Tuesday, April 29, 2008

Oil, again: Pemex, the left, and why we should care

As a follow-up to yesterday's post about $10/gallon gasoline, this morning's DMN business page has a column by Jim Landers regarding the condition and immediate future of Mexico's state-owned oil monopoly, Pemex.

Pemex is, in short, a disaster. At a time when the Mexican government should be rolling in tax pesos from it's abundant oil reserves, Pemex, which is the only company allowed to drill for and extract Mexican oil, can't find the resources to buy equipment or hire people. Years of mismanagement and lack of incentive have made it essentially impossible for Pemex, as it exists now, to drill in deep water in the Gulf, which is where any new production is going to come from.

President Felipe Calderón , who is fighting an uphill battle in so many areas, recently introduced legislation intended to start modernizing Pemex and make it competitive again. This legislation stops well short of allowing anyone else into the market - Pemex is a state-sponsored monopoly and is going to stay that way. But Calderón is at least attempting to get it moving, so that Mexico can start to realize the benefits of being an energy producer in this insane energy market.

But, this is Mexico, where no pro-business idea, no matter how good, gets by the rabid left unscathed.

Opposition leader Andres Manuel López Obrador, the man who narrowly lost the Presidential election to Calderón a few years ago and who nearly destroyed the country by refusing to concede, immediately shut down the legislature to protest. His claim: Calderón is trying to give away Mexico's sovereignty.

And you thought only college football fans could knee jerk that hard.

López Obrador, who never met a microphone he didn't like, has used the proposed legislation to propel himself back into the spotlight as the leader of the always-vocal opposition. But he really cares for the people of Mexico, don'tcha know?

I know, I know. Everyone does it. And I shouldn't let it exasperate me the way it does. But it just drains my life force the way politics gets in the way of actually getting things accomplished so often. López Obrador, like politicians of every stripe in every country, is, of course, FAR more interested in keeping his smiling mug on page one than he is in spreading Mexico's oil wealth among the people.

So, why do we care if Mexico can't get it's bleep together? Its not like this is new, right?

Did you know the US gets more if its oil from Mexico than anywhere else besides Canada and Saudi Arabia? Wouldn't you rather buy oil from Mexico than, say, Iran? Wouldn't our dough, if it's going to have to go out the door, be better spent in Mexico than in Russia, Sudan, or Venezuela? If the Mexicans can produce more, I'm all for buying it from them rather than (insert name of your favorite petro-fascist here). Conversely, if Mexican production continues to fall (and it has fallen dramatically since Pemex was nationalized), we're, at least for now, going to have to buy more from people who want us dead.

I really feel for the people of Mexico. They have been crapped on for centuries, and the people who claim to be looking out for them now are the worst kinds of demagogues; people who are far more interested in preserving their power than they are in actually doing something for their country and for the people the profess to care about.

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