Andrés Manuel López Obrador (AMLO) took office promising energy sovereignty. Within months, his administration halted renewable energy auctions, suspended new wind and solar contracts, and redirected investment toward Pemex (oil) and CFE (state electricity). New fossil fuel projects were framed as national security priorities.

Under cover of the COVID pandemic, Mexico's grid operator CENACE issued an emergency reliability agreement that effectively blocked new renewable energy plants from connecting to the grid. The move was challenged by foreign investors under USMCA and found to violate international trade commitments, but the policy remained in force for years.

Construction of the 1,500 km Tren Maya railway through the Yucatán Peninsula began under military oversight without adequate free, prior, and informed consent (FPIC) from affected Maya communities. The project cuts through the Calakmul Biosphere Reserve and the Sian Ka'an UNESCO site. Environmental impact assessments were rushed or bypassed. Groundwater risks in the karst landscape were documented by scientists but ignored.

AMLO's 2021 electricity reform gave state-owned CFE dispatch priority over cheaper, cleaner private renewables. The Supreme Court struck down key provisions in April 2022, finding constitutional violations. AMLO responded by proposing a constitutional reform to entrench the policy, which was ultimately blocked in Congress.

AMLO nationalized lithium, creating LitioMx to control extraction. Mexico's Sonora deposit was claimed to be the world's largest. However, the deposit is bound to clay minerals and is technically very difficult to extract economically. Indigenous Yaqui and Rarámuri communities in Sonora have raised land rights concerns. As of 2025, no commercial-scale extraction has begun.

Prolonged drought across northern Mexico pushed reservoirs to critical lows. Monterrey — a city of 5 million — experienced rotational water cuts of 12+ hours per day for months in 2022-23. Sonora's agricultural sector, heavily dependent on groundwater, faced aquifer depletion. Climate models project northern Mexico will face permanent aridification by mid-century.

Claudia Sheinbaum, a climate scientist and former Mexico City mayor, won the 2024 presidential election on a platform that included renewable energy commitments. However, she inherited a CFE and Pemex dominated by fossil infrastructure, a weakened regulatory framework, and international trade disputes from AMLO-era energy nationalism. Progress has been incremental.

Mexico's manufacturing boom — driven by U.S.-China trade decoupling — brought massive new industrial investment to Nuevo León, Guanajuato, and Querétaro. These states sit above the Lerma-Santiago-Pacific basin, already one of Mexico's most water-stressed. New semiconductor and auto plants require vast volumes of water, straining aquifers that agriculture and communities depend on.

Pemex carries over $100 billion in debt and has posted losses for multiple consecutive years. The Sheinbaum administration faces pressure to continue sovereign bailouts to maintain energy sector employment. Every peso transferred to Pemex is a peso not available for climate adaptation, renewable buildout, or water infrastructure.