EPA to Support PEMEX in Reducing Its Emissions

PEMEX announced a cooperation agreement with the Environmental Protection Agency (EPA) for 1H22. EPA will provide the NOC with diagnoses and economic analyses to support decision-making for oil and gas operations to reduce greenhouse gas emissions, specifically methane.

PEMEX also said that EPA will assist in developing and launching a mitigation plan to match the Global Methane Pledge. PEMEX will receive EPA’s recommendations on mitigation options as well as opportunities for burner capture and burner efficiency, equipment replacement, operational changes to eliminate flaring, leak detection and repairs.

PEMEX’s efforts to reduce emissions?have?slowed down?over the past few years, which has?raised concerns?over the company’s environmental practices. After receiving fines for excess flaring during former President Enrique Pe?a Nieto’s administration, the company compromised to invest US$3 billion to fix the problem, but the plan was practically abandoned by the end of his administration, according to Reuters. The NOC has been under scrutiny since it has not shown improvement. Mexico also signed a deal with the World Bank to reduce its flaring to zero in 2030, however, Reuters reported that flaring reached record levels in 2021. Despite a slight reduction in 2022, the NOC remained close to former emissions levels. What is more, PEMEX has requested CNH to approve extending flaring for another decade, which would allow the company to burn 71.3 percent of the natural gas produced during oil production up to 2030.

Mexico announced new goals to combat climate change at COP27. Among its commitments were the elimination of flaring and the increase of its cut in emissions from 22 percent to 33 percent by 2030. Mexico also talked about its?plans to increase renewable energy, relying on government programs such as CFE’s renewable energy projects and the photovoltaic solar plant in Puerto Pe?asco, Sonora. Despite these developments, Mexico has received?negative attention?for?undermining the development of clean energy?and for controversy over non-competitive practices favoring state-owned companies.

The energy crisis in Europe?fostered a growth spike in the fossil fuel industry. While the climate crisis seems to have made up its way onto most industries’ agendas, the current international context has forced countries to prioritize energy security and affordability. “In this context, fossil fuel suppliers are experiencing an unexpected boom and benefiting from higher profits. Despite the short-term incentives to increase supplies of oil and gas, these companies are feeling the pressure of a growing environmentally conscious society,” Andres Friedman, CEO, Solfium.