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LAS AMERICAS Tricky Dick’s NAFTA For Energy BY JOHN ROSS Although last month’s historic blackout shut down crucial industrial and financial centers in two out of the three North American Energy Alliance nations and killed the prospects for the privatization of electricity in a third, consolidating that strategic alliance continues to be a Bush-Cheney policy goal. George W. Bush first proposed the creation of a “North American Energy Market” during his 2000 presidential campaign, and quickly obtained endorsement from Mexican president-elect Vicente Fox. The deal hinged on the privatization of Mexico’s state-run electricity and petroleum sectors. Both initiatives came to form the building blocks of Fox’s energy program, which as later revealed by the national daily La Jornada, was partially designed by Enron, whose former CEO, Kenneth Lay, was a long-time Bush crony. Not unexpectedly, the creation of a North American Energy In May 2001 the White House-directed “North American Energy Alliance Working Group,” chaired by Dick Cheney, the once and future chief honcho of the Halliburton oil empire, issued a report that since has become administration energy policy, urging Mexico and Canada to formally join a North American Energy Alliance to provide the United States with a “stable” source of energy and ensure “U.S. energy security” As an example of such “stability,” under Alliance strictures the price of oil supplied by Mexico and Canada would be fixed below the world market price. Mexican critics of the proposed alliance, often described as “a NAFTA for Energy,” argue that the plan serves Washington’s needs at the expense of the delivering countries. The United States is the fattest energy hog on the planet, snorkeling up a quarter of the world’s daily petroleum output every 24 hours-20,000,000 barrels. Flanked by cabinet ministers, business bigwigs, and officials this past August 14th,Vicente Fox used a ribbon-cutting ceremony at a Tamaulipas state electricity generation plant constructed by private enterprise as a springboard to launch his annual pitch for the privatization and deregulation of Mexico’s electricity industry.The new facility is one of 17 being built by private sector consortiums that include such transnationals as Mitsubishi, Westinghouse, and Siemens. With 70 percent of its generating facilities set to reach 30year operating longevity capacities by 2010, Mexico needs $60 billion in private sector investment over the next decade just to stay abreast of the demand for electricity, Fox warned. But less than an hour after the Mexican president wrapped up his pep talk on the wonders of privatization, the privatized and deregulated U.S. electricity infrastructure collapsed into unprecedented blackout, a $6-billion-a-day catastrophe that spread chaos and panic throughout North America without Al Qaeda even having to lift a finger. “Allah sent that thunderbolt,” one Baghdad resident told The New York Times. His city of course, has been on permanent blackout since the United States invaded. Under the Mexican constitution, electricity generation is the exclusive domain of the CFE. But a 1992 modification imposed by then-president Carlos Salinas as a stepping stone to NAFTA opened the door for major corporation participation in the construction of generating facilities to run their own factories and manufacturing operationswith the stipulation that all excess energy be sold back to the CFE for general public distribution. Under Fox’s proposed changes, private energy producers would now be able to sell their own juice to a select group of customers. Opponents like the very vocal and venerable would permit private producers to walk away with the CFE’s 400 largest consumers, decapitalize the public sector, and create a two-tiered delivery system with poorer Mexicans left in the dark. At present, 7 percent of Mexican households have no electricity and for millions more, climbing rates limit illumination to a single dim light bulb. Fox’s fixation with the privatization and deregulation of Mexico’s energy sector first emerged in a much-heralded “Plan for the Reorganization of the National Electricity Industry,” a document which incorporates verbatim chapters of an Enron proposal entitled “Clear Rules for Energy Development.” Before its collapse, the Houston megacorp operated 64 subsidiaries in Mexico, most of them incorporated in the Cayman Islands. Despite Fox’s pleas for privatization, he continues to runhead-on into a legislative road block. Now the colossal August blackout on the east coast of North America has once again driven a coffin nail through the president’s plans. Nonetheless, a worried SME decries the “silent”privatization of the industry. Between 15 percent and 30 percent of Mexico’s electricity generation is now in private hands; CFE documents obtained by the union speak of an eventual 50 percent share. Such inroads are a key goal of the North American Energy Alliance. But the Alliance is conceived of as a two-way street, both of them leading right back to the 16 THE TEXAS OBSERVER 9/12/03