Do we want to be a colony? AMLO

For a backgrounder on PEMEX, I was forwarded a rough machine translation of an interview with Raúl Muñoz Leos posted on Catholic.net.  That seems an odd place to read about the workings of a major oil company, but remember, that PEMEX was nationalized back in 1938, among other reasons, to fund social development.  The Church-connected website is a natural for this.  

More surprising, in a way, is finding Andrés Manuel López Obrador in the pages of the conservative daily Reforma.  Reforma is paid-subscription only.

¿Qué Queremos Ser los Mexicanos, País o Colonia?: AMLO (Diario Reforma, 18-Feb-2008,) was reprinted in the lively “legitimate government” virtual resistance movement — Blogotitlan

Unlike the right wing and their technocrats, we think that we can move the country forward, while cutting out the corruption which nourishes the political and economic power in this country.

Furthermore, we think it indispensable for the transformation of the nation, that we develop an economic model that is based on the advantages of our own people’s abilities and the rational use of our natural resources – especially our energy resources

I will not deal at this time with the problem of political corruption and the benefits that we would obtain by with eradicating it. Nor will I speak of the substantial business interests presently favored by the state, such as the sale of gas to the Spanish company Repsol for 15 billion dollars, sold without bids, or of the gas extracted by that company in Peru, and resold to the Federal Electrical Commission at the highest possible price.

Nor, will I talk about how much we would benefit by liberating Mexican workers from their oppression, the cancellation of their future in this country, which has forced them to emigrate, sending their talents and labor abroad. 

Instead, my intention in this article is to emphasize the strategic importance of petroleum and to discuss ways we can turn it to our advantage for our national development.  The energy sector’s relevance extends from the extraction of crude oil and gas to refining, petrochemicals and electrical generation.  The products of these industries are engines that drive yet other industries, and of great economic value.  In addition to the energy generating industries are massive amounts of goods and services depending on them, all serving to fortify internal markets. 

On the other hand, all projections indicate that energy demand will continue to grow regardless of anything else.  Estimates for the year 2020 show a 50 percent increase over this year.  That is to say, even as we continue to investigate other sources of energy, for the next several decades, hydrocarbons will sustain world-wide economic development. 

With these developments on the horizon, Mexico enjoys an invaluable possibility for development.  Our country can count of reserves of crude oil sufficient to produce gas and petrochemicals, and, furthermore, we possess great quantities of natural gay which, over time, will be used more and more for electrical generation. 

Why then, given the economic potential of petroleum resources to foment industrialization, generate power and has Mexico not become an energy power?  The answer, although seems incredible, has to do with an idea that has prevailed for the last 25 years, to privatize the electrical and petroleum industry.  And, of course, behind this thinking are those interests who seek control of those resources which are the property of the nation and the Mexican..

The only explanation is that from 1983 onward, instead of modernizing the oil industry and driving national development, all neoliberal governments have chosen – deliberately – to ruin the industry, giving a pretext to sell it and turn it to private businesses…

During this period, our energy policy has been handled inn a perversely irresponsible way, with a suprising lack of vision and common sense.  The only thing that has mattered has been a drive to sell crude oil to foreigners while neglecting the search for new deposits and abandoning the refining and petrochemical industries

Direct public investment in Petróleos Mexicanos (PEMEX) has fallen from 2.9 percent of GNP in 1982 to 0.57 percent in 2007.  Investment in electricity has gone from 1.2 percent in 1982 to 0.31 percent in 2007.  That is to say, during this period, total public investment in the energy sector fell from 4.12 to 0.88 percent of GNP.

And, for the past two decades, production has depended primarily on fields opened in the seventies: mainly the Cantarell deposits in the Sea of Campeche, and Chiapas and Tabasco wells.

With respect to the gas, the technocrats have never comprehended the strategic importance of this power source.  And, as to refineries and petrochemical plants, they have been starved of resources for expansion and modernization.  No refineries have been built in over 25 years.  As a result, we are importing 307 thousand barrels of gasoline daily, which could be produced in our own country, generating employment for Mexicans. 

It is completely absurd that this year will spend 10 billion dollars to buy gasoline from abroad, exactly what it would cost to build three refineries, which would make the country self-sufficient in this fuel.  The energy sector has not been a government priority, and as a result Mexico has become an exporter of crude oil, and an importer of products with an added value. .

This leaves us in a seriously dependent state.  We pay dearly to foreigners for a quarter of the gas we need, and 40 percent of the gasoline we consume.  buy from foreigners dear All this has taken to a very serious situation of dependency. One buys expensive in the outside the fourth part of the gas which we needed in the country and the 40 percent of the gasoline that we consumed.

Outside Mexico, gas and electricity are more expensive for both consumers and industrial users than in the United States and other countries.  In December 2007, we paid 8.74 pesos for a liter of gasoline.  Compare this to other oil producers.  In Russia, a liter of gasoline cost 8.48;  in the United States, 7.51; in China 7.16; in Nigeria, 5.28; in the Arab Emirates, 4.99; in Ecuador, 4.34; in Iraq, 3.49; in Kuwait, 2.32; in Saudi Arabia, 1.32; in Iran, 0.97 and in Venezuela 50 centavos per liter. 

Facing the panorama of issues caused by lack of economic and technical resources, the usurping government [a reference to Felipe Calderón’s administration] tries to compound their misdeeds by privatizing the nation’s wealth, and to spread our oil revenue with foreign companies.

They must know that PEMEX, in spite of corruption mismanagement, generates an annual surplus of over 60 billion dollars, more than six percent of the GNP.  It is the most profitable company in the country (extracting a barrel of oil for four dollars, and selling it for 80 dollars). .

In terms of cash flow, PEMEX is the second largest oil company in the world.  The taxes paid last year were 60 billion dollars, equivalent to 38 percent of the federal budget and more than three times the amount of taxes paid by all other private companies in the country.  If PEMEX lacks investment funding, it is because the government confiscates everything.   

As far as technology goes, it is a mistake to assume that we must irremediably associate with foreign companies, and cannot contract what we need.  In addition there are many experienced Mexican workers, technicians and petroleum engineers with much experience.

We have not forgotten that, despite all prognostications by foreign companies in 1938, do not forget that, against all the prognoses of the foreign companies, Petróleos Mexicanos forged ahead with operations, and can continue to do so now.  We know, and they know, they can still do it.  is we all know, and we know they are ready to contribute.     

Only those technocrats with a neurotic need to sell out their country can argue that today’s PEMEX cannot survive, and that it’s delivery to the private sector – foreign or national – is the only way of salvation.  complex and sell mother countries, can argue that today PEMEX cannot and that its delivery to the deprived sector, national or foreign, it is the only salvation.

The strengthened energy policy we propose would not require opening the energy sector to neither foreign nor domestic private capital.  The first phase would be the immediate investment of 400 billion pesos for exploring new fields, developing natural gas deposits, perforating new wells, constructing three new refineries, modernizing and expanding petrochemical plants and research and technology development (including alternative energy plants) and maintaining existing oil facilities

A logical question is to ask where the money would come from.  Our proposal is based on funding from two sources.  First, we propose to reduce the current government operational costs by 200 billion pesos

This implies, among other things, cutting off the budget guarantees to high bureaucrats, one of the most privileged castes in the world.  I would emphasize that budget cuts would not reduce investments, not reduce the salaries of lower paid workers nor public works, but only to reduce those bureaucratic operating expenses and salaries in the public sector where there have been enormous increases. 

The current cost of the public sector, from 2000 to the present, has increased by 714 billion pesos to one trillion, 466 billion.  That is to say, it doubled. 

The second funding source we propose is that all excess profits over the actual price of petroleum approved by the Chamber of Deputies, be reserved for energy sector development. 

To give an idea of the potential revenue: if the present international price for petroleum remained constant for a year, the excess revenue would be more than 200 billion pesos. 

With respect to these numbers, remember that during the Fox administration, we received 10 billion dollars annually between 2004 and 2006 because of excess returns from the high price of oil. Our misfortune was – and continues to be – that this money was not destined to modernize PEMEX, nor to promote Mexican development, nor to guarantee the well-being of the people, but was wasted on benefits for the high bureaucracy or disappeared down the sewer of corruption.

So the answer is yes.  Yes, there is an alternative proposal to confront the robbery of our Mexico which would leave the people without future development.  Let us celebrate the 70th anniversary of oil expropriation by turning our backs on the right and their allies within the PRI who would return us to the Porfiriate and leave us a colony. 

(Diario Reforma, 18-02-2008)

With oil prices today at $100.01 per barrel, it isn’t only the Mexican left looking at their natural resources in a new light.  Edmundo Rocha (Xicanopwr.com) analyzes the recent dustup over ExxonMobile’s suit against Venezuala’s PDVSA (also a funding source for social programs), and reaction by Hugo Chavez, as well as a new player in the oil market, Iran’s Oil Bourse.