Mexico is the third-largest source of oil for the United States. But Mexico's oil industry is in trouble. Its existing oil fields are drying up, its infrastructure (things like pipelines) is crumbling and the state-run oil monopoly, Petroleos Mexicanos (Pemex as its more commonly known) doesn't have the money to explore for new oil fields or to repair its facilities.
The obvious answer would be to encourage foreign investment in the oil industry, a step that President Felipe Calderon wants to take. It’s a step being met with outrage by many Mexicans who see it as nothing less than Mexico surrendering its national sovereignty.
"Calderon is a right-winger who is going to take away our way of life," said one protestor in Mexico City. "It's the same as strangling us because foreign oil companies are exploiters who will enslave us." Opposition members of parliament have staged a two-week long sit-in to protest the move, while TV ads have compared Calderon to Hitler.
Mexico took back control of its oil industry from American and European companies more than 70 years ago when those companies refused to pay union wages to oil workers. And for many Mexicans, who feel that the United States stole a sizable chunk of their country (places you may have heard of like California, Nevada, and much of the rest of the American Southwest) in the Mexican-American war in 1848, the idea of American companies again investing in their oil industry is tantamount to surrendering the sovereignty of their nation.
But at the same time Pemex cannot rebuild the oil industry on its own. For now President Calderon and the parliament are locked in a standoff. Meanwhile, oil experts warn that if nothing is done, Mexico could lose its status as a major oil exporter within the next five years.
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