The Status and Evolution of Energy Supply and Use in Mexico Prior to the 2014 Energy Reform: An Input-Output Approach †

Abstract

Abstract:In 2014, the Mexican government approved a bold energy reform that allows private energy companies to freely participate in the energy market (something prohibited during the previous eight decades). This reform is expected to significantly restructure the energy sector and boost and diversify the energy production. Moreover, changes in the energy sector and production might lead to structural changes in the rest of the economy and ultimately generate significant economic benefits for the country. Nevertheless, the fundamental role of the energy sector in this oil producing country makes the potential impacts of the reform complex to forecast. The objective of the study is to analyze the current state, evolution, and driving factors of the total primary energy use in Mexico in 2003-2012 (prior to the implementation of the reform) as a precedent for future analyses of impacts of the energy reform. The results show three driving factors of the evolution of primary energy use: final non-energy demand, direct energy intensity, and economic structure. Also, it was found that the energy sector has been in a precarious situation regarding its structure and efficiency. However, this situation had a small effect on the evolution of primary energy use.

The impact of final demand on energy sectors' interregional output

“…This region has reaped substantial benefits from the development of electricity, primarily because it hosts most of the industrial sector (Girik Allo et al, 2022). The correlation between energy usage and a region's economic structure is well-documented, underscoring the economic framework's integral role in determining energy consumption patterns (Guevara et al, 2017).…”

Evaluating Economic Alternatives for Wood Energy Supply Based on Stochastic Simulation

“…With the introduction of the General Law of Climate Change and the National Climate Change Strategy [41], the development of alternative energy supply chains based on sustainability parameters is crucial at regional and national levels. Guevara et al [24] argued that further research on energy supply and its evolution in Mexico should be focused on understanding the relationship between energy and economics and evaluating the impact of energy policies on the energy and economy sectors. As suggested by the International Energy Agency, the introduction of methodologies and sustainability criteria for bioenergy supply-chain use and forecasting different medium-and long-term demand scenarios are fundamental to achieving the main objectives of the law together with actions presented in the National Climate Strategy [42].…”

“…This was changed in 2014 with a reform of energy policy allowing private companies to be freely involved in the national energy supply. A considerable restructuring and diversification of the energy sector, together with structural changes in the rest of the economy, are expected to happen [24]. Thus, given that Mexico is an oil-producing country [25], the effect on the economy and corresponding implications for the development of alternative energy supply chains must be analyzed.…”

Relational analysis of the oil and gas sector of Mexico: Implications for Mexico's energy reform

“…Current energy reform, ending the 75-year-old state regulation, has opened Mexico's oil and gas market to private investors. One of the main aims of this reform is to increase the production of oil & gas through private investment [21,25]. At the same time, Mexico's climate policy must be addressed as PEMEX, the Mexican oil state company, is among the top ten fossil fuel producer's emitters in the world [26,27].…”