For a few years now, we energy-focused Fools have been casting a concerned eye at Mexico, and more specifically Cantarell, the cornerstone of Mexican oil production.

My colleague David Lee Smith detailed the matter of Cantarell's dangerous decline curve in a seminal piece back in 2007. At that time, production had slipped by 20% in a little more than one year, from 2 million to 1.6 million barrels per day. The declines have only gotten more dramatic.

Last summer, Cantarell dropped below 1 million barrels a day. This July, output registered a 40% year-on-year decline, to a little more than half a million barrels per day. That's a 72% decline from peak production rates in 2005.

State oil monopoly Pemex's 2009 forecast of 756,000 barrels per day at Cantarell now looks not only optimistic but downright naive. The company is clearly aware of the staggering challenge it faces, and it has thrown some cash at service companies such as Schlumberger (NYSE:SLB) and Halliburton (NYSE:HAL) to crank out crude at the onshore Chicontepec field. Pemex just doesn't seem to be tackling this situation with anything like the alacrity required.

This week, Mexican President Calderon installed a new chief executive at Pemex. How this fellow, booted out of brewer Grupo Modelo for blowing a derivatives book in the fashion of Cemex (NYSE:CX) and Sadia (NYSE:SDA) circa 2008, can right this listing ship is unclear. Legislators ultimately control Pemex's purse strings, and this shuffle in the executive suite seems rather like rearranging deck chairs on the Titanic.

Without bringing in outside capital and the deepwater savvy of foreigners such as StatoilHydro (NYSE:STO), Petrobras (NYSE:PBR), and Transocean (NYSE:RIG), Pemex appears doomed to dwindling oil exports. That would devastate the Mexican economy, and it would pose a serious problem for the United States as well.

In 2007, Mexico was our second-biggest oil supplier, after Canada. Last year, with a 15% drop in daily barrels supplied, the country dropped to third place behind Saudi Arabia. As Mexican oil exports dry up, we become more dependent on Nigeria and other places you wouldn't take your family on vacation.

Last year's oil reforms were a step in the right direction, but the pace needs to pick up dramatically if the country is serious about heading off a crude cataclysm.

Cemex is a Stock Advisor selection, and the Fool owns shares. Petrobras and StatoilHydro are Income Investor recommendations. See whether any of our newsletter services spin your drill bit with a 30-day free trial.

Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his CAPS profile or follow his articles using Twitter or RSS. The Motley Fool owns shares of CEMEX and has a disclosure policy.