In 1938, when President Lazaro Cardenas nationalized the oil industry in Mexico, everyone said it was the right move. After all, there were some pretty gamy capitalists from the U.S., Britain, France and Spain operating in the country, and getting them out and creating a national oil company, even if it meant expropriations, seemed like a good idea at the time.

Today, amid a global oil boom, Mexico can barely keep up with its usual production, and it certainly can produce no additional oil or other energy. It now actually imports natural gas from the U.S., and though it is one of the top three sellers of oil to the U.S., its industry is not growing. This is the state of affairs despite vast and abundant opportunities in the Gulf of Mexico via deep-sea drilling. But that requires advanced new technology available only from U.S. oil majors and from a few others, like Statoil. Foreign partnerships would go a long way toward keeping Mexico’s oil industry productive but there is a lot of resistence to it around Mexico. Failed presidential contender Andres Manuel Lopez Obrador dismissed it best, saying, “that’s not for us.” Net result: Mexico will run completely out of oil in seven years. Gone.

You think Iran and Saudi Arabia are running out of oil? You think Venezuela is an oil disaster? Well, they are. But just check out the mess in Mexico.

Fortunately, there is no idiot in the presidential palace. There is a real leader and he may be the cavalry that comes just in time.

Mexico’s President Felipe Calderon, acting with great resolve and leadership, has actually persuaded his contentious, fisticuff-happy congress to play ball with him and open Mexico’s oil industry to private partnerships. It’s not much (Venezuela already has these arrangements, even under Hugo Chavez) but it’s a step up.

But mannn, is it going to be uphill.

Pemex, the state oil company, for one thing, has not only been a failure of organization and production, it’s also been a giantic mobile pigpen for Mexico.

Just look at these foul photos Mark in Mexico has assembled of Pemex’s environmental contribution to Mexico’s development in just one state, Vera Cruz, which, I might add, is for good reason not on the tourist circuit. Oily crabs, dead gape-mouth fish, floating cattle, rubbish and ooze abound.

This clearly is the result of 1930s socialist and nationalist idealism gone to seed. Pemex was meant to be a marvellous solution for Mexico but it’s only proven once again to be the greatest of failures of state socialism, complete with Soviet-style pollution as its legacy. It’s not just pollution, either – its corruption costs Mexico $1 billion a year, more than all the foreign capitalists combined had ever taken from Mexico. Now, the locals in Veracruz are starting to take notice. What a failure. Que fracasado.

See Mark’s incredible slide show here.