Mexico’s monumental energy sector transformation enacted by the Peña Nieto administration also targeted the country’s transport and mobility sector with measures aimed at the transition to cleaner fuel vehicle fleets.
As the year comes to a close, the Institute of the Americas asked five energy experts what keeps them awake at night heading into 2016. Their responses covered the Western Hemisphere and issues varied from COP21 outcomes, to Brazil’s macroeconomic instability, to political shifts in Venezuela, to the changing geopolitics of oil, to renewed prospects for regional integration in the Southern Cone. On the back of the Paris Agreement and unprecedented global political will to tackle climate change, renewable financing and the transition to clean energy is an area we will also be watching as we begin the new year.
As Mexico celebrates two years since the nation embarked on its momentous energy reforms, the oil and gas sector has much to commemorate and much on which to reflect. The lackluster opening of Round One in
July ultimately enabled competitive bidding as the government responded to concerns and criticisms in the second tender process that concluded in September. The outlook for Mexico’s reforms remains positive, in part due to the efforts by regulators and officials to ensure transparency at every level. Still, some concerns persist, particularly in the area of social impact and community engagement. As Mexico moves forward, the government must build on early successes while ensuring the legal, regulatory, and judicial certainty that will buoy investor confidence and guarantee further progress.
Brazil’s compelling energy profile demands continued consideration. The country is the eighth largest energy consumer in the world and third largest in the Americas. In terms of production Brazil is the ninth largest globally and trails only the United States and Canada in the Western Hemisphere. In South America, Brazil is second only to Venezuela in oil production terms. But the country faces critical questions for attracting energy investment.
Panama is thriving. The country is riding a wave of prosperity that has seen the nation become one of Latin America’s fastest growing, at an average 8 percent annually. Even as global growth slows, Panama’s economy is projected to expand at a rate of 5.5 percent over the coming three years. Energy demand is expected to keep pace at between 4.5 – 5 percent per year. Still, the rise in energy demand must be met by new investment, supply, and infrastructure. With the country’s first natural gas power plant coming online in 2018, Panama is heading in the right direction.
Communities across Latin America have become increasingly engaged and empowered to make decisions that seek a balance between economic development, environmental conservation, and upholding cultural traditions and ways of life.