Transnational corporations are pressing Mexico to open up its energy sector as part of this year’s government review of the US-Mexico-Canada agreement. as day As reported, Larry Rubin, head of the American Society of Mexico, recently emphasized the need for a trade agreement to advance North American energy integration and establish clear rules for private investment in the energy sector.
At the same time, the Mexican government is moving to reopen the country to hydraulic fracturing (fracking), claiming it will help achieve “energy sovereignty” by reducing dependence on natural gas imports from the United States. President Claudia Sheinbaum’s plan to exploit “unconventional” gas reserves marks a significant shift from the previous administration’s critical stance on fracking.
Mexican civil society organizations strongly opposed Shinbaum’s plan, led by Mexican Alliance Against FrackingAn alliance of over 40 companies. Beyond the environmental risks, there is an obvious conflict between national sovereignty goals and opening fracking to public-private projects that use foreign companies’ “new technologies.”
The USMCA allows US corporations to sue the government of Mexico in international tribunals for disputes related to the hydrocarbon sector (oil and gas). If the government strikes fracking-related deals with US companies, Mexico will be vulnerable to more potential lawsuits in addition to the more than 20 pending lawsuits already worth several billion dollars.
The fossil fuel industry has filed more of these “investor-state” lawsuits than any other sector worldwide. So far, oil and gas companies have filed 93 cases against the government in supranational courts, most of them with the World Bank’s International Center for the Settlement of Investment Disputes.
Industry groups claim that their “new technology” reduces the adverse effects of fracking But scientists, health experts and environmental organizations argue that these innovations are often a form of “greenwashing” that doesn’t address fundamental risks.
“New technologies are making fracking more dangerous, more profitable and more attractive for fossil companies, but no less harmful to the environment and human health,” Greenpeace states.
Experts at the Yale School of Public Health note that 65 percent of the chemicals used in the fracking process lack toxicity data, meaning claims of being “green” may be the result of insufficient research.
D Yale experts also warns that fracking is associated with negative health effects for local residents, including adverse pregnancy outcomes and higher cancer, hospitalization and asthma rates. They also note that some fracking-related operations are located near low-income communities, “exacerbating their growing burden of environmental and social injustice.”
as Earthwork And others have concluded, oil and gas wastewater injection can also cause earthquakes. Fracking even causes earthquakes. For example, in Oklahoma, the number of earthquakes greater than 3.0 has increased from an average of less than five per year (before fracking) to about 40 per year.
Such serious problems could eventually lead the Mexican government to resort to defensive measures that could, in turn, provoke costly investor-state lawsuits. Other governments have already experienced this fate.
US company Lone Pine Resources has sued Canada for $108 million under the North American Free Trade Agreement after the province of Quebec revoked a fracking permit in the St. Lawrence River. Ultimately, the tribunal ruled in favor of the government, but the case contributed to Canada’s withdrawal from supranational arbitration in the USMCA (see friend of the court Submitted by Boston University’s Global Development Policy Center.
The Energy Charter Treaty, which has more than 50 member countries, is also in crisis, as investors have resorted to its dispute settlement mechanism to challenge fracking regulations. Many European countries have withdrawn or announced their withdrawal from the agreement.
Large corporations are involved in fracking, incl SLB (formerly Schlumberger), Baker Hughes and Halliburton, already have operations in Mexico. While Shinbaum denied that his plan would involve “asset transfers” to these or other transnational companies, inviting them to be part of the business in Mexico is cause for serious concern. The pursuit of “energy sovereignty” should not come at the cost of sacrificing true national sovereignty or the search for alternative energy sources.
As long as the Mexican government remains part of the investor-state regime, it will invite predatory companies to come into the country and threaten the environment and public welfare.
A Spanish version of this article was originally published day.
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Previously published with inequality.org Creative Commons License
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