Regulatory Reform in Mexico's Natural Gas Industry
Title | Regulatory Reform in Mexico's Natural Gas Industry PDF eBook |
Author | Juan Rosellón |
Publisher | World Bank Publications |
Total Pages | 42 |
Release | 2001 |
Genre | Gas industry |
ISBN |
Liberalization of the natural gas industry is complex because the sector combines activities with natural monopoly characteristics with activities that are potentially competitive. The challenges are compounded when the state opts to retain vertically integrated monopolies in otherwise contestable segments of the industry. Regulatory issues associated with partial liberalization of natural gas markets are analyzed through a case study of Mexico.
Regulatory Reform in Mexico's Natural Gas Sector
Title | Regulatory Reform in Mexico's Natural Gas Sector PDF eBook |
Author | International Energy Agency |
Publisher | International Energy Agency |
Total Pages | 184 |
Release | 1996 |
Genre | Business & Economics |
ISBN |
Regulatory Reform in Mexico's Natural Gas Industry
Title | Regulatory Reform in Mexico's Natural Gas Industry PDF eBook |
Author | Juan Rosellon |
Publisher | |
Total Pages | 37 |
Release | 2016 |
Genre | |
ISBN |
Liberalization of the nat ...
Regulatory Reform in Mexico's Natural Gas Industry
Title | Regulatory Reform in Mexico's Natural Gas Industry PDF eBook |
Author | Jonathan Halpern |
Publisher | |
Total Pages | 42 |
Release | 1999 |
Genre | Air |
ISBN |
Abstract: January 2001 - Liberalization of the natural gas industry is complex because the sector combines activities with natural monopoly characteristics with activities that are potentially competitive. The challenges are compounded when the State opts to retain vertically integrated monopolies in otherwise contestable segments of the industry. Regulatory issues associated with partial liberalization of natural gas markets are analyzed through a case study of Mexico. The natural gas industry combines activities with natural monopoly characteristics with those that are potentially competitive. Pipeline transport and distribution, which have natural monopoly characteristics, require regulation of price and nonprice behavior. Production is a contestable activity, but in a few countries (including Mexico) it remains a state monopoly. Gas marketing is also contestable, but the presence of a dominant, upstream, vertically integrated incumbent may pose significant barriers to entry. Market architecture decisions"such as horizontal structure, regional development, and the degree of vertical integration"are also crucial. Rosellón and Halpern report that Mexico has undertaken structural reform in the energy sector more slowly than many other countries, but it has introduced changes to attract private investment in natural gas transport and distribution. These changes were a response to the rapid growth in demand for natural gas (about 10 percent a year) in Mexico, which was in turn a response to economic development and the enforcement of environmental regulations. The new regulatory framework provides incentives for firms to invest and operate efficiently and to bear much of the risk associated with new projects. It also protects captive consumers and improves general economic welfare. The continued vertical integration of the state-owned company Pemex and its statutory monopoly in domestic production posed a challenge to regulators. Their response in liberalizing trade, setting first-hand sales prices, and regulating natural gas distribution makes the Mexican case an interesting example of regulatory design. As the first phase of investment mobilization and competition for the market in Mexican distribution projects concludes, remaining challenges include consistently and transparently enforcing regulations, coordinating tasks among government agencies, and ensuring expansion of gas transport services and domestic production. A key challenge in the near term will be fostering competition in the market. In strengthening the role of market forces, one issue is Pemex's discretionary discounts on domestic gas and access to transport services, made possible by its monopoly in domestic production and marketing activities and its overwhelming dominance in transport. The main instrument available to the regulator is proscribing Pemex contract pricing, but more durable and tractable instruments should be considered. This paper"a product of the Finance, Private Sector, and Infrastructure Sector Unit, Latin America and the Caribbean Region"is part of a larger effort in the region to evaluate and disseminate lessons of experience in designing policies to improve the quality and sustainability of infrastructure services. The authors may be contacted at [email protected] or [email protected].
Price and Rate Regulations for the Mexican Natural Gas Industry
Title | Price and Rate Regulations for the Mexican Natural Gas Industry PDF eBook |
Author | Juan Rosellón |
Publisher | |
Total Pages | 74 |
Release | 1997 |
Genre | Gas industry |
ISBN |
Regulation of Mexico's Natural Gas Industry
Title | Regulation of Mexico's Natural Gas Industry PDF eBook |
Author | Héctor Olea |
Publisher | |
Total Pages | 26 |
Release | 2005 |
Genre | Gas industry |
ISBN |
Natural Gas Policy Change in Mexico. The Political Economy of State Ownership and Regulation (1995-2018).
Title | Natural Gas Policy Change in Mexico. The Political Economy of State Ownership and Regulation (1995-2018). PDF eBook |
Author | Rafael Armando Aguirre Ponce |
Publisher | |
Total Pages | |
Release | 2021 |
Genre | |
ISBN |
A reform of the constitutional bases of the oil and gas industry in Mexico took place in 2013 (with sweeping changes to secondary legislation through 2014). Private and foreign production of hydrocarbons became legal after almost six decades of national monopoly --and 75 years after the revolutionary regime nationalized the assets of foreign producers. A wholesale market for electricity was also put in place. These legal reforms started to crystallize in 2018, as private producers started to have access to the networks carrying electricity and gas across the nation. This research presents a retrospective examination of 23 years of policy implementation in the natural gas industry of Mexico (1995-2018). The dissertation pays central attention to the patterns of state intervention that have characterized the national economy and that have contributed to shape the outcome of two policy packages pursuing liberalisation (one starting in 1995 and the other in 2013 and 2014). The research is based on a classical political economy approach, drawing on the literature on Varieties of Capitalism and Varieties of State Capitalism. The study centers on the relations between the players in the sector: their constraints and resources, against a backdrop of other economic policies affecting energy. Importantly, this study considers regulation as a mechanism of economic coordination. As a process-tracing case study, this thesis sets out to elucidate the distinctive factors that contributed to produce the current organization of the natural gas sector in Mexico --one where, ironically, liberalisation has been possible thanks to the deployment of a new state-owned enterprise. Three factors stand out as characteristic in the Mexican trajectory towards liberalisation: the strength of the national oil company as an obstacle of upstream liberalisation for almost two decades after 1995; the absence or weakness of constituencies supporting the restructuring of the sector (large industrial consumers, local distributors), and the sudden restructuring of supply and demand patterns, with the state-owned electricity enterprise emerging as a dominant trader. The new centrality of the electricity SOE and an Independent System Operator (also an SOE) underscores the limits of the new, more competitive, structure of the Mexican natural gas industry.