To the Editor: Mary O’Grady, WSJ — Will Mexico Welcome Wildcatters?

It is a good thing that Mexico’s finance minister was available for an interview to talk about energy. At least he acknowledges that the topic is one that the Journal’s readers would like to hear about.

His story-line, however, is but a melodic variation on Brahms’s Lullaby. It is the big picture, not the details, that need to be worked out, starting with the orthodoxy that it is the State that sets all energy prices, from electricity to gasoline.

To ponder why energy is “expensive” in Mexico is to ponder why the political class keeps a closed energy economy without market signals by competitors. Mexico imports expensive LNG cargos for this reason: the absence of gas transportation pipelines that compete with those of Pemex, coupled with the absence of a secondary capacity market, means that Pemex and the ministry are operating in the dark without the information that would have prompted pipeline investments in a timely fashion.

The new PRI has invented the rhetorical figure of “expensive energy” as a way to change the conversation. The answer to the question about wildcatters is “no.”

Read O’Grady’s op-ed article published in The Wall Street Journal by clicking here.

George Baker

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Mexico Energy Intelligence

Baker & Associates offers niche-market business and policy intelligence related to Mexico's oil and gas, power and chemical industries. Over 1,000 reports have been issued in the last 20 years. Subject matter expert and publisher George Baker, who directs the firm, has carried out consulting assignments starting in the late 1970s at the height of the Oil Boom in Mexico. He brings bilingual and bicultural skill-sets to understanding and responding to challenges of business and public policy, coupled with a deep familiarity with the history and idiosyncrasies of the Mexican operating environment.