Mexico Woe: Quakes, Flu, and Oil

Reluctantly I’m going to briefly cover Mexico today. Your RSS newsreader and your Bloomberg however are already, no doubt, filled up with reports from Mexico’s Flu Zone. Or Quake Zone. Or both. Instead, I lightly suggest you turn your attention away from these acute conditions, to something more chronic: the relentless crash in Mexico’s oil production.

olmec-head-1On Tuesday of last week quarterly production data was released by PEMEX. In the last several years, I cannot actually recall a single forecast by PEMEX that was not undercut later by worse than predicted production data. Last week was no different. But what’s concerning is that PEMEX has truly made an effort, starting last year, to get ahead of the dramatic declines at Cantarell. They have of course tried to soften the blow by claiming that Mexico could bring production back up again, through the development of newer fields. As I explained in my early January post on Mexico, that is highly unlikely. Despite the best diplomatic efforts by Georgina Kessel, Mexico’s Energy Secretary, to put a good face on a very worrying situation. Essentially, PEMEX–and the Mexican Government–have been trying to allay concerns by forecasting that new production from Ku-Maloob-Zaap (KMZ) would counter the spectacular falls from Cantarell. While KMZ has indeed been producing nicely, it’s simply not enough to negate Mexico’s oil production collapse path. When your largest field peaks, generally, you have peaked. And Mexico is now a testament to this rule.

Mexican oil production fell 7.8 percent in the first quarter of 2009 to 2.667 million barrels per day. This means that production kept on falling right through February and March, as January’s production had already been recorded at 2.685 Mb/day. While it’s not impossible that through an unusual set of circumstances–say economic collapse that shuts production down to very low levels for some time–that Mexican production could rise back up briefly and touch previous high levels, it is unlikely. Besides, an outlier month or two back towards 3 Mb/day is not really what the Energy Ministry has in mind, in their cheery outlook for 2015. They are talking sustained production at 3 Mb/day. That is not going to happen.

In general, it is nothing less than astonishing that Mexico’s oil production collapse is not one of the biggest stories of the decade, especially for the United States. The trajectory here is on pace to take Mexico’s output from 3.4 Mb/day as recently as early 2005, to 2.4 Mb/day perhaps as soon as this Fall. That is not only a huge percentage for Mexico, but it’s a large percentage of total North American supply. If you believe as I do that geography is going to reassert itself in the years ahead, these declines are fated to unleash an even greater impact.

-Gregor

Photo: Hans Li: Olmec Head, Monument Number 1, La Venta Museum, Villahermosa, Mexico, 1992. Iris photographic black and white print, 36 x 48 inches, edition of 5. Copyright Hans Li 1994. See: The Ancient Ones, available for purchase at amazon.com

  • mjanousak

    To too many folks in DC (and across the entire country, for that matter), oil just magically arrives at our refineries courtesy of the “oil fairies”. It was really funny watching the reaction to Obama's friendly gestures to Chavez recently. In certain right-wing quarters, the knee-jerk response was a howl of anguish. Yet Venezuela, despite Chavez's rhetoric during the Bush years, has always been another of our main sources of oil. And whether they like it or not, Chavez and PDVSA are going to need engineering and technology from the US oil majors to develop and figure out a way to refine the heavy sour crude Venezuela is sitting on top of in the Orinoco belt. Mexico hasn't run out of oil yet — but its declining production isn't going to hurt Venezuela's feelings any.

  • mjanousak

    To too many folks in DC (and across the entire country, for that matter), oil just magically arrives at our refineries courtesy of the “oil fairies”. It was really funny watching the reaction to Obama's friendly gestures to Chavez recently. In certain right-wing quarters, the knee-jerk response was a howl of anguish. Yet Venezuela, despite Chavez's rhetoric during the Bush years, has always been another of our main sources of oil. And whether they like it or not, Chavez and PDVSA are going to need engineering and technology from the US oil majors to develop and figure out a way to refine the heavy sour crude Venezuela is sitting on top of in the Orinoco belt. Mexico hasn't run out of oil yet — but its declining production isn't going to hurt Venezuela's feelings any.

  • mjanousak

    To too many folks in DC (and across the entire country, for that matter), oil just magically arrives at our refineries courtesy of the “oil fairies”. It was really funny watching the reaction to Obama's friendly gestures to Chavez recently. In certain right-wing quarters, the knee-jerk response was a howl of anguish. Yet Venezuela, despite Chavez's rhetoric during the Bush years, has always been another of our main sources of oil. And whether they like it or not, Chavez and PDVSA are going to need engineering and technology from the US oil majors to develop and figure out a way to refine the heavy sour crude Venezuela is sitting on top of in the Orinoco belt. Mexico hasn't run out of oil yet — but its declining production isn't going to hurt Venezuela's feelings any.

  • mjanousak

    To too many folks in DC (and across the entire country, for that matter), oil just magically arrives at our refineries courtesy of the “oil fairies”. It was really funny watching the reaction to Obama's friendly gestures to Chavez recently. In certain right-wing quarters, the knee-jerk response was a howl of anguish. Yet Venezuela, despite Chavez's rhetoric during the Bush years, has always been another of our main sources of oil. And whether they like it or not, Chavez and PDVSA are going to need engineering and technology from the US oil majors to develop and figure out a way to refine the heavy sour crude Venezuela is sitting on top of in the Orinoco belt. Mexico hasn't run out of oil yet — but its declining production isn't going to hurt Venezuela's feelings any.

  • mjanousak

    To too many folks in DC (and across the entire country, for that matter), oil just magically arrives at our refineries courtesy of the “oil fairies”. It was really funny watching the reaction to Obama's friendly gestures to Chavez recently. In certain right-wing quarters, the knee-jerk response was a howl of anguish. Yet Venezuela, despite Chavez's rhetoric during the Bush years, has always been another of our main sources of oil. And whether they like it or not, Chavez and PDVSA are going to need engineering and technology from the US oil majors to develop and figure out a way to refine the heavy sour crude Venezuela is sitting on top of in the Orinoco belt. Mexico hasn't run out of oil yet — but its declining production isn't going to hurt Venezuela's feelings any.

  • mjanousak

    To too many folks in DC (and across the entire country, for that matter), oil just magically arrives at our refineries courtesy of the “oil fairies”. It was really funny watching the reaction to Obama's friendly gestures to Chavez recently. In certain right-wing quarters, the knee-jerk response was a howl of anguish. Yet Venezuela, despite Chavez's rhetoric during the Bush years, has always been another of our main sources of oil. And whether they like it or not, Chavez and PDVSA are going to need engineering and technology from the US oil majors to develop and figure out a way to refine the heavy sour crude Venezuela is sitting on top of in the Orinoco belt. Mexico hasn't run out of oil yet — but its declining production isn't going to hurt Venezuela's feelings any.

  • mjanousak

    To too many folks in DC (and across the entire country, for that matter), oil just magically arrives at our refineries courtesy of the “oil fairies”. It was really funny watching the reaction to Obama's friendly gestures to Chavez recently. In certain right-wing quarters, the knee-jerk response was a howl of anguish. Yet Venezuela, despite Chavez's rhetoric during the Bush years, has always been another of our main sources of oil. And whether they like it or not, Chavez and PDVSA are going to need engineering and technology from the US oil majors to develop and figure out a way to refine the heavy sour crude Venezuela is sitting on top of in the Orinoco belt. Mexico hasn't run out of oil yet — but its declining production isn't going to hurt Venezuela's feelings any.

  • mjanousak

    To too many folks in DC (and across the entire country, for that matter), oil just magically arrives at our refineries courtesy of the “oil fairies”. It was really funny watching the reaction to Obama's friendly gestures to Chavez recently. In certain right-wing quarters, the knee-jerk response was a howl of anguish. Yet Venezuela, despite Chavez's rhetoric during the Bush years, has always been another of our main sources of oil. And whether they like it or not, Chavez and PDVSA are going to need engineering and technology from the US oil majors to develop and figure out a way to refine the heavy sour crude Venezuela is sitting on top of in the Orinoco belt. Mexico hasn't run out of oil yet — but its declining production isn't going to hurt Venezuela's feelings any.

  • mjanousak

    To too many folks in DC (and across the entire country, for that matter), oil just magically arrives at our refineries courtesy of the “oil fairies”. It was really funny watching the reaction to Obama's friendly gestures to Chavez recently. In certain right-wing quarters, the knee-jerk response was a howl of anguish. Yet Venezuela, despite Chavez's rhetoric during the Bush years, has always been another of our main sources of oil. And whether they like it or not, Chavez and PDVSA are going to need engineering and technology from the US oil majors to develop and figure out a way to refine the heavy sour crude Venezuela is sitting on top of in the Orinoco belt. Mexico hasn't run out of oil yet — but its declining production isn't going to hurt Venezuela's feelings any.

  • mjanousak

    To too many folks in DC (and across the entire country, for that matter), oil just magically arrives at our refineries courtesy of the “oil fairies”. It was really funny watching the reaction to Obama's friendly gestures to Chavez recently. In certain right-wing quarters, the knee-jerk response was a howl of anguish. Yet Venezuela, despite Chavez's rhetoric during the Bush years, has always been another of our main sources of oil. And whether they like it or not, Chavez and PDVSA are going to need engineering and technology from the US oil majors to develop and figure out a way to refine the heavy sour crude Venezuela is sitting on top of in the Orinoco belt. Mexico hasn't run out of oil yet — but its declining production isn't going to hurt Venezuela's feelings any.

  • mjanousak

    To too many folks in DC (and across the entire country, for that matter), oil just magically arrives at our refineries courtesy of the “oil fairies”. It was really funny watching the reaction to Obama's friendly gestures to Chavez recently. In certain right-wing quarters, the knee-jerk response was a howl of anguish. Yet Venezuela, despite Chavez's rhetoric during the Bush years, has always been another of our main sources of oil. And whether they like it or not, Chavez and PDVSA are going to need engineering and technology from the US oil majors to develop and figure out a way to refine the heavy sour crude Venezuela is sitting on top of in the Orinoco belt. Mexico hasn't run out of oil yet — but its declining production isn't going to hurt Venezuela's feelings any.

  • mjanousak

    To too many folks in DC (and across the entire country, for that matter), oil just magically arrives at our refineries courtesy of the “oil fairies”. It was really funny watching the reaction to Obama's friendly gestures to Chavez recently. In certain right-wing quarters, the knee-jerk response was a howl of anguish. Yet Venezuela, despite Chavez's rhetoric during the Bush years, has always been another of our main sources of oil. And whether they like it or not, Chavez and PDVSA are going to need engineering and technology from the US oil majors to develop and figure out a way to refine the heavy sour crude Venezuela is sitting on top of in the Orinoco belt. Mexico hasn't run out of oil yet — but its declining production isn't going to hurt Venezuela's feelings any.

  • Dmckj

    Astute, if largely unstated, observation that geography will reassert itself.

    I have extensively worked and lived in Mexico. Back in 1995 I said that the only solution to the border issue would be to militarize the border. People thought I was crazy at the time, but now it is, and will continue to, come to pass.

    Mexico is a country that does not work well. Power is slated from the top down, but those in power fear the possibility of a politcal implosion. The country dodged a bullet when Lopez Obrador lost the election. The issue of declining oil production is strongly tinged by populist sentiment and ignorance of free markets with respect to oil production and trade. One can thank the stupendously paralytic stranglehold that PRI had for many decades for that. What do I mean? I mean that Mexico is a country with a HUGE 'victim' complex, and the politcal powers that be have always played this to retain control. For this reason, pretty much nothing is Mexico's own fault, but rather someone elses…always. Along those lines, Mexico is paralyzed on the the energy front, both in terms of oil investments and production and as well electrical production. Both are dominated by hugely corrupt and powerful 'sindicatos' that will stonewall private investments till the day they die. You see, private investment will mean private accounting and accountability, this being a huge risk to the cash cow of corruption government-run production.

    In other words, Mexico's production is bound to tank. Two options are possible: 1) a moderately conservative leader will open up foreign investment in the energy sector, or 2) a left-wing leader will take power and ride the sinking ship of Mexico further down the tubes. I hope for the former, but think there is a fair likelihood of the latter. Problem is, the latter will likely result in extreme political instability in the country and a further flight of foreign capital. In turn this will increase illegal immigration to the U.S. by probably at least 3 fold.

    It ain't pretty, and it won't be getting better anytime soon.

  • Dmckj

    Astute, if largely unstated, observation that geography will reassert itself.

    I have extensively worked and lived in Mexico. Back in 1995 I said that the only solution to the border issue would be to militarize the border. People thought I was crazy at the time, but now it is, and will continue to, come to pass.

    Mexico is a country that does not work well. Power is slated from the top down, but those in power fear the possibility of a politcal implosion. The country dodged a bullet when Lopez Obrador lost the election. The issue of declining oil production is strongly tinged by populist sentiment and ignorance of free markets with respect to oil production and trade. One can thank the stupendously paralytic stranglehold that PRI had for many decades for that. What do I mean? I mean that Mexico is a country with a HUGE 'victim' complex, and the politcal powers that be have always played this to retain control. For this reason, pretty much nothing is Mexico's own fault, but rather someone elses…always. Along those lines, Mexico is paralyzed on the the energy front, both in terms of oil investments and production and as well electrical production. Both are dominated by hugely corrupt and powerful 'sindicatos' that will stonewall private investments till the day they die. You see, private investment will mean private accounting and accountability, this being a huge risk to the cash cow of corruption government-run production.

    In other words, Mexico's production is bound to tank. Two options are possible: 1) a moderately conservative leader will open up foreign investment in the energy sector, or 2) a left-wing leader will take power and ride the sinking ship of Mexico further down the tubes. I hope for the former, but think there is a fair likelihood of the latter. Problem is, the latter will likely result in extreme political instability in the country and a further flight of foreign capital. In turn this will increase illegal immigration to the U.S. by probably at least 3 fold.

    It ain't pretty, and it won't be getting better anytime soon.

  • Dmckj

    Astute, if largely unstated, observation that geography will reassert itself.

    I have extensively worked and lived in Mexico. Back in 1995 I said that the only solution to the border issue would be to militarize the border. People thought I was crazy at the time, but now it is, and will continue to, come to pass.

    Mexico is a country that does not work well. Power is slated from the top down, but those in power fear the possibility of a politcal implosion. The country dodged a bullet when Lopez Obrador lost the election. The issue of declining oil production is strongly tinged by populist sentiment and ignorance of free markets with respect to oil production and trade. One can thank the stupendously paralytic stranglehold that PRI had for many decades for that. What do I mean? I mean that Mexico is a country with a HUGE 'victim' complex, and the politcal powers that be have always played this to retain control. For this reason, pretty much nothing is Mexico's own fault, but rather someone elses…always. Along those lines, Mexico is paralyzed on the the energy front, both in terms of oil investments and production and as well electrical production. Both are dominated by hugely corrupt and powerful 'sindicatos' that will stonewall private investments till the day they die. You see, private investment will mean private accounting and accountability, this being a huge risk to the cash cow of corruption government-run production.

    In other words, Mexico's production is bound to tank. Two options are possible: 1) a moderately conservative leader will open up foreign investment in the energy sector, or 2) a left-wing leader will take power and ride the sinking ship of Mexico further down the tubes. I hope for the former, but think there is a fair likelihood of the latter. Problem is, the latter will likely result in extreme political instability in the country and a further flight of foreign capital. In turn this will increase illegal immigration to the U.S. by probably at least 3 fold.

    It ain't pretty, and it won't be getting better anytime soon.

  • Dmckj

    Astute, if largely unstated, observation that geography will reassert itself.

    I have extensively worked and lived in Mexico. Back in 1995 I said that the only solution to the border issue would be to militarize the border. People thought I was crazy at the time, but now it is, and will continue to, come to pass.

    Mexico is a country that does not work well. Power is slated from the top down, but those in power fear the possibility of a politcal implosion. The country dodged a bullet when Lopez Obrador lost the election. The issue of declining oil production is strongly tinged by populist sentiment and ignorance of free markets with respect to oil production and trade. One can thank the stupendously paralytic stranglehold that PRI had for many decades for that. What do I mean? I mean that Mexico is a country with a HUGE 'victim' complex, and the politcal powers that be have always played this to retain control. For this reason, pretty much nothing is Mexico's own fault, but rather someone elses…always. Along those lines, Mexico is paralyzed on the the energy front, both in terms of oil investments and production and as well electrical production. Both are dominated by hugely corrupt and powerful 'sindicatos' that will stonewall private investments till the day they die. You see, private investment will mean private accounting and accountability, this being a huge risk to the cash cow of corruption government-run production.

    In other words, Mexico's production is bound to tank. Two options are possible: 1) a moderately conservative leader will open up foreign investment in the energy sector, or 2) a left-wing leader will take power and ride the sinking ship of Mexico further down the tubes. I hope for the former, but think there is a fair likelihood of the latter. Problem is, the latter will likely result in extreme political instability in the country and a further flight of foreign capital. In turn this will increase illegal immigration to the U.S. by probably at least 3 fold.

    It ain't pretty, and it won't be getting better anytime soon.

  • Dmckj

    Astute, if largely unstated, observation that geography will reassert itself.

    I have extensively worked and lived in Mexico. Back in 1995 I said that the only solution to the border issue would be to militarize the border. People thought I was crazy at the time, but now it is, and will continue to, come to pass.

    Mexico is a country that does not work well. Power is slated from the top down, but those in power fear the possibility of a politcal implosion. The country dodged a bullet when Lopez Obrador lost the election. The issue of declining oil production is strongly tinged by populist sentiment and ignorance of free markets with respect to oil production and trade. One can thank the stupendously paralytic stranglehold that PRI had for many decades for that. What do I mean? I mean that Mexico is a country with a HUGE 'victim' complex, and the politcal powers that be have always played this to retain control. For this reason, pretty much nothing is Mexico's own fault, but rather someone elses…always. Along those lines, Mexico is paralyzed on the the energy front, both in terms of oil investments and production and as well electrical production. Both are dominated by hugely corrupt and powerful 'sindicatos' that will stonewall private investments till the day they die. You see, private investment will mean private accounting and accountability, this being a huge risk to the cash cow of corruption government-run production.

    In other words, Mexico's production is bound to tank. Two options are possible: 1) a moderately conservative leader will open up foreign investment in the energy sector, or 2) a left-wing leader will take power and ride the sinking ship of Mexico further down the tubes. I hope for the former, but think there is a fair likelihood of the latter. Problem is, the latter will likely result in extreme political instability in the country and a further flight of foreign capital. In turn this will increase illegal immigration to the U.S. by probably at least 3 fold.

    It ain't pretty, and it won't be getting better anytime soon.

  • Dmckj

    Astute, if largely unstated, observation that geography will reassert itself.

    I have extensively worked and lived in Mexico. Back in 1995 I said that the only solution to the border issue would be to militarize the border. People thought I was crazy at the time, but now it is, and will continue to, come to pass.

    Mexico is a country that does not work well. Power is slated from the top down, but those in power fear the possibility of a politcal implosion. The country dodged a bullet when Lopez Obrador lost the election. The issue of declining oil production is strongly tinged by populist sentiment and ignorance of free markets with respect to oil production and trade. One can thank the stupendously paralytic stranglehold that PRI had for many decades for that. What do I mean? I mean that Mexico is a country with a HUGE 'victim' complex, and the politcal powers that be have always played this to retain control. For this reason, pretty much nothing is Mexico's own fault, but rather someone elses…always. Along those lines, Mexico is paralyzed on the the energy front, both in terms of oil investments and production and as well electrical production. Both are dominated by hugely corrupt and powerful 'sindicatos' that will stonewall private investments till the day they die. You see, private investment will mean private accounting and accountability, this being a huge risk to the cash cow of corruption government-run production.

    In other words, Mexico's production is bound to tank. Two options are possible: 1) a moderately conservative leader will open up foreign investment in the energy sector, or 2) a left-wing leader will take power and ride the sinking ship of Mexico further down the tubes. I hope for the former, but think there is a fair likelihood of the latter. Problem is, the latter will likely result in extreme political instability in the country and a further flight of foreign capital. In turn this will increase illegal immigration to the U.S. by probably at least 3 fold.

    It ain't pretty, and it won't be getting better anytime soon.

  • Dmckj

    Astute, if largely unstated, observation that geography will reassert itself.

    I have extensively worked and lived in Mexico. Back in 1995 I said that the only solution to the border issue would be to militarize the border. People thought I was crazy at the time, but now it is, and will continue to, come to pass.

    Mexico is a country that does not work well. Power is slated from the top down, but those in power fear the possibility of a politcal implosion. The country dodged a bullet when Lopez Obrador lost the election. The issue of declining oil production is strongly tinged by populist sentiment and ignorance of free markets with respect to oil production and trade. One can thank the stupendously paralytic stranglehold that PRI had for many decades for that. What do I mean? I mean that Mexico is a country with a HUGE 'victim' complex, and the politcal powers that be have always played this to retain control. For this reason, pretty much nothing is Mexico's own fault, but rather someone elses…always. Along those lines, Mexico is paralyzed on the the energy front, both in terms of oil investments and production and as well electrical production. Both are dominated by hugely corrupt and powerful 'sindicatos' that will stonewall private investments till the day they die. You see, private investment will mean private accounting and accountability, this being a huge risk to the cash cow of corruption government-run production.

    In other words, Mexico's production is bound to tank. Two options are possible: 1) a moderately conservative leader will open up foreign investment in the energy sector, or 2) a left-wing leader will take power and ride the sinking ship of Mexico further down the tubes. I hope for the former, but think there is a fair likelihood of the latter. Problem is, the latter will likely result in extreme political instability in the country and a further flight of foreign capital. In turn this will increase illegal immigration to the U.S. by probably at least 3 fold.

    It ain't pretty, and it won't be getting better anytime soon.

  • Dmckj

    Astute, if largely unstated, observation that geography will reassert itself.

    I have extensively worked and lived in Mexico. Back in 1995 I said that the only solution to the border issue would be to militarize the border. People thought I was crazy at the time, but now it is, and will continue to, come to pass.

    Mexico is a country that does not work well. Power is slated from the top down, but those in power fear the possibility of a politcal implosion. The country dodged a bullet when Lopez Obrador lost the election. The issue of declining oil production is strongly tinged by populist sentiment and ignorance of free markets with respect to oil production and trade. One can thank the stupendously paralytic stranglehold that PRI had for many decades for that. What do I mean? I mean that Mexico is a country with a HUGE 'victim' complex, and the politcal powers that be have always played this to retain control. For this reason, pretty much nothing is Mexico's own fault, but rather someone elses…always. Along those lines, Mexico is paralyzed on the the energy front, both in terms of oil investments and production and as well electrical production. Both are dominated by hugely corrupt and powerful 'sindicatos' that will stonewall private investments till the day they die. You see, private investment will mean private accounting and accountability, this being a huge risk to the cash cow of corruption government-run production.

    In other words, Mexico's production is bound to tank. Two options are possible: 1) a moderately conservative leader will open up foreign investment in the energy sector, or 2) a left-wing leader will take power and ride the sinking ship of Mexico further down the tubes. I hope for the former, but think there is a fair likelihood of the latter. Problem is, the latter will likely result in extreme political instability in the country and a further flight of foreign capital. In turn this will increase illegal immigration to the U.S. by probably at least 3 fold.

    It ain't pretty, and it won't be getting better anytime soon.

  • Dmckj

    Astute, if largely unstated, observation that geography will reassert itself.

    I have extensively worked and lived in Mexico. Back in 1995 I said that the only solution to the border issue would be to militarize the border. People thought I was crazy at the time, but now it is, and will continue to, come to pass.

    Mexico is a country that does not work well. Power is slated from the top down, but those in power fear the possibility of a politcal implosion. The country dodged a bullet when Lopez Obrador lost the election. The issue of declining oil production is strongly tinged by populist sentiment and ignorance of free markets with respect to oil production and trade. One can thank the stupendously paralytic stranglehold that PRI had for many decades for that. What do I mean? I mean that Mexico is a country with a HUGE 'victim' complex, and the politcal powers that be have always played this to retain control. For this reason, pretty much nothing is Mexico's own fault, but rather someone elses…always. Along those lines, Mexico is paralyzed on the the energy front, both in terms of oil investments and production and as well electrical production. Both are dominated by hugely corrupt and powerful 'sindicatos' that will stonewall private investments till the day they die. You see, private investment will mean private accounting and accountability, this being a huge risk to the cash cow of corruption government-run production.

    In other words, Mexico's production is bound to tank. Two options are possible: 1) a moderately conservative leader will open up foreign investment in the energy sector, or 2) a left-wing leader will take power and ride the sinking ship of Mexico further down the tubes. I hope for the former, but think there is a fair likelihood of the latter. Problem is, the latter will likely result in extreme political instability in the country and a further flight of foreign capital. In turn this will increase illegal immigration to the U.S. by probably at least 3 fold.

    It ain't pretty, and it won't be getting better anytime soon.

  • Dmckj

    Astute, if largely unstated, observation that geography will reassert itself.

    I have extensively worked and lived in Mexico. Back in 1995 I said that the only solution to the border issue would be to militarize the border. People thought I was crazy at the time, but now it is, and will continue to, come to pass.

    Mexico is a country that does not work well. Power is slated from the top down, but those in power fear the possibility of a politcal implosion. The country dodged a bullet when Lopez Obrador lost the election. The issue of declining oil production is strongly tinged by populist sentiment and ignorance of free markets with respect to oil production and trade. One can thank the stupendously paralytic stranglehold that PRI had for many decades for that. What do I mean? I mean that Mexico is a country with a HUGE 'victim' complex, and the politcal powers that be have always played this to retain control. For this reason, pretty much nothing is Mexico's own fault, but rather someone elses…always. Along those lines, Mexico is paralyzed on the the energy front, both in terms of oil investments and production and as well electrical production. Both are dominated by hugely corrupt and powerful 'sindicatos' that will stonewall private investments till the day they die. You see, private investment will mean private accounting and accountability, this being a huge risk to the cash cow of corruption government-run production.

    In other words, Mexico's production is bound to tank. Two options are possible: 1) a moderately conservative leader will open up foreign investment in the energy sector, or 2) a left-wing leader will take power and ride the sinking ship of Mexico further down the tubes. I hope for the former, but think there is a fair likelihood of the latter. Problem is, the latter will likely result in extreme political instability in the country and a further flight of foreign capital. In turn this will increase illegal immigration to the U.S. by probably at least 3 fold.

    It ain't pretty, and it won't be getting better anytime soon.

  • Dmckj

    Astute, if largely unstated, observation that geography will reassert itself.

    I have extensively worked and lived in Mexico. Back in 1995 I said that the only solution to the border issue would be to militarize the border. People thought I was crazy at the time, but now it is, and will continue to, come to pass.

    Mexico is a country that does not work well. Power is slated from the top down, but those in power fear the possibility of a politcal implosion. The country dodged a bullet when Lopez Obrador lost the election. The issue of declining oil production is strongly tinged by populist sentiment and ignorance of free markets with respect to oil production and trade. One can thank the stupendously paralytic stranglehold that PRI had for many decades for that. What do I mean? I mean that Mexico is a country with a HUGE 'victim' complex, and the politcal powers that be have always played this to retain control. For this reason, pretty much nothing is Mexico's own fault, but rather someone elses…always. Along those lines, Mexico is paralyzed on the the energy front, both in terms of oil investments and production and as well electrical production. Both are dominated by hugely corrupt and powerful 'sindicatos' that will stonewall private investments till the day they die. You see, private investment will mean private accounting and accountability, this being a huge risk to the cash cow of corruption government-run production.

    In other words, Mexico's production is bound to tank. Two options are possible: 1) a moderately conservative leader will open up foreign investment in the energy sector, or 2) a left-wing leader will take power and ride the sinking ship of Mexico further down the tubes. I hope for the former, but think there is a fair likelihood of the latter. Problem is, the latter will likely result in extreme political instability in the country and a further flight of foreign capital. In turn this will increase illegal immigration to the U.S. by probably at least 3 fold.

    It ain't pretty, and it won't be getting better anytime soon.

  • Dmckj

    Astute, if largely unstated, observation that geography will reassert itself.

    I have extensively worked and lived in Mexico. Back in 1995 I said that the only solution to the border issue would be to militarize the border. People thought I was crazy at the time, but now it is, and will continue to, come to pass.

    Mexico is a country that does not work well. Power is slated from the top down, but those in power fear the possibility of a politcal implosion. The country dodged a bullet when Lopez Obrador lost the election. The issue of declining oil production is strongly tinged by populist sentiment and ignorance of free markets with respect to oil production and trade. One can thank the stupendously paralytic stranglehold that PRI had for many decades for that. What do I mean? I mean that Mexico is a country with a HUGE 'victim' complex, and the politcal powers that be have always played this to retain control. For this reason, pretty much nothing is Mexico's own fault, but rather someone elses…always. Along those lines, Mexico is paralyzed on the the energy front, both in terms of oil investments and production and as well electrical production. Both are dominated by hugely corrupt and powerful 'sindicatos' that will stonewall private investments till the day they die. You see, private investment will mean private accounting and accountability, this being a huge risk to the cash cow of corruption government-run production.

    In other words, Mexico's production is bound to tank. Two options are possible: 1) a moderately conservative leader will open up foreign investment in the energy sector, or 2) a left-wing leader will take power and ride the sinking ship of Mexico further down the tubes. I hope for the former, but think there is a fair likelihood of the latter. Problem is, the latter will likely result in extreme political instability in the country and a further flight of foreign capital. In turn this will increase illegal immigration to the U.S. by probably at least 3 fold.

    It ain't pretty, and it won't be getting better anytime soon.

  • Dmckj

    Astute, if largely unstated, observation that geography will reassert itself.

    I have extensively worked and lived in Mexico. Back in 1995 I said that the only solution to the border issue would be to militarize the border. People thought I was crazy at the time, but now it is, and will continue to, come to pass.

    Mexico is a country that does not work well. Power is slated from the top down, but those in power fear the possibility of a politcal implosion. The country dodged a bullet when Lopez Obrador lost the election. The issue of declining oil production is strongly tinged by populist sentiment and ignorance of free markets with respect to oil production and trade. One can thank the stupendously paralytic stranglehold that PRI had for many decades for that. What do I mean? I mean that Mexico is a country with a HUGE 'victim' complex, and the politcal powers that be have always played this to retain control. For this reason, pretty much nothing is Mexico's own fault, but rather someone elses…always. Along those lines, Mexico is paralyzed on the the energy front, both in terms of oil investments and production and as well electrical production. Both are dominated by hugely corrupt and powerful 'sindicatos' that will stonewall private investments till the day they die. You see, private investment will mean private accounting and accountability, this being a huge risk to the cash cow of corruption government-run production.

    In other words, Mexico's production is bound to tank. Two options are possible: 1) a moderately conservative leader will open up foreign investment in the energy sector, or 2) a left-wing leader will take power and ride the sinking ship of Mexico further down the tubes. I hope for the former, but think there is a fair likelihood of the latter. Problem is, the latter will likely result in extreme political instability in the country and a further flight of foreign capital. In turn this will increase illegal immigration to the U.S. by probably at least 3 fold.

    It ain't pretty, and it won't be getting better anytime soon.

  • Dmckj

    Astute, if largely unstated, observation that geography will reassert itself.

    I have extensively worked and lived in Mexico. Back in 1995 I said that the only solution to the border issue would be to militarize the border. People thought I was crazy at the time, but now it is, and will continue to, come to pass.

    Mexico is a country that does not work well. Power is slated from the top down, but those in power fear the possibility of a politcal implosion. The country dodged a bullet when Lopez Obrador lost the election. The issue of declining oil production is strongly tinged by populist sentiment and ignorance of free markets with respect to oil production and trade. One can thank the stupendously paralytic stranglehold that PRI had for many decades for that. What do I mean? I mean that Mexico is a country with a HUGE 'victim' complex, and the politcal powers that be have always played this to retain control. For this reason, pretty much nothing is Mexico's own fault, but rather someone elses…always. Along those lines, Mexico is paralyzed on the the energy front, both in terms of oil investments and production and as well electrical production. Both are dominated by hugely corrupt and powerful 'sindicatos' that will stonewall private investments till the day they die. You see, private investment will mean private accounting and accountability, this being a huge risk to the cash cow of corruption government-run production.

    In other words, Mexico's production is bound to tank. Two options are possible: 1) a moderately conservative leader will open up foreign investment in the energy sector, or 2) a left-wing leader will take power and ride the sinking ship of Mexico further down the tubes. I hope for the former, but think there is a fair likelihood of the latter. Problem is, the latter will likely result in extreme political instability in the country and a further flight of foreign capital. In turn this will increase illegal immigration to the U.S. by probably at least 3 fold.

    It ain't pretty, and it won't be getting better anytime soon.

  • Dmckj

    Astute, if largely unstated, observation that geography will reassert itself.

    I have extensively worked and lived in Mexico. Back in 1995 I said that the only solution to the border issue would be to militarize the border. People thought I was crazy at the time, but now it is, and will continue to, come to pass.

    Mexico is a country that does not work well. Power is slated from the top down, but those in power fear the possibility of a politcal implosion. The country dodged a bullet when Lopez Obrador lost the election. The issue of declining oil production is strongly tinged by populist sentiment and ignorance of free markets with respect to oil production and trade. One can thank the stupendously paralytic stranglehold that PRI had for many decades for that. What do I mean? I mean that Mexico is a country with a HUGE 'victim' complex, and the politcal powers that be have always played this to retain control. For this reason, pretty much nothing is Mexico's own fault, but rather someone elses…always. Along those lines, Mexico is paralyzed on the the energy front, both in terms of oil investments and production and as well electrical production. Both are dominated by hugely corrupt and powerful 'sindicatos' that will stonewall private investments till the day they die. You see, private investment will mean private accounting and accountability, this being a huge risk to the cash cow of corruption government-run production.

    In other words, Mexico's production is bound to tank. Two options are possible: 1) a moderately conservative leader will open up foreign investment in the energy sector, or 2) a left-wing leader will take power and ride the sinking ship of Mexico further down the tubes. I hope for the former, but think there is a fair likelihood of the latter. Problem is, the latter will likely result in extreme political instability in the country and a further flight of foreign capital. In turn this will increase illegal immigration to the U.S. by probably at least 3 fold.

    It ain't pretty, and it won't be getting better anytime soon.

  • Dmckj

    Astute, if largely unstated, observation that geography will reassert itself.

    I have extensively worked and lived in Mexico. Back in 1995 I said that the only solution to the border issue would be to militarize the border. People thought I was crazy at the time, but now it is, and will continue to, come to pass.

    Mexico is a country that does not work well. Power is slated from the top down, but those in power fear the possibility of a politcal implosion. The country dodged a bullet when Lopez Obrador lost the election. The issue of declining oil production is strongly tinged by populist sentiment and ignorance of free markets with respect to oil production and trade. One can thank the stupendously paralytic stranglehold that PRI had for many decades for that. What do I mean? I mean that Mexico is a country with a HUGE 'victim' complex, and the politcal powers that be have always played this to retain control. For this reason, pretty much nothing is Mexico's own fault, but rather someone elses…always. Along those lines, Mexico is paralyzed on the the energy front, both in terms of oil investments and production and as well electrical production. Both are dominated by hugely corrupt and powerful 'sindicatos' that will stonewall private investments till the day they die. You see, private investment will mean private accounting and accountability, this being a huge risk to the cash cow of corruption government-run production.

    In other words, Mexico's production is bound to tank. Two options are possible: 1) a moderately conservative leader will open up foreign investment in the energy sector, or 2) a left-wing leader will take power and ride the sinking ship of Mexico further down the tubes. I hope for the former, but think there is a fair likelihood of the latter. Problem is, the latter will likely result in extreme political instability in the country and a further flight of foreign capital. In turn this will increase illegal immigration to the U.S. by probably at least 3 fold.

    It ain't pretty, and it won't be getting better anytime soon.

  • Dmckj

    Astute, if largely unstated, observation that geography will reassert itself.

    I have extensively worked and lived in Mexico. Back in 1995 I said that the only solution to the border issue would be to militarize the border. People thought I was crazy at the time, but now it is, and will continue to, come to pass.

    Mexico is a country that does not work well. Power is slated from the top down, but those in power fear the possibility of a politcal implosion. The country dodged a bullet when Lopez Obrador lost the election. The issue of declining oil production is strongly tinged by populist sentiment and ignorance of free markets with respect to oil production and trade. One can thank the stupendously paralytic stranglehold that PRI had for many decades for that. What do I mean? I mean that Mexico is a country with a HUGE 'victim' complex, and the politcal powers that be have always played this to retain control. For this reason, pretty much nothing is Mexico's own fault, but rather someone elses…always. Along those lines, Mexico is paralyzed on the the energy front, both in terms of oil investments and production and as well electrical production. Both are dominated by hugely corrupt and powerful 'sindicatos' that will stonewall private investments till the day they die. You see, private investment will mean private accounting and accountability, this being a huge risk to the cash cow of corruption government-run production.

    In other words, Mexico's production is bound to tank. Two options are possible: 1) a moderately conservative leader will open up foreign investment in the energy sector, or 2) a left-wing leader will take power and ride the sinking ship of Mexico further down the tubes. I hope for the former, but think there is a fair likelihood of the latter. Problem is, the latter will likely result in extreme political instability in the country and a further flight of foreign capital. In turn this will increase illegal immigration to the U.S. by probably at least 3 fold.

    It ain't pretty, and it won't be getting better anytime soon.

  • Jeronimo

    Carpet bagger (Oil bagger) Mexico will be fine with its natural resources. In the famous words of Geronimo, the white man is a mad man that is always looking for something to destroy.

  • Jeronimo

    Carpet bagger (Oil bagger) Mexico will be fine with its natural resources. In the famous words of Geronimo, the white man is a mad man that is always looking for something to destroy.

  • Jeronimo

    Carpet bagger (Oil bagger) Mexico will be fine with its natural resources. In the famous words of Geronimo, the white man is a mad man that is always looking for something to destroy.

  • Jeronimo

    Carpet bagger (Oil bagger) Mexico will be fine with its natural resources. In the famous words of Geronimo, the white man is a mad man that is always looking for something to destroy.

  • Jeronimo

    Carpet bagger (Oil bagger) Mexico will be fine with its natural resources. In the famous words of Geronimo, the white man is a mad man that is always looking for something to destroy.

  • gregor.us

    I would agree that Mexico could make the decision, if they wanted to, to take the pain of lost export revenues from oil in the short term–to then retain the resource for use over a longer timeframe. By doing so, they would probably raise the price of oil globally, hurt their own economy, cause havoc in the corrupt political structure, and cause a crisis.

    However, it might be worth it and here's why: because in about 2 years Mexico won't have any oil for export anyway.

    G

  • gregor.us

    I would agree that Mexico could make the decision, if they wanted to, to take the pain of lost export revenues from oil in the short term–to then retain the resource for use over a longer timeframe. By doing so, they would probably raise the price of oil globally, hurt their own economy, cause havoc in the corrupt political structure, and cause a crisis.

    However, it might be worth it and here's why: because in about 2 years Mexico won't have any oil for export anyway.

    G

  • gregor.us

    I am now moving quickly to the view that MX should almost immediately cut oil exports by 80% and take the pain. But watch what would happen to the price of oil after such a move. Especially if they said it was necessary to conserve the resource. It would also, in my view, trigger responses from other global oil producers who have gone into production decline.

    Thanks so much for your thoughtful remarks.

    G

  • gregor.us

    I am now moving quickly to the view that MX should almost immediately cut oil exports by 80% and take the pain. But watch what would happen to the price of oil after such a move. Especially if they said it was necessary to conserve the resource. It would also, in my view, trigger responses from other global oil producers who have gone into production decline.

    Thanks so much for your thoughtful remarks.

    G

  • gregor.us

    Yes there are many sedimentary levels here. I would note that Chavez has nearly destroyed PDVSA, replaced technical experts with hacks, and run foreign oil firms out of the country. I frankly see VZ, MX, and the US as bogged down messes of a varying kind. It's almost impossible to know what Caracas or Washington for that matter will do next to make the situation even worse.

    G

  • gregor.us

    Yes there are many sedimentary levels here. I would note that Chavez has nearly destroyed PDVSA, replaced technical experts with hacks, and run foreign oil firms out of the country. I frankly see VZ, MX, and the US as bogged down messes of a varying kind. It's almost impossible to know what Caracas or Washington for that matter will do next to make the situation even worse.

    G

  • mjanousak

    Perhaps that's why Chavez was so willing to shake Obama's hand — and vice versa. At some point, PDVSA is going to have to step back and bring in the gringos to run the show (well, actually to make it operable first, and then run it long enough to fund Hugo's socialist wet dreams). And let's face it, it is in the USA's interests to provide that guidance and technical expertise. It sure beats the hell out of losing oil supplies and watching VZ descend into anarchy.

  • mjanousak

    Perhaps that's why Chavez was so willing to shake Obama's hand — and vice versa. At some point, PDVSA is going to have to step back and bring in the gringos to run the show (well, actually to make it operable first, and then run it long enough to fund Hugo's socialist wet dreams). And let's face it, it is in the USA's interests to provide that guidance and technical expertise. It sure beats the hell out of losing oil supplies and watching VZ descend into anarchy.

  • gregor.us

    I would agree that Mexico could make the decision, if they wanted to, to take the pain of lost export revenues from oil in the short term–to then retain the resource for use over a longer timeframe. By doing so, they would probably raise the price of oil globally, hurt their own economy, cause havoc in the corrupt political structure, and cause a crisis.

    However, it might be worth it and here's why: because in about 2 years Mexico won't have any oil for export anyway.

    G

  • gregor.us

    I am now moving quickly to the view that MX should almost immediately cut oil exports by 80% and take the pain. But watch what would happen to the price of oil after such a move. Especially if they said it was necessary to conserve the resource. It would also, in my view, trigger responses from other global oil producers who have gone into production decline.

    Thanks so much for your thoughtful remarks.

    G

  • gregor.us

    Yes there are many sedimentary levels here. I would note that Chavez has nearly destroyed PDVSA, replaced technical experts with hacks, and run foreign oil firms out of the country. I frankly see VZ, MX, and the US as bogged down messes of a varying kind. It's almost impossible to know what Caracas or Washington for that matter will do next to make the situation even worse.

    G

  • mjanousak

    Perhaps that's why Chavez was so willing to shake Obama's hand — and vice versa. At some point, PDVSA is going to have to step back and bring in the gringos to run the show (well, actually to make it operable first, and then run it long enough to fund Hugo's socialist wet dreams). And let's face it, it is in the USA's interests to provide that guidance and technical expertise. It sure beats the hell out of losing oil supplies and watching VZ descend into anarchy.

  • gregor.us

    I would agree that Mexico could make the decision, if they wanted to, to take the pain of lost export revenues from oil in the short term–to then retain the resource for use over a longer timeframe. By doing so, they would probably raise the price of oil globally, hurt their own economy, cause havoc in the corrupt political structure, and cause a crisis.

    However, it might be worth it and here's why: because in about 2 years Mexico won't have any oil for export anyway.

    G

  • gregor.us

    I am now moving quickly to the view that MX should almost immediately cut oil exports by 80% and take the pain. But watch what would happen to the price of oil after such a move. Especially if they said it was necessary to conserve the resource. It would also, in my view, trigger responses from other global oil producers who have gone into production decline.

    Thanks so much for your thoughtful remarks.

    G

  • gregor.us

    Yes there are many sedimentary levels here. I would note that Chavez has nearly destroyed PDVSA, replaced technical experts with hacks, and run foreign oil firms out of the country. I frankly see VZ, MX, and the US as bogged down messes of a varying kind. It's almost impossible to know what Caracas or Washington for that matter will do next to make the situation even worse.

    G

  • mjanousak

    Perhaps that's why Chavez was so willing to shake Obama's hand — and vice versa. At some point, PDVSA is going to have to step back and bring in the gringos to run the show (well, actually to make it operable first, and then run it long enough to fund Hugo's socialist wet dreams). And let's face it, it is in the USA's interests to provide that guidance and technical expertise. It sure beats the hell out of losing oil supplies and watching VZ descend into anarchy.