We’ve been told for years that oil would last forever. We especially here [sic] this from the governments of many oil producing countries. Unfortunately, this is not the case. The many lies we’ve been told are finally being exposed, and we’re paying the price. What’s really going on here? Find out by clicking here...
And then, in the 1990s, Pemex began a systematic program to increase oil output. Mexico’s government wanted to raise more revenues from oil sales. The government wanted more of that “abundance” to administer. So Pemex built the world’s largest nitrogen injection project right on top of Cantarell. That is, a large system of air pumps strips nitrogen gas from the atmosphere to inject it into the upper parts of the Cantarell reservoir. This maintains reservoir pressure, and thus increases (at least in the beginning it increased) the oil production. Oil output from Cantarell rapidly increased to nearly two million bpd. But by the end of 2005, oil production stopped rising. In fact, oil output dropped below two million bpd as 2005 wore on. In January 2006, Pemex announced that Cantarell had “peaked” in daily output and would begin a process of irreversible decline. What happened was that Pemex accelerated the depletion of the Cantarell field. There is only so much oil in any oil field. You can extract it slowly over time. Or you can apply technology to extract more oil more quickly. In the case of Cantarell, the nitrogen injection squeezed the “easy” oil out of the field. One could say that the nitrogen project worked too well. Output from Cantarell is now declining at a rate around 14% per year. Some estimates are that Mexico will cease to be an oil exporter by 2012. And this will be a disaster for Mexico.
In 1938, President Lázaro Cárdenas nationalized the Mexican petroleum industry. Indeed, for this act alone, Cárdenas is still regarded as a national hero in Mexico. Since that time, Mexican law has forbidden foreign investment in the energy sector. So Pemex has long held a total monopoly on oil exploration and production within Mexico. Pemex also controls many of the oil services that are required by any oil company, Mexican or otherwise. But while Pemex has an oil monopoly, the Mexican government has used Pemex as both a social welfare program and a cash cow. It has to do with that notion of “administering abundance.” One prime example is that the Mexican government has encouraged a strong union movement in the energy sector. This has led to massive overstaffing — featherbedding, really — within the oil industry. Pemex wages and benefits are among the highest in Mexico, while Pemex’s productivity is at the low end of world standards. And Pemex has over $48 billion of unfunded future pension obligations alone. Furthermore, Pemex pays over 60% of its profits to the state and federal coffers. And over 40% of Mexican federal revenues come from Pemex. Pemex is a goose that lays golden eggs for the Mexican government. It goes back to “administering abundance.” But without Pemex, the Mexican government would rapidly become illiquid and insolvent. Mexican government entities, in turn, use the money for social programs. But as is the case with large government entities everywhere, the politicians always seem to want more. The effect on Pemex is one of massive and ongoing decapitalization. Thus, for many decades, Pemex has not had adequate funds to reinvest in the Mexican energy sector. Much of the Pemex energy infrastructure is old and in poor mechanical condition. To make a long story short, Pemex is deep in debt and — despite the high oil prices of late — losing money. And now output from Cantarell is crashing. The implications of all this are strategic not just for Pemex, but for Mexico and the U.S., as well. Regards,
Byron W. King
Know well...when food is plentiful, storing is not Hoarding as many who are playing the foolish virgins now are trying to claim. But, when there is no food out there to speak of, the media and others will label you a hoarder. However, you stored during times of plenty and thus, you actually helped the farmer and agri–business. Be prepared for neighbors, if you talked, to do a "number" on you. They will castigate you and your family. Develop an 'alligator hide' to all this. You can even expect various ones to organize against you and come and get—by force— the little you do have...because you talked. Now is the time to shut–up. These WebMasters will go underground When The Hell Breaks. Peruse the web site, because you may need some of the information. Download to your printer. We Will have to take down the WebSite and make it to safety. Many of our contrarian newsletters, those we have been quoting from with financial information and other information concerning food, water, health, and disease, have clearly said they will probably be shut down by the forces that be when the Hell Breaks in its fullest rigor. Many website masters have told us similar. Trustworthy information may be nowhere to be found, so print it out now.
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