Kunstler's Latest

On January 13 I posted in this blog about the state of Mexican oil. I speculated on the impact on American when Cantarell fails, as it will.

Today, James Kunstler posted an essay at his site, Clusterfuck Nation in which he also comments on Cantarell. I had forgotten, assuming I knew, that the chief exporters of oil to America are Canada, Mexico, and Saudi Arabia in that order! Here is what he has to say about the upcoming loss of Cantarell and, by extension, the likely collapse of the Mexican oil industry:

The Cantarell field is a horror story. Pemex, the Mexican national oil company, tried to conceal the dire developments, because Cantarell alone is practically the whole Mexican oil industry. But it is now self-evident that Cantarell is crashing, with a 40 percent annual decline rate projected ahead, meaning a couple of years and it's out. Mexico is America's second largest source of oil imports (after No. 1 Canada and before No. 3 Saudi Arabia). When Cantarell crashes, the Mexican oil industry will crash and the US will be out a major source of imported oil. The US will also be out of imports that were so conveniently close they could be shipped by pipeline rather than tanker ships. For its part, Mexico will be out of a major source of export hard currency revenue and as its economy crashes will probably become even more politically unstable -- meaning more Mexican citizens desperately seeking to get out. Guess where.

Evidently my question on Saturday was not rhetorical, Kunstler has answered it.

ETA: See this article and related audio link regarding the state of Pemex and Mexican oil. The estimated 45bbl oil field in the Gulf is the equivalent of just over ~2 years of oil consumed in the USA. Just to put a little context on it.