Mexican political parties at impasse over key reforms

An opposition political party is threatening to pull its support for Mexican President Enrique Peña Nieto’s landmark oil industry reforms.

The conservative National Action Party (PAN) said this week it would only support an energy overhaul bill if Peña Nieto agrees to electoral changes that could weaken the ruling party’s hold on power.

The president’s Institutional Revolutionary Party, the PRI, is resisting the electoral reform package despite agreeing to it earlier, Sen. Jorge Luis Preciado, head of the PAN’s Senate bench, said in a meeting with the international press.

The PAN stormed out of legislative discussions on the energy measures in retaliation.

“This is not blackmail,” Preciado said of his party’s decision to hold up support for the energy package. He added that the PAN had maintained all along that election reform should come first, then energy reform.

The PRI shot back. Sen. David Penchyna, head of the Senate energy commission, said he would suspend legislative debate until “the waters calmed.”

Although much of this back-and-forth may be political brinkmanship, the PAN’s actions have the potential of threatening the energy measures, which amount to a far-reaching program to open Mexico’s struggling oil-and-gas industry to foreign investment for the first time in nearly 70 years.

Without these new laws, proponents argue, Mexico could become an oil-importing country within a decade or so. The country has vast oil and shale gas reserves, but many are in deep water and other hard-to-exploit areas. Mexico’s state oil behemoth, Petroleos Mexicanos, does not have the technology to reach those reserves easily, proponents say.

Improved oil and gas production is also considered key to spurring Mexico’s sluggish economic growth.

The left is adamantly opposed to opening up the industry, saying it will allow foreign companies to take the lion’s share at the expense of Mexican patrimony. For decades, allowing foreign hands to touch Mexican oil was a cultural, political and traditional taboo.

For these reasons, Peña Nieto and his PRI can count only on the PAN to pass the legislation. The reform is similar to what the PAN proposed during its 12 years of presidential rule, which ended in 2012 with the return of the PRI. Before 2000, the PRI had held presidential power for seven decades.

While the PAN was in the presidency, the PRI consistently blocked its efforts to push oil-industry reform. Still, with the return of the PRI, the PAN decided to enthusiastically support the PRI’s project.

“We decided not to act with the same pettiness with which they had treated us,” Preciado said.

Petty or not, the PAN has now withdrawn that support, for the time being. Preciado said his party was prepared to hold firm even if it meant dragging final approval of energy legislation until the end of the year.

The election reforms that the PAN wants, and that it says the PRI agreed to, include allowing re-election of most posts, such as mayors and legislators (banned in the constitution), and candidacies by independent contenders.

Perhaps most important would be changes to Mexico’s form of proportional representation in state legislatures. Victorious parties in states are given a disproportionate percentage of seats in legislatures if they are in coalition even with tiny parties, which has almost always favored the PRI. Most of Mexico’s 31 states are controlled by PRI governors and their powerful machinery.

The electoral reform would in effect end that system, and also take the appointing of regional election officials out of the hands of the president and give it to the federal Senate.

The goal “is to dismantle the feudal control exercised by the governors,” Preciado said. Its need became clearer than ever after the last round of state elections, when local parties, especially from the PRI, were accused of improperly using federal resources and other shenanigans.

The PAN finished a poor third in 2012 presidential and statehouse elections and has been struggling to overcome internal battles and rebuild itself.

PRI congress members said the PAN seemed to be trying to gain through legislation what it couldn’t at the polls.

“We will not allow ourselves to be blackmailed,” Sen. Emilio Gamboa, head of the Senate PRI faction, told reporters. “I’m convinced this will lead us to no good.”

In near record time, Peña Nieto was able to push through legislation that changed the Mexican constitution to allow the energy reform in the Senate and lower Chamber of Deputies. The same bill was quickly approved by a majority of Mexico’s states.

The current discussion involves so-called enabling legislation that goes to the fine points of the reform and exactly how contracts would be awarded to oil-and-gas exploration firms, including many of the major U.S. petroleum companies, and other details.

Editorial opinion seemed to be running against the impasse, saying a better political leadership was needed to confront such disputes.

Meanwhile, the speed with which the laws have been aired and approved in Congress has also come under criticism from some quarters. Critics complain about a lack of public input and deeper debate, while the left is hoping to push forward a national referendum on energy reform. However, for legal reasons, it probably could not be conducted until next year.

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