Mexican president rails against private energy companies

Mexican President Andres Manuel Lopez Obrador said Friday that previous administrations opened the energy sector to private firms with the intent of undermining state-owned electric utility CFE.

“We need to strengthen this productive enterprise that belongs to the nation, which was dismantled so that the entire electric power market was controlled by private firms,” he said during his daily morning press conference.

Those companies, most of them foreign-owned, also receive subsidies from the Mexican government, the leftist president said.

“What was done was a great abuse,” Lopez Obrador, referring to what he called a culture of “pillage” in the energy sector just after he announced plans for a referendum in the central state of Morelos to decide whether a newly built power plant fueled by natural gas can begin operating.

Some residents in the vicinity of the plant have campaigned against the facility, which also faces opposition from environmentalists.

“With this plant, we could produce enough energy to power the entire state of Morelos, and without it, we would have to buy the energy from foreign private companies. I say this clearly for those raising the banners to oppose the plant,” Lopez Obrador said.

He said that construction of the plant and an accompanying gas pipeline cost 20 billion pesos ($1.04 billion).

“There are environmentalist movements supported by foreign companies that don’t want competition. And when it’s a plant like this - even more if it belongs to the nation - foreign companies promote opposition,” the president said.

“Fortunately it is the minority (of environmentalists), so this is not misinterpreted,” he added.

Lopez Obrador was joined at the news conference by the top executive of the CFE, Manuel Bartlett, who promised to present next Monday a detailed description “of the looting” of the company during the 2012-2018 term of President Enrique Peña Nieto .

The energy overhaul implemented by Peña Nieto had the effect of leaving the CFE in a diminished state, Bartlett said, lamenting the tendency toward the disappearance of state-owned enterprises.

In 2014, Lopez Obrador brought a legal challenge against Peña Nieto over the heart of the energy reform: a constitutional change allowing private companies to develop Mexico’s crude oil reserves for the first time since the late 1930s, when then-President Lazaro Cardenas nationalized the petroleum industry.

Since taking office Dec. 1, the new president has worked to undo several of his predecessors major policy initiatives.