Mexico’s state-owned oil company has doubled emissions in three years

Luis León Martínez’s house has a view of heaven and hell. The house is surrounded by a garden with banana trees, lilies, and a papaya plant that bears delicious fruit. Martinez is proud of his piece of green. He has just mowed the lawn and is making little mounds with a rake. But neither the smell of freshly cut grass nor the concrete wall that borders the property manages to hide the imposing presence of the Tula refinery. About 500 meters away, an apocalyptic landscape rises: dozens of gray towers and their columns of gas, and the orange flame that almost never goes out. “We’re used to our smoke now,” says the 47-year-old neighbor.

Everyone has their way of calling the torch that burns the gas. Lighter, match… It is the first thing that the visitor who arrives in Tula from Mexico City sees, the cherry of a huge complex of more than 700 hectares with the capacity to process 315,000 barrels of crude oil per day. Founded in 1976, the Miguel Hidalgo refinery is one of Pemex’s biggest polluting outlets. Despite the environmental commitments signed by Mexico, the emissions of the state oil company have practically doubled since President Andrés Manuel López Obrador came to power at the end of 2018.

Year-round northerly winds push the dense cloud of pollution over the Martinez family’s roof toward Mexico City. In the last month, the Megalopolis Environmental Commission (CAMe) has declared four environmental contingencies because the concentration of polluting particles in some areas of the capital practically doubled the maximum allowed. 18% of the sulfur dioxide that the capital breathes originates in the Tula area, according to the Government of the State of Hidalgo. The refinery reduces activities for a few days until the alert is deactivated and Pemex can continue polluting.

In 2017, the company was already the ninth most polluting oil company in the world in a ranking led by Saudi Arabia’s Aramco, according to the NGO Climate Accountability. After two consecutive annual reductions in 2017 and 2018, the gases that Pemex sends into the atmosphere rebounded in 2019, the first with López Obrador in power. That year, emissions grew by 31%; in 2020, 37%; and in 2021, another 7%, reaching 70.5 million tons of carbon dioxide equivalent, the highest level in at least a decade, according to the oil company’s annual reports.

The increase in pollution collides with the country’s environmental commitments. Mexico committed in the Paris Agreement to reduce its emissions by 22% by 2030. Parallel to the signing of the treaty, the Government modified the national law to include a specific goal for the energy sector: a reduction of 14%. Experts think it is increasingly unlikely that both Mexico and Pemex will meet their reduction targets. “The company is not listening to the world’s priorities and is doing what it wants for its production priorities,” says consultant Pablo Zárate, from FTI Consulting.

The increase in emissions goes hand in hand with a modest increase in oil production, one of López Obrador’s objectives. In the president’s reading, previous governments had abandoned Pemex, preferring to import gasoline from abroad than to produce crude oil and refine it in the country. López Obrador has wanted to turn the trend around to achieve what he calls “energy self-sufficiency”.

Three years later, production is far from the 2.6 million barrels per day that the president set as a goal at the beginning of his six-year term. At the end of 2021, there were 1.75 million barrels per day of crude oil and condensates, a figure very similar to that of the end of 2018. However, refineries processed 740 million barrels per day, an increase of 46% compared to 505 million barrels three years ago.

Beyond the barrels produced, Pemex has recognized that part of the increase in emissions comes from an inefficient operation. In its most recent report to the US Securities and Exchange Commission, published at the end of April, the oil company mentions “failures” in gas compressors and “limited” recovery of this fuel in its extraction activities. The oil company often resorts to burning excess gas, the largest source of emissions on offshore platforms. In 2021, the company burned 12% of all its natural gas production.

The former commissioner of the National Hydrocarbons Commission (CNH) Sergio Pimentel points to Pemex’s lack of infrastructure to store the gas it does not use. The expert recalls that in September 2020 the CNH sanctioned Pemex for burning more fuel than the norm allowed. “The regulatory body imposed a sanction on it that consisted of asking it to invest in infrastructure, but Pemex did not invest,” he says. “Over the last 20 years, the emphasis has been on oil production and gas development infrastructure has been pushed to the side.”

The refineries, moreover, have already been in operation for several decades. The most modern was inaugurated in 1979. “Its efficiencies and emission levels are far from international standards, mainly due to its age and lack of investment and proper maintenance over the last two decades,” the NGO recently pointed out in a report.

Martínez goes from scare to scare. On Sunday the “match” was out, but the smell of gas permeated everything. He even thought that something was going to explode. Sometimes he wakes up in the middle of the night. “Shhhhhhh…”, he says the refinery sounds. “What a holy relief when he calms down,” he says, rubbing his forehead. Gerardo Castillo, a former federal government official and now an activist agrees with Martínez’s statements. “The plants are old and need maintenance,” says this quiet 70-year-old retiree, dressed in a plaid shirt. “The particles enter our lungs like Pedro through his house.”

Faced with this challenge, the Government has promised to modernize the refineries. In its reports, Pemex also mentions a series of actions to address the emissions problem: the repair and replacement of gas compressors to increase the natural gas processing capacity and reduce burning, the improvement of the transportation infrastructure of the fuel, as well as the review of the methodology for calculating emissions.

Pablo Zárate believes that these actions are insufficient to stop the increase and believes that investors will penalize Pemex if it does not change course. “If you compare the substantive actions of Pemex with those of any other oil company, it is clear that it lags behind year after year and the gap is getting bigger and bigger,” he explains. “In the world, there are oil companies that even get rid of refineries to have a more manageable carbon footprint.”

Shell, for example, sold its half of the Deer Park complex in Texas a year ago to Pemex after the Mexican government expressed interest in taking over the entire operation. In addition to that purchase, Pemex plans to inaugurate an eighth refinery, Dos Bocas, in just over a month. López Obrador has reaffirmed his strategy and has promised to stop importing gasoline in 2023. “It’s like we’re selling oranges and buying orange juice,” he declared in early May.

Faced with the government’s stubbornness, Gerardo Castillo and his group of ecologists do what they can to put pressure on them. They are few, mostly retired, but they do not give up. They want the government to declare a “special ecological zone” in Tula to save what is left. “We have to be more forceful,” he says. Less proactive, Luis León Martínez prefers to concentrate on his garden. The lilies depend on him; pollution doesn’t. “Who do we complain to?” he says. “We put up with it and that’s it.” A belief shared by most of humanity.

Written by Jon Martin Cullell, originally published on El Pais