A report by the Los Angeles Times predicts that Mexico’s oil production will drop by one-third this decade. According to Jesus Reyes Heroles, the General Director of the national Mexican oil company Petroleos Mexicanos (Pemex), "the situation is critical and merits immediate attention."
Although Exxon-Mobil enjoyed record profits yet again this past financial quarter, the picture is less rosy for Pemex. Mexico, the world’s sixth-largest oil producer, suffered a $1.2 billion loss in the third quarter of 2007. Output, exports, and proven reserves are all declining.
From the LA Times:
The consequences could be painful, not only for Mexico, which relies on oil revenue to fund about 40% of its federal spending, but also for world markets, which are feeling the pinch of tight supplies. Mexico is the No. 2 provider of petroleum to the United States, behind Canada.
Peak oil and its effects on the global marketplace may not be as far off as experts had predicted. Although in this instance a lack of supply is not to blame; there’s still more oil available in Mexico’s sites, Pemex just doesn’t have the resources to find the new reserves. The country hasn’t reinvested its oil income in exploration to continue the flow into the pipelines.
The economic ramifications could be drastic, especially in the U.S. The nation’s appetite for oil has shown no indication of decreasing and, once supply diminishes, prices will skyrocket well beyond their current highs.
This is just a taste of peak oil crises to come. The oil industry is trafficking in a finite resource. Of course, from a climate change point-of-view, the sooner we can steer away from our oil addiction, the better.
Via The Daily Green.
Photos via flickr by junk_id_09 & waywuwei
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And this dream goes back to the early ’30’s. La-la the land of milk and honey where a (bicycle?)bum can stay for many a day and he won’t need any money.