Energy Articles

December 15, 2016

Regulatory Updates on the Occupation of Land for Electric Generation Projects, by José María Lujambio

Article 71 of the Electric Industry Law (EIL) provides that the occupation of the surface or the establishment of easements for the construction of power plants shall take place in cases in which the characteristics of the project require a specific location. Since the publication of the EIL in the Official Journal of the Federation in August 2014, there has been concern within the industry as to whether such precept should be understood as applicable to all electric generation projects that use renewable sources or only some of them.  The definition was of utmost importance in order to determine the types of projects that would be subject to the strict rules of the EIL applicable to the negotiation and agreement … read more

April 18, 2016

New Steps toward Opening the Fuels Market, by José María Lujambio

On February 23, 2016, the Department of Energy (“SENER”) published in the Official Journal of the Federation (“DOF”) a notice informing that, as of April 1, 2016, it will be able to grant permits for the importation of gasoline and diesel to any interested party who fulfills the applicable legal requirements. Therefore, parties will not have to wait until January 1, 2017, which was the date originally set forth for such purposes in the fourteenth transitory article of Mexico’s Hydrocarbons Law.    This policy measure is justified by the SENER considering that it will promote free competition by eliminating restrictions on the current supply model; it will offer consumers access to prices below the maximums, particularly along the border; and … read more

May 7, 2015

Industrial Security and Environmental Protection in the Hydrocarbons Sector

By Jose Maria Lujambio I.

One of the most important developments that the energy reform has brought to Mexican law is the creation of a new institution known as the National Agency for Industrial Security and Environmental Protection in the hydrocarbons sector. Due to its lengthy name, in April 2015, it was announced that such agency will be officially identified as the Security, Energy and Environment Agency (ASEA for its Spanish acronym). The constitutional reform of December 2013 ordered Congress to create a decentralized agency of the Department of the Environment and Natural Resources (SEMARNAT for its Spanish acronym), with technical and administrative autonomy, and a certain degree of budget autonomy. Contrary to the National Commission of Hydrocarbons (CNH for its Spanish acronym) and the … read more

May 7, 2015

Relevant Aspects and Current Situation of Pemex Following the Implementation of the Energy Reform

By Antonio Franck

In the midst of Mexico’s implementation of the energy reform, and the complicated situation with the fall of oil prices, the internal restructure and the development of investment projects by Petróleos Mexicanos (Pemex) remains at a halt. For the past several months, the private sector has drawn up new strategies and alliances in search of opportunities for investments due to the opening of the sector, while preparing to compete for the best technical tools and financial strategies. Pemex appears to be facing the competition alone and is also faced with converting itself into a productive state entity. Its biggest challenges are the following: (i) a lack of clear investment objectives; (ii) financial debt and employment liabilities such as pensions and … read more

April 7, 2015

Challenging and Suspending Acts and Decisions by Mexican Energy Regulatory Agencies

By José María Lujambio I.

Article 27 of the Coordinated Energy Regulatory Agencies Law (LORCME) establishes that the general rules, acts and omissions of the National Hydrocarbons Commission (CNH) and of the Energy Regulatory Commission (CRE) may be challenged only through means of an appeals process known as an indirect amparo lawsuit. However, Article 22 of such law establishes the authority of both agencies to hear appeals filed against their own acts and decisions. This incongruity reveals an instance of oversight by the Mexican executive branch and Congress, the solution to which will eventually have to be addressed by the courts. Before the LORCME took effect in August 2014, the CRE Law allowed parties to file an administrative motion for reconsideration against decisions of the … read more

November 18, 2014

Potential Popular Referendum on Mexico’s Energy Reform

By José María Lujambio I.

In August 2012, a decree of reforms to the Mexican Constitution on political matters was published in the Official Journal of the Federation to, among other things, recognize the right of citizens to vote in popular referendums on issues of national importance. Since then, this mechanism of direct democracy has complemented the representative democracy model shaped by Articles 39, 40 and 41of the Constitution. In terms of Article 35, section VII of the Constitution, popular referendums shall be called by Mexico’s Federal Congress at the request of the President of at least 33% of the members of each of its chambers, or the equivalent of a minimum of 2% of registered voters. Under the latter option, last April members of … read more

October 18, 2014

The Proposed Energy Presidential Rulings

By José María Lujambio I.

Article 89, section I of the Mexican Constitution confers upon the President of the Republic of Mexico the power to provide, in the administrative area, for the compliance with laws. Such relates to the regulatory authority of the Federal Executive, which encompasses not only the issuance of rulings (reglamentos) but also of decrees, resolutions, orders and other regulatory instruments, which should be countersigned by the heads of the departments responsible for their implementation. Since the beginning of the last decade, the proposed presidential rulings, and actually all of the general regulations issued by the federal public administration, must go through a prior process of public consultation, which seeks to provide a greater democratic legitimacy to governmental regulation. Additionally, the proposals … read more

September 18, 2014

Energy Regulatory Agencies in Mexico

By José María Lujambio I.

One of the new statutes that constitutes the Mexican energy reform is the Energy Coordinated Regulatory Agencies Law (Ley de los Órganos Reguladores Coordinados en Materia Energética, LORCME) that came into effect on August 12, 2014. This law sets forth the legal provisions of the eighth paragraph of article 28 of the Constitution, which was amended in December 2013 to establish that the executive branch would include the agencies known as the National Hydrocarbons Commission (Comisión Nacional de Hidrocarburos, CNH) and the Energy Regulatory Commission (Comisión Reguladora de Energía, CRE). The CRE had been created by a presidential decree in 1993 as a consultative agency of the Department of Energy (Secretaría de Energía, SENER) regarding the interactions that began to … read more

August 12, 2014

Private Investment in Pipelines and Storage Facilities for Petroleum, Petrochemicals and Refined Products

By José María Lujambio I.

The 1995 Mexican energy reform legally allowed the private sector to participate in activities such as the transportation, storage and distribution of gas through what was then a new permits’ regime. In 2008, a bill by President Calderón proposed that, in accordance with the Hydrocarbons Law relating to gas, permits could also be granted for conduction through pipelines, and the storage related to such or to import terminals, for basic petrochemicals and refined products. Naturally, the regulatory agency for these infrastructure networks would be the Energy Regulatory Commission (Comisión Reguladora de Energía, CRE). The strange consensus that led to the 2008 reform resulted in useless legislation, given that the activities described above were included as subject to regulation by the … read more

May 10, 2014

The Negotiation of Energy Laws in Mexico’s Congress

Following the December, 2013 publication of important reforms to the Mexican Constitution pertaining to energy, in April, President Enrique Peña Nieto presented the proposed new energy laws to Mexico’s Congress, with the majority of the bills being presented to the Senate and others to the House of Representatives. At the beginning of June, the Senate’s Energy and Legislative Review Committees established a schedule for the review and discussion of the pending presidential bills, dividing such into four reports to be reviewed between June 10 and 23. The proposed schedule was questioned by the legislators of the Democratic Revolution Party (Partido de la Revolución Democrática, PRD), as they considered, among other reasons, that discussing such during the World Cup soccer tournament … read more