Mexican energy regulators are struggling to coordinate with local and state governments, putting the development of petroleum projects at risk, Luis Pineda, a commissioner with Mexico's Energy Regulatory Commission (CRE), said Tuesday.
Some companies have found obstacles at the state and local level due to right of way and land use permits, Pineda told S&P Global Platts on the sidelines of the National Oil Congress, which organized by Mexico's association of hydrocarbon companies, or AMEXHI.
"Until there is a homologation among federal, state and local levels it will be very difficult to coordinate and allow projects to be developed," he said.
Mexico is in the process of liberalizing its energy industry, and needs to build out its pipeline, terminal and retail network in order to more efficiently import, store and market petroleum.
Only two of Mexico's 32 states have coordinated their local and state regulations and policies with the ones at the federal level, Pineda said.
Also, a lack of understanding about the energy sector has been a major problem in coordinating with the states. Only a handful, like the state of Tamaulipas, have an energy commission or secretariat, Pineda said.
While the lack of coordination has not created a widespread bottleneck, it has created a challenge for specific regions and projects, he said.
For example, Pineda said no land use permits have been approved yet to build a new retail gasoline station in Mexico City. Mexico City has the lowest number per capital of retail stations of any major city in the country.
Another issue has been the acquisition of right of way permits for refined products and natural gas pipelines, he added.
To date, several pipeline projects have faced legal injunctions due to right of way issues, such as TransCanada's El Encino--Topolobampo pipeline and IEnova's Guaymas--El Oro pipeline.
Challenges have also emerged in the construction of local natural gas distribution systems and fuel terminals at ports, Pineda said.
Pineda's comments were shared by other speakers at the convention, who were not allowed to be quoted by name according to the Chatham House Rule.
One speaker at the conference said that Mexico's upstream regulator has also found it challenging to coordinate with local and state authorities.
"There hasn't been the integration of municipal and state level and the federal initiatives to implement the energy reform," he said.
