As underlined by Mexico’s President Enrique Peña Nieto this past August 3rd during his enactment speech of the transcendental Secondary Laws, the creation of a new entity in charge of regulating and overseeing oil and gas operations is expected to be announced by the end of a 90-day period.
According to PEMEX, the National Agency of Industrial Safety and Environmental Protection, or ANSIPA, will essentially regulate HSE issues and will be responsible for accident prevention pertaining to hydrocarbon production. In order to carry out its main objectives, it will have the ability to sanction, suspend, and even terminate operations of any company operating in Mexico’s producing regions.
Enforcing public policy related to environmental concerns that may arise from oil and gas extraction in the country will also be another one of the agency’s main pillars, where it will have the power to exert the Environmental Impact Assessments (MIAs in Spanish) and demand compensation for any accidents related to production activities. Moreover, the ANSIPA will require companies to have strict preventative measures that ensure the physical and operational integrity of their facilities to mitigate potential accidents and risks that can harm the general population and the environment.
Many aspects have been proposed and shall be defined during this three-month timeline. The first step to determine the agency’s internal structure was established this past Tuesday by Mr Juan José Guerra Abud, Mexico’s Minister of Environment and Natural Resources (SEMARNAT). The ANSIPA’s director will be Carlos de Régules, ex-Subdirector of PEMEX’s Strategic and Operational Planning division. With a background in Chemical Engineering title and a Master’s in Environmental Engineering and Management from MINES ParisTech, Mr de Régules will be in charge of laying the agency’s groundwork to become an effective regulator among the country’s oil and gas industry players. The ANSIPA will be decentralized from the SEMARNAT and will operate with an external auditing scheme. Additionally, it will require for companies to have an internal auditing division to guarantee operational safety and environmental protection.
Another controversial topic that will also be within the jurisdiction of the ANSIPA is hydraulic fracking. Fracking is among the more specific responsibilities of the new agency in terms of hydrocarbon exploitation and transportation. The injection of carbon dioxide as well as other chemicals apart from water into wells will be supervised and regulated to guarantee the improvement of oil and gas production. In regard to water allocation for fracking activities in Mexico’s oil regions, the National Water Commission (CONAGUA) will be in charge of reviewing companies’ petitions for the industrial use of the country’s water resources for well drilling purposes. Once these requests are either approved or denied, the ANSIPA will have to effectively manage the appropriate use of the resources in drilling operations.
Evidently, the ANSIPA has been proposed as a means to ensure a clean hydrocarbon industry and a safe working environment in all oil-related operations. The post-Energy Reform scenario will require a strong, transparent, and effective regulator in the new playground of the country’s oil and gas sectors. Targets for the ANSIPA are truly demanding, considering that previous to this new entity, the combined forces of the SEMARNAT, the Federal Attorney’s Office for Environmental Protection (PROFEPA), and the Ministry of Labor and Social Welfare (STPS) had specific authorities concerning oil and gas operations in Mexico’s monopolized scenario.
Now, and into the near future, the diversification in the country’s hydrocarbon production portfolio is setting the stage for one agency that must be driven by international standards. Sweeping changes in the industry’s framework require for the ANSIPA to hit the ground running as it has only 180 days to reveal its internal procedures, rules, and regulations.