When Mexico runs dry

Country’s giant oil field is shrinking

Mexico’s economy and government are living on borrowed time, and the day of reckoning may be coming sooner rather than later.

A third of the country’s federal revenues come from the profits from government-run oil fields. A single field known as Cantarell provides most of the oil and the profits. While the exact condition of this field is a closely kept secret, news leaks and the limited published data suggest that Cantarell is quickly passing its pumping prime. Production in May was down 7 percent from just the beginning of the year, according to the Los Angeles Times. The demise of an oil field can be rather sudden. As one former Mexican oil executive told the Times, “Cantarell is going to fall a lot, and quickly.”

The economic, political and social repercussions of the end of Cantarell would be devastating. That it is precisely why elected leaders tend to ignore it. Presidential candidates in the recent Mexican election avoided Cantarell and energy policy. On this side of the border, leaders focus on reforms with popular appeal such as tighter border security and tougher penalties for illegal immigrants.

Today’s problems will pale compared to a future Mexico, now the world’s fifth-largest oil producer, that hasn’t prepared for life beyond Cantarell. The same goes for the future United States, which is the largest purchaser of oil from both Cantarell and Mexico.

Sacramento Bee