Mexico’s Oil Dilemma And The Future

David Simmonds

Washington Post columnist Marcela Sanchez has a piece in yesterday’s paper titled “Time Running Out for Energy in Mexico”, detaling Mexico’s energy situation, where the government entirely owns Pemex, the only oil company in the country. There is a serious  and growing problem: the oil is running low and Pemex produces 40% of the revenue for the government. If they don’t do something to remedy the situation the outfall will be enormous, affecting the lives of every Mexican for generations to come. Sanchez and the Calderon administration argue that the country needs to open the door to foreign investment to provide the technology, money and skill to dig deeper into the earth for exploration and extract more oil. For the short term, they may be right.

However, I would like to advance another viewpoint: show some vision and prepare for a world without a huge oil dependence. There is a term that you will hear more of in  the coming years called “Peak Oil”. In general, the theory/fact is that the earth is in a rapidly declining state of oil reserves. Put simply, oil is not a renewable substance and we’re draining the tank like a cold keg at a frat party. Although many new sources of energy are available to help the situation (wind, solar, etc), petroleum-based products intertwine and are essential to nearly every aspect of the world’s daily existence, from fertilizer to medicines to the clothes that we wear. But automobiles are the biggest users and this is an area that needs to be addressed immediately. For more information about Peak Oil, click here

I would like to see Mexico move forward with a high-speed rail system, simlar to those in Japan and France. Much of Mexico presently depends on bus transportation and auto ownership has increased dramatically in the last 30 years. Efficient, low energy transporation methods will be essential in the near future. Mexican car manufacturers, with government incentives, should begin to roll out hybrid plug-in cars. The technology is here now and there is no reason to wait. They should also start investing in wind and solar energy, resources that are in abundant supply throughout the country. And, most assuredly, they need to overhaul their government revenue stream to compensate for what is sure to be a declining source of funds…oil. The countries that understand the future will lead the way into the 22nd century. With progressive leadership, Mexico could well be one of them.