The Mexican Connection:
Kipling, Richard E.
DON'T BURN THAT OIL BEFORE IT'S PIPED . IN The...
...A secret CIA study last year concluded that Mexico nomic blocs...
...Since 1938, when Mexico became the first country those 1. 1 million barrels either now or in the near future...
...imbalance...
...policymakers readily admit that Mexican oil, to tages, but it is no solvent for the country's economic woes...
...Second, when petroleum-less shipping costs-would remain approxiMexican oil becomes available, OPEC members, led by Saudi mately the same...
...He neither Mexico nor any other country beyond its borders can can argue persuasively that whatever adversely effects the provide the cure...
...be of value to the United States, must be produced in much Dependence on foreign oil sources has placed the United greater quantities,.at least two or three times present Mexican States in a precarious position...
...This conservative compromise, want to deal with the United States, his options are limited by while it may help Lopez Portillo temper the opposition, hardly the fierce nationalism that infests the production and sale of oil serves to ease things for the U.S., which won't gain access to in Mexico...
...DON'T BURN THAT OIL BEFORE IT'S PIPED . IN The Mexican connection RICHARD E. KIPLING origin, almost half of that from Arab embargo partners Saudi Arabia, Libya, Algeria and the United Arab Emirates...
...But politics, establish a policy which favors, if at all possible, Mexican oil not technology, will determine how much oil Mexico proover Saudi Arabian oil...
...Key members of Congress- Senators Cranston, Church and Javits, CERTAINLY the oil is there...
...All three men see in Mexico a duces...
...That easily puts Mexico in the same league as Saudi or political quagmire away...
...that is due to change...
...However Lopez Portillo might lion barrels slated for export...
...Even if boat...
...Some pause before hopping on the Mexican energy bandwagon...
...dollars would ent energy policy to limit it...
...Feeling runs high against any foreign wants to diversify its petroleum supply sources, so Mexico involvement in the country's oil operations, and any attempt to plans to expand its markets...
...might gain access to the huge rels, and the count on potential reserves is now well over 200 quantities of oil discovered by its secure, stable, friendly billion barrels, with some experts predicting up to twice that neighbor just south of the border and not an ocean, continent, amount...
...Em- events-in Iran, where oil exports at one time ceased albassy's petroleum officer in Mexico City, "pro- together and where a hostile regime deliberates over who will vides the United States with the possibility of be allowed to buy what amounts of oil...
...needs to kick the habit altogether, and Granted, Jimmy Carter has a lot of strings he can-pull...
...France, Israel deal-would smack of capitulation to "gringo interests...
...Recent ~~ EXICO," according to Glenn Rase, the U.S...
...exceeded only by the Soviets, the United States and Saudi partners against the perfidies of OPEC and other world eco- Arabia...
...oil connection is in energy future...
...MexiAmerica's energy dilemma, no matter what the point of origin...
...Quarterly's Editorial Research Report...
...oil deliveries, and Philippino, Eastern Bloc and other West Nor-would the Mexican government risk a move that could European interests are waiting in the wings...
...Recent discoveries have pushed among others-favor doing good neighbor deeds for the Mex- estimates of known reserves to more than 60 billion baricans, hoping that the U.S...
...can going from heroin to methadone, may have some salutary do to speed up Mexican production...
...important national security advanSome U.S...
...Jimmy Carter couldn't agree more...
...Arabia, which has known and potential reserves of between Mexico could become a major issue of the 1980 presidential 150 and 200 billion barrels...
...Of that they insist, can Mexico come to grips with its major problems amount, 85 percent arrives stateside from OPEC points of of lagging economic growth, extensive international indebtedness and a rapidly expanding population for which it can RICHARD E. KIPLING is West Coast correspondent for Congressional provide neither sufficient jobs nor food...
...shortfall, leaving no net supply gain...
...destinations, and that three-fifths of its iming the progress of.Mexico," and Mexican President Jose ports have "made in USA" stamped on them...
...Enter Mexico...
...First, shortcoming of an envisioned U.S.-Mexico oil connection...
...in the world to expropriate foreign corporate holdings and While Mexico now sends nearly 90 percent of its export oil nationalize oil production, Mexicans have turned a suspicious tothe U.S...
...He could talk about the "produce fuels for domestic consumption and exports in the billions of dollars sent home to family and relatives by millions quantity and time frame most convenient to us...
...No and Japan have already concluded agreements for substantial Mexican politician can survive such a label...
...could get it all, however, chances are it would have Mexico's militant stand on oil prices illustrates yet another only a marginal effect on the situation, for three reasons...
...the Moses who leads America out of the Egypt of Arab oil to Like the Saudis and the Khomeini regime in Iran, Mexicans the land of plenty-plenty of oil, that is...
...last December's 14.5 diversifying our petroleum sources, securing a dependable percent OPEC price hike combined with the recent 9 percent supply, and building better relations with a good trading part- increase...
...the U.S...
...need of a new socket...
...Finally, America's appetite for oil is growing, with tional bankers, or currency traders worried by the increasing daily consumption now over 20 million barrels and no coher- U.S...
...And indications are that it will be much less than the possible promised land, and doubtless each would like to be U.S...
...The result?-The Saudi Arabian coffers is inconsequential to economists comsame amount of world oil supplies available at the same high puting trade deficit figures, or to foreign governments, internaprices...
...that "Mexico highly respects the spirit of OPEC and won't lower its prices to compete with OPEC...
...Mexican officials break the back of OPEC and bring an end to what since 1974 have-even discussed with the Soviets an arrangement to fulfill has been essentially a sellers' market...
...announcing a compromise development plan which calls for Big strings could be pulled, but they quite predictably would daily production by 1982 of 2.2 -million barrels of oil-a have the wrong effect, poisoning the already tense relations one-million barrel increase over present levels-with 1.1 mil- between the two countries...
...1982, does little to solve leaving inflation and a devalued currency in their wake...
...Switching dependencies, like production- goals...
...petroleum experts predict that, with modern producthe few issues-perhaps the only one-that Jerry Brown and tion technologies, Mexico could extract as much as five or Teddy Kennedy agree on...
...What does matter is that U.S...
...consumption...
...the persistent threats of another oil shut-off in rener...
...Now that Mexico is S O THE United States isn't going to get much oil from about to reap the considerable dividends of cartel-created Mexico, both because there isn't that much to get, and- market conditions, he is not about to risk rocking the OPEC because Mexico has decided to slice the pie differently...
...From the White sponse to America's peacemaking role in the Middle East-all House, the word is that Mexico could be the key to America's have made it painfully clear that the U.S...
...would still have to pay cash on Arabia and Kuwait, will likely drop their production levels to the barrel for it...
...Brown wants to establish a North even seven million barrels daily by the mid-1980s, totals now American common market with Mexico and Canada as U.S...
...Imports, now running to more than 10 million barrels a Only through accelerated development utilizing oil revenues, day, constitute 46 percent of daily U.S...
...In recent discussions with the Japanese, who a pie with only 1.1 million barrels, and what is left is a very complained about the price of Mexican oil, he responded tartly small slice for the U.S...
...Carter could Lopez Portillo pointedly declared recently that his country is refer to the more than two billion dollars in direct foreign not at the beck and call of other nations' energy needs, and will investment by American business...
...can oil may offer the U.S...
...Whether dollars find their way into Mexican or maintain present supply/demand ratios...
...Much as the United States eye on foreign interests...
...He director, Antonio Bermudez, has warned that Mexico "not could point out that two-thirds of Mexico's exports are eardestine its-reserves for the progress of other countries, sacrific- marked for U.S...
...have come to question the logic of full-scale oil exploitation...
...Kennedy announced virtually the same idea in a could produce ten million barrels a day by the end of the next speech early this year, and last year called for "an effort to decade, equal to the Saudi's present production...
...it is also one of U.S...
...Lopez Portillo has made diversifi- "make a deal" with the United States-particularly an cation a major policy objective, and his government is moving increased-production or lower-than-world-market-price quickly to cement deals with other countries...
...And the U.S...
...needs for relief from the energy crunch...
...campaign...
...the promises and contracts and subtract from keep them there...
...to do...
...But opponents of oil development are quick to chastise Pemex expertss for "thinking . in English," and label rapid U.S...
...interests...
...Mexican oil prices today Cuba's oil requiremeilts in exchange for the Soviets' supplying are among the world's highest, and Lopez Portillo plans to Spain...
...of Mexican illegals working north of the border, or of the The Mexican government has responded to the debate by billions American tourists spend playing south of it...
...But while Americans aren't happy about the way oil-rich There is widespread debate in Mexico-among intellectuals, Middle East regimes extract expensive and risky promises labor leaders and in the state bureaucracy-about whether oil from Uncle Sam before they deign to extract oil to sell at left in the ground may be worth more tomorrow than oil increasingly prohibitive prices, there remain good reasons to pumped and sold to profligate Western nations is today...
...officials of Mexico's national oil company, Pemex, with supThere's no question that the United States has some hopping port from members of the government, argue the opposite...
...Add upp all...
...Not only is it high on Carter's list...
...22 June 1979: 365...
...effects...
...Problem is, there is very little the U.S...
...A former Pemex to a large extent, the United States is Mexico's economy...
...Clearly, an additional 1.1 million continue to flow out of the country in enormous numbers, barrels daily, and that not until...
...Carter is not the only one to hold these sentiments...
...economy will visit Mexican commerce as well because, exploitation a sell-out to U.S...
...But the U.S...
...if Iran cannot or will not boost production to former levels, Even if Mexico produced enough oil to free the United States then much of Mexico's additional supplies would simply go to from dependence on the Middle East, the price per barrel of replace the...
Vol. 106 • June 1979 • No. 12
