"This report documents an executive briefing given to the Board of Trustees of The RAND Corporation. Focusing on newly discovered liquid petroleum reserves, it predicts what Mexico will do with its oil and it suggests how the United States can best respond to Mexico's actions. It is limited to an examination of Mexico's oil, and excludes consideration of Mexico's natural gas reserves. Mexico's behavior will probably agree with U.S. interests in most of the issues examined. There are potential problems arising out of Mexico's possible decisions concerning the installation of emergency oil production capacity, the development of nuclear energy as an alternative power source, and the invocation of protectionist trade barriers. The research points to one overall principle: to be successful, U.S. policy must respond as much to Mexico's sense of sovereignty as to what Americans regard as economic rationality."--Provided by publisher.