THE UNITED STATES is once again negotiating with Mexico for natural gas, and the negotiations seem once again to have hit that same familiar rock. The rock is the question of price, but a price could have been worked out long since if it were a conventional commercial sale. Because it is governments that are negotiating and not gas companies things are not so simple.
Two years ago, several American gas companies happily contracted to buy the Mexican gas only to have the contracts vetoed by the U.S. Department of Energy. There were two reasons, both - at different levels - political. The companies had agreed to pay Mexico a price tied to the price of fuel oil. The Carter administration feared that the precedent might jeopardize the delicate process of coaxing its compromise gas-pricing bill through Congress. Even more important, that precedent would induce Canada to adopt, immediately, the same formula. Canada already exports to this country several times as much gas as Mexico would under this long-stalled sale, and Canada has made it clear that it will not sell at a lower price than the Mexicans. The United States is not the only country in which gas prices have taken on a certain symbolic importance.
Meanwhile, the Energy Department is in the process of working out the rates that it will allow for natural gas from Alaska's North Slope. It is to be delivered, beginning in the latter 1980s, to the upper Midwest and the Pacific Northwest through a gigantic pipeline across Alaska and Canada. The Energy Department's regulatory agency seems to be working toward a delivered price similar to that at which the department would have liked to see the Mexican gas come in - about $3.50 a thousand cubic feet. There is no legal connection between the regulated price of the Alaskan gas and the negotiated price of the Mexican gas. But if the federal government permits a substantially higher price in the Mexican case, it will be difficult to prevent that decision from affecting the pricing of Alaskan gas that is produced in far harsher conditions and will travel through a much longer pipeline.
You can see why the Energy Department is struggling to keep the Mexican price down. But the time has come to buy the gas. The United States has the strongest interest in the stable development of the Mexican economy, and can contribute to it most usefully by giving Mexico access to the American market for its products. The Mexican gas is going to cost a lot more than the present average for American gas. But the pattern is clear. All future gas, foreign or domestic, is going to cost more than present gas. A successful Mexican-U.S. gas sale promises a range of political benefits to both countries that are not often represented, unfortunately, in the imports of oil from overseas.