"Energy policy in Latin America, the cases of Mexico and Brazil." Presentation by Alejandro Díaz-Bautista, Ph.D. Professor of Economics and Researcher. Prepared for Economic Policy in Latin America, Graduate School of International Relations & Pacific Studies. University of California, San Diego (UCSD), La Jolla, California, January 20, 2010. Dr. Alejandro Díaz-Bautista received his Ph.D. in Economics from the University of California Irvine (UCI). He also earned his master's degree in economics at UCI. He was educated at ITAM in Mexico City where he earned his Bachelor’s degree in Economics. He has been professor of Economics and Researcher at COLEF. He held the position of head of the Master’s Program in Applied Economics and coordinated the working paper series in economics. Professor Díaz-Bautista has taught courses in the fields of industrial organization, macroeconomics, international economics, political economy, econometrics, public finance, economic growth, economy and territory and regional economics. Professor Díaz-Bautista has also been a research fellow and guest scholar at the Center for U.S.-Mexican Studies, University of California San Diego (UCSD). He has also been teaching courses in international economics, economic policy in latin america, economic geography and economic development at the Universidad Iberoamericana del Noroeste, CISE and UCSD. Previously, he worked at the Energy Regulatory Commission and the Ministry of Energy. He has also worked as an energy economist and economic consultant for private firms. He has been a member of the Technical Committee for the Federal Electoral Institute and CONACYT. In 2009, he is also a member of the U.S.-Mexico Border Governors Council of Economic Advisers. Email: adiazbau@hotmail.com

1. Energy policy in Latin America, the cases of Mexico and Brazil. Alejandro Díaz-Bautista, Ph.D. Professor of Economics and Researcher, Colef [email_address] http://www.linkedin.com/pub/alejandro-diaz-bautista/6/619/691 http://usmex.ucsd.edu/programs/fellows/former-fellows/alejandro-dazbautista.htm Prepared for Economic Policy in Latin America, Graduate School of International Relations & Pacific Studies. University of California, San Diego (UCSD), January 20, 2010.

6. Major Oil Fields in 2002

12. Top Oil Producing Countries 2008 (in million barrels per day)

38. Governments in Mexico, Venezuela, Argentina, and elsewhere are spending billions of dollars on fuel subsidies to assure cheap fuel and keep a lid on social unrest. But as national budgets come under increasing strain, these governments may have to consider alternatives. Remember your gallons to liters conversion: 1 gallon = 3.785 liters

50. Brazil’s LNG Terminals

52. ''Brazil has the most sustainable and cleanest energy matrix in the world,'' with 90 percent of its power generation based on renewable sources, including hydroelectric power, In the wake of the 1970s energy crisis, Brazil developed sugarcane alcohol as a gasoline substitute.

68. To increase investment capacities To incorporate State of the Art technology Oil pillar CHALLENGES To increase execution capacities and efficiency Flexible contracts Management autonomy Transparency and accountability Pemex strengthening CHANGES National content promotion New Energy Reform in Mexico Regulator strengthening and change in Fiscal Regime To achieve the Energy Transition Transition pillar Renewables Sustainable energy

77. Gasoline Prices (Tijuana versus San Diego) Source: Esquivel (2009).

85. CRE’s regulation powers Reserved to the State Open to private investment Regulated by CRE Generation CFE & LFC National Transmission Grid Third Parties Others Imports Imports / Exports Power Natural Gas Exploration Marketing Production Processing. PMX Sales Transport Storage Distribution LPG Marketing Production Processing PMX Sales Transmission Generation Transmission Distribution Pipeline Pipeline Distribution Surface transport. Bottle Distribution Storage

90. Mexico’s LNG Terminals

118. Forecast 2010 (dollars per barrel)

131. Renewable energy sources - including biomass, solar, wind, geothermal and hydropower - not only use indigenous resources but also have the potential to provide energy services with zero or almost zero emissions of both air pollutants and greenhouse gases.

132. The outlook for renewable energy generation is promising, with increased deployment expected By 2030, renewable energy is expected to account for 22% of electricity generation in emerging markets, with the biggest contributions from hydro and wind Projected Generation Costs of Renewable Energy Technologies Growth in renewable energy investments is expected to be driven by declining investment costs, government support and response to climate change concerns Source: International Energy Agency, World Energy Outlook 2008 2007 US$ / MWh

134. Energy policy in Latin America, the cases of Mexico and Brazil. Alejandro Díaz-Bautista, Ph.D. Professor of Economics and Researcher, Colef [email_address] http://www.linkedin.com/pub/alejandro-diaz-bautista/6/619/691 http://usmex.ucsd.edu/programs/fellows/former-fellows/alejandro-dazbautista.htm Prepared for Economic Policy in Latin America, Graduate School of International Relations & Pacific Studies. University of California, San Diego (UCSD), January 20, 2010.

137. Gasoline Prices U.S. vs. Europe