BajaNomad

The Fracking End Of Mexico's Horn Of Plenty?

DavidE - 1-11-2014 at 12:25 PM

Whazziz, I'm reading in the Wall Street Journal, The Economist, and other supposedly responsible-journalism publications?

The USA is going to become a major oil EXPORTER during 2015? Enough crude oil reserves to last 3,000 years? Australia has enough "Frackable Shale" to feed China's growth until the 25th century?

What's going to happen to Mexico? Thirty five percent of its income is from crude oil.

Any nerds out there that can shed light on this? Boy if this is factual info Mexico is in for one hell of a rough ride. When Cuba liberalizes its economy, it will devastate Cancun. Hoo Boy...

desertcpl - 1-11-2014 at 02:03 PM

Mexico,,is going to get it from all sides

not only with Oil

but from over sea manufacturing

Japan and china, USA how been pulling out of MX complaining

of corruption and thievery

bledito - 1-11-2014 at 03:07 PM

one of the reasons they're going to pass the article 27 revisions

Hook - 1-11-2014 at 03:14 PM

Our consumption peaked around 2005 and really started a deceleration around 2008. The Great Recession was partly to blame but the downturn has continued.

A big part of this is how "green" we have become with all the conversion to natural gas, low-consumption lighting and all the other alternative energy sources like wind and solar. Our consumption of oil is actually expected to continue going down. Couple this with big finds in North Dakota, increased shipments from Canada and new means of extraction and we are sitting pretty in this area.

We actually could have been an exporter much earlier except for treaties we have with countries to buy a specified amount of crude. Oh yeah, and oil companies are also banned from exporting oil. There is talk of changing that.

Yeah, Mexico better get their act together, especially if some kind of agreement is reached with Iran to allow them to begin selling oil on the open market. We could see oil challenge the 80.00/barrel mark. Or go lower. I expected it to challenge it sooner than this but this cold winter has kept demand higher than normal for winter.

Canada, too. They have become very dependent on crude exports. I'm not sure why the value of the Canadian dollar (with respect to the US dollar) has done so poorly in the last month but it could be related to where people think the price of oil is going. Or, it could just be a side effect of the Fed's decision to begin "tapering". Many are predicting a REALLY strong US dollar in 2014.

Time to book that vacation to Tuscany you have been putting off!!!!

CortezBlue - 1-11-2014 at 03:20 PM

I wonder how soon until we start seeing gas wars in Mexico between Exon, BP and Pemex?
Or will there still be a Pemex station?

DavidE - 1-11-2014 at 03:27 PM

Sheezo, a vacation in Tuscany will have me returning weighing 380 lbs. Italian and Mexican food is some of the best on earth.

Private investment in MX oil industry (WSJ)

Whale-ista - 1-11-2014 at 04:06 PM

Is this what you're referring to? Process of the privatization of Pemex is already underway, and they rely on these revenues for 40% of the budget per this report:

http://online.wsj.com/news/articles/SB1000142405270230393250...

Excerpt:
The bill, which changes several articles of Mexico's Constitution, now needs to be ratified by a majority of state legislatures, but that is seen as a formality. Mr. Peņa Nieto is expected to sign it into law by early February.

The government may have its work cut out convincing ordinary Mexicans that the moves will benefit them. Polls show many Mexicans are skeptical of allowing private investment in the oil industry, not because of nationalism but because they are worried the country's oil wealth will be pilfered by companies and unscrupulous politicians.

"Until now, we Mexicans used oil revenue to pay 40% of our public spending," said Bishop Raul Vera, a leftist priest. But now we'll have to negotiate that money with foreign oil firms. That's what awaits our children."

Many of the privatizations carried out in the 1990s are widely seen as having had mixed results, with state monopolies becoming de facto private monopolies. Mexican businessman Carlos Slim became the world's richest man thanks to a stranglehold on Mexico's telephone industry.

DavidE - 1-11-2014 at 04:16 PM

There is NO REASON ON GOD'S EARTH that gasoline and diesel must cost almost four dollars a gallon. Cutting fuel prices 50% would fuel the biggest economic boom in the history of the world.

Runny Reagan broke the spine of STAGFLATION by crashing the price of fuel.

We are hitched to the yoke of speculators who do absolutely nothing but sponge the wealth and profit of legions of hard working vassals. Quality of life and hope is not a gosh darnned slot machine for the maggots.

Thought this was the OT for a moment

durrelllrobert - 1-11-2014 at 05:07 PM

I had to scroll all the way up to make sure I was still on Today's posts

weebray - 1-11-2014 at 05:14 PM

Quote:
Originally posted by DavidE

Runny Reagan broke the spine of STAGFLATION by crashing the price of fuel.


THIS JUST IN! **Eisenhower still dead!**

Barry A. - 1-11-2014 at 05:15 PM

I heard on CNBC yesterday from some VERY respected big-time investors that much of the "smart money" is flowing into Mexico as their economic future is relatively rosy, in their opinion.

You never really know who is telling the truth. I will go with the "smart money" as it has always paid off big-time over-all.

Barry

bacquito - 1-12-2014 at 11:09 AM

Quote:
Originally posted by Barry A.
I heard on CNBC yesterday from some VERY respected big-time investors that much of the "smart money" is flowing into Mexico as their economic future is relatively rosy, in their opinion.

You never really know who is telling the truth. I will go with the "smart money" as it has always paid off big-time over-all.

Barry


Yes Barry, I have heard the same reports on the BBC.

bacquito - 1-12-2014 at 11:24 AM

Quote:
Originally posted by DavidE
Whazziz, I'm reading in the Wall Street Journal, The Economist, and other supposedly responsible-journalism publications?

The USA is going to become a major oil EXPORTER during 2015? Enough crude oil reserves to last 3,000 years? Australia has enough "Frackable Shale" to feed China's growth until the 25th century?

What's going to happen to Mexico? Thirty five percent of its income is from crude oil.

Any nerds out there that can shed light on this? Boy if this is factual info Mexico is in for one hell of a rough ride. When Cuba liberalizes its economy, it will devastate Cancun. Hoo Boy...


What is going to happen to the Natural Gas plant north of Ensenada (Sempra) and next to the Golf Club?

I think the best thing for Mexico to do is permit outside investors into their oil fields and hope they can extract oil from deep in the Golf of Mexico. Granted it looks like oil/gas could get mighty cheap (I hope). I remember $.20/gal. gas. On my Dad's Tuna boat diesal was so cheap it was considered a misc. espense.
The oil embargo of the '70s changed all that. I hope gas/oil gets so cheap that Saudia Arabia and others in the middle east revert back to camels as their means of transportation.
It was a very stressful time in the '70s!

bajarich - 1-12-2014 at 04:46 PM

There was an actual shortage of gas back in the '70's when they cut refinery production to drive the price up. I have seen no sign of gas lines since then, indicating that there has been plenty of supply. It's just that the price has been held high by a shortage of competition as the oil companies have merged. That is how supply and demand really works. They've got it and you have to pay their price because they will not undercut each other. Viva competition!!! It will work in Mexico as well as the US. Let Pemex enter the US market, the more the merrier!

Jonno_aus - 1-12-2014 at 07:16 PM

Petrol (gas) and diesel in Australia is around $6.00 a gallon. Could be worse...


Edit : that was in AUS. Once you convert it to USD, it works out only $5.30-$5.40 USD or something like that. Not so bad. :rolleyes:



[Edited on 1-13-2014 by Jonno_aus]

DavidE - 1-13-2014 at 12:21 PM

Yeah I remember all THE SMART MONEY THAT HEADED to Mexico 1992 to 21 December 1994! Go back and read these articles. They are clones of the garbage which is being printed today. The authors of this rubbish make MONEY on investments, or through advertisements. Solidaridad! Carlos Salinas de Gotari, the economic miracle whiz bang technocrat of the 90's!

Sorry of some of you have short term memory issues that force you to go back to the first posting and see where you should have been. Mexico is teetering on a financial precipice and it isn't going to take much for it to slip off. The real issue is antiquated industrial and workforce habits and customs that make the country DIS-competitive with other regionally viable competitors. Nicaragua, and Panama are set to change their laws regarding investments. Mexico's sole strength is it's proximity to the USA and investiture of auto manufacturing and machinery production. Few laws regarding lead smelting and worker safety for Pb (that's lead) for battery manufacturing. When Nicaragua comes up with a workforce and government that charges half the production price that Mexico does, the stampede is going to be heard all the way to Wall Street. Cuba said it is already poised to offer gaming, entertainment shows, hotel rooms, and resort fees that will cost the consumer LESS THAN HALF of the fees now found in resort Mexico. 140 miles from Miami. Passenger boats, automobile ferries.

The roar you will here will be Mexico's wealthy sending dollars out of the country. Oops wait a minute, the pundits said that couldn't possibly happen in 1994. Sorry! My bad!

Mexitron - 1-13-2014 at 12:47 PM

Quote:
Originally posted by Hook


We actually could have been an exporter much earlier except for treaties we have with countries to buy a specified amount of crude. Oh yeah, and oil companies are also banned from exporting oil. There is talk of changing that.



Hook---I was under the impression we were selling Alaskan crude to Japan.

monoloco - 1-13-2014 at 12:58 PM

" Cuba said it is already poised to offer gaming, entertainment shows, hotel rooms, and resort fees that will cost the consumer LESS THAN HALF of the fees now found in resort Mexico. 140 miles from Miami. Passenger boats, automobile ferries."

Cuba's certainly no bargain for tourists now, I kind of doubt that they are going to slash prices there in the future. I wouldn't worry too much about Nicaragua either, the government and the infrastructure there makes Mexico look like Switzerland, as for Panama, the wages are already too high there to be competitive with Mexico in manufacturing. I do agree that Mexico doesn't look like the safest place to invest give the crime and security issues.

Barry A. - 1-13-2014 at 01:29 PM

Quote:
Originally posted by DavidE
Yeah I remember all THE SMART MONEY THAT HEADED to Mexico 1992 to 21 December 1994! Go back and read these articles. They are clones of the garbage which is being printed today. The authors of this rubbish make MONEY on investments, or through advertisements. Solidaridad! Carlos Salinas de Gotari, the economic miracle whiz bang technocrat of the 90's!

Sorry of some of you have short term memory issues that force you to go back to the first posting and see where you should have been. Mexico is teetering on a financial precipice and it isn't going to take much for it to slip off. The real issue is antiquated industrial and workforce habits and customs that make the country DIS-competitive with other regionally viable competitors. Nicaragua, and Panama are set to change their laws regarding investments. Mexico's sole strength is it's proximity to the USA and investiture of auto manufacturing and machinery production. Few laws regarding lead smelting and worker safety for Pb (that's lead) for battery manufacturing. When Nicaragua comes up with a workforce and government that charges half the production price that Mexico does, the stampede is going to be heard all the way to Wall Street. Cuba said it is already poised to offer gaming, entertainment shows, hotel rooms, and resort fees that will cost the consumer LESS THAN HALF of the fees now found in resort Mexico. 140 miles from Miami. Passenger boats, automobile ferries.

The roar you will here will be Mexico's wealthy sending dollars out of the country. Oops wait a minute, the pundits said that couldn't possibly happen in 1994. Sorry! My bad!


Billionair Ken Fisher (Investments) only makes increasing profits when his managed portfolios make increasing profits. Right now he is 67% invested in the USA in his portfolios----the rest overseas (25 different Countries). I notice that he has NOTHING invested in Latin America at this time which is rather unusual for him. Zero investments in Mexico!!! So he must not buy what these "Investment talking heads" are saying about Mexico and Latin America-----at least not yet.

This would support what DavidE is saying above.

Barry

DavidE - 1-13-2014 at 01:37 PM

The successors to Fidel/Raul et al have already hinted they had to face liberalization of the economy or go the way of North Korea. Cuba taxes the hell out of hotel rooms now, and the import restrictions make everything from toothpaste to toilet paper cruelly expensive.

When US industry moves in without a pandora's box of corruption they can transform vast areas outside cities into manufacturing powerhouses. Daniel Ortega's faction may see the handwriting on the wall.

It's not like Cummins, Caterpillar, and the auto companies are going to abandon Mexico. They aren't. But economics dictates a country has to export more than they import. Been to a supermarket or hardware store lately? Besides cement, gravel and rebar what do you see made in Mexico? Nestle profits go to Switzerland, Bayer, BMW, and Siemens dinero goes to Germany. Ford Coca-Cola? Sony? Samsung? Made in China? How many Mexican made medicines are imported into the USA? None, or less...

Forensic economics is a specialized field. "Why I cannot be overdrawn! I still have checks left!" is very reminiscent of a country that purloined investments and is living hand to mouth. The proof is in the pudding, and unless USA oil producers sign illegal contracts to import Mexican oil while exporting USA fracked product, the handwriting is on the wall. Let's see how 2014 plays out.

Oh yeah, exactly WHERE do you think forklift pallets of US drug banknotes get laundered, hmmmmm? Some street corner huckster mercado negro deep in the burbs of Mexico? This is a scandal ripe to break.

It would be safer to build a liquid metal cooled nuclear reactor just north of Ensenada than to believe Mexico's "prosperity" is inevitable and perpetual.