Thursday, November 15, 2007
Trouble in our Back Yard?
I am not sure how much is hyperventilation, but Michael Orme, a technology writer, comments on what looks like an ongoing economic breakdown in Mexico. I know I once said that immigration from the south was likely to increase if Mexico's economy got worse. He is certainly correct about Pemex' impact on the Mexican economy, although all those billionaires are getting their money from somewhere. If Pemex fails in the next few years and the oil stops pumping, it will make for even more interesting times for the US. I wonder what Calderon will do.
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2 comments:
We are in for some interesting times because everything I've read indicates that we need expect no more imported oil from Mexico within 5 years, if not sooner.
Mexico is our number 3 supplier. By what percentage will our oil supply shrink without Mexican imports?
A much greater influx of poor, desperate people in combination with the economic contraction that will surely result from even a 5% drop in the available oil supplies is a scary thought.
Are our political leaders and policy makers thought of the consequences of unlimited immigration, and why are the people who we pay to manage these things not using simple arithmetic before they expand airports and highways, and build more suburbs further removed from urban cores? Why does the massive misallocation of our resources towards propping up and expanding a totally unsustainable lifestyle continue?
Right now the focus is on getting elected or staying in your seat. That makes knee jerk reactions to immigration issues very attractive, versus the sober discussion that needs to occur. Pemex has said they will be done pumping in 7 years, so I expect the exports to here will end in about 3 years, 4 at the outside.
Their oil comes to us primarily via the sea. However internal use is via the pipelines, and there have been two assaults on pipelines in the past few months with serious consequences for the businesses being fueled. If that keeps up (and rumor has it that group is borrowing a page from MEND in Nigeria), then I wouldn't be surprised if some of those businesses pull up stakes and leave. The combination of no revenue due to no royalties from pumped revenue and no revenue due to no taxes from foreign manufacturers could be quite lethal, economically speaking. I don't know that it will get that far. We'll have to see if anymore attacks occur.
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