Oil reforms in Mexico will be good for the US
For years, Mexico has meant two things for most Americans: Illegal immigration and violence on the border.
However, there is another Mexico and may have a much bigger impact than people realize. I am talking about the new reforms in Mexico, especially those for energy.
We saw something this week that is truly radical, as reported by Fox Latino:
"This week's opening of Mexico's oil industry to private and foreign investment caps a remarkable series of legislative victories by a president trying to re-engineer the country's most dysfunctional institutions.
Enrique Peña Nieto struck an unprecedented political deal with the two main opposition parties in his first days in office.
Then he pushed through reforms meant to bring higher standards, greater openness and competition to the oligarch-dominated telecommunications industry, the education and tax systems, the banking system, and, now, the state-run petroleum business."
How remarkable is this? Can you imagine President Obama calling on Congress to "reform" portions of Social Security, such as President Bush proposed in 2005? Or Democrats in the Congress sending President Obama a bill calling for "school choice" across the board?
The oil reforms will have many consequences: It will change Mexico by allowing foreign companies to drill and refine oil. It will also give US energy companies, large and small, great opportunities to take their "know-how" to Mexico.
North America will have a lot more oil, according to Bloomberg. It will reduce our dependence on Middle East oil:
"An influx of Mexican oil would contribute to a glut that is expected to lower the price of Brent crude, the benchmark for more than half the world's crude that has averaged $108.62 a barrel this year, to as low as $88 a barrel in 2017, based on estimates from analysts in a Bloomberg survey. Five of the seven analysts who provided 2017 forecasts said prices would be lower than this year."
Mexico will need a lot of petroleum engineers over the next decade. Many of those "engineers" will come from the US, especially Texas. Don't be surprised if petroleum engineering schools start recommending Spanish to their students!
Congratulations to President Pena-Nieto for showing leadership. It is good to see a leader lead and make things happen.
P. S. You can listen my chat with Allan Wall about these reforms & follow me on Twitter @ scantojr.