Can we get past the “Next Place to Drill” in Mexico?

In Mexico, recent energy reforms have promised to boost the economy. It is now in fact considered the biggest hope of President Pena’s Administration. But now many feel it could become the great climate crime of his legacy.

In the beginning of 2015, there were fifteen thousand layoffs of workers that were providing services in the outsourcing scheme for PEMEX, the Mexican oil company in Ciudad del Carmen, Campeche in the South of Mexico. Crude oil prices fall due to the economic activities. Campeche’s economic growth last year was about -4.7%, which puts the state at the bottom of the list compared to other Mexican states.

The impacts of the oil production and the volatility of oil prices are visible in the economic, social and environmental spectrums of Ciudad del Carmen. The increasing rate of crimes and insecurity became the consequences of the layoffs. Socially, there is an important difference between the salaries of qualified workers in the sector and families with low income and poor education working in the service industry.

Environmentally, the city is part of the Natural Protected Area of the Terminos Lagoon which is also a RAMSAR site that protects 705 thousand ha of rivers, sea and mangroves in the state of Campeche. Carmen’s located in a protected area of the island. Due to the economic development of the city, the conservation of mangroves and forest reserves are sensitive topics. They represent an everyday battle between the government development policies and the monetary pressure. It forces to choose between developing housing projects for high income families, shopping malls and offices instead of preserving the forests.

What are the benefits of the Mexican Energy Reform? As written, the legislation is brilliant with the best intentions of increase productivity. In practice, it depends in the oil prices, environmental and safety legislation, and human resources to being implemented correctly. What is the cost of the petroleum industry located in a region with abundant natural resources? The growth of the city and the expansion of the industry put the ecosystem in danger because of the pollution in air, water and land. It also makes the region more sensitive to climate change impacts without mangroves to protect the coasts and forests to control the rising temperatures and absorb water from heavy rain.

The petroleum industry represents 30% of Mexico’s gross domestic product. Taking this into account while looking at the big picture, the petroleum industry might be holding us back instead of boosting our economy. Mexico could diversify its investments, increasing the solar energy market, not relying in petroleum and gas as its major energy source. In analogy, fossil fuels are our drug. We know they are not good for us and our development. The cost they have in the lives of future generations is huge but we don’t seem to be able to stop drilling. We want shale and drill in the deep water horizon when we know is time to move forward.

The cost of not acting now to preserve our natural resources and mitigate climate change is proven to be higher that accepting the reality. Fossil fuels should be conserved in the future if we want the next generations to enjoy clean water and green fields.