MEXICO IS SOON TO BE A BIGGER PROBLEM
By Alan Caruba
“A Slippery Moment for Mexican Oil” was the title, followed by “Output is tanking, but there’s fierce opposition to a plan that could reward Big Oil for helping find new reserves.” You have to read through most of the article before you discover:
It takes at least a decade between the discovery of new reserves and the infrastructure required to extract it, transport it to a refinery, and then distribute it to consumers.
The May, 2008, issue of Energy Tribune applauded the efforts of Mexican President Felipe Calderon to free up Pemex sufficiently to encourage exploration and production. “Under the reform, Pemex would be freed from stifling oversight,” noted Energy Tribune, but which also noted: “Its approval is far from certain, and the proposal wouldn’t turn Pemex’s fortunes around any time soon.”
Allan Wall, a U.S. citizen who lives in Mexico, writes some of the most penetrating and accurate commentaries about our neighbor to the south. In May, his Memo from Mexico, provided notice of how bad the problem is and, while not saying so, also reminds us that America, with its own vast known and undiscovered reserves of oil, has been wasting time and thwarting access to our oil resources.
Wall begins by reminding us that Mexico is not “poor.” Its citizens are not starving and it’s home to at least ten billionaires, one of whom is the world’s second wealthiest man. It’s not that Mexico doesn’t have “vast economic potential,” but that, “It’s just been spectacularly mismanaged.”
Pemex has long been the Mexican government’s piggy bank, providing up to 40% of the Mexico’s revenues. If any nation could be said to be “addicted” to oil, it’s Mexico. You would think that it would have taken steps to explore for more, but you would be wrong. You would be wrong if you thought it had bothered to build new refineries as well. The United States has 150 oil refineries (and needs more), but Mexico only has six and they are aging.
Pemex has been spectacularly mismanaged. In this respect, it is not much different from the rest of the world’s nationalized oil operations, which include petroleum industries owned and operated by unstable governments, like those in Africa, and include South American operations, like that of Venezuela’s Communist dictator, Hugo Chavez. What this means is that the United States and other oil importing nations are literally at the mercy of governments that do not have to answer to their citizens.
The United States has depended heavily on imports from Canada and Mexico, but the latter nation is a governmental basket case. With ownership of its oil written into its Constitution, the prospect of privatizing its oil industry is off the table. Permitting other oil companies to explore for oil is difficult, at best, under these circumstances. It is a costly and high-risk enterprise, at best. Any new discovery would cost in excess of a billion dollars. And you don’t hit oil every time you drill.
If oil were not enough of a problem, the billions in drugs that are controlled by the Mexican cartels and purchased by Americans constitute an entire column by itself. We have a narco-army on our border that poses a major threat.
Meanwhile, Mexico has been “solving” the problem of a lack of jobs and opportunities for its people by exporting them to America. The U.S. taxpayers are picking up the bill for these uninvited workers through our education, health, and legal systems to the tune of billions. Congress has been reluctant to close our border with Mexico and the three candidates seeking to be our next President have no plans to slow or stop the invasion.
These are solvable problems, if sensible people make sensible changes and encourage investment in their energy sector, but neither the United States nor Mexico appears ready to do that. Instead, out of sight of U.S. citizens and Congress, the two governments, in concert with Canada, are re-writing U.S. trade regulations to create a socalled Security and Prosperity Partnership of North America, undermining the sovereignty of all three nations.
Earlier this month, a lot of people in America celebrated Cinco de Mayo, but a lot of them were not legal citizens.
United States Immigration, Assimilation, & National Security Policy:
Immigration into the U.S.A., Legal & Illegal Aliens,
& U.S. Border Control
Latin America -- Economics, Politics, Political Regimes,
& Relations with the United States of America:
Problems & Opportunities for the U.S.A.
Political Economy -- Philosophies, Systems, & Public Policies:
Government, the Economy, & Economic Prosperity
Alan Caruba is a veteran business and science writer, a Public Relations Counselor, and Founder of the National Anxiety Center, a clearinghouse for information about media-driven scare campaigns. Caruba writes a weekly commentary, "Warning Signs," posted on the Internet website of the National Anxiety Center, which is located at www.anxietycenter.com.
Caruba has a daily blog at http://factsnotfantasy.blogspot.com.
Caruba’s new book, Right Answers: Separating Fact from Fantasy, has been published by Merril Press.
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