How Indigenous Mexicans Took on Big Energy and Won
Pahuatlán, Puebla, Mexico—On the afternoon of September 16, 2016, hundreds of people crammed into the narrow cobblestone streets of Pahuatlán, Puebla. It was Mexican Independence Day, and that night the municipal president, Arturo Hernández, was slated to lead the festivities. But people poured into Pahuatlán from surrounding towns not to celebrate but to protest the construction of a natural gas pipeline. Men in cowboy hats, women carrying babies on their backs, and teenagers in school uniforms crowded the central plaza and chanted, “The earth is not for sale, we must preserve and defend it.”
They were calling on Hernández to push the Calgary-based energy giant TransCanada and its local affiliate out of the region. Homemade signs expressed outrage over the pipeline that was set to run from the Gulf of Mexico through Puebla to its destination at a thermoelectric plant in Tula, Hidalgo. “Don’t think in the present, think about the future, stop the pipeline,” read one sign. “Real leaders fight for their people, not for foreign companies,” said another.
Hernández canceled his speech that night. The protesters, many of whom had come from nearby mountain villages, declared a momentary victory. In the subsequent months, the Totonac, Hñähñu (Otomí), and Nahua indigenous people of Pahuatlán and surrounding counties demanded a say in the project. Nearly three years later, construction on the pipeline is suspended, awaiting resolution of lawsuits filed by the regional indigenous council. The pipeline’s future hangs in the balance, as the federal government and TransCanada are still trying to complete the project.
TransCanada, which did not respond to multiple requests for comment, wrote in an August 1 press release, “Construction for the central segment of the Tula project has been delayed due to a lack of progress by the Secretary of Energy, the governmental department responsible for Indigenous consultations. Project completion has been revised to the end of 2021.”
TransCanada, which officially changed its named to TC Energy earlier this year, landed the half-billion-dollar contract for the pipeline in 2015. Partnering with its local subsidiary Natural Gas Transporter of the Huasteca (TGNH), TransCanada projected that the 178-mile pipeline would go online in late 2017, but it wasn’t counting on local resistance from indigenous communities well-versed in their rights and skeptical of the company’s promises.
If finished, the Tuxpan-Tula pipeline would connect to an underwater pipeline from Brownsville, Texas, known as Sur de Texas-Tuxpan, also owned by TransCanada. The fate of the Tuxpan-Tula pipeline, now almost two years behind schedule and millions of dollars over budget, will have consequences far beyond these mountain towns. The pipeline will connect the oil and gas fields of West Texas with the burgeoning Mexican energy market. Crucially, it will lock Mexico into natural gas consumption for years to come, delaying the transition to renewable fuel sources and making it nearly impossible for the country to meet its climate goals.
Mexico, a middle-income country of 130 million people, has committed to reducing its greenhouse gas emissions 22 percent below 2000 levels by 2030 and 50 percent by 2050. The Mexican Congress adopted a carbon tax in 2013, but excluded natural gas. Despite environmental concerns, President Andrés López Obrador has prioritized investment in oil refineries. It’s hard to imagine how increased funding for oil and gas, combined with a recent slowdown in renewable energy investments, will somehow result in Mexico’s achieving its IPCC targets. How López Obrador decides to handle discontent with natural gas infrastructure projects will have massive long-term impacts for North America and the global climate crisis.
López Obrador inherited the energy policy of his predecessor, Enrique Peña Nieto, who opened the sector, once dominated by the state-directed company Pemex (Petróleos Mexicanos) and the Federal Electricity Commission (CFE), to foreign investment. The US Department of State, under Hillary Clinton, pushed for the privatization effort. In the years since, American, Canadian, and European companies have received lucrative contracts. The reforms also accelerated the transition from fuel oil to natural gas, and now experts project a 75 percent increase in demand for natural gas over 15 years.
TransCanada has four pipelines in operation in Mexico. In addition to Tuxpan-Tula, two other pipelines are delayed. All told, the seven pipelines could cover more than 1,200 miles.
Meanwhile, US energy companies are facing a gas surplus north of the border. The Permian Basin of the West Texas oil fields produces large volumes of natural gas. But without enough pipeline capacity to move the gas, and low demand in the United States, prices have dropped into the negatives. This leads companies to “flare” natural gas, burning it at well sites, which releases methane and carbon dioxide.
Expanding infrastructure in Mexico provides an outlet for the glut of natural gas and a new income stream for American and Canadian energy companies. TransCanada increased its investments in Mexico just as its US projects faced fierce opposition. The company won the Tula-Tuxpan contract only days after the Obama administration rejected its expansion of the Keystone XL crude-oil pipeline (which Trump later approved).
A business-friendly regulatory framework and a perception of lower political opposition to pipelines encouraged investment. In a 2016 press release, the president of TransCanada Mexico, Robert Jones, gloated that the company “has been embraced in Mexico.”
But TransCanada is wearing out its welcome.
Santos Vargas grew up in the hamlet of Montellano, which is perched on a lush hillside in the northern corner of Puebla that borders Hidalgo and Veracruz. Montellano’s springs provide fresh water to the towns at the foot of the hill. In mid-June, the rainy season had begun, and the maize plants had already grown over five feet tall.
Vargas, 24, remembers seeing unfamiliar trucks going through town in early 2016 and helicopters flying overhead. The pickup trucks were marked “TGNH.”
“The workers started going through the maize and bean fields,” Vargas says, in an interview in Montellano. “They were measuring, they carried a lot of implements. All of this was without the consent from the community and the property owners.”
Neighbors began to research online and learned that TransCanada and its affiliate TGNH were building a pipeline. The counties of Pahuatlán, Tlacuilotepec, and Honey are in the Northern Sierra of Puebla, the mountain range separating the Gulf of Mexico from the country’s interior. Otomí, Nahua, and Totonac indigenous people have coexisted in the region for centuries.
While local communities were gradually learning about the pipeline, TransCanada was passing the Mexican government’s final regulatory hurdles. The Energy Secretariat (Sener) approved the project in December 2014. TransCanada won the contract in November 2015 and presented an Environmental Impact Statement (EIS) the next month.
By that November, human rights organizations questioned why the government still had not informed communities along the pipeline route. Mexico is a signatory to Convention 169 of the International Labor Organization, which requires governments to consult indigenous people on development project that will impact them. The standard of “free, prior and informed consultation” means that communities must be able to weigh in on projects before they start with adequate information and without coercion.
In June 2016, the Mexican government approved the project’s EIS. Construction began in July. More than 450 communities lay within the pipeline’s zone of influence, but authorities determined that only 15 had to be consulted. In Pahuatlán, a consultation meeting on September 12, 2016, resulted in a “resounding no” to the consultation and pipeline construction.
Jeremías Castillo, of Zoyatla, Puebla, is another leader in the movement. Castillo worked for nearly a decade outside the community, first in North Carolina and then Mexico City. Returning to Zoyatla, he started a family and built a home.
When he heard about the pipeline in 2016, he joined a group of neighbors who were going from town to town. At this early stage, they were sharing basic information about the pipeline route and potential impacts to their water sources and forests.
“My roots are here, I’m going to stay here,” he says. “If the pipeline comes through and impacts us, where are we going to go? We don’t have anywhere else.”
Among Castillo and his neighbors’ primary concerns is the risk of leaks or ruptures along the pipeline route, which could contaminate local water sources. They also fear that the explosives used while constructing the pipeline could disrupt subterranean water sources and trigger landslides.
The cloud forests of Puebla’s Northern Sierra are important water catchment areas. Many communities rely on these springs for their daily water use. Several villages in the region, including Chila de Juárez, observe yearly rituals at their freshwater springs; impacts to these water sources would have cultural as well as material implications.
The cloud forest is also home to an immense variety of plants, trees, mammals, birds, and insects. The pipeline’s EIS, however, downplayed the biological significance of the area, stating that less than 12 percent of the route was through “natural ecosystems,” including less than 3 percent through cloud forest.
The pipeline will have a 65-foot right of way, which will result in significant deforestation that the EIS says will be remediated. The EIS also argues that the pipeline will reduce greenhouse gas emissions. While in the short-term natural gas might produce less emissions than fuel oil, this view overlooks the long-term implications of relying on natural gas instead of switching to renewables. The evidence is clear: Natural gas has no place in tackling climate change.
Even though the indigenous people of the region were not fully consulted, local politicians knew about the project. Castillo explains that Hernández, former municipal president of Pahuatlán, claimed that because the pipeline was a federal project, he had no decision-making power. But Hernández had to authorize a zoning change to allow the pipeline to go through the area.
People began to suspect that local politicians had accepted money from TransCanada to approve the project. In September 2016, a congressman representing the region accused Hernández of receiving 2 million pesos (about $105,000) in bribes to let the pipeline pass. While these suspicions are difficult to verify, a judge later opened an investigation to prove whether local authorities had falsified signatures of their constituents. The suspicions culminated with the September 16, 2016, protest in Pahuatlán, when Hernández canceled his Independence Day speech.
In 2017, communities spread across the mountains of Puebla and Hidalgo decided to formalize their resistance, creating the Regional Council of Indigenous Communities in Defense of Territory. Oliveria Montes, a young woman from Zoyatla, became the council’s spokesperson.
Castillo says the hard work of organizing the geographically dispersed and culturally diverse communities was worth it. “There were some people who were fooled by the company, and handed their property papers over,” he says. “But other people, with the information we gave them, thought it over. In the end, they didn’t give the company anything.”
Vargas says he thinks that TransCanada tried to convince people to accept the pipeline with monetary bribes and by offering to build sports fields or pave rural roads. Along a pipeline route through indigenous Rarámuri communities in Chihuahua, TransCanada funded similar projects, such as installing solar panels and building a baseball field. “They take advantage of our poverty,” Vargas says. “Even if we don’t have much, we are determined, and we don’t want to accept the pipeline.”
In Mexico City, Montes met lawyer Raymundo Espinoza Hernández, who agreed to take on the case. The first lawsuits were filed in September 2017, calling for construction to be suspended because the indigenous consultation was not carried out, and the social and environmental impacts were not adequately assessed. One lawsuit named all the communities in the Regional Council as plaintiffs, while separate lawsuits were filed for the specific grievances of several key communities.
The lawsuit representing multiple communities alleges that local authorities “have held private negotiations [with the company] that usurp our communities’ representation, with the aim of obtaining a personal benefit, whether financial or political.”
In December 2017, a judge ruled that TransCanada had to suspend construction at two points along the route, in Cuautepec and San Pablito, both in Pahuatlán municipality.
As the legal process gained steam, a presidential race was ramping up. López Obrador, running for the Morena party, was gaining ground to challenge the incumbent Institutional Revolutionary Party (PRI), and its perennial right-wing opposition, the National Action Party (PAN). López Obrador built his base in communities like Pahuatlán; poor, rural towns where farmers, migrants, and indigenous people feel the federal government has forgotten them. He was also a strong critic of the energy reforms.
On February 2, 2018, López Obrador held a rally in Pahautlán. At the end of his speech, members of the Regional Council asked for his support to stop the pipeline. The candidate replied that he would not impose any projects on indigenous people.
López Obrador won a historic election on July 1—it was the first time since Mexico’s democratic transition that the PRI or the PAN would not hold the presidency. He was, however, quick to assure foreign investors that he would respect the energy contracts, seemingly reneging on his pledge in Pahautlán.
In mid-November, TGNH announced it was suspending construction on the Tuxpan-Tula pipeline, even though only a fraction of the route was left to build. The company said that communities were demanding “extortion” money, a claim that the Regional Council staunchly rejects. The suspension was a victory for the local movement, and on January 30, 2019, another judge ruled in favor of Cuautepec, Puebla,against the pipeline, citing potential impacts to indigenous rights.
While other communities have reached deals with TransCanada, the Regional Council has rejected negotiation. “Since this began, we’ve said we want the pipeline canceled,” Castillo says. “We don’t want them to change the route. What’s the point, if the new route will impact other communities?”
When López Obrador announced in June that Mexico would be renegotiating contracts for seven pipelines, including Tuxpan-Tula, the reaction was fast and harsh. The Canadian ambassador to Mexico tweeted that he was “profoundly concerned.” The US Chamber of Commerce also criticized the renegotiation, saying in a statement that “there are few factors more critical to investment and economic growth than the legal certainty and predictability fostered by the respect for the rule of law.”
The contracts signed under Peña Nieto require the Mexican government to pay TransCanada, Grupo Carso, and Sempra even if the pipelines aren’t delivering gas, to the tune of 85 billion pesos ($4.45 billion) over 25 years.
The contract renegotiation, however, is focused on the bottom line for the Mexican government, not the social or environmental impacts of foreign-owned pipelines. Communities like Zoyatla and Montellano have again been left out of the discussion. Itzam Pineda, an anthropologist at the Autonomous University of Mexico City, who has collaborated with the Regional Council, says, “The debate is playing out between the government and the companies. The local communities are made invisible. The motivations and grievances of the communities have been erased on purpose.”
Despite local protests, López Obrador has forged ahead on other fossil-fuel infrastructure projects. One is the Morelos Integral Project, which includes a pipeline and a thermoelectric plant. Local communities have resisted it for years. The new president organized a referendum, but most communities included in the vote are not affected by the project and those that are voted overwhelmingly against it. Three days before the referendum, anti-pipeline activist and radio journalist Samir Flores was murdered in Amilcingo, Morelos.
Castillo of the Regional Council says that López Obrador has changed tactics but not the actual infrastructure plans. “I think if the PRI or the PAN had won, the pipeline would already be constructed,” he says. “Because they have a different way of imposing their projects, by using force and repression.”
López Obrador, on the other hand, is using referendums to push through development projects, without adequately consulting indigenous communities and accounting for environmental impacts. Andrés Barreda, an environmental economist at the Autonomous University of Mexico, says that the votes are a sham. “If you have a vote, and there hasn’t been discussion or education in the community, it’s just another form of manipulation,” he says.
Barreda adds that Mexican political parties have not proposed real solutions to reduce greenhouse gas emissions and transition from fossil fuels: “It’s urgent for us to have a Mexican Green New Deal.”
Meanwhile, people in the mountains of Puebla continue to organize and defend their homes from a pipeline project that never took them into account.