Mexico: Peak Oil in Action
Cantarell'd decline in January 2007

There is a present-day example of the World Problematique unfolding on the North American continent.  It involves Peak Oil, climate change, food scarcity and socioeconomic instability. It brings the nature of the problems the world will face over the next few decades into stark relief.

The Scenario
  • Mexico's biggest oil field is Cantarell. Its 2 million barrel per day output was responsible for 60% of Mexico's production, and all its oil exports to the United States.
  • Those oil exports account for 40% of Mexico's public funding.
  • Cantarell's output is known to be crashing (see graphic above). Production has declined by 25% in the last year and is predicted to be down about 60% from its peak by the end of 2007. The field will probably lose over 75% of its production capacity by the end of 2008.
  • When this happens Mexico's economy will probably implode.
  • The United States currently exports about 20% of its corn crop.
  • Next year, 20% of the United States' corn crop is going to be used for ethanol.
  • Mexico imports a substantial amount of corn from the United States.
  • As Cantarell's output declines, oil exports to the US will drop in lockstep.
  • As oil imports drop in the US, the pressure will mount to produce more ethanol as a substitute.
  • As more corn is bought by the American ethanol industry, US corn exports, especially to Mexico, will slide.
  • At the same time the probability is high that Global Warming will result in higher temperatures in Mexico, a country already at temperature risk.
  • Rising temperatures will bring more drought conditions and a drop in Mexico's own corn production.
  • Now you have a country with a decimated economy and declining food. This is a recipe for massive migration.
  • The migration moves North as it has in the past, but this time in enormous numbers.
  • As the economic refugees cross the border what do they find?
  • In January, 2006, KBR (a subsidiary of Halliburton) was given a $385M contract to build a string of very large detention camps in the United States...
Peak oil, global warming, food, biofuels and authoritarianism — all rolled up into one neat but ugly little package.  Coming to a border near you within 3 years.

The American Response

The fact that the United States has put in place a number of detention camps across the Southern and Central United States seems to indicate that the administration is aware of  an impending immigration crisis.   What is significant and instructive, as well as worrying, is the nature of the official response to this insight.  The camps that have been contracted are explicitly characterized as detention camps, not as refugee camps.

The official attitude underlying this approach is an illustration of the growing tendency to criminalize and militarize social problems in the United States.  The
current administration's prevailing ethos of control, punishment and retribution pervades such programs as "The War on Drugs", 'The War On Terror" and "The War on Poverty" (which is characterized by many on the target side as a "War on the Poor").  To this can now be added "The War on Immigration" which, while as yet undeclared, is in full swing along the Mexican border, under the auspices of the DHS and INS.

Countries like the Philippines, Chad and Pakistan have hosted large refugee processing centers under the direction of UNHCR.  The mandate of such camps is protective: to safeguard the rights and well-being of refugees and provide physical care for them.  By contrast, the purpose of the detention camps established in the United States is primarily one of movement control and the segregation of refugees from the indigenous population.

The fact that this is widely perceived as appropriate by American citizens is yet another illustration of the shifting tenor of American public discourse since 2001: a shift away from the values of inclusivity, generosity and freedom to those of exclusion, parsimony and control.  A return swing of that pendulum would be most welcome but does not, unfortunately, seem imminent.

The Spectre of Revolution

When contemplating Mexico's future you should always remember her past.  Mexican history is full of revolutionary episodes: the War of Independence of 1810; the Mexican Civil War or War of Reform of 1857; the Mexican Revolution of 1910;  the Zapatista actions in Chiapas in 1994; and the recent violent confrontations in Oaxaca.

The effect of NAFTA on the lives of the Mexican poor has been devastating.  In an echo of the enclosure movement in Britain many have been forced off land they traditionally occupied, either by economic circumstances or legislation. A good overview of Mexican agrarian history, including the impact of NAFTA, is available in this
FAO document.

The 100+ year-old push-pull effect of the US economy on Mexican migration is a very well documented historical phenomenon. This time, circumstances are somewhat different. Many Mexican
campesinos — subsistence farmers that either owned their own land or held it jointly in a collective called an ejido — were forced off their land due to NAFTA rules that allowed the dumping of highly subsidized, below market-priced US corn on the Mexican market.  The land is still there, but now sits idle. In the event of a severe economic downturn there would likely be a large movement to return to the land as well as increased northward migration.

Cantarell's crash and PEMEX's impending bankruptcy present a political crisis of the first magnitude for Mexico's elite and threaten the stability of the small middle class.  This crisis presents a great opportunity for the long downtrodden majority to gain power as has happened in Bolivia, Ecuador and Venezuela.  Conditions will be ripe for a resurgence of revolutionary sentiment in Mexico, which will probably take the form of an import of the Bolivarian Revolution championed by Hugo Chavez.

Of course, having such an incendiary political movement on their very doorstep will not sit well with the American industrial/political establishment.  The probability of direct American political, economic and even military involvement in Mexican affairs as a result should not be lightly dismissed.
© Copyright 2007, Paul Chefurka
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