A first encounter with ChatGPT (IA)
By Francisco Peyret
In Mexico, the discussion on energy sovereignty intensified after purchasing 13 electricity production plants from the Iberdrola company. A series of disagreements between the Spanish company and the Mexican government ended with an understanding allowing the government of Mexico to regain control of electricity production within the country. From 35%, the Federal Electricity Commission will manage 65% of the national output.
Opponents of this Mexican energy policy argue that we should be transitioning to production with clean technologies. From my point of view, this is a discourse that has been exposed, at least in our country. The opponents do not say that in Mexico, 90% of the companies that produce solar and wind energy are foreign concessions. In addition, they argue that the oil industry in Mexico was over. For a few decades, the governments dedicated themselves to dismantling both the electricity and oil industries to become dependent on the private sector in these industries. But what can this mean for a country?
It costs Mexico about 20 dollars to produce a barrel, and the country produces 1.8 million barrels daily. With a current price of about 75 dollars, we are talking about 99 million dollars of daily profits. It is crazy to think of throwing away a business of that size. However, it is also true that Mexico does not have a clear energy policy to transition to production with clean technologies. For the future, this is worrisome, but where else can it get money to invest in this process? Much infrastructure is necessary to achieve this. For example, in the electricity industry, the transmission systems are always in charge of the state.
We must prepare because the energy demand in the world is going to skyrocket in 2040. The International Energy Agency (IEA) warns it will rise by 30%. The agency’s annual report warns it will be like adding another China and another India to global demand. The global economy grows at an average rate of 3.4% per year. The population will expand from 8,000 to 9,000 million people until 2040. With a rising demand, gas will continue to be the protagonist, oil will not lay off, and the United States will continue dominating energy production, even when prices are not very high.
On the other hand, state ownership of the energy sector in the world is moving. According to the OECD, systems range from 100% publicly owned, as in Sweden, to fully privatized, as in Germany or the United States. Despite this diversity and the wave of privatizations in recent decades, public companies with state participation currently have 62% of the total electricity generation capacity on the planet.
And in recent years, throughout different working documents, the SOE (state-owned enterprise), an organization of 38 members founded in 1961 and headquartered in Paris, increasingly values the role of investee companies in whole or in part by governments. SOEs are trending: according to a document dated June 2020, the OECD (The Organisation for Economic Co-operation and Development) establishes that state-controlled companies generated 62% of electricity capacity in 2016. «Resource-rich countries typically turn to state-owned companies to maintain some degree of control over the extraction and production of natural resources» in addition to prices. Paradoxically, countries like Germany and Spain that do not have state participation in the industry, with the war in Ukraine and Russia, have not fared well at all.
From my point of view, a country like Mexico must follow models like Norway’s. In this country, the exploration and production of oil and gas are in charge of a state company. Equinor operates several regional oil and gas platforms, not just within the country. Norway’s oil and gas development follows strict environmental and safety regulations. But at the same time, Norway is also a leader in renewable energy, with a significant hydropower industry and a growing wind power sector. The country has an ambitious goal of becoming greenhouse gas neutral by 2050 and has taken steps to promote renewable energy and energy efficiency.
After a few months of doubts, I agreed to interview ChatGPT (Artificial Intelligence) and take advantage of the flight to ask about the issue of energy sovereignty.
Francisco Peyret (FP): What is energy sovereignty?
ChatGPT: Energy sovereignty is a concept that refers to the ability of a country or region to control and manage its energy resources sustainably and autonomously. In my opinion, energy sovereignty is a very important objective for any country since it allows it to reduce its dependence on energy imports and guarantee a secure and stable energy supply in the long term.
In addition, energy sovereignty can also positively impact a country’s economy since it allows for job creation and the development of new energy-related technologies and companies. It can also have environmental benefits, as increased use of renewable energy sources and reduced greenhouse gas emissions can help mitigate climate change.
FP: What is the role of European public companies in energy production?
ChatGPT: The role of European public companies in energy production can vary depending on the country and region in question. However, in general, these companies tend to play an important role in producing and distributing electrical energy, as well as in managing critical energy infrastructures, such as gas and electricity transmission and distribution networks.
FP: What do you think of the future of oil and gas as the main source of energy production?
ChatGPT: The future of oil and gas as the main source of energy production is uncertain and up for debate. On the one hand, global energy demand is expected to continue to grow as the world population and economy expand. On the other hand, the need to address climate change and reduce greenhouse gas emissions requires a transition to cleaner and more sustainable energy sources.
Oil and gas remain important energy sources worldwide today and are expected to remain important for some time. However, their use is expected to decline gradually as renewable energy sources, such as solar and wind power, become more competitive and more advanced technologies for storage and distribution are developed.
FP: Is the recovery of oil and electricity infrastructure favorable for Mexico?
ChatGPT: The oil and electricity infrastructure recovery can benefit Mexico in certain aspects, such as job creation and improving the country’s energy security. However, remember that challenges and risks are associated with reliance on fossil fuels and the lack of investment in renewable energy.
FP: In the oil and gas industry, how has the United States fared during the Ukraine-Russia War?
ChatGPT: During the war between Ukraine and Russia, the US oil and gas industry has been affected in certain aspects. Although the war itself has not had a direct impact on oil and gas production in the United States, there have been several factors that have affected prices and demand for these products.
On the one hand, the tension between Ukraine and Russia has generated uncertainty in the world energy market, which has led to greater volatility in oil and gas prices. On the other hand, oil and gas production in the United States has continued to grow in recent years, thanks to fracking technology and the exploration of unconventional deposits. Greater energy independence for the United States and reduced oil and gas imports from other countries, including Russia, have resulted.
