Mexican President Andrés Manuel López Obrador takes political loss over rejected energy bill

By April 19, 2022

After failing to reach the votes needed in Congress, Mexican lawmakers shut down President Andrés Manuel López Obrador’s controversial energy reform bill, marking the first political loss for the populist leader during his term. 

Andrés Manuel López Obrador’s (AMLO) energy reform aimed to redefine the energy industry in the country by giving state-owned energy companies at least 56% of market participation, leaving the private sector as minority investors in the country’s energy supply. 

During a vote on Sunday, the bill received 275 votes in favor and 223 votes against it. While AMLO’s political party, MORENA, holds the majority in both congressional houses, the required two-thirds of approval to pass the bill was frustrated by Mr. López Obrador’s opposition in Congress. 

Since he was first elected in 2018, the 68-year-old president had enjoyed relatively uncontested political power by securing historical support from voters and in Congress, thanks in large part to the ruling MORENA party.

Following the mid-term elections in the summer of 2021, MORENA had lost the absolute majority achieving 40% of seats in the lower house and 47% in the senate but maintaining relative influence thanks to allied political parties. 

By 2021, AMLO had pushed 36 different initiatives, which 77% were fast tracked and approved by the parliament thanks to MORENA and its allies. 

As a response, dissident political parties have allied under the “Va por México” movement — a coalition group composed of the three biggest political parties in Mexico outside of MORENA. 

According to political analysts and critics, the repeal of Mr. López Obrador’s energy bill is a significant setback for MORENA and could signal AMLO’s congressional opposition setting a precedent for the upcoming presidential elections in 2024. 

Former President Vicente Fox praising the congress results. 

For his part, Mr. López Obrador condemned the results labeling legislators who voted against the reform as “traitors” accusing them of serving the interests of foreign companies. 

“Yesterday, a group of legislators committed an act of treason against Mexico, who instead of defending the interests of the people, of the nation, instead of defending the public interest, became outspoken defenders of foreign companies that are dedicated to stealing,” said Mr. López Obrador at his morning press conference. 

According to Mr. López Obrador and his allies, the bill was meant to rescue state-owned companies that have been impoverished and targeted by foreign companies with the help of past administrations. 

Specifically, AMLO has pointed to Spanish electric transnational, Iberdrola, which has been accused of “looting” the country’s energy industry for years as well as lobbying against his energy reform. 

Mexico represents 2% of Iberdrola’s foreign investment. In 2019, the Spanish conglomerate generated 16% of the country’s energy. 

On Sunday, lawmakers pushing for the energy bill pointed out that Iberdrola has exploited the Mexican industry by purchasing electricity produced in the country and selling it abroad at higher prices. 

Federal legislator Andrea Chavez explaining Iberdrola’s alleged “scam”

The debate on Iberdrola generated criticism to such an extent that members of MORENA requested that opposition Congresswoman Margarita Zavala be prevented from voting over her husband, former President Felipe Calderon’s alleged professional ties with Iberdrola. 

For now, Mr. López Obrador has responded he will continue to protect the country’s resources by issuing a mining law to nationalize the country’s lithium reserves. 

The bill was fast-tracked and approved by MORENA and its allies after congressional opposition decided to walk away from the debate.