Reversal of Fortunes: Changes in the Public Policy Environment and Mexico’s Energy Reform

Hybrid Governance in Northeastern Mexico: Crime, Violence, and Legal-Illegal Energy Markets

“…There was an increase in extortion of public officials, business owners, and other members of society and in competition with legitimate companies for the sale of fuel (Pérez, 2017). In both Mexico and the United States this marked an evolution to hybrid governance schemes in which organized crime took part in businesses and governments, with members of the cartels acting as “employees” (Payan and Correa-Cabrera, 2014) and organized crime using hybrid instruments such as phantom companies, legitimate businesses, falsified contracts, and money laundering (Pérez, 2011: 12):During Felipe Calderón’s administration, the Burgos Basin turned into a supply center of condensate gas that was sold illegally to different U.S. and European corporations. In the absence of a reliable authority, the [Burgos] basin became a battlefield between criminal organizations, whose members put up roadblocks, expropriated lands, took over the right-of-way, and, as if that weren’t enough, controlled access to Pemex’s facilities.…”

“…In 2010–2011 the violence in the region led several companies to leave it (Payan and Correa-Cabrera, 2014: 4), but the large transnational companies “remained untouched and achieved great success during the most violent times in Mexico” (Correa-Cabrera, 2017: 165). The reason seems to be that criminal groups offered these companies protection to facilitate transportation (Correa-Cabrera, 2017).…”