One of the (many) things that has puzzled me about the violence and anti-drug smuggling campaign in Mexico is why have the Mexican based drug production and smuggling networks not counter-attacked the clearest vulnerability of the Mexican state --- its cash flow?
Mexico's government receives about a third of its income from oil production and exports. PEMEX, the state oil firm, is in a production death spiral as depletion is rapidly outpacing new finds. Cantarell is Mexico's biggest oil field. Earlier in the decade, Cantarell was able to produce 2 million barrels of oil per day. Now it is producing less than 700,000 barrels per day. New discoveries and increased production at other fields have not made up for the drop of 1.3 million barrels per day. The Mexican pipeline and distribution network is fairly brittle as it does not have significant inter-connectivity to divert flows between disruptions nor is the network particulary dense. Additionally, Mexican oil pipelines flow through cartel dominated territory and urban areas.
In short, it is a natural economic chokepoint on the Mexican government's ability to function and finance itself.
So I have been surprised that there has not been a concentrated campaign attacking the pipeline system by the cartels as a means of both diverting pressure by forcing Army units to patrol endless miles of pipelines, as well as placing the Mexican government in a financial vise as revenues would decrease as security expenditures sky-rocket.
However, I may have been a step or two too far on the Nigerian analogy. MEND not only blows up pipelines for political ends, but they also smuggle a massive amount of oil from those pipelines to neighboring nations' refineries. The last is what appears to be the case for the Mexican smuggling groups --- they are utilizing their other black-market smuggling skills and have engaged in domain growth and taken up oil smuggling into the US as CBS News reports:
U.S. law enforcement agencies will unveil details of an investigation into smuggling Mexican oil into the United States, CBS News correspondent Peter Maer reports.
The U.S. will return up to $2.4 million to the Mexican government as a result of a year-long probe into a scheme in which stolen Mexican oil products were funneled into the United States
Why hit the pipelines when you can make money by tapping them?
Probably the drug cartel owners are like the Japanese Yakuza. In their own minds they are nationalists. Mini dictator wanna-be's. Damaging Mexico's economy would wreck their delusional Robin Hood image.
ReplyDeleteNigerians SHOULD wreck the pipelines. It's the worlds 5th largest oil exporter and has been an exporter since 1955 but Shell and it's major shareholder Queen Beatrice of The Netherlands have been gouging that country into poverty through the puppet kleptocracy. With the army ion on the racket the people have no viable option but revolt. Unfortunately the BBC et. al. have a tendency to misreport anyone who stands up to the "democratic" Junta.
The cartels are not revolutionaries. The bloodshed is over turf and generally defensive. They are criminals running a criminal enterprise under attack by the military. Many of them are the political and police leadership.
ReplyDeleteThey are narrow minded, vicious, greed driven individuals to whom the petroleum industry would only be relevant as a source of income. Rumors today that they are stealing and smuggling oil out of the country is the only connection they would have with that industry.
Again. Enough of these silly articles! They are not revolutionaries. This fact should "explain" all of the things they do not do.