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1
Mexico Country Analysis Brief
http://www.eia.doe.gov/emeu/cabs/mexico.html
www.eia.doe.gov
United States
ela
Energy Information
Administration
Energy Information Administration
April 1999
Mexico
A member of NAFTA and the OECD, Mexico is a major non-OPEC oil producer and has the world's sixth largest oil company (Pemex). Over
half of Mexico's net oil exports go to the United States.
Press here for more details on Mexico.
GENERAL
Tijuana
BACKGROUND
Ensenada
UNITED STATES
Despite the challenges of
sustained low oil prices
1
Ciudad
Juárez
and the continuing
worldwide emerging
markets economic crisis,
Guaymas
Chihuahua
both of which are
Nuevo Laredo
affecting the Mexican
Topolobampo
Gulf of
economy, the country's
Monterrey.
economic outlook is
Matamoros
Mexico
CUBA
guardedly positive.
La Paz
Durango
Although Mexico's
economy in 1998 was
North Pacific
Mazatlán
Tampico
affected by these factors,
Progreso
Cancún
Ocean
León
Mérida
it still posted a
Puerto Vallarta:
Tuxpan
4.6%-4.8% real growth
Guadalajara
Caribbean
rate, due in large part to
Veracruz
Sea
MEXICO
increasing economic ties
Manzanillo
to the United States,
Lázaro Cárdenas
BBLIZE
Oaxaca
international confidence
0
200
400 km
Acapulco
in the strength of the
0
200
400 mi
Salina GUATEMALA
HONDURAS
Mexican economy, and
Cruz
continued economic and
political reforms. Mexico's real growth rate in 1999 is forecasted to be 2.1%. According to the OECD (of which Mexico has been a member
since May 1994), economic growth in 1999 will depend on several factors, including: continued implementation of structural reforms; prudent
fiscal policy; a monetary policy aimed at further reducing inflation; and stable financial markets. Another important factor is strong exports,
which are expected to face greater competition from Asia.
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Mexico's government was forced to slash its budget, which is calculated using a specific oil price, three times in 1998 (by a total of $4 billion)
due to historically low oil prices. Overall, oil accounts for about 7% of Mexico's total export earnings, and about 33% of government revenues.
Mexico loses about $1 billion for every $1 per barrel drop in oil prices, and the 1998 collapse in oil prices thus contributed to a worsening trade
deficit and repeatedly threw the government budget into disarray. Low oil revenues also have threatened to offset continued growth in Mexico's
export sector, which has been a major force behind Mexico's economic recovery. As a result of Mexico's tightening fiscal situation, in the last
year the government has eliminated subsidies for tortillas--Mexico's staple food--and instituted unpopular tax hikes and higher prices for
government goods and services, including a 31% increase in gasoline prices and a 15% surcharge on phone services.
Mexico continues to open up its political process to further democratization. There are three main parties in Mexico: the ruling centrist
Institutional Revolutionary Party (PRI); the center-right National Action Party (PAN), and the leftist Party of the Democratic Revolution
(PRD). The PRI was formed in 1929, and up until only a few years ago, had won every election for President, and controlled every one of
Mexico's 29 states. However, in the past few years, opposition parties have won numerous gubernatorial elections, and in July 1997, gained
control of the federal government's lower house the Chamber of Deputies for the first time ever. The next election for president is
scheduled for 2000. President Zedillo is not eligible to run.
The United States is Mexico's major trading partner and the country's primary source of foreign direct investment. In December 1997, Mexico
displaced Japan as the second-largest importer of U.S. goods, after Canada. This relationship has been fostered through official mechanisms
including the U.S.- Mexico Binational Commission (composed of U.S. cabinet officials and their Mexican counterparts) and the North
American Free Trade Agreement (NAFTA). Implemented in January 1994, NAFTA has liberalized Mexico's trade with the United States and
Canada. Indeed, future trends point to even closer ties among the United States and Mexico, in terms of economic integration, immigration, and
energy ties. The U.S. merchandise trade deficit with Mexico has remained in the $15-20 billion range since the start of the Mexican peso crisis
in late 1994, and these large U.S. trade deficits with Mexico have been a source of friction in U.S.-Mexican bilateral relations. However, overall
Mexican import demand has increased as Mexico's economy has recovered from its severe 1995 recession, resulting in the country's overall
monthly trade balance turning negative in late 1997, after three years in positive territory.
With the Mexican economy predicted to grow at an average rate of just over 5% per year for the next two decades, energy demand also is
expected to increase during this time period. Oil and natural gas will likely remain the dominant energy sources through 2020, accounting for
well over 80% of total energy consumed. The Mexican state still dominates domestic energy resources at all levels, and unlike most Latin
American energy markets in the past decade, Mexico thus far has resisted substantial amounts of privatization. However, dwindling oil
reserves, increasing fuel deficits, poor provision of electricity, and increasing imports of raw materials for the nation's petrochemical sector are
all beginning to expose the large inefficiencies within the energy sector. Up until now, the government has allowed only limited private
participation in the country's energy sector, such as access to transmission and distribution facilities in the natural gas industry, and
self-generation of electricity in the power sector. Under the Mexican constitution, the government maintains a monopoly on direct access to
natural resources, and this monopoly continues to prevent the flow of private investment required to improve conditions. In the meantime,
businesses must rely on the government to provide energy services and raw materials to operate.
Despite an overall 43% increase for 1999 federal energy spending over 1998 levels, principally for increased electricity capacity and oil
industry investments, Mexico still plans to tap the private sector for about $8.4 billion of the $14 billion in new investment planned for 1999.
This private investment represents a large increase from 1998 levels, and will come both from the financial markets and direct investment.
Mexican energy officials plan to award contracts to private companies to lay down natural gas pipelines, construct new power plants, and to
modernize and expand six oil refineries (in part to expand Mexican production of unleaded gasoline). This increased dependence on foreign
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investment is further necessitated due to ever tighter federal budgets, as well as the need to control the fiscal deficit. Budget outlays for Pemex
and the Federal Electricity Commission (CFE), which generates and distributes power in Mexico, have been cut, and there also have been cuts
in energy subsidies. In the case of CFE, the government is effectively shrinking the share of national power output it directly controls by
licensing private companies to build, own and operate generation facilities.
Due to Mexico's expected future electricity demand growth, especially in the industrial and fast-growing northern region, there is an
expectation of ever-greater energy interdependence between northern Mexico and Texas in the coming years. Both gas and electricity
consumption in Mexico will continue to grow due to privatization efforts, growth in energy demand, advances in gas generation technologies,
and growth in independent power production. Mexican tariffs on the imports of natural gas will be reduced to zero by 2003 (they are presently
set at 4%), and this is viewed as a big opportunity for U.S. natural gas exporters.
OIL
Pemex, Mexico's state oil company, is the world's sixth largest oil company, the single most important entity in the Mexican economy, and a
symbol of Mexican sovereignty and independence. Nationalized in 1938, it controls virtually all areas of the oil and gas sectors, and provides a
major source of government revenues. Pemex enjoys a monopoly over exploration, development, refining, transportation, storage, and
distribution of the country's hydrocarbons, a position guaranteed by Article 27 of Mexico's Constitution. Per Article 27, foreign participation in
Mexico's upstream sector is limited to service and performance contract arrangements and turnkey drilling contracts. Pemex is divided into four
primary areas: Exploration and Production; Refinery; Gas and Basic Petrochemicals; and Petrochemicals. President Zedillo has reaffirmed
many times in recent years that Pemex will remain in state hands. This is in spite of the oil sector being badly in need of modernization and
investments.
For 1999, Pemex will concentrate its spending on developing offshore basins in the Gulf of Mexico and building a new natural gas processing
facility that will allow the oil monopoly to feed a growing gas supply network for industry. Pemex has announced that it will also seek $5.8
billion in private investments to modernize refineries and boost production, as operating budgets have been slashed three times in 1998 due to
lower oil revenues. The Mexican government also plans to continue its troubled project of attempting to sell minority stakes in Pemex's
petrochemical plants to private investors. One of the main challenges for Pemex is the amount of money it must turn over to the federal
government each year in the form of taxes and special levies on production. Since oil prices began sinking in 1997, talk has increased about
granting Pemex greater budget autonomy, although nothing has yet materialized on that front. Despite the current great need to invest billions
in major upgrades, such movements towards even minimum privatization are politically sensitive, and raises fears of lost jobs. The prospect of
any substantial stake for the private sector in the oil sector therefore appears unlikely in the medium term.
Mexico's proven oil reserves were estimated at about 48 billion barrels by the Oil and Gas Journal, as of January 1, 1999. In February 1999,
Pemex officially downgraded its hydrocarbon reserve figures to about half this number, although it is not clear what this number includes.
Nonetheless, Mexico has the second largest oil reserves in the Western Hemisphere after Venezuela. In 1998, Mexico produced about 3.52
million barrels per day (bbl/d), of which 3.07 million bbl/d was crude, and consumed about 1.9 million bbl/d. Net oil exports amounted to 1.5
million bbl/d, of which 1.33 went to the United States. Crude oil production increased by about 2.4% over 1997 levels, following a 5% increase
from 1996.
The biggest story for the Mexican oil sector in 1998 was record low oil prices, which seriously impacted Mexico's federal budget and its plans
for capital investments in the energy industry. Petroleum export revenues totaled $7.14 billion in 1998, a drop of $3.9 billion from the previous
year. The average price of Mexico's export crude fell to $10.15 per barrel in 1998, down 38% from 1997. The overall average price for Mexican
crude fell by $6.61 per barrel in 1998, to $10.16 per barrel. The average price hit its lowest level on December 10, 1998, at $6.91 per barrel. By
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early 1999, Mexico was receiving prices for its generally heavy sour exports at about $6 - $7 per barrel, although prices started to rise in March
1999. As a result of low oil prices, Pemex reported that operating profits in the first quarter of 1998 were down 39% from the first quarter of
1997 ($2.98 billion vs. $4.88 billion). Pemex loses an estimated $1 billion annually for every dollar per barrel decline in its average oil price.
About half of all Mexican crude oil production is exported. The export price of Mexican crude in December 1998 was the lowest monthly price
reported since 1980.
Mexico's current oil development efforts focus mainly on the giant offshore $5.3 billion Cantarell heavy oil project in the southern part of the
Bay of Campeche. Cantarell, which contributes about 1.4 million bbl/d of Mexico's total crude oil production, alone accounts for more than half
of Pemex's investment budget. Pemex plans to spend nearly $5 billion between 1998 and 2011 to boost production even further, including
nearly $1 billion on the world's largest nitrogen production and injection scheme to raise reservoir pressure and increase per-well production of
heavy Mayan crude. Other new Mexican oil development projects include the heavy-crude Ku-Maloob-Zaap complex in the offshore
Campeche basin, and the Grijalva Delta light oil project. Although Mexico has ambitious plans for further exploration and production of oil,
unlike the exploration finds of the late 1970s, today's exploration is more difficult and requires advanced seismic techniques and instruments.
Mexico produces three grades of crude oil: heavy Maya-22, which accounts for more than half of total production; light, low-sulfur Isthmus-34
(about 28% of total production); and extra-light Olmeca-39 (about one-fifth of total production). About three-fourths of Mexico's crude oil
production comes from offshore sites in the Campeche Sound of the Gulf of Mexico, which contain about 15 billion barrels of proven crude oil
reserves (according to Mexico's first audited reserves estimates, which were released in March 1997).
Historically low oil prices, and Mexico's great dependence on oil revenues, has prompted the country to push for oil production cuts in an effort
to boost prices. Three times in the past year, Mexico has played active roles in agreement among OPEC and non-OPEC oil producers. In March
1998 in Riyadh, Mexico announced a deal (along with Saudi Arabia and Venezuela) under which it pledged to cut its own crude oil exports by
200,000 bbl/d as part of a worldwide deal to cut supply by 3.1 million bbl/d. Following this agreement, Mexico's crude price increased to more
than $10/bbl by early May, but still remained well below the federal budget's target price for 1998 of $12.50/bbl. In June 1998 in Amsterdam,
Mexico pledged to cut its oil exports further. In March 1999, Mexico agreed to a further 125,000 bbl/d cut. In order to reduce oil exports as
agreed, Pemex plans to push more Mexican crude into domestic refineries while cutting back on oil product imports.
Negotiations between the United States and Mexico continue on the issue of two "doughnut holes," or gaps, lying outside the respective
countries' 200-mile Exclusive Economic Zones (EEZs) in the oil-rich western Gulf of Mexico. The western "doughnut hole" covers a
4.7-million acre area on the outer continental shelf; a similar "doughnut hole" also exists in the eastern Gulf. In November 1997, the U.S.
Senate ratified a 1978 treaty on maritime limits in the Gulf of Mexico, setting both nations' borders of EEZs at 200 nautical miles into the Gulf.
The Mexicans had stated that they would not discuss the "doughnut hole" issue until the border treaty was ratified by the U.S. Senate (the
Mexican Senate ratified it soon after it was completed). The issue has become important in recent years as offshore drilling technology has
improved significantly, opening up for the first time the 10,000-foot waters of the western "doughnut hole." This resolution of a 19-year old
boundary proposal in the Gulf cleared the way for both countries to discuss how to divide mineral rights of these areas. The westernmost area,
or western gap, is the one being eyed by petroleum companies for its large reserves of oil and gas. The eastern gap lies beyond the territorial
waters of the United States, Mexico, and Cuba, but it is not currently being considered for exploration. Exploration in these deep waters of the
Gulf has converged on a triangular-shaped area that is beyond the 200 nautical mile limit of U.S. and Mexican territorial waters. In order to
divide the area, the U.S. is proposing that the two nations agree upon an equal distance from each country's 200-mile limit. Mexico's position
on this proposal is still being defined. In order to come up with the land boundaries, the countries conducted surveys in 1998 at the same shore
points from which the initial treaty was measured (southern Louisiana, points on the Yucatan Peninsula, and points near the Rio Grande River).
Both parties now agree upon the boundaries. With the boundary issues resolved, both parties are further discussing the equal distance method.
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The issue of transboundary resources has been raised by the Mexicans, as oil can seep from underneath the Mexican leases into wells drilled on
the U.S. side, and as the United States is closer to starting to drill the near-boundary leases, transboundary resources are a concern to Mexico.
REFINING
There is a great need in Mexico for investments in refining and petrochemicals. In fact, petrochemicals accounts for more than $3 billion per
year in trade deficits with the United States, as Mexican factories cannot obtain quality or competitively priced petrochemical products, and
must import them from the United States. However, constitutional and political limitations on foreign involvement in the hydrocarbon sector
will make any substantial participation difficult in the medium term.
Pemex maintains monopoly control over the refining of crude oil and production. As with petrochemicals, Mexico's domestic refineries are in
need of upgrading, and refinery modernization has long been considered crucial to increasing Pemex's production and profitability. Although
Mexico produces about 5% of the world's oil, it does not have sufficient refinery equipment or technology to supply all its own product needs.
Mexico actually exports much of its oil to the United States, and then imports back almost 150,000 bbl/d of refined product. Overall, Mexico
imports a little more than $2 billion per year in oil and gas from the United States. Between 1998 and 2002, Mexican consumption of gasoline
is expected to grow by 3.6% annually on average, according to Pemex estimates. The total trade deficit in lighter fuels (mostly gasolines) has
climbed from $479 million in 1995 to $1.8 billion in 1997. Given this situation, Pemex has been working to expand the country's refining
capacity to process heavy crude oils and to produce higher volumes of lighter fuels.
Mexico has six main refineries. Pemex is in the process of a major modernization drive as part of plans to increase refining capacity. These
plans call for investments of $3.1 billion from 1999-2001. The goal of these investments is for Pemex to produce better quality and
cleaner-burning fuels, reduce imports of gasoline, meet its demand for jet fuel, diesel, gasoline, and other fuels, increase the profitability of its
refineries, and possibly eliminate imports of these products. Plans call for 44 new plants and upgrades to 22 more over five years. In the past
year, Pemex has added three units to the Tula refinery, added two alkylation plants in the Salina Cruz and Salamanca refineries, and is
expanding refining capacity at the Cangrejera refinery.
Three main refinery upgrades, at Ciudad Madero, Tula and Salamanca, have been tendered and are expected to move ahead in the coming
months. However, other planned upgrades required by Pemex, in Minatitlan and Salina Cruz, estimated to cost about $2.4 billion, have been
delayed due to adverse market conditions, and have been pushed back until at least 2000, depending on global financing opportunities
available. Along with Cadereyta, Pemex will build cokers at these refineries to allow the processing of heavier crudes starting in 2002. The
Cadereyta refinery upgrade, a $2.46 billion massive expansion in northern Nuevo Leon state, was awarded in November 1997. The contract
went to South Korea's Sunkyong Engineering and Construction, Germany's Siemens AG, and Mexico's Grupo Tribasa. When work is
completed in late 2000, Cadereyta's capacity to produce jet fuel, diesel, and gasoline will increase sharply.
NATURAL GAS
Until recently, Mexico has not placed as much emphasis on the development and exploration of natural gas as it has for oil. The majority of
natural gas currently is found and produced in association with crude oil. A major constraint has been the lack of investment in pipeline
infrastructure for transporting gas over long distances (most production is in offshore and southern onshore regions while population is
concentrated inland and in the north). However, natural gas is slated to play a more important role in the future as new combined cycle power
plants are built, and existing power plants are converted to use natural gas. Mexico's Energy Regulatory Commission (CRE) expects that
natural gas demand will double over the next decade, and that half of this gas will be used to generate electricity.
Mexico produced about 1.19 trillion cubic feet (Tcf) of natural gas in 1997, from reserves of 63.5 Tcf (as of January 1999). The United States
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exported a total of 38.4 billion cubic feet (bcf) of natural gas to Mexico in 1997, while importing 17.2 Bcf. Imports of natural gas from the
United States have been allowed since January 1996. The current import tariff is 4%, but this is decreasing annually and is set for total
elimination by 2003. Mexico's Energy Ministry expects gas production to increase by an average of 10% annually over the 1998-2000 period.
Domestic demand is expected to grow faster than production, at an average annual rate of 12% between 1998 and 2000, reaching 2.5 trillion
cubic feet (tcf) by 2006 (from around 1.2 tcf in 1997). Investment in Mexico's natural gas market is expected to reach $1 billion in the next two
years. Of that amount, $400 million is expected to be invested in natural gas distribution in Mexico City, and $60 million will be invested in
natural gas distribution in the central Bajio region comprising Leon, Salamanca, Celaya and Irapuato.
A Liberalized Sector.
Mexico's natural gas industry is rapidly becoming the most liberalized of its energy sectors. In 1995, the Mexican Congress approved the
Natural Gas Law, modifying Article 27 of the Mexican constitution. Legislation was enacted to open the natural gas market to private,
including foreign, investors. This includes gas transportation, storage, and distribution, and allows private companies to import and export
natural gas, although it restricts ownership in more than one function within the industry. This legislation liberalized exports and imports,
defined the conditions for first-hand sales, contracts, authorizations, and concessions. It also established the regulatory framework for building
and expanding transmission and distribution pipelines. Pemex holds the exclusive rights for the extraction and sale of natural gas, and therefore
holds the monopoly on all distribution and storage until the time of sale. Thus the growth of the natural gas market is dependent on the actions
of Pemex to establish a competitive market.
CRE is mandated to achieve a competitive, efficient, safe, and sustainable natural gas industry as part of Mexico's efforts at increasing use of
natural gas for environmental, economic and other reasons. CRE's powers include enforcement of regulations, inspections of facilities, issuance
of permits, regulation of prices, overall supervision of the industry, ensuring an adequate supply, security, the promotion of competition, and
the elimination of cross-subsidies. Since this landmark legislation, CRE has been working to create pertinent regulations for transmission,
distribution and storage operations for natural gas, and a more transparent overall policy for pricing, eliminating cross-subsidies, and access to
the national grid. Private-sector participation in these areas currently are subject to permits granted by CRE for 30 years based on competitive
bidding. CRE has already allotted many distribution and transmission concessions in the Mexicali, Hermossillo, and Chihuahua area, and will
allocate more in the Bajio, Tijuana-Tecate-Ensenada, Quetaro-San Juan del Rio-Laguna, and Puebla Tlaxcala regions. The large markets for
residential gas, which currently use LPG, and the emerging needs for gas-fired generation plants will continue to attract investors to the
industry and to press for further liberalization, particularly in the area of LPG. Privatization of natural gas distribution rights will continue over
the next few months.
Most of Mexico's natural gas is produced in the southeastern part of the country, far from major consuming areas in the north and northeast.
Associated ("wet") gas is produced both onshore (primarily in the southern Chiapas and Tabasco regions) and offshore. Natural gas also is
produced in the northeastern part of the country at the country's largest non-associated ("dry") gas field (Burgos), where Pemex has begun an
ambitious plan to increase production from 500 million cubic feet/day (Mmcf/d) in late 1997 to a peak of 1,400 Mmcf/d in 2001. The Burgos
basin has been in production since 1945, with maximum production of more than 600 Mmcfd reached in 1970. Pemex hopes to increase Burgos
production through 3D seismic technology combined with new drilling techniques and hydraulic fracturing. The first major contract ($110
million) for this work went to U.S. firm Schlumberger. Pemex plans to spend $2 billion through 2000 (and $5.5 billion over 15 years) on these
and other efforts at Burgos. By increasing Burgos production, Pemex hopes to supply the growing industrial market of northeastern Mexico,
which U.S. producers also have targeted. In addition, Pemex is considering exporting part of any increased gas production to the United States.
Natural gas consumption in northeastern Mexico pushed by rapid industrial growth, clean air goals, and construction of new gas-fired power
plants -- is expected to increase rapidly during the next decade. In late 1997, natural gas was exported from the United States to Mexico via the
new Samalayuca Pipeline, which crosses the U.S.-Mexican border near Clint, Texas. The pipeline is aimed at supplying the Samalayuca power
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plant near Ciudad Juarez, Mexico, as well as other markets in the area.
COUNTRY OVERVIEW
President: Ernesto Zedillo (since December 1994; next election in 2000)
Independence: September 16, 1810 (from Spain)
Population (1998): 94.3 million
Location/Size: Southern N. America/762,000 square miles (nearly three times the size of Texas)
Major Cities: Mexico City (capital), Guadalajara, Monterrey
Languages: Spanish, Mayan dialects
Ethnic Groups: Mestizo (Indian-Spanish), 60%; Amerindian, 30%; Caucasian, 9%; Other, 1%
Religions: Roman Catholic, 89%; Protestant, 6%, Other, 5%
Defense (8/97): Army: 130,000, Navy: 37,000, Air Force: 8,000, Rural Defense Militia: 14,000
ECONOMIC OVERVIEW
Finance Minister: Jose Angel Gurria
Currency: 1 Peso = 100 centavos
Market Exchange Rate (4/1/99): US$1 = 9.523 pesos
Gross Domestic Product (GDP, market exchange rates) (1998E): $429.8 billion
GDP Per Capita (1998E): $4,405
Real GDP Growth Rate (1998E): 4.6%-4.8% (1999E): 2.5%-3.0%
Inflation Rate (consumer prices, 1998E): 17.0%-18.6% (1999E): 14.8%-16.5%
Unemployment Rate (1998E): 3.2% (official rate)
Major Trading Partners: United States, Japan, Germany, France, Italy, European Union
Current Account Balance (1998E): -$14.9 billion (3.5%-3.9% of GDP)
Merchandise Trade Balance (1998E): $0.62 billion ($14.5 billion with the United States)
Exports : $110.4 billion ($94.7 billion to the United States)
Imports: $109.8 billion ($79.0 billion from the United States)
Major Export Products: Crude oil and products, coffee, silver, engines, motor vehicles, cotton, consumer electronics
Major Import Products: Metal-working machines, steel mill products, agricultural machinery, electrical equipment, aircraft, motor vehicle
and aircraft parts
Total Reserves (non-gold) (1998E): $30.0 billion
Total External Debt (1998E): $174 billion
ENERGY OVERVIEW
Energy Minister: Luis Tellez Kuenzler (appointed 10/20/97)
Total Energy Consumption (1997E): 5.77 quadrillion Btu
Energy-Related Carbon Emissions (1997E): 93.7 million metric tons (1.5% of world carbon emissions)
Proven Oil Reserves (1/1/99E): 48 billion barrels (Note: estimate may be lowered by about half this amount by Mexico)
Oil Production (1998E): 3.52 million barrels per day (bbl/d), of which 3.07 million bbl/d is crude
Oil Consumption (1998E): 1.9 million bbl/d
Net Oil Exports (1998E): 1.62 million bbl/d
Gross Crude Oil Exports (1998E): 1.69 million bbl/d (1.36 million bbl/d to the United States)
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Oil Export Revenues (1998E): $11.5 billion
Crude Oil Refining Capacity (1/1/99E): 1.525 million bbl/d
Natural Gas Reserves (1/1/99E): 63.5 trillion cubic feet (tcf)
Natural Gas Production (1997E): 1.19 tcf
Natural Gas Consumption (1997E): 1.20 tcf
Natural Gas Imports from the United States (1997E): 38.4 billion cubic feet (bcf)
Natural Gas Exports to the United States (1997E): 17.2 bcf
Recoverable Coal Reserves (12/31/96E): 1.3 billion short tons
Coal Production (1997E): 10.3 million short tons
Coal Consumption (1997E): 12.0 million short tons
Net Coal Imports (1997E): 2.5 million short tons
Electric Generation Capacity (1/1/97E): 37.6 gigawatts
Net Electricity Generation (1997E): 164 billion kilowatthours (bill kwh)
Net Electricity Consumption (1997E): 154 BKWh
ENERGY INDUSTRY
Organization: Oil and natural gas - Petroleos de Mexicanos (Pemex), four operating subsidiaries (Exploration and Production, Refining, Gas
and Basic Petrochemicals, Secondary Petrochemicals), Petroleos Mexicanos Internacional (PMI); Electric power - Comission Federal de
Electricidad (CFE); Natural gas and electric power regulation - Comission Reguladora de Energia (CRE)
Major Ports: Gulf Coast - Cayo Arcos, Dos Bocas, and Pajaritos (handle most of Pemex's oil exports), Tuxpan, Ciudad Madero; Pacific Coast
- Salina Cruz, Rosarito
Major Oil-Producing Fields (1997): Cantarell, Abkatun, Ku, Caan, Pol
Major Refineries (1/1/99 Capacity): Salina Cruz (340,000 bbl/d), Tula Hidalgo (320,000 bbl/d), Salamanca (235,000 bbl/d), Cadereyta
(235,000 bbl/d), Minatitlan (200,000 bbl/d), Ciudad Madero (195,000 bbl/d)
Mexico Full Report Mexico Internet Links Mexico: Petrochemicals and Tankers Mexico:Graphs
o:Environment and Renewables Mexico: Electricity
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File last modified: April 8, 1999
Contact:
Lowell Feld
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Fax: (202)586-9753
8 of 9
7/1/99 11:55 AM
Mexico Country Analysis Brief
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9 of 9
7/1/99 11:55 AM
Chavez Mexico one view
last 3 yrs: 5.5% 6DP grath
1998:- 4.8% "
gas will ~ 51%
half of elect from not gas - 2007
private participation in gas
electricity - - 2 playes
limited participation by private sector
3/4 elect from FF
D
6%/yr
$256 investments necessary
-:.
need privitization
competition ettiziencies,
costs
Mazer US NaH Action Plan
CCAP
CCTI
electres
Chavez
Mex total energy Supply: 66% crude alt lignds
18% nat gas
9.5 quads
"sus energy " N 25.4% ind not gas, hydro,
@,
bimass,
I
2,4 grads
population: 1998: 97m 2020. 122m pop granth rate 97/28.162
Svs energy policy: renew resources: solar, wind, gesthermals hydro
not gas
to contribute to itl ettents to mitizate GHG emailsing
switch to not saw
promoting renewables + energy efficiency
1994- began program to convert 70% of fuel oil power
plants to not gas
renewables
installed capacity (MW)
hy dro
10,000
geo
750
world
1.6
solar
11
CHP 231MW installed capacity
endy ethicing - Ilumex, FIVE, voluntary programs, regulation,
day light saing time
avoided capacity: 1689 MW
Actsant. mitizate GHG enasing
:
" local pollutants
de Buen energy consuration - hasat
Danish model - applying to Mexico energy -economic- luv
"MexBrus I" - WB grant
- -engineering model
- then Ghh to econ model
meet w/
Manuel cowt's assistat beding modely effort
5 labs, " labs studies
A background info on SO2 trading
Manuel
# talk to Jae E. e Mexico
has Common baseline for all istitutes
Odon Eneg. Cooperation Agreement
Annex I
Annex II
impacts of daylight savings time - need evidence
-criticized on health, accidents, + labor productivity
Criteria for Primitizing Efforts
bycategary
into
- timetrame-son
policy/reas
- -which ones world have greatest impact
projects
-need to better understand each others' models
- Mex want to understand print trading
- have existing program is Mex but hasn't been
successful-problens w/ monitoring
- provide into on 5021 ideas for GHG
- get into an their experince - description at
law/poling + performance
Joseph E. Aldy
06/03/99 06:44:04 PM
Record Type:
Record
To:
Raymond. @ hq.doe.gov @ inet, phil.tseng @ hq.doe.gov @ inet, Nagelhout.Peter @
epamail.epa.gov @ inet, donez.francisco @ epa.gov @
inet
CC:
Rosalind V. Rasin/CEA/EOP, mark.mazur @ hq.doe.gov
Subject: meeting with Bernardo Flores
The meeting with Bernardo Flores of the Mexican Energy Secretariat has been confirmed for
Tuesday, June 8. We will meet from 10am - 12noon in 324 OEOB. Please email Vickie Rasin (see
cc) your clearance information (date of birth and social security number).
We plan on discussing our experience with economic modeling of climate change and the Mexican
energy secretariat's efforts to conduct modeling. While informal, it would be useful for us to be
prepared to talk about several different topics (but formal presentations are not necessary).
Specifically, I would appreciate it if you could be prepared to discuss the following:
Ray: IAT
Peter: SGM
Phillip: Markal-Macro
Francisco: ongoing cooperation with Mexican environment secretariat
I will open the discussion with an overview of how we use economic modeling to inform the policy
process, and describe the kinds of questions that models can be used to address. From there, I
would like to go to each of you (in the order above) for a brief overview of these topics (e.g., 3-5
minutes) and try to promote an active dialogue with Bernardo. We will use this opening discussion
to identify the key issues that we should focus on for the rest of our meeting.
For more information about what to expect from this meeting, refer to what Bernardo wrote in a
recent email to me:
"In that meeting we could share what our governments are developing on this issue [modeling]. In
the mexican case, we are now building a bottom-up model and we are also working on the
integration of this model with a general equilibrium model in order to evaluate energy, economic and
enviromental policies as a whole."
Thanks for your help with this.
Joe
more into on modeling
how will itl mht behave in future (cilmlet)
- - GCC+oil
- MERGE; EIA
compare modeling results
get preliming results from Mex
Developing Country Participation in International Emissions Trading
If a developing country (a) chooses to adopt a growth target slightly below its business as
usual (BAU) emissions, and (b) trades its emissions allowances internationally, it could
enjoy substantial economic and environmental gains.
Economic Benefits. As potential sellers, developing countries with targets slightly
below BAU projections could enjoy net gains from participation in international
emissions trading, because they can achieve emissions reductions relatively "cost-
effectively" (i.e., at a cost per metric ton of carbon equivalent that is less than the
world trading price). Even with this participation, a country's emissions could
continue to grow above current levels (see figures below).
Environmental Benefits. A world with broad-based participation in international
emissions trading, including participation by countries with growth targets slightly
below their BAU projections, could result in lower global greenhouse gas
emissions relative to a world with narrow participation. Moreover, reductions in
greenhouse gas emissions would generate ancillary air quality benefits through
reductions in sulfur dioxide, nitrogen oxides, and particulate matter emissions.
Benefits of Trade: The following example illustrates (i) a potential growth target, set
slightly below a developing country's BAU projection, and (ii) the economic benefits
available to this developing country through international emissions trading.
(i) Illustration of a Developing Country Growth Target
BAU
target
Greenhouse gas emissions
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
(ii) Marginal Abatement Cost Curve and Gains from Trade in 2010
MC
Price per ton of carbon equivalent
World price of a ton of carbon equivalent
Gains from trade
with target slightly
below BAU
Cost of
meeting
Allowances sold with target
target
slightly below BAU
BAU
Emissions reductions below BAU
emissions
target
These gains from trade represent revenue from sales of emissions allowances less the cost
to the developing country of reducing emissions.
Secretaría de Energía
Economy - Energy - Environment
June 8th, 1999
Washington, D.C.
Index
Secretaría de Energía
Objective
Background
EEE System
Bottom-up Model (BRUS II-M)
Demand
Supply
Scenarios
Computable General Equilibrium Model
Objective
Secretaría de Energía
To design integral public policies (Energy and Environmental) in
order to promote economic growth, social welfare and nature
conservation.
To this end, Ministry of Energy (SE) and Ministry of Environment
(SEMARNAP) are developing reliable quantitative tools which
simulate the Economy-Energy-Environment System and allows us
to evaluate different public policies in the short, mid and long run.
Background
Secretaría de Energía
The Economy, the Energy Sector and the Environment are topics
strongly related.
ENERGY
PUBLIC
POLICIES
ECONOMY
ENVIRONMENT
Background
Secretaría de Energía
When the economy grows, the different consumption sectors begin
to demand more energy to be able to carry out their activities.
Historically, energy consumption in Mexico has grown in the same
average percentage as the GDP.
Therefore, in order to sustain dynamic growth, the Energy Sector
should grow at least at the same rate as the rest of the economy.
Mexico's Energy Sector is an important source of Government
income, which is used to finance infrastructure and social
development.
Energy Sector's sales represented almost 4% of GDP in 1998.
Additionally, oil revenues represented 33% of total public sector
revenues and oil exports represented 6.1% of total exports, which
meant a Government revenue of over 7.1 billion dollars.
Background
Secretaría de Energía
In spite of the above mentioned benefits, the production,
transformation, transportation and consumption of energy have
important implications on the environment. Those activities
generate greenhouse gases emissions (GHG), which cause the
climate change phenomenon. In order to delay this phenomenon,
the growth rate of the emissions must be reduced, specially CO₂.
The current challenge for Mexico's energy sector is to adapt and
evolve in order to maintain its competitiveness, meet expected
demand growth and respect environment. Specifically, the energy
sector must not only keep up with the pace of the economy, but it
must stay ahead, to function as a catalyst for growth.
EEE System
Secretaría de Energía
To simulate the EEE system, the following types of quantitative
models are required:
An engineering model that calculates the consumption and
production of energy, with a bottom-up methodology (BRUS II-M).
An economic model which incorporates economic agents behavior
(Computable General Equilibrium Model).
BRUS II-M
Secretaría de Energía
The BRUS II-M is a long-term simulation model for the Mexican
energy system. It is being developed by the Ministry of Energy, the
Ministry of Environment and the Risoe Institute of Denmark.
This model applies a bottom-up methodology, and is organized as
a spreadsheet model using Excel with more than 30 sheets. It is
divided in four modules:
Macroeconomic assumptions
Energy demand (consumption)
Energy supply (availability)
GHG emissions
BRUS II-M
Secretaría de Energía
Macroeconomic assumptions
This module includes basic assumptions as demographic growth
(urban and rural); economic growth divided into subsectors; energy
prices.
Energy demand (consumption)
On the basis of these assumptions, the model proceeds to the
energy demand side, which is divided into four sectors:
Residential (households)
Services (public and commercial)
Industry
Transport
The final energy consumption is calculated by adding up the
results from the demand sectors.
BRUS II-M
Secretaría de Energía
Energy Supply (availability)
On the supply side, there are modules for the transformation
sector, i.e. refineries, gas and electric plants. The supply is the
total production of natural gas, oil products, electricity and so on.
GHG emissions
The model uses emission factors according to sector and type of
fuel in order to calculate the greenhouse gas emissions (CO₂, CH₄,
N₂O, CO, HCNM y HC) and others as PST, SO₂ and NOx.
BRUS II-M
Secretaría de Energía
Finally, for the chosen system configuration, the model calculates
the total capacity needed (split into different types of plants and
technologies) and what the cost would be in terms of investment,
operation and maintenance.
BRUS II-M is constructed to facilitate the development of
scenarios. Given a baseline, the scenarios are developed using a
number of choice-parameters which includes:
Economic growth and energy prices
A long-term structure of the energy system
Choices of technology and fuel substitution
The base year of the model is 1996, the mid-term is 2007 and
long-term is 2017.
Demand
Secretaría de Energía
Residential
Households
- Urban
- Rural
Energy end uses:
- Lighting
- Electric appliances
- Water heating
- Cooking
Fuels:
- Natural Gas
- Electricity
- Biomass
- LPG
- Solar energy
Demand
Secretaría de Energía
Service Sector
Private services:
Restaurants, hotels, business, schools, hospitals and others.
Public distribution:
Water and lighting systems.
Energy end uses:
Lighting, air conditioning, compressors, water pumping, heating
processes and others.
Fuels:
Electricity, LPG, fuel oil, gas oil, solar energy and others.
Drivers
Population growth and value added.
public
primate
Demand
Secretaría de Energía
Industry
Subsectors:
mining, beer, beverages, car factories, construction, rubber,
aluminum, tobacco, petrochemicals, chemicals, iron and steel,
ceramics and glass, paper, cement, fertilizers and other industries.
Energy end uses:
Lighting, air conditioning, electronics, cooling, motors, heating
processes, compressed air and others.
Fuels:
Electricity, LPG, fuel oil, gas oil, solar energy and others.
Drivers
Value added per subsector and fuel prices.
Demand
Secretaría de Energía
Transport
Uses of transport:
Passengers and cargo.
Types of transport:
Airplane, car, truck, train and ship.
Fuels:
Gasoline, natural gas, electricity, LPG, fuel oil, jet fuel, diesel and
others.
Drivers:
Passenger per km, and for cargo is ton per km.
Estimates of these drivers are made through linear projections.
Number of vehicles are estimated by OLS using GDP and
population as explanatory variables.
Supply
Secretaría de Energía
Refineries
In Mexico there are six refineries which are both consumer and
producer of fuels.
They produce fuels as gasoline, diesel, fuel oil, LPG, gas oil, coke,
etc., and consume crude (Istmo, Maya, Olmeca), fuels and
electricity.
Refining Division of PEMEX (PR) runs an LP model to optimize the
fuel production in the refineries at the minimum cost, according to
the demand figures reported by BRUS II-M.
Finally, the model calculates emissions associated to fuel
consumption and crude oil process in the refineries.
Supply
Secretaría de Energía
Gas Plants
Gas plants are also consumers and producers of energy.
Gas Division of PEMEX (PGPB) runs a model to optimize the
natural gas production in the gas plants at the minimum cost,
according to the demand figures reported by BRUS II-M and the
production plans of Production Division of PEMEX (PEP).
The model calculates emissions associated to that production
level, including flaring and venting of gas.
Supply
Secretaría de Energía
Power Plants
This module simulates the electricity distribution and production
processes, as well as the plants' selfconsumption of fuels,
according to the demand scenarios.
It employs an LP process to optimize the dispatch of the power
plants in order to satisfy the average and peak demand.
It reports the investment needs to satisfy the electricity demand
increase.
Finally, it calculates the emissions associated to power plants' fuel
consumption.
Scenarios
Secretaría de Energía
Scenarios of:
Fuel substitution
Technology substitution
Technology improvements (energy efficiency)
CHP promotion
Development of renewables sources of energy
Changes on energy prices
Taxes & subsidies
prelimina of results be
BRUS both misting to
CGE Model
Secretaría de Energía
Description
It is a Computable General Equilibrium Model which solves various
equations simultaneously.
Current main characteristics:
A dynamic model
Assumes Rational Expectations
Allows for a 30 year time horizon
Ron developing 304d
( beig
CGE Model
Secretaría de Energía
current main characteristics:
Four economic agents
Consumers, producers, Government and a foreign sector.
Seven consuming sector
Agriculture, coal, petroleum, natural gas, refining,
chemical, manufactures and services.
Eight producing sectors
Food, housing, gasoline, energy use, automobiles,
transportation, services & utilities.
CGE Model
Secretaría de Energía
Results
Assessment of direct and indirect effects of price changes
on consumption goods
Shows changes in spending patterns which appear as
consumers anticipate a change in policies
Show changes in investment, capital formation, economic
growth and income distribution
next step: ind world oil wht
AND CLIMATE CHANGE
First Edition: November, 1998
Secretaria de Medio Ambiente, Recursos Naturales y Pesca (SEMARNAP)
Periférico sur 4209. Fraccionamiento Jardines en la Montaña
14210 Tlalpan. México, D.F.
Web Site: www.semarnap.gob.mx
Printed in Mexico
TABLE OF CONTENTS
Introduction
7
1. Mexico's contribution to greenhouse gas emissions
8
2. Mexico's vulnerability to climate change
12
3. Sectorial actions
13
3.1 Energy
13
3.2 Natural resources
14
3.3 Agriculture and livestock production
16
3.4 Industry
16
3.5 Urban development
18
3.6 Communications and transport
18
4. Institutional strengthening: development of experimental
methodologies and projects
19
5. Conclusions
20
Mexico is committed to the transition to sustainable
development. Its policies are oriented to the reversion of
current trends in environmental deterioration, while
encouraging economic development and combating
poverty.
Mexico's generation of greenhouse gases is not significant
on a world scale, particularly considering its population
and territory.
Mexico is very vulnerable to climate change.
Mexico is working in mitigation actions related to energy,
natural resources, agriculture, husbandry,
communications, transport and urban development. In
addition, Mexico is promoting research on climate
change, developing and strengthening the institutional
framework for the effectiveness of those actions.
Mexico has developed national inventories of its
emissions, and conducts research on the mitigation of,
and adaptation to, climate change.
Altogether, these actions exceed Mexico's obligations as
stipulated by the Convention.
MEXICO AND CLIMATE CHANGE
INTRODUCTION
Mexico's environmental policy attempts to restrain the historical tendency of deterioration
of the environment and the natural resource base, to achieving significant economic growth
based on cleaner production processes, and to improve the living conditions of approximately
26 million of Mexicans living in extreme poverty, especially in rural areas.
This policy, consistent with the search for a more sustainable development path, has
two important aspects in terms of the actions Mexico is undertaking to face global climate
change.
On one hand, Mexico's economy needs to grow more rapidly than its population. The
national economy can only grow if energy production also increases, which implies larger
greenhouse gas emissions.
On the other hand, many of the actions required to mitigate climate change have
beneficial effects relevant to the above mentioned objectives of environmental policy, such
as: stopping present day deforestation and deterioration of the forestry sector; promoting
the sustainable use of natural resources -particularly of temperate forests and rainforests-;
contributing to reduce extreme rural poverty; improving energy efficiency and reducing
pollution.
Mexico is developing an important set of actions to mitigate climate change. During
the 90's, Mexico's economy has grown using productive processes cleaner than those used
in the past, and inter-institutional mechanisms have been established which contribute to
the objectives of the United Nations Framework Convention on Climate Change, thus
avoiding the emission of significant quantities of thermoactive gases.
Mexico is committed to continuing the present course of actions, irrespective of the
result of the multilateral negotiations on climate change. These actions represent this
country's best possible contribution to the solution of this global problem, which is causing
growing and justified concern within the international community. Under the present
circumstances, Mexico cannot commit itself to further obligations over and above those to
which it is currently committed. Nevertheless, the establishment of flexible mechanisms
derived from the Convention-i particular, the Clean Development Mechanism (CDM)-
could complement the nation's present endeavor, widening its overall reach.
This document presents several aspects of Mexico's contribution, both to the problem
and to its solution, among which some of the most salient are: a summary of the inventory
of greenhouse gas emissions, which forms a component of the First National
Communication; an analysis of Mexico's vulnerability to climate change, and a brief listing
of the actions taken by different government institutions, and the projects undertaken.
1. MEXICO CONTRIBUTION TO GREENHOUSE GAS EMISSIONS
In terms of emissions by GNP and per capita, Mexico trails way behind the main carbon
emitting nations, even though in terms of total emissions, Mexico is in 14th place. This is
understandable, given its population, its territory and level of development.
Mexico's total emissions of CO, are the equivalent of only 6.27% of carbon emissions
regarding the main emitting nation. Mexico is not one of the world's large emitters of
carbon.
Emissions per person
6
5
4
O n S 1
3
2
1
0
USA
Kazakhstan
Australia
Canada
Russia
North Korea
Germany
United Kingdom
Ukraine
Japan
Poland
South Africa
South Korea
Italy
France
Iran
Mexico
China
Brazil
India
17
I In order to make these comparisons the following sources were consulted: Marland, G., R.J. Andres and T.A.
Boden (1995) Global Regional and National CO, Emission Estimates from Fossil Fuel Burning, Cement
Production and Gus Flaring: 1950 1992 (electronic database) Carbon Dioxide Information Analysis Center, Oak
Ridge National Laboratory. Oak Ridge. Termessee World watch estimations are based on the above and on British
Petroleum (1995) BP Statistical Review of World Energy Group Media Publications, London. Population Reference
Bureau (1994) World Population Data Sheet Washington, D.C. World Bank (1995) The World Bank Atlas. 1995
Washington D.C.
IEA Statistics (1997) CO2 emissions from fuel combusion 1972-1995 OECD.
*
GNP measured in "Purchasing Power Parity" for 1993
8
In terms of CO, emissions per capita, Mexico occupies the 72nd place at world level,
with 3.46 tons/ person in 1995. In terms of per capita carbon emissions, it ranks 71, with
0.96 tons.
Total emissions
1400
M
1200
i
I
I
1000
i
o
n
800
s
600
o
1
400
t
o
n
200
s
0
USA
China
Russia
Japan
Germany
India
Canada
Maly
United Kingdom
Ukraine
France
Poland
South Korea
Mexico
South Africa
Kazakhstan
Australia
North Korea
Iran
Brazil
Countries
Among other indicators of Mexico's situation with respect to greenhouse gas emissions,
it is worth mentioning that the country emits 1.16 kg of CO, per unit of GNP, at 1990
prices. The emission per square kilometer is 166.74 tons of CO2; the ratio of emissions/
energy supply (not including renewable sources) is 2.66 tons of CO, for every ton of
petroleum equivalent. The ratio of emissions/ renewable energy supply is 41.46 tons of
CO₂ for every ton of petroleum equivalent.
Emissions/GNP (m illions of dollars)
1400
1200
1000
t
o
800
n
S
600
400
200
0
Kazakhstan
South Africa
Russia
China
Australia
Canada
India
Germany
Japan
France
9
Comparatively speaking, Mexico has a lower energetic efficiency than most of the
OECD countries, although those countries have larger per capita emissions than does
Mexico.
The compilation of Mexico's National Inventory of Greenhouse Gas Emissions¹ has
allowed the identification and quantification of the country's principal sources and sinks
of greenhouse gasses. The inventory was developed using the IPCC methodology for
estimating these sources and sinks.
The National Inventory of Greenhouse Gas Emissions includes direct greenhouse ga-
ses, such as carbon dioxide (CO,), methane (CH1) and nitrous oxide (N₂O), as well as
indirect greenhouse gases which contribute to the formation of atmospheric ozone, such as
carbon monoxide (CO), nitrogen oxide (NO.) and volatile non-methane organic
compounds.²
Inventory of emissions of direct greenhouse gases from Mexico
Summary of results, 1990 (Quantities in Gg (10° gr))
Category
CO2
CO₂
CH₄
N₂O
Sources and sinks of
top/down*
Bottom/up**
Greenhouse gases
National total of emissions
and by sources and sinks
459 278.3
444 489.0
3641.6
11.8
(net emissions)
1. Total energy
311 800.0
297 010.6
1081.3
3.962
(fuel+leaks)
2. Industrial processes
11 621.0
11 621.0
3. Agriculture
1793.3
5.8
4. Land use change and
135 857.3
135 857.3
241.0
2.0
forestry
4
5. Waste
526.0
*Top-down: Breakdown which goes from total energy demand to final uses.
** Bottom-up: Aggregation of final energy uses to form total demand.
2 Compiled in 1990 (updated in 1996) by INE (Mexico's National Ecology Institute), with international sponsorship.
3 For greater detail consult the First National Communication to the United Nations Framework Convention on
Climate Change.
4 It should be noted that the figure for methane emissions in the "waste" category includes waste water treatment.
10
As can be seen, national emissions of greenhouse gases derive from the burning of
fossil fuels, land use change, industrial processes, agriculture (including livestock
production), and from waste decomposition.
In 1990, total carbon dioxide emissions amounted to 444 489 Gg. The energy sector
was the most important source of this gas, contributing with 297 010.6 Gg (67% of the
total), while land use change represented 31% of national CO2 emissions.
Carbon dioxide emissions in Mexico, 1990 (Gg)
Manufacturing
Land use change and
industry and energy
forestry
24%
31%
Industrial processes
Industry (ISIC)
3%
15%
Others
1%
Transport
Residencial and
21%
Commercial
5%
Sector
Gg
Manufacturing industry and energy
108,473.1
industry
*
Industry (ISIC) **
64,971.2
Transport
94,705.6
Residential and commercial
23,558.6
Agriculture, livestock and fisheries
5,301.9
Industrial processes (cement)
11,621.0
Land use change and forestry
135,857.3
Electricity generation including that consumed by the energy industry (Petroleos Mexicanos and the Federal
Electricity Commission)
**
ISIC: International Standard Industrial Classification of All Economic Activities, including cement production and
metallurgy
11
Within the energy sector, the main sources of emissions are the energy industry and
transportation, which together account for 45% of total CO, emissions. On the other hand,
emissions due to land use change, which account for 31% of total CO, emissions, result
mainly from deforestation processes.
Methane emissions for 1990 were of the order of 3 641.6 Gg. Agriculture and livestock
production were the main sources of this gas, accounting for 49% (1 793.3 Gg), followed
by fugitive emissions from the oil industry, natural gas and coal industries which, without
including the burning of fuel per se, accounted for 29% (1 039.58 Gg). Solid waste
contributed 13% (468.0 Gg), land use change accounted for 7% (241 Gg), and fuel burning
1% (41.778 Gg).
Considering that the warming potential of one gram of methane is 21 times higher than
that from CO2, emissions of this gas are equivalent to 14.6% of total CO, emissions.
2. MEXICO'S VULNERABILITY TO CLIMATE CHANGE
Mexico's Country Study,⁶ allowed for an evaluation of the country's vulnerability to climate
change. The research conducted compared present conditions to those which could
potentially prevail with climate change, in the hypothetical event that increases in greenhouse
gases would lead to an effective doubling of atmospheric CO2, compared to pre-industrial
levels.
The results of these studies indicate that the following processes, among others, would
be likely to occur in Mexico:
Modification of rainfall patterns, including changes in temporal and spatial
distribution.
Changes in soil and atmospheric humidity, including alterations in the processes of
evapotranspiration and aquifer recharging.
Intensification of droughts, desertification of the land, and the potential modification
of regional ecosystems: drastic reductions in tropical and temperate forests.
Greater incidence of forest fires, leading to more acute problems of deforestation,
soil erosion, carbon emissions and biodiversity loss.
Alteration of hydrological catchments, as well as the pattern and distribution of
surface runoff and flooding.
Sea level rise, with consequent impacts on coastal and marine ecosystems.
30% of Mexico's territory is comprised of arid and semiarid areas. Temperate and
tropical forests cover an additional 28%. Around 80% of the nation's soils present some
degree of erosion, principally due to deforestation of steep slopes. Under these circumstances,
6 Coordinated by the National Ecology Institute between 1994-1996.
7 Vulnerability studies were carried out for: agriculture, human settlements. coastal zones, desertification and drought,
forest ecosystems. water resources and the energy and industrial sectors
12
a doubling of CO, compared to pre-industrial levels, would have grave consequences in
terms of such processes as desertification, deforestation, erosion and biodiversity loss. It
would also potentially increase the frequency and severity of extreme events.
The area most appropriate for the production of basic grains would shrink considerably;
forest ecosystems and the species which comprise them would suffer irreversible damage;
water supplies for human consumption and irrigation would be affected, and the country's
production infrastructure could suffer severe damage. Furthermore, some coastal regions
would be exposed to flooding, and agriculture, in particular rain-fed production, would
suffer severe losses due to the greater frequency of droughts. In sum, Mexico is a country
with an enormous vulnerability to potential climate change.
3.
SECTORIAL ACTIONS
The actions carried out by sectors which are analyzed below, constitute a determined
strategy of transition towards sustainable development. a strategy comprised of various
facets:
1. A policy which oriented to increasing energy efficiency, including:
The continual improvement, within financial constraints, of fuel quality.
A substitution of fuels, whereby natural gas will gradually replace other fossil fuels.
An energy saving policy, both in terms of production and domestic consumption.
The promotion of alternative and renewable energy sources.
2. An industrial policy that seeks to modernize industry, offering new technological
alternatives which reduce the environmental impact of emissions.
3. An important group of actions to improve the sustainability of the agricultural sec-
tor, simultaneously limiting emissions of greenhouse gases from agriculture and livestock
production.
4. A policy of urban development and ecological land use planning which, at the same
time it strengthens the institutional and legal framework, prevents changes in land use.
5. Modernization of the transport sector which reduces both emissions and fuel
consumption per unit transported (passengers per kilometer or goods per kilometer).
6. An active policy to contain and, if possible, revert the trends of deforestation, erosion
and desertification, all of which prevent the efficient sequestering of greenhouse gases.
Some of the concrete actions that Mexico is currently developing are specified below.
3.1. Energy
Mexico's energy policy recognizes the need to satisfy the requirements of the country's various
productive activities and of its households in order to promote economic development and to
improve the living standards of the population within the context of competitivity, sustainability
and harmony with the environment. In this sense. its efforts to reduce greenhouse gas emissions
are aimed, on one hand, toward energy production and transformation through the provision
13
of improved quality fuels and the promotion of alternative energy sources and, on the other
hand, it has induced changes in fuel consumption in several branches of the economy (for
example, switching from gasoline to natural gas, or the promotion of greater efficiency levels
in fuel consumption by industry, transport and domestic sector).
In this sense, the following actions have been taken:
Promotion of natural gas use.
- Structural change of the electrical sector using combined cycle units.
- Extending the natural gas distribution network.
Efficient Use of energy and Energy Saving.
- Energy Savings program in the electrical sector
- Electrical Sector Energy Saving Support Fund.
- National Commission for Energy Saving.
- Product standards.
- Co-generation projects.
- Seasonal hour adjustments.
Fuel improvement.
- Reconfiguration of the National Refinement System for the transformation of fossil
fuel, despite the high cost involved.
- Elimination, since 1998, of leaded gasoline, and improvement in the quality of
diesel.
- Change, as of 1996, in the composition of liquid petroleum gas, in order to reduce
emissions of highly reactive hydrocarbons implicated in the formation of ozone.
Promotion of renewable sources for energy generation.
- Creation of the National Council on Renewable Fuels, and the development of:
- Hydroelectric plants,
- Geothermal plants,
- Solar energy projects,
- Eolic energy projects.
The actions derived from the energy policy presently represent an important mitigation
action, which is in the process of being quantified.
3.2. NATURAL RESOURCES
As a result of Mexico's strategy on natural resources, the country has much to offer, with
regard to the objectives of the Convention, if the enormous mitigation potential of its forest
ecosystems can be fully exploited.
Most of Mexico's forest resources are socially owned (ejidos), and comprise the heritage
of 12 million Mexicans, most of whom live in conditions of poverty and marginality. For
this reason, Mexico's forestry policy aims at the dual objectives of conservation and increase
of forest resources to maximize their potential for providing environmental services
(including carbon sequestration) on the one hand, and promoting their sustainable use as a
source of economic and social development for the communities who depend on them
directly, on the other.
14
National policy with regard to natural resources comprises the following strategies for
mitigating greenhouse gas emissions:
Increase in carbon sequestration.- This includes forest management practices which
foster the expansion of forest ecosystems in terms of extent and/or of biomass, and
by increasing the density of carbon stored in the soil. This strategy is implemented
through:
- National Reforestation Program (Pronare).
- National Campaign for Ecological Restauration and Against Land Use Change in
areas affected by forest fires.,
- Commercial Forestry Plantations.
- Forest Frontier Defense Program.
Conservation of carbon sequestered in soil and vegetation. - Includes measures to
preserve existing biomass, such as reducing the rate of deforestation, reducing risk
factors and increasing support measures to encourage the natural regeneration of
temperate and tropical forests. This strategy is comprised of:
- Forest Frontier Defense Program.
- Agro-ecological Improvement Program for Peasant Agriculture.
- National Program for Forest Inspection and Vigilance.
- Program of Protected Natural Areas.- In 1998 the total area with protection status
in Mexico is around 12 million ha, distributed among a total of 112 protected natu-
ral areas. It is estimated that the present focus on 36 priority areas will avoid the
deforestation of 312 000 ha of rainforest, temperate forest and semiarid zone
vegetation.
- Conservation, Management and Sustainable Exploitation of Wildlife Units. - Some
1,449 such units currently exist, under either intensive or extensive management,
and contribute to the conservation of 7200000 ha of temperate and tropical forest,
grazing land and desert scrub.
- Sustainable management of natural forests.- Between 1995 and 1998, some 442
700 ha of forest has been incorporated into a scheme which emphasizes more efficient
silvicultural techniques, doubling forest productivity. Investments are made in the
form of subsidies channeled to those engaged in forestry production, thereby making
sustainable harvesting even more attractive.
- Forestry Development Program (Prodefor).- In the period 1997-2000, some 6
million ha will be incorporated within programs of sustainable management, a figu-
re which implies an increase of 85% in the area currently under such management,
encouraging the efficient integration of silvicultural production processes.
- National Program for Protection against Forest Fires.
- National Program for Forest Sanitation.
- Substitution of emissions derived from the use of fossil fuels.
- Improvement of bio-fuel devices, and increased supply of biomass for fuel. - In
1998 the following actions have been carried out in this respect: Promotion of 170
ha for multiple use plantations using suitable species; support for the manufacture
and distribution of 2 653 biomass stoves for rural areas; development of a manual
for the management and exploitation of forest resources for sustainable production
15
of fuel-wood; design and implementation of a program for the production and sale
of charcoal.
3.3. AGRICULTURE AND LIVESTOCK PRODUCTION
The agricultural sector includes attention to climate change as an integral part of rural
development. In order to ensure that rural producers join the effort to mitigate climate
change, actions must encompass measures that i) Improve agricultural productivity, ii)
ensure greater economic benefits, and iii) overcome disparities between agriculture and
other sectors of the economy.
With these premises in mind, programs and actions are currently underway which:
Improve agricultural systems, eliminating -as far as is possible- those practices
which pose risks or damage the environment.
Foster technologies in accordance with the cultural and socioeconomic, characteristics
of producers.
Permit the natural regeneration of ecosystems.
Promote minimum tillage.
Improve the use of crop residues.
Induce perennial crops.
In this context, those programs which are particularly important in terms of contributing
to the reduction in emissions of greenhouse gases are:
- Conservation Tillage Program.
- Salinized Soils Recovering Program.
- Soil Productivity Improvement Program.
- Fertilized Irrigation ("Ferti-Irrigación") Program.
- Promotion of pastures sown with grasses with a high capacity for carbon sequestration.
3.4. INDUSTRY
Mexico's technological policy for industry follows the recommendations of the IPCC for
reducing greenhouse gas emissions from the industrial sector, employing greater fuel
efficiency, as well as the prevention and control of pollution. With this objective, the
following steps are being taken:
Revision of productive processes to improve their environmental performance.
Fuel efficiency measures.
Substitution of fuels and materials for less pollutant alternatives.
Adoption of cleaner production methods.
Recycling of sub-products and residues.
Significant steps have been taken with regard to the following:
Adaptation of the tariff system. - Aiming to improve the competitiveness of national
industry, the tariff system has been adjusted, allowing duty-free import of capital
16
goods not produced in the country, including environment-friendly devices which
prevent or reduce emissions of greenhouse gases.
Modernization of the regulatory framework and promotion of environmental indus-
trial management. At present, the environmental regulations are being updated in
the context of current environmental conditions and requirements of the country.
Mexico's regulatory systems have been gradually modified and improved, in the light
of reconsidered technological assumptions, and the evaluation of potential environmental
benefits that can be derived from them. The principal changes to existing regulatory
instruments include the following:
The process of Environmental Impact Assessment (EIA) has been refined in terms
of those activities which specifically require EIA. In turn, the need for EIA is being
linked to ecological land use planning ordenances.
Compulsory standards have been modified in the light of environmental considerations.
Limits are established with regard to the carrying capacity of the environment, to limit
waste generation or potential environmental risk. For a given ecosystem, these limits
are independent of the nature of the emitting agent. Thus, the notion of "best available
control technology" loses relevance, given that stipulated limits are not tied to specific
processes. On one hand this allows the internalization of the differential environmental
costs of regulation, and on the other, it recognizes that environmental costs vary among
ecosystems. This new regulatory framework induces a wide range of preventive
measures through the implementation of modifications to productive processes, instead
of simply enforcing an "end of pipe" approach to emission control.
The modernization of the environmental regulation of industry simultaneously promotes
voluntary programs of environmental management that give impetus to the self-regulation
of industry and also foment:
The exploitation of the benefits provided by cleaner technology.
The development of environmental auditing to improve industry's environmental
compatibility.
The presentation of awards and other benefits to industries which go further than
simply complying with set environmental standards.
An integrated approach to prevention of media pollution that both minimizes
emissions of contaminants and saves energy and resources.
Several mandatory environmental standards emphasize the control and prevention of
pollutants, and promote the modernization of industry. These standards aim to reduce
emissions, optimize combustion processes, reduce fuel consumption and constitute indirect
steps to toward mitigation. The most important are:
NOM-085, which aims to substitute energy sources and to optimize combustion
processes. It establishes different limits for emissions of SO2, NOX, PST and CO,
depending on the region in which the emissions are produced. It is closely tied to
the switching from fossil and solid fuels with natural gas. This standard has rapidly
increased the consumption of natural gas.
NOM-086, linked to the above, establishes the characteristics of petroleum derived
fuels, which must satisfy increasingly stringent environmental requirements.
Processes of direct heating and drying are also subject to controls.
17
3.5. URBAN DEVELOPMENT
By the year 2000, Mexico's population will have reached 100 million, of which 63% will
live in urban areas. In the medium and long term, a more ordered growth path of urban
areas will contribute to mitigate the effects of climate change. Among the programs and
actions that contribute to achieve this, are the following:
Program for Ecological Land Use Planning and Promotion of Urban Development.
The legal adoption of these tools of rural and urban planning contribute to restrain
the processes of deterioration and destruction of the vegetative land cover, while at
the same time promote changes in land use patterns which reduce environmental
risks and encourage the efficient and sustainable use of natural resources.
One Hundred Cities Program - This Program aims at guaranteeing the ordered growth
of 116 small to medium size cities, which significantly influence their ecological,
social, economic and cultural surroundings. In order to attain these objectives, seven
lines of action have been developed, among which the following stand out in terms
of their potential to mitigate emissions:
- Land use regulation and urban administration.
- Ordered incorporation of agricultural (and other) sites to urban use.
- Road system modernization and promotion of public transport use.
- Solid waste management.
- Consolidation of the most important urban areas of the country.
Air Quality Programs. - These aim at gradually reducing pollution levels and the
number of days of "environmental atmospheric contingency" per year in the large
cities. It is expected that, on average, between 10-50% of the anthropogenic emissions
of hydrocarbons, nitrogen oxide and suspended particles will be reduced. In gene-
ral, these measures include steps to promote clean industry, non-polluting vehicles,
efficient public transport and the abatement of soil erosion.
3.6. COMMUNICATIONS AND TRANSPORT
The steps toward reducing emissions from the communications and transport sector include
the improvement of infrastructure, the modernization of automotive vehicles and the
promotion of less polluting means of transport.
Among the measures adopted are:
With regard to road transport:
- Improvement in the design and use of highways.
- Construction of overhead lanes for sections of highways with difficult topography
and heavy volumes of traffic.
- Improvement of the ecological surroundings on highways through reforestation.
- Improvement of the free flow of traffic on long stretches of highway via the
construction of access and egress slip-roads, where volumes of traffic justify such
action.
18
- Development projects which promote the improved articulation of highway
infrastructure.
- Reduction of tolls and development of special tariffs for frequent users, seasonal
use, user type and regional conditions, which foment the use of better highways and
promote fuel saving.
With regard to Coastal ports:
- Formulation of new compulsory standards with particular attention to pollution
control.
- Development of multi-modal transport systems, through Integral Port
Administrations and the participation of the shipping industry, so as to improve the
movement of cargo from point of origin to point of delivery, and to increase fuel use
efficiency.
- Introduction of new, environmentally friendly technology to replace that which is
becoming obsolete.
Further, there is a development of infrastructure which permits the efficient
integration of ports, highways and railroads.
Stricter regulation of emissions from vehicles with internal combustion engines.
This set of actions, seeking to improve and modernize transport conditions, constitute
mitigation actions by avoiding unnecessary emissions from cargo and passenger transport,
and by shortening journey distances.
4. Institutional Strengthening: development of experimental methodologies and
projects
A new institutional framework has been established in order to comply with international
commitments.
In April 1997 the Inter-secretarial Committee on Climate Change was established,
under the coordination of the Ministry of Environment, Natural Resources and
Fisheries, and it includes the Ministries of Energy, Commerce and Industrial
Promotion, Agriculture and Rural Development, Communications and Transport,
International Relations, and Social Development. This committee establishes
Mexico's position in international fora on climate change, and coordinates the various
sectorial strategies.
Mexico's First National Communication, presented at the Third Conference of the
Parties (Kyoto, December 1997), documents the fulfillment of Mexico's
commitments with regard to inventorying greenhouse gas emissions and to the studies
related with Mexico's vulnerability to climate change.
A Mitigation Office is currently being set up which, at present, is part of the National
Institute of Ecology. Its functions will be to:
- Promote the studies required to improve national knowledge on climate change.
- Foster methodological studies in all areas related to mitigation actions, with special
emphasis on carbon sinks.
19
- Help generate regional and sectorial projects for fuel saving and carbon sinks.
- Keep a register of private sector mitigation activities and evaluate them using
available methods.
- Act as promoter and intermediary for projects which could eventually qualify for
the Clean Development Mechanism.
In recent years, Mexico has actively participated in the work of IPCC, and has
contributed with methodologies and pilot projects that facilitate the implementation of the
Convention's objectives. Among these are:
An inventory of anthopogenic emissions of greenhouse gases, identifying sources
and sinks, carried out in 1995 with data from 1990.
Development of specific emission factors for methane emissions from living systems,
forests and transport areas, much more precise for actual Mexican conditions.
Scenarios, of future emissions, based on the Markal and Stair model.
Climatic scenarios based on US and Canadian models. The vulnerability of the
country to climate change was estimated with reference to forests, agriculture,
desertification, drought, hydrology, coastal areas, human settlements and industry.
Studies to evaluate technology in terms of greenhouse gas emissions mitigation in
the forestry and energy sectors.
Studies of climatic variability and climate change to allow the adaptation of the
agricultural sector.
Integrated programs for the reduction of greenhouse gas emissions in an specific
area of Mexico City, with the aim of repeating them in other areas.
Studies on renewable energy: pre-feasibility studies on solar heaters for domestic use.
5. CONCLUSIONS
Mexico, as an intermediate developing nation, is implementing an important number of
official and sectorial actions that contribute significantly toward the objectives of the United
Nations Framework Convention on Climate Change. These actions are motivated by the
search of a transition towards a new development pattern which must be sustainable from
economic, environmental and social perspectives.
To coordinate the actions which affect climate change, a Program for National Action
on Climate Change is currently being drawn up. This program is being developed within
the framework of the Inter-secretarial Committee, and once completed will undergo a process
of public consultation. A greater coordination of actions, a more explicit national
commitment to take the global effects derived from different actions undertaken by Mexico
into account, during its transition to sustainable development, as well as a national strategy
to face the challenges and opportunities that Climate Change holds for our country may be
expected from this Program.
20
FIRST MEXICO-U.S. WORKING GROUP ON
SUSTAINABLE ENERGY MEETING
Mexico City, April 15, 1999
PROGRAM
Hour
Activity
9:00 hrs.
Welcoming remarks
9:15 - 9:25 hrs.
1. Overview of the Working Group on Sustainable Energy
9:25 - 11:00 hrs.
2. National Action Plans in aspects related to Sustainable Energy
-
Mexican action program description
-
U.S. Action Plan description
11:00 - 11:15 hrs.
Coffee break
11:15 - 12:30 hrs.
3.
Review activities under Energy Cooperation Agreement
3.1.
Overview discussion
-
Report of the activities under the Energy Cooperation
Agreement Annexes
Project Annex 1: Cooperation in the Field of Renewable Energy
Project Annex 2: Cooperation in the Field of Energy Efficiency
3.2.
Investment opportunities in clean energy and energy
Efficiency
3.3.
Prioritization of activities
- Discussion:
-
What is missing?
-
New activities / projects
12:30 - 13:00 hrs.
4. Regional developments in sustainable energy
13:00 - 14:30 hrs.
Lunch hosted by the Secretariat of Energy
14:30 - 15:30 hrs.
5. Final comments
-
Summary of agreements
-
Report to Binational Commission
-
Next steps
15:30 - 16:00 hrs.
Closing remarks
MEXICO/US
EERE Areas of Cooperation
Renewable Energy
Energy Efficiency
Information/Technical Exchange
Financing Activities
Joint Implementation/CDM
MEXICO/US
Renewable Energy Goals
To institutionalize the use of renewable energy
through project implementation process
To strengthen the supply and maintenance
infrastructure necessary for sustainable projects and
to build the foundation for their replication
To increase the sustainable use of renewable energy
technologies in partnership with Mexican industry
To increase the use of renewable energy
technologies as a mechanism for combating global
climate change, especially greenhouse gas
emissions
MEXICO/US
Renewable Energy Activities
Signed Project Annex 1 on Cooperation in the
Field of Renewable Energy
DOE/USAID program that works with established
Mexican organizations and provides training and
technical assistance in technologies, applications
and project implementation
Other cross-cutting activities that include solar
and wind resource assessment; technical and
economic analyses; project monitoring and
evaluation; and environmental assessments
MEXICO/US
Renewable Energy Transition
Traditional Energy System
Emerging Energy System
Clean Energy
Transition Strategy
Goal: For the end-user, the emerging energy
system is superior to the traditional energy system
when considering quality of service, environmental
End-User
impacts, reliability and cost.
End-User
MEXICO/US
Renewable Energy Costs
Cost of Electricity
(levelized cents/kWh in constant 1995$)
Photovoltaics
Solar Thermal
Wind
50
25
8
40
20
6
30
15
4
20
10
10
2
5
0
0
0
1990
1995
2000
1990
1995
2000
1990
1995
2000
Biomass
Geothermal
10
6
8
5
4
6
3
4
2
2
1
0
0
1990
1995
2000
1990
1995
2000
MEXICO/US
Energy Efficiency Goals
To increase the sustainable use of energy
efficiency technologies in partnership with
Mexican industry
To promote energy activities that support
Global Climate Change by reducing
greenhouse gas emissions from energy
production and use
To promote energy activities that support
pollution reduction by supporting activities
that increase clean energy usage in Mexico
MEXICO/US
Energy Efficiency Activities
Signed Project Annex 2 on Cooperation in
the Field of Energy Efficiency
DOE and other US Government Institutions
are collaborating with Industry through the
Committee on Energy Efficiency
Commerce and Trade (COEECT) to provide
Mexico with energy Efficiency technology
and know how
MEXICO/US
Energy Efficiency - -Annex 2
Collaboration in the design and development of government
programs, aimed at voluntary participation of the private sector
Collaboration in the design and development of programs for
government procurement of energy efficiency technologies
Collaboration in the development, implementation and
harmonization of test procedures for appliances, motors and
other equipment
Collaboration in the training in energy efficiency technologies
and delivery mechanisms
Collaboration in the benchmarking of energy efficiency in energy
intensive industrial sectors and buildings
MEXICO/US (cont)
Energy Efficiency -Annex 2
Cooperation in the development of financing packages for
energy efficiency projects
Cooperation in the development of energy services companies
and the promotion of their activities
Cooperation in the development of web sites, seminars and
work shops, and sharing of information on energy efficiency
Collaboration in the development of monitoring, evaluation and
verification of energy efficiency projects and programs
Collaboration in promoting energy efficiency in the U.S./Mexico
border region
MEXICO/US
COEECT Coordination
GOVERNMENT
INDUSTRY
REPRESENTATIVES
Federal
Agencies
Export Council for
Energy Efficiency
DOE
DOS
DOI
(ECEE)
DOC
DOD
TDA
EPA
GSA
USTR
OPIC
AID
USIA
COEECT
Alliance to save Energy
EX-IM
SBA
DOTy
Int'l Institute for Energy Conservation
National Assoc.. of Energy Services Companies
National Assoc.. of State Energy Officials
Solar Energy Industries Association
Organize semi-annual
meeting of agency heads
Export promotion
Fund ECEE
Market Conditioning
Communicate to industry
Financing
Identify financing options
Education and training
Coordinate policies
Project partnering
Technology transfer
Focused trade missions
Coordinate programs
Market development
DOE (202) 586-1491
ECEE (202) 371-2779
MEXICO / US
Energy Efficiency Partnership Opportunities
Electric Motors - Pilot EE Programs; FIDE and Hagler-Bailly
Appliance Standards - Pilot program and joint conferences
CONAE, IIE, FIDE and others with LBNL
Building Standards - Pilot program and joint conferences
CONAE, IIE, FIDE and others with LBNL
Steam Generation - Pilot Steam Generation & Distribution Project; CONAE
and Hagler-Bailly
ESCO - Finance Project
Empresas ESM and EEAF
Lighting Efficiency - Residential Lighting Project
FIDE - Hagler-Bailly
Sustainable Cities - Monterey Pilot
MEXICO / US
Renewable Energy Efficiency Partnership Opportunities
Bioenergy - Bi-lateral Joint Implementation projects (UNFCCC AIJ pilot)
Photovoltaic - CONAE (COFER) Projects with SNL/NREL
Wind - CONAE/NREL Wind Mapping
Hybrid Systems - CFE/San Juanico Project with NREL, SNL
Off-Grid Application - FIRCO Agricultural Water Pumping with SNL
CONAC
COMMON VICE/VE
SECRETARIA DE ENERGIA
UNITED
DC ENTREM
Energy Efficiency and
Renewable-Energy Activities
in México
Odón de Buen
Technical Secretary
National Commission for Energy Conservation
se
CONNE
COMMIS VICROSE
SECRETARIA DE ENERGIA
PERSON MOST
or ENERGY
The National Commission for
Energy Conservation
Created on September, 1989
Original mandate: a public consulting-body on
energy conservation and renewable -energy
issues
se
CONNC
COMMISS NAME
SECRETARIA DE ENERGIA
"WIS were
a
Conae's main functions
Standardization for energy
efficiency
Technical assistance
Promotion
se
CONNC
COMMON NATURAL
SECRETARIA DE ENERGIA
MAISE
Dt INDIAN
Conae: Areas of action
Energy-efficiency standards
Energy efficiency programs
Industrial
Commercial
Municipal
Transportation
Promotion of supply-side alternatives
Cogeneration
Renewable energy
Alternative fuels
SE
CONNE
COACAGN
SECRETARIA DE ENERGIA
PARTE MORRO
Energy-Efficiency Standards (1)
18 mandatory standards for systems and
equipment
Refrigerators, AC units, electric motors, water-
pumping systems, water heaters, steam generators
Apply to more than 5 million products sold in
México
Locally manufactured and/or imported
Efficiencies up to 40% higher than models five
years or older
se
CONNE
COMMON MACHINAL
SECRETARIA DE ENERGIA
PRICE MORMA
Dr ENEMGIA
Energy-Efficiency Standards (2)
Very positive economic impacts
More than 2,000 GWh conserved per year
More than 650 MW avoided through 1998
Close to 80 million US$ saved per year by energy
users
Important environmental impacts
Avoided emissions of more than 9 million Tons of
CO2 (up to 1998)
Test procedures for refrigerator standards
harmonized in NAFTA region
CONNE
COMISION straws
SECRETARIA DE ENERGIA
PARTY
DESIRGA
Energy-Efficiency Programs:
Public Buildings
One-Hundred Public Buildings
Close to 1 million m2 of office space and 125,000
luminaries were analyzed
Potential of more than 25% in energy costs (1 million
US$ per year)
Federal-Buildings Program
Started in March of 1999
Expected to identify energy-efficiency potentials in
more than 8 million m2
Will operate under CONAE's new, Internet-based,
technical-assistance strategy
se
CONNC
COMMON VICENSE
SECRETARIA DE ENERGIA
PUBLIC
or intern
Energy-Efficiency Programs:
PEMEX-CONAE Committee (1)
Aimed at specific systems
Cooling systems, processs heaters, exhaust-gas
heat recovery, industrial lighting, and lighting in
buildings
More than a hundred installations have been
analyzed
A portafolio worth more than 10 Million US$ of
possible investments
Recommendations involving operation procedures
have been implemented
SE
CONNC
COMMEN CREW
SECRETARIA DE ENERGIA
PARTER ******
no ENERGY
Energy-Efficiency Programs:
PEMEX-CONAE Committee (2)
CONAE's technical assistance strategy has
been tested in PEMEX
Methodolgies available in the Internet
Operator's gather data
CONAE supports through Internet
CONAE's strategy is becoming part of
PEMEX's environment-protection and
industrial-safety programs
CONAE's methodologies will become mandatory
Methodologies already available in PEMEX Intranet
CONAE will train PEMEX personnel
se
CONAC
COMMON VERSE
SECRETARIA DE ENERGIA
PERT UNITED
or INDICIA
Utility-Operated Demand-Side
Programs (1)
ILUMEX
GEF proyect
23 Million US$ (WB, CFE and Norway)
Started in 1995
More than 2.4 million CFLs installed in two regions
300 GWh saved (through 1998
80 MW avoided (through 1998)
FIPATERM
Specific to residential sector in Mexicali, Baja
California
Oriented towards efficiency in air-cooling
CONAC
COMMAN CAP
SECRETARIA DE ENERGIA
PARK NAME)
Utility-Operated Demand-Side
Programs (2)
FIDE
Demonstration projects
Several hundred projects in the industrial, commercial and
municipal sectors
Daylight-savings time
Operates since 1996
1,000 GWh saved per year
More than 650 MW avoided
Incentives program
IDB loan
Oriented towards residential and commercial, lighting
systems and electric motors
se
CONNC
COMMON VEHICLE
SECRETARIA DE ENERGIA
FORTH INCRED
of ENERGY
Cogeneration: National
Potential
Analysis performed in 1994-95
Based on 1993 data from 1,700 installations
representing 94% of industrial energy
consumption (fuel-oil and natural gas)
Two scenarios:
Without surplus fuel:
7,590 MW
With surplus fuel:
14,300 MW
An estimated 114 million BOE could be conserved
on the highest scenario (per year)
CONAC
COMMON NERVY
SECRETARIA DE ENERGIA
********
DESIGNA
Cogeneration in Mexico:
Present Status
26 cogeneration permits granted since 1994
1,385 MW total capacity
7,450 GWh-yr total generation
781 M$US total investment
14plants in operation
14 in operation
691 MW total capacity
5 under construction
se
CONNC
company MICHAEL
SECRETARIA DE ENERGIA
P:21 MORRO
or ENERGES
Cogeneration: Promotion Sub-
Commission
Created in 1996 to analyze non-economic barriers
to cogeneration
Has the participation of private sector
representatives, the utililities, the Regulatory
Commission, and related government agencies
Its main conclusions have been:
Self-supply is economically feasible under the current
rate structure
The main barriers are power dispachability and the price
paid by the utility (short-run marginal price)
CONAC
COMMON
SECRETARIA DE ENERGIA
PAR
fit DIRGO
Cogeneration: Regional
Seminars
Organized by the Ministry of Energy with Conae's
support
Includes presentations by CFE on wheeling, the
Regulatory Commission on applicable
regulations, and success stories by private
developers
Eight have taken place so far in Mexico's most
important cities and with great turnout
CONNC
COMMON VERAN
SECRETARIA DE ENERGIA
PRICE ORDER
or INDICA
Renewable Energy:
Activities (1)
Studies
Small-hydro potential in a region on Eastern Mexico
Specific projects
Micro-hydro in Veracruz
Biogas from urban sanitary-confinemts in Mexico City
Advisory council
Created in 1997
A partnership of CONAE with the National Solar
Association
Integrated by private and public sector representatives
Analyses barriers and recommends actions and policies
CONNC
COMMIN VALVE
SECRETARIA DE ENERGIA
PARTY
OCCURITY
Renewable Energy:
Activities (2)
Seminars
Saltillo (Oct. 1998): Analized barriers
Veracruz (Nov. 1999): Will focus on small hydro
Courses
Residential water-heating and small-photovoltaic
systems-evaluation
Projects under development
Internet-accesible, geographic information system for
renewable resoures
Solar water-heating in Mexico City
se
CONAC
COMMON VOTAL
SECRETARIA DE ENERGIA
AND UNITED
Alternative-fuel use promotion
activities
Natural gas
International seminar on natural gas use for
transportation (Mexico City, 1997)
Seminar on natural gas use-technology (Mexico City,
1999)
Ethanol
International seminar in Mexico City (1998)
Hydrogen
Creation of a national association of hydrogen-related
research
S6
CONAC
COMMON
SECRETARIA DE ENERGIA
Conclusions
Mexico is doing a serious effort to promote energy
efficiency
Potential for cogeneration is considerable but some
barriers remain
There is social interest in the development of
renewable energy alternatives
CONAE is a serious partner for the promotion of
cogeneration, renewable-energy and alternative-
fuels use in Mexico
se
CONNC
COMMAN VICENSE
SECRETARIA DE ENERGIA
ACT a MORE
as ENERGIA
http://www.conae.gob.mx
Mexico: Total Primary Energy Supply, 1997
Imports *
6.9%
Coal 1.9%
Biomass 3.4%
Electricity **
4.4 %
Natural gas
17.6 %
10,046 PJ
(9.5 Quads)
Crude oil & liquids
65.8 %
* * Includes stock change.
** Includes solar energy.
Share of Sustainable Energy in TPES, 1997
10,046 PJ (9.5 Quads)
2442 PJ (2.3 Quads)
Geothermal * 2.4 %
Sugar cane 3.9 %
10.1 %
Wood
11.1 %
Hydro
Other sources
of energy
75.7 %
72.5 %
Natural gas
Sustainable energy
24.3 %
* Includes solar
& wind energy.
Share of Sustainable Energy in TPES, 1997
10,046 PJ (9.5 Quads)
2554 PJ (2.4 Quads)
Geothermal * 2.3 %
Sugar cane
3.8 %
Nuclear
4.4 %
9.6 %
Wood
10.6 %
Hydro
Other sources
of energy
74.6 %
69.3 %
Natural gas
Sustainable energy
25.4 %
* Includes solar
& wind energy.
Share of Sustainable Energy in TPES, 1997
10,046 PJ (9.5 Quads)
5992 PJ (5.7 Quads)
Wood
4.1%
4.4 %
Others *
4.5%
Hydro
Other sources
40.3 %
of energy
29.6 %
Natural gas
Sustainable energy
59.7 %
57.4 %
Clean oil products
* Includes nuclear,
geothermal, wind,
solar & sugar cane.
Mexico: Demographic indicators
Population, 1998 (e): 96.6 million (midth of the year)
Years
(%)
0 - 14
34
Age structure
15 - 29
30
0 - 29
64
30 - 64
31
65 or more
5
Population Growth Rate, 1998/1997: 1.6%
2005 2010 2015 2020
Population (million):
106.3 112.2 117.5 122.1
Area:
1,972,550 sq. km
Sustainable energy
Sustainable energy is the basis for economic development that
meets the needs of the present without jeopardizing the ability of
future generations to meet their needs.
- Strongly implies the need to exploit natural resources at a
rate that does not impede the regeneration of ecosystems.
In the case of the renewable natural resources, this
dictates production and consumption at rates such that
nature, or nature aided by technology, is allowed to
regenerate itself.
In the case of non-renewable natural resources, this
implies extraction at rates that allow optional
alternatives to be developed.
optimal
Sustainable energy (continued)
- Sustainable development is an environmental issue. The
effect of production and consumption of energy on the
environment should be considered in detail.
- Widespread support for energy efficiency is a main weapon
for sustainability, and R&D will play an important role in
designing means to achieve this.
Sustainable energy
Sustainable Energy Policiy refers to the promotion of cleaner
consumption and production of energy in order to encourage economic
growth and social welfare in the short and long run, minimizing its
negative externalities on environment.
Hydro
Renewable Resources
Wind
Solar
Geothermal
Hydrocarbons
Fuels as natural gas
Specific policies in the energy sector
In order to contribute with the international efforts to mitigating
greenhouse gases emissions, Mexico is concentrating in three
areas:
Switching energy consumption towards clean fuels
as natural gas.
Promoting the use of renewable energy resources.
Efficient use of energy and its conservation.
A) Natural gas
High sulphur fuel substitution in current power plants
In 1994, the Electricity Company started a program for converting
the 70% of power plants using fuel oil to use natural gas by the
year 2000.
New power capacity using natural gas
There are 14 projects of new power plants using natural gas. They
represent an additional capacity of 5,553 MW.
B) Promoting the use of renewable resources
Source of Energy
Installed
Capacity (MW)
Hydro power
10,000
Geo thermal power
750
Wind power
1.6
Solar power
11
C) Efficient use of energy and its conservation
Supply Side
Combined Heat and Power (CHP)
231 MW of installed capacity
It generates 1,575 GWh per year.
C) Efficient use of energy and its conservation
Demand Side
-
Ilumex
Program for switching use of bulbs to fluorescent lamps.
Incentive Program of FIDE
Program for promoting the use of high efficiency equipments in the industry
sector.
Voluntary Programs
National Commission for Energy Saving (CONAE) offers technical assistance to
Companies interested on saving energy in their buildings.
Regulation
During the last 3 years, the Secretary of Energy has issued 16 mandatory
standards (NOM) which define efficiency standards for appliances, electric
motors, lamps, air conditioners, etc.
Daylight Saving Time
During summer, time is adjusted in order to save energy.
C) Efficient use of energy and its conservation
Demand Side - Results
Program
Avoided Capacity
(MW)*/
Ilumex
267
Incentives (FIDE)
65
Voluntary Program
154
Regulation
653
Daylight Saving Time
550
Total
1,689
*/ From its implementation up to now.
Set of actions to mitigate pollutants
Mexico is developing an important set of actions to mitigate climate
change. During the 90's, Mexico's economy has grown using cleaner
productive processes than those used in the past, and inter-institutional
mechanisms have been established which contribute to the objectives
of the United Nations Framework Convention on Climate Change.
In parallel, Mexico has carried out other actions to mitigate local
pollution, as the reconfiguration of its refining system in order to improve
both the quality of oil products and therefore the air. These actions have
had a positive impact on avoiding health damage in the urban
population.
Set of actions to mitigate local pollutants
Since 1994 Mexico has carried out the reconfiguration of the National
Refining System for the transformation of fossil fuels, despite the high
cost involved:
Elimination since 1998, of leaded gasoline production and
improvement in the quality of gasoline.
Reduction the sulphur content in oil products.
Implementation of a phase down process on the availability of high
sulphur fuel oil through the installation of cokers.
In 1996, Mexico implemented a change in the composition of liquid
petroleum gas (LPG) in order to reduce emissions of highly reactive
hydrocarbons implicated in the formation of ozone.
FIRST MEXICO-U.S. WORKING GROUP ON
SUSTAINABLE ENERGY MEETING
Mexico City, April 15, 1999
Draft Agenda
1. Overview of the Working Group on Sustainable Energy
2. National Action Plans in aspects related to Sustainable Energy
-
Mexican action program description
-
U.S. Action Plan description
3. Review activities under Energy Cooperation Agreement
3.1. Overview discussion
- Report of the activities under the Energy Cooperation Agreement
Annexes
Project Annex 1: Cooperation in the Field of Renewable Energy
Project Annex 2: Cooperation in the Field of Energy Efficiency
3.2. Investment opportunities in clean energy and energy efficiency
3.3. Prioritization of activities
- Discussion:
- What is missing?
- New activities / projects
4. Regional developments
- Overview of clean energy developments in the region
5. Final comments
- Summary of agreements
- Report to Binational Commission
- Next steps
AMERICAN DELEGATION
FIRST MEETING OF THE SUSTAINABLE ENERGY WORKING GROUP
APRIL 15, 1999, MEXICO CITY
Theodore James Glauthier
Deputy Secretary of Energy
U.S. Department of Energy
Rachel King
Senior Policy Advisor for International Affairs
U.S. Department of Energy
Mark Mazur
Senior Policy Advisor and Chief Economist
U.S. Department of Energy
Joseph Aldy
Senior Advisor
Council of Economic Advisors
David Pumphrey
Director, Office of the Americas, Asia and Africa
Office of Policy and International Affairs
U.S. Department of Energy
Robert Dixon
Director, International Programs
Office of Energy Efficiency and Renewable Energy
U.S. Department of Energy
Larry Sperling
Environmental Protection Agency
U.S. Embassy, Mexico
Katherine Simonds
Economic Officer
U.S. Embassy, Mexico
DELEGACIÓN MEXICANA
PRIMERA REUNIÓN DEL GRUPO DE TRABAJO DE ENERGÍA SUSTENTABLE
15 DE ABRIL DE 1999
Dr. Jorge Chávez Presa
Subsecretario de Política y Desarrollo de Energéticos
Secretaría de Energía
Dra. Lourdes Melgar
Directora General de Asuntos Internacionales
Secretaría de Energía
Ing. Odón de Buen
Secretario Técnico
Comisión Nacional para el Ahorro de Energía
Lic. Manuel Betancourt
Director General de Política y Desarrollo de Energéticos
Secretaría de Energía
Lic. Ana María Sánchez
Directora para América, Medio Oriente y Países Petroleros
Secretaría de Energía
Lic. Ramiro Magaña
Director para Asia - Pacífico y Europa
Secretaría de Energía
Lic. Sergio Segura
Asesor de Cooperación Internacional
Comisión Nacional para el Ahorro de Energía
Additional Items for Table of Contents
Notional Schedule
A
Scope Paper
B
Deputy Secretary's Opening Remarks
C
Agenda Item 2 - - National Action Plans Discussion
D
- Deputy Secretary's Opening Remarks
- New Information about Mexico's Action Plan
- Information about U.S. Action Plan
Agenda Item 3 - - Bilateral Energy Cooperation
E
- Deputy Secretary's Opening Remarks
- Talking Points for Proposed New Annex
Agenda Item 4 - - Regional Developments
F
- Deputy Secretary's Opening Remarks
- Background Paper
Meeting with Secretary Tellez
G
Breakfast Meeting with U.S. Industry Representatives
H
Hemispheric Energy Initiative
I
OF
BAERGYA
The Deputy Secretary of Energy
Washington, DC 20585
STATES
OF
Last printed 04/14/99 1:35 PM
CONTACT LIST
Travel to Mexico, DF
Wednesday, April 14, 1999 - Friday, April 16,1999
Rachel King
Cell:
011.525.452.9328
Mark Mazur
Cell:
011.525.452.9319
Dave Pumphrey
Cell:
011.525.452.9391
Hotel Presidente
P:
011.525.327.7700
F:
011.525.327.7737
OF
The Deputy Secretary of Energy
SOUTH STATES OF
Washington, DC 20585
FINAL
Last printed 04/14/99 1:35 PM
SCHEDULE FOR DEPUTY SECRETARY GLAUTHIER
Travel to Mexico, DF
Wednesday, April 14, 1999
Wednesday, April 14, 1999
3:30 PM
Depart en route Dulles Airport
Note: Rachel King will ride with YOU
4:30 PM
Arrive Dulles Airport
5:20 PM
Wheels up en route Mexico, DF
Airline:
United Airlines
Flight:
1021
Seat:
6-D
Flight Time:
4 Hours 33 Minutes
Time Change: Mountain (-2 Hours)
Meal:
Dinner
8:53 PM
Wheels Down Mexico, DF
Note: YOU will be met by car from US Embassy
YOU will be met by Tim Sykes and Bob. Pittman, DOE Security Detail
YOU will be met by Katherine Simonds, Economic Officer, US Embassy
YOU will proceed to Hotel Presidente for overnight
10:00 PM
Arrive Hotel Presidente
Location:
Campos Eliseos
218 Polanco, Mexico, DF
011-525-327-7700 (Phone)
011-525-327-7737 (Fax)
FINAL
Thursday, April 15, 1999
7:30 AM
BREAKFAST WITH DELEGATION
Location:
Hotel Presidente
Campos Eliseos
218 Polanco, Mexico, DF
Attendees:
-DOE staff
-CEA staff
-Embassy staff
Note:
YOU will receive briefing during this breakfast
8:30 AM
Depart en route
9:00 AM-
SESSION I - FIRST MEETING OF THE HIGH-LEVEL WORKING
11:00 AM
GROUP ON SUSTAINABLE ENERGY
Location:
Secretariat of Energy
Avenida Insurgentes
Sur 890
Colonia Del Valle
Attendees:
-Dr. Jose Chavez Presa
-Dra. Lourdes Melgar
-Ing. Odon de Buen
-Dr. Francisco Guzman
-Lic. Manuel Betancourt
-Lic. Ana Maria Sanchez
-Lic. Ramiro Magana
-Rachel King
-Mark Mazur
-David Pumphrey
-Robert Dixon
-Joseph Aldy
-Katherine Simonds
-Jim Loveland
-Robert Wolcott
11:00 AM-
BREAK
11:30 AM
11:30 AM-
SESSION II - FIRST MEETING OF THE HIGH-LEVEL WORKING GROUP ON
1:00 PM
SUSTAINABLE ENERGY
1:00 PM-
MEETING WITH MINISTER TELLEZ
1:30 PM
Location:
Office of the Minister
Attendees:
TBD
FINAL
1:30 PM-
LUNCH
2:00 PM
2:30 PM-
SESSION III - FIRST MEETING OF THE HIGH-LEVEL WORKING GROUP ON
4:00 PM
SUSTAINABLE ENERGY
= .
4:00 PM
Depart en Route Hotel Presidente
4:30 PM-
DOWN AT HOTEL
6:00 PM
6:30 PM
Depart en Route (Location TBD)
7:00 PM
DINNER WITH UNDER SECRETARY CHAVEZ
Location:
TBD
Attendees:
TBD
FINAL
Friday, April 16, 1999
7:00 AM
Depart en route Charges d'Affaires Residence
7:20 AM
BREAKFAST WITH U.S. ENERGY EXECUTIVES
Location:
Charges d'Affaires Residence
115 Virreyes Lomas de Virreyes, Mexico, DF
Attendees:
-Bill Weidler
Lone Star Gas International
-Jorge Young
Intergen
-James Robo
GE of Mexico
-Richard Bryan
Bechtel
-Bill Pollard
Tejas Gas
-Derek Stillwell Fernandez
Calpine
-Karl Huber
AES
-Bob Reed
Coastal Gas Services Corp.
9:00 AM
Depart en route Mexico, DF Airport
10:36 AM
Wheels up en route Dulles Airport
Airline:
United Airlines
Flight:
1020
Seat:
6-D
Flight Time:
4 Hours 03 Minutes
Time Change:
Eastern (+2 Hours)
Meal:
Lunch
3:39 PM
Wheels down Dulles Airport
4:00 PM
Depart en route HOME
U.S.-Mexico Sustainable Energy Working Group
Scope Paper
April 15, 1999
Overview
This group was formed as a result of Secretary Richardson's meeting with President Zedillo of
Mexico Wednesday, October 21, 1998. At that meeting, Secretary Richardson proposed that we
initiate a broad, high-ranking Climate Change Working Group that would bring to the table
energy and economic/finance interests to complement the ongoing diplomatic/environment
interaction, emphasizing tangible economic and technology benefits. This Sustainable Energy
Working Group, to be chaired by the U.S. and Mexican Energy Ministries, is, as agreed to by the
Mexicans, much narrower in focus. The Mexicans agree that clean energy strategies have an
important role in future energy policies but emphasize that the energy ministry has no role, by law,
in affecting Climate Change policy-that can only be done by the environment ministry,
SEMARNAP. The goal of this group is not to work the issue of targets, but to get the Mexican
energy side comfortable with the climate change issue. Coming up with the parameters was
difficult and while we have pushed for interagency participation from both countries, the
Mexicans have resisted.
It was agreed that the focus of the Working Group would be sustainable energy development.
Progress in this area would improve the environment (addressing local air pollution and climate
change concerns) at the same time that economic growth was spurred. The Working Group
would draw from the various bilateral energy efficiency, renewable energy, and clean power
activities under the existing bilateral energy agreements. The Working Group will parallel and so
draw from the bilateral climate change group led by EPA and SEMARNAP that has focused on
international negotiations issues and other elements under the United Nations Framework
Convention on Climate Change.
Mexico has not agreed to a Climate Change target, although President Clinton also raised this
with President Zedillo. Mexico is concerned about the effect of climate change measures on its
economic growth as well as on its state-run energy industry, a source of great pride and little
government flexibility for Mexico. Mexico is, however, one of only two OECD members (Korea
is the other) not to have taken on a target and has recently shown interest in policies to increase
trade, foreign investment and growth in the renewable energy, energy efficiency and natural gas
sectors. We hope to continue to stress that all these measures would benefit from Mexico
agreeing to take on a target, probably a growth target, and become a beneficiary of an emissions
trading scheme.
Mexico's energy sector continues to be an area of significant political sensitivity, dominated by the
two powerful Parastatals, Petroleos de Mexicanos (PEMEX) and the Comision Federal de
Electricidad (CFE). Notwithstanding the opportunities provided by NAFTA for private sector
participation in natural gas distribution and electricity generation, efforts by the government to
institute further changes have been fraught with delays and changes in plans. Tellez, with Zedillo's
support, is pushing for reforms in the electricity sector, including restructuring CFE, and we should
privately commend and support their efforts.
In the meeting, we will want to take up the goals of the Working group and emphasize President
Zedillo's support for these goals. Mexico may want to develop terms of reference for the Working
Group in order to contain the scope of the discussion. We want to keep the scope of the
discussions as broad as possible and therefore would like to avoid restrictive terms of reference.
National Action Plan
Mexico has recently completed and released a National Action Plan. This plan was developed with
assistance from DOE and other agencies. We understand that the National Action Plan results in
reducing the growth of emissions below a baseline case. Secretary Richardson offered to put our
governments' best minds together to help Mexico develop a path to a target after completion of
the National Action Plan. Mexico indicated at the time of the October meeting that it was ready to
release its internal strategy on greenhouse gas emissions and the key push for Mexico should be on
how they cast the results of this package. Mexico should be encouraged to stand as a leader as a
result of their strategy and the fact that it will lower their emissions levels significantly. We should
continue to encourage Mexico to take a proactive stance.
During this meeting we will also outline the U.S. Action Plan and encourage discussion on a
cooperative agenda that commits to an exchange of information on our National Action Plans and
movement forward on both Action Plans.
Energy Cooperation Agreement
At the last meeting of the Energy Working Group of the U.S.-Mexico Binational Commission in
June 1988, the U.S. and Mexico, agreed to enhance cooperation in energy efficiency and
renewable energy by signing annexes to the Agreement for Energy Cooperation in the fields of
energy efficiency and renewable energy. These annexes will bring together and extend already
existing programs. At this meeting you should emphasize that we need to move from research into
development, and push for agreement on the clean power annex.
The activities under the energy efficiency and renewable energy annexes include: collaboration in
the development and testing of renewable energy equipment under varying conditions and the
training of engineers and technicians, as well as development of programs to encourage the use of
renewable energy in the private and public sector. In addition, we agreed to pursue participation in
a workshop on new and emerging clean power generation technologies.
Renewable Energy -- DOE and U.S. AID are jointly funding a project to identify and promote
renewable energy opportunities in Mexico's rural areas, particularly for those communities not
served by the central electricity grid. This project began in 1994, and is receiving $500 thousand
from DOE and $880 thousand from AID. In addition, DOE has other renewable energy projects
underway in Baja California Sur, Xcalac, and other states in Mexico. To codify and expand these
activities, an Annex to our Memorandum of Agreement (MOA) was signed that would expand
cooperation in this area including, collaboration in the evaluation of renewable energy equipment
under varying conditions, the training of technicians to install and maintain renewable energy
equipment and perform work related to other renewable energy technologies, as well as programs
to encourage the use of renewable energy by the private and public sector.
Energy Efficiency -- At the December 1997 U.S.-Mexico Technical Energy Consultations, we
agreed to continue our cooperative efforts in a number of areas, including work on standards, the
verification protocol, and how to manage Federal energy efficiency programs. There had been
very little activity in any of these areas, so the second annex to the MOA was signed in the hope
of increasing Mexico's interest in pursuing activities in energy efficiency. The annex includes AID
and the Environmental Protection Agency as Parties, and encompasses cooperative activities such
as programs for energy efficient buildings, homes and motors as well as the development of
procedures for appliance testing, testing and training of technicians to conduct the above tests and
perform work related to other energy efficiency technologies.
At this meeting of the working group we will hear a status update on cooperative efforts under
these agreement and discuss how these activities can support reducing greenhouse gas emissions.
A key objective will be to begin to develop a set of policy priorities that will help frame future
cooperation. We will want to begin to direct the cooperative activities into the areas of greatest
interest and potential payoff. The priorities that get set by the Sustainable Working Group should
provide guidance to the researchers to redirect existing activities and develop new ones. We will
propose additional activities and a new annex for cooperation in the area of clean power
technologies. We will want Mexico to take the lead in identifying key areas of interest for new
activities.
Regional Developments
A key objective for our work with Mexico is to reinforce and expand cooperation in the
Hemisphere on sustainable energy. Mexico has participated in some of the activities of the
Hemispheric Energy Initiative created by the Summits of the Americas. This Initiative is aimed at
enhancing the climate for investment in clean energy and to further integration of regional energy
markets. Recently Mexico has been critical of the lack of progress in the Initiative, but has not
offered concrete suggestions for new projects to strengthen the work. We want to use this part of
the discussion to begin to focus Mexico on some proposals for enhanced regional cooperation on
sustainable energy. This discussion will help prepare for the July Hemispheric Energy Ministers
Conference that the Secretary will host.
We want to encourage Mexico that there are significant benefits to expanding work with the
countries and regional organizations in the Western Hemisphere to integrate its energy
infrastructure. Projects such as the Mexico-Guatemala gas pipeline develop partnerships among
governments, industry, non-government organizations and universities to foster economic
development, which is increasingly crucial to the Hemisphere's prosperity and of no small
consequence to Mexico's own. The expansion of a gas market south from Mexico to Guatemala
will increase gas use in southern Mexico and Guatemala and back out less environmentally friendly
fuels. It would also create demand in the north of Mexico for U.S. gas supplies. Unfortunately,
given the current size of Guatemala's gas market, the economics are not very attractive for private
investors. You will hear presentations on this project and other regional initiatives.
We should also discuss ways to enhance regional cooperation in energy efficiency, clean power
technologies, and rural electrification. We should reach agreement that we will build on our strong
bilateral cooperation in these areas to enhance regional cooperation.
Final Comments
You will want to reemphasize the goals of the Working Group: sustainable energy development to
improve the environment (addressing local air pollution and climate change concerns) at the same
time enhance economic growth. Congratulate the Working Group on the conclusions that various
bilateral energy efficiency, renewable energy, and clean power activities already underway can
enhance climate change goals. We would propose that the next meeting of the Working Group
take place in Washington in October.
OPENING REMARKS FOR T.J. GLAUTHIER
DEPUTY SECRETARY, U.S. DEPARTMENT OF ENERGY
U.S.-Mexico Sustainable Energy Working Group
April 15, 1999
Under Secretary Chavez, other Mexican colleagues, I am very pleased to be here to launch
this bilateral dialogue on sustainable energy paths for our two nations and for the region.
This discussion carries forward a commitment made between our two countries in 1998.
Secretary of Energy Bill Richardson was very pleased to have reached mutual agreement
on this dialogue in his meetings with President Zedillo and Energy Secretary Tellez last
fall. The Secretary thanks you for your early engagement in this important discussion.
The United States is firmly committed to cooperating closely with Mexico and the other
countries in the region to help accelerate the path to a sustainable energy future. This has
multiple benefits. Greater deployment of energy efficiency and clean energy options helps
address compelling local environmental problems, reduces greenhouse gas emissions, fuels
economic growth and prosperity in a sustainable fashion, and enhances the
competitiveness and deployment potential of clean technology options.
In short, the United States is convinced that sustainable energy practices will allow us to
be both environmentally responsible and promote vigorous economic growth. That is why
I am accompanied today by delegates not only from my Department of Energy and from
the Environmental Protection Agency, but also from the Council of Economic Advisors.
I hope that at today's meeting, we can engage in four areas:
recognize the important role which energy does and can play in dealing with the
challenge and response to global climate change;
make a commitment to exchange information on our national climate change
action plans and strategies, and identify potential areas and opportunities for
cooperating in implementing them;
examine our ongoing and extensive cooperation in the energy sector, take stock of
its benefits to our sustainable energy goals and identify possible priorities to guide
our future efforts;
discuss how we can leverage our bilateral efforts in sustainable energy by finding
ways to communicate the importance of sustainable energy paths for the
region as a whole, using the process available through the Hemispheric Energy
Initiative and the Summit of the Americas.
1
Bilaterally, we have a strong foundation of cooperation to build on today. Already, we
have cooperative agreements in energy efficiency, renewable energy and waste water
clean-up and a commitment by both our countries to sustainable energy initiatives in our
national energy plans.
In the regional context, we can provide leadership through our own actions. Mexico's
commitment to increasing energy efficiency, natural gas utilization, renewable energy and
private power investments in the electric power sectors demonstrates that kind of
leadership.
With natural gas demand in Mexico expected to double, spurred by expanded investments
in pipelines and infrastructure and elimination by the year 2003 of tariffs on imported gas,
you will be encouraging an option with significantly lower greenhouse gas emissions than
other conventional fossil fuels.
Enhanced energy efficiency also opens doors to more sustainable energy paths and to
greater cooperation between our two countries. We encourage you in your resolve to
increase energy efficiency and are seeking ways to support you in this effort.
Our two countries are already working cooperatively to advance the potential for
renewable energy. DOE and US AID are jointly funding a project to identify and promote
renewable energy opportunities in Mexico's rural areas, particularly those communities
not served by the central power grid. This project began in 1994 and is receiving $500
thousand form DOE and $800 thousand from AID. Other activities are underway and, an
Annex to our Memorandum of Agreement was also signed that would expand
collaboration in this area.
Intensifying our cooperative efforts, identifying priorities, exchanging strategies and
expanding this dialogue to the region will serve and advance the interests of both the
United States and Mexico to achieve a competitive, efficient, safe and sustainable energy
industry.
I look forward to our discussions today.
2
NOTES FOR SESSION ON NATIONAL PLANS
mjm 4/14/99
Background: The main goal here is to set the stage for the subsequent discussions. Mexico
released its National Action Plan last week (April 6th) and we expect them to discuss this
document and its policy implications. The US will focus on: the Administration's Climate Change
Action Plan (announced in 1993 and included in the 1997 Climate Action Report to the UN); the
Administration's FY 2000 Budget Request, including the Climate Change Technology Initiative;
the Administration's Electricity Restructuring Proposal (released April 15th); and the
Administration's analysis of the economic costs of complying with the Kyoto Protocol (the CEA
analysis released in July 1998).
Presentation on the first three elements on the US side will be by Mark Mazur; the Kyoto
Protocol analysis will be presented by Joe Aldy, Senior Advisor to the Chair of the Council of
Economic Advisers.
Talking Points
We would like to begin our substantive discussion today with a brief overview of the
sustainable energy strategies our countries are following in light of our concerns with local
and global environmental matters.
United States
In the United States, the main policy driver behind our sustainable energy strategies is the
issue of global climate change. This comes up in our Climate Change Action Plan
(unveiled in 1993 and updated and presented in our 1997 Climate Action Report to the
UN) and in our annual budget submissions. In fact, our FY 2000 Budget Submission
included over $4 billion in climate change-related items basic scientific research, R&D in
a wide variety of areas, such as energy efficiency, renewable energy, improved fossil
energy technologies, and nuclear energy, and tax incentives to accelerate deployment of
effective technologies.
Today we unveiled the Administration's electricity restructuring proposal. This legislation
would, by 2010, reduce consumers' electricity bills by about $20 billion per year and
reduce greenhouse gas emissions by 45-60 million tons of carbon equivalent. This is an
example of a policy that is good for the economy and good for the environment.
We also want to spend some time discussing the Administration's analysis of the economic
costs of complying with the target set out in the Kyoto Protocol, greenhouse gas
emissions 7 percent below 1990 levels. We think that the overall cost to the economy
would be modest, due to the market-based mechanisms contained in the Kyoto Protocol
and the ability of the United States economy to adjust to the target.
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UNCLAS
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CLAN:
ACTION: EST
INFO FCS ECON DCM DAO AMB AID CONS POL
Laserl:
INFO: EPA
DISSEMINATION: EST
CHARGE: PROG
OPTIONAL FORM 99 (7-90)
APPROVED: EST:LKERR
FAX TRANSMITTAL
# of pages 3
DRAFTED: EST:JDLOVELAND
To
CLEARED: EST:MOPTICAN
Kathy Deutsch
From K.Simands
Dept./Agency
Phone #
VZCZCMEI058
PP RUEHC
Fax # 586-0013
Fax #
DE RUEHME #3271/01 1031955
NSN 7540-01-317-7368
5099-101
GENERAL SERVICES ADMINISTRATION
ZNR UUUUU ZZH
P 131955Z APR 99
FM AMEMBASSY MEXICO
TO SECSTATE WASHDC PRIORITY 3250
BT
UNCLAS SECTION 01 OF 02 MEXICO 003271
DEPT FOR ARA/MEX PAUL STORING
DEPT FOR OES/PCI
EPA/CLIMATE CHANGE FOR JLEGGETT
USAID/ENVIRONMENT
E.O. 12958: N/A
TAGS: SENV, KSCA, MX
SUBJECT:
MEXICO PRESENTS NATIONAL CLIMATE CHANGE
PLAN
SUMMARY
1. MEXICO PRESENTED ITS NATIONAL CLIMATE CHANGE
PLAN ON APRIL 6. THE PLAN INCLUDES A STATEMENT
OF MEXICO'S POSITION ON CLIMATE CHANGE AS WELL
AS BRIEF DISCUSSIONS OF THE NATIONAL CLIMATE
CHANGE STRATEGY, SECTORAL PRIORITIES, AND LIKELY
DIRECTIONS FOR FUTURE RESEARCH. THE PLAN IS
AVAILABLE ON THE INTERNET, IN SPANISH, AT
HTTP://WWW.INE.GO.MX/DGRA/PNCC/INDEX.HTML. END
SUMMARY.
MEXICO'S POSITION
2. MEXICO'S POSITION GROWS OUT OF THE
FUNDAMENTAL ASSUMPTION THAT THE COUNTRY'S TOTAL
AND PER CAPITA EMISSIONS WILL GROW OVER TIME, AS
A RESULT OF NATIONAL EFFORTS TO EXPAND THE
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ECONOMY. REGARDING EMISSIONS TARGETS, THE PLAN
EMPHASIZES THAT MEXICO IS NOT NOW TECHNICALLY
CAPABLE OF MEASURING OR PREDICTING EMISSIONS
WITH THE ACCURACY NECESSARY TO CONSIDER TARGETS.
HOWEVER, THE PLAN SIGNALS MEXICO'S WILLINGNESS
TO UNDERTAKE ACTIONS .TO REDUCE CLIMATE CHANGE,
AND UNDERLINES THE IMPORTANCE OF INTERNATIONAL
COOPERATION TO ACHIEVE THIS END.
STRATEGIES FOR THE FUTURE
3. MEXICO'S STRATEGIES FOR FUTURE ACTION INCLUDE
SUPPORTING ADVANCES IN ENERGY EFFICIENCY AND
ALTERNATIVE ENERGY PROGRAMS, MODIFYING
REGULATIONS TO ENCOURAGE RATIONAL DECISION-
MAKING WITH RESPECT TO CLEAN TECHNOLOGIES AND
ENERGY PRICES, AND CAPTURING THE ENORMOUS
POTENTIAL OF FOREST ECOSYSTEMS AND PREVENTING
CHANGES IN LAND USE WHICH CONTRIBUTE TO CLIMATE
CHANGE. FINALLY, THE PLAN SIGNALS MEXICO'S
INTENTION TO GRANT MAXIMUM POSSIBLE BUDGETARY
SUPPORT TO CARBON SEQUESTRATION, ENERGY
EFFICIENCY, AND CLEAN DEVELOPMENT PROJECTS.
SECTORAL INITIATIVES
4. MEXICO'S NATIONAL PLAN IDENTIFIES CLIMATE
CHANGE POLICIES FOR VARIOUS SECTORS OF THE
SOCIETY. IN THE AREA OF NATURAL RESOURCES AND
AGRICULTURE, EMPHASIS IS PLACED UPON EXPANDING
AND CONSERVING FOREST ECOSYSTEMS, REDUCING THE
USE OF FOSSIL FUELS, AND LIMITING HARMFUL LAND-
USE CHANGES. AS ENERGY POLICIES, THE PLAN
IDENTIFIES PROMOTION OF ALTERNATIVE FUELS AS A
PRIORITY, AS WELL AS ENERGY CONSERVATION
PROGRAMS AND THE PROMOTION OF COGENERATION OF
ELECTRICITY. IN THE INDUSTRIAL SECTOR, ENERGY
EFFICIENCY, TECHNOLOGICAL ADVANCES, AND THE
MODERNIZATION OF THE REGULATORY FRAMEWORK ARE
IDENTIFIED AS PRIORITY AREAS.
5. THE PLAN LISTS THE FOLLOWING AS PRIORITIES
FOR URBAN DEVELOPMENT: ORDERLY URBAN GROWTH, THE
MODERNIZATION OF PUBLIC TRANSPORTATION SYSTEMS,
THE CONTROL AND UTILIZATION OF LANDFILL-
GENERATED METHANE, AND THE INSTITUTION OF AIR
QUALITY PROGRAMS IN LARGE CITIES. THE PLAN ALSO
HIGHLIGHTS THE IMPORTANCE OF MODERNIZATION OF
TRANSPORTATION AND COMMUNICATION
INFRASTRUCTURES.
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DIRECTIONS FOR RESEARCH
6. MEXICO'S PLAN MENTIONS IMPORTANT DIRECTIONS
FOR FUTURE RESEARCH. THESE INCLUDE DEVELOPMENT
OF A NATIONAL INVENTORY OF EMISSIONS, THE
PROJECTION OF EMISSION LEVELS BASED ON VARIOUS
ESTIMATES OF ECONOMIC GROWTH, AND THE CREATION
OF REALISTIC ESTIMATES OF THE COSTS OF
TECHOLOGIES AND MITIGATION OPTIONS.
FINALLY, THE PLAN IDENTIFIES THE STUDY OF OTHER
NATIONAL STRATEGIES AS A PRIORITY.
COMMENT
7. THE PUBLISHED NATIONAL PLAN DOES NOT REFLECT
SUBSTANTIAL CHANGE IN PREVIOUS GOM POSITIONS ON
CLIMATE CHANGE. THE FACT THAT THE PLAN IS NOW
THE PRODUCT OF GOVERNMENTAL CONSENSUS, HOWEVER,
WILL MAKE THOSE POSITIONS EVEN MORE FIRM.
BREW
BT
#3271
NNNN
Dane 3 of 3
From Rey Prince (Policy)
- his take on Mexico's
National Action Plen.
TALKING POINTS FOR THE DOE DELEGATION TO MEXICO
(page numbers denote page in the National Communication)
4/99
General (pp. 13-7)
Mexico's proven hydrocarbon reserves in 1997 totaled 50 million barrels, 80% of which were
petroleum and 20% natural gas. Mexico's coal reserves total 663 million tons. Mexico has
significant potential for geothermal, solar and wind energy.
Although Mexico contributes less than 2% of world emissions of CO2, it ranks in the top 20 in
per capita CO2 emissions (0.96 tons per capita in 1994 compared to 5.26 for the U.S.).
Carbon dioxide accounts for 96% of total greenhouse gas emissions, methane for 1% and other ? from
gases 3%. [by molecular weight]
energy
In 1990, 62% of electricity was generated by fossil fuels.
The effects of a doubling of the CO2 concentration above pre-industrial levels (from
approximately 280 ppm to 560 ppm) would cause flooding in the Panuco River delta in
Tamaulpais in the North, render much arable land in central Mexico unsuitable for maize
production and affect coastal areas along the Gulf of Mexico and the Caribbean.
Programs adopted to reduce air pollution from the burning of fossil fuels in Mexico's four major
urban areas (Mexico City, Guadalajara, Monterrey, Toluca valley) include an increased use of
unleaded gas and low sulfur diesel, conversions from petroleum to natural gas, development of
co-generation plants and standards for consumer electrical products.
Approximately 72% of Mexico's territory (142 million square hectares) is covered with forests,
jungles and other natural vegetation.
The National Communications estimates that approximately 30% [by weight] of Mexico's
greenhouse gas emissions are traceable to past land use changes [starting date undetermined].
(p.22)
Climate Policy Specific
The Secretariat for Environment, Natural Resources and Fisheries (SEMARNAP) was formed in
1994. It mission is to establish the basis for sustainable development through programs that
encourage the judicious use of ecological systems, natural resources, and protection of
environmental quality. Those programs, spelled out in the National Development Plan for 1995-
2000, included a proposed reform of environmental regulations for industry and improved
monitoring (pp50-51).
Mitigation programs described in the National Communications that fall under SEMARNAP's
jurisdiction include
Air quality programs in the four major metropolitan areas (Note: the program for Mexico
City is known as PROAIRE [Programa Integral contra la Contaminacion Atmosferica en
la Zona Metropolitana de la Ciudad de Mexico])
Programs to protect natural areas
Programs to establish industrial standards
Programs to measure emissions
Plan for management of the national forests [PRODEFOR]
Plan for the management of commercial forests [PRODEPLAN] (p 51)
Develop plans for carbon sequestration by reforestation and aforestation
Undertake pilot phase Joint Implementation projects (pp. 66-8)
The primary tenets of Mexican energy policy as it affects greenhouse gas emissions are
Efficient and economical use of conventional energy including improved performance of
internal combustion engines
Substitution of natural gas for petroleum in electric generating plants in the major
metropolitan areas.
Encourage the economic use of renewable energy (p.53)
Accomplishments:
70% conversion of electricity generation plants in the metropolitan areas
Deregulation of the natural gas electricity generation sector
Establishment of CONAE [Comision Nacional para el Ahorro de Energia] to encourage
co-generation plants
Increased use of flourescent lights for residences
Improved lighting systems for industry [p. 55]
Pilot phase JI projects to promote carbon sequestration in Bahia Kino in Sonora, Chiapas,
Oaxaca, Campeche and the Monarch Butterfly Reserve.
Apr-14-99 09:52A Climate Change Task Force
P.01
President Clinton's FY 2000 Climate Change Budget
"Our most fateful new challenge is the threat of global warming Tonight I propose a new clean air fund 10 help
communities reduce greenhouse and other pollution. and tax incentives and investments to spur clean energy
technology."
President Bill Clinton, State of the Union address, January 19, 1999
Meeting the challenge of global warming. In his FY 2000 budget, the President is proposing a 34 percent
increase for R&D in energy efficient technology and renewable energy; a new Clean Air Partnership Fund
to boost state and local efforts to reduce greenhouse gases and air pollution; a five-year package of tax
incentives to spur clean energy technologies; substantial new funding to focus on the ways farms and forests
can reduce and offset greenhouse gas cmissions; and $1.8 billion for global change research -- a total
package for FY 2000 of over $4 billion.
Clean Air Partnership Fund. The President proposes $200 million for a new fund to provide grants to
state and local governments for projects that reduce both greenhouse gases and pollutants like soot, smog.
and air toxics.
Climate Change Technology Initiative (CCTI). The CCTI is a package of targeted tax incentives and
investments aimed at increasing energy efficiency and spurring the broader use of renewable energy. The
package will savc consumers money and reduce greenhouse gas emissions at the same time. FY 1999
appropriations represented a 25 percent increase over the prior year. The President's new budget proposes a
still more accelerated effort.
$3.6 billion in tax incentives over five years. The proposed package contains $3.6 billion over
five years in tax cuts ($383 million for FY 2000) for consumers who purchase energy efficient
products and for producers of energy from renewable sources. Highlights include:
Tax credits for energy efficient homes. Consumers can receive a $1000-2000 credit toward
the purchase of a new energy efficient home; a 10-20 percent tax credit for the purchase of
selected energy efficient products for their homes and buildings; and a $1000-2000 credit for
installing a rooftop solar system.
Tax credits for fuel-efficient cars. The package includes tax credits ranging from
$1000-4000 for the purchase of a qualifying electric, fucl cell or hybrid vehicle.
Tax credits for renewable energy. The package extends the 1.5 cent per kilowatt hour tax
credit for the production of electricity from wind and biomass: expands the biomass credit to
cover additional sources of biomass; and adds a 1.0 cent per kilowatt hour tax credit for
cofiring coal and biomass in power plants.
$1.4 billion for Energy Efficiency & Renewables. The proposed package contains nearly $1.4
billion in FY 2000 to research, develop, and deploy clean technologies for the four major
carbon-emitting sectors of the economy - buildings, transportation, industry. and electricity
a 34 percent increase over the amount appropriated in FY 1999. Highlights include:
Partnership for a New Generation of Vehicles PNGV is a government-industry effon to
develop comfortable, affordable cars that meet all applicable safety and environmental
standards and get up to three times the fuel efficiency of today's cars. The combined
proposal for PNGV in the FY 2000 budget is $264 million. an increase from the $240
million appropriated in FY 1999.
Apr-14-99 09:52A Climate Change Task Force
P.02
Partnership for Advancing Technology in Housing. PATH is a government-industry
partnership to improve the energy efficiency of new homes by more than 50 percent and to
reuofit 15 million existing homes to make them 30 percent more energy efficient within a
decade. The FY 2000 budget request for building efficiency efforts. such as PATH. Energy
Star. and Building America, totals $273 million. a 59 percent increase over FY 1999
appropriations.
Renewable energy. The President proposes $399 million for the Department of Energy's
(DOE) solar and renewable energy programs, a 19 percent increase over the amount
appropriated in FY 1999. The package includes expanded efforts in key renewable
technologies, such as wind, biocnergy. photovoltaics, and geothermal energy.
Forests and Farms. The FY 2000 proposal includes $105 million for the Department of Agriculture's
(USDA) climate change budget, an increase of $50 million over the amount appropriated in FY 1999 and
$40 million over the Administration's FY 1999 request. The new proposal includes funding for a new,
multi-agency Carbon Cycle Initiative to better understand how carbon is absorbed by agricultural soils and
forests; a soil carbon inventory; pilot projects to demonstrate how improved farming practices can help
store carbon; and programs to reduce emissions through means such as the conversion of waste to energy.
In addition, DOE, in conjunction with USDA, will expand efforts aimed at broadening the use of biomass w
produce power, fuels, and chemicals.
Cleaner Coal. The budget request contains $122 million for R&D to develop next-gencration technologies
for coal combustion with much higher energy efficiency and lower greenhouse gas emissions.
Weatherization & State Energy Grants. The budget request includes $191 million - - a $25 million
increase over FY 1999 appropriations to deliver energy conservation services to low-income Americans
and to assist state energy offices in addressing their energy priorities.
U.S. Global Change Research Program. The FY 2000 request includes $1.8 billion for scientific research
to improve our understanding of human and natural forces that influence the Earth's climate system and to
assess the likely consequences of global warming.
2
Apr-14-99 09:52A Climate Change Task Force
P.03
President Clinton's FY 2000
Climate Change Budget
The President's climate change package for FY 2000 totals over $4.1 billion - an increase of
more than $1 billion (34 percent) from the amount enacted for FY 1999. It is comprised of a new
Clean Air Partnership Fund to boost state and local efforts to reduce both greenhouse gases and
ground-level air pollutants; the Climate Change Technology Initiative, which mixes tax incentives
and direct spending to spur the research, development, and deployment of energy efficient
technology and renewable energy; other climate-related investments, such as R&D of highly
efficient technologies for the combustion and use of coal and natural gas, weatherization, and
state energy grants; and the United States Global Change Research Program. to enhance our
understanding of the human and natural forces that influence the Earth's climate system.
Table 1. Climate-Change-Related Domestic Programs ($ in Millions)
FY 1999 FY 2000
Enacted
Request
Change
Clean Air Partnership Fund
0
200
+200
Climate Change Technology Initiative--tax incentives
--
383*
+383
Climate Change Technology Initiative-spending
1,021
1,368
+347
Other Climate-Related Investments (cleaner coal &
387
400
+13
natural gas; weatherization; state energy grants)
Global Change Research Program
1,681
1,786
+105
TOTAL
3,090
4.137
+1.048
"First year of a proposed five year, $3.6 billion package.
Apr-14-99 09:52A Climate Change Task Force
P.04
Clean Air Partnership Fund
To help protect public health and ease the threat of global warming, President Clinton is
proposing $200 million for the creation of a new Clean Air Partnership Fund. The Fund will
provide grants to states, localities, and tribes to support state, local, tribal, and private efforts that
achieve reductions in both greenhouse gas emissions and ground-level air pollutants. The Fund
will be administered by the Environmental Protection Agency (EPA) under existing authority.
Integrated Pollution Control. The Fund will stimulate integrated, cost-effective pollution
control strategies. It directs new resources to state, local, and tribal governments to
finance projects and programs that achieve accelerated reductions in both air pollutants,
such as soot, smog, and air toxics, and in greenhouse gases.
A Quicker Path to Cleaner Air. By providing new resources for projects that accelerate
pollution reductions, the Fund will enable communities to achieve multi-pollutant clean air
goals sooner and reduce greenhouse gas emissions at the same time.
Technological Innovation. The Fund will help spur both public and private sector
innovations in next-generation pollution control technology.
A Magnet for Local Investment & Innovation. The Fund will encourage public-private
partnerships to demonstrate ways to create a cleaner environment at the local level. The
Fund can be used to support local revolving funds, low-interest loan programs, matching
grants, and other mechanisms that will leverage the original Federal investment, greatly
increasing its impact.
"Win-Win" Clean Air Projects. The Fund will support a wide range of practical projects
that will mean cleaner air. reduced greenhouse gas emissions, and real savings for
taxpayers and consumers. These could include projects such as building combined heat
and power facilities that put waste heat to work, reducing emissions of both sulfur dioxide
and carbon dioxide: retrofitting municipal buildings to make them more energy efficient,
reducing pollution resulting from electricity generation; and upgrading municipal vehicle
fleets to make them more fuel efficient.
2
Apr-14-99 09:53A Climate Change Task Force
P.05
Climate Change Technology Initiative:
$3.6 Billion in Tax Incentives
The President is proposing a new $3.6 billion package in tax incentives over five years to
help reduce greenhouse gas emissions by spurring the purchase of energy efficient products and
the use of renewable energy (see Table 2).
Table 2. CCTI Tax Incentives ($ in Billions)
Revenue Effect
Total
FY 2000
FY00-04
Homes and Buildings
Provide tax credit for energy efficient building equipment
-0.2
-1.5
Provide tax credit for new energy efficient homes
-0.1
-0.4
Provide tax credit for rooftop solar systems
*:
-0.1
Vehicles
Extend tax credit for electric or fuel cell vehicles and provide
tax credits for highly fuel efficient hybrid vehicles
0
-0.9
Renewable Energy
Extend tax credit for electricity produced from wind and
biomass; expand eligible biomass sources; and include coal-
biomass cofiring
_*
-0.3
Industry
Provide tax credit for combined heat and power systems
-0.1
-0.3
TOTAL**
-0.4
-3.6
*Less than $50 million.
**Total may not add due to rounding.
3
Apr-14-99 09:53A Climate Change Task Force
P.06
HOMES AND BUILDINGS
Tax credit to consumers who purchase new energy efficient homes. To encourage the
purchase of new energy efficient homes, consumers would receive a tax credit of $1,000
for homes purchased from 2000-2001 that are at least 30 percent more energy efficient
than the standard under the 1998 International Energy Conservation Code (IECC); a
credit of $1,500 for homes purchased from 2000-2002 that are at least 40 percent more
efficient than the IECC standard; and a credit of $2,000 for homes purchased from
2000-2004 that are at least 50 percent more efficient than the IECC standard.
Tax credit for energy efficient equipment in new and existing homes or buildings.
This credit will encourage the purchase of electric heat pump and natural gas water
heaters, electric and natural gas heat pumps, advanced central air conditioners, and fuel
cells. The credit would apply to both residential and commercial equipment. For electric
heat pump water heaters, natural gas heat pumps, and fuel cells, the credit would be 20
percent of the cost of the investment, subject to a cap, for equipment purchased from
2000-2003. For all other equipment, the credit would be 10 percent of the cost of the
investment, subject to a cap, at one level of efficiency (2000-2001) and 20 percent, subject
to a cap. at a higher level of efficiency (2000-2003).
Tax credit for rooftop solar systems. A 15 percent tax credit will encourage the purchase
by consumers and businesses of rooftop solar systems. The maximum credit would be
$2,000 for rooftop photovoltaic systems placed in service from 2000-2006 and $1,000 for
solar water heating systems placed in service from 2000-2004.
VEHICLES
Tax credits for highly efficient cars and light trucks. Cars and light trucks (including
minivans, sport utilities, and pickups) currently account for 20 percent of greenhouse gas
emissions. Tax credits for electric, fuel cell, and hybrid vehicles will help to move these
highly efficient technologies from the laboratory to the highway. These technologies can
significantly reduce emissions of carbon dioxide, the most prevalent greenhouse gas.
Extend the current tax credit for electric vehicles and fuel cell vehicles. Under
current law, a 10 percent credit, up to $4,000, is provided for the cost of qualified
electric vehicles and fuel cell vehicles. The credit begins to phase down in 2002
and phases out in 2005. The President's proposal would extend the tax credit at
its $4,000 maximum level through 2006.
4
Apr-14-99 09:53A Climate Change Task Force
P.07
Tax credits for hybrid vehicles. The credit available for all qualifying vehicles,
including cars, minivans, sport utility vehicles, and pickup trucks -- would be:
-- $1,000 for each vehicle that is one-third more fuel efficient than a
comparable vehicle in its class- - available from 2003-2004;
-- $2,000 for each vehicle that is two-thirds more fuel efficient than a
comparable vehicle in its class -- available from 2003-2006;
-- $3,000 for each vehicle that is twice as fuel efficient as a comparable
vehicle in its class - available from 2004-2006; and,
-- $4,000 for each vehicle that is three times as fuel efficient as a
comparable vehicle in its class -- available from 2004-2006.
RENEWABLE ENERGY
Tax credit for electricity produced from wind. Current law encourages the production of
electricity from wind, which emits no greenhouse gases, through a tax credit of 1.5 cents
per kilowatt hour (adjusted for inflation after 1992). The current tax credit covers
facilities placed in service before July 1, 1999. The President proposes a 5-year extension
of this tax credit.
Tax credits for electricity produced from biomass. Biomass refers to trees, crops and
agricultural wastes used to produce power, fuels or chemicals. This package of credits
would:
-- Extend current biomass credit. This proposal extends for five years the
current 1.5 cent per kilowatt hour tax credit (adjusted for inflation after 1992).
which covers facilities placed in service before July 1, 1999.
-- Expand definition of eligible biomass. This proposal expands the definition of
biomass eligible for the 1.5 cent tax credit to include certain forest-related
resources and agricultural and other sources.
-- Include cofiring biomass and coal. This proposal adds a 1.0 cent per kilowatt
hour tax credit for electricity produced by cofiring biomass in coal plants.
INDUSTRY
Tax credit for combined heat and power (CHP) systems. CHP systems make effective
use of thermal energy that is otherwise wasted in producing electricity by more
conventional methods. To encourage and accelerate investment in CHP equipment, this
proposal provides an 00 percent tax credit for investments in large CHP systems that have a
total energy efficiency exceeding 70 percent and in smaller systems that have a total
energy efficiency exceeding 60 percent. The credit would apply to property placed in
service from 2000-2002.
5
Apr-14-99 09:53A Climate Change Task Force
P.08
Climate Change Technology Initiative:
$1.4 Billion for Energy Efficiency & Renewables
The President's FY 2000 budget proposes nearly $1.4 billion for the research, development, and
deployment of renewable energy technologies and energy efficient products that will help reduce
U.S. greenhouse gas emissions. This represents a $347 million increase (34 percent) over FY
1999 spending (see Table 3). The President's proposed investment package covers the four
major carbon-emitting sectors of the economy -- buildings, transportation, industry, and electricity
-- as well as carbon sequestration (see Table 4). The following sections highlight selected
programs in each of these areas of effort. The full agency programs extend well beyond what is
described here.
Table 3. CCTI Funding by Agency ($ in Millions)
FY 1998
FY 1999
FY 2000
Change
Enacted
Enacted
Request
from 1999
Energy
729
902
1,124
+222
EPA
90
109
216
+107
Housing & Urban Development
0
10
10
0
Agriculture
0
0
16
+16
Commerce
0
0
2
+2
TOTAL*
819
1.021
1.368
+347
"Totals may not add due to rounding
Table 4. CCTI Funding by Area of Activity ($ in Millions)
FY 1998
FY 1999
FY 2000
Change
Enacted
Enacted
Request
from 1999
Buildings
140
172
273
+101
Transportation
245
291
377
+86
Industry
157
188
239
+51
Electricity
239
310
379
+69
Carbon Sequestration
0
14
39
+25
Management, Planning & Analysis
37
46
60
+14
TOTAL
819
1.021
1.368
+347
Totals may not add due to rounding.
6
Apr-14-99 09:54A Climate Change Task Force
P.09
BUILDINGS
Partnership for Advancing Technology in Housing (PATH). PATH is a partnership
between the Federal government and building industry to develop and deploy housing
technologies to make new homes 50 percent more energy efficient and to make at least
15 million existing homes 30 percent more energy efficient within a decade.
Energy Efficient Appliances and Products. Various DOE and EPA programs aim to
promote the dissemination of energy efficient appliances and products:
-- DOE will accelerate its program to establish energy efficiency standards for
lighting and appliances.
-- EPA and DOE's Energy Star Products program saves consumers money and
reduces greenhouse gas emissions at the same time by promoting the use of
energy efficient products everything from computers to refrigerators to central
air-conditioning units. New funding will support the launch of new Energy Star
product lines.
Energy Efficient Commercial Buildings. DOE and EPA work in partnership with
industry to research, develop, and deploy new technologies and practices to improve the
energy performance of commercial buildings. Buildings in the top 25 percent in energy
efficiency qualify for EPA's "Energy Star Buildings" label Participants include the
Empire State Building, the World Trade Center, and Chicago's Sears Tower.
Energy Smart Schools. Announced in October 1998, this initiative cuts across several
DOE programs and brings together public and private sector resources to cut schools'
energy bills so that the savings can be reinvested in students and their education.
TRANSPORTATION
Partnership for a New Generation of Vehicles (PNGV). PNGV is a government-
industry effort that aims to develop attractive, affordable cars that meet all applicable
safety and environmental standards and get up to three times the fuel efficiency of today's
cars. Since 1993. great strides have been made in producing lower-cost, light-weight
materials, inexpensive fuel cells. and advanced internal combustion engines for use in
hybrid vehicles. The program aims to produce a prototype mid-sized family car capable of
80 miles per gallon (mpg) with a two-thirds reduction in carbon emissions by 2004. The
FY 2000 budget includes $264 million for PNGV-related work, an increase of $24 million
over the amount appropriated for FY 1999.
7
Apr-14-99 09:54A Climate Change Task Force
P.10
Light and Heavy Trucks. Similar government-industry efforts are aimed at developing
cleaner, more efficient diesel engines for both light and heavy trucks.
-- By 2002, DOE aims to develop advanced diesel cycle engine technologies for
pickup trucks, vans. and sport utility vehicles which achieve at least a 35 percent
fuel efficiency improvement relative to current gasoline-fueled trucks while
meeting strict emission standards.
-- By 2004, DOE, in coordination with EPA and the Department of Defense, aims
to develop engine and vehicle technologies for heavy trucks that will increase
the fuel economy to 12 mpg from the current average of 5.3 mpg.
Biofuels. Working with the Department of Agriculture (USDA), DOE will continue its
work in the biochemistry of converting wood chips. grasses. agricultural wastes, and other
products into ethanol and other potentially useful fuels.
INDUSTRY
Industries of the Future. This DOE program works cooperatively with the nation's most
energy-intensive industries such as aluminum, glass, chemicals, forest products, mining,
petroleum refining, and steel on developing technologies that increase energy and
resource efficiency. Promising collaborative efforts include improvements in the process
of making steel, pulp and paper, and other energy-intensive products that could
dramatically increase efficiency, lower greenhouse gas emissions, and improve
competitiveness.
Industrial Combined Heat and Power (CHP) Systems. DOE is developing new
industrial CHP systems to capture thermal heat would otherwise be wasted. These
systems are expected to be 15 percent more energy efficient and 80 percent cleaner than
conventional power systems and cut electricity costs by 10 percent. In addition, EPA and
DOE are also working to eliminate barriers to the rapid dissemination of combined heat
and power technology.
Voluntary Industrial Partnerships. EPA will expand its industry partnership programs,
such as Climate Wise and the Voluntary Aluminum Industrial Partnership, to
encourage businesses to take advantage of cost-effective emissions reductions
opportunities - including emissions of the most potent greenhouse gases, such as
methane, perfluorocarbons (PFCs), hydrofluorocarbons (HFCs), and sulfur hexaflouride
(SF6).
8
Apr-14-99 09:54A Climate Change Task Force
P.11
Agriculture and Forestry. USDA will undertake R&D and support demonstration
projects aimed at both lowering greenhouse gas emissions from agriculture and forestry
and reducing their vulnerability to climate change.
--The Natural Resources Conservation Service will invest $3 million in projects
to demonstrate and test various means of reducing greenhouse gas emissions in
agriculture, such as compost-based waste-handling facilities, rotational grazing
systems, and improved feed and forage systems.
-The Agricultural Research Service will devote $7 million towards climate
change related activities, including the development of new technology and
expertise for reducing agriculture's vulnerability to a changing climate. Field
experiments will seek to measure various potential effects of climate change, such
as varying amounts and patterns of rainfall on forage production.
The FY 2000 budget also includes important USDA funding for developing advanced
biomass energy technologies; R&D and demonstration projects for carbon sequestration;
research to study the role of farms, forests, and other natural or managed lands in
capturing and storing carbon; and a comprehensive U.S. soil carbon inventory (see PP- 10-
12 below).
ELECTRICITY
Photovoltaic Energy Systems. Over the past 20 years, Federal R&D has resulted in a 90
percent cost reduction in solar photovoltaics. DOE will accelerate R&D of the next
generation photovoltaic cells: increase manufacturing R&D; increase research in
buildings-integrated applications; and fund efforts to develop new, unconventional
technologies.
- Million Solar Roofs. In June, 1997, the President announced an initiative to
encourage the installation of one million solar systems by 2010, which would
reduce carbon emissions equivalent to the annual emissions from 850,000 cars.
DOE has received commitments for over half a million solar rooftop installations.
Biomass. Biomass represents a tremendous renewable resource whose use can help
strengthen our energy security, protect the environment, and enhance our rural economy.
-- Biomass Power. DOE is testing and demonstrating biomass co-firing with coal:
developing advanced technologies for biomass gasification using paper industry
by-products; and developing and testing high-yield, low-cost biomass feedstocks.
9
Apr-14-99 09:54A Climate Change Task Force
P.12
-- Advanced Biomass Technologies. This year DOE, USDA, and other Federal
agencies and private partners will launch a national partnership to develop
advanced integrated biomass technologies. These technologies will enable the
production of power, transport fuels, and high-value chemicals from biomass
feedstocks.
Wind Power. DOE will continue developing a next-generation wind turbine able to
produce power at 2.5 cents per kilowatt-hour in good wind regions, accelerate R&D on
critical components, and accelerate testing and field validation.
Hydrogen. DOE will accelerate research on low-cost hydrogen production and storage,
prerequisites to the widespread use of hydrogen as a fuel
High Temperature Superconductivity. DOE supports industry-led projects to capitalize
on recent breakthroughs in superconducting wire technology. aimed at developing devices
such as advanced motors, power cables, and transformers. These technologies would
allow more electricity to reach the consumer without an increase in fossil fuel input.
CARBON SEQUESTRATION
R&D for Sequestration. Research initiatives are being funded to find ways to sequester
(store) carbon. Examples include:
-- Enhancing Forest and Farmland Sinks. The Forest Service, in conjunction
with other USDA agencies, will spend $6 million for R&D and demonstration
projects for optimizing forest. farmland. and rangeland carbon sinks. The focus of
such projects will include storage of carbon in forest soils and increased durability
and use of wood products to sequester carbon.
-- Enhancing natural geological and oceanic processes. DOE will support
research into the feasibility of capturing and storing carbon dioxide in underground
geological structures and in the deep ocean.
10
Apr-14-99 09:55A Climate Change Task Force
P.13
Other Climate-Related Investments
There are a number of additional programs for which funding is proposed in the FY 2000 budget
that while not part of the Climate Change Technology Initiative per se -- contribute to
improving energy efficiency and reducing greenhouse gas emissions. These programs include:
Cleaner Coal and Natural Gas. The FY 2000 budget includes $209 million to support
the Department of Energy's (DOE) aggressive R&D effort to develop next-generation
technologies for the combustion and use of coal and natural gas. For example, research
and development of two new coal combustion technologies integrated gasification
combined cycle and pressurized fluidized bed combustion - could lead to ultra-high
efficiency coal plants with dramatically lower greenhouse gas emissions.
Low Income Weatherization and State Energy Grants. These DOE programs facilitate
energy efficiency investments at the State and local level. The Weatherization
Assistance Program, for example, delivers energy conservation services, such as
insulation, to low-income Americans, reducing energy costs for consumers, improving
health and safety, and reducing carbon emissions. The total FY 2000 budget request for
these two programs is $191 million -- a $25 million increase over FY 1999 appropriations.
Agricultural & Forestry Conservation Programs. Many Department of Agriculture
conservation programs have the co-benefit of reducing carbon emissions resulting from
agriculture and forestry and enhancing the ability of "sinks," such as forests and
farmlands, to sequester or store carbon. This includes programs such as the Conservation
Reserve Program, the Environmental Quality Incentives Program, and the Farmland
Protection Program. In general, these programs assist farmers, ranchers. and other
landowners in conserving and improving soil, water, and other natural resources
associated with rural land.
11
Apr-14-99 09:55A Climate Change Task Force
P.14
U.S. Global Change Research Program
The United States Global Change Research Program (USGCRP) seeks to provide a sound
scientific understanding of both the human and natural forces that influence the Earth's climate
system. The information produced by USGCRP's scientists is used by national and international
policy makers to make informed decisions on global change issues. This multi-agency scientific
research program coordinated through the National Science and Technology Council.
For FY 2000, the President is requesting nearly $1.8 billion for the USGCRP, an increase of $105
million, or 6 percent, above the amount enacted for FY 1999. Of the FY 2000 budget request,
$828 million is for scientific research (up $84 million) and $958 million is for NASA's
development of climate monitoring satellites and ground based observation systems. Other
important USGCRP budget highlights include:
Carbon Cycle Initiative. The FY 2000 budget request establishes a new multi-agency
initiative to improve our understanding of how carbon cycles between the atmosphere. the
oceans, and land. Included in this request are funds to study the role of farms, forests, and
other natural or managed lands in capturing carbon. Such carbon "sinks" may provide the
U.S. and other nations with new tools for offsetting greenhouse gas emissions. The
initiative includes $10 million in new funding for the Department of Agriculture (USDA)
and $5 million for the Department of Energy.
Soil Carbon Inventory. The FY 2000 budget request includes $14 million (an increase of
$12 million from FY 1999 appropriations) to significantly expand efforts to conduct a
comprehensive scientific inventory of carbon stored in U.S. soils and to develop methods
to predict how soil carbon levels would be affected by different practices and policies.
The inventory will be conducted by USDA's Natural Resources Conservation Service.
3-Dimensional Mapping of Forests. The FY 2000 budget provides funding to launch
NASA's Vegetation Canopy Lidar, which, for the first time, will give scientists a three
dimensional view of the Earth's forests to help determine the contribution of forests in
sequestering atmospheric carbon.
Consequences of Climate Change. The FY 2000 budget provides funding to complete a
report on the first national assessment of the potential consequences of climate change on
the United States. The report will identify potential impacts on key economic sectors and
geographic regions, mitigation and adaptation strategies, and provide technical
information for policy makers.
Regional Variability. The FY 2000 budget request includes funding to help scientists
examine climate change and variability on a regional scale. Supported in part by the
Administration's new Information Technology Initiative, the funding will help improve
U.S. computer capabilities to run the complex models required to understand the effects of
climate change and variability at the regional level
12
Apr-14-99 09:56A Climate Change Task Force
Agriculture and The President's FY 2000
Climate Change Budget
Farmland, rangeland, and forests can play a critical role in meeting the challenge of global
warming through carbon sequestration and renewable bioenergy. In his FY 2000 budget. the
President is proposing $251 million in funding for sequestration and bioenergy research,
development. and deployment. This includes $105 million for the Department of Agriculture
(USDA). a $50 million increase over the amount appropriated for FY 1999, and $146 million for
the Department of Energy (DOE), a $59 million increase over FY 1999 appropriated funds.
Highlights include:
SEQUESTRATION
Carbon sequestration refers to the storage of carbon from the atmosphere by soils, trees, crops,
and other plants.
Demonstration Projects and New R&D. The Forest Service, the Agriculture Research
Service and the Natural Resources Conservation Service will launch new R&D and
demonstration projects to optimize farmland. rangeland. and forest carbon sinks.
Carbon Cycle Initiative. The FY 2000 budget request establishes a new multi-agency
initiative to improve our understanding of how carbon cycles between the atmosphere, the
oceans, and land. Included in this request are funds to study the role of farms. forests. and
other natural or managed lands in capturing carbon. Such carbon "sinks" may provide the
U.S. and other nations with new tools for offsetting greenhouse gas emissions. The
initiative includes $10 million in new funding for USDA and $5 million for DOE.
Soil Carbon Inventory. The FY 2000 budget request includes $14 million to significantly
expand efforts to conduct a comprehensive scientific inventory of carbon stored in U.S.
soils and to develop methods to predict how soil carbon levels would be affected by
different practices and policies.
BIOENERGY
Biomass refers to trees. crops and agricultural wastes used to produce power, fuels or chemicals.
It represents a tremendous renewable resource whose use can help strengthen our energy security.
protect the environment. and enhance our rural economy.
Biomass Power and Fuels. DOE and USDA will continue developing, testing, and
demonstrating high-yield. low-cost biomass feedstocks; testing and demonstrating biomass
cofiring with coal: and seeking to produce alternative fuels. such as ethanol. from biomass.
Advanced Biomass Technologies. This year, DOE, USDA and other Federal agencies
and private partners will launch a national partnership to develop advanced integrated
biomass technologies.
Biomass Tax Credit. The President's tax package proposes to extend for 5 years the
current 1.5 cent per kilowatt hour tax credit for electricity produced from biomass. The
proposal also expands the types of biomass eligible for the credit to include certain forest-
related. agricultural and other resources. Finally, the package includes a 1.0 cent per
kilowatt hour tax credit for electricity produced by cofiring biomass in coal plants.
Opening Remarks
Review Activities Under Energy Agreement
The objectives of the Agreement for Energy Cooperation are to conduct collaborative
activities in the fields of research, development and commercialization, to promote
improved use of renewable energy and energy efficiency, to develop and analyze energy
strategies and regulatory criteria, and to encourage the promotion of energy trade
opportunities.
Today, we will review activities in Annex I, Renewable Energy, and Annex II, Energy
Efficiency. Most importantly, we have an opportunity to evaluate the progress of this
cooperation and identify new areas of collaboration.
An inventory of Annex I and Annex II activities reveals we have a broad scope of
cooperation. We appreciate the leadership of the National Commission for Energy Savings
(CONAE) and GoM Departments and agencies in working with DOE Program Offices
and the National Laboratories in the development of project activities. Much of the
cooperation in the U.S. involves multiple government agencies.
Dr. Robert Dixon, Director, International Programs, Office of Energy Efficiency
Renewable Energy will review the history of this cooperation and offer an overview of the
project activities.
Our ongoing bilateral cooperation under the Agreement provides the foundation to help
achieve the goals of the Sustainable Energy Working Group. Today I would like to
initiate the discussion on the merits of individual project activities and identify appropriate
next steps in our cooperation.
Historically, much of our cooperation has focused on research activities. This cooperation
has been productive. In the future I am hopeful we can place greater emphasize on
technology deployment, commercialization, sustainable energy strategies, regulatory
criteria, and project finance.
We want to encourage broad participation by both U.S. and Mexican government
Departments and Agencies as we consider a Sustainable Energy Strategy. My
interagency team represents a broad spectrum of human, material and financial resources
to consider sustainable energy strategies and technologies.
Finally, I am hopeful we will have time to discuss Clean Power Annex to the Agreement.
Talking Points for Discussion of Clean Energy Technologies Annex
The U.S. Department of Energy wishes to propose to the Mexican Secretariat of Energy
our intention to develop a new annex under our Agreement for Energy Cooperation in the
area of Clean Energy Technologies.
The primary goal of the new annex is to promote the use of clean energy technologies for
electric power generation while eliminating environmental issues as barriers to fossil fuel
production and use, and maintaining the availability and affordability of fossil fuels in
both Mexico and the United States.
Outcomes of this annex could include:
- workshop(s) to be held in Mexico or the U.S. in the areas of clean power generation,
fuel evaluation and selection, and other topics of interest;
- possible joint project to demonstrate a 200-kW fuel cell unit in Mexico using technology
developed in the DOE Fuel Cell Program;
- possible conversion of one of CFE's existing oil-fired power plants to coal using DOE
fluidized-bed combustion technology developed under the DOE Combustion Program.
- cooperative R&D work related to DOE's Advanced Turbine Systems Program,
particularly in the areas of blade materials and coatings.
AGENDA ITEM 4-- REGIONAL DEVELOPMENTS
Suggested Talking Points
Promoting Hemispheric Cooperation
We have over the last few years developed an extensive program of bilateral energy
cooperation that includes the successful application of renewable energy and energy
efficiency technologies.
We should seek to find a way to apply our successful bilateral activities to a wider, regional
group.
I would like today to explore the possibility of implementing this outreach and the
mechanisms available to implement it. I would like to see us take our experiences and use
them to strengthen and expand cooperation under the Hemispheric Energy Initiative which
was launched with Miami Summit of the Americas.
Hemispheric Energy Ministerial Conference:
The theme for this Ministerial will be creation of the energy infrastructure to meet the
economic and environmental needs of the hemisphere in the 21st century. We have an
opportunity to invest in the cleanest energy technologies possible and address our concerns
about local environment problems as well as show how clean energy technology can
mitigate the effects of Global Climate Change.
We all know that fossil fuels will be our key source of energy well into the next century,
but even within that context the steps we propose to take will contribute to a positive
climate change story. For example, expanding the use of your gas resources will help
diversify your energy needs AND reduce green house gas emissions.
WE believe that we can approach the issue by highlighting the positive results of energy
efficiency, better technology and development of a regional gas industry for both economic
growth and for the mitigation of the effects of climate change. We would like the Ministers
to issue a clear statement that recognizes this link and says that, for this reason,
governments that may wish to take on voluntary emissions targets should be allowed to do
so.
In addition, we should find a way to institutionalize an effective dialogue with the private
sector. I believe your country had expressed concern on this issue and we are hoping that
we can resolve these concerns and bring all of the other governments on board on this
proposal. We need to find a mechanism through which the private sector can provide
input into our Ministerial discussions without interfering with the government-to-
government dialogue.
We should also highlight the actions we have taken and will take to implement the Santiago
Summit's mandate to accelerate the integration of our energy markets, as well as address
the issue of establishing a permanent secretariat for the Hemispheric Energy Initiative.
AGENDA ITEM 4
REGIONAL DEVELOPMENTS
Overview:
We are seeking to encourage Mexico to partner with the U.S. to expand our cooperative activities
with the countries of the Western Hemisphere in the area of Sustainable Energy Use.
There are significant potential benefits to both our countries from a partnership to promote
cooperation among the governments of the Western Hemisphere, industry, universities, and non-
government organizations. Projects such as the prospective Mexico-Guatemala natural gas
pipeline, and the Central American electricity grid, foster the integration of energy infrastructure.
They are being increasingly viewed as crucial to the Hemisphere's prosperity by providing
efficient energy services to the Hemisphere's energy consumers.
With the above prospective projects in mind as well as the various bilateral energy cooperation
activities underway between our two countries, we will want to encourage Mexico to work with
us in promoting cooperation among our Western Hemisphere neighbors to pursue regional energy
integration.
Mexico-Guatemala Pipeline and Electricity Integration:
The expansion of a natural gas market south from Mexico to Guatemala is important for a number
of reasons. It will increase gas use in Southern Mexico and Guatemala where gas use is currently
low, backing out less environmentally friendly fuels now in use. It may promote further expansion
of the natural gas market in Central America, through the extension of the pipeline into the other
countries of Central America. Additionally, it may create an opportunity to market U.S. natural
gas in Northern Mexico, replacing the Mexican gas that is shipped south into Central America.
Finally, since the pipeline project is envisioned as a private sector project, it will highlight the
potential value to the countries involved, of having such ventures financed and operated by
private firms rather than government institutions.
The countries of Central America are also in the process of interconnecting their electrical systems
through the construction and operation of a interconnecting grid, financed by the Inter American
Bank. It's construction and operation creates an opportunity for Mexico to ultimately tie into the
grid.
While the economics for regional integration are still to be demonstrated, these opportunities will
be expected to grow over time, and with it the opportunity to incorporate cleaner, more efficient
energy supplies.
U.S./Mexico Energy Cooperation:
Additionally, the U.S. and Mexico have an active bilateral energy cooperation agreement in
renewable energy and energy efficiency, the results of which can be used as a basis for energy
collaboration among other countries of the Hemisphere. AID and EPA are also active in these
areas and their activities are conducted under the umbrella of DOE's cooperative agreement.
Hemispheric Energy Initiative:
The Summit generated Hemispheric Energy Initiative (HEI) is built on two key themes; regional
integration of energy infrastructures and markets, and encouraging regional cooperation in
promoting clean and efficient energy use. In both cases, we can look first at what we have
achieved and what we want to accomplish bilaterally, and then at how we can broaden the scope
to the rest of the Hemisphere. This should be our mechanism for making the link to the Summit
of the Americas and the Hemispheric Energy Initiative, and the theme for the July Ministerial and
engaging the Secretariat of Energy in thinking about how our experiences can be shared
regionally.
Under the HEI, we have established several working groups to develop cooperative activities on
sustainable energy. These working groups include clean power options, regulatory cooperation,
petroleum, natural gas, energy efficiency, rural electrification and climate change information
exchange. Our bilateral energy cooperation includes projects that are applicable to the
cooperation in these groups. We should be able to commit to using the results from our
cooperation to provide direction for some these groups.
Mexico has not taken on a leadership role in any of these working groups but has criticized the
lack of progress. We should aim to get them more directly involved in all activities and encourage
them to take a more productive role in defining new projects and activities for the Initiative. The
process to prepare for the Secretary's Hemispheric Energy Ministers Conference provides an
opportunity to more directly involve Mexico.
The theme for the Conference will be creation of the energy infrastructure to meet the economic
and environmental needs of the hemisphere in the 21 st century, including regional integration,
open markets and development of the natural gas markets. We will seek to have the Conference
make a clear statement about our commitment to creating the cleanest, most efficient energy
systems possible and to make the link between clean energy policies and climate change. We
would also like to get an acceptance of the idea that countries should be able to make voluntary
commitments to greenhouse gas emissions targets. Finally, we hope to get agreement to the
establishment of a Business Advisory Forum that will allow for more direct interaction with the
private sector in the HEI.
We will need to find a way to get Mexico to support a role for the private sector in the
Hemispheric Energy Initiative. Mexico has been the most resistant to such an effort. A draft of
the Terms of Reference for a Business Advisory Board has been prepared and is being reviewed
within DOE.
Meeting with Luis Tellez, Mexico's Secretary of Energy, Mexico City
Setting:
Secretary Tellez' Office, April 15, at 1:00 p.m.
Background:
Luis Tellez was named Secretary of Energy in November 1997. Prior to that he was President
Zedillo's Chief of Staff, a position he held from the beginning of the President's term in 1994.
Tellez was educated in Mexico and the U.S. obtaining a degree in economics from the
Autonomous University of Mexico and a PHD in the same field from the Mass. Institute of
Technology. Most of his career has been in the public sector with positions in the now defunct
Department of Programming and Budget and in the Department of Agriculture.
Tellez is a strong proponent of private sector activities in energy. In January of this year, he
submitted the Administrations proposals to amend the Constitution to allow private firms to sell
electricity directly to the public. He is pushing hard to get these changes adopted before the end
of this Presidency. Tellez also supports removal of the tariff on natural gas but this issue is
controlled by the Ministry of Trade and Investment. Tellez has also sought to help PEMEX sell
off its secondary petrochemical plants.
You may wish to discuss DOE's plans for the Hemispheric Energy Ministerial Conference this
summer. Secretary Richardson has sent a letter to Tellez noting the importance of the two
secretaries staying in close touch as we prepare for the Conference (copy attached).
The theme for the Conference will be creation of the energy infrastructure to meet the economic
and environmental needs of the hemisphere in the 21st century, including regional integration,
open markets and development of the natural gas markets. The Conference will make a clear
statement about our commitment to creating the cleanest, most efficient energy systems possible.
We would like to see the Conference issue a statement that makes the link between progress on
clean energy and climate change.
We will need to find a way to get Mexico to support a role for the private sector in the
Hemispheric Energy Initiative. Mexico has been the most resistant to such an effort. A draft of
the Terms of Reference for a Business Advisory Board has been prepared and is being reviewed
within DOE.
MEETING WITH SECRETARY TELLEZ
Suggested Talking Points
It is a pleasure for me to be able to lead this first meeting of the Sustainable Energy
Working Group. I believe these meetings will give our ministries the opportunity to
exchange views and ideas on energy issues related to climate change. I
I would like to discuss with you our plans for the Hemispheric Energy Ministerial
Conference.
The theme for this Ministerial will be creation of the energy infrastructure to meet the
economic and environmental needs of the hemisphere in the 21st century. We have an
opportunity to invest in the cleanest energy technologies possible and address our
concerns about local environment problems as well as show how clean energy technology
can mitigate the effects of Global Climate Change.
We all know that fossil fuels will be our key source of energy well into the next century,
but even within that context the steps we propose to take will contribute to a positive
climate change story. For example, expanding the use of your gas resources will help
diversify your energy needs AND reduce green house gas emissions.
We believe that we can approach the issue by highlighting the positive results of energy
efficiency, better technology and development of a regional gas industry for both
economic growth and for the mitigation of the effects of climate change. We would like
the Ministers to issue a clear statement that recognizes this link and says that, for this
reason, governments that may wish to take on voluntary emissions targets should be
allowed to do so.
In addition, we should find a way to institutionalize an effective dialogue with the private
sector. I believe your country had expressed concern on this issue and we are hoping that
we can resolve these concerns and bring all of the other governments on board on this
proposal. We need to find a mechanism through which the private sector can provide
input into our Ministerial discussions without interfering with the government-to-
government dialogue.
We should also highlight the actions we have taken and will take to implement the
Santiago Summit's mandate to accelerate the integration of our energy markets, as well as
address the issue of establishing a permanent secretariat for the Hemispheric Energy
Initiative.
On other matters, I wish you success in your efforts to promote an expanded role for the
private sector in electricity, but I understand that there is resistance to your proposal.
OF
The Secretary of Energy
Washington, DC 20585
STATES OF
April 13, 1999
Mr. Luis Tellez K.
Secretario de Energia
Insurgentes Sur No. 890
17 Piso
Mexico, D.F. 03100
Dear Luis:
Greetings from Washington! I hope all is well with you and that your many
initiatives are making progress. I appreciate your sending Under Secretary Chavez
here with your message on electricity last month.
I am pleased that my Deputy, T. J. Glauthier, and Under Secretary Chavez will be
able to lead the first meeting of the Sustainable Energy Working Group on
Thursday. These meetings will give our ministries the opportunity to exchange
views and ideas on energy issues related to climate change. I hope you will have
an opportunity to meet with T.J. during his time in Mexico.
I also want to provide you an update on my plans for the Hemispheric Energy
Initiative Ministerial Conference this summer. I appreciate having the opportunity
to host the conference this year. I believe it is important that we stay in close
touch as the Conference approaches.
s-you and I have discussed, the theme for this Conference will be creation of the
energy infrastructure to meet the economic and environmental needs of the
hemisphere in the 21st century. In this context, I would like the discussions to
focus on regional integration, open markets, and development of the natural gas
markets. The Conference should give us the opportunity to make a clear statement
about our commitment to creating the cleanest, most efficient energy systems
possible. We can highlight the progress we have made together in these areas,
including the work of the Sustainable Energy Working Group meeting this week. I
would like to see the Conference issue a statement that makes the link between our
progress on clean energy and climate change.
Printed on recycled paper
2
I also believe we should find a way to institutionalize an effective dialogue with the
private sector. As has been discussed before, we need to find a mechanism
through which the private sector can provide input into our Ministerial discussions
without interfering with the government-to-government dialogue. I would like to
see a Business Advisory Board established this summer.
Finally, we should highlight the actions we have taken and will take to implement
the Santiago Summit's mandate to accelerate the integration of our energy
markets, as well as address the issue of establishing a permanent secretariat for the
Hemispheric Energy Initiative.
T.J. will be able to discuss preparations for the ministerial with you and your staff.
I know members of his delegation will also meet with Lourdes Melgard to go over
our plans in greater detail. I look forward to seeing you when I am next in
Mexico.
With warm regards.
Yours sincerely,
Bill Rucherdon
Bill Richardson
MEMORANDUM FOR THE DEPUTY SECRETARY
From:
Calvin Humphrey
Acting Assistant Secretary for Policy and International Affairs
Subject:
Breakfast Meeting with U.S. Industry Representatives
Setting:
Mexico City, Charge 'Affairs' Residence, Friday morning, April 16, 1999
Participants: Don Hamilton, Charge D'Affairs
David Pumphrey, Director, Office of the Americas
Kathy Deutsch, Staff, Office of the Americas
Kathy Simonds, U.S. Embassy, Mexico City
Industry Participants (list to be provided by Embassy)
Background:
U.S. companies look upon Mexico as a major opportunity for business. One of the key areas for
these opportunities is in the energy sector, particularly in energy services (oil and gas, and
construction) and in the ownership and operation of natural gas facilities and electric generating
plants. Early this year, the Zedillo Administration submitted proposed legislation to restructure
the electricity sector and ultimately privatize generation and distribution almost completely, while
retaining the transmission system under state ownership but setting it up for "open access"
operation. The proposed legislation, not surprisingly, has run into some heated opposition.
Other important opportunities have also developed but many companies have commented on the
slow, bureaucratic pace they have confronted. This is particularly true in electricity, where efforts
to promote increased cross-border electricity trade through construction and operation of
interconnections have been frustrated by unclear rules and lack of decision-making.
Another apparent opportunity which has not materialized to any significant degree is the ability to
bring U.S. natural gas into Mexico. While natural gas suppliers now have the right to market gas
directly to Mexican end users, they are subject to an import tax, currently set at three percent.
This tariff has effectively limited this apparent opportunity and efforts to negotiate accelerated
removal of the tariff have not been successful.
For further details, see the Background paper.
BREAKFAST MEETING WITH U.S. INDUSTRY REPRESENTATIVES
SUGGESTED TALKING POINTS
Thank you Charge Hamilton for the opportunity to meet with the members of this
Chamber.
I am pleased to have this opportunity to meet with you and to share views on issues of
common interest.
Mexico has made some important strides in defining and developing new opportunities in
the energy sector for private industry.
Allowing private sector participation will help to establish a competitive energy market in
Mexico that will help keep energy prices at reasonable levels - an important goal for all
governments to support. I understand that U.S. industry interest in Mexico continues to
be strong.
Most recently, the Mexican Administration has submitted important Constitutional and
legislative proposals to restructure and ultimately privatize the electrical sector. This is a
major initiative milestone which, I understand, has been received with mixed reactions. I
would like to hear your views about it's chances for adoption and when this may be
achieved.
I also understand that some of you continue to be frustrated by the pace of decision-
making, particularly in the electricity sector, and I would like to hear more about this.
Finally, I want to hear your views on doing business here in Mexico, your successes and
your concerns.
One issue that we have tried to resolve, unsuccessfully, was the accelerated removal of the
tariff on imported natural gas, now at three percent. This tariff will phase out by year
2002. In your view, is this issue still important for us to push on?
INVITED
Guest List for Breakfast for Deputy Secretary Glauthier and U.S. Energy Executives,
April 16, 8:00-9:30 am, the Charge d'Affaires Residence, 1115 Virreyes, Lomas de
Virreyes, Mexico, D.F.
The Charge
OPTIONAL FORM 99 (7-90)
Deputy Secretary Glauthier+3
FAX TRANSMITTAL
ECON Bill Brew
To Kathy Deutsch
# of pages
7
From
FCS Tom Moore
Dept/Agency
Phone #
Kathy Simonds
Andy Wylegala, FCS Officer
Fax #
Fax #
Lone Star Gas International, Bill Weidler
NSN 7540-01-317-7388
5099-101
Av. Jardin 330, Col. Del Gas, 02950
GENERAL SERVICES ADMINISTRATION
Tel: 355-3199, Fax: 277-2197
Enron Mexico Corp., Lic. Mario Max Yzaguirre, Director General
Tel: 8-152-2401
Intergen, Jorge Young, Director General for Mexico
Torre Chapultepec, Piso 13, Ruben Dario 281, Col. Bosques de Chapultepec, 11580
Tel: 282-1842/282-1056, Fax: 282-1448
General Electric de Mexico, James Robo, Chairman and CEO
Av. Prolg. Reforma 490, Piso 5, Col. Santa Fe, 01217
Tel: 257-6280, Fax: 257-6281
Bechtel, Richard D. Bryan, Vice President
Edificio Monte Urales III, Monte Urales 505, Piso 2,
Col. Lomas de Chapultepec, Mexico, D.F. 11000
Tel: 201-3510, Fax: 202-1785
Tejas Gas, Bill Pollard, Vice President
Insurgentes Sur No. 954, Piso 4, Col. Del Valle, Mexico, D.F. 03100
Tel: (713) 230-3551, Fax: (713) 230
Calpine, Derek Stilwell Fernandez, Director of Business Development, Mexico
Calero #21, San Angel Inn, Mexico, D.F. 01060
Tel: 616-6795, Fax: 550-3646
AES, Karl Huber, Vice President
Paseo de la Reforma No. 383, Piso 12, Col. Cuauhtemoc, Mexico, D.F. 06500
Tel: 208-5151, Fax: 208-5367
Coastal Gas Services Corp., Bob Reed, Director Mexico Projects
Tel: (713) 877-7391
American Electric Power, Judd Kessler
Tel: (202) 778-3080, Fax: (202) 778-3063
U.S. Department of Energy
Hemispheric Energy Initiative Update
May 1998
Washington. During the Symposium,
policies that facilitate trade in the energy
In December of 1994, at the largest
public and private energy representatives
sector; (2) promotion of policies
summit ever to take place in the Western
presented national energy policies,
facilitating the development of
Hemisphere and the first such gathering
discussed regional issues and steps for
infrastructure; (3) achievement of
in 27 years, President Clinton and the 33
implementing the Action Plan. The
regulatory frameworks that are transparent
democratically elected Heads of State of
participants identified over 40
and predictable; (4) promotion of local
Western Hemisphere met at the first
collaborative actions as next steps for the
and foreign private investment; (5)
Summit of the Americas in Miami,
Hemispheric Energy Initiative.
expansion of rural electrification; and (6)
Florida. The Summit provided the
activation of the working group on climate
opportunity for the region to solidify the
To ensure implementation of these
change and the environment.
strong political and economic
actions, each Minister designated a
transformation sweeping the Western
representative to an implementing body
Coordinating Secretariat
Hemisphere. On energy, the Summit's
which is the Hemispheric Energy Steering
Plan of Action specifically provides the
Committee. The committee's members are
The Ministers also agreed to the
political guidance to initiate cooperation
drawn from national governments, and
establishment of a coordinating secretariat
on the development of consistent policy
they periodically meet along with
to facilitate cooperation under the
framework and information exchange to
representatives from several multilateral
Hemispheric Energy Initiative. This
facilitate private investment in clean
and international organizations.
Secretariat is composed of representatives
energy production and use.
from Venezuela, the United States and
Second Hemispheric Meeting of
OLADE. The Secretariat functions on a
Ministers
virtual basis, relying heavily on electronic
FRAMEWORK FOR HEMISPHERIC
communication to coordinate the activities
COOPERATION
A second hemispheric meeting of Energy
of the Initiative. Venezuela serves as the
Ministers was held in Santa Cruz de la
focal point for the Coordinating
Sierra, Bolivia in July of 1996. The
Secretariat.
Ministers confirmed the key role of the
Summit Action Plan
energy sector in the achievement of
The Second Summit of the Americas
sustainable development and recognized
At the 1994 Miami Summit, 34 Western
the need to promote private investment in
The principal themes of the Second
Hemisphere Heads of State signed the
the energy sector. Additionally, the
Summit of the Americas held in Santiago,
Summit of the Americas Action Plan. The
Summit participants recognized and
Chile this past April were democracy,
Plan included two action items addressing
endorsed the work of the Hemispheric
poverty alleviation, and regional
energy action item 12, Energy
Energy Steering Group in advancing
integration. On energy the Plan of Action
Cooperation, and action item 21, the
sustainable development in the Americas.
contains commitments to further the
Partnership for Sustainable Energy Use.
integration of energy markets and to
These initiatives are the basis for the
Third Hemispheric Meeting of Energy
exchange information on climate change
countries commitment to promote
Ministers
related issues.
economic growth and environmental
protection.
The Third Meeting of the Western
Hemispheric Energy Ministers took place
HEMISPHERIC ENERGY
Hemispheric Energy Symposium/First
on January 15-16, 1998, in Caracas,
COOPERATIVE INITIATIVES
Hemispheric Energy Ministers
Venezuela. Twenty-six countries,
Meeting
including the United States, were
represented. The meeting was co-chaired
The following is an overview of the
The U.S. Department of Energy and
by the Department and the Venezuelan
actions of under the Hemispheric energy
Venezuela's Ministry of energy and Mines
Minister of Mines and Energy.
Initiative since December of 1994 to
agreed to host the Hemispheric Energy
further energy cooperation and
Symposium/ the First Hemispheric Energy
At the Caracas meeting the Energy
partnerships for sustainable energy use.
Ministers Meeting in October of 1995 in
Ministers agreed to: (1) the promotion of
Developing Markets for Sustainable
Energy Initiative a working group was
Energy
established to promote and accelerate the
deployment of economically sustainable
CALENDAR OF EVENTS
One of the most important aspects of the
rural electrification solutions to increase
Hemispheric Energy Initiative has been
energy services in rural and indigenous
Summit Steering Committee Meeting
cooperation on the strengthening of
communities.
market mechanisms that will support
The next Summit of the Americas Energy
sustainable development goals of the
Sustainable Energy Use and Climate
Steering Committee is scheduled for May
Miami Summit. Efforts have included
Change
10, 1998, In Trinidad & Tobago.
support for the creation of markets for
new technologies and efficiency,
Sustainable economic development
Meeting of Energy Minister
development of strategies for the
requires hemispheric cooperation in the
integration of natural gas markets, and
field of energy. Consistent with the
The Fourth Hemispheric Meeting of
discussion of regulatory frameworks to
Framework Convention on Climate
Energy Ministers will be held in Mexico
support private sector investment.
Change governments and the private
during 1999.
sector are working together to promote
Making Energy Production and
increased access to reliable, clean, and
Consumption Cleaner
least cost energy services. At the Third
CONTACT INFORMATION
Energy Ministers Meeting it was agreed to
The Summit governments recognize the
activate a working group on Climate
importance of cooperation in the search
Change in order to exchange information
Additional information on any of the
for, and application of, clean technologies.
and analyze cooperative activities.
subjects addressed within, and other
Through its working groups, the
energy related Summit of the Americas
Hemispheric Steering Committee's efforts
activities, in which the Department has
include the promotion of clean energy
KEY MILESTONES
been involved, can be found on the
technology in the restructuring of electric
Internet or by contacting the Department
power markets, developing national action
of Energy Headquarters.
plans to phase out lead as a gasoline
December 1994, Summit of the Americas
additive, establish a Hemispheric
Miami, Florida
This Document is produced quarterly in
Environmental Forum for Petroleum and
Washington D.C., by the Department of
Gas, and efforts to promote alternative
October 1995, The Hemispheric Energy
Energy's Office of Policy, Analysis, Trade,
fueled vehicles in heavily polluted cities.
Symposium/First Hemispheric Energy
and Investment for the Americas, Asia,
Ministers Meeting, Washington, D.C.
and Africa. The Department's address is:
Using Energy More Efficiently
February 1996, First Hemispheric
U.S. Department of Energy
The countries of the Hemisphere have a
Energy Steering Committee Meeting in
1000 Independence Ave SW
wide range of experiences, policies,
Santiago, Chile
Washington, D.C. 20585
strategies and programs to improve the
efficiency of energy use and to stimulate
Home Page Address:
July 1996, First Hemispheric Conference
investment in more efficient technologies.
www.eia.doe.gov/summit/summit.html
of Hemispheric Energy Regulators
A major objective of the cooperative
The Department of Energy's Western
efforts under this initiative has been to
July 1996, Second Hemispheric Energy
Hemisphere Contacts are:
establish a framework for sharing
Ministers Meeting, Santa Cruz Bolivia
experiences, therefore benefiting from the
David Pumphrey
efforts of individual countries. A key body
Director
December 1996, Hemispheric Summit on
Office of Policy, Analysis, Trade and Investment for
of work has been the coordination and
Sustainable Development, Santa Cruz
the Americas, Asia, and Africa
standardization of energy efficiency
Bolivia
Tel. (202 586-6832 /Fax (202)586-6148
standards and testing procedures for the
CC Mail: [email protected]
Hemisphere.
January 1998, First Energy Business
Gary Ward
Forum of the Americas, Caracas,
Senior International Affairs Specialist
Meeting the Energy Needs of Rural
Office of Policy, Analysis, Trade and Investment for
Venezuela
Communities
the Americas, Asia, and Africa
Tel. (202) 586-6123 / Fax (202)586-6148
January 1998, Third Hemispheric
CC Mail: [email protected]
Access to dependable and reasonably
Meeting of Energy Ministers, Caracas,
priced energy is critical in providing
Venezuela
basic health services, education and
employment opportunities. Both the
April 1998, Summit of the Americas II
Miami and the Santiago Summits
Santiago, Chile
recognized rural electrification as one of
the most important energy issues for the
Hemisphere. Within the Hemispheric