A Kafkaesque Electric Reform

A curious trait of our society is that the powerful ideas of some authors remain marked by their name. Thus, we give the qualifier of Machiavellian to some action taken where the end justifies the condemnatory character of said action. In the same logic we can find other qualifiers such as Malthusian, Orwellian or Kafkaesque, and on that last one I will stop a little today to refer to the Mexican energy sector.

Yes, the Mexican energy sector in our days is, to say the least, Kafkaesque. The term is derived from Franz Kafka, an author born in Prague, known for his work The Metamorphosis, and is usually used in situations with oppressive, complex or illogical qualities, which for the author was exemplified with the soulless bureaucratic machinery of the Austro-Hungarian Empire. Are you beginning to imagine something?

Frederick Karl, Kafka’s biographer, gives us a better definition of the meaning of Kafkaesque. He says that a Kafkaesque situation is one in which you find yourself in a surreal world where all your patterns of control, all your plans, the complete way in which you have configured your own behavior begin to fall into pieces and you begin to fight against it with all your resources, with everything you have and, however, it is evident that you have no opportunity whatsoever.

That is Kafkaesque, whether it is turning into a beetle, as in The Metamorphosis, or facing the new configuration of the electric sector proposed by the initiative of constitutional reform in matters of electricity.

“If the reform is approved, we would enter a surreal world, perhaps unique in the world.”

The Kafkaesque nature of the matter cannot be denied. If the reform is approved, we would enter a surreal world, perhaps unique in the world. Where a public company becomes the only buyer of electricity and the only seller of electricity and where citizens have no options, where we enter into the soulless bureaucratic machinery, complex, illogical and oppressive.

As surreal as the above is the fact that said company self-regulates, creates the energy transition policy and is outside any of the controls of the federal public administration. Even more, in this surreal world, citizens and companies, we see how our patterns of control, our plans and our own behavior fall into pieces.

And it is that companies that have invested for years in the electric sector in designs, payments of permits and rights, expansions of the network, studies and construction of plants, which are carried out with a budget and a debt with national and international funds, will see how their plans fall into pieces.

Not only the inanimate components of the companies, but their employees, suppliers and the communities with which they have a relationship will be affected in a magnitude that it is still not possible for us to imagine in its fair dimension, those who make up millions of Mexican families who will see their ways of life affected.

What to say about those families that invested their savings to install solar panels on their roofs to reduce their consumption? They will see the models of consideration contracts modified with a stroke of the pen, absorbed within the complex structure of a State organism.

And yes, although there have been efforts of struggle through debates, positions and amparos before the constant onslaught, before a constitutional change it will be evident that citizens, families and companies will have no opportunity whatsoever. We will remain under the shelter of a superstructure called CFE. That, friends, is Kafkaesque.

This article was originally published by Energía a Debate.
Date: October 25, 2021
Link: https://energiaadebate.com/una-reforma-electrica-kafkiana/ [Online]

The Bet on Sovereignty

We can describe this as the six-year term of the bet on energy sovereignty, even if to many of us it is not very clear what it means. What is clear is that, like every bet, this one has a degree of uncertainty linked to the capacity of the State companies to achieve success. We bet everything, even the furniture, and if we lose the cost would be very high.

The idea appears in Andrés Manuel López Obrador’s Nation Project published around back in 2018 and establishes that Mexico’s national power will be recovered through energy sovereignty, a concept that is defined as the capacity of the State to guarantee the energy needs of the population.

At first, the idea does not sound bad, since the Mexican State is the relationship between rulers and the governed, which would include, then, the capacity of our country to articulate the efforts among private and public companies, the governments of the three levels, public and private universities and civil society organizations. But no, it becomes a euphemism that speaks of state control of the energy sector.

The real vision of the project is that the capacity of the State to guarantee the energy needs of the population is achieved through public organisms, companies of national capital and national science, technology and engineering. That is, through public organisms, such as SENER, CENACE or CENAGAS; state companies, PEMEX and CFE, and organisms such as Conacyt, IMP or INEEL.

“And it was thus that, with this bet, starting in December 2018 the dice were thrown and we are losing.”

And it was thus that, with this bet, starting in December 2018 the dice were thrown and we are losing. The bet was placed on increasing oil production regardless of the cost, for this a program of 21 priority fields was declared, authorizations and permits were accelerated, investment in PEMEX was increased. At the same time, the oil rounds, farm-outs were cancelled and the participation of private parties has been disdained. As a result, production has not increased, but the costs per barrel produced have.

We can say the same about the electric sector. Electric auctions were cancelled, the regulator was captured, private participation has been obstructed and permits have been stopped. In contrast, everything has been given to CFE, so much so that even the Electric Industry Law has been modified to guarantee it control of the market, while electricity prices continue without going down.

What to say about gasoline? Permits were limited, asymmetric regulation was eliminated for the preponderant player, measures that favor PEMEX are established, tickets were created and the Hydrocarbons Law was modified so that the State company recovers market. In spite of this, gasoline prices do not go down either. But also, the Secretariat of Energy builds for PEMEX its own refinery in Dos Bocas, which has already broken the promised budget, while PEMEX loses more money every day by refining.

Another case, the infamous Gas Bienestar and the control of LP gas prices with the promise that prices would not rise. Well, neither was Gas Bienestar the cheapest LP gas, nor has price control given results. Gas Bienestar has already announced that it will increase its prices as a result of the growing maximum prices that the government promised to control.

We are, then, in the bet on energy sovereignty but not as a State, as a society as a whole, but as an isolationist government policy that uses only the public apparatus. It is worth asking ourselves: Energy sovereignty, but at what cost?

This article was originally published by Energía a Debate.
Date: September 18, 2021
Link: https://energiaadebate.com/la-apuesta-por-la-soberania/ [Online]

Escaping Energy Obscurantism

It is natural, I believe, transparency makes governments uncomfortable, not for nothing, it is a constant struggle with citizens, media outlets and social organizations around the world. Here in Mexico, even, the government carries out an open crusade to define the true truth and establish nuances to everything that the media outlets publish, as if the media outlet were more important than the object that is communicated. Form is substance, then, the old political school would say.

The energy sector, of course, is not the exception and the problem of transparency is great, as if transparency harmed the consumer or the citizenry. I leave you some examples. In these days in which LP Gas has become a trend in Mexico because of price controls and Gas Bienestar, accessing the open data of prices to generate a comparison is a titanic task.

The Energy Regulatory Commission publishes daily the current prices of LP gas through distribution plant reported by the permit holders. For this, it establishes a form that asks for the Federal Entity, Municipality and Locality to be selected from the list, as well as to check a box that says “I am not a robot.”

If the media outlets or civil organizations wanted to report the average prices of the whole country in real time, they would have to select more than 2000 municipalities and other thousands of localities. As if it were a moral duty of the CRE to present partial data in areas of protecting the market.

The pattern repeats itself from agency to agency. In CENACE there is no information related to the amount of renewable energy that is limited, as does happen in California, nor can we know the amount of electric energy by technology by state, municipality and hour of generation. They will say that for protection of the market, as if the competent authority, COFECE, could not attend to this issue.

CFEnergía does not publish the prices and quantities of natural gas that it buys, alluding to the fact that they are unregulated activities. But they have a very important effect on the plants that deliver energy to CFE Basic Supply, which is indeed a regulated activity and whose effects we already saw in February with the freezes in Texas.

In any instance, energy obscurantism is present, from Environmental Impact Manifestations that have public versions mutilating the most important elements to protect the business, to the social impact manifestations whose publicity shines by its absence.

The national energy sector urgently needs a movement that consolidates an idea of open energy where the benefits for citizens and consumers are greater than those of the State, its agents or the business itself. Where transparency is not a painful and costly exercise for citizens and media outlets, but rather a practive exercise of periodic obligations that facilitate consultation and the maximum publicity of information. It is urgent, then, to escape energy obscurantism.

This article was originally published by Energía a Debate.
Date: September 10, 2021
Link: https://energiaadebate.com/escapar-del-oscurantismo-energetico/ [Online]