Rice University Think-Tank Report - Mexican Oil Exports Could End In Less Than 10 Years - NYT

[hatrack]

Mexico, the third-largest supplier of foreign oil to the United States, could lose the capacity to export crude altogether within a decade without major new investments in exploration and production, warns a research group report released on Friday. The country’s shift from exporter to importer would deal a severe blow to Mexico’s federal government, which depends on oil sales for roughly a third of its budget, said the report, a two-year investigation by researchers with the James A. Baker III Institute for Public Policy at Rice University in Houston.

“A shift toward oil importer status would be a severe burden on the Mexican government and curb its ability to provide important services, both related to social programs and internal peace and security,” it states. Production by Pemex, the national oil company, has fallen 25 percent from its peak in 2004, while internal demand has climbed, sharply curtailing the amount of crude available for export. The drop in supply is largely due to steep declines at Cantarell, an aging super-giant field formerly responsible for the bulk of Mexico’s oil output.

Much of the country’s undeveloped oil reserves, meanwhile, are found in complex formations on land or in the deep waters of the Gulf of Mexico, necessitating a high level of technical expertise and investment to exploit. “It would appear that the days of easy oil are over for Pemex,” the report notes. Development of these hard-to-reach reserves has already begun, but will not be cheap or easy and carries environmental risks.

Pemex’s most ambitious new project is the development of the Chicontepec field northeast of Mexico City, a deposit estimated to hold more than 15 billion barrels of heavy oil. The oil is trapped in vast numbers of small, unconnected pools, and requires hydraulic fracturing to extract, which injects large amounts of water and chemicals deep underground. Once extracted, the oil remains difficult to refine.

EDIT

http://green.blogs.nytimes.com/2011/04/29/mexico-oil-exports-could-end-within-decade-report-warns/

[starroute]

1. Oh, the Baker Institute -- the people who used to cosy up to Enron

I hope you'll forgive me if I see an ulterior motive in anything they say.

[hatrack]

4. Not at all - grain (or block) of salt advisable . . .

My sense of it was that even they're saying it . . .

[pscot]

2. Mexico

They were our biggest dealer just a few years ago.

[Systematic Chaos]

3. But they captured the big, bad bogeyman!!

Don't look at the looming border war lurking behind the curtain, little sheep. We got us a terra-ist! Smoked him out of his dialysis ward and got him good!

FML :banghead:

[NickB79]

5. And if you think the drug wars down there are bad now

Wait until the Mexican government's main source of foreign income is cut away and the government is forced to either cut back on services HARD or increase taxes greatly to make up the difference.