THE ENERGY REFORM IN MEXICO that was announced by the Peña Nieto administration in December of 2013 was applauded by prospective investors in the oil‐and‐gas and power industries. Six months later, as the implementing legislation winds itself through committee review, the applause has noticeably weakened in volume. The reasons for the diminishing enthusiasm are found at two levels: body language and fine print.

In this report, we shall mainly consider the body language of the two hydrocarbon bills pending before Congress. We may consider “body language” as having two dialects: market‐friendly and otherwise. In this respect, the Hydrocarbon Governance Act in its transitory articles is market‐friendly to an extent that is beyond expectations; for example, the concepts of open access, electronic bulletin board and secondary markets are embraced. The concepts set forth in the Hydrocarbon Revenue Act, in contrast, are entangled with ideological and populist constraints that diminish the attractiveness of the fiscal terms.

It is this entanglement to which we shall give primary attention in this report. Our concern is that the government and legislators who are trying to make peace between the Past the Future may end up being too deferential toward the Past; and, in so doing, they may put at risk the future benefits of the energy reform, especially in the upstream.