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So, should we take our oil and go home?

17 October 2008

At Wednesday’s U.S. Presidential Debate, the issue of the U.S. dependence on oil imports was raised.  Both candidates mentioned THREE of the four largest sources:  Canada, Saudi Arabia and Venezuela.  The candidates both thought that the United States could free itself from dependence on Saudi Arabian and Venezulan oil imports, though the Republican nominee, Senator McCain, went out of his way to say that CANADIAN oil imports would be necessary, and were in the interest of the United States:

I think we can, for all intents and purposes, eliminate our dependence on Middle Eastern oil and Venezuelan oil. Canadian oil is fine.

By the way, when Senator Obama said he would unilaterally renegotiate the North American Free Trade Agreement, the Canadians said, “Yes, and we’ll sell our oil to China.”

You don’t tell countries you’re going to unilaterally renegotiate agreements with them.

The #3 oil producer (according to the United States government’s Energy Information Administration is, as you already have guessed, Mexico. Mexico oil imports to the United States (YTD through August 2008) were 1,207,000 barrels, much more than Venezuela’s 1,051,000 barrels (and even more than imports from Venezuela and #5 importer, Nigeria, combined).

Saudi Arabia is a popular villian country in the United States, and threatening to cut off purchases from the Saudis is a crowd pleaser.  Venezuela, or rather the elected president of that country, is a popular villian at least to a sizable number of U.S. voters, so ending supplies from those two countries is a politically prudent promise.  Although, one needs to ask, what “other” middle-eastern nations was Senator McCain talking about.  Besides Saudi Arabia, the only Middle Eastern nations in the list of the top fifteen oil exporting countries to the U.S. are Iraq and Kuiwait — together sending only slightly more oil than Nigeria.  Several of those nations are less than democratic (Chad, Equatorial Guinea, Azerbaijan) so the perceived Venezuelan “dictatorship” is, I’m assuming, less an issue than Hugo Chavez’ potty mouth.

And, still, nothing was said about Mexican oil.  While it is true that PEMEX is almost forced to continue selling oil to the United States (that’s where the pipelines run), there is no guarantee that the PEMEX restructuring — being discussed this week in the Mexican Senate — will mean “business as usual” with the United States. The Calderón Adminstration has already been forced by the left to make significant changes in their original proposals (among them, financing a new refinery in Mexico) and I expect other changes, none of which are necessarily favorable to the United States, will be forthcoming.

When the debate turned to trade agreements, other than Senator McCain’s brief reference to Canada and the Mexican-originated NAFTA agreement , discussions of Free Trade Agreements focused on potential agreements with Colombia and Peru… not the existing agreement, though Senator Obama did speak of NAFTA in the negative:

NAFTA doesn’t have — did not have enforceable labor agreements and environmental agreements.

And what I said was we should include those and make them enforceable. Iur exports more expensive and their exports to us cheaper.n the same way that we should enforce rules against China manipulating its currency to make our exports more expensive and their exports to us cheaper.

In other words, neither of the U.S. presidential candidates seem to think Mexico — and its oil — are of any concern for the United States’ energy future, nor do they show the least interest in existing Mexican trade agreements, opting instead to expand trade agreements with other countries.

Andrés Manuel López Obrador — whatever else you may think of him — was right. During his 2006 Presidential campaign, one of his agenda items was strengthening both the internal market and diversified foreign trade outside the NAFTA zone.   He is now pushing for “substitution to lessen dependence on the U.S. market , and a restructuring of NAFTA. Neither of these two ideas seem particularly “radical” given the apparent U.S. political party’s support of these ideas, and — given the lack of U.S. attention to Mexico — you can be sure the original platform will be a viable option for the future.

Don’t want our oil?  We can sell it (and our cars, food, commodities, etc.) to China… India… the European Union… Australia, New Zealand, etc., etc. etc.

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