income not obtained from the sale of crude oil.

Consider that the use of oil causes serious problems related to climate change. Therefore, one of the logics of taxing fossil fuels is to dissuade their use in the long term to avoid their negative externalities or else to develop policies that allow correcting the consequences; for example, to adapt societies to climate change.

However, if one of the trends in the future is decarbonization, that would mean that taxes on fuels could disappear; with this, government revenues would decrease. Then, if fossil fuels are replaced by renewable sources of energy, how could said income be recovered?

Some proposals that have been debated in some countries regarding this topic are to tax, for example, electricity, batteries or even hydrogen. The logic behind these new levies would not be externalities, but collection itself.

Then, it would be possible that in the future, we see an IEPS on electricity, which by the way, this possibility has been established in the Constitution for some years. Perhaps, then, we could see taxes on the sun as in Spain some years ago or perhaps taxes on hydrogen as were recently approved in Argentina.

The challenge is that these taxes be progressive and that they do not condition the energy transition; at the same time that they allow governments to obtain the necessary resources for their continuous operation in the long term. For the moment, let this text serve to encourage the debate regarding the tax on energy in the future.

This article was originally published by Business Insider México.
Date: January 19, 2021
Original Link: https://businessinsider.mx/impuesto-energia-mexico-futuro-opinion-paul-sanchez-energia-circular/ [offline]
Archived Link: https://web.archive.org/web/20240222173025/https://businessinsider.mx/impuesto-energia-mexico-futuro-opinion-paul-sanchez-energia-circular/ [Archived]