On Monday 16 December, Mexico’s Secretary of Energy Pedro Joaquin Coldwell presented the International Energy Agency’s Executive Director Fatih Birol with an official letter declaring Mexico’s interest in joining the advisory organization.

The IEA was founded one year after the 1973 oil shock as an autonomous intergovernmental organization within the OECD framework, in order to help western countries coordinate a collective response to major oil supply disruption. Nowadays, it serves an as energy policy adviser to industrialized countries, advocating policies that will improve the reliability, affordability, and sustainability of energy in its member countries and beyond. The advisor currently holds 29 members, in addition to partnerships with countries with which it works closely, including China, Brazil, and India. Only OECD members can be part of the IEA. Over the years, the IEA has intervened in the oil markets three times, releasing oil stocks to respond to the supply disruption occasioned by the 1991 Gulf War, the 2005 Hurricane Katrina, and the 2011 Libyan civil war.

151115_Birol_Coldwell

Source: IEA

Birol was very enthusiastic about Coldwell’s request, claiming it presented “an excellent opportunity for the IEA to strengthen its ties with Mexico, and open the door the greater engagement across Latin America. It is a key step towards our objective of building a truly global international energy organization.” Mexico is the third-largest oil producer in the OECD, and is the top producer in Latin America.

The IEA and Mexico have not been entirely independent to date, as the organization has worked to build good working relationships with the country. Mexico’s co-operation involves holding topical workshops on specific topics, participating in surveys on specific energy sectors or on its preparedness for major disruptions to oil and gas supplies, and helping to spread best practices in energy policy and statistics nationally.

IEA membership would grant Mexico the possibility to join a forum to establish joint answers and global co-operation schemes to ensure energy security, promote economic development, and foster environmental awareness and engagement worldwide. This step would be in line with Mexico’s recent opening of its energy industry to private investment, whereby the country is seeking to bring production back to or above previous levels, as a solution to the country’s energy challenges. In fact, Birol praised Mexico, asserting that the country “has made remarkable progress in transforming its energy sector into a market-oriented one that is based on the principles reflected in the IEA Shared Goals.” He expects closer ties with the IEA not only to reinforce, but also to and accelerate the remarkable progress of the Energy Reform.

The next step involves a decision by the IEA’s governing board to approve or discard this request. In the former scenario, the organization would work with Mexico to help the country meet the conditions for membership, which include the need to hold oil reserves equivalent to 90 days of net imports.

 

Sources: iea, The Economic Times

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