Energy output short of demand

Mexico, the No. 2 U.S. supplier of oil, is unable to produce enough to meet the demands of its customers, especially its neighbor to the north, because of outdated national economic policies that have hamstrung its oil and gas exploration and production, analysts say.

Mexican President-elect Felipe Calderon met with Canadian officials this month to discuss trade and explore further cooperation as Mexico’s production capacity dives.

Although Mexico has the potential to be an energy powerhouse, the country’s national oil company, Pemex, lacks the investment funds to improve production in mature fields.

As oil prices rose and production increased in the past year, the government became addicted to Pemex’s revenues, taking more than 60 percent of the company’s earnings, which provide a third of the national budget, the Canadian newsmagazine Maclean’s reported.

Washington Times