Oil Depletion Debate

Because petroleum has been so instrumental in the development of modern societies and because it is also a finite resource that will some day go into decline, supply needs will fall short of demand at some point. The main focus of this blog is on the arguments put forth by the pessimists. I believe geopolitics will play an equal part in causing a supply shortage before an absolute geological peak, governments will limit their oil production levels

The Next Disaster

The Next Disaster
Jesse Bogan, Kerry A. Dolan, Christopher Helman and Nathan Vardi, 11.27.08, Forbes Magazine dated December 22, 2008
Narco violence is exploding--just as oil prices are plunging and Mexico is bracing for a deep U.S. recession.

http://www.forbes.com/home/forbes/2008/1222/073.html

The narcotraficantes have infiltrated the highest levels of law enforcement, including, allegedly, Mexico's principal link to Interpol and its former senior drug czar.
"We have more dead than you have in Iraq."
The explosion of narco terror comes alongside a precipitous drop in oil prices and the crushing effects of a deep U.S. recession. The climate of fear is kicking the life out of the economy.
State-owned oil monopoly Pemex (Petróleos Mexicanos) contributes 37%--$80 billion in 2008--of federal revenue.
Pemex is in sorry shape. From a peak of 3.3 million barrels a day in 2004, output is down to 2.8 million barrels.
Pemex says it must spend $20 billion a year for two decades just to keep output stable. That will be very tough to pull off without outside investment--especially for a company sagging under $100 billion in debt.
(with certain calculations) jobless figure soars to 10%. Feliz expects that number to reach 12% next year.
Eighty percent of Mexican exports--$240 billion this year, up 10% from 2007--go to the U.S., where shoppers aren't spending.
Drug-related violence pervades all segments of life in Mexico.
An executive can shell out as much as $500,000 a year to protect himself and his family
Most Mexicans, however, believe the cartels are winning the war.
On the other side of the border look for a large drop in remittances from Mexicans living in the U.S.