Sectoral Energy Program 2020-2024: Mexico’s Path to Energy Sovereignty and Sustainable Development

Source: Diario Oficial de la Federación (Official Gazette of the Federation) – Mexico, July 8, 2020

This document outlines the Sectoral Energy Program 2020-2024, derived from Mexico’s National Development Plan 2019-2024. It details the strategic vision of the Mexican government for its energy sector, emphasizing key objectives, strategies, and actions aimed at achieving energy self-sufficiency, strengthening state-owned enterprises, fostering a sustainable energy transition, and ensuring universal access to energy. This comprehensive plan underscores Mexico’s commitment to infrastructure investment in key sectors like energy, as further explored at https://finanzasdomesticas.com/plan-de-inversion-de-infraestructura-en-mexico/, and its dedication to leveraging its energy resources for national development and the well-being of its citizens.

1. Index

1. Index
2. Normative Basis for the Program’s Elaboration
3. Acronyms and Abbreviations
4. Origin of Resources for Program Implementation
5. Analysis of the Current Situation
6. Priority Objectives
   • 6.1. Relevance of Priority Objective 1: Achieve and maintain sustainable energy self-sufficiency to meet the population’s energy demand with national production.
   • 6.2. Relevance of Priority Objective 2: Strengthen Mexican State Productive Enterprises as guarantors of energy security and sovereignty, and drivers of national development, to trigger a multiplier effect in the private sector.
   • 6.3. Relevance of Priority Objective 3: Organize the scientific, technological, and industrial capacities necessary for Mexico’s energy transition throughout the 21st century.
   • 6.4. Relevance of Priority Objective 4: Raise the level of efficiency and sustainability in the production and use of energy in the national territory.
   • 6.5. Relevance of Priority Objective 5: Ensure universal access to energy, so that all Mexican society has it available for its development.
   • 6.6. Relevance of Priority Objective 6: Strengthen the national energy sector so that it constitutes the base that drives the country’s development as a power capable of satisfying its basic needs with its resources, through State, social, and private productive enterprises.
7. Priority Strategies and Specific Actions
8. Goals for Well-being and Parameters
9. Epilogue: Vision for the Future

2. Normative Basis for the Program’s Elaboration

The program is grounded in the Political Constitution of the United Mexican States (CPEUM), which establishes the State’s authority over the energy sector. This constitutional mandate allows for the execution of the National Development Plan, presidential directives, and international commitments.

Key constitutional articles underpinning this program include:

• Article 25: Affirms the State’s leadership in national development, responsible for planning, guiding, coordinating, and directing the national economy, regulating and promoting activities of general interest, and fostering priority development areas. It also guarantees state ownership and control of State Productive Enterprises (EPEs), ensuring their efficiency, honesty, productivity, and transparency.
• Article 27: Establishes the Nation’s direct ownership of all natural resources, including mineral fuels, oil, and hydrocarbons. Exploitation of these resources is generally through concessions granted by the Federal Executive, except for strategic areas. The Federal Government can establish and remove national reserves and conduct hydrocarbon exploration and extraction via allocations and contracts.
• Article 28: Designates strategic activities, not constituting monopolies, those carried out by the State in planning and controlling the national electric system, public service of electricity transmission and distribution, and in the exploration and extraction of hydrocarbons, radioactive minerals, and nuclear fuels for nuclear energy generation.

The National Development Plan 2019-2024 (PND) sets “Rescuing the energy sector” as a key objective, emphasizing the role of Petróleos Mexicanos (Pemex) and the Federal Electricity Commission (CFE) as drivers of national development, stimulating competitiveness, economic growth, and employment.

The Sectoral Energy Program 2020-2024 serves as the guiding instrument integrating objectives, priority strategies, and specific actions led by the Ministry of Energy (SENER) in coordination with EPEs, decentralized administrative bodies, parastatal entities, and regulatory bodies. It aligns with Article 26 of the CPEUM, which mandates sectoral programs to support the National Development Plan.

This program also considers international agreements, including the UN Framework Convention on Climate Change, the Kyoto Protocol, the Paris Agreement, and Agenda 2030 for Sustainable Development. It is further framed by federal laws governing energy planning, such as the Organic Law of the Federal Public Administration, the Planning Law, the Hydrocarbons Law, the Electric Industry Law, the Energy Transition Law, and others, which define SENER’s responsibilities in program development.

The Sectoral Program guides institutional programs of sectorized parastatal entities and aligns with key energy programs and plans, including the Strategy for Energy Transition, the Special Program for Energy Transition, the National Program for the Sustainable Use of Energy, the National Electric System Development Program, and the Pemex and CFE Business Plans. SENER is responsible for coordinating the program’s publication, execution, and monitoring.

3. Acronyms and Abbreviations

(List of acronyms and abbreviations is provided in the original document and is maintained for reference.)

4. Origin of Resources for Program Implementation

All actions within this Program, including Priority Objectives, Strategies, and Specific Actions, will be funded from the authorized budget of participating expenditure units during its validity.

5. Analysis of the Current Situation

Mexico aims to enhance productivity, replenish hydrocarbon reserves, diversify fuel sources, reduce environmental impacts from energy production and consumption, increase renewable energy participation, promote energy saving and efficiency, strengthen EPEs, and support national technological research and development.

Achieving and maintaining sustainable energy self-sufficiency:

In 2019, the historical decline in crude oil and natural gas production, ongoing since 2004 and 2009 respectively, stabilized. January-December 2019 showed an inflection point, with positive trends of 5.7% and 9.0% respectively. Rehabilitation efforts at six refineries led to a 67% decrease in unscheduled shutdowns compared to 2018. However, petrochemical production has consistently decreased since 2010, with 2018 levels 69% below 1995 peak production.

The National Natural Gas Transportation System (Sistrangas) includes 17,210 km of pipeline, with Cenagas operating 10,336 km and 6,874 km owned by private entities not interconnected. In October 2019, 1,679 km were under construction. 86% of infrastructure is in the north, and 14% in the south. Insufficient infrastructure in the southeast, dependent on declining Pemex gas production, limits natural gas supply.

Petrochemical production decline is addressed in Pemex’s 2019-2023 Business Plan, which includes fertilizer infrastructure rehabilitation (Cosoleacaque Petrochemical Complex), operational reliability improvements at Cangrejera and Morelos complexes, and projects to diversify feedstock for ethylene and aromatics production. In August 2019, a strategy to reactivate Mexico’s fertilizer industry was approved, leading to Cosoleacaque plant No. VI startup tests in November 2019.

In 2018, Mexico’s effective electricity generation capacity reached 70,053 MW, with CFE accounting for 59.2%, Independent Power Producers (PIE) 19.2%, and other permit holders 21.6%. Electricity consumption was 317,278 GWh, generated primarily by combined cycle (51%), conventional thermal (13.2%), hydroelectric (10.2%), and coal-fired (9.2%) technologies. Clean energy sources contributed 23.2%, falling short of the 25% target set in the Energy Transition Law (LTE).

The National Transmission Network (RNT) comprised 108,018 km in 2018, while General Distribution Networks (RGD) reached 838,831 km. Quality and Continuity indices (SAIDI, SAIFI, CAIDI) in 2018 were 26.98 minutes/user, 0.50 interruptions/user, and 53.76 minutes/interruption, respectively. RGD losses were 13.45%, with 5.92% technical and 7.54% non-technical losses.

The Energy Reform’s Electric Industry Law (LIE) maintained pre-reform permits, leading to private sector participation but creating inequities. CFE was obligated to create CFE Legacy Contracts Intermediation to manage operational and administrative work for its competitors, resulting in significant losses. These legacy contracts are projected to cause substantial financial losses if continued until 2039.

Private companies’ participation in the National Electric System (SEN) includes 255 self-supply, small production, export, and import permits, generating 45.8 TWh (14% of national consumption). The Wholesale Electricity Market (MEM), initiated in January 2016, is in early implementation, causing some energy imbalances. CFE, through its EPS and subsidiaries, represents almost all demand and about 90% of SEN generation capacity, including legacy contracts. CFE represents legacy private producers in the MEM.

The new energy development model aims to address these issues by achieving sustainable energy self-sufficiency. This requires increased hydrocarbon exploration, expanded hydrocarbon and petroleum product infrastructure, refinery processing capacity, reduced import dependence, and increased electricity generation, especially from clean energy sources.

Strengthening State Productive Enterprises:

Energy is a crucial input for Mexican industry, services, and agriculture. The energy sector represented 4.6% of national GDP in 2018, with Pemex contributing 19% of the country’s budgetary revenues. EPEs have lost sector participation. Pemex faced asymmetric regulation and fiscal regimes intended to limit its dominant power, but new participants did not significantly invest, failing to benefit the population.

In December 2019, the Energy Regulatory Commission (CRE) eliminated asymmetric regulation for Pemex Transformación Industrial (Petri) in gasoline and diesel pricing, removing price caps and advance price publication requirements. This aims to allow Pemex to compete more fairly. Import permit requirements for hydrocarbons and petroleum products were modified in February 2019 to ensure permit holders have the necessary logistics and customer access.

Past administrations’ neglect of Pemex’s fiscal regime led to a sustained debt increase, averaging 21% annually from 2013-2018. The current administration has stabilized crude oil and natural gas production decline, with positive growth in 2019, supported by a 31% increase in Pemex Exploration and Production’s physical budget investment compared to 2018.

A refinery rehabilitation program, with a 25 billion peso budget over two years, addresses increasing unscheduled plant shutdowns and aims to enhance reliability. Construction of a new refinery in Dos Bocas, Tabasco, was announced in December 2018, with permits and contracts awarded in 2019.

CRE authorized 1,188 electricity generation permits to private generators (84,491 MW) and 165 permits to CFE (45,558 MW). Self-supply contracts were misused, allowing subsidized tariffs and creating systemic imbalances in SEN planning. Independent External Producers (PEE) were introduced under independent production schemes, with CFE obligated to purchase, supply, and transport gas, assuming operational risks. CFE has ceased building its own plants and bears all risks and costs for PEEs.

CFE’s electricity generation was affected by Strict Legal Separation Terms, leading to increased costs. CRE-authorized Central Electric Plant permits require costly RNT reinforcements exceeding CFE’s financial capacity. No RNT reinforcements have been initiated under the LIE. Renewable energy plants interconnected to the grid have saturated the network in some regions, compromising reliability.

The incorporation of intermittent renewable energy plants from long-term public auctions poses financial challenges for CFE due to dispatch preference and costs for capacity reserves, transmission investments, and intermittency management. Tariff structures established by CRE in 2016 do not cover real costs, leading to financial losses for CFE. Electricity tariffs have increased significantly since 2017, while natural gas import dependence has grown. Negotiations in 2019 reduced gas transportation tariffs, generating estimated savings.

The Energy Reform in electricity primarily weakened CFE’s operational, financial, and investment capacities, necessitating its rescue through a public interest-based energy policy. The PND prioritizes “Rescuing the energy sector” and strengthening EPEs. Modernization of state-owned electricity generation facilities, particularly hydroelectric plants, and renewable energy development for isolated communities are crucial.

Organizing Scientific, Technological, and Industrial Capacities:

Mexico needs to organize scientific, technological, and industrial capacities for its energy transition throughout the 21st century. National Content targets for hydrocarbon exploration and extraction were set at a minimum of 26.4% for shallow waters and land, and 3.5% for deep waters in 2019, increasing to 35% and 8% respectively by 2025. However, monitoring and enforcement were lacking in the past administration.

Human resources in energy science and technology have significantly declined since 2011. Mexico must strengthen links between academia, industry, and specialist development. Dependence on foreign technology has deteriorated Mexico’s development, with a technological balance of payments deficit. Patent applications are low compared to technologically competitive nations.

Successful oil-producing countries have leveraged national technology strategies. Mexico needs to prioritize technology development across the energy value chain, aligned with the PND’s “Economy for Well-being” principle. The objective “Scientific development, technology and national industry” aims to integrate and analyze technology strategy, diagnose technology needs, and reposition EPE capabilities. The energy policy emphasizes national science, technology, engineering, and industry development for energy industrialization, increased national content in industry supply, and workforce training.

Investment in innovation and technology development is critical for maximizing Mexico’s resources and achieving energy sovereignty.

Elevating Efficiency and Sustainability:

Mexico is committed to international climate change mitigation and greenhouse gas (GHG) emission reduction. The LTE mandates minimum clean energy participation in electricity generation: 25% by 2018, 30% by 2021, and 35% by 2024. While private sector renewable energy efforts have occurred, EPEs must play a significant role in energy transition and universal energy access. Science, technology, and engineering are crucial for re-industrialization and developing supply chains for renewable energy equipment manufacturing, creating jobs and national technologies.

This administration prioritizes “Elevating the level of efficiency and sustainability in energy use,” contributing to climate change mitigation and respecting indigenous peoples’ rights.

Ensuring Universal Access to Energy:

Past administrations’ energy sector relationship with the private sector focused on market-driven approaches. Social sector projects lacked effective implementation. Southern Mexico requires transportation infrastructure to meet demand in Yucatán, Quintana Roo, and Campeche. The Sistrangas expansion plan includes projects to increase natural gas supply to the south, such as the Cempoala compression station reconfiguration and the Mayakan Interconnection (Cuxtal I) project.

Temporary exceptions to diesel sulfur content standards were granted in 2018 and 2019 to ensure reliable diesel supply in specific regions. However, starting January 1, 2025, Pemex must supply diesel with a maximum sulfur content of 15 mg/kg nationwide.

Social conflicts arise from energy projects’ land occupation due to legislation prioritizing contractor rights over community rights, lack of information, corruption, and negotiation asymmetries. An integral rights policy is essential to address conflicts. This administration prioritizes “Ensuring universal access to energy,” with an equitable approach guaranteeing indigenous peoples’ and vulnerable groups’ rights.

Strengthening the National Energy Sector:

Between 2004 and 2018, national crude oil production halved, and natural gas production decreased by 44%. This has reduced feedstock availability for the National Refining System (SNR) and Gas Processing Complexes (CPG) and Petrochemical Complexes (CP). Of 103 contracts awarded in bidding rounds, 35 reported production in 2019, totaling only 1% of national production. SENER requested cancellation of bidding rounds for 46 onshore areas.

National hydrocarbon reserves have declined due to extraction focus and limited exploration. Proven reserves (1P) lifespan decreased from 22.2 years in 2000 to 8.5 years in 2018. State leadership and EPE investment are crucial to reduce supply interruption risks and ensure energy security. Energy sovereignty is essential for national security, economic stability, and sustainable development.

6. Priority Objectives

Priority Objectives of the Sectoral Energy Program 2020-2024:

1. Achieve and maintain sustainable energy self-sufficiency to meet the population’s energy demand with national production.
2. Strengthen Mexican State Productive Enterprises as guarantors of energy security and sovereignty, and drivers of national development, to trigger a multiplier effect in the private sector.
3. Organize the scientific, technological, and industrial capacities necessary for Mexico’s energy transition throughout the 21st century.
4. Raise the level of efficiency and sustainability in the production and use of energy in the national territory.
5. Ensure universal access to energy, so that all Mexican society has it available for its development.
6. Strengthen the national energy sector so that it constitutes the base that drives the country’s development as a power capable of satisfying its basic needs with its resources, through State, social, and private productive enterprises.

6.1. Relevance of Priority Objective 1: Achieve and maintain sustainable energy self-sufficiency…

Mexico prioritizes achieving and maintaining energy production to meet national demand in hydrocarbons and electricity, sustainably using resources and developing capacities for long-term self-sufficiency. This objective aligns with PND principles of “Economy for well-being,” “The market does not replace the State,” “Leave no one behind,” “Honesty and honesty,” and “Ethics, freedom and trust.” It strengthens the domestic market through energy sovereignty strategies, reinforces the State’s role as guarantor, and respects human rights in energy activities. Prior consultation with indigenous communities is strictly observed.

Import dependence has increased due to limited domestic fuel production, making national prices vulnerable to international fluctuations and impacting energy sovereignty. The energy sector’s contribution to GDP in 2018 was 4.6%, down from 10% in 2003, reflecting reduced industrialization and increased import dependency.

In 2017, the energy trade balance deficit was USD 18.8 billion. In contrast, 2006 saw a surplus of USD 18.7 billion. In 2018, petroleum product trade deficit was USD 23.16 billion, improving to USD 21.22 billion in 2019 despite reduced crude oil export value. High fuel and natural gas import dependence stems from underinvestment in hydrocarbon industrial transformation.

Mexico, as a price-follower, is vulnerable to global oil market volatility. Energy planning for the past 30 years prioritized global market demands over domestic industrialization. The current government prioritizes energy sector rescue through investment in self-sufficiency, reducing imports, and promoting domestic production from alternative and renewable sources, establishing a sovereign, balanced, and sustainable paradigm.

Integral medium and long-term participatory planning is necessary to guarantee energy supply for national well-being. Increased investment in exploration and extraction, diversification of project portfolio focusing on shallow water and onshore fields, and emergency measures are needed to meet production goals. Crude oil production decisions prioritize domestic demand.

Declining hydrocarbon production and export-oriented policy reduced feedstock for the SNR. Refinery crude oil processing decreased from 1,155 Mbd in 2014 to 609 Mbd in 2018. Petroleum product output also declined. SNR maintenance and rehabilitation investment, and new refinery construction are crucial.

Natural gas production decline impacted fertilizer feedstock availability. Fertilizer production has been hampered by natural gas shortages. CPG reliability has deteriorated. Petrochemical production has significantly decreased since 2010. Pemex considers public and private investment for petrochemical sector development, focusing on feedstock availability and infrastructure rehabilitation.

In 2018, clean energy sources contributed 23.18% of total electricity generation. MEM is in early implementation, with tariff imbalances and suboptimal capacity utilization. Basic Supply operation costs exceeded revenue in 2018 due to tariffs below production costs, requiring government subsidies. Increased CFE-owned generation and reduced reliance on third-party purchases are necessary to control costs and maintain affordable tariffs. CFE must enhance its own generation to reduce production costs and increase revenue, ensuring affordable tariffs and reserve capacity. Prioritizing national energy resources for power plant planning and construction, reducing CFE debt, and utilizing clean energy sources are key to energy independence and sustainable transition.

6.2. Relevance of Priority Objective 2: Strengthen Mexican State Productive Enterprises…

The PND’s “Rescuing the energy sector” goal emphasizes strengthening EPEs (Pemex and CFE). This program aims to enhance their financial, operational, administrative, and value-generation capacity, making them pillars of the energy system, guaranteeing energy security and sovereignty, and enabling ordered private sector participation and a sovereign energy transition.

This objective aligns with PND principles of “Economy for well-being,” “The market does not replace the State,” “Leave no one behind,” “Honesty and honesty,” and “Ethics, freedom and trust.” It marks a shift from past administrations’ focus solely on extractive activities, neglecting industrial transformation through EPEs.

Past policies limited industrial sector growth reliant on hydrocarbon transformation products, increasing import dependence and trade deficits. In 2018, the energy sector contributed 31% of State revenue, with 19% from oil revenues and 12% non-oil revenues. Energy sector contributions to public revenue have declined over the past two decades.

Reliable hydrocarbon and petroleum product quantification and traceability across the value chain are needed to improve revenue collection and combat illicit markets. Pemex, once a leading global producer, faced reduced investment, market share loss, and increased debt under the Energy Reform’s asymmetric regulation. Private investment has not yet guaranteed national energy needs. While asymmetric regulation for Pemex has been partially addressed, further adjustments are needed.

Natural gas is strategic for industry and electricity generation. Private sector participation has not displaced Pemex as the primary national producer. Limited investment in drilling and extraction reduced associated gas production. State leadership through SENER and regulatory bodies is crucial for Pemex to compete fairly and increase exploration and extraction in high-value areas, prioritizing energy sovereignty and public benefit.

Past policies favored dry gas imports over domestic wet gas production, impacting ethane feedstock for petrochemicals. Ethane production declined, necessitating imports and propane injection, insufficient to meet profitability potential. Crude oil processing in the SNR consistently declined from 2012-2018, leading to high import dependence for refined products (gasoline and diesel). Pemex’s petroleum product storage capacity is limited, emphasizing the need to strengthen the company for energy security.

In the electricity sector, the LIE’s Strict Legal Separation Terms failed to promote sector efficiency. CFE’s reorganization into EPS and EF increased costs and reduced operational and administrative efficiency due to inadequate asset allocation. CFE is being strengthened through productive reintegration, investment, operational efficiency improvements, and efficient administrative management. CFE and Pemex face high debt levels due to past fiscal policies. Current administration efforts are stabilizing and reducing debt. Government support includes reducing Pemex’s Shared Profit Duty and capital injections.

The government is creating conditions to guarantee energy sovereignty through transversal coordination and inter-institutional collaboration, promoting gender equity, ethnic identity, transparency, and combating corruption. Energy sector planning prioritizes EPE rescue as drivers of national development, overcoming past policies, eliminating energy dependence, and reducing debt, making them true drivers of economic, scientific, technological, industrial, and social development.

6.3. Relevance of Priority Objective 3: Organize the scientific, technological, and industrial capacities…

Mexico’s energy security and sovereignty require immediate and long-term organization and strengthening of scientific research, technological development, engineering, capital goods industries, and service providers. This will enhance productivity and efficiency of the hydrocarbon-based energy system and build a sovereign new energy system incorporating clean and renewable energy sources. This objective aligns with PND principles “Economy for well-being,” “Leave no one behind,” “Honesty and honesty,” and “Ethics, freedom and trust.”

It necessitates a State policy involving federal, state, and municipal governments, higher education and research institutions, business organizations, labor unions, and society as a whole. Developing a culture of efficient and sustainable energy use is a priority for the education system.

This policy is urgent given the growing evidence of climate change impacts. Mexico possesses significant primary energy resources, including renewable energy potential. Developing domestic science, technology, engineering, and industry is an ethical and rational imperative. Overcoming historical dependence requires shifting away from short-term profit-driven approaches and unsustainable energy consumption patterns.

In 2019, Pemex and CFE procurement represented 2.4% of national GDP, but this has declined over the past decade. Their combined purchases in 2019 exceeded the budgets of Mexico City and the State of Mexico. Scientific and technological dependence has perpetuated unsustainable consumption patterns and limited technological design tailored to Mexican needs and incomes.

The government’s transformation requires simultaneous consideration of energy system demands, renewable energy integration, and specific sector and societal needs. Past science and technology policy was fragmented and disconnected from societal needs. A new productive pact is needed to strengthen the domestic market and leverage economic demands to drive national capital profitability. No economic power has achieved high income and well-being solely through foreign investment and international trade dominance over domestic market development. The energy sector policy is Mexico’s most powerful tool for boosting technology, national industry, and the domestic market.

In contrast to past fragmentation, energy policy promotes critical mass in scientific research and technology development through a shared agenda coordinated by specialized sector institutes, integrating capabilities from Conacyt, universities, and EPE-linked laboratories. Priorities for technologies and equipment crucial for energy policy goals are being established and shared with relevant public entities. Efforts are concentrated on strategic technologies and equipment.

Energy policy aims to guarantee design and manufacture of capital goods and IT systems with cutting-edge technology and low production costs. Mexico must prioritize hydrocarbon technology development, considering value chain impact, execution priority, and technical and economic feasibility. Robotics, AI, IoT, and new materials for energy systems will be developed. These activities require specialized maintenance, assembly, and user services, creating opportunities for SMEs nationwide. This policy encourages private sector initiatives aligned with energy policy.

Proactive and coordinated EPE procurement, along with federal, state, and municipal government purchases, will drive initial investment certainty and domestic market growth in the energy sector.

6.4. Relevance of Priority Objective 4: Elevate the level of efficiency and sustainability…

This objective aligns with the PND’s “Economy for well-being” principle, promoting efficiency and sustainability in the energy sector for a renewable energy transition benefiting the population. Energy policy principles include improving production processes to reduce fossil fuel use and emissions.

Energy industries, transportation, and fugitive emissions from oil and gas extraction are major emission sources. Efficiency and sustainability improvements are crucial. Carbon dioxide, methane, and sulfur dioxide are primary GHGs. Energy policy promotes energy efficiency, rational energy use, reduced carbon intensity, and energy transition to renewables, contributing to GHG reduction commitments under international agreements and Agenda 2030.

Reliable emission measurement systems are needed across the hydrocarbon value chain, as current information is largely estimated. SENER coordinates with authorities to ensure measurement and reporting framework implementation. SENER promotes cogeneration projects between Pemex and CFE for energy efficiency and waste heat recovery. Maximizing higher-value petroleum product output and reducing fuel oil production through refinery reconfiguration projects are priorities. Fuel oil utilization for power generation, with emission reduction technologies, is considered.

Energy efficiency is linked to technology and manufacturing processes. Continuous energy performance improvement necessitates replacing equipment with more efficient technologies. Promoting efficient generation and consumption of energy-efficient products, strengthening energy efficiency regulations, and monitoring compliance are crucial. Building codes, new materials, bioclimatic architecture, and consumption habits should contribute to energy demand reduction.

Technology quality must ensure cost-effective energy savings for consumers. Efficiency and sustainability are promoted through energy efficiency actions, technology substitution, energy audits, and social workshops. Public information campaigns on energy-efficient housing design and access to affordable construction materials are important. Updated regulations will include mandatory energy efficiency requirements in building design and construction, integrated into curricula and professional training programs. Social co-responsibility in energy efficiency and public awareness campaigns are encouraged. Energy efficiency training is promoted across public, social, and private sectors.

Electricity demand requires efficient, high-quality, and affordable supply. CFE and private generators must improve energy efficiency in production processes. The new Dos Bocas refinery incorporates energy-efficient technologies. Global environmental concerns drive sustainable development, balancing economic growth with environmental respect and social equity. Circular economy principles, from product design to waste disposal, are crucial for reducing energy demand and optimizing material use and reuse.

Improving primary energy utilization efficiency is vital for increasing electricity generation from the same primary energy input. SENER is revising guidelines for bioenergy permits and developing a biofuel policy to enhance efficiency and sustainability. NOM-016-2016, setting petroleum product quality specifications, is being modified to incorporate biofuel considerations. Reducing electricity transmission and distribution losses is crucial. The electricity sector must increase clean energy use, sustainably leveraging national energy resources. Renewable energy generation, both isolated and interconnected, is promoted in a planned manner, optimizing renewable resource use and ensuring system efficiency, reliability, and sustainability.

6.5. Relevance of Priority Objective 5: Ensure universal access to energy…

The Mexican government aims for a population living in well-being by 2024, covering basic needs like water, food, health, education, and housing equitably. Democratization of energy allows organized participation of marginalized communities to expand local capacities and drive regional economic growth. This objective aligns with the PND’s “Leave no one behind” principle, extending cleaner energy use, expanding electricity grids, involving communities in projects, and ensuring prior consultation with indigenous peoples.

Energy access is fundamental for social and economic development. Energy inequality exists in Mexico due to geography and economic situation. Universal energy access is a central priority to eliminate development restrictions. Access to electricity improves quality of life, enabling activities after dark, information access, and economic integration through electric motors and food preservation.

Combating poverty through universal electricity access is a priority. In 2018, 98.75% of the population had electricity access. Efforts are needed to reach the remaining 2 million, primarily in rural and marginalized urban areas, through grid expansion and renewable energy self-consumption projects. Mexico has high renewable energy potential. Projects are developed with CFE to provide grid-supplied and locally generated renewable energy to communities. Renewable energy generation is crucial for electrifying isolated communities.

Natural gas access positively correlates with economic growth. Manufacturing activity in Sistrangas-connected states grew faster than in unconnected states. The Public Policy for Minimum Storage of Petroleum Products incentivizes infrastructure development for emergency supply security. Increasing service stations aims to improve public access to fuels. The government promotes LPG access in remote areas at affordable prices, replacing wood and charcoal for users’ benefit.

Lack of community consensus has hindered universal energy access. Communities in project areas have not seen direct benefits, leading to social discontent. Early community engagement, transparent information, and benefit-sharing are crucial to avoid social conflicts and project delays.

6.6. Relevance of Priority Objective 6: Strengthen the national energy sector…

Between 2004 and 2018, national crude oil production halved, and natural gas production decreased by 30%, reducing feedstock for SNR and CPGs. Hydrocarbon reserves have declined, with proven reserves lifespan shrinking. State leadership and EPE investment are vital to ensure energy security and sovereignty. Energy sovereignty is essential for national security and sustainable development, allowing Mexico to participate interdependently in the global economy. Rescuing the energy sector is a priority of the PND and a driver of national development. This objective aligns with the PND’s “The market does not replace the State” and “Economy for well-being” principles.

SENER coordinates international energy relations and cooperation to align with national energy policy. The immediate goal is energy sector rescue, leveraging the State’s constitutional authority to guide national development, strengthen sovereignty, promote economic growth, and employment. State leadership is essential for national well-being.

National energy policy involves short, medium, and long-term planning, based on rational and sustainable hydrocarbon resource use, maximizing all primary energy sources, increasing energy reserves, and advancing renewable energy utilization. The energy system is fundamental to all economic, social, and cultural activities and national security. Energy sovereignty is a crucial dimension of Mexico’s international presence and geopolitical self-determination.

Strategic energy planning includes immediate sector rescue (2019-2021) and consolidation as an economic and energy power (2021-2024), contributing to climate change mitigation and renewable energy promotion.

Guiding Principles for Energy Sector Rescue and Promotion:

1. Rescue and promote the energy sector with the support of the Mexican people, boosting national energy production and renewable energy alternatives, ensuring energy self-sufficiency and sector development.
2. Rescue and promote the sector under republican austerity and efficiency, prioritizing national interest, avoiding debt not for productive investment, and limiting fuel and electricity tariff increases to inflation, with worker participation.
3. Eliminate all forms of corruption and impunity in the energy sector.
4. Recognize energy reserves, supply, infrastructure, and value chains as dimensions of national and energy security, based on EPEs and national capital supply chains.
5. Sustainably utilize all national energy resources, increase available reserves, and enhance energy security for current and future generations, linking energy policy with water and subsurface resource policy, and exploring hydrogen energy sources.
6. Strategically plan production and transition to an energy matrix meeting national demand, achieving energy sovereignty in the 21st century as a State policy, based on industrialization and value-added to all primary energies.
7. Develop national science, technology, engineering, and industry for energy industrialization and increased national content, coordinated by sector research institutes.
8. Supply energy to the entire population and economy at reasonable prices, contributing to EPE profitability, productive sector competitiveness, and household finances.
9. Reduce fuel imports and achieve energy self-sufficiency.
10. Reintegrate the energy sector, strengthen Pemex and CFE operationally and financially, reduce external energy dependence, integrate and optimize hydrocarbon and electricity processes, increase public investment, capitalize EPEs, reduce EPE debt and fiscal burden, reduce production costs through technology and innovation, implement republican austerity, improve EPE management efficiency, and enhance workforce training.
11. Increase crude oil production to meet domestic petroleum product demand, increase natural gas production, and boost refined product output through SNR rehabilitation and Dos Bocas refinery construction.
12. Increase hydrocarbon reserves, reduce gas import dependence, increase petrochemical production with private sector collaboration, and improve production processes to reduce gas flaring, energy use, and pollution.
13. Establish rational electricity sector planning based on demand and primary energy sources, and expand and modernize RNT and RGD accordingly.
14. Increase CFE electricity generation, reduce electricity purchases, rehabilitate and optimize CFE power plants, invest in new generation capacity, and strengthen state infrastructure for transmission and distribution.
15. Construct a sovereign and accelerated energy transition through an integral State policy for renewable energy utilization, based on EPE productive and technological evolution and ordered renewable generation growth.
16. Advance a sovereign energy transition to renewables based on national science, technology, and capital goods production.
17. Promote sovereign technological and industrial development to increase energy efficiency and reduce GHG emissions.
18. Respect hydrocarbon public tender contracts and evaluate their performance over the next three years.
19. Ensure clear rules, rule of law, and leverage private sector experience.
20. Utilize government procurement for national technology and industry development.
21. Promote a culture of energy efficiency and rational and sustainable energy use.
22. Train specialists, technicians, and researchers to support the new national energy policy.
23. Review regulations and permits to align with rationality criteria and benefit the energy sector and population.

7. Priority Strategies and Specific Actions

The six priority objectives require strategies and specific actions involving the Mexican people, federal, state, and municipal governments, social organizations, industry, and academia. These strategies and actions should become a multi-dimensional lever for economic growth, well-being, science and technology development, and domestic market strengthening, following the new energy policy principles.

Energy planning must meet criteria of energy sovereignty and security, improved energy productivity, hydrocarbon reserve replenishment, fuel source diversification, reduced environmental impacts, increased renewable energy participation, basic energy needs satisfaction, energy saving and efficiency, strengthened EPEs, and support for national technological research and development.

(Detailed strategies and specific actions for each priority objective are listed in the original document. These are highly granular and extensive. For brevity, I will summarize the key strategic directions for each objective):

Objective 1: Achieve and Maintain Sustainable Energy Self-Sufficiency

• Strategies:
  • Establish strategic national planning instruments.
  • Increase investment in hydrocarbon exploration and extraction.
  • Expand and improve the National Refining System (SNR).
  • Rehabilitate Gas Processing Complexes (CPG) and promote natural gas infrastructure.
  • Optimize primary energy use and enhance electricity generation efficiency.
  • Develop renewable energy projects for energy sovereignty.
  • Accelerate hydrocarbon reserve incorporation and production.

Objective 2: Strengthen State Productive Enterprises

• Strategies:
  • Implement integrated planning and information systems for EPEs.
  • Strengthen Pemex to guarantee State leadership in hydrocarbon production and supply.
  • Strengthen CFE to guarantee State leadership in electricity generation, transmission, and distribution.

Objective 3: Organize Scientific, Technological, and Industrial Capacities

• Strategies:
  • Coordinate and enhance research, technological development, innovation, and specialist training.
  • Align INEEL and ININ research with electricity industry needs.
  • Align IMP research with hydrocarbon industry needs.
  • Direct international energy cooperation towards national science and technology development.

Objective 4: Elevate Efficiency and Sustainability

• Strategies:
  • Establish a policy for energy source diversification and renewable energy promotion.
  • Reduce GHG emissions through technology and efficiency improvements.
  • Increase DUBA (Ultra-Low Sulfur Diesel) production.
  • Optimize fuel oil use and reduce sulfur content for power generation.
  • Implement planning instruments aligned with LTE and LGCC (Energy Transition Law and General Climate Change Law).

Objective 5: Ensure Universal Access to Energy

• Strategies:
  • Implement mechanisms to reduce energy poverty.
  • Guarantee supply of petroleum products, natural gas, and petrochemicals.
  • Increase natural gas availability and coverage.
  • Integrate populations and communities in energy projects.

Objective 6: Strengthen the National Energy Sector for National Development

• Strategies:
  • Evaluate compliance of Hydrocarbon Exploration and Extraction Assignments and Contracts.
  • Promote sector cohesion in international energy relations.
  • Define guidelines for energy sector information management.
  • Generate optimal administrative support conditions for public sector management.

8. Goals for Well-being and Parameters

(Detailed Well-being Goals and Parameters for each Priority Objective are provided in the original document and are maintained for reference. These include specific metrics, baseline values, and targets for 2024 related to energy independence, production, trade balance, EPE profitability, renewable energy participation, energy efficiency, and energy access.)

Examples of Well-being Goals and Parameters include:

• Objective 1: Energy Independence Index, Self-Sufficiency in Primary Energy Production, Energy Trade Balance.
• Objective 2: Gross Operating Profit, Growth Rate of Pemex Productive Capacities, Growth Rate of CFE Productive Capacities.
• Objective 3: Percentage of Critical Technology Production Capacity Built by National Capital Companies, Number of Institutions Participating in Critical Technology Agenda, Number of Agreements/Projects in Critical Technology Agenda.
• Objective 4: Percentage of Clean Energy in Electricity Generation Matrix, Efficiency in Energy Production and Use, Growth Rate of Renewable Energy Installed Capacity.
• Objective 5: Percentage of Population with Electricity Access, Variation in Fuel Prices and Domestic Electricity Tariffs vs. Inflation, Variation in Energy Transport Infrastructure Extension.
• Objective 6: Reserve Replacement Rate (TRR), Contribution of Oil Sector to Budgetary Revenue, Real Percentage Variation of CFE Fiscal Contributions.

9. Epilogue: Vision for the Future

The Sectoral Energy Program 2020-2024 aligns with the National Development Plan and the Mexican Constitution, fulfilling SENER’s legal responsibilities. It is the guiding instrument for national energy policy, encompassing institutional programs of EPEs, decentralized bodies, research centers, and regulatory bodies. The program’s overarching objective is to rescue and promote the energy sector to achieve energy self-sufficiency, essential for energy security and national sovereignty.

Mexico aims to guarantee primary and secondary energy supply for its economy and society sustainably, with appropriate private sector participation. The program prioritizes rescuing EPEs and research institutions as strategic public entities. Pemex and CFE are critical for energy security and sovereignty. The program aims to strengthen them, eliminating irrational and detrimental policies. EPEs are vital for State leadership in development, contributing through production, fiscal contributions, exports, and nationwide energy and input supply, fostering certainty and productivity across the economy.

Strengthening the energy sector will drive national development, guarantee fuel and tariff prices below inflation, support national competitiveness, and enhance household income. The program promotes productive excellence, increases national energy production, reduces imports, improves productivity, lowers production costs, and ensures sustainable use of all national energy resources.

In hydrocarbons, the program includes projects to increase exploration and production investment, rehabilitate the SNR, construct the Dos Bocas refinery, and recover petrochemical production, aiming to meet domestic demand and increase strategic reserves. A strengthened Pemex will fulfill its social function, enhance operational and commercial capacity, improve finances, and drive sector and regional development.

In electricity, the program ensures demand-driven generation with reliable clean energy sources, modernizes RNT and RGD, establishes smart grid development, and guarantees basic and qualified supply with technological and regulatory advancements. A strengthened CFE will fulfill its social function, enhance operational and financial capacity, guarantee electricity supply, and increase generation capacity, incorporating clean energy sources.

The program optimizes EPE productive capacity and infrastructure, expanding it to meet future demand growth. Mexico is committed to international GHG emission reduction targets, modernizing EPE electricity generation, incorporating mitigation and adaptation actions, promoting new technologies, improving value chain ecological performance, and fostering new consumption patterns and lifestyles.

The program outlines actions for a Sovereign Energy Transition across key energy end-use sectors and building types, addressing the energy-water nexus. This transition from fossil fuel-based systems to electricity and renewables will be led by EPEs with appropriate private sector contributions. The program ensures an ordered, coordinated, gradual, and systematic transition in energy generation, technologies, capital goods, and equipment, meeting climate change commitments.

The Sovereign Energy Transition will boost the domestic market, economic development, and national industry, organizing national production of critical technologies and fostering domestic technology and industrial supply capacity. It will coordinate national technological-industrial supply with EPE demand, federal and state government demand, and social and productive sector demand, creating a multiplier effect on the domestic market.

The program establishes the energy sector’s productive commitment as a driver of industrial development, leveraging national research institutes and ensuring efficient energy consumption with environmental stewardship. The program outlines a transformation agenda, restoring the State’s role in well-being, energy security, and national sovereignty, promoting domestic market development, and contributing to improved income distribution. National development is guided by sustainability and economic viability. Through this program, Mexico will consolidate itself as an energy and economic power based on self-sufficiency and national sovereignty.