Mexico's president, Enrique Peña Nieto, unveiled a proposal this month to reform the country's state-owned oil and gas monopoly Petroleos de Mexico, or Pemex. The plan, which requires a constitutional amendment, would allow foreign firms to partner with Pemex for the first time since 1938, when then-President Lazaro Cardenas nationalized the industry. It's a plan worth pursuing.
The proposal has enormous implications for Mexico's growing and yet still-troubled economy. The waters off Mexico contain one of the largest oil and natural gas reserves in the world, but Pemex has yet to realize their potential because it lacks the technology and money to drill in deeper waters. One result is that the country's oil production is declining, alarming to a government that relies on revenue from oil to make up about a third of the national budget.
Inviting foreign firms to help shoulder the costs of deep-water exploration in exchange for a share of the profits would surely help lift Mexico's economy and boost sagging oil production for years to come. But not without costs. Continued dependence on oil will contribute to climate change, and deep-water drilling carries special perils, as Americans were reminded in 2010 when an oil rig in the Gulf of Mexico exploded, killing 11 workers and fouling thousands of miles of coastline.