AMLO’s Lithium Grab and War on Green Energy Will Hurt North America

By reasserting state control over Mexico’s natural resources, President Andres Manuel Lopez Obrador is once again slowing the nation’s economic recovery and its potential for longer-term growth. As sad and predictable as his actions may be, however, their damage will extend beyond Mexico’s borders, affecting the North American continent’s ability to shorten and strengthen its supply chains, address the damaging effects of climate change and regulate migration. More broadly, they will retard the process of integration on which the region’s future depends.

Since 2013 Mexico’s constitution has allowed private investment in energy. Money has flooded in. Deepwater and onshore oil fields have brought in billions of dollars from global companies including Shell Plc, Chevron Corp., Exxon Mobil Corp., and BP Plc. Private domestic and international capital has gone into pipelines, gas storage facilities and retail outlets. Exxon and BP stations now dot busy commercial corners, eroding state-controlled Pemex’s monopoly over gas pumps. Private investment has transformed electricity production as well. As available wattage has soared, rolling blackouts no longer pepper Mexico’s industrial heartland. Overall prices have fallen, too, as the auction process favored lower-cost generators. The influx of private funds kicked off Mexico’s green energy transition, building out much of the nation’s wind and solar capacity.