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Beset by many social and economic problems, Mexico is determined not to follow the example of some oil nouveau riche countries and use up its resources without establishing a solid industrial and agricultural base. Says Diaz Serrano: "It must be considered an absolute error for Mexicans to pin all their hopes for progress on the oil industry." Mexico's President, Jose Lopez Portillo, adds: "According to our plans, toward 1980 we will reach a plateau in oil production that will enable us to export about 1 million bbl. a day. It could be more, but we believe it is prudent to enter the next century maintaining this production level."
Pemex lacks the technology, organization and capital to develop its fields quickly. Yet it remains wary of admit ting multinational companies for fear of Losing its tight grip on production. The need to control the oil flow is rooted in the almost mystical and sometimes xenophobic attachment that Mexicans have for their resources, which they regard as their national patrimony to be exploited by and for Mexicans.
Leftists particularly oppose pumping out oil rapidly to satisfy U.S. needs. On walls all over Mexico City hastily plastered up signs read: DON'T SELL OUR GAS, and MEXICO'S WEALTH FOR MEXICANS. In addition, the country's wealthy upper class wants to avoid the disruptions that would go with sudden oil-based growth. These sentiments are reinforced by the climate of anti-gringo suspicion. Early in this century, U.S. firms controlled more than half of Mexico's oil wells. Finally, by 1938 the cry "El petroleo es nuestro" (the oil is ours) was being raised by a growing number of Mexicans. In a burst of frenzied nationalism, the government expropriated all foreign oil holdings and kicked out the companies. To this day that action remains for Mexicans the most stirring symbol of their independence.
All the old wounds were opened last year when Pemex signed a letter of intent to sell gas to six U.S. distributors at $2.60 per thousand cu. ft. (MCF). Pemex began building a pipeline that was to stretch from Cactus in southeast Mexico to Reynosa just south of the Texas border. As the line neared completion, the U.S. Government refused to allow the companies to buy gas at the agreed price. The Department of Energy argued that the U.S. could not pay Mexico 440 an MCF more than it was paying Canada. Carter Administration officials also feared that Congress would never approve paying the Mexicans $2.60 for gas, while limiting American producers to a ceiling of $1.75, as the President initially had proposed in his energy bill. So Mexico has redirected the pipeline to stop well short of the border and expects to complete the line next year, and to use the gas in the country's own utilities, factories, homes and even city buses. The rest is being flared off.
Meanwhile, Mexico is experiencing the ecstasies and agonies of an oil boom, particularly in Villahermosa, the capital of Tabasco. Once a sleepy little river town, it gained notoriety in the early 1930s when its dictatorial governor sent out his redshirted militia to shoot Catholic priests and their congregations. The town's watchwords were: "No alcohol, no churches and lights out at 9:30." Graham Greene memorialized these events in his novel The Power and the Glory.