Many Mexicans See Oil as Last Frontier against US Invasion
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Even with oil prices at record highs, Mexico’s state-run oil company is managing to lose money. But a presidential plan to fix Petroleos Mexicanos by inviting foreign help is stirring deep-seated emotions over sovereignty—and causing a paralysis that could doom America’s third-largest oil supplier.
Leftist legislators have padlocked the doors of Congress, camping out in the chambers for two weeks in protest. Opponents on the right have attacked them in a national TV ad, invoking images of Adolf Hitler.
{snip}
“Calderon is a right-winger who is going to take away our way of life,” said Arriola, 35, pulling her 6-year-old daughter’s pink Barbie suitcase as her family walked with hundreds of protesters. “It’s the same as strangling us because foreign oil companies are exploiters who will enslave us.”
Pemex is rapidly running out of the oil that provides more than one-third of Mexico’s federal budget. Finding more will require drilling thousands of feet below the surface of the Gulf of Mexico—an exceedingly difficult challenge. Nearly everyone agrees that Pemex lacks the capacity to accomplish this without serious reforms.
The trouble is, Mexico’s Constitution bans Pemex from joint ventures with private and foreign companies that have the technology and expertise to find oil in such deep water.
Calderon has backed off the politically explosive idea of changing the Constitution, proposing merely to ease some state restrictions on involvement by private companies.
{snip}
But while Mexicans may shop at Walmart and eat at McDonald’s, oil is a birthright. The sentiment dates back to March 18, 1938, when President Lazaro Cardenas kicked out the American and European oil companies that refused to pay union wage demands while reaping Mexico’s oil profits.
Every year on that day, school children learn about the bold eviction of foreign companies, especially those from the United States, whose annexation of half of Mexico’s territory after the 1846 Mexican-American War still hurts.
Women offered their jewelry to help pay to establish the national oil company. Arriola says her grandparents gave their chickens and pigs, and she is hell bent on protecting the company 70 years later.
“We are defending our resources, our patrimony, our dignity,” she said.
{snip}
But oil expert Justin Dargin says Mexicans’ passion for their oil could doom the company—and possibly the country.
The national turmoil is keeping anyone from dealing with declining production, leaky pipelines and a lack of technology to tap into potential reserves in the Gulf, where U.S. companies are busily preparing to drill.
Mexico’s Cantarell oil field—discovered in 1976 and one of the world’s largest—is drying up. Pemex reported a 2007 net loss of US$1.48 billion (euro98 billion) this week, as its revenues are drained to fund schools, hospitals and public works. Meanwhile, every other major oil company is reinvesting unprecedented profits in oil exploration.
Mexico could lose its standing as a major oil exporter in five years if it does not find more oil, experts say.
“We’re talking about the vitality of the Mexican state. That’s how important this issue is,”
{snip}
For Maria Elena Hernandez, 53, much more is at stake than Mexico’s image, which wasn’t helped when the congressional takeover forced the cancellation of an official state reception for India’s president.
The retired secretary joined demonstrators singing the national anthem to police guarding an office building where legislators have fled in hopes of getting some work done.
“If we let down our guard, the Americans would come in and install their oil workers,” said Hernandez, wearing a white baseball cap and T-shirt emblazoned with “Defend Pemex.” “Soon they would be telling us that we have to pay rent to live here.”
(Posted on April 24, 2008)
Comments
We’re invading them? It’s more like they’re invading us.
The goofy part about this is that Calderon gets his North American Union, then Americans won’t be legally “foreign” in Mexico anymore (and vice versa).
Posted by Question Diversity at 7:30 PM on April 24
Invading and occupying Mexico is a good idea compared to the idea of invading and occupying Iraq. If Americans were given the choice of which country to invade and occupy, they would vote 95% invade Mexico.
Here are just some advantages.
We can fight them here instead of over there.
They speak a language that uses the same alphabet.
We can turn the country into a resort area.
Mexican rulers are little Hitlers.
This is such a good idea that Bush will not invade and conquer Mexico.
Posted by at 9:00 PM on April 24
An oil company that loses money. Can even Africa do worse than that?
Posted by Schoolteacher at 9:03 PM on April 24
“Mexicans believe Americans are scheming to take over their country”
they’re right!!!
Someone on this website once posted that we have a Shock and awe” in Mexico.
Posted by at 9:17 PM on April 24
Raise the price of corn to Mexico and others to a $100 a bushel.
Posted by Bandmo at 9:32 PM on April 24
Why don’t they use some of the billions in remittances their ‘heroic’ countrymen send them every year from the U.S. for exploratory drilling?? Bet you all know the answer.
BTW, they just opened a PeMex gas station in my neighborhood in Memphis. It’s run by Arabs…..makes me want to puke.
And, no, I will never buy gas there.
Posted by James at 10:19 PM on April 24
It’s projection. You can always tell what someone knows, deep-down, about themselves, when they irrationally accuse you of doing something bizarre.
Posted by Bernard at 10:28 PM on April 24
The country is filthy. It would cost millions to build the infrastructure. I would like to see 78 billion babyboomers invade Mexico with our 10 trillion dollars of savings and live like Kings and Queens like the rich elites, such as Carlos Slims, the richest man in the world, and the other 21 plus billionaires that refuse to take care of their poor peasants, while the filthy rich live in their gated communities and vacation in Spain, dumping their poor illiterates on the U.S.
Posted by at 10:41 PM on April 24
“We are defending our resources, our patrimony, our dignity,” she said…
If only we could defend OUR resources, OUR patrimony, OUR dinity!
Posted by Jackers at 10:41 PM on April 24
“If we let down our guard, the Americans would come in and install their oil workers,” said Hernandez, wearing a white baseball cap and T-shirt emblazoned with “Defend Pemex.” “Soon they would be telling us that we have to pay rent to live here.”
Yes, American oil workers will come to Mexico to do something Mexican oil workers can’t do - make a profit on their oil production.
This is so ironic only a single digit IQ can miss it in this story. But wait, isn’t that why the story exists at all?
Posted by Whiteplight at 10:45 PM on April 24
This reminds me of one of those TV shows where the moron wins the lottery and ends up poorer and worse off than before.
Posted by Ryan Chaserian at 10:51 PM on April 24
I believe when Winfield Scott entered Mexico City as a conquering general during the Mexican-American War, the inhabitants begged him to remain on and rule the country in place of the defeated Santa Anna. He turned down the offer, but one can only imagine how Mexico might have turned out under a benevolent American rule.
Posted by Dave at 11:16 PM on April 24
When the oil in Mexico runs out, all those people are going to head up here. Like we’re supposed to take care of them.
But as they can’t get the oil out of their ground, they can’t take care of themselves.
This really makes sense, doesn’t it. At least blacks in Zim and SA are willing to starve to death in their own countries just to prove that the black man has that country. When the mexicans get hungry enough, they will take off for the States.
Posted by Delano Man at 12:06 AM on April 25
Mexico and its illegal expatriates have long been bragging of their conquest of the United States. It’s an actual physical occupation, not simply some Mexican corporation earning some profits here. They are hypocrites of high order.
Posted by WR the elder at 1:34 AM on April 25
They are running out of oil. There won’t be any to steal.
From: http://www.goldenjackass.com/members/april2008_v2.html
Mexican finances are on the wane in important ways, with dire implications for the North American region. Instability is my forecast for Mexico, a failed state in the making, likely before 2010. The United States will soon lose its #3 oil supplier. The deterioration of the Mexican national oil industry will topple the nation and result in a failed state, plainly put. One year ago, this topic was first covered in the Hat Trick Letter. Formerly the second largest oil field in the world, Cantarell now shows output decline of 15% annually. Its impact on national finances is multi-faceted, all dreadfully harmful. Their #2 oil field is Ku Maloob Zaap (KMZ), itself suffering an annual decline of 100k barrels/day, where a nitrogen injection program will enable a final output gasp. Similar nitrogen injection took Cantarell over the edge in recent years, realizing its final hurrah. In aggregate, Mexico’s oil reserve replacement rate is low at 41%. Hope comes both for KMZ ramping upward, and for new deep water oil projects to come online in the future, located in the Gulf of Mexico. They are years away.
Numerous problems hinder progress. PEMEX provides 40% of Mexican state revenue, a horrible drain. Current law forbids foreign contractors from taking major roles in any energy projects. Its oil deposits are considered national treasures, guarded fiercely with intense nationalism. However, grossly inadequate investment has taken place as a result. More investment is necessary in their two leading oil fields, but plans for devoting at least $2 billion per year are being hammered out now for deep water Gulf projects. As PEMEX invests less, it produces less from glaring inefficiency and absence of reserve replacement via new discovery. Dramatic cuts in exports are anticipated by those who refuse to don rose colored glasses, preferring reality. In June 2007, Mexico imported over 90% more refined gasoline imports versus one year prior. It now imports 40% of its gasoline from the US. It failed to invest in refineries, treating PEMEX like a perpetual cash cow. The gasoline imports are accelerating the decline in their net surplus in oil and energy products. The net PEMEX trade surplus will be gone before the year 2010. The frightening development for the USEconomy is that PEMEX officials are already investigating the logistics of canceling many oil supply contracts with the United States. In focus are short and medium term contracts.
Posted by Cogitator at 1:50 AM on April 25
Good. Let’s take over Mexican oil fields. I’m sure that our government would make a deal with the Mexican government in the “new trade agreement” that would follow. I wouldn’t give my hopes up with this supposed upcoming Mexican economic collapse.
Posted by Ben D. at 7:17 AM on April 25
I’d love to see a bunch of illegal aliens from America go to Mexico, wave American flags and demand rights to work the oil fields…. and see how far they got before they were shot by federales.
Posted by at 7:31 AM on April 25
Had we wanted Mexico, we would have taken it over at the end of the Mexican War in (if I remember correctly) 1849. As it was, we gave the settled part back to them and then bought and paid for the northern, largely unsettled, part, which became the Western US.
The last thing we want in this country are several million people who are to lazy to learn English.
Peace,
Allan
Posted by ALLAN at 11:39 AM on April 25
“…the bold eviction of foreign companies…”
Straight out of Animal Farm.
Posted by sedonaman at 1:20 PM on April 25
We here in America have the technology to convert coal into fuel to use in our cars…the ones in washington have known this for years, but you see….they get nice kick backs from oil companies not to develop something that will cut off their big bucks or hurt the feelings of those idiots over in the middle east. This administration has devistated this country….I keep praying that the next one up…will have some sense of how badly wounded our people are…not only from the illegal invasion (and it is an invasion) but all these high prices for us the working class, I am not only the working class, but a widow as well and I get no help from the government I have to earn what I live on. Send those lice back where they belong and develope new ways to run our autos, ect…and tell them to shove their oil where the sun don’t shine or go drown in it…..I know I am fed up!!
Posted by lydia at 1:29 PM on April 25
How bigoted, racist and xenophobic of Mexicans to try and keep foreigners out of their country.
Posted by Proudinfidel at 3:25 PM on April 25
Obviously what Americans want, and have always wanted, is for Mexicans to take over their OWN country, get rid of all the thieves and grafters who cynically own and operate it now, and finally stop dumping all their wretched illiterates and criminals into our country.
Posted by Gary at 3:49 PM on April 25
Are they kidding?! Mexico owes this nation all the oil that it has, just to repay the American citizens who have had THEIR TAXES, robbed from them, to pay for illegal alien Mexican Nationals social services, the education of their children, medical, etc. etc. We are talking about billions and billions of U.S. Taxdollars here, that citizens were deprived of.
Posted by Bobby at 5:10 PM on April 25
We must keep in the back of our minds, Mexico loves any enemy of the United States.(WW I and WW II )
Think China. They are already 70 miles south of Miami. It would be very easy for them to slip over to Mexico and make a deal that would really cut off the nose of the United States. Don’t doubt it.
China is HATEFUL AND FORMIDABLE and would like nothing better than to camp on our COMPLETE sourthen border, as well as in Panama thanks to Carter, with two countries that also hate us, Cuba and Mexico.
Posted by Flippie at 5:16 PM on April 25
Mexico owes the USA trillions of dollars in the costs of their invasion and destruction of our homeland. The traitorous American citizen defenders of their invasion and destruction of our homeland need to go live there. They are as unwelcomed here as the invaders themselves.
Posted by Elrey Jones at 6:48 PM on April 25
They are running out of oil. There won’t be any to steal.
http://www.goldenjackass.com/member/april2008_v2.html
Posted by Cogitator at 7:18 PM on April 25
“The gasoline imports are accelerating the decline in their net surplus in oil and energy products. The net PEMEX trade surplus will be gone before the year 2010. The frightening development for the USEconomy is that PEMEX officials are already investigating the logistics of canceling many oil supply contracts with the United States. In focus are short and medium term contracts.”
Even if the Mexicans can straighten out the laws regarding FOREIGN investment in petroleum, a big IF in my book. Is investment in Cantarell worthwhile? As a believer in peakoil myself is it profitable for foreign investors to put billions into Cantarell even in a best case scenario.
Can foreigners boost recovery rates to a level that would justify their investment? At least from what Matt Simmons has written my understanding is that new exploration technology only seems to suck out oil faster, rather than actually increasing the level of reserve recovery.
In the long run maybe this is a good thing. US Oil production lasted as long as it did because the Texas Railroad Commision put clear restraints on oil production.
Simmons has actually advocated slowing down the rate of extraction of existing fields so they last longer.
Also from what I understand deep water reserves are extremely expensive to produce.
With capacity tight in the energy business are there even enough rigs and crews in place that could actually do the job?
Posted by Yellow Man at 9:11 PM on April 25
Raise the price of corn to Mexico and others to a $100 a bushel.
Posted by Bandmo at 9:32 PM on April 24
I say stop giving any food at all to anywhere in the world and see how quick they crumble. I advocate scorched earth and food diplomacy.
Posted by Skip. at 6:37 AM on April 26
One effect of declining Mexican oil production will be the acceleration of the conversion of US corn into biofuels. There have already been widespread protests in Mexico over increasing food prices.
Posted by Michael C. Scott at 8:37 PM on April 27
I believe should qualify my last post wih the caveat that biofuel production is not solely responsible for food price hikes. First, increases in oil prices are driving up the cost of operating farm machinery and driving up the cost of fertilizer (ammonium nitrate is made near refineries using nitrogen and the hydrogen produced from catalytic cracking of heavy petroleum fractions.) Second, Australia, a major food exporter is experiencing a serious drought. Third, investment money has been scared away from real-estate, and so quite a bit of speculation on commodities is being done. With more money chasing the same quantities of wheat, corn, soybeans, ect., the prices were bound to go up. Fourth, increases in fuel prices drive up the cost of getting things to the stores. Fifth, thanks to insane government fiscal policy, we hae a weak dollar, which again drive up costs.
Posted by Michael C. Scot at 2:03 PM on April 28