Mexico's 2018 elections could have far-reaching implications for the country's energy reform, but any shift in policy would likely come from a slowdown in implementation rather than an outright reversal.
That conclusion was the collective wisdom of panelists speaking at the Mexican Energy Series conference hosted by Energy Dialogues last week in Mexico City.
The socialist-leaning presidential candidate, Andres Manuel Lopez Obrador, now leads in the national polls and has raised alarms among international investors with a stake in Mexico.
But in the country's national legislature, elections are currently looking more highly contested.
"The most likely outcome in Congress is that there won't be a clear majority," said Alejandro Chanona Robles, director of international affairs and planning at Mexico's Comision Reguladora de Energia.
A congressional majority would be a minimum requirement to affect a legal change in Mexico?s energy reform, which was enshrined in the nation's constitution upon its passage in 2013.
"On the implementation side though, where the policy instruments are allocated, that's where a lot of change can take place," Robles said.
Geoff Street, director of marketing at Tenaska, who spoke alongside Robles, had a similar take, saying that he's not concerned about a policy reversal, but more about a degree-change in implementation.
"The Mexican president has the ability to appoint a secretary of energy, a CRE commissioner, and as I understand it, the CEO of Pemex and CFE -- all very important actors in the energy space," he said.
The election of a socialist-leaning candidate and particularly L?pez Obrador, who vowed in 2014 to overturn Mexico's energy reform, could have enduring impacts over the six-year term of the next presidential administration.
As Street suggests, the appointment of director-level agency heads with executives unsympathetic to the reform effort could slow the growth of competitive markets in Mexico.
For the natural gas industry, one of the biggest changes in direction could come from Cenagas.
The current director general there, David Madero, has been pushing several initiatives that target more diversified market access to imported gas from the US.
On a conference panel April 18, Madero said that he was working on multiple projects in coordination with industry participants. Some of those projects would give open access to third-party gas shippers and marketers at border-crossing points in South and West Texas.
Currently, ownership of transmission capacity at the US-Mexico border is held largely by international affiliates of Petr?leos Mexicanos and the Comision Federal de Electricidad or CFE.
With a change in leadership at Cenagas, that reality could remain unchanged for years to come.
In the US, gas marketers like Tenaska have called attention to some of Mexico's existing regulations, which they say are limiting participation in places like the secondary capacity market.
According to Street, current Cenagas policy makes no distinction from a credit standpoint between shippers using firm and interruptible capacity, meaning that small-volume marketers are subject to the same financial requirements as large-volume shippers.
With existing "open-door" policies at many of Mexico's energy agencies, concerns like those are getting heard by regulators. Following some high-level changes in Mexico's executive branch, calls for more competitive markets and for industry-government dialogue could soon fall on deaf ears.
