Mexican Oil Reform Threatens Changes to U.S. Energy Supply
President Felipe Calderon wants to reform Mexico's oil industry. Jeremy Martin from the Institute of the Americas at UCSD explains how this might impact gas prices here in the U.S.
Tom Fudge: Last week, a familiar sight was seen in the Mexican Congress: members of an opposition party camping out at the speaker's podium to stop debate on a controversial proposal. That protest ended on Friday, when all parties agreed to an extension of the discussion.
So what's all the fuss about? It's revolves around Mexico's most important economic engine: the state-run oil company called Pemex . President Felipe Calderon has proposed a five-point reform of the company. He wants to make it easier for Pemex to form partnerships with private oil companies, to better to exploit oil deposits in the Gulf of Mexico. But political opponents, mainly on the left wing, say Calderon is trying to privatize the oil industry.
At stake is an industry that now provides 40 percent of Mexico's federal tax receipts. It is the government's cash cow. But milking time has become a lot less productive now that Mexico's largest oil field appears to be drying up. Mexico is now the third largest importer of oil to the U.S.