AMLO outside the Senate, Monday, October 26

Worker's Party Deputy Mario di Costanzo Tears Apart Carstens Economic Plan

Wednesday, April 23, 2008

Oaxaca's Slow Burn

While I have found it easy to begin this blog and post about national issues in Mexico - the war for petroleum principally up to this point - I have found it much harder to speak about Oaxaca, the city where I have lived for seven years. Perhaps I am too close to it, perhaps I feel that there is nothing I can say that has not already been and is not already being said better elsewhere - or perhaps it is that I share with local residents a taste of the same sense of desperation and discouragement born of being long at odds (and at long odds) with an oppressive regime that clings nominally to power in the face of widespread repudiation. "We've marched and marched," a Oaxacan friend told me, "and what has it gotten us? Nothing."

At first glance, it does seem that way. If anything, things seem much, much worse. Trucks armed with machine gun-toting cops do rounds on the streets, both downtown and in the outlying colonias. Relatives of former governors are kidnapped at high noon from prominent downtown restaurants. Top-level police officers are shot, also in broad daylight and also in very public places. Corpses are deposited in plastic right outside the State Judiciary Offices, or wrapped taco-style in a blanket and left by the house of the Director of Public "Security." Low-intensity warfare continues, picking off a person here, a person there, not enough to generate signficant media coverage: two Triqui Indians from the town of San Juan Copala, members of the community radio station "The Voice that Breaks the Silence" were the latest victims this past April 7th, ambushed and killed as they were making their way to Oaxaca City to attend a statewide conference on, ironically, the defense of the rights of the peoples of Oaxaca.

What has the conflict of 2006 gotten us? On one hand, an overt police state. In his book on the Oaxaca conflict, Professor Victor Raúl Martinez Vásquez from the Autonomous University of Benito Juarez, the State's public university, makes use of Edward Gibson's term "subnational authoritarism" to describe the example of Oaxaca as a state with a retrograde authoritarian regime in the midst of a (supposedly) democratizing national scene. While accurate, the term does not go far enough, as it is insufficiently descriptive of the desperate acts of state-sponsored terrorism that Governor Ulisses Ruíz and his cabal have resorted to in order to try to keep a lid on Oaxaca's slow burn. On the other hand, however, the fact that the trappings of the police state have become so overt shows just how tenuous Ruiz's hold on power truly is. What is truly moving Oaxaca now is not overweaning power but its exact opposite - a power vacuum, the child of governing institutions that have lost all face. Nature abhorring a vacuum, it of course finds itself being filled - by paramilitary operations and narcotrafico, to name two. Who knows if the police have been killed by disgruntled citizens, drug lords or by the government itself, settling old scores or trying to silence people who know too much? Above the "who" question lies the salient fact that no amount of "Nights of Lights" downtown can outshine: in Oaxaca there is no "gobernabilidad", no governability, no more real government (besides the pro forma one) than there has been since it essentially ceased functioning in June of 2006.

There is another force filling the vacuum. Also under the radar and invisible to most of the mainstream media, Oaxacans are organizing. They are organizing in ways that do not match traditional models of top-down leadership with media-hogging leaders, or even what was seen here two years ago. Going, in fact, beyond the APPO experience of 2006, they are learning from both the successes (non-hierarchical organization, cross-class community involvement, increased public awareness, lack of dependence on traditional political parties, decision-making by consensus,and just plain balls) and the failures (succeptibility to infiltration and actions that alientated public opinion, such as graffitti and seizing private property, an insufficient ability to explain their cause clearly and cogently to people who did not by nature sympathize), and are quietly laying the groundwork for the next chaper of this social movement, one that will see them pressing their demands with more order and discipline, perhaps, with fewer blood-rushing confrontations in the streets, but one with no less determination and commitment to achieving their ends: the end of the Ruíz junta, a release of all political prisoners, and a new state constitution that enshrines the right to initiative and referendum, just to name a few. And I would add, the urgent formation of a Truth and Reconciliation Commission, similar to the ones held in South Africa and Chile, that would clarify the crimes of the past, identify those responsible, and set the stage for both prosecuting and at the same time overcoming. The numberless dead and disappeared from the conflict, who my next-door neighbor contends she can sense lamenting in the night winds blowing across the Central Valleys from Ejutla to Etla to Tlacolula, demand it.

Postscript: 7:00 PM: Just put Google Ads on this blog to see how they would work, and 3 of the first 4 ads that came up were about...investing in oil! The crawler is clearly picking up mechanically on all of the references to oil in previous posts. One of the ads is for investment opportunities in Malaysia. One can only wonder if there is a site out there called "Deconstructing Malaysia" where the Google Ads are advertising new oil opportunities in Mexico. God help us.

Post-postscript, following morning: Looks like there is, in fact, a way to filter out undesirable or inappropriate ads - let's see if I can get that to work.

Sunday, April 13, 2008

López Obrador's Speech in the Zocalo

López Obrador's speech at today's assembly in the Zócalo in Mexico City summed up the fundamental tenets of the nation's burgeoning civil resistance movement against oil privatization, so I thought it would be useful to present a rough translation of it here:

"My friends. Many thanks once again for your participation. The call for this assembly was made just three days ago, and here we all are.

"Our movement is advancing with serenity and optimism, because time has shown that we are in the right. This movement, made up of free and conscious men and women, has on its side the indisputable fact that we are speaking the truth as opposed to an adversary who has opted for the hackneyed road of simulation and deceit.

"In this battle being fought in defense of our oil, we have little by little been exposing those who, moved by greed and the profit motive, wish to strip the people of Mexico of its heritage; the heritage of this generation and the heritage of future generations, of our children.

"We were the first to denounce the plan to mug the Nation that was being hatched. We said very clearly that the intention was to privatize the oil industry and we called upon those who we consider to be the principal promotors of this felony and treason against the Nation to debate it.

"None of them responded openly. As always, they had their followers speak for them and launched instead another of their media campaigns against us.

"They accused us of hallucinating, of seeing ghosts, of tilting against windmills, of looking for notoriety for political reasons. 'What privatization?' they exclaimed. 'What reform? What initiative?'

"When we made it known that they were preparing a video of the so-called 'hidden treasure in the deep sea', first they denied it and then, cynically, put it on the air in an attempt to thus trick the people of Mexico.

"From that moment on, they started using euphemisms in an attempt to hide the privatization they were hatching, by using a series of terms and phrases, those past and those yet to come.

"They talked of association, alliances, accompaniment, opening-up, manufacturing, permits, risk contracts, multiple-services contracts, third-party contracts, widened-service contracts, operating autonomy, anything that would help them hide their genuine intentions.

"Only later did they fully take off the mask and stop beating around the bush. Last Wednesday, the usurping President sent his energy-reform initative to the Senate, and his desire to privatize the totality of the national oil industry is now undeniable.

"What was clear before now becamse crystal-clear: their wish to consummate one of the biggest affronts that the people of Mexico have suffered in their entire history.

"This explains Calderón's nervousness when he appeared on national television to talk about his proposal. This is why he was sweating and so unsure of himself. Inside he knew that he is very close to the role played, in his time, by Antonio López de Santa Anna.

"What do these reforms translate into and really mean? What they mean is that they want to modify the secondary laws in violation of both the letter and spirit of Article 27 of the Constitution.

"They propose to grant permits to foreign companies to privatize the exploration, perforation, refining, petrochemistry, transportation, ducts and storage of oil products, leaving Pemex as a simple provider of crude oil.
"They wish to eliminate the possibility of using all of the potential of our energy sector to carry out the independent economic development our country needs.

"They wish to condemn us to only selling raw material, without ever being able to use it to produce gasoline, petro-chemical products and electrical energy for ourselves and in this way industrialize Mexico, create jobs, strengthen our internal market, reduce prices for the consumers of natural gas, electricity, gasoline and, especially, raise our people's levels of well-being.

"And if that weren't enough, they propose a legal framework that not only grants rights to foreign companies and requires us to submit to international courts, it allows the highest governmental functionaries to wield a free hand in making lucrative business deals, raising corruption in Pemex to a whole other level.

"For example, it is proposed that there not be public bidding, that contracts for projects and services be assigned directly. That is to say, Calderón, Mouriño, Elías Ayub and others will be able to keep feeding themselves with a very large spoon.

"Here I just wish to remind us all of the following irrefutable facts, which I enumerate:

"1. The first contract for multiple services which was granted, in violation of the Constitution, to a foreign company was made when Felipe Calderón was the Secretary of Energy and president of the Council of Administration for Pemex. On November 14th, 2003, without any other company participating in the bidding, Repsol of Spain was awarded a contract for $2 billion, 437 million dollars to exploit natural gas reserves in the Cuenca de Burgos. This contract is currently, by the way, in litigation in the courts for unconstitutionality.

"2. Recently, the Federal Bureau of Audits denounced the damage to Pemex's finances when Calderón was Secretary of Energy and president of the Council of Administration for Pemex, when they made a low-price sale in bonds of the stocks that Pemex holds in Repsol of Spain. Months later, those stocks increased in value, provoking a loss for Pemex of $655 million dollars.

"3. This plainly demonstrates that Juan Camilo Mouriño, current Government Secretary in the usurping government, is a confessed influence-trafficker: he has cynically accepted signing contracts with Pemex to the benefit of his family's business. And we must point out here - it is important to call a spade a spade - that in the face of such a flagrant case of impunity, our detractors on the radio and television, who are constantly screeching about us, have been as quiet as mummies.

"4. We also have proof that the contract awarded by the Federal Electricity Commission to Repsol of Spain, without their being any other bids, for $21 billion 650 million dollars for the purchase of gas from Peru, the profits for which will be $15 billion dollars, was authorized from Los Pinos [the Presidential residence], in 2007, when Juan Camilo Mouriño was the coordinator of the President's Office.

"5. And if all that weren't enough, we are also in possession of proof that even before the reform bill was sent to the Senate and Calderón began talking about the oil bonds that the public will supposedly be able to acquire, before all that, bankers and financial speculators were already making the details known confidencially to their main friends in the trade. That is to say, ahead of time and with privileged information, bankers and financial speculators were already rubbing their hands in preparation.

"As is clear, behind and ahead of the thirst for privatization is the voracity of a minority of corrupt politicians along with a handful of national tycoons in association with foreign companies.

"This is why we have come out against oil privatization. This explains why the peaceful civil resistance has come into being. Fortunately, we were able to see what was coming and made good use of our time, not only to denounce this attempt at dispossession but also to organize ourselves in order to prevent it.

"Last Thursday, in a coordinated, unified and simultaneous manner, the actions of peaceful civil resistance began.

"The first measure was taken by our Senators who occupied the rostrum of the Senate. A round of applause to all of the Senators.

"And immediately following the members of Congress from the Broad Progressive Front did the same in their chamber in support of their colleagues. A round of applause for our Members of Congress.

"All of this was accompanied by the extraordinary, generous and exemplary action of the women's brigades. A round of applause for the women.

"The woman brigadeers were themselves supported by the men who make up the brigades from Mexico City and the surrounding metropolitan area in the State of Mexico.

"We have depended upon the solidarity of many millions of Mexicans, free and conscious women and men. A round of applause for everyone in Mexico who has participated in this movement, for all of the progressive sectors.

"This is why they haven't been able to destroy us politically. Let me repeat here the words of President Juárez: 'With the people, everything; without the people, nothing.' This is where our strength lies.

"With the first actions of peaceful civil resistance and with the support of many, including those with whom we have some differences but with whom we are in full agreement in the defense of our oil, we have succeeded in casting away the risk of a surprise attack in the legislature.

"And now this bill is not going to get snuck through in the early-morning hours!

"Let us not forget, and let this help to explain why we are taking the actions we are. What do they want? They want to approve this on the fast track, like they did with the ISSSTE [Pension] Law. They want to make a deal among the leadership and sneak through something as fundamental and vital as the oil issue is.

"But the opportune action of our legislators and the brigades prevented it. And it is practically a fact that they will not be able to approve any give-away iniative in the current session, which ends on April 30th. Not one step forward, my friends.

"However, we cannot become complacent. We know how our adversaries think and act, but we especially know how much greed they possess, their hunger for money.

"Let me make it clear what our principal deamand is. What we want is something that is completely rational, peaceful and possible. I repeat: rational, peaceful and possible.

"What we are demanding is the summoning of a national debate. We are demanding the summoning of a national, plural and democratic debate with the participation of all of society. An unrushed, non-simulated debate, open to everyone who has something to say, with the understanding that oil is the property of every Mexican, and thus, everyone has the right to express their opinion on it.

"It may be that the Senators and Congresspeople have the final word, but the people of Mexico will always have the first word.

"We cannot, in any way and for any reason, accept that a few wish to rob the Mexicans of their heritage, and much less that this robbing take place behind their backs.

"My friends: as long as there is no response to our request for a broad, national debate on oil and what it implies as regards sovereignty, history, legality, corruption, development, well-being and social peace, we will continue with the peaceful civil resistance.

"This coming Tuesday we are going to be attentive to what happens in the Senate Chamber; upon that depends the actions that we will be taking. All of us are in peaceful civil resistance, all of us attentive and alert.

"I also propose that all of the state brigades, women and men, as well as those who wish to voluntarily join in, that we dedicate ourselves to informing the people of Mexico, letting them know our reasons and the grave consequences privatization of the oil industry would have.

"For this reason, starting this week, we will be distributing a folder of basic information which will serve as a tool for brigade members and citizens in general to generate consciousness-raising house by house, neighborhood by neighborhood, district by district, town by town.

"Are we going to do it? (The people respond yes.)

"Faced with a closed media, each one of us will become a means of communication. Faced with deceit and manipulation, we will take charge of opening a breach for the truth and penetrating the most distant corners of our Nation.

"I further propose, because the circumstances demand it, that next Sunday we hold informational assemblies in all of the main public squares in the country. These meetings will be organized by the National Committee in Defense of Oil and the state Commitees in Defense of Oil.

"I make a call once again, friends, to not allow yourselves to be provoked. Not one broken window, not one throwing of a stone. Only those who are not in the right need to make use of force. They are the violent ones, not us. This movement has been, is and will continue to be peaceful.

"My friends: as we know - we have said it several times here - and as we predicted, the media campaign against us has intensified since last Thursday. It is clear and out in the open, in the majority of the media, with honorable exceptions. They have hit us with everything.

"With great hypocrisy, using double-speak and dual morality, with the hypocrisy that is their trademark, they have dedicated themselves to throwing up their hands in horror and attacking and offending us in a vulgar manner.

"In midst of all this clamor, what is that one hears, what do they allege? They say that our legislators have hijacked Congress.

"But we ask this question: is it possible for a Senator or Congressperson to stand there with their arms crossed while the Constitution, which they have taken an oath to protect and defend, is violated?

"Is it not the powerful, the tycoons of this country, those who have hijacked the institutions for their personal benefit?

"Have they not converted the government of this Republic into a committee at the service of the few?

"With what moral authority do they speak of democracy, when they themselves have been publicly recognizing that they stole the Presidency of the Republic 'whatever it took?'

"They say we have to follow legal procedures, but they deliberately overlook that the majority of the ministers of the Supreme Court of Justice do nothing more than cover up corrupt politicians and white-collar delinquents.

"Of course we know what the legal procedures are when faced with a violation of the Constitution; we have very good Constitutional lawyers.

"Of course we can go to the Court and lodge an appeal on the grounds of unconstitutionality. But we are not naive. Unfortunately, that institution's only role is to put a legal stamp on the looting committed by the powerful.

"In the majority of the media, especially on radio and television, the presenters are also vociferating about our hijacking Congress.

"I ask them: are they not hijackers of the word, of information, the most tenacious manipulators of public opinion?
"Right from this spot let me tell them that their campaigns of hate and political lynching will not stop us.

"They must know what nothing and no one will make us turn into accomplices of the mugging of the people and of the Nation.

"This movement - let this be known, let it be heard near and far - this movement is made up of dignified women and men who do not size themselves up by the measuring stick of traditional politics, but of history.

"In the politics of old, where all interests counted except the public interest, women and men in public life, politicians, had to adjust to the rules of the game. They could not make full exercise of their freedom, they could not think out loud, they were obligated to taking care of their image so as not affect their careers, and to submit to the codes of conduct demanded by established interests.

"Our case is different. For us, what is most important is to maintain our dignity and our principles. We are moved by ideals and convictions, not mere political interests.

"Here, I insist, it doesn't matter if we use up political capital if we succeed in preventing oil from being handed over to foreign companies.

"It doesn't matter if we use up political capital if we succeed in our main goal, that our oil not be handed over to foreign companies.

"As opposed to the right wing, which dehumanizes everything, and in its pursuit of material benefit acts with irresponsability and intolerance, we are at peace with our conscience.

"We know what love for our neighbor means. We know that love means fighting for others and respecting differences.

"And we also know that peace is the fruit of justice and freedom. We know that snatching things away never brings about anything good. And it is precisely for this reason that we maintain that the looting of our oil will create an environment of insatisfaction, farse and frustration, making us live in constant risk of internal confrontation and threats of conflicts with foreign nations.

"In short, we are defending our oil because we want to live in peace.

"Friends: we are trying to create a new kind of politics, based in principles, moral values and respect for the people, where the common good prevails above private interests.

"Along the road to this new way of doing politics, we have had to confront authoritarian power, exerting a counterweight which provides us with moral authority and the support of the people.

"For example, in Congress, the legislators of the Broad Progressive Front do not have the quantitative power of the votes, but their defense of people's causes confers upon them an important moral, qualitative power: the power of veto, the power to oppose and, in the last resort, the right to carry out peaceful civil resistance when their arguments are not taken into consideration in the making of decisions that concern the people and the Nation.

"This counterweight consists, also, in not playing the system's game, that of the traditional politics that has lorded over our country for so long, where everything is resolved up above, in the upper echelons, without taking into account the feelings and needs of the majority.

"My friends: history teaches us that advances in justice, freedom, democracy and sovereignty have only come when the people, the workers, the farmers, the indigenous people, the students and the women have mobilized against national or foreign oppressors.

"Only the people can save the people, only the people can save the Nation.

"Let us continue to struggle together to defend our aspirations for freedom and justice for the people of Mexico."

Friday, April 11, 2008

Game On

After many months of veiled jabbing in the shadows, Mexico's battle for the future of its petroleum is now openly underway. In a nationally-televised address two nights ago, a sweating Felipe Calderón promised a land of milk and honey for all - more schools, more hospitals, chickens in every pot, and 100 peso ($10 dollar) bonds for each citizen, gee wow! - if the initiative clumsily delivered to Congress earlier the same day is passed. Although carefully avoiding open privatization, the proposed law would allow private investment to intervene in practically every stage of Pemex's operations, from transportation and storage to distribution and petrochemistry, private industry even being able to own its own ducts and other installations outright. It would expand the infamous "Contracts for Multiple Services" that have led to the privatizing in the shadows of 35% of Mexico's electricity production, legalizing this category of contracts while creating yet another: "Contracts for Expanded Services". Moreover, the law would dote Pemex with "autonomy" by creating a sort of Board of Directors to run the show, with ten of the fifteen members handpicked by...the President himself, thus neatly severing any possibility of real Congressional or public oversight while nominally providing the institution with "indpendence". Independence along the lines of the Federal Electoral Institute, that is. The only thing the initiative does not do is share Pemex's profits directly with the companies who would participate in all of these operations, but as the Repsol case clearly shows (see my April 8th post below), it is enough in Mexico to simply open the door, and before you know it, somebody's favorite company is getting no-competition contracts to do more expensively (factoring in kickbacks and price gouging) what was once done more cheaply and effectively by the much-demonized public sector. One can only imagine now, if oil is opened up, what the government's next spectacular contract will be: a $50 billion dollar contract for Repsol to import oil from Iran, perhaps, while building a plant for them to unload it, this time on the Atlantic, rather than the Pacific, coast.

Nevertheless, the fact that overt privatization was avoided allowed the PRI, in the name of the shadow President of the country, Senator Manlio Fabio Beltrones, to jump on board the project, contending that several of the provisions (presumably the "autonomy" for Pemex) that were included in the proposal had been originally generated by them. An ebullient Beltrones, in fact, was already predicting the day after the official proposal that it could be approved, with a change or two (letting Congress choose the Board of Directors instead of the President, one imagines), in the remaining two weeks of this Congressional session, a stunningly short period of time for a proposal of this magnitude to be debated and considered in full. Debate and consideration, however, is precisely what is not wanted, or, that is, a controlled and manipulated debate. The center-left FAP (Frente Amplo Progresista, or Broad Progressive Front) coalition of parties knew this. Fresh from their experience with ISSSTE pension reform, which was slipped through Congress Patriot-Act style last year al vapor, as they say in Spanish, the FAP insisted on an open, national debate, lasting for several months, which would give time for the public to weigh in in open (as opposed to orchestrated) hearings along with scientists and technical experts. And yeserday, seeing this basic demand going nowhere and the proposal heading directly towards Committees and then to the floor, they occupied the podiums of both Houses of Congress, stopping sessions in their tracks and closing Congress down. This triggered the civil-resistance brigades (see my first post) to kick into action, with a contigent of several thousand women (known as the "Adelitas" in honor of a revolutionary-era women's brigade) setting off for the Senate building, which they surrounded as close as the police blockade would let them. They remained until the evening at which point they were relieved by several of the men's brigades who spent the night. And the occupation continues to this hour: FAP congressmen inside the Congress, the brigades outside of it.

The mass media response to the taking of Congress was apoplectic. Dispensing with even the slight pretense of objectivity he usually offers up, Televisa anchorman Joaquín López-Dóriga, for example, was literally foaming at the mouth in a twenty-minute diatribe kicking off the nightly newscast about minorities hijacking democracy, coups d'état, and so on (oh, where were you in 2006, Joaquín?). The respect all of the mass media suddenly showed for the august debating chamber that is the Mexican Congress was truly heartwarming. Here is where proposals are debated and discussed. Here is where Congresspeople and Senators bring in all the experts, hold public hearings, gather expert information, debate and discuss, change their mind, go over the proposal word by word, and, above all, represent the people. Deals are never made in backrooms, the parties never dictate how their members are to vote (they just always seem to spontaneously agree), money never changes hands, Presidents are never elected by fraud, laws are never approved al vapor. Fortunately, the massive public civil resistance movement to oil privatization is not that naive, or we'd all be waking up two weeks down the road with yet another unconstitutional measure rammed down our throats. And undoing something once it is underway is much harder than preventing it right from the outset. This is what the proponents of this measure in the "government" are banking on - by the time the legal challenges to this law (should it be approved) ever make it to the Supreme Court, the damage will already have been done.

Tuesday, April 8, 2008

The Repsol Connection

Follow the contracts. In a pair of provacative pieces in the two most recent Saturday editions of the newspaper La Jornada, journalist Jaime Aviles traces the tortured path of Mexico's threatened energy privatization from several years back. Aviles uses as his starting point a November 10, 2003 interview hosted by Jeffrey Davidow at the Institute of the Americas with one Felipe Calderón, a chat sponsored by the Reinhart Foundation (promoter of "projects" in Mexico and Guatemala) and Servicios Integrados de Gas de México ("Mexican Integrated Gas Services" or Igamex, owner of 13 gasoducts in Mexico and whose partners include Fergus Thermes, Corporativo San Ángel and Saks Energy). Calderón, then an obscure, recently-named Secretary of Energy for President Vicente Fox, makes no secret, despite his stumbling English, of his zeal for energy privatization, in order to provide Mexico the investment it needs to grow and create jobs and the usual canned blah blah. What is fascinating about the timing of this interview, however, as Áviles points out, is that just three-and-a-half weeks before it on October 16th, Secretary Calderón had provided the Spanish energy company Repsol with its first contract for the "development, infrastructure and maintenance" of gas fields in the Cuenca de Burgos in the Bloque Reynosa-Monterrey for over $2 billion US dollars. All this is part of the "silent privatization" of Mexico's electricity and gas industry (also supposedly protected by Article 27 of the Constitution) through such mechanisms as the so-called "Contracts for Multiple Services", as this hefty contract for Repsol, in fact, was.

The rest of the story, as Áviles lays it out, goes like this: Calderón quits as Energy Secretary in June of 2004, having made sure in the meanwhile to get a construction project for a regasification plant in the State of Colima underway. Why? To thaw out frozen natural gas arriving from South America by ship. A year and a half later, on December 12, 2005, Repsol makes a surprise announcement; it has signed a contract with the Peruvian government to buy natural gas from them and re-sell it in Mexico.

Mexico, however, has still not announced any intention to buy Peruvian gas or build a regasification plant. It is vitally important, then, that Calderón make it publicly known to Davidow (as he does in the final part of the interview, available on YouTube with the title "Encuentros: Davidow and Calderon November 2003) in order to, in effect, seal the deal (make explicit his intentions) with Repsol before beginning his candidacy for the Presidency.

On October 23, 2005, the PAN nominates Calderón for President. Shortly after, on December 12th, Repsol gives advance notice that it intends to sell Peruvian gas to Mexico. On June 6, 2006, just 26 days before the Presidential election, the Diario Oficial (the official publication of the Mexican government) opens the bidding for the provision of natural gas and the construction of the regasification plant in Manzanillo, on the coast of Colima. President Fox thus gives the green light in code to Repsol, and to anyone else who is paying attention: the election is stacked; come what may, Calderón will safely get in and execute this contract (López Obrador would certainly have not). The bidding is for a 25-year contract, with the meeting for the bidders to make their offer being set for September 25, 2006. That day, Repsol makes its offer, but with a catch: it can only offer gas for 20 years. The very next day, Mexico's Federal Energy Commission magically modifies the terms of the bidding so that the Mexican government contract will only be for 20 years.

Calderón is subsequently installed in office, not without great difficulty, and on September 18th, 2007, the Federal Energy Commission awards the contract to Repsol, but for 15 years, as Peru had in the intervening time modified their own agreement with the Spanish company for a lesser period. Peru will sell the gas to Repsol at Peruvian prices but Mexico, per the terms of the contract (in which only Repsol, of all the companies in the whole world, met the terms and conditions to make an actual bid), will buy it at Texas prices, the highest in the world as they are subject to what is known as the Henry Hub index - the $15 billion dollar cost to Mexico I mentioned in my last post may, consequently, spiral upwards of $21 billion dollars. And here we are today, with Calderón and his very interested Internal Affairs Secretary grasping at any argumental straws available to push the "opening" of Pemex, and the contract between Peru, Mexico, and their costly intermediary Repsol, safely in place, the plants being built, and all is well. Except, of course, for the Mexican consumers of gasoline, natural gas, and electricity.

(The two pieces by Jaime Áviles can be found at: and

Wednesday, April 2, 2008

Dog Days

These are, indeed, dog days for Felipe Calderón. Faced with a recalcitrant Congress, an energized social movement, and the sweltering end-of-dry season Mexican weather, Calderón - as it usual oscillating between Napoleon complex-style authoritarianism and visionless vacillation (one, of course, plays off the other) - finds himself trying to hand off responsibility for the hot potato that is oil privatization to the Congress, which (the PRI faction at least) insists on trying to hand it back to him. "The Executive must lead," says the PRI. "Congress is where the energy initiative will originate," says Santiago Creel, head of the PAN (Calderon's conservative party) faction in the Senate. But what will the initative include, exactly? One can hardly tell if the "government" can't even get it together enough to decide what the justification is for presenting the initiative in the first place. First, we heard that we needed to associate with private enterprise because Mexico was running out of reserves, fast. Then the tune changed, and we heard, in a sweet-sounding television spot (making a moot point of the new electoral reform law that supposedly bans political advertising on TV) that Mexico has a "hidden treasure" buried deep in the Gulf of Mexico, and that only association with private enterprise will provide Mexico with the technology necessary to extract it (incidentally, two versions of that ad were made, one for foreign consumption, and one for the national audience, with the privatizing language toned down). Question: with over $50 billion dollars in oil revenues last year alone, why can't Mexico acquire the required technology itself, instead of associating with private companies who don't have it either? Norway, for one, offers a moveable ocean rig for rent at 250,000 euros a day called "Erik the Red" which can penetrate down 3,000 meters, three times the depth of existing, fixed rigs (check out a Discovery Channel program on this new rig on YouTube: Surely, with $50 billion in revenue, PEMEX could rent Erik the Red itself, especially considering what it stands to gain from it? And what's more, if Mexico ever quit being the lackey of international capital and started looking out for its own interests, it could use its oil revenues to become an expert in oil-perforation technology on its own (certainly in its interest), start building these kinds of rigs and training its engineers to use them, and even export them for other countries to use. Or even better than placing its entire bet on a dwindling store (depending on which governmental argument is being used on which day) of polluting fossil fuels, it could use its revenues to become a leader in eco-technology and electric cars. Hell, with oil prices at a record high and promising to rise, Mexico should be building its own refineries on the double, a long row of refineries right on the border with the United States, and then sell refined gasoline for energy-hog Americans to fill up their SUVs with, undercutting Exxon Mobil and Texoco by just enough and still making an absolute killing. As it stands now, Mexico sells its crude oil to the States and buys back the gasoline; it hasn't built a new refinery in 25 years (not suprisingly, the same amount of time the neo-cons have been running the show here). How pathetic is that?

All of this is part of an energy-reform smokescreen which is doing nothing more than undercut what's left of Mexico's national sovereignty. The Calderón "government", for example, recently signed a deal with Repsol of Spain to provide natural gas to Mexico for the next 15 years, at a cost to Mexico of $15 billion dollars. Repsol, who was the only bidder, will buy the gas from Peru and sell it to Mexico, who has dutifully committed to building a plant in Colima to house it. As a mere intermediary, Repsol will make its own killing. And this, despite the fact that Mexico has gas reserves of its own lying fallow in the Yucatan, and despite the obvious conflict of interest of PEMEX having bought Repsol stock back when Calderón was Secretary of Energy and on PEMEX's Administrative Board, and then making a hash of it (for the public interest, at least) by effectively selling the stock off before its value subsequently rose, for a neat loss of $655 million dollars. So one wonders: how did Repsol, "Calderón's favorite company" happen to get that no-bid gas contract anyway, and how did it know to put in its bid just at the right time? And incidentally, whatever happened to old article 27 of the Mexican Constitution, making energy production the property of the nation?