It’s official: Mexico has finally voted to build a 21st century economy:
The new energy law allows private oil and gas companies to drill for oil and gas with the state-run firm Pemex in exchange for a share of the profits. It has been approved by the Chamber of Deputies a day after being passed by the upper house, the Senate. [...]
President Enrique Pena Nieto says private investment is needed to modernise the energy sector. ”The energy reform is a fundamental transformation, which will enable Mexico to strengthen its sovereignty and energy security,” Mr Pena Nieto posted on his Twitter account after the vote. He said the new legislation “will also boost economic growth and the creation of new jobs” in the country.
Private firms will be allowed for the first time since 1938, when the sector was nationalised, to explore and extract oil and gas with state-run firm Pemex – and take a share of the profits.
Far reaching reforms like these make it likely that Mexico will see a huge job-creating bonanza in oil and gas production. The United States stands to benefit in many ways. For one, a richer neighbor is a better trading partner. For another, more oil in Mexico means US and world supplies are safer from Middle East disruptions. States like Russia and Iran will be hardest hit as North America’s energy abundance alters the world energy picture. And finally, the increase in well-paid blue collar jobs in Mexico, coupled with a continuing fall in the birth rate will reduce immigration pressure on the United States, making border security and immigration reform more likely and less painful.
Good news all around. We congratulate our neighbors on their smart choice.