The rest of the world is embracing clean energy, while Mexico’s president foolishly bets on oil | Opinion

Latin American governments are pursuing many ridiculous policies, but perhaps none is more absurd that Mexico’s President Andres Manuel Lopez Obrador’s bet on his country’s state oil monopoly at a time when the world is increasingly embracing clean energies.

Lopez Obrador, a nationalist populist who celebrated his second anniversary in office last week, has vowed to spend more than $24 billion on his country’s inefficient Pemex oil monopoly and its refineries, including $8 billion in the Dos Bocas refinery in a swamp in his home state of Tabasco.

I have talked with more than a dozen oil experts, and I couldn’t find a single one who says that Mexico’s bet on oil makes sense. Most big oil producers have been reducing their oil dependence in recent years, and the trend is likely to accelerate after U.S. President-elect Joe Biden’s inauguration on Jan. 20.

Biden has promised to rejoin the Paris Climate Accord on his first day in office, which would reinvigorate the 189-country agreement to reduce fossil-fuel emissions that cause climate change.

In another sign that Biden will make the environment one of his top priorities, he has appointed former Secretary of State John Kerry — one of the Democratic Party’s most influential figures —as his special envoy for global climate, with Cabinet-level status.

The Biden administration is expected, among other things, to demand that Mexican companies abide by stricter environmental regulations under the recently signed U.S.-Mexico-Canada USMCA trade agreement.

Biden’s promise to support solar and wind energies at home and abroad is in line with what most of the world is doing, despite President Trump’s open disregard for the climate crisis.

Oil-rich Saudi Arabia is carrying out a “Vision 2030” development plan aimed at reducing its dependence on oil production. Abu Dhabi has unveiled plans to generate a third of its power from clean energies in four years. European countries are also moving toward clean energies, as are leading oil companies.

ExxonMobil, which only seven years ago was America’s biggest company, has seen its stock plummet to less than half, from $103 per share in 2014 to $45 today. An ExxonMobil internal study predicts that oil prices will remain depressed for much of the next decade because of environmental regulations and the growing use of electric cars, the Wall Street Journal reported Nov. 25.

But none of this is deterring Lopez Obrador’s quest to expand Mexico’s bloated state oil industry. Pemex, with about 129,00 employees, produces less oil than other countries’ oil companies with a fraction of that workforce.

A forthcoming book on Lopez Obrador by Mexican oil expert Carlos Elizondo Mayer-Serra, “And My Word is the Law,” describes the Mexican president’s obsession with the oil industry as a “sentimental” affair.

I called Elizondo to elaborate during a phone call this week. He noted that Lopez Obrador was born in the oil-producing state of Tabasco, and that he is nostalgic for the good old days when Mexico could subsidize massive social programs with its oil revenues.

“He looks at the country with a vision of the 1970s, when the oil industry was a big source of government income,” Elizondo told me. “In his logic, we should invest in Pemex to recreate the glories of the past.”

On Sept. 24, 2019, Lopez Obrador said, “Let’s not forget what (John D.) Rockefeller used to say: that oil is the best business in the world.” Problem is, crude oil is at about $40 a barrel, way down from its 2008 peak of almost $150 a barrel.

To make things worse, Lopez Obrador is spending a fortune on Pemex’s expansion while cutting education, science and technology budgets, as part of his austerity measures to cope with the COVID-19 economic slump. Mexico’s economy is projected to fall by 9 percent this year, according to the International Monetary Fund.

Elizondo fears that Mexico’s economic downturn will trigger a new wave of migration to the United States. “It has already started to happen, “ he told me.

Instead of wasting more money on oil production, Lopez Obrador should be investing in school computers, hospitals and research and development for industries of the future. His “sentimental” affair with oil is not just foolish, it’s also bad for Mexico, and bad for the rest of the world.

Don’t miss the “Oppenheimer Presenta” TV show at 8 p.m. E.T. Sunday on CNN en Español. Twitter: @oppenheimera