Historically, Pemex has been a major player in gas flaring, but its position has gained relevance as other major oil companies emphasize reducing this activity. The World Bank has cataloged Mexico –and Pemex– as the seventh country that burns the most gas and therefore one of the major polluters resulting from this activity. The country advanced ranking during this six-year term, in 2018 it ranked ninth. In the past six-year term, the state company burned 5.8% of its natural gas production and so far this administration this percentage has grown to 12.4, according to data compiled with Duhalt.
Pemex has already reduced the amount of gas it flared significantly in 2022, but last year’s volume is still more than double what it registered in 2019. Duhalt doesn’t discount these advances, but says the task of reducing gas flaring will remain. pending in this presidential administration. “For Pemex to significantly reduce gas flaring in the short term is going to be complex, firstly due to the large debt it has and must face large financial commitments. When I speak of a short term, I mean the day López Obrador leaves the presidency. ”, he says in a call.
“Another factor that makes reducing burning complex is that oil production must be maintained precisely because it is a government promise and we are also getting closer to the beginning of the presidential campaigns, that makes things even more complicated because this discussion is also policy. For Pemex, stopping gas flaring is not now a priority, at least not in the short term”, says the researcher. “With the current strategy of chasing crude production, short-term debt commitments and the upcoming presidential election, a dramatic shift to focus on reducing flaring would be surprising.”
Pemex has already advanced in this reduction process, at the same time that its investors and the markets have increased the pressure and so the oil company must improve these indexes to improve its financial position. The company, according to its latest financial statement, reduced 17.6% of its equivalent carbon dioxide emissions derived, as he explained, from the implementation of infrastructure projects to take advantage of the gas. Despite this, Pemex continues with a very low rating in the ESG criteria (environmental, social and governance). Moody’s and Fitch Ratings, for example, have it listed at level 5, the lowest for this category.
But at the same time that Pemex seems to improve in these figures, it has not met other goals. Octavio Romero Oropeza promised last year that by January of this year, the company would stop flaring gas in the Ixachi field – one of Pemex’s largest gas and condensate producers – but so far that has not been achieved.
Duhalt finds a simple explanation for why reducing gas flaring is not one of the top priorities, beyond the three factors he mentions: “Because Pemex is so indebted, it cannot afford to develop multiple facets of business at the same time, because it is so intertwined with the Mexican state, its priorities only reflect those of the presidential administration.
With the presidential elections already approaching and just over a year after López Obrador left the National Palace, it is “difficult to imagine” that the Morenista administration would support projects that do not pay financial dividends or that are popular for use in political discourse, he defends. the researcher in an article published by Columbia University.