On a hot August day, Claudia Sheinbaum stood alongside her mentor, President Andrés Manuel López Obrador, to open a $16 billion oil refinery in Tabasco, Mexico. This project, the most expensive in Mexico’s history, symbolizes López Obrador’s energy strategy, which he plans to pass on to Sheinbaum, a climate scientist who will become president in October.
While many countries are transitioning to clean energy, Mexico is doubling down on fossil fuels, a decision that is now proving costly. The country’s oil production has hit a 45-year low, leading to energy shortages and increased reliance on natural gas imports. State-controlled oil company Pemex is drowning in debt, requiring billions in taxpayer bailouts to avoid default.
This energy crisis presents a challenge that will define Mexico’s future and Sheinbaum’s presidency. Despite her background in energy engineering, Sheinbaum has been hesitant to challenge López Obrador’s oil-centric policies. While she has hinted at a shift towards clean energy, she has largely supported her mentor’s fossil fuel agenda.
The Olmeca refinery, a key part of López Obrador’s energy plan, has faced delays and cost overruns, doubling in cost from its original budget. Pemex’s financial woes have led to underinvestment in exploration and declining output, threatening the country’s energy security.
Sheinbaum has proposed building solar plants, mining lithium for electric vehicle batteries, and capping Pemex’s oil production. However, the deep-rooted belief in Mexico’s oil power and the political resistance to privatizing Pemex present obstacles to her vision for a clean energy transition.
As Mexico’s economy struggles under the weight of Pemex’s debt and declining oil production, the government faces tough choices about the country’s energy future. Sheinbaum’s plans to shift towards renewable energy will require significant financial and political maneuvering, with the legacy of López Obrador’s energy policies casting a long shadow over her presidency.