Mexico’s energy problems hurt U.S.

America’s energy doomsday clock could be inching closer to midnight with the news that Mexico’s primary oilfield may be ready to crater. If these dire predictions turn out to be correct, such a development could deal a body blow to the United States’ desperately needed oil supplies.

With 2006 demand calling for 22 million daily barrels, domestic U.S. supply is down to less than 8 million barrels a day. Of the average daily imports exceeding 12 million barrels, Mexico has been counted on to deliver 20 percent of that amount. In fact, additional offshore discoveries in the Gulf of Mexico were expected to add to that total. However, due to the excessive depth of these reserves, and the prohibitive cost of extraction, Mexico is not capable of pursuing that option at this time.

Compounding this problem, energy experts now believe that the Cantarell Oil complex, which had reached 2.1 million barrels a day two years ago, is now in sharp decline. It could be as low as 520,000 barrels a day by the end of 2008, with further downturns after that.

This unexpected shrinking of the world’s second-largest oil complex, which has made up the lion’s share of Mexico’s production of 2.5 million barrels, jeopardizes about 90 percent of Mexico’s exports, most of which are headed for the U.S. Only America’s northern neighbor, Canada, which is expanding its oil sands capacity, may be left to make up this shortfall.

Ghawar complex

However, a similar crisis could be developing at the world’s largest oilfield, Saudi Arabia’s huge Ghawar complex, the only one in the world eclipsing the size of Mexico’s Cantarell. Like Mexico’s giant offshore development, Ghawar is also starting to be plagued by the incursion of seawater.

The Desert Sun (Palm Springs, CA)