Mexico - Only 7 Years of Oil Left

This week oil futures have hit a new high of over $78 a barrel and now the prices have swung down nearly 8 dollars to around $70 a barrel. What do these huge swings say exactly? The answer is volatility. Despite what skeptics say, notice that the oil is staggering around the high end like a drunk on the edge of a cliff. The buffer of oil stocks that once absorbed these crazy price fluctuations is gone and it doesn't appear that things will get any better.

Petroleos Mexicanos (PEMEX) issued a press release a little over a week ago that plainly stated Mexico would be out of oil in 7 years or less. This isn't a peak and decline scenario, it's 'E' on the tank level guage scenario.

Mexico, Jul 27 (Prensa Latina) Petroleos Mexicanos (PEMEX) announced that oil reserves may run out in seven years.

"Supplies of this economically exploitable resource are running out,"...Carlos Ramirez, PEMEX spokesman as saying that if necessary investments were made, this would provide another 2.9 more years...difficult moments due to a reduction of production in Cantareli, the main oil field in the country.

Do you think that companies will pump billions of dollars in investments into Mexico's fields to squeeze another 2 and a half years out of it? Possibly if the price of oil gets high enough, but don't bet on it.

Why should we worry about poor little Mexico running out of oil. Probably because they're our second largest import country. Look past all the hype you hear about Saudi Arabian oil and see that we import more oil from Mexico than Saudi Arabia. Mexico accounts for about 15% of our imports and in 7 years or less you can kiss the supply bye-bye. We can probably eat the loss if we stop sending gasoline to a couple of large states. Outside that scenario, get ready for the price to go up to over $100 a barrel within a couple of years. Invest in oil futures now so you'll have enough to buy gas when the price sky-rockets.

[edit on 10-8-2007 by dbates]

i've already started pondering what i would do in that situation.

stay overnight at work here and there to save the trip.
get a hobby beater car and work on making it petrol-free.
get ready to make a treadmill/bike into a generator to save on power. i could use the exercise anyway =)
start my own garden so i don't have to run to the store and pay inflated prices due to industry expenses.

if anyone has any more ideas i'd love to hear them.

i can't move closer to my job because it's not really in the best of areas. i can only imagine it declining in that type of situation.

Originally posted by an0maly33
if anyone has any more ideas i'd love to hear them.

Believe it or not there's an entire forum called Survival Techniques that's dedicated to this exact thing. The Peak Oil forum is more of a when than a how-to forum so you won't see too much of that discussion here.

I think you're partly right. We should at least look at alternatives to cut corners and save money. I don't believe that oil is going to be gone *poof*, but that the production will gradually decline and cause ever-increasing prices. What we're seeing is situations like the Cantarell Field (One of the top 5 oil fields in the world) where the production is slipping away. One by one these giant fields will go out like the flood-lights at a football stadium, leaving only the lesser lights of concession stands and walk-way lighting to carry on. We'll still be able to do what we did before, but it will cost us a lot more.

I'm sure at least one Peak-oil denier will show up and talk about all the new technologies and yet to be discovered oil fields. It's all window dressing in store that's running out of supplies. Peak oil deniers are hyping the window dressing and ignoring the store shelves that get more and more empty each year. It's as if they were running a store that claimed more marketing and the search for new suppliers would save them, while an ever-growing supply of customers keeps pulling merchandise off the shelves at a steadily incresing rate. It's called denial.

Where are the new supplies of oil? Where's the oil field that will replace the Cantarell in Mexico? As for new technology all it does it help us use up the remaining oil faster and faster shortning the amount of time we have left.

by 1981 the Cantarell complex was producing 1.16 million barrels (180,000m³) per day. However, the production rate dropped to 1 million barrels (160,000 m³) per day in 1995. The nitrogen injection project started operating in 2000, and it increased the production rate to 1.6 million barrel/d (250,000 m³/d), to 1.9 million barrel/d (300,000 m³/d) in 2002 and to 2.1 million barrel/d (330,000 m³/d) of output in 2003, which ranks Cantarell the second fastest producing oil field in the world behind Ghawar Field in Saudi Arabia.[3]

This is the critics answer to peak oil. New technologies will save us, but let's look at what actually happened. By 2003 the Cantarell went from being a declining field to the second best in the world. Hurray for technology. All we really managed to do was hurry up the depletion of this great oil field. By 2004 it was obvious that the Cantarell was declining despite their best efforts. By the end of this decade it's doubtful that Mexico will even export any oil. What's left will be used internally.

By 2008 it is estimated that Cantarell will only produce 1 million barrel/d (160,000 m³/d) as it continues to decline. This rapid decline is postulated to be a result of production enhancement techniques causing faster oil extraction at the expense of field longevity.

We'll probably see the same result from Saudi Arabia within a year or two at the rate their going. Just like Mexico and the giant Cantarell, Saudi Arabia depends on the the giant Ghawar Field for over 60% of it's oil exports. In this giant field we are seeing the same symptoms that Mexico had. Decling production was propped up with new technology yet all they are succeeding in doing is bringing the end of this field to a closer date.

"Saudi Aramco is injecting a staggering 7 million barrels of sea water per day back into Ghawar, the world's largest oilfield, in order to prop up pressure. It accounts for 30% of Saudi oil reserves and up to 70% of daily output." "Doubts grow about Saudi As Global Swing Producer," Aberdeen Press & Journal Energy, April 5, 2004, p. 15
article

If they are pumping in 7 million barrels of sea-water a day and only getting out 5 million barrels of oil you don't have to be a genius to see that this field is about to go belly-up too.

[edit on 10-8-2007 by dbates]

Let mexico run out oil, there is plenty in canada.
I am more concern about the lack of refineries being built, there is a shortage of refining capacity that is why prices are high. Why is Richard Branson the Uk billionaire wanting to build a refinery!

OSAAMA

Just re-visiting this to see if the previous predictions are still holding true. A recent article in the New York Times that cites new reports from the James A. Baker III Institute for Public Policy at Rice University indicates that this is just as bad or worse than they expected it to be. The problem is compounded greatly by the fact that the Mexican government takes 60% of the revenue from their oil companies to pay for government expenses. PMEX, the state oil company, doesn't have the funds to invest in more advanced oil extraction measures ensuring that the oil production will decline at an even faster rate than it needs to. Internal oil consumption was up again as well.

Production by Pemex, the national oil company, has fallen 25 percent from its peak in 2004, while internal demand has climbed, sharply curtailing the amount of crude available for export. The drop in supply is largely due to steep declines at Cantarell, an aging super-giant field formerly responsible for the bulk of Mexico’s oil output.

Mexico Oil Exports Could End Within Decade, Report Warns - nytimes.com

We can try to find a new source in the United States for imports but I wonder how Mexico will deal with losing 1/3 (one-third) of its national budget and income? This can't be good for anyone.