Mexican presidents are limited to one six-year term, known as a sexenio, without the possibility of re-election. This is a byproduct of the 35-year rule of Porfirio Diaz, who served seven presidential terms in the late 19th and 20th centuries. His dictatorial rule was finally ended by the Mexican Revolution, which was followed by an almost 20-year period of volatility and intense political machinations. Several groups tried to consolidate power through assassinations, coups, and countercoups. By 1929, the situation stabilized with the formation of what would eventually become known as the Institutional Revolutionary Party (PRI). The PRI coalesced the different power centers into a central and homogenous body that ruled Mexico for another 70 years. One element that allowed for that long-term continuity was the energy industry, with revenue from the country's oil production filling state coffers for decades. However, now the electorate will have to decide on two different visions of what energy will mean for Mexico as the world begins the energy transition in earnest.

The upstream space was not the only area that Lopez Obrador decided to focus his attention. The opening of the power generation sector in 2013 saw massive amounts of foreign capital invested to build pipelines from the US Permian basin to supply gas-fired electricity plants in Mexico and wind and solar facilities. The idea was that an open market would diversify supply, increase productivity, and reduce electricity costs. However, Lopez Obrador felt foreign companies were "over-prioritized" in the 2013 reform. For example, private firms were not obliged to pay any fees to CFE when they wanted to distribute power through transmission lines, which are government-owned and maintained. Lopez Obrador saw an eroding market share for CFE as a concern and sought legal mechanisms to strengthen the state-owned institution. He's been a massive proponent of Mexico's energy sector but wants it controlled and owned by Mexican state institutions rather than outside interests.

The two leading presidential candidates are only now expanding on their proposed energy policies, with both citing a push toward renewables as underpinning the next sexenio. Xochitl Galvez, the opposition coalition candidate, has been more vocal in supporting foreign investment in non-fossil fuel projects to supply cleaner and cheaper energy to the Mexican market. Less loudly, she's spoken pragmatically about the oil and gas industry, trying to find a balance between the importance of Pemex as a freestanding institution and private investment as a potential generator of revenue for the state, including restarting the bid rounds that have stalled under Lopez Obrador.

The ruling Morena party candidate, Claudia Sheinbaum, is Lopez Obrador's handpicked successor and has been more cautious when discussing her energy policy. In the run-up to this year's election, she's ostensibly obliged to toe the party line but believes that Pemex and the CFE can and will be the architects of Mexico's future energy space. Her academic background as an energy engineer and her work at the United Nations on the Intergovernmental Panel on Climate Change (IPCC) suggests that she desires to make her mark on the energy sector in Mexico rather than follow unquestioningly in Lopez Obrador's footsteps. Her true intentions will only become known if she assumes the presidency. Either candidate will have to deal with Mexico being one of only two G20 countries that have not set net zero emission targets. This will need to be corrected, which means some dramatic change will be in the air in 2024.                

Probably the most pressing energy issue the incoming president will have to face is natural gas. Mexico has a robust and growing demand for natural gas that spans multiple industries, including the all-important power generation sector. Mexican demand for natural gas is set to rise to a peak of 88 billion cubic meters (Bcm) by 2030. That same year, it is forecasted that natural gas imports will reach 70 Bcm, almost all piped gas from the US. This means that Mexico will import 80% of its supply needs from abroad in 2030 while only being able to satisfy 20% of its demand from domestic production. This trend is forecasted to continue. By 2040, the country will need 78 Bcm of gas to meet the demand projection but will only produce 16.65 Bcm domestically. Mexico will be highly dependent on the US for supply over the next two decades, which, for the moment, isn't necessarily an issue. The piped gas is sold on long-term contracts, mostly linked to Henry Hub pricing, meaning that Mexico currently accesses gas at a much lower cost than countries dependent on LNG imports. This is one condition that makes 'nearshoring' to Mexico so attractive. But depending wholly on a foreign provider is fraught with aboveground risk, some of which is predictable and some of which is not. The war in Ukraine has exposed the latent fragility of depending on a single supply source for energy needs. Mexico's current situation mirrors where Western Europe was less than 24 months ago, although the political-economic factors may differ on a macro scale. Something must be done to mitigate this overdependence, but precisely what that is will be left to the next president.