147. Memorandum for the Files by the Director of the Office of Policy Planning, Public and Congressional Affairs, Bureau of Inter-American Affairs (Einaudi)1
- Concern of Mexican President over Relations with US
On Friday October 13, Jose Lopez Portillo met for an hour and a half in Tijuana with California Governor Jerry Brown. The meeting was arranged by Baja California Governor Roberto de la Madrid. The two have met several times previously, but are not close.
The following summary of major points was conveyed to me today by my former student and colleague, Richard Maullin, now head of the California State Energy Agency, who was present.
Lopez Portillo expressed himself about the United States in an intelligent, occasionally rhetorical, apparently frank, and certainly exasperated manner. His predominant mood seemed to be a mixture of outrage and perplexity.
Lopez Portillo said he had greatly enjoyed his state visit in 1977, and had been impressed with President Carter, who had said all the right things.2 Lopez Portillo came away convinced that US-Mexican relations were off the back burner, and that Mexico’s oil finds would lead to a process in which outstanding issues could gradually be settled.
He had thought the gas deal was the first step. When the US government did not approve it, he felt more than betrayed. He felt stunned.3 He felt neither he nor his advisors understood U.S. intentions, and could not predict what the US might do next—on anything.
What was so disturbing to him, Lopez Portillo said, was that not knowing what to expect from the US meant that Mexico could not plan its own internal development. He apparently emphasized agricultural policy as a current headache. How could he authorize investments in irrigation for export production, he asked, knowing that some grower in Florida might get the ear of some congressman and shut off a market that Mexico was feeding?
As for gas, Lopez Portillo said that the failure of the gas deal had led him to change policies and decide in favor of the only market that [Page 321] was certain: Mexico’s internal demand. Dry gas will be left in the ground, and PEMEX has committed itself to the technology required to use associated gas internally so as to free fuel oil for export, primarily to Europe.
Asked whether Mexico was still interested in selling gas to the US, Lopez Portillo answered affirmatively, but noted that it was now too late for the large quantities anticipated in the proposed 1977 deal.
Pressed whether PEMEX might still have an exportable surplus at some point, Lopez Portillo again answered affirmatively, saying that PEMEX might have an exportable surplus in 12 to 18 months.
Asked whether he advised California energy authorities to begin immediate discussions of possible purchase arrangements, Lopez Portillo told Maullin to get in touch with Ricardo Garcia Saenz.4
Maullin believes that a California-Mexico deal, even drawing on a smaller total quantity, might still match the share California would have obtained from the 1977 deal. He will go to Mexico Saturday, October 28, after two days in Washington.