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Latin America - May 24

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Mexico's Battle Over Oil

Laura Carlsen, IRC Americas Program
On April 8, President Felipe Calderon dropped a political bomb on the Mexican political scene. The Senate received an executive initiative that would fundamentally change the structure and operations of the oil company, Petroleos Mexicanos (Pemex). Key operations of the state-owned enterprise would be taken over by private companies.

In the reform proposal, Calderon and his National Action Party (PAN) took care to avoid calling for modifying the Mexican Constitution. National ownership of petroleum is a touchstone of nationalist pride in Mexico since President Lazaro Cardenas expropriated private companies on March 18, 1938. At that time, citizens fed up with the arrogance and voracity of foreign oil companies supported the expropriation by donating everything from live chickens to family jewels to pay compensation and regain control of the resource. The Mexican Constitution is very clear about who owns Mexican oil: "The nation has direct dominion over all national resources of the continental platform ... (including) petroleum and all solid, liquid, or gaseous hydrocarbons ..."

The president announced the "energy reform initiative" as an administrative packet to save Pemex from a deep financial and operational crisis. To these neoliberal administrators, the only way out of this crisis is to turn to the private sector. According to the Calderon government, Mexican citizens and politicians must now acknowledge that Mexican administrators are incapable of rising to the lucrative challenge at hand, Mexican scientists can't provide the needed technology, and Mexican consumers prefer public services in foreign hands.

That line will be a hard sell, given the history of the oil industry in Mexico and current trends in Latin America.
(16 May 2008)
Also at Znet.


ELM in Mexico

Jeffrey J. Brown (westexas), The Oil Drum (DrumBeat)
Like the ELM, the UK and Indonesia, Mexico was consuming about half of their production at peak, so they are in the "red zone," unlikely to be a net exporter beyond 2014, and their year over year change in net oil exports should look something like the ELM, UK and Indonesia net export year over year changes:

As I have noted on the other threads, it appears that all three of our closest sources of exported oil--Canada (slight decline), Venezuela and Mexico--showed net export declines in 2007.
(23 May 2008)
Comment by EB contriiburor Jeffrey J. Brown.


Back to the Future: Limits of Economic Growth in Latin America

Eduardo Gudynas, IRC Americas Program
t was back in the days of enormous computers. Massive machines that occupied several rooms calculated the surface area of the earth needed to feed the planet's population, and the area lost due to urbanization and other uses. The computers vibrated and spit out their results: in a matter of a few years, a situation of abundance could give way to one of food shortages due to supply that cannot satisfy the exponential growth in demand.

Today, similar warnings have become common, but what is shocking about this case is the fact that they come more than 30 years after the book The Limits to Growth. This study, published in 1972 by Donella Meadows and colleagues at the Massachusetts Institute of Technology, questioned whether environmental limits render continuous economic growth possible.1 Immediately, controversy arose on all sides. Conservative groups and businesses rejected the existence of the effect of ecological limits on exponential economic growth, and they also minimized the reduction of natural resources and the importance of environmental impact. But many left-wing groups during that period also questioned the study, seeing it as a bourgeois imposition or a neo-Malthusian demand that would impede the development of third world countries.

Today the food crisis and the question of peak oil once again expose those warnings on environmental limits and confront conventional defensive strategies for continuous economic growth.

Eduardo Gudynas (egudynas(a)adinet.com.uy) is an analyst with CLAES D3E, a sustainable development research and promotion center (www.integracionsur.com) and collaborates with the Americas Policy Program (www.americaspolicy.org).

Translated from: El regreso al futuro: Los limites del crecimiento económico en América Latina

Translated by: Charlotte Elmitt
(23 May 2008)

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