Mexico's Energy Future

Abstract

Energy has played a vital role in Mexico's development and oil has been its major resource. During the 1920s Mexico became the world's second largest producer of oil (over 180 million barrels in 1922) and the largest exporter (1). More recently, the discovery and exploitation of new fields converted the country again into a major exporter, promoting a vigorous economic growth that lasted about five years, until the market softened in 1981. The energy sector is state owned, and both the petroleum industry and the national electric utility have a major impact on the country's economy, the balance of trade, and the levels of income and employment. About 90% of the commercial primary energy inputs is derived from oil and gas, and, consumption of secondary energy is dominated by the transport (28%) and the industrial (21%) sectors. Per-capita energy consumption in 1981 amounted to 2400 kilograms of coal equivalent which is below the world average. fhisreftects to a certain extent the dichotomy of the country, which has a modern economy in the large cities coexisting with a rural economy where the standards correspond to those in the lessdeveloped countries. ' In view of Mexico's population of close to seventy million, which is growing at an annual rate of 2.7%, the pattern of development, in spite of the present economic recession, should be a balanced industrialization. The expected rate of economic growth should be about 6% per year. This will obviously require a continuation in the growth of energy consumption, which has had an average growth rate of about 8.7% per year for the last ten years. There are two main factors that can account for energy growth being greater than economic growth. The first is income redistribution, and the second is the fact that investment in new industrial plants is not accounted