DEER PARK, Texas -- Two giant murals on storage tanks at an oil refinery here depict the rebels led by Sam Houston who secured Texas' independence from Mexico in the 1830s. This week those murals will become the property of the Mexican national oil company, which is acquiring full control of the refinery.
The refinery purchase is part of President Andres Manuel Lopez Obrador's own bid for an independence of sorts. In an effort to achieve energy self-sufficiency, the president of Mexico is investing heavily in the state-owned oil company, placing a renewed emphasis on petroleum production and retreating from renewable energy even as some oil giants such as BP and Royal Dutch Shell are investing more in that sector.
Lopez Obrador aims to eliminate most Mexican oil exports over the next two years so the country can process more of it domestically. He wants to replace the gasoline and diesel supplies the country currently buys from other refineries in the United States with fuel produced domestically or by the refinery in Deer Park, which would be made from crude oil it imports from Mexico.
The shift would be an ambitious leap for Petroleos Mexicanos, the company commonly known as Pemex. The company's oil production, comparable to Chevron's in recent years, has been falling for more than a decade, and it has more than $100 billion in debt, the largest of any oil company in the world.
The decision to pay $596 million for a controlling interest in the Deer Park refinery, which sits on the Houston ship channel and would be the only major Pemex operation outside Mexico, is central to fulfilling Lopez Obrador's plans to rehabilitate the long-ailing oil sector and establishing eight productive refineries for Mexican use. Mexico also agreed to pay off $1.2 billion in debts that Pemex and Shell jointly owe as co-owners of the refinery, which is profitable.
"It's something historic," Lopez Obrador said last month. In a separate news conference last year, he said, "The most important thing is that in 2023 we will be self-sufficient in gasoline and diesel and there will be no increase in fuel prices."
Although Lopez Obrador's policies diverge from the rising global concern over climate change, they reflect a lasting temptation for leaders and lawmakers worldwide: replacing imported energy sources with domestically produced fuels. Further, the generally well-paying jobs the oil and other fossil fuel industries provide are politically popular across Latin America and Africa as well as industrialized countries like the United States.
In the 1930s, the Mexican government took over Royal Dutch Shell's operations south of the border as it nationalized the entire oil industry, then dominated by foreigners. Now, Lopez Obrador is poised to go one step further, taking complete control of a big Shell oil refinery.
PRESIDENT AN OIL ALLY
Lopez Obrador hails from the oil-producing state of Tabasco, and the powerful Pemex labor union is a crucial part of his political base. He ran on a platform of rebuilding the company, and he has raised its production budget, cut taxes it pays and reversed efforts by his predecessor to restructure its monopoly over oil production in the country.
When he took office three years ago, Lopez Obrador began undoing changes made in 2013 to the country's constitution intended to open the oil and gas industry to private and foreign investment. He is also pushing to reverse electricity reforms that his predecessor, Enrique Pena Nieto, put in place to increase the use of privately funded wind and solar farms and move away from state-run power plants fueled by oil and coal.
Energy experts say Mexico is backtracking on a commitment it made a decade ago under President Felipe Calderon to generate more than one-third of its power from clean-energy sources by 2024. Mexico now produces just over one-quarter of its power from renewables.
"They are going to heavier fuels rather than to lighter fuels," said David Goldwyn, a top U.S. State Department energy official in the Obama administration. "Virtually every foreign company -- Ford, Walmart, GE, everybody who operates there -- has their own net-zero target now. If they can't get access to clean energy, Mexico becomes a liability."
Lopez Obrador's government has said it will combat climate change by investing in hydroelectric power and reforestation.
TEXAS REFINERY
Long a partner of Pemex, Shell, which operates the Deer Park refinery, is selling its stake in part to satisfy investors concerned about climate change who want the oil giant to invest more in renewable energy and hydrogen.
Under Mexican ownership the refinery will continue its practice of using Mexican crude oil, but it will probably sell more of the gasoline and other fuels it produces to Mexico.
Residents in Deer Park, in the heart of the Gulf of Mexico petrochemical complex, say they feel assured that locals will run the plant and Shell will continue to own an adjoining chemical plant.
Jorge Pinon, a former president of Amoco Oil de Mexico, said Mexico most likely would not be able to immediately profit from slashing exports of crude and processing its own fuels since the refinery business typically has low profit margins, especially in Latin America.
He said the Mexican refineries could not match U.S. refineries in handling Mexico's high-sulfur heavy crude. Mexican fuels made from heavy oil caused severe air pollution problems in many cities before the country began importing cleaner-burning U.S. gasoline and diesel over the past 20 years.