Mexico Oil Politics Keeps Riches Just Out of Reach

VENUSTIANO CARRANZA, Mexico — To the Mexican people, one of the great achievements in their history was the day their president kicked out foreign oil companies in 1938. Thus, they celebrate March 18 as a civic holiday.

Yet today, that 72-year-old act has put Mexico in a straitjacket, one that threatens both the welfare of the country and the oil supply of the United States.

The national oil company created after the 1938 seizure, Pemex, is entering a period of turmoil. Oil production in its aging fields is sagging so rapidly that Mexico, long one of the world’s top oil-exporting countries, could begin importing oil within the decade.

Mexico is among the three leading foreign suppliers of oil to the United States, along with Canada and Saudi Arabia. Mexican barrels can be replaced, but at a cost. It means greater American dependence on unfriendly countries like Venezuela, unstable countries like Nigeria and Iraq, and on the oil sands of Canada, an environmentally destructive form of oil production.

“As you lose Mexican oil, you lose a critical supply,” said Jeremy M. Martin, director of the energy program at the Institute of the Americas at the University of California, San Diego. “It’s not just about energy security but national security, because our neighbor’s economic and political well-being is largely linked to its capacity to produce and export oil.”

Mexico probably still has plenty of oil, especially beneath the deep waters of the Gulf of Mexico, but Pemex lacks the technology and know-how to get it out. Inviting foreign companies into the country to help is one of the touchiest propositions in Mexican politics.

As the Mexican government struggles to find a way forward, production keeps falling.

The basic problem is simply that Mexico’s readily accessible oil is used up —

More Mexico ‘economics’ by way of CIS

Calderon’s Latin American Initiative: A Few Concerns
By Jerry Kammer, March 3, 2010

Last month, as Mexican President Felipe Calderon hosted a meeting where Latin American and Caribbean leaders agreed to form a new regional organization that will include Cuba while excluding the United States and Canada, the initiative received little attention in the U.S.

The New York Times did note — on page A8 — that some of the leaders, including Venezuela’s Hugo Chavez, would like the new bloc to supplant the Organization of American States, which they and other critics say is dominated by the United States. The story added that Calderon said “Mexico would continue to participate in the O.A.S.”

According to an editorial in the Pittsburgh Post Gazette: “U.S. diplomats in Washington ... downplayed the significance of the new group, which could take years to form. Nevertheless, the meeting in Mexico and the possible emergence of a bloc to replace the OAS should prompt a re-examination of U.S. policy toward the region, especially Cuba.”

Now comes Mexican immigration scholar Jorge Bustamante, expressing concern that Calderon’s enthusiasm for the new organization — which has yet to be named — could have a negative effect on Mexicans living in the U.S.

Writes Bustamante in today’s edition of the Mexico City daily Reforma: “I’m not against seeking a Latin American brotherhood, but I am against confusing facts with sentiments.” He notes that “millions of Mexican citizens live in the United States in conditions that require our attention and active solidarity. From them we receive our second largest source of foreign currency, which sustains the national economy.”

Bustamante goes on to say that Mexicans “can’t afford to exclude from regional alliances the country with which we have our largest border” and a major economic relationship. He says that to make such observations is to be “neither pro-gringo nor anti-Latin American. These are simply facts of our reality, which the president of Mexico does not seem to be recognizing.”

http://www.cis.org/kammer/new-calderon-initiative

Funny that New York Times story completely avoided mentioning the malign and destructive influence the Pemex employees' union has had on the industry in Mexico. The system was set up to be corrupt by Lazaro Cardenas, who was a well intentioned socialist (at best, probably a communist) fool. The union is run in a way that encourages inefficiency and corruption.

It takes two or three Pemex workers to produce the same amount of oil as one worker in other countries because of Pemex's rigid labor contracts. Half of Pemex's exploration and production employees work in fields that yield 2 percent of production. The union is run by officials who double as member of the Mexican Congess. Pemex's labor costs have risen more than 15 percent despite falling productivity. Corruption lifts about a billion a year off the top through fraud and theft. Look up Fidel Velazquez.

Exhibit A: http://www.allbusiness.com/legal/evidence-testimony/5522714-1.html

After spending several years starting oil exploration crews for Pemex, I think I have The reason Mexico has become so bad.

I like the Mexican people in the fly over parts of Mexico. The mid level and workers of Pemex are good. It is the government and the high up in Pemex that are the vultures and looters. The peso was about 8 cents (12.5 to a dollar) (old pesos). When Pemex found the sito grande, a very large oil pool that covers parts of the states of Chiapas and Tabasco also a long ways into the Gulf of Mexico.

Pemex borrowed billions to produce this great oil find. The looters (government) stole most of the money and what they did buy was junk oil rigs and drill pipe, etc. 1,000 pesos which was worth about $80 now will not buy a coke. This was due to the looters stealing billions from the Mexican people.

Instead of overthrowing the looters the Mexican people had an out, they had no weapons and they could cross into America and have a much safer life. This hurts both Mexico and America as Mexico lost some of it’s hardest workers. The gangbangers also came over from Mexico as they could rape and pillage at will.

The government of Mexico is propped up by the billions sent back by the illegals and by our government having borders that are too open.

The only chance I see to help America and Mexico is to seal the border, deport the people who are not here legally. We also need to arm the Mexican people so they can have a chance against the looters with their armies.

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