Living with Oil: Promises, Peaks, and Declines on Mexico’s Gulf Coast

Conclusion: Post-Peak Futures

Cantarell was born out of apocalypse, its rich oil deposits left in the destructive aftermath of an asteroid hitting the Yucatán Peninsula 65 million years ago. The ancient impact event caused an “armageddon”—setting off wildfires and tsunamis, darkening skies with soot and ash, and causing storms of acid rain. It was enough to kill off the dinosaurs, explains Walter Alvarez in his book T. Rex and the Crater of Doom (1997). As early as the 1950s, oil prospectors surveying the peninsula’s northwest coast began to detect the result: a 125-mile-wide impact crater known as Chicxulub. More recently, geologists have determined that the seismic shaking and tsunami waves produced by the impact caused the Yucatán platform to slump into the Gulf, leaving trapped underwater layers of carbon-rich material (Grajales-Nishimura et al. 2000). From booming inception to trickling demise, Cantarell’s ancient history and modern fate are a heritage of apocalypse. But Mexico’s current oil crisis is far from the end of days imagined by Mad Max scenarios or peak-oil “doomers.” The peak of Cantarell is not the end of oil for Mexico. The significant decline of one of the world’s supergiants is a red flag that Mexico’s energy sector now stands at a crossroads. On the one hand, the country can continue to maintain pre-peak production levels by opening Pemex to the private sector and engaging in riskier and more expensive drilling efforts. On the other hand, an alternative energy policy may be pursued, one that reduces the energy sector’s overall reliance on fossil fuels and scales down the national budget’s dependence on oil rents. Current efforts to maintain production demonstrate a drive to produce at any price—even if the price is compromised resource sovereignty and environmental protection . The pressure to maintain high levels of production without a CONCLUSION Post-Peak Futures 260 Conclusion: Post-Peak Futures concomitant replacement of reserves certainly means a shortened oil future for Mexico, the logic of which pro-privatization arguments for rationality and efficiency in the oil industry take no account. Geopolitics and the peculiarities of markets have, at least in the short term, mitigated the effects of the decline. The lower volume of oil has been offset by continued reliance on Mexican exports, which have brought higher prices. In the global cartography of oil supply, Mexico remains a safe and secure source. This “other Gulf” oil (much closer to home than the Persian Gulf in the Middle East) is preferable for the insatiable U.S. market. Meanwhile, net exporters have benefited from the recent historic highs in oil prices in the international oil market. As a result , Mexico’s oil rents in the five years after the peak of Cantarell have increased while actual volumes have decreased (Morales 2011: 10). Even if Mexico’s energy crisis does not promise a sudden apocalypse, there remains some urgency to the nation’s energy problems, exacerbated by its vulnerability to the combined pressures of declining production , unstable market prices, rising domestic consumption, and a chronically low refining capacity that increases the nation’s dependence on imported consumer products. Given that Mexico’s oil crisis stems from the energy sector’s imbalance tipped toward nonrenewable hydrocarbons , new national policy is looking toward renewable alternatives in the energy mix. Currently, more than three-quarters of the nation’s energy generation comes from fossil fuels. Mexico is the highest emitter of greenhouse gases in Latin America and the thirteenth highest in the world. Legislation including the 2008 renewable energy law passed concurrently with the Calderón energy reforms is designed to reduce domestic consumption of fossil fuels and move the nation toward 35 percent of all energy production deriving from renewable energy sources by 2024 (Diario Oficial 2008b). Renewable alternatives will help the country back its strong demonstrated interest in promoting the international agenda on climate change. Still, renewables are far from a panacea and not quite politically neutral. Debates over the promotion and provision of renewables call attention to the politics of resource sovereignty in energy realms beyond hydrocarbons, as critics saw renewables as another path for multinationals to enter Mexico’s decreasingly protected energy sector. As the domestic and global energy landscape grows and changes, what are the prospects for a post-peak future in Mexico? The answer begs the question of perspective. From inside the centers of decision making, whether in the offices of...