That sucks!

21 February 2012

Mexico and the United States signed an agreement on Monday to help U.S. firms and Mexican oil monopoly Pemex exploit deep water oil resources in the Gulf of Mexico that straddle the countries’ maritime boundaries.

The deal, negotiated last year, will lift the moratorium on oil and gas exploration and production for 1.5 million acres in the Gulf and sets up legal guidelines for companies to jointly develop any trans-boundary reservoirs.

“These reservoirs could hold considerable reserves … but they don’t necessarily stop neatly at our maritime boundary. This could lead to disputes,” U.S. Secretary of State Hillary Clinton said at a ministerial meeting of Group of 20 nations in Los Cabos Mexico. “The agreement we are signing today will help prevent such disputes.”

Both the U.S. Senate and its Mexican counterpart have to approve the agreement before it goes into effect.

Interior Secretary Ken Salazar called the region an “area of high interest” to oil companies.

As you’d expect, at least some quarters (mostly on the left) are already comparing Calderón to Santa Ana… and not in a good way. The sense that Mexico’s mineral and other wealth is being given away at a fraction of its value has always resonated with both nationalists and leftists (not always overlapping categories). The cartoon at the top happened to come my way via a pro-AMLO facebook page … with unflattering comparisons between Calderón and Santa Ana among the more printable remarks posted about this agreement.

While I am dubious of the proposition that U.S. privately owned oil companies are the only (or the best) partners for PEMEX … or even if PEMEX necessarily needs foreign partners… or even if it is necessary for Mexico to sell oil to the United States (the existing reserves would more than meet domestic needs here, and allow for expanded manufacturing, although it would require a major overhaul of the existing tax system), there are good arguments to be made for resolving the questions of which country has the right to exploit these oil reserves in that “area of high interest”. And, being a country with a lot of oil and a crappy army, there’s every reason to avoid things that could “lead to disputes” with a country that has invaded here three times, and has occupied other oil rich nations under the rubric of “fighting terrorists”. Especially when the speaker, Mrs. Clinton, has used the term (“terrorist”) to describe those entrepreneurs who supply yet other commodities the United States uses in an appallingly larger percentage than the rest of the planet.

I am not yet ready to make any predictions about this agreement, but expect there will be resistance from the Mexican Senate, and — depending on which party seems most likely to accept the agreement with the least onerous restrictions on those U.S. based private corporations — more suspicion of U.S. political interference on behalf of that party in the upcoming election. The suspicion coming, of course, from those that will be making an issue of the agreement, i.e., the left.