Mexico’s opposition politicians have denied the country’s nationalist president the two-thirds majority needed to amend the constitution and implement a radical energy reform bill.

The reform, which would guarantee a 54 percent market share for state-owned power group CFE, spooked the private sector, the opposition and the U.S. government. Critics argue that this is bad for investment, the economy and the environment.

The proposal seeks to change the electricity regulatory landscape, including removing permits to generate electricity and prioritizing CFE electricity over private renewables on the grid.

After a day of insults and chants of debate, Mexico’s lower house voted 275 to 223 in favor of the reforms, well short of the two-thirds majority needed to amend the constitution.

After a severe setback, Lopez Obrador on Monday pledged to submit legislation to nationalize the country’s lithium industry, saying: “There will be a company that explores, extracts, commercializes it.”

He added that passing the law would only require a simple majority in Congress — held by his Morena party and its allies in both chambers.

The results of the energy reform vote will be welcomed by most investors, but analysts expect political and regulatory uncertainty in the industry to continue.

Since the reforms were proposed in October, business leaders, the government and lawmakers have been negotiating and publicly debating them behind the scenes. But the gap between President Andres Manuel López Obrador and the opposition’s vision to open energy markets to private investment in 2013 is too wide to bridge.

Instead, Sunday’s vote was more about the political points made by Lopez Obrador, analysts said. The government wants to portray the opposition as representing the interests of foreign energy companies while serving the Mexican people.

López Obrador has previously said that if the reforms are rejected, he will immediately submit a new initiative to Congress to nationalize the country’s lithium resources.

“I said in Tuesday’s update: No matter what happens, we are protected from betrayal. I will explain it again tomorrow,” he said. wrote on twitter Sunday hours before voting.

His coalition passed secondary legislation with a simple majority. The issue is less of a concern to the private sector, as Mexico’s lithium is mostly found in hard-to-mine clay deposits, the value of which is unclear.

López Obrador, who grew up in an oil-producing state and believes in state control of oil and electricity, believes the liberalization of the industry, plagued by corruption, is too favorable for private companies.

“It’s not just another topic, another item on the agenda, it’s the heart of it[his]. . . agenda because it’s at the heart of Mexico’s history,” said Lorenzo Meyer, a historian who has widely supported Lopez Obrador’s government. “The opposition could veto the bill, but Can’t deny the idea. “

Energy experts agree and express skepticism that even without constitutional reform, the industry will attract significant investment. The government has other tools at its disposal, such as blocking licensing through regulators and trying to implement secondary bills that the Supreme Court did not invalidate in a ruling this month.

“The energy sector will not change, it will remain as it is until now with no investment or very concentrated investment,” said CFE and Pemex, the state-owned company.

The lack of a constitutional majority is also important to the broader economic and investment climate, he said. “It’s good news for the rest of the industry to know there are at least checks and balances,” he said.