“Almost from its inception, the evolution of Mexico’s natural-gas industry has been designed and executed according to specific planning by the public sector.” This penultimate sentence in Fredda Jean Bullard’s book is the most significant statement in the volume from the historical standpoint. The development of the Mexican gas industry is unique among non-Communist economies—a prime example of socialized economic development in a highly nationalized political system.
Bullard uses statistical data in 122 tables, charts, and figures to indicate the growth of the gas industry; she examines exploration, reserves, production, processing, transportation, consumption, utilization, and pricing. The data are voluminous and complete, so that she has concentrated into one available printed manual information which is otherwise hard to find and sometimes not printed. The focus is not always perfect, but the mind’s eye can sharpen that.
Petróleos Mexicanos (Pemex), the socialized national oil agency, has controlled the development of the gas industry in a rational manner. It has used increased gas production to alleviate parallel and peripheral economic-social pressures on the whole Mexican system of production and consumption. Increased gas use releases petroleum for other internal uses and for export. Gas production makes possible a petrochemical industry (nitrogenous fertilizers and polyethylene materials), which relieves some pressure on the balance of payments by reducing imports and by increasing agricultural production (not to mention lagniappe in the form of chemically pure sulfur). Mexico continues to be firm in its socialized approach to basic production. Petrochemical production (including anhydrous ammonia) is a state monopoly. Pemex regulates production to enforce uniform and rigorous conservation. It does not allow market or war psychology to dominate production planning in basic industry.
The results are impressive, as Bullard shows. Since 1948 consumption of gas and petroleum energy in Mexico has increased 400 percent, with gas supplying about 20 percent of all energy consumed in Mexico. Pipelines have been expanded from 1,231 miles in 1938 to 7,163 miles in 1963 and located rationally with respect to producing areas and industrial consumption. Mexico’s annual growth rate in energy consumption is estimated at 8 percent, double the world average, while imports of energy-producing materials have decreased. Imports of pipe and machinery have declined, as Mexico has begun to produce such equipment herself. Pricing is rationally determined rather than a by-product of the “market.” After experiencing the private blockade in 1938, which cut off her supply of tetraethyl lead, what pleasure Mexico must take in a partnership with Du Pont to produce a surplus of that commodity!
To keep Mexico’s level of development in perspective, however, it is worth noting (as Bullard does) that in 1945 Pemex drilled the deepest well on record and used wood as the fuel to power the drilling machinery. Nevertheless, as Bullard’s data establish, the development of the Mexican nationalized gas industry is a social-economic success story.