Monday, March 26, 2007

 

The Cold In Mexico, the Cartels and Cantarell

 

By Allan Wall

 

Is Mexico perpetually sunny, bathed in continual sun?  Certainly it’s warmer than the United States, but it is definitely possible to be cold in Mexico.

 

The Tropic of Cancer divides the Mexican temperate zone from the tropical zone. North of the Tropic of Cancer, it can get cold in the winter (and south of it as well, in high altitude areas).

 

Winter mornings can be quite nippy, and one can see laborers huddled over a fire before beginning their day’s work.

 

Many Mexican houses don’t have heating, so sometimes during winter it can actually be colder inside the house than outside.

 

Every winter in Mexico there are tragic deaths caused by the cold.  This year, the Mexican Health Department announced that from October 15 to March 15, 113 Mexicans died of cold-related causes, mostly from hypothermia, carbon monoxide poisoning and being burned in fires.  The majority of those who perished were in northern Mexico (42 in Chihuahua), but there were some cold-weather fatalities in more southerly states:  Veracruz, Puebla, Jalisco and Michoacan.

 

Speaking of another deadly subject in Mexico, the drug cartel killings continue. In one week, from March 11 to March 18, there were over 50 people killed in cartel murders and fighting, many of them police officers.

 

The latest front in the anti-cartel war is in the southern state of Tabasco, which has of late become a big drug corridor.  Ironically, part of the reason for the increase in cartel activity in Tabasco is the interdiction success the United States has had in the Gulf of Mexico.  But that’s how things work in the cartel business.  As long as the demand exists, you cut off the flow in one place and traffickers run their merchandise through another corridor.

 

Whereas Mexican narcos used to be just carriers for Colombians, they now drive the regional market, with Mexican narcos running operations all the way from Bolivia to the U.S.

 

A shootout in the tourist resort of Boca del Rio, Veracruz, left three policemen dead.  A 20-year old driving a pickup to the beach with his family was caught in the crossfire.

 

Violent encroachment upon tourist areas is not good for Mexican tourism.  And certainly the vast majority of Mexican tourist areas are quite safe, but perception is the key.

 

If Americans come to see Mexico as an unsafe place to visit, they will take their tourist dollars elsewhere. That would be disastrous for Mexican tourism, which earned the nation US$14 billion this past year and could earn a lot more if managed properly.

 

Speaking of managing things properly, Mexico’s oil industry is in desperate need of the same. 

On March 18 the government, as always, celebrated another anniversary of the 1938 oil expropriation, which nationalized Mexico’s oil. 

 

Now, in 2007, the government-owned oil monopoly PEMEX is US$100 billion in debt (counting pension obligations).  And the Cantarell Field in the Gulf of Mexico, Mexico’s biggest, is in decline.

 

There’s other oil out there, but PEMEX doesn’t have the technology to exploit it, and making private companies full partners is against the Constitution.

 

According the President Felipe Calderon, Mexico only has another 9.3 years of proven oil reserves.

 

So on March 18 the government celebrated the oil industry expropriation, but one might ask if there is really much to celebrate?  President Calderon’s comments were somewhat contradictory.

On the one hand, Calderon promised not to privatize PEMEX, solemnly affirming that Mexico’s oil “will always continue to belong to all Mexicans.”  (A cynic might inquire if it ever did belong to “all Mexicans”?)

 

On the other hand, Calderon said, “We need to invest, and invest seriously, in exploration.” 

 

How does Calderon intend to do that, when Mexico has stricter oil investment laws than Fidel Castro’s Cuba?

 

Politicians of Calderon’s National Action Party (PAN) are afraid to publicly call for privatization. It might actually be easier for a leftist president of Mexico to privatize petroleum than a “right-winger” like Calderon.

 

Leftist leader Cuauhtemoc Cardenas (son of Lazaro Cardenas, who expropriated the oil back in 1938) has come out with a ten-point plan.  It’s not exactly privatization, but a new private-public petroleum partnership. 

 

Ideally, all the major Mexican political forces could get together and negotiate a new and better arrangement for exploiting Mexican petroleum, for the benefit of the Mexican economy and its people.

 

Or they can all just keep muddling along, in which case next year’s 70th expropriation anniversary may have even less to celebrate.

 

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Allan Wall, a MexiData.info columnist, recently returned from a tour of duty in Iraq.  He currently resides in Mexico, where he has lived since 1991. He can be reached via e-mail at allan39@prodigy.net.mx.