PEMEX Advantage – Neg
$ Controls -> collapse
The reason PEMEX isn’t inclined to drill for more gas is that the government has tied
prices to the US. The plan does not change this. Low prices and high demand mean
importing from the US is inevitable and PEMEX will inevitably collapse.
PEMEX collapse inevitable-price controls mean there’s no incentive to increase drilling
Davis, 2012 (Lucas, Associate Professor of Economic Analysis and Policy at the Haas School of Business at the University of
California, Berkeley, “Natural Gas Shortages in Mexico”, Energy Institute at Haas,
http://energyathaas.wordpress.com/2012/09/24/natural-gas-shortages-in-mexico/)
As U.S. Henry Hub prices have continued to decrease, demand for natural gas in Mexico has skyrocketed,
particularly among industrial users. And today in Mexico there is a severe shortage of natural gas. A recent article from Bloomberg
(click here) reports that large industrial customers in Mexico are seeing ~50% curtailments. Mexico would like to import more from
the United States, but north-south pipelines are extremely limited and already running near 100% capacity. This is a classic textbook example
of a price control. When you impose a price control lower than the market clearing price, demand exceeds supply so
there is deadweight loss. Mexican buyers with high willingness-to-pay aren’t able to buy natural gas, and the
Mexican producer, PEMEX, doesn’t have much incentive to increase production. In addition to deadweight loss, price
controls leads to misallocation. Prices serve to coordinate actions of buyers and sellers, but they also serve to allocate goods to
the buyers who value them the most. Without a market mechanism to clear the market, PEMEX is deciding who gets gas on a
“case-by-case” basis. This doesn’t guarantee an efficient allocation, and leads to wasted resources as industry executives fly
back and forth from Mexico City trying to increase their allotments.
Drug violence Impx D
Status Quo Solves/Resources Now
Their only internal link is that taxing PEMEX gives the government resources to fight the drug
war---squo solves that
Selee, 2010 (Andrew, the director of the Mexico Institute at the Woodrow Wilson International Center for Scholars; David Shirk, fellow at
the center and an associate professor at the University of San Diego; and Eric Olson, senior adviser at the center, 3/28/10, “Five myths about
Mexico's drug war,” http://www.washingtonpost.com/wp-dyn/content/article/2010/03/26/AR2010032602226_pf.html)
The Mexican government has the tools to succeed, but it must redirect its efforts. To date, its campaign against drug traffickers
has relied on the massive deployment of federal security forces, both police and military. But their "presence and patrol" strategy presents only a
minor inconvenience to criminal groups, which work around it by shifting their trafficking routes. To strengthen law enforcement and
restore public confidence, there is an urgent need to modernize and professionalize Mexico's police and courts. The
2008 passage of constitutional reforms in this area was a good start. As they are implemented, the changes will
transform the country's judiciary from one that relies on closed courtrooms and mostly written evidence into a system where
evidence is presented in open court. The federal government has also made strides in developing a professional
national police force. It is devoting resources to the improvement of state and local forces and boosting investigative
capabilities, including creating a national police database that allows authorities to track crimes in different parts of the
country.
Drug Violence Inevitable
Widespread corruption means attempts to solve drug violence inevitably fail
CFR, 2013 (Aimee Rawlins, Council on Foreign Relations, “Mexico's Drug War”, 1/11/2013, http://www.cfr.org/mexico/mexicosdrug-war/p13689#p3)
From 2006 to 2012, Calderón
sent more than 50,000 soldiers onto Mexico's streets, invested billions of dollars on
equipment and training, attempted to vastly reform the police and judicial systems, and strengthened Mexico's
partnership with the United States (PDF). But a legacy of "political manipulation of law enforcement and judicial
branches, which limited professionalization and enabled widespread corruption" has left the government with
"only weak tools to counter increasingly aggressive crime networks," writes CFR's Shannon O'Neil in America's Quarterly.
The police are easily bought, in part because in many cities, they earn less than teachers or even burrito vendors. On the
website InSight Crime, Patrick Corcoran notes that "an underpaid officer could double or triple his salary by simply agreeing
to look the other way." The CFR report notes police agencies "suffer from dangerous and deplorable working conditions, low professional
standards, and severely limited resources." The Calderón administration attempted to counter police corruption by dramatically increasing the
role of the military in the fight against drug cartels. Not only have tens of thousands of military personnel been deployed to supplement, and in
many cases replace, local police forces, they have also been heavily recruited to lead civilian law enforcement agencies (PDF). Mexico's
judicial system—with its autocratic judges and lack of transparency—is also highly susceptible to corruption. The
Congressional Research Service report noted that even when public officials are arrested for working with a cartel,
they are rarely convicted. Calderón's militarization strategy also resulted in accusations of serious human rights abuses. A November 2011
report by Human Rights Watch found that "rather than strengthening public security in Mexico, Calderón's 'war' has
exacerbated a climate of violence, lawlessness, and fear in many parts of the country." The report, which looked at five
states, documented more than one hundred and seventy cases of torture, thirty-nine disappearances, and twenty-four extrajudicial killings.
No Mexican economic collapse or failed state, cartel violence is getting better but it’s
inevitable because of U.S. drug demand
Economist, 2012 (The Economist, “The Rise of Mexico,” 11/24/12, http://www.economist.com/news/leaders/21567081-americaneeds-look-again-its-increasingly-important-neighbour-rise-mexico)
The White House does not spend much time looking south. During six hours of televised campaign debates this year, neither Mr Obama nor his
vice-president mentioned Mexico directly. That is extraordinary. One in ten Mexican citizens lives in the United States. Include their Americanborn descendants and you have about 33m people (or around a tenth of America’s population). And Mexico itself is more than the
bloody appendix of American imaginations. In terms of GDP it ranks just ahead of South Korea. In 2011 the Mexican
economy grew faster than Brazil’s—and will do so again in 2012. Yet Americans are gloomy about Mexico, and so is
their government: three years ago Pentagon analysts warned that Mexico risked becoming a “failed state”. As our special
report in this issue explains, that is wildly wrong. In fact, Mexico’s economy and society are doing pretty well. Even the
violence, concentrated in a few areas, looks as if it is starting to abate. Mañana in Mexico The first place where Americans will
notice these changes is in their shopping malls. China (with more than 60 mentions in the presidential debates) is by far the biggest source of
America’s imports. But wages in Chinese factories have quintupled in the past ten years and the oil price has trebled, inducing
manufacturers focused on the American market to set up closer to home. Mexico is already the world’s biggest exporter of flatscreen televisions, BlackBerrys and fridge-freezers, and is climbing up the rankings in cars, aerospace and more . On
present trends, by 2018 America will import more from Mexico than from any other country. “Made in China” is
giving way to “Hecho en México”. The doorway for those imports is a 2,000-mile border, the world’s busiest. Yet some American
politicians are doing their best to block it, out of fear of being swamped by immigrants. They could hardly be more wrong. Fewer Mexicans now
move to the United States than come back south. America’s fragile economy (with an unemployment rate nearly twice as high as Mexico’s) has
dampened arrivals and hastened departures. Meanwhile, the make-up of Mexican migration is changing. North of the border, legal Mexican
residents probably now outnumber undocumented ones. The human tide may turn along with the American economy, but the supply of
potential border-hoppers has plunged: whereas in the 1960s the average Mexican woman had seven children, she now has two. Within a
decade Mexico’s fertility rate will fall below America’s. Undervaluing trade and overestimating immigration has led to bad policies. Since
September 11th 2001, crossing the border has taken hours where it once took minutes, raising costs for Mexican manufacturers (and thus for
American consumers). Daytrips have fallen by almost half. More crossing-points and fewer onerous checks would speed things up on the
American side; pre-clearance of containers and passengers could be improved if Mexico were less touchy about having American officers on its
soil (something which Canada does not mind). After an election in which 70% of Latinos voted for Mr Obama, even America’s “wetback”bashing Republicans should now see the need for immigration-law reform. No time for a siesta The least certain part of Mexico’s
brighter mañana concerns security. This year has seen a small drop in murders. Some hotspots, such as Ciudad Juárez, have
improved dramatically. A third of Mexico has a lower murder rate than Louisiana, America’s most murderous state. Nevertheless, the
“cartels” will remain strong while two conditions hold. The first is that America imports drugs—on which its citizens
spend billions—which it insists must remain illegal, while continuing to allow the traffickers to buy assault weapons
freely. American politicians should heed the words of Felipe Calderón, Mexico’s outgoing president, who after six years and 60,000 deaths
says it is “impossible” to stop the drug trade.
Drug demand and weapons trafficking means security approaches are incapable of success
Couch, 2012 (Neil, Brigadier, British Army, July 2012, “Mexico in Danger of Rapid Collapse’: Reality or Exaggeration?,”
http://www.da.mod.uk/colleges/rcds/publications/seaford-house-papers/2012-seaford-house-papers/SHP-2012-Couch.pdf)
President Obama acknowledged that ‘the battle President Calderón is fighting … is not just his battle, it´s also
ours’.59 However, Hilary Clinton said in 2009: ‘clearly what we’ve been doing has not worked’, adding that US policies on
curbing drug use, narcotics shipments and the flow of guns had been ‘ineffective’.60 ‘Our insatiable demand for
illegal drugs fuels the drug trade. ….Our inability to prevent weapons from being illegally smuggled across
the border to arm these criminals causes the deaths of police , of soldiers and civilians ’61 ‘We have been pursuing these
strategies for 30 years…. Neither interdiction [of drugs] nor reducing demand have been successful’.62 Many argue that for as long as
the US continues to treat the problem solely as a crime and security issue rather than a health issue to be managed and a
commercial business to be regulated, there will be a constant stream of recruits to fill the gaps created in the ranks of the
traffickers no matter how successful security operations become. Despite calls from former and current presidents of
Colombia, Guatemala and Mexico to broaden the debate to look at alternative approaches, such as decriminalisation or legalisation, the
US has been unwilling or politically unable to do so. 63 Obama refused to address it at the Summit of the Americas 2012, saying that
he personally and his administration did not view legalisation as the answer.64
Total stalemate on controlling the drug trade makes it inevitable
Friedman, 2012 (George, Founder and CEO of STRATFOR, 8/21/12, “Mexico's Strategy,” http://www.stratfor.com/weekly/mexicosstrategy)
The advantage to Mexico also creates a strategic problem for Mexico. Given the money at stake and that the legal system is unable
to suppress or regulate the trade, the borderland has again become -- perhaps now more than ever -- a region of ongoing
warfare between groups competing to control the movement of narcotics into the United States . To a great extent, the
Mexicans have lost control of this borderland. From the Mexican point of view, this is a manageable situation. The borderland is distinct from
the Mexican heartland. So long as the violence does not overwhelm the heartland, it is tolerable. The inflow of money
does not offend the Mexican government. More precisely, the Mexican government has limited resources to suppress the trade and
violence, and there are financial benefits to its existence. The Mexican strategy is to try to block the spread of lawlessness into Mexico proper but
to accept the lawlessness in a region that historically has been lawless. The American position is to demand that the Mexicans
deploy forces to suppress the trade. But neither side has sufficient force to control the border, and the demand is
more one of gestures than significant actions or threats. The Mexicans have already weakened their military by trying to come to
grips with the problem, but they are not going to break their military by trying to control a region that broke them in the past. The United
States is not going to provide a force sufficient to control the border, since the cost would be staggering. Each will
thus live with the violence. The Mexicans argue the problem is that the United States can't suppress demand and is
unwilling to destroy incentives by lowering prices through legalization. The Americans say the Mexicans must root out
the corruption among Mexican officials and law enforcement. Both have interesting arguments, but neither
argument has anything to do with reality. Controlling that terrain is impossible with reasonable effort, and no
one is prepared to make an unreasonable effort.
Reforms CP
1NC
Text: The federal government of Mexico should pass President Nieto’s PEMEX reform
proposal
Nieto’s reforms solve the PEMEX advantage but avoids the net benefit
Martin and Rodriguez, 6/20/13 (Eric and Carlos, reporters for Bloomberg News in Mexico City, “Mexico's President
Pushes Reforms for State Oil Company Pemex”, Bloomberg Businessweek, http://www.businessweek.com/articles/2013-06-20/mexicospresident-pushes-reforms-for-state-oil-company-pemex)
Petróleos Mexicanos, known as Pemex, has long been the third rail of Mexican politics. The state-owned company,
originally based on oil fields seized from foreign owners over 70 years ago, has produced sizable government
revenue and union jobs for hundreds of thousands of Mexicans. Foreign investment has been largely restricted. But now Pemex’s main
asset, the giant Cantarell offshore field, is shrinking fast. The company says it needs to boost annual investment by
46 percent, to $37 billion, to tap undeveloped shale-gas deposits and deep-water reserves. Without some private capital and
expertise from abroad, Mexico risks becoming an importer in the next decade . Many of Mexico’s politicians and policymakers
have known this for years. Yet Mexican nationalism, resistance from the unions, and the sheer size of the task of transforming Pemex have stood
in the way. The planets may be aligning for a solution: Mexican President Enrique Peña Nieto says he’s negotiating to
get the political support he needs to break the state monopoly in oil and gas exploration and production this year in a
bid to accelerate Mexico’s economic growth. In the model envisioned by Peña Nieto, Pemex would develop certain fields,
while foreign and private companies would tap others. The oil and gas reserves in the ground would still be the
property of Mexico. Peña Nieto declines to discuss many details of the proposal or whether it would include a change in the constitution,
which limits how private companies can profit from the nation’s energy resources. He has, however, been sending signals to
international oil companies that he needs their help to arrest eight years of decline in Mexico’s crude output. “It’s obvious that
Pemex doesn’t have the financial capacity to be in every single front of energy generation,” the 46-year-old president said in an interview in
London on June 17, before he traveled to Northern Ireland for meetings with Group of Eight leaders. “ Shale is one of the areas where
there’s room for private companies, but not the only one.”
2NC Solvency
Nieto’s current reform package solves the entire advantage-allows foreign investment
Corpart, 2013 (Guillaume, Managing Director of Americas Market Intelligence and a veteran of Latin American competitive
intelligence and strategy consulting, “President Peña Nieto's Reforms and What They Mean for Business in Mexico” , AMI,
http://americasmi.com/en_US/expertise/articles-trends/page/president-pena-nietos-reforms-and-what-they-mean-for-bussiness-inmexico)
The most highly anticipated of Peña Nieto’s announced reforms are the energy and fiscal reforms , which he is likely to
try to push through before the 2015 mid-term elections. The energy reform seeks to realize the vast and largely untapped
potential of Mexico’s oil and gas reserves. Pemex, the state-owned oil and gas monopoly, hands over most of its profits in
taxes to the state. This prevents the company from investing in new technology or optimizing production, which has
led to a gradual decline in oil production since 2004 and forced Mexico to begin importing petrol and natural gas from the United States.
While Mr. Peña Nieto has ruled out privatizing Pemex, many hope that the energy and fiscal reforms will, on the one hand, allow
private investors to enter into risk-sharing contracts with Pemex for deep water exploration (half of Mexico’s oil is in
unexplored deep waters), shale gas, and refining; and, on the other hand, allow Pemex to reinvest more of its profits as the
government weans itself off oil revenue and relies on a greater tax intake. This is why the administration argues that any changes in the energy
sector must go hand in hand with fiscal changes. The most likely approach would be to introduce a value-added tax on food and medicine (which
are now exempt) and undertake a new social-security reform to ensure more Mexicans emerge from the informal economy and contribute to the
public safety net through social security taxes. Mr. Peña Nieto’s reforms have the potential to open up attractive new business
opportunities and spur greater foreign investment in Mexico . If the new administration can build on its early reforms
and open up the energy sector to private investment while restructuring its public finances, Mexico is sure to attract more
attention from international investors and become a top investment destination .
Nieto’s PEMEX reforms generate massive growth in the Mexican economy
Cattan and Espinosa, 7/10/13 (Nacha and Veroníca Navarro, Bloomberg Businessweek, “Mexico Oil Monopoly Ending to
Pemex as JPMorgan Sees Reform (3)”, http://www.businessweek.com/news/2013-07-10/mexico-poised-to-end-state-energy-monopolypemex-official-says)
The country needs “very deep” reforms to lure investment to its natural gas and crude fields after eight years of
declining oil output, and proposed changes could be ready by the end of summer, Hector Moreira, who also is a former official in the
country’s Energy Ministry, said today at the Bloomberg Mexico Conference in New York. A congressional bill to open the oil
monopoly would prompt as much as $50 billion in annual investments if approved , he said. Much-needed changes
will open the way for faster growth and a stronger currency in the region’s second-largest economy, Gray Newman,
Morgan Stanley’s chief Latin American economist, said at the event. Officials from JPMorgan Chase & Co. and Grupo Financiero Banorte said
they’re optimistic President Enrique Pena Nieto will lead a successful effort at reforms this year. “This administration doesn’t only have
the willingness, but the political power and political capital” to enact the changes , Gabriel Casillas, Banorte’s chief Mexico
economist, said. Casillas said he was “very bullish” on the peso, the best-performing major currency against the dollar
this year, and that investors hadn’t yet priced in the reforms. Economic Slowdown A slowdown in economic expansion is putting
pressure on Pena Nieto to gain approval to open the energy industry and change laws to boost tax collection, reforms he
says may lift growth to 6 percent. “We need far more investment, we need capacity in production and we need
technology,” Moreira said. “We need to transform the energy sector in a very deep way. I think now is the time.” The
ruling Institutional Revolutionary Party has the ability to pass the key bills, which will attract investment and bolster
Mexican markets, according to Eduardo Cepeda, the senior country officer for JPMorgan in Mexico. Mexico’s stock market may slump 10
percent if none of the promised reforms are carrier out this year, Cepeda said. Still, that could present a buying opportunity because the structural
changes will eventually get done, he said.
US Push bad
Overt U.S. push for joint ventures derails PEMEX reform-turns the aff
Barnes, 2011 (Joe, the Bonner Means Baker Fellow, James A. Baker III Institute for Public Policy, Rice University, 4/29/11, “Oil and U.S.Mexico Bilateral Relations,” http://www.bakerinstitute.org/publications/EF-pub-BarnesBilateral-04292011.pdf)
Nonetheless, the ability of the United States to encourage reform is severely limited. Mexican leaders are extremely
sensitive to perceived "bullying" by the United States. Too public a U.S. position—particularly on opening up
Mexican oil fields to foreign development—might actually undermine reform efforts. In any instance, the United
States should be modest in its calls for reform in Mexico. After all, Mexico is not the only North American country with
constitutional and cultural constraints on good public policy. As noted, the United States appears incapable of stopping the flow of weapons to
Mexico. Recently queried on this. President Obama was reduced to spluttering about the Second Amendment to the U.S. Constitution.37 Both
Mexico and the United States should avoid fetishizing the oil sector. Petroleum production is a means, not an end—
a reality often forgotten by resource nationalists and industry experts alike. In Mexico, petroleum production is only
one sector of an economy that has failed to deliver broad-based, sustained growth. The importance of oil is, to a large degree,
a manifestation of Mexico's inability to develop an adequate taxation regime. We would not be discussing a potential crisis
associated with declining production if the Mexican government were not so dependent on it for revenue. Ultimately,
Mexicans must determine the future of the Mexican oil sector . They have by far the greatest economic stake in
the development of their countries energy industry. It is they who must bear whatever costs—in terms of higher sectoral
unemployment or steeper personal taxation— that restructuring the Mexican energy sector might entail. It is they who must endorse and,
perhaps more importantly, sustain the political compromises necessary to attain reform.
Pressing joint ventures before a Mexican constitutional amendment causes mass litigation,
conflict, and uncertainty---turns every advantage
Grunstein, 2011 (Miriam, professor and researcher at the Centro de Investigación y Docencia Económicas, attorney, served as an
advisor to a commissioner at the Federal Energy Regulatory Commission in Mexico as well as to the Mexican Senate, 2011, “UNITIZED WE
STAND, DIVIDED WE FALL: A MEXICAN RESPONSE TO KARLA URDANETA’S ANALYSIS OF TRANSBOUNDARY PETROLEUM RESERVOIRS IN THE
DEEP WATERS OF THE GULF OF MEXICO,” Houston Journal of International Law, http://www.hjil.org/wp-content/uploads/2010/10/GrunsteinFinal.pdf)
When it was first drafted by the Mexican revolutionary government in 1917, Article 27 of the Constitution did not foresee
transboundary reservoirs in Mexico’s hydrocarbon picture, much less the possibility of drilling for such resources in
ultra deep waters in the Gulf of Mexico.94 The current text of Article 27 corresponds to a rather regional, isolated map of Mexico.95
The resources that are referred to by such article are either clearly located within Mexican territory or within territories that are under Mexican
jurisdiction.96 The complex reality of resources trespassing maritime or territorial boundaries is not even contemplated
by the Mexican Constitution and, therefore, there is no constitutional foundation for the treatment of such reservoirs.97 ¶ On the other
hand, the Mexican Constitution does set forth a generic prohibition concerning the execution of contracts that may entail
the exploitation of such resources by any other company other than the state oil company, which, pursuant to the Regulatory Law, is
Pemex.98 This prohibition clearly bans the contracts that would permit joint development or unitization agreements with a third party, be it
private or public.99¶ To this effect, noted oil and gas expert Bernard Taverne has pointed out that a unitization agreement is
really a joint operating agreement with a number of added features that make it more complex.100 Hence, it would seem obvious that if
Article 27 of the Constitution can be interpreted in the sense that it forbids cooperative schemes, such as joint operating agreements, this
prohibition can all the more be extended to a unitization and/or other similar agreements.101¶ Therefore, a constitutional amendment in
Mexico is necessary as the legal foundation for such negotiations and cooperative instruments .102 Otherwise, the
already difficult process of negotiating and performing joint development agreements would be made more
difficult by legal uncertainty.103 Political convenience should not be the criteria for creating the legal framework
for transboundary development. A framework filled with gaps and loopholes may condemn such projects to joint
litigation instead of cooperation, and all would parties suffer greatly as a result.
Mexican Economy Advantage – Neg
Status Quo Solves
Squo Solves-Joint Ventures-1NC
PEMEX is doing deep water drilling joint ventures now
Penn Energy, 2013 (“Petrofac wins PEMEX deepwater drilling contract offshore Mexico,” 3/12/13,
http://www.pennenergy.com/articles/pennenergy/2013/03/petrofac-wins-pemex-deepwater-drilling-contract-offshore-mexico.html)
Petrofac's Engineering and Consulting Services business has won a contract by Petroleos Mexicanos (PEMEX) for a
deepwater drilling project offshore Mexico. The project was awarded in conjunction with Doris Engineering of
Houston. Under the contract, Petrofac will complete specialized technical assistance and supervision for a deepwater subsea well
for the Lakach project, located in the Gulf of Mexico. The contract also includes construction, installation, commissioning,
testing and startup of the well and infrastructure, as well as tie-ins to existing onshore facilities. The project is scheduled
for completion near the end of 2015, according to Petrofac. "I am delighted that Petrofac's Engineering & Consulting Services business has been
selected to support such a significant project for PEMEX with this its first major deepwater development," said Craig Muir, managing director of
Petrofac. "PEMEX will benefit from the full breadth of Petrofac's specialist subsea pipeline consulting and
engineering services in addition to our well management capabilities. We look forward to working closely with
PEMEX on this significant project and further building Petrofac's presence in Mexico ."
Squo Solves-Joint Ventures-2NC
U.S. involvement isn’t key- other countries are already filling in
Barnes, 2011 (Joe, the Bonner Means Baker Fellow, James A. Baker III Institute for Public Policy, Rice University, 4/29/11, “Oil and U.S.Mexico Bilateral Relations,” http://www.bakerinstitute.org/publications/EF-pub-BarnesBilateral-04292011.pdf)
But we should not exaggerate the commercial advantages to U.S. firms were Mexico to open up its petroleum sector
to more foreign involvement. U.S. firms would face competition from elsewhere —notably Brazil's state-controlled
Petrobras, which already has extensive experience in the Gulf of Mexico . Moreover, the most important economic
stake in reviving Mexican production—volume and diversity of world supply—does not require the extensive
participation of U.S. companies. Indeed, from a long-term perspective, it might be best for the United States were Mexico
to open up first to non-U.S. firms. Such an approach could diminish political obstacles; assuage the fears of the Mexican public;
demonstrate that foreign participation can work to Mexico's advantage; and set a precedent for later, major U.S. participation. Needless to say, no
U.S. administration would ever publicly support such an idea. But Washington would be wise, indeed, to restrain its response to
any Mexican moves in the direction of increasing its cooperation with firms such as Petrobras .
Squo Solves-Production-1NC
Recent discovery of 10 billion barrels of oil means Mexican politicians won’t reform
Businessweek, 2012 (“A Big Oil Find May Derail Reforms in Mexico,” 10/4/12, http://www.businessweek.com/articles/2012-10-04/abig-oil-find-may-derail-reforms-in-mexico)
The finds will bolster the legacy of President Calderón, who had overseen declines in crude output by Pemex every
year since he took office in late 2006. But ultimately the discovery could derail an overhaul of the company promised by
President-elect Enrique Peña Nieto, who assumes office on Dec. 1. Because Pemex’s petroleum production has dropped 25 percent from
its peak of 3.4 million barrels a day in 2004, Peña Nieto called energy reform his “signature issue.” He promised to change
rules that allow private and foreign oil companies to provide services to Pemex but ban them from owning stakes in Mexico’s
oil and gas fields. Mexico depends on royalties from Pemex for about a third of its budget. Pemex lacks experience beyond shallow waters, and
Mexico’s deepwater Gulf territory is too vast for a single company to explore and exploit , says Juan Carlos Zepeda, head of
the nation’s Hydrocarbons Commission. Capital Economics, a London-based research firm, says allowing international companies to invest and
produce in Mexico’s fields could boost the nation’s growth by as much as 0.8 percent a year. Now, with a possible 10 billion barrels in
new reserves from the recent finds, politicians may find it easier to stick with the status quo. “Reforms are easier
done in an urgency moment,” says Lisa Schineller, chief of Latin American ratings at Standard & Poor’s (MHP), which downgraded
Mexico in 2009 in part because of its overreliance on oil. “When you’re losing oil revenue, there’s greater pressure.”
Squo Solves---Production---2NC
No PEMEX production declines-new production and deep-water exploration prove
WSJ, 2/28/13 (Wall Street Journal, “Mexico's Pemex Plans Record $25.3 Billion Investment in 2013,” 2/28/13,
http://online.wsj.com/article/SB10001424127887323978104578332400579225008.html)
Mexico's state oil monopoly Petroleos Mexicanos plans to invest a record $25.3 billion this year, of which the lion's
share will go into upstream activities as the company works to maintain or raise oil and gas output, officials said
Thursday. Chief Financial Officer Mario Beauregard said in a conference call with analysts that 79% of the total is earmarked for exploration and
production, 17% for refining, and the rest for gas processing and petrochemicals. Pemex had record sales of $126.6 billion in 2012,
up from $111.4 billion in 2011, as double-digit growth in domestic sales offset practically flat export sales. Pemex also paid a
record $69.4 billion to the federal government in taxes and duties, leaving it with a net profit of just under $400 million. Oil and related taxes and
royalties make up about a third of Mexico's federal budgets, and Pemex occasionally reports quarterly net losses. The administration of
President Enrique Pena Nieto is planning to overhaul the country's restrictive energy laws to allow for greater
private investment in the state-run oil industry, and is expected to present proposals to Congress in the second half of the
year. Mr. Beauregard said reform discussions are under way but declined to comment further. Carlos Morales, who heads Pemex's
production and exploration division, said that $3 billion of the planned investment this year will be for exploration .
With the decline of some of the company's most productive fields in the shallow waters of the southern Gulf of Mexico, Pemex is seeking
oil from more complex reserves, such as the onshore Chicontepec basin and in deep waters of the Gulf .
New shallow off-shore production and increased on-shore production solves PEMEX
production
WSJ, 3/2/13 (Wall Street Journal, 3/2/13, “Pemex Executive Says Oil Output Set to Rise,”
http://online.wsj.com/article/SB10001424127887323978104578336673832410166.html?mod=googlenews_wsj)
Mexico's level of crude-oil production will move higher as new wells come online at existing fields, giving staterun oil monopoly Petroleos Mexicanos, or Pemex, time to develop shale oil and gas resources in the medium term,
followed by deep-water fields in subsequent years, the company's production chief said Friday. "We now see conditions for a
return to higher output," Carlos Morales, Pemex's head of exploration and production, said in an interview. "Today we are producing 2.565
million barrels a day," he said. "We hope to be reaching the end of the administration [2018] with production around three
million barrels a day." Pemex's predictions for output have failed in the past, with production falling in each of the past eight years from a
peak of 3.4 million barrels a day in 2004. Since 2009, the yearly declines have been minimal, and production has increased in
recent months. Mr. Morales carefully outlined how Pemex would raise production at existing fields. Big offshore assets such as KuMaloob-Zaap and Cantarell will hold at current levels through careful management, and two new offshore fields in
shallow waters will add 280,000 barrels a day in the next few years. Output at the sprawling onshore Chicontepec
fields will rise to 200,000 barrels a day from the current 75,000, and mature fields being revisited with new technology will be
good for an additional 190,000 barrels a day, Mr. Morales said. The Pemex production chief says he expects the company's mix of oil
sources to keep the production cost of crude around the current $6.80 per barrel. But while production over the next eight years or so will be
dominated by existing projects, Pemex will be moving aggressively on exploiting shale oil and gas deposits, particularly
those that are part of the Eagle Ford formation in Texas that crosses the border into Mexico. "We have drilled wells in shale that
produce crude," Mr. Morales said. "The cost is around $30 per barrel," which is more expensive than the relatively easy oil in the shallow waters
of the Gulf of Mexico but still highly profitable at current oil prices, he added. Pemex thinks Mexico could have as much as 60 billion barrels of
crude oil equivalent in shale deposits, about evenly divided between oil and gas, Mr. Morales said. In the next few years, shale resources
could undergo huge development because the technology to do so is already being widely used in the U.S.
PEMEX production increasing now-Chicontopec and increased investment prove
Brown & Meacham, 2012 (Neil Brown and Carl Meacham, Senate Foreign Relations Committee Senior Staff Members, 12/21/12,
“Oil, Mexico, and the Transboundary Agreement,” http://www.foreign.senate.gov/publications/download/oil-mexico-and-the-transboundaryagreement)
Large increases in direct and third-party investment in recent years has enabled PEMEX to halt net decreases in
production, at least temporarily. Importantly, PEMEX also now reports achieving a 100% replacement rate for reserves,
improving prospects for continued production. Increased investment also has led to discoveries of large new deep
water resources at Trion, Supremos, and Maximino, achievements of which PEMEX officials are justifiably proud. Several interlocutors
credited energy reforms passed in 2008 for enabling those finds by giving PEMEX more flexibility to partner with
international companies on a service contract basis, building on the shift to reliance on contracting services to enable investments stretching from
the late 1990s. PEMEX leaders plan to raise production to 2.7 mbd in 2013 and 3 mbd by 2017, requiring up to $38 billion
annually in investment. Near term growth is expected to come primarily from Chicontopec, a highly complex
unconventional onshore project that is subject of great hope and scorn. Despite years of development and reportedly $5 billion in
investment, the project is well behind expectations and currently only 70,000 barrels per day are produced, which puts claims of near-term growth
in serious doubt. Over the longer-term PEMEX has set a goal to increase production to 3.3 mbd by 2024. Achieving
that goal will require significantly more new production than the difference between the 3.3 mbd goal and today’s 2.6 mbd given
expected large declines in KMZ.
Squo Solves-Reforms-1NC
Reforms will pass in the squo-Nieto and PRI promises prove
Upstream, 3/4/13 (Upstream is an international oil & gas newspaper, 3/4/13, “Mexico ruling party steps toward Pemex reform,”
http://www.upstreamonline.com/live/article1319001.ece)
Mexico’s ruling party has taken a first step to back President Enrique Pena Nieto’s plan to end a 75-year-old state
monopoly on the oil industry.¶ The president’s Institutional Revolutionary Party, known as PRI, voted Sunday at its national
assembly to end its opposition to constitutional changes that would ease state-owned Petroleos Mexicanos’s grip on
the oil industry, Bloomberg reported. ¶ Pena Nieto has not yet presented a bill proposing the changes and would still have to win the votes in
Congress, where his coalition controls 241 of 500 seats in the lower house. ¶ Oil output in the world’s ninth-largest producer of crude has fallen
for eight years as Pemex finances a third of the government’s public budget. Opening the industry to foreign investors would boost
production while lifting economic growth by as much as 2 percentage points each year , according to the Energy Ministry. ¶
“Our party is transforming itself in order to represent and better serve all Mexicans,” Pena Nieto said at his party’s
assembly according to the news wire. ¶ “The PRI, without falling into complacency, has opted to examine itself and redefine
its position to adapt to the nation’s new circumstances.” ¶ The PRI also ended a ban that prohibited its members from voting for
taxes on food and medicine. The changes were approved today at the party’s national assembly. ¶ Pena Nieto, 46, has pledged to open the
oil industry to more competition, to reduce the tax burden on Pemex and to increase government revenue in a bid to boost economic
growth. His administration hasn’t yet disclosed details on the proposals it said will be sent to Congress this year.
Nieto’s current reforms solve the advantage
Melgar, 2012 (Lourdes, director of the Center for Sustainability and Business at EGADE Business School of the Tecnológico de Monterrey,
Summer 2012, “The Future of PEMEX,” http://www.americasquarterly.org/node/3781)
The time is ripe for a historic transformation of Mexico’s energy sector. The 2008 Reforma Energética (Energy
Reform)—a congressionally-approved presidential initiative that established or modified seven laws—highlighted the significant challenges
facing the Mexican oil industry and the economic implications of a decline in oil production. The problem: it didn’t resolve them. ¶ With the
exception of Andrés Manuel López Obrador of the Partido de la Revolución Democrática (Party of the Democratic Revolution—PRD), for the
first time in Mexican politics the presidential candidates this year set out a series of bold institutional reforms. These
included what was unthinkable years ago: turning the state-owned enterprise, Petróleos Mexicanos (PEMEX), into
an autonomous firm that could issue stock shares—a model similar to the one adopted by Brazil’s Petrobras in the 1990s. ¶ But is this
wishful thinking? As with past proposals to open up Mexico’s power or oil industries, are expectations rising against all odds? ¶ The answers will
begin to emerge once the newly elected congress convenes in September and President-elect Enrique Peña Nieto takes office in December 2012.
But Mexico’s incoming leadership will have to address a growing consensus about the need to modernize the energy
sector. ¶ Conventional wisdom holds that Mexico’s energy sector will not change until the country faces a severe crisis. But, at least
conceptually, change is already under way. The future of Mexico will be determined by the ability of the incoming
administration to turn visions of a grand redesign of the energy sector into implementable policies. To be sure, there will
need to be some hard negotiation and bargaining to reach the compromises and build the agreements necessary to make this happen.
Squo Solves-Reforms-2NC
PRI will get PEMEX reforms passed soon-they’re the key party for passage
AP, 3/3/13 (Associated Press, 3/3/13, “Mexico’s ruling party backs energy reform,”
http://fuelfix.com/blog/2013/03/03/mexico%E2%80%99s-ruling-party-backs-energy-reform/)
Mexico’s ruling party changed its platform on Sunday to allow for private investment in the state-owned oil
monopoly, paving the way for a possible overhaul of a company that is seen as a pillar of the Mexican state. Nearly
5,000 members of the Institutional Revolutionary Party, also known as the PRI, voted unanimously at their national
convention to remove language in the party’s platform that for years had opposed injecting private money in Petroleos Mexicanos, or Pemex. The
party also erased its opposition to sales taxes on food and medicines. President Enrique Pena Nieto, who led last year’s electoral comeback for
the party that governed from 1929 to 2000, said the energy and fiscal reforms are needed for Mexico to become more
competitive. He urged party members to support him when he sends the bills to Congress, likely in the second half
of this year. “The PRI is seeking renovation to bring the changes Mexico needs,” Pena Nieto told a crowd of thousands.
“The PRI is not pleased and it is choosing to reexamine and redefine where it stands on the challenges facing the
country.” Pena Nieto’s intention of opening the oil behemoth to more private and foreign investment has set off warnings among leftists about
the privatization of an enterprise whose nationalization is seen by the left as a source of national pride. Pena Nieto has previously denied any
plans to privatize Pemex. On Sunday, party president Cesar Camacho repeated that the Pemex would stay in state hands, saying “We share
the
need of an energy reform for better growth, keeping the state’s control, but modernizing the industry to reach its full
potential and making sure the exploitation of our resources benefits everyone .” A meeting of opposition mayors called for
protests in mid-March to oppose the ruling PRI’s new platform. After Sunday’s decision, analysts said they expect the PRI to put
forward a unified front when the bills are voted upon. The PRI doesn’t hold a majority in Congress, but it’s the
strongest legislative block with 241 of 500 representatives. Pena Nieto has also built consensus in other issues with the opposition
parties. “The party is leaving behind its old taboos to be able to discuss the reality of the country ,” said Alejandro
Schtulmann, head of research of the firm Emerging Markets Political Risk Analysis. During the PRI’s 12-year hiatus from presidency, its
members firmly opposed such measures proposed by then-ruling National Action Party, arguing the country would lose sovereignty by allowing
foreign investment in Pemex. They also alleged that taxing for food and medicines’ purchases would severely affect the poor. “The PRI
wanted to wait until it had the presidency,” said Schtulmann. Though oil is a sensitive topic for many Mexicans who learn state
ownership is one of the three main principles of the constitution, its production has fallen year after year. But most of the country’s reserves
remain untapped because Pemex lacks the technology for exploration.
The PRI unanimously voted for PEMEX reform-that’s the key litmus test
LA Times, 3/4/13 (Los Angeles Times, “Mexico president wins key party vote on reform of national oil company,” 3/4/13,
http://www.latimes.com/news/world/worldnow/la-fg-wn-mexico-pri-oil-pemex-20130304,0,7559619.story)
In an important test of President Enrique Peña Nieto’s sway over resistant factions of his party, the ruling
Institutional Revolutionary Party has changed its bylaws to clear the way for major reform of the gigantic
national oil company. Meeting in its annual convention, the PRI, as the party is known, on Sunday passed several changes that
Peña Nieto needed to make possible a series of reforms he has promised as the hallmark of his administration. Chief and most
difficult among them is a plan to open the behemoth state oil company, Petroleos de Mexico, or Pemex, to private and
foreign investment, long a taboo in this country. Pemex, a symbol of nationalistic pride, is the top income earner for the Mexican state, but
its production of oil has been declining dramatically and the company is in dire need of outside expertise for deep-sea exploration and other
projects. Peña Nieto has stated that reform of Pemex is a top priority, but his party’s bylaws forbid its members who
serve in Congress from voting on any change in the way the company is managed . On Sunday, after hearing from the
president, several thousand members of the party voted unanimously to change the rules and allow support for Pemex
reform. The membership also voted to allow its representatives to support changes in the value-added tax scheme. PRI statutes had prohibited
taxes on food and medicines, but Sunday’s vote removed that ban. Sunday’s vote was a significant gauge of whether Peña Nieto
would be able to win the support of the more recalcitrant members of the party who remain wedded to old-style PRI
nationalistic paternalism and who are not inclined to change the way Pemex is run nor the way taxes are levied.
Even if the PRI isn’t enough- the PAN still supports Nieto’s reforms
Economist, 2012 (The Economist, “From darkness, dawn,” 11/24/12, http://www.economist.com/news/special-report/21566773after-years-underachievement-and-rising-violence-mexico-last-beginning)
However, Mr Peña has reason to be optimistic. The opposition
PAN shares much of Mr Peña’s agenda, and together
the two parties have a two-thirds majority in both houses of Congress. A new power to fast-track two bills per
congressional session will help. A lot will depend on who ends up leading the PAN, which is restive and rudderless after finishing third in
the presidential election. The handover period between July’s election and December’s inauguration has been a model of
presidential co-operation. Mr Calderón’s crackdown on Mexico’s vindictive criminals has given him a personal
reason to stay on good terms with the new government, to make sure of the protection he and his family will need when he leaves
office. Fighting on two fronts Mr Peña’s main problem in Congress may well be his own party . As this special report went
to press Congress was about to pass a labour-law reform, which among other things would make hiring and firing easier. But linked measures to
make Mexico’s over-mighty unions more transparent and democratic were voted down by congressmen from Mr Peña’s own PRI, which has
strong ties to unions. If the unions cannot be tamed, Mr Peña’s other reforms—to open up the monopolised energy sector and overhaul the tax
system—may be similarly diluted.
Status quo solves Mexican reform---PRI support was the biggest hurdle---PAN support is
locked in
Brown & Meacham, 2012 (Neil Brown and Carl Meacham, Senate Foreign Relations Committee Senior Staff Members, 12/21/12,
“Oil, Mexico, and the Transboundary Agreement,” http://www.foreign.senate.gov/publications/download/oil-mexico-and-the-transboundaryagreement)
Mexico’s need for oil and natural gas reform is widely acknowledged amongst leaders in Mexico . The primary question
remains whether domestic political conditions will allow reform to advance. Oil has a privileged status in Mexican identity and
politics akin to the third rail of Social Security in the United States: it basically works for now, is widely acknowledged to not work in the future,
and any attempts to reform it may jeopardize a politician’s future. Newly sworn-in President Enrique Pen˜a Nieto campaigned on
reforming the Mexican energy sector and his new administration appears committed to follow-through on that
promise. The political will to reform is evident; it is less clear whether President Pen˜ a Nieto will garner sufficient support within his
Institutional Revolutionary Party (PRI), including overcoming possible union opposition, to pass meaningful reform. Having achieved
incremental energy reforms in 2008, the now opposition National Action Party (PAN) leadership appears poised to
support broader oil and natural gas reform if offered by the PRI. Previously, some observers had raised concern that
the PAN may hinder reform, as the PRI had done under the Caldero´n administration , to frustrate the new Presidential
administration. In addition, some interlocutors indicated that the leftist Revolutionary Democratic Party (PRD) could attempt to undermine oil
sector reform, including by staging public demonstrations against any initiative. While the general contours of political distinctions can be
surmised even now, the exact lines of debate will be determined only when the government offers the actual scope of their proposed reform
initiative.
Sequencing Turn
Sequencing Turn-1NC
Mexican constitutional reform to PEMEX will pass now
Upstream, 3/4/13 (Upstream is an international oil & gas newspaper, 3/4/13, “Mexico ruling party steps toward Pemex reform,”
http://www.upstreamonline.com/live/article1319001.ece)
Mexico’s ruling party has taken a first step to back President Enrique Pena Nieto’s plan to end a 75-year-old state
monopoly on the oil industry.¶ The president’s Institutional Revolutionary Party, known as PRI, voted Sunday at its
national assembly to end its opposition to constitutional changes that would ease state-owned Petroleos Mexicanos’s
grip on the oil industry, Bloomberg reported. ¶ Pena Nieto has not yet presented a bill proposing the changes and would still have to win the
votes in Congress, where his coalition controls 241 of 500 seats in the lower house. ¶ Oil output in the world’s ninth-largest producer of crude has
fallen for eight years as Pemex finances a third of the government’s public budget. Opening the industry to foreign investors would
boost production while lifting economic growth by as much as 2 percentage points each year, according to the
Energy Ministry. ¶ “Our party is transforming itself in order to represent and better serve all Mexicans ,” Pena Nieto
said at his party’s assembly according to the news wire. ¶ “The PRI, without falling into complacency, has opted to examine
itself and redefine its position to adapt to the nation’s new circumstances.” ¶ The PRI also ended a ban that prohibited its
members from voting for taxes on food and medicine. The changes were approved today at the party’s national assembly. ¶ Pena
Nieto, 46, has pledged to open the oil industry to more competition, to reduce the tax burden on Pemex and to increase
government revenue in a bid to boost economic growth. His administration hasn’t yet disclosed details on the proposals it said will be sent to
Congress this year.
Overt U.S. push for joint ventures derails PEMEX reform-turns the aff
Barnes, 2011 (Joe, the Bonner Means Baker Fellow, James A. Baker III Institute for Public Policy, Rice University, 4/29/11, “Oil and U.S.Mexico Bilateral Relations,” http://www.bakerinstitute.org/publications/EF-pub-BarnesBilateral-04292011.pdf)
Nonetheless, the
ability of the United States to encourage reform is severely limited. Mexican leaders are extremely
sensitive to perceived "bullying" by the United States. Too public a U.S. position—particularly on opening up
Mexican oil fields to foreign development—might actually undermine reform efforts. In any instance, the United
States should be modest in its calls for reform in Mexico. After all, Mexico is not the only North American country with
constitutional and cultural constraints on good public policy. As noted, the United States appears incapable of stopping the flow of weapons to
Mexico. Recently queried on this. President Obama was reduced to spluttering about the Second Amendment to the U.S. Constitution.37 Both
Mexico and the United States should avoid fetishizing the oil sector. Petroleum production is a means, not an end—
a reality often forgotten by resource nationalists and industry experts alike. In Mexico, petroleum production is only
one sector of an economy that has failed to deliver broad-based, sustained growth. The importance of oil is, to a large degree,
a manifestation of Mexico's inability to develop an adequate taxation regime. We would not be discussing a potential crisis
associated with declining production if the Mexican government were not so dependent on it for revenue . Ultimately,
Mexicans must determine the future of the Mexican oil sector . They have by far the greatest economic stake in
the development of their countries energy industry. It is they who must bear whatever costs—in terms of higher sectoral
unemployment or steeper personal taxation— that restructuring the Mexican energy sector might entail. It is they who must endorse and,
perhaps more importantly, sustain the political compromises necessary to attain reform.
Sequencing Turn-2NC
Mexican President Nieto is pushing Constitutional reforms that would open up the state’s
monopoly on oil production to private and foreign investment---the Mexican Congress has to
approve it, and it’ll pass now because of support within Nieto’s party, the PRI---that’s
Upstream.
The plan’s an aggressive push for short-term joint ventures-that means reform won’t pass
because Mexican politicians are fearful that the U.S. is over-eager to exploit Mexican oil
reserves---that’s Barnes.
This turns the entire case:
a) Constitutional reform is a prerequisite to aff solvency
Melgar, 2012 (Lourdes, director of the Center for Sustainability and Business at EGADE Business School of the Tecnológico de Monterrey,
Summer 2012, “The Future of PEMEX,” http://www.americasquarterly.org/node/3781)
The challenge for PEMEX is to increase reserves and oil and gas production in areas that are not part of its
traditional zone of expertise. PEMEX has been outstanding at E&P in shallow waters . But its experience is mostly
limited to 3,300 feet (1,000 meters) deep—far above the 8,200 to 11,500 feet (2,500 to 3,500 meters) needed in the most interesting area
of the Gulf of Mexico. Going to deep and ultra-deep waters or to complex, fractured onshore fields such as Chicontepec requires new skills.
Mexico is in the process of developing regulatory and safety measures to do so. But it is not a matter of buying
technology in the market, as some politicians have asserted . Particularly in the case of deepwater production, international best
practices show that because of the associated complexity and high risk, no company can operate alone. The Deepwater
Horizon oil spill in April 2010, when a BP-operated drilling rig exploded on the U.S. side of the Gulf of Mexico and caused a 4.9 million barrel
leak, reinforces the concerns over risks. Ideally, PEMEX would enter in a joint venture with companies at the cutting edge
of deepwater production, such as Chevron, Shell, Petrobras, or BP. Yet this is prohibited by the Mexican
Constitution, and the new contracts are unlikely to attract those companies.
b) Pressing joint ventures before a Mexican constitutional amendment causes mass
litigation, conflict, and uncertainty---turns every advantage
Grunstein, 2011 (Miriam, professor and researcher at the Centro de Investigación y Docencia Económicas, attorney, served as an
advisor to a commissioner at the Federal Energy Regulatory Commission in Mexico as well as to the Mexican Senate, 2011, “UNITIZED WE
STAND, DIVIDED WE FALL: A MEXICAN RESPONSE TO KARLA URDANETA’S ANALYSIS OF TRANSBOUNDARY PETROLEUM RESERVOIRS IN THE
DEEP WATERS OF THE GULF OF MEXICO,” Houston Journal of International Law, http://www.hjil.org/wp-content/uploads/2010/10/GrunsteinFinal.pdf)
When it was first drafted by the Mexican revolutionary government in 1917, Article 27 of the Constitution did not foresee
transboundary reservoirs in Mexico’s hydrocarbon picture, much less the possibility of drilling for such resources in
ultra deep waters in the Gulf of Mexico.94 The current text of Article 27 corresponds to a rather regional, isolated map of Mexico.95
The resources that are referred to by such article are either clearly located within Mexican territory or within territories that are under Mexican
jurisdiction.96 The
complex reality of resources trespassing maritime or territorial boundaries is not even contemplated
by the Mexican Constitution and, therefore, there is no constitutional foundation for the treatment of such reservoirs.97 ¶ On the other
hand, the Mexican Constitution does set forth a generic prohibition concerning the execution of contracts that may entail
the exploitation of such resources by any other company other than the state oil company, which, pursuant to the Regulatory Law, is
Pemex.98 This prohibition clearly bans the contracts that would permit joint development or unitization agreements with a third party, be it
private or public.99¶ To this effect, noted oil and gas expert Bernard Taverne has pointed out that a unitization agreement is
really a joint operating agreement with a number of added features that make it more complex.100 Hence, it would seem obvious that if
Article 27 of the Constitution can be interpreted in the sense that it forbids cooperative schemes, such as joint operating agreements, this
prohibition can all the more be extended to a unitization and/or other similar agreements.101¶ Therefore, a constitutional amendment in
Mexico is necessary as the legal foundation for such negotiations and cooperative instruments .102 Otherwise, the
already difficult process of negotiating and performing joint development agreements would be made more
difficult by legal uncertainty.103 Political convenience should not be the criteria for creating the legal framework
for transboundary development. A framework filled with gaps and loopholes may condemn such projects to joint
litigation instead of cooperation, and all would parties suffer greatly as a result.
Internal Link Defense
Deep Water Not K2 PEMEX
Shallow water drilling is sufficient for PEMEX growth
Melgar, 2012 (Lourdes, director of the Center for Sustainability and Business at EGADE Business School of the Tecnológico de Monterrey,
Summer 2012, “The Future of PEMEX,” http://www.americasquarterly.org/node/3781)
In the midst of this debate, PEMEX has opted to speed up the process and commit significant investment in order to try
to lock in a favorable decision by the CNH. pemex has also invested heavily in acquiring the equipment to respond in
case of an accident. But questions arise about whether PEMEX should instead focus on Mexico’s less risky and
financially more rewarding options: enhanced oil recovery, secondary recovery and shallow water production .
Choosing any of those alternatives would allow PEMEX to profit from its expertise , save financial resources and
buy time so that a sustainable deepwater exploitation process can be put in place .
Oil/Reforms Not K2 PEMEX
Lack of reforms won’t collapse PEMEX-gas fills in
FT, 2/27/13 (Financial Times, “Pemex chief hails Mexico as ‘new Mideast’,” 2/27/13, http://www.ft.com/intl/cms/s/0/5dbc2e8e-80d811e2-9c5b-00144feabdc0.html#axzz2NSCSJswg)
Even in a worst-case scenario where the reforms do not happen, Mr Lozoya says Pemex will manage to increase
production to 3m bpd by the end of the administration in 2018. But he and the president have set their sights far higher than
that.¶ He pulls out a map that shows one of two new gas pipelines that will bring cheap natural gas south from the
US to feed Mexican industry and petrochemical development – especially of fertilisers.¶ “It is going to boost agriculture and
heavy manufacturing, significantly,” he says. Then he adds, arching his eyebrows: “but most important of all, it is a two-way
pipeline which will also allow us to send gas the other way.”
PEMEX/oil not k2 Mexican econ
PEMEX not key to the Mexican economy-overall increases despite PEMEX failures
FT, 2013 (Financial Times, 2/1/13, “Pemex blast puts onus on energy reforms,” http://www.ft.com/intl/cms/s/0/eb947824-6c88-11e2953f-00144feab49a.html#axzz2NSCSJswg)
While the Mexican stock market has hit record highs recently and the economy is forecast to grow more than 3.5 per
cent in 2013, faster than Brazil for the third year in a row, output at Pemex has slumped. From a peak of 3.4m barrels of oil
a day in 2004, production has fallen to about 2.6m bpd. Experts say that without greater foreign investment and technology
Mexico could cease to be a major energy exporter within six years , even though it sits on promising deepwater reserves in the
Gulf of Mexico. “So what will the Pemex explosion mean for the national debate on energy reform? It puts Pemex firmly in the spotlight for a
start,” tweeted Duncan Wood, director of the Mexico Institute at the Woodrow Wilson centre in Washington. “Pemex needs to be modernised
from top to bottom, from exploration and production to basic practices ... Will legislators [now] recognise that Pemex has fallen behind the
times?” The contrast between Pemex and the rest of Mexico’s export sector is stark. While foreign car and electronic
goods manufacturers have poured investment into the country, boosting national exports to a record, under the
Mexican constitution Pemex is only allowed to offer limited service contracts with private companies .
PEMEX isn’t key to the economy and no collapse-Homex checks
Rieff, 2011 (David, Senior Fellow at the World Policy Institute at the New School for Social Research, a Fellow at the New York Institute for
the Humanities at New York University, and a member of the Council on Foreign Relations, 3/17/11, “The Struggle for Mexico,”
http://www.newrepublic.com/article/world/magazine/85337/mexico-calderon-clinton-obama-drug-cartels#)
On the economic side, while Mexico remains heavily dependent on the remittances of the millions of immigrants now
working, legally or illegally, in the United States, the country also has a rising middle class. It is common to associate the
Mexican economy with Pemex, the state oil company, which the government has tended to loot—in the process, depleting oil
revenue that should have been put to work on modernization of drilling infrastructure, particularly offshore, which, if Mexico is to continue as a
major petroleum exporter, is where it must hunt for new resources. (The contrast with the much better-run, state-controlled Brazilian oil giant,
Petrobras, or Malaysia’s Petronas, is painful.) But, increasingly, there is also the Mexico of Homex, a company started in Sinaloa
in 1989. Homex is now one of the leading global firms involved in the building of low- and middleincome housing,
with large operations in Brazil and India as well as in 20 Mexican states. And yet, the only thing most non-Mexicans who are
drawn to the failed-state hypothesis seem to know about Sinaloa is that it gave its name to a powerful drug cartel. If one takes the long view, the
clash between the Mexico of Pemex and the Mexico of Homex may be as important as the war between the cartels
and the government. And, unless the Mexican economy implodes, which is highly unlikely, there is an excellent
chance that the Mexico of Homex will prevail. In any case, it is a contest in which the narco-traffickers—even narcotraffickers operating right alongside the Homexes of Mexico—do not now have, and will never have, a say.
Increasing openness in the rest of the economy means it’s decoupled from oil
Economist, 2012 (The Economist, “Señores, start your engines,” 11/24/12, http://www.economist.com/news/specialreport/21566782-cheaper-china-and-credit-and-oil-about-start-flowing-mexico-becoming?zid=298&ah=0bc99f9da8f185b2964b6cef412227be)
Once shuttered off by tariffs and trade controls, Mexico has opened up to become a place where the world does business . The
North American Free-Trade Agreement (NAFTA), which in 1994 eliminated most tariffs between Mexico, the United States
and Canada, was only the beginning: Mexico now boasts free-trade deals with 44 countries, more than any other nation.
In northern and central Mexico German companies turn out electrical components for Europe , Canadian firms assemble
aircraft parts and factory after factory makes televisions, fridge-freezers and much else. Each year Mexico exports manufactured
goods to about the same value as the rest of Latin America put together. Trade makes up a bigger chunk of its GDP
than of any other large country’s. Normally that would be a good thing, but after the 2007-08 financial crisis it meant that Mexico got a
terrible walloping. Thanks to its wide-open economy and high exposure to the United States it suffered the steepest recession on the American
mainland: in 2009 its economy shrank by 6%. The country had already had a rocky decade. When China joined the World Trade Organisation in
2001, it started undercutting Mexico’s export industry. In the ten years to 2010 Mexico’s economy grew by an average of just 1.6% a year, less
than half the rate of Brazil, which flourished in part by exporting commodities to China. But now changes are under way, in Mexico’s
factories, its financial sector and even its oil and gas fields, that augur well for a very different decade. Latin
America’s perennial underachiever grew faster than Brazil last year and will repeat the trick this year, with a rate of
about 4% against less than 2% in Brazil. Mr Peña is aiming to get annual growth up to 6% before his six-year presidency is over. By the end of
this decade Mexico will probably be among the world’s ten biggest economies ; a few bullish forecasters think it might even
become the largest in Latin America. How did Mexico achieve such a turnround?
Mexican Economy Defense
Squo Solves Mexican Econ
Irreversible trends guarantee continued Mexican economic growth
Economist, 2012 (The Economist, “From darkness, dawn,” 11/24/12, http://www.economist.com/news/special-report/21566773after-years-underachievement-and-rising-violence-mexico-last-beginning)
THE APOCALYPSE WAS on its way, and it would begin in Mexico. Where else? When archaeologists dug up Mayan calendars that ominously
seemed to run out in the final days of 2012, some doomsayers predicted the end of the world. To many Mexicans it seemed like just
another example of their country’s unending run of bad luck. The steepest recession on the American mainland, a plague of H1N1
swine flu and a deepening war against organised crime had made the preceding few years fairly grim . In 2009 the Pentagon had given
warning that Mexico could become a “failed state”. Armageddon would be the icing on the cake. But it turns out
that the Mayan glyphs were misunderstood. The men with magnifying glasses now say that the world is not about to end—in fact, it
seems that the Mayans were predicting something more like a renewal or a fresh start. Could the same be true of
Mexico? This special report will argue that there is a good chance of it. Some awful years are giving way to what, if
managed properly, could be a prosperous period for Latin America’s second-largest economy. Big, irreversible
trends, from a falling birth rate at home to rising wages in China, are starting to move in Mexico’s favour . At the same
time the country’s leaders are at last starting to tackle some of the home-grown problems that have held it back. Many
of the things that the world thinks it knows about Mexico are no longer true. A serially underachieving economy, repeatedly trumped by dynamic
Brazil? Mexico outpaced Brazil last year and will grow twice as fast this year. Out-of-control population growth and an endless
exodus to the north? Net emigration is down to zero, if not negative, and the fertility rate will soon be lower than that of the United States.
Grinding poverty? Yes, but alleviated by services such as universal free health care. A raging drug war? The failure of rich
countries’ anti-drugs policies means that organised crime will not go away. But Mexico’s murder rate is now falling, albeit slowly, for
the first time in five years. A vast country with deeply ingrained problems and unreformed corners, Mexico could yet squander the opportunities
that are coming its way. But there are signs that it is beginning to realise its potential. With luck, the dire predictions made by the
Pentagon and others may turn out to be as reliable as a misread Mayan calendar .
Manufacturing shift to Mexico locks in growth
Economist, 2012 (The Economist, “Señores, start your engines,” 11/24/12, http://www.economist.com/news/specialreport/21566782-cheaper-china-and-credit-and-oil-about-start-flowing-mexico-becoming?zid=298&ah=0bc99f9da8f185b2964b6cef412227be)
China’s cut-price export machine sucked billions of dollars of business out of Mexico. But now Asian wages and transport costs are
rising and companies are going west. “The China factor is changing big-time,” says Jim O’Neill, the Goldman Sachs
economist who in 2001 coined the “BRICs” acronym—Brazil, Russia, India and China—much to Mexico’s irritation. China is no longer as
cheap as it used to be. According to HSBC, a bank, in 2000 it cost just $0.32 an hour to employ a Chinese manufacturing worker, against
$1.51 for a Mexican one. By last year Chinese wages had quintupled to $1.63, whereas Mexican ones had risen only to $2.10 (see chart 1). The
minimum wage in Shanghai and Qingdao is now higher than in Mexico City and Monterrey, not least because of the
rocketing renminbi. Right next door Hauling goods from Asia to America is costlier too. The price of oil has trebled since the
start of the century, making it more attractive to manufacture close to markets. A container can take three months to travel
from China to the United States, whereas products trucked in from Mexico can take just a couple of days. AlixPartners, a consultancy, said last
year that the joint effect of pay, logistics and currency fluctuations had made Mexico the world’s cheapest place to
manufacture goods destined for the United States, undercutting China as well as countries such as India and Vietnam. Companies
have noticed. “When you wipe away the PR and look at the real numbers, Mexico is startlingly good ,” says Louise Goeser,
the regional head of Siemens, a German multinational. Siemens employs 6,000 people at 13 factories and three research centres around Mexico.
From its recently enlarged facility in Querétaro, in central Mexico, surge-arrestors and transformers trundle up to warehouses in the central
United States in two days. Ms Goeser says that Mexican workers are well qualified as well as cheap: more engineers graduate
in Mexico each year than in Germany, she points out. In Aguascalientes, not far away, Nissan is building a $2 billion factory. Together
with an existing facility it will turn out a car nearly every 30 seconds. About 80% of the parts in each car are made in Mexico. By using local
suppliers, the company is “armoured” against currency fluctuations, says José Luis Valls, head of Nissan Mexico. “ If you are localised, you
can navigate through floods and storms. If you depend on imports of components, you are very fragile.” In nearby Guanajuato Mazda
and Honda are building factories; Audi is constructing a $1.3 billion plant in Puebla. This year Mexico will turn out roughly 3m
vehicles, making it the world’s fourth-biggest auto exporter. When the new factories are up and running, capacity will be 4m.
According to projections by HSBC, in six years’ time the United States will be more dependent on imports from Mexico
than from any other country (see chart 2). Soon “Hecho en México” will become more familiar to Americans than
“Made in China”.
Mexican economy’s sustainable-diversification and drug cartels can’t undermine
Fournier, 2012 (Pierre, geopolitical analyst, National Bank Financial (a subsidiary of National Bank of Canada), 7/30/12, “POST-ELECTION
MEXICO REMAINS A BUY,” http://c3352932.r32.cf0.rackcdn.com/pdf4100207b74a22c3c754fffc3d98edf42.pdf)
Mexico’s economy on a sustainable growth path Mexico’s economy was particularly hard hit during the recent recession, with a
7% drop in GDP in 2009. GDP rebounded 5.5% in 2010, and has increased by 4.3% in the first quarter of 2012. Mexico
is expected to eclipse Brazil for the second year in a row. The Economist Intelligence Unit forecasts 3.7% average annual growth in
the 2013-16 period. The Mexican economy is far more diversified than that of other Latin American countries, which are
generally more dependent on commodities. The industrial sector accounts for about 90% of export earnings, including 20%
in the high-tech sector. The automobile industry is by far the most important sector, directly employing more than 500,000
people and generating $30 billion in revenue. Virtually all major car manufacturers have operations in Mexico, surpassing Canada as dominant
North American manufacturer just last year. Earlier this year, for example, Nissan announced a $2 billion car plant investment in Aguascalientes.
Consumer durables, including electronics, also account for a significant portion of exports . While a number of
companies have chosen to forego or delay investments in Mexico because of cartel violence, FDI remains high and
growing. In the last couple of years, the key manufacturing hub of Monterrey has been hit hard by the open conflict between Los Zetas and the
Gulf Cartel. Nonetheless, in 2010 alone, 95,000 jobs were created and FDI amounted to a record $2.4 billion. Tourism is also
a key industry, accounting for 9% of GDP and 7.5 million direct and indirect jobs. Despite the U.S. media focus on drug violence,
Mexico remains the number one destination for Americans travelling abroad, and very few tourists have been caught in the
violence. Over a million Americans are permanent residents, and a record 20 million visited the country last year, up 10% from 2010.
Mexican Econ Resilient
Interdependence with the U.S. means it’s impossible for Mexico’s economy to collapse
Rieff, 2011 (David, Senior Fellow at the World Policy Institute at the New School for Social Research, a Fellow at the New York Institute for
the Humanities at New York University, and a member of the Council on Foreign Relations, 3/17/11, “The Struggle for Mexico,”
http://www.newrepublic.com/article/world/magazine/85337/mexico-calderon-clinton-obama-drug-cartels#)
There are other ways in which it is important to distinguish Mexico from Pakistan. The government in Islamabad has done virtually
nothing, and seems to care not a whit, about the country’s poor, whether in terms of their health and general nutrition, their educational
opportunities, or their chances of finding work. Moreover, unlike Pakistan, Mexico is not a religiously divided country (the contest for
adherents between the Catholic Church and its increasingly successful evangelical rivals is impassioned, but it is neither violent nor a challenge to
the state’s authority). Nor is it a country facing a population crisis: The average age in Mexico was 17 in 1980; it is 28 today, and
Mexican birthrates are in free fall. Pakistan’s birthrates, by contrast, continue to rise, which makes the chances of even a decent
government providing reasonable levels of employment a long shot at best. Finally, Pakistan’s only powerful neighbor with whom
it could plausibly link its economy happens to be its chief rival, India. The Mexican economy, by contrast, is now thoroughly
interconnected with America’s. Which means that, barring a complete collapse of the capitalist system, Mexico’s
economy will always have a floor from which to build.
Mexican economy’s super-resilient---even massive instability can’t hurt it
Vardi, 2012 (Nathan, Forbes Staff, 10/15/12, “The Mexican Miracle: Despite Drug War, Economy Is Booming,”
http://www.forbes.com/sites/nathanvardi/2012/10/15/the-mexican-mircale/print/)
Driven by Mexico, Citigroup’s Latin-American consumer banking revenue grew 7% year-over-year in the third
quarter to $2.4 billion, while the bank’s revenue in Asia was down. “We think that Mexico is extremely well-poised for growth,”
Pandit said on Citigroup’s earnings conference call. “I was just there not too long ago and with the leadership change there in
addition to prospects for reforms and what you are seeing on the ground—that is a high spot definitely.” Citigroup’s
stock was up 4% on Monday. Not too long ago, the idea that big-shot American CEOs would be touting Mexico would have seemed unlikely.
When the financial crisis hit the U.S. in 2008, FORBES predicted a “Mexican Meltdown.” The explosion of the drug
war between the Mexican drug cartels and the government, coupled with the sure-to-come drop in exports to the contracting
U.S. economy, seemed like it would derail Mexico again and ensure that other emerging markets like Brazil would keep passing it
by. The U.S. Joint Forces Command lumped Mexico in the same category as Pakistan and worried it was becoming a failed state. Mexico’s
economy was hit very hard by the financial crisis and its recession was severe, but its recovery miraculously
has been even stronger. Even with the weak U.S. recovery and the ongoing drug violence, Mexico has boomed . Top
officials in the Mexican government predict the country’s economic growth could reach 5% in 2012, after gross domestic product
increased by 3.9% and 5.5% in the last two years. At the same time, Brazil’s economy has slowed and Mexico is starting to catch up
to its regional rival. The Mexican stock market has performed well, with the benchmark IPC index up nearly 13% in 2012
and more than 20% in the last year. Pemex, the state-owned oil company that dominates the Mexican economy, recently announced deepwater oil discoveries in the Gulf of Mexico, suggesting the company might be able to slow the decline of its production.
Mexican State Collapse Defense
No Mexico State Collapse-1NC
Zero risk of Mexican collapse---best predictive models of state failure agree
Couch, 2012 (Neil, Brigadier, British Army, July 2012, “Mexico in Danger of Rapid Collapse’: Reality or Exaggeration?,”
http://www.da.mod.uk/colleges/rcds/publications/seaford-house-papers/2012-seaford-house-papers/SHP-2012-Couch.pdf)
A ‘collapsed’ state, however, as postulated in the Pentagon JOE paper, suggests ‘a total vacuum of authority’, the state having
become a ‘mere geographical expression’.16 Such an extreme hypothesis of Mexico disappearing like those
earlier European states seems implausible for a country that currently has the world’s 14th largest economy and
higher predicted growth than either the UK, Germany or the USA; that has no external threat from aggressive
neighbours, which was the ‘one constant’ in the European experience according to Tilly; and does not suffer the ‘disharmony
between communities’ that Rotberg says is a feature common amongst failed states.17,18 A review of the literature does not reveal why the
JOE paper might have suggested criminal gangs and drug cartels as direct causes leading to state collapse. Crime and corruption tend to
be described not as causes but as symptoms demonstrating failure . For example, a study for Defense Research and
Development Canada attempting to build a predictive model for proximates of state failure barely mentions either .19 One of
the principal scholars on the subject, Rotberg, says that in failed states, ‘corruption flourishes’ and ‘gangs and criminal
syndicates assume control of the streets’, but again as effect rather than trigger .20 The Fund for Peace Failed States Index,
does not use either of them as a ‘headline’ indicator, though both are used as contributory factors. This absence may reflect an
assessment that numerous states suffer high levels of organised crime and corruption and nevertheless do not
fail. Mandel describes the corruption and extreme violence of the Chinese Triads, Italian Mafia, Japanese Yakuza and the Russian Mob that, in
some cases, has continued for centuries.21 Yet none of these countries were singled out as potential collapsed or failed states in the Pentagon’s
paper. Indeed, thousands of Americans were killed in gang warfare during Prohibition and many people ‘knew or at least suspected that
politicians, judges, lawyers, bankers and business concerns collected many millions of dollars from frauds, bribes and various forms of
extortion’.22 Organised crime and corruption were the norm in the political, business, and judicial systems and police forces ran their own
‘rackets’ rather than enforcing the law.23 Neither the violence nor the corruption led to state failure .
No Mexico State Collapse-2NC
No failed state risk or chance of the cartels controlling the state---reject their ev from circa
2010---violence will trend down in the future, and PEMEX reforms solve now
Fournier, 12 (Pierre, geopolitical analyst, National Bank Financial (a subsidiary of National Bank of Canada), 7/30/12, “POST-ELECTION
MEXICO REMAINS A BUY,” http://c3352932.r32.cf0.rackcdn.com/pdf4100207b74a22c3c754fffc3d98edf42.pdf)
Despite concerns about the newly elected government, continued drug cartel violence, and the wave of resource
nationalism sweeping much of Latin America, we reiterate our view that investors in Mexico and the Mexican markets will
outperform. What “failed state”? In 2009-10, negative perceptions about Mexico hit an all-time high. A number of
forecasters and think-tanks, including the U.S. Army’s Southern Command, predicted that Mexico was on the verge of becoming
a “failed state”. In our initial country report on Mexico in March 2010 (Mexico: Too Strategic to Fail with Strong Long-Term Fundamentals”,
NBF Geopolitical Research), we argued that “Mexico’s social, political and economic fundamentals are far stronger than
what proponents of the ‘failed state’ thesis pretend ”. Since then, the Mexican economy has outperformed most Latin
American economies, and the Mexican Bolsa (up 30.5%) has outperformed most other global stock markets. In this update, we reiterate
our bullish view on Mexico. We believe that: (i) The rebound in economic growth after the 2009 recession is sustainable (ii) Drug
violence does not represent an existential threat to the state and that it is likely to decrease (iii) The new
government will follow through on its promises to reduce PEMEX’s stronghold on the oil sector (iv) Mining companies
Bottom line:
will continue to benefit from a favourable investment climate (v) The political system will become gradually more democratic and transparent
going forward. The politics of Mexico: Endemic corruption or the consolidation of democracy? The election on July 1st of Enrique Pena Nieto of
the Institutional Revolutionary Party (PRI) – along with the strong showing of the PRI in congress (240 of 500 seats) – has been viewed with
much scepticism. The PRI had ruled Mexico for 71 consecutive years, a period widely associated with corruption, cronyism and autocratic rule.
In the short term, media headlines have been focused on the legal challenge which defeated Presidential candidate Manuel Lopez Obrador has
filed with the Federal Electoral Institute (IFE). While Lopez Obrador – from the left-wing Democratic Revolution Party (PRD) – lost by more than
three million votes (38.21% to 31.59%), he has formally accused the PRI of purchasing and manipulating millions of votes, and of overspending.
Tens of thousands of Mexican youth have been demonstrating regularly in Mexico City to denounce the election and what they view as media
bias in favour of the PRI candidate. In 2006, Lopez Obrador lost the Presidential election by 0.5%, and accusations of fraud and irregularities
caused significant havoc in central Mexico. This time, however, the Federal Electoral Court’s impending ruling in September, which will likely
validate Pena Nieto’s victory, is unlikely to create much disruption. The President-elect will be officially sworn in on Dec. 1st. More importantly,
while a number of PRI officials will inevitably yearn for “the good old days”, Mexico’s democratic progression is unlikely to lose
steam. The combined opposition – the PRD and the centre-right National Action Party (PAN), which took third place with 25.4% of the vote –
holds a majority in congress. The PRI itself, which campaigned on a reformist platform, is also far less monolithic than in the past. Arguably, the
Institutional Revolutionary Party (PRI) is far more institutional than revolutionary, and the expectations should be for continuity and
stability . Beyond the controversy surrounding the last two Presidential elections, Mexico has achieved a successful transition from
one-party rule to a credible multi-party system. Nonetheless, the new government faces a number of significant challenges. The federal
government is far too dependent on oil revenues from Petróleos Mexicanos (PEMEX), and must broaden its meagre tax base, especially as the
growth of the informal economy is responsible for 75% of the jobs created in the last decade. Local and state authorities are largely
unaccountable for the money they spend, and along with the police and judiciary, are the source of pervasive corruption. Drug Violence: An
existential threat? No challenge is greater than the violence and uncertainty resulting from the drug wars. With 55,000 dead since President
Felipe Calderon (PAN) decided to declare war on the cartels in 2006 with the active support of the army, drug violence has monopolized global
media coverage on Mexico. It has also cost the Mexican economy an estimated 1% of its GDP annually. While the cartels will remain a
serious issue for the foreseeable future, they are unlikely to become an existential threat to the Mexican state and
economy . The violence remains focused on northern border towns, and Michoacán and Guerrero states. The Central American
nations of Belize, Guatemala and Honduras have double the murder rates of Mexico, and those of Brazil and Colombia are also higher. Drugrelated homicides have dropped 19% in the 12 months ending June 2012. The President-elect has pledged to continue the war on the cartels,
but has given no clear indications on his strategy. While negotiating an official truce is out of the question, it appears that a modus vivendi (an
understanding) involving a less aggressive military posture in exchange for less cartel violence involving civilians
could be sought and achieved. With the Sinaloa and Los Zetas cartels gradually eliminating their rivals, a reduction in violence
between cartels and perhaps even a truce between the two top criminal gangs is also possible. Overall, the balance of
risks favours a reduction of cartel violence rather than an increase .
No failed states impact, and it’s impossible to solve drug cartels
Couch, 2012 (Neil, Brigadier, British Army, July 2012, “Mexico in Danger of Rapid Collapse’: Reality or Exaggeration?,”
http://www.da.mod.uk/colleges/rcds/publications/seaford-house-papers/2012-seaford-house-papers/SHP-2012-Couch.pdf)
The evidence indicates that the Pentagon’s apocalyptic horizon-gazing was exaggeration. The conjecture may have arisen
from a failure to understand the nature of the ‘war’, to paraphrase Clausewitz. The US’s inclination to classify it as an insurgency, George
Bush’s judgement on the threat from failed states and assessments of Mexico’s poor progress all add up to make the
Pentagon’s prognosis understandable, but nonetheless flawed . However, if Mexico is not failing , it certainly is not
winning in its drug war . The flow of arms, drugs and money in and out of the country continues undiminished and the number of deaths
each year continues to rise. What is surprising, therefore, is the extent to which the country confounds the predictions of theories
that indicate looming weakness. The inability to provide security throughout the country and to control her borders should be expected
to undermine the rule of law and thus state legitimacy, as should the corruption that causes lack of confidence in key institutions such as the
police and judiciary. The scholarly work that this paper has referenced indicates that organised crime and corruption pose
challenges to Mexico’s legitimacy, rule of law and institutions similar to those described in the theory of state failure. Crime and
corruption threaten her economy. The media are not unfettered. The police forces may not be ‘paralysed’, but are distrusted and ineffective.
The military is one of few, if not the only, institutions that retains its integrity, despite being unable to ‘secure the population from violence and
fear’ across the ‘whole of its domain’. Her borders are not fully controlled. Drug barons, though not warlords, act as alternative suppliers of
services, such as protection and community projects. The legal system and judicial framework are not structured to deliver justice equitably.
The economy is underperforming, as is the delivery of public goods and services. However, Clausewitz, Garzón and Rotberg explain why
these are not existential threats . The aim of the gangs is to make money and they use violence and corruption only to shape
the environment in order to do so. They have no political agenda. Their violence is not ‘politics by other means’ nor is it
directed at the regime in order to gain greater autonomy, political power or concessions. The majority of the violence is internecine,
between gang members; security forces are engaged only when they interfere with the narco-traffickers’ business. In fact, it is possible
the gangs would not want the state to fail . They rely on protection from compromised elements of the state and on
the infrastructure and services that enable them to continue their business and which allow them to enjoy their profits. The
error, therefore, lies in confusing the motives of drug gangs with those of terrorists and insurgents .
Even massive Mexican instability doesn’t get close to state collapse or spilling over to affect
the U.S.
Jenkins, 2009 (Brian Michael, Senior Advisor to the President of the RAND Corporation, 3/23/9, “Mexico: Failing State?,”
http://security.nationaljournal.com/2009/03/mexico-failing-state.php)
A recent Pentagon study concluded that Mexico, like Pakistan, could suffer a “wholesale collapse of civil government,”
which would cause a major national security problem for the United States. The report understandably has attracted attention
here and has caused alarm in Mexico, where any U.S. concerns about border security summon bitter memories. In 1848, half of what was then
Mexico was lost to the United States as the result of a war, which both sides eagerly sought. And during the Mexican Revolution, the last time
the United States deployed large numbers of troops on the border, General Pershing invaded Mexico in pursuit of Pancho Villa, bringing the
two countries to the brink of war. Nothing on the political horizon even vaguely indicates that Mexico is on the brink of
collapse. Mexico is a vigorous if tumultuous democracy. Unlike Pakistan, there are no significant insurgent challenges, and no
history of coups since the Mexican Revolution nearly a century ago. Until the current global financial crisis, Mexico’s economic situation has
much improved. Instead, the threat comes from the proliferation of criminal gangs profiting from the traffic in illegal drugs
headed for the United States. Law enforcement efforts are hampered by corruption that extends high into Mexico’s political apparatus. Local
police in the border towns simply have been out-gunned. President Calderon has ordered the army to restore order, and it has had a measure
of success in killing or capturing some of the most notorious gang leaders. But Mexico’s gangs have not been reluctant to fight back, taking on
the state through assassination of high-ranking officials and local terror campaigns. The violence could escalate . Mexico’s gangs
could turn to large-scale terrorist bombings, as the narco traffickers did in Colombia, as a warning to authorities to back off. They
could also create and finance local terrorist groups to distract authorities. And they can finance public protests and, as we have seen in
Colombia, back political candidates to oppose the government’s crackdown and protect their interests. While collapse is highly unlikely, the
near- and long-term trends are worrisome. With 85 percent of its exports going to the United States, Mexico is being hit hard by the sharp
decline in the U.S. economy. Remittances from Mexican workers in the United States—Mexico’ second largest source of foreign exchange—are
also down. Mexico wisely hedged its 2009 oil revenues, but unless oil prices again rapidly ascend, the country’s oil revenues will fall in 2010.
The deteriorating security situation also directly impacts the economy. Growing violence discourages foreign investment and tourism, thereby
increasing unemployment. Meanwhile, domestic drug consumption continues to increase. The Mexican Army may retake the border towns, but
that will not alter the fundamental equation. The continuing demand in the United States for illegal drugs enriches and empowers the criminal
cartels that provide them. The United States has also become the principal source of weapons for Mexico’s gangs. As a consequences of drugs
going north, and billions of dollars and thousands of guns going south, the growing wealth and firepower of Mexico’s crime lords raises a longterm threat to the security of both countries. The deterioration of northern Mexico from crime-ridden to crime-ruled is
likely to be gradual and insidious. Nominal state authority would still exist . Police would continue to deal with petty crime.
Commerce would continue . Superficially, northern Mexico might appear normal—a failed state does not necessarily have to look like
Somalia. But no-go areas and untouchable crime bosses protected by heavily armed private armies would point to the real locus of power.
Although this situation would hardly be good news, the United States could live with it . Concerns would increase if the violence were to
spread across the border into the United States.
Absolute zero risk of Mexican collapse---everything’s super-resilient
Krauze, 2009 (Enrique, editor of the magazine Letras Libres and the author of “Mexico: Biography of Power,” 3/24/9, “The Mexican
Evolution,” NYT, http://www.nytimes.com/2009/03/24/opinion/24krauze.html?_r=0&pagewanted=print)
This notion appears to be increasingly widespread. The Joint Forces Command recently issued a study saying that Mexico — along with Pakistan
— could be in danger of a rapid and sudden collapse. President Obama is considering sending National Guard troops to the Mexican border to
stop the flow of drugs and violence into the United States. The opinion that Mexico is breaking down seems to be shared by much of the
American news media, not to mention the Americans I meet by chance and who, at the first opportunity, ask me whether Mexico will
“fall apart.” It most assuredly will not . First, let’s take a quick inventory of the problems that we don’t have. Mexico is a tolerant
and secular state, without the religious tensions of Pakistan or Iraq. It is an inclusive society, without the racial hatreds of
the Balkans. It has no serious prospects of regional secession or disputed territories, unlike the Middle East. Guerrilla
movements have never been a real threat to the state, in stark contrast to Colombia. Most important, Mexico is a young
democracy that eliminated an essentially one-party political system, controlled by the Institutional Revolutionary Party, that lasted more
than 70 years. And with all its defects, the domination of the party, known as the P.R.I., never even approached the same level of virtually
absolute dictatorship as that of Robert Mugabe in Zimbabwe, or even of Venezuela’s Hugo Chávez. Mexico has demonstrated an
institutional continuity unique in Latin America. To be sure, it can be argued that the P.R.I. created a collective monarchy with the
electoral forms of a republic. But since 2000, when the opposition National Action Party won the presidency, power has been decentralized.
There is much greater independence in the executive, legislative and judicial branches of government. An autonomous Federal Electoral
Institute oversees elections and a transparency law has been passed to combat corruption. We have freedom of expression, and electoral
struggles between parties of the right, center and left. Our national institutions function. The army is (and long has been) subject
to the civilian control of the president; the church continues to be a cohesive force; a powerful business class shows no desire
to move to Miami. We have strong labor unions, good universities, important public enterprises and social programs that provide
reasonable results. Thanks to all this, Mexico has demonstrated an impressive capacity to overcome crises , of which we’ve
had our fair share. They include the government’s repression of the student movement of 1968; a currency devaluation in 1976; an economic
crisis in 1982; the threefold disaster of 1994 with the Zapatista rebel uprising, the murder of the P.R.I. candidate for president and a devastating
collapse of the peso; and the serious post-election conflicts of 2006.
Mexico won’t turn into a failed state
Selee, 2010 (Andrew, the director of the Mexico Institute at the Woodrow Wilson International Center for Scholars; David Shirk, fellow at
the center and an associate professor at the University of San Diego; and Eric Olson, senior adviser at the center, 3/28/10, “Five myths about
Mexico's drug war,” http://www.washingtonpost.com/wp-dyn/content/article/2010/03/26/AR2010032602226_pf.html)
The country has certainly seen a big rise in drug violence, with cartels fighting for control of major narcotics shipment routes -especially at the U.S. border and near major seaports and highways -- and branching into kidnapping, extortion and other illicit activities. Ciudad
Juarez, in particular, has been the scene of major battles between two crime organizations and accounted for nearly a third of drug-linked
deaths last year. But the violence is not as widespread or as random as it may appear. Though civilians with no evident ties to the
drug trade have been killed in the crossfire and occasionally targeted, drug-related deaths are concentrated among the
traffickers. (Deaths among military and police personnel are an estimated 7 percent of the total.) A major reshuffling of leaders and alliances
is occurring among the top organized crime groups, and, partly because of government efforts to disrupt their activities,
violence has jumped as former allies battle each other. The bloodshed is also geographically concentrated in key
trafficking corridors, notably in the states of Sinaloa, Chihuahua and Tamaulipas. While the violence underscores weaknesses in the
government's ability to maintain security in parts of the country, organized crime is not threatening to take over the federal
government. Mexico is not turning into a failed state .
No Mexico state failure ever
Rieff, 2011 (David, Senior Fellow at the World Policy Institute at the New School for Social Research, a Fellow at the New York Institute
for the Humanities at New York University, and a member of the Council on Foreign Relations, 3/17/11, “The Struggle for Mexico,”
http://www.newrepublic.com/article/world/magazine/85337/mexico-calderon-clinton-obama-drug-cartels#)
All of this would seem to suggest that the pessimism of the U.S. military back in 2008 was justified—that Mexico is in fact a failed, or at least a
failing, state. And yet, as grave and as horrifying as all this is, it’s worth pausing to ask whether the label “failed state” is really
the most accurate, or useful, way to think about our neighbor to the south. When people talk about Mexico as a failed
state, what they seem to be discussing is not the Mexico of today but the Colombia of 20 years ago . (Generals,
apparently, are not the only people always well-prepared to fight the last war.) From the 1980s to the early ’90s, the Medellín and, to a lesser
extent, the Cali cartel posed a genuine threat to the Colombian state. To be fair, some of the similarities between Colombia and Mexico are
startling, most notably that Medellín then was what Juárez is today—the city with the highest murder rate in the world. But it is also important
to consider the differences. The Colombian narco-traffickers had complicated but extremely important links with both the left-wing
FARC guerrillas and the right-wing paramilitaries. The result of these connections was that the leaders of the cartels, most famously, Pablo
Escobar Gaviria of the Medellín cartel—in 1989, Forbes magazine described him as the seventh-richest man in the world—became
important actors on the political and military fronts of a two- and sometimes three-sided, low-intensity insurgency that verged on
civil war. Escobar really was like a character out of a Gabriel García Márquez novel, fascinated by power and with political ambitions from the
start. In 1982, he had been elected on the Colombian Liberal Party list as an alternate representative from Medellín to Congress. He never gave
up his ambition to play a political role, advertising it to the media even in the last year of his life, as government forces were hunting him down.
In contrast, while Mexicans are profoundly divided about how to respond to the cartels, no one I have spoken with has ever suggested
there is credible evidence that any of the cartel leaders have Escobar-like ambitions—or any national political agenda.
This emphatically does not mean that what the drug lords want is not terrible enough. How else can one describe their demand that the
Mexican state give them a free hand to run their domestic production and cross-border smuggling operations, as well as to go after their real
and supposed enemies, and, indeed, anyone who gets in their way or who is just in the wrong place at the wrong time, with complete
impunity? To do this, the cartels have not just bribed enormous numbers of policemen and local officials, but, in at least one case, helped elect
someone to the Mexican Congress. Still, to say that the cartels represent a fundamental challenge to the Mexican
government as a whole—a rebellion on the scale of what took place in Colombia or what is taking place now in Pakistan— would be
hyperbole . Indeed, the Mexican state is in important ways both stronger and more successful than many Americans seem to
realize. In the area of public health, and, more broadly, in poverty reduction, Mexico has far more to teach than to learn. The country is
generally thought to have handled the H1N1 panic better than many rich countries. And the Mexican government’s social-assistance
program, now known as Oportunidades—which skillfully and creatively uses a range of assistance, from conditional cash transfers to health
and nutritional support—has been enormously effective in changing the status of Mexican women (who are the program’s recipients),
improving the health of children, and lifting large numbers of people out of poverty . Oportunidades’s global reputation is such that
Michael Bloomberg gave the okay for an Oportunidades pilot program in New York City. The Ministry of Social Development (SEDESOL in its
Spanish acronym) is a model of what such an agency should be, and development experts around the world speak of it with a respect
sometimes bordering on awe. Significantly, the corruption that bedevils Mexican law enforcement has no equivalent
whatsoever in the social sphere, and, despite the drug crisis, SEDESOL goes from strength to strength.
Mexico Not K2 Heg
The U.S. will never let Mexican instability threaten strategic interests---they always comply
with pressure on security issues
Starr, 2010 (Pamela K., Director, U.S.-Mexico Network, Associate Professor (NTT), University Fellow, Center on Public Diplomacy,
University of Southern California, October 2010, http://college.usc.edu/usmexnet/wp-content/uploads/2010/10/Camp-Oxford-paper-final.doc)
This chapter will illuminate how these six variables have defined the nature of the bilateral relationship and its consequent
impact on Mexican domestic policy and politics. These drivers explain Mexico’s impressive degree of political autonomy during much
of the twentieth century despite sharing a 2,000-mile border with a superpower; the narrowing of this autonomy in the last quarter century;
and the still significant freedom of action the bilateral relationship affords Mexico. They
explain why Mexico almost always bends
to U.S. demands related to national security and follows the U.S. lead on economic policy, why Mexican vulnerability to U.S.
pressure varies depending on the issue at hand and thus why Mexico’s democratic transition has thus been a largely Mexican affair while its
narcotics control policies have been subject to significant U.S. influence. The chapter concludes with an analysis of how these
variables are apt to mold the future of the bilateral relationship and its likely impact on Mexican domestic affairs. The Drivers Power and
geography One of the most important sources of Mexico’s historic vulnerability to U.S. power is its geographic
position on the southern (and previously western) border of the United States. In the years after Mexico’s 1821 independence, an insecure
and expansionist United States facing the intrigues of European powers on its borders was an active player in Mexican domestic affairs to
counter British influence in a country characterized by persistent political instability. Twenty-five years later, the United States initiated a war
that deprived Mexico of half of its territory and transformed the United States into a continental power. For most of the remainder of the
nineteenth century, U.S. intervention in Mexican affairs declined markedly owing to internal U.S. challenges (the Civil War and Reconstruction)
and the rise of a stable, relatively pro-U.S. government in Mexico. During the early twentieth century, however, Mexican political instability
again invited U.S. intervention in a failed attempt to steer the Mexican Revolution in a direction amenable to U.S. interests. Failing that, the
United States repeatedly exploited its military and economic power to force Mexico to adopt policies more “acceptable” to the United States.
The oft-quoted aphorism attributed to former Mexican President Porfirio Diaz, “Poor Mexico, so far from God and close to the United States,”
conveys these real historic limits to Mexico’s sovereign autonomy created by a border shared with a great power. Yet geography has also
constrained the freedom of U.S. policy action. Mexico’s position on the U.S. southern border means that the overriding U.S. interest in
Mexico is ultimately to have a stable ally on its frontier. The importance of this fact was evident during the early nineteenth
century and was forcefully underlined during World War I when Mexican political instability and flirtation with U.S. adversaries created the
threat of a possible attack on the United States through Mexican territory. In the aftermath of that war, concerns about foreign adversaries
attacking the United States through Mexico declined, but the approach of a second world war rekindled U.S. strategic concerns about Mexico.
In this circumstance the United States acquiesced to the 1938 nationalization of the Mexican petroleum industry, a clear violation of the
sanctity of private property rights for which the United States had intervened in the past. Put simply, having an ally in such a strategically
important country trumped the rights of U.S. property owners. During the Cold War when the United States feared that developing nations
might fall like dominos to communist influence, Mexico was the “last domino” in Latin America. This strategic reality motivated a
U.S. willingness to accept Mexico’s authoritarian politics and closed economy for forty years, practices that had previously motivated U.S.
involvement in Mexican affairs, in exchange for a stable, anti-communist ally to the south. Mexico repeatedly exploited this consequence of
geography to carve out an autonomous policy-making space. Throughout the Cold War, this enabled an independent foreign policy that was
regularly at odds with U.S. preferences. For a revolutionary regime following increasingly conservative economic and social policies at home, a
foreign policy motivated by the revolutionary principles of anti-imperialism, social welfare, and non-intervention was an effective tool for
legitimating the regime. This inspired a series of international positions in direct opposition to United States policy. Most notably, Mexico
sustained diplomatic ties with the Soviet Union when that was frowned upon in Washington; it recognized the Castro regime in Cuba and
persistently opposed its political and economic isolation; it vocally opposed U.S.-sponsored coups and other forms of intervention in Latin
America; and it actively supported the 1970s socialist government in Chile. The United States tolerated this opposition with an eye to
strengthening a stable, essentially pro-U.S. regime on the U.S. frontier, but only as long as Mexican action did not pose a real
obstacle to the U.S. capacity to protect its strategic interests . The lone exception to this Cold War rule occurred during the 1980s
in Central America when the United States concluded that Mexican involvement directly impeded the promotion of U.S. strategic aims in the
region. This circumstance provoked two years of very tense bilateral relations, but the United States ultimately concluded that a strategy
designed to outmaneuver Mexico was more likely to produce a positive outcome than further pressure on Mexico to abandon its independent
and domestically popular policy stance. Yet when the United States perceives a threat to its national security emanating from
Mexico or when Mexican stability appears to be at risk, Mexico’s autonomy narrows once again. Following the
September 11, 2001 terrorist attacks on the World Trade Center and the Pentagon, Mexican policy autonomy evaporated
leading to a series of actions that responded perfectly to U.S. national interests . Mexico’s current difficulties with
drug trafficking organizations and the threat they represent to stability in Mexico have also hampered its policy freedom. The
strategic factor in the bilateral relationship thus trumps other policy concerns . When this involves the possibility of
an attack on the U.S. homeland or political instability in Mexico, it sharply increases U.S. influence in Mexican
affairs , but when it involves protecting an established, stable ally in Mexico, U.S. influence declines sharply.
The U.S. will always just force Mexico to do whatever we need to maintain heg-this cites the
factors from their evidence
Starr, 2010 (Pamela K., Director, U.S.-Mexico Network, Associate Professor (NTT), University Fellow, Center on Public Diplomacy,
University of Southern California, October 2010, http://college.usc.edu/usmexnet/wp-content/uploads/2010/10/Camp-Oxford-paper-final.doc)
The intermestic quality of the bilateral relationship has made nationalism a much less effective barrier against U.S. meddling in Mexican
internal affairs. From drugs to jobs, health care, environmental protection, and even the ethnic makeup of U.S.
society, many U.S. domestic policy challenges are now influenced by developments in Mexico. This situation
unsurprisingly creates an incentive for U.S. politicians to demand that Mexico adjust its domestic policy in a manner
that might help resolve these U.S. policy problems . This incentive is particularly pronounced in those divisions of the executive
branch responsible for domestic problems with clear international drivers, such as the Drug Enforcement Administration, and in the U.S.
Congress where political survival depends on resolving local concerns that have international drivers. The domestic ¬policy focus of these
actors, meanwhile, limits their sensitivity to the self-restraining influence that Mexican nationalism has elsewhere in the U.S. government. It is
the U.S. Congress, however, that has the greatest capacity to influence Mexican policy and politics because of its role in
making and overseeing U.S. foreign policy. For example, it was the U.S. Congress that established the drug policy certification process
that from 1987 to 2001 threatened foreign governments with economic sanctions for insufficient cooperation with U.S. counter-narcotics
policies. The Congress elicited a number of policy concessions from Mexico in exchange for its 1993 authorization of NAFTA, and it attempted
to condition the 1995 U.S. financial rescue package for Mexico on changes to its immigration, drug, and economic reform policies. And the very
limited U.S. government demands for increased democracy in Mexico during the 1980s and 1990s emanated almost exclusively from the U.S.
Congress. Congress has thus attempted to force Mexico to modify its domestic behavior to a much greater degree than
other members of the U.S. government in large measure because its incentive to self-restrain is less pronounced. And congressional
pressure has proven to be most effective when it has control over something Mexico wants, such as the approval of
NAFTA under Salinas, immigration reform under Fox, and authorization of counter-narcotics funding under Calderón. Case Studies The interplay
among these six drivers has determined the relative degree of U.S. influence in Mexican policy and politics for decades and continues to do so.
Three basic axioms about their interplay and resulting impact on Mexico’s domestic policy-making autonomy apply: 1) Mexican autonomy
is most narrow when the United States perceives that developments in Mexico directly threaten its national security
and when Mexico has tied its own policy-making hands; 2) Mexican domestic policy autonomy will never again be as wide as it was in the midtwentieth century, but it remains significant when U.S. national security is not at risk, Mexican nationalism is potent, and the U.S. Congress is
marginalized; and 3) Mexican autonomy is often constrained when the U.S. Congress plays a central bilateral policy role, especially when
Mexico needs congressional cooperation to achieve a policy objective. These basic rules for the reach of U.S. influence in Mexican affairs are
best illuminated by five cases that exemplify each axiom in turn.
zzzz
If any actual threat to U.S. security emerges, we’ll force Mexico to comply, and they won’t
backlash
Starr, 2010 (Pamela K., Director, U.S.-Mexico Network, Associate Professor (NTT), University Fellow, Center on Public Diplomacy,
University of Southern California, October 2010, http://college.usc.edu/usmexnet/wp-content/uploads/2010/10/Camp-Oxford-paper-final.doc)
Mexico’s room for policy maneuver is most narrow in two very distinct sets of circumstances – when a threat to U.S.
national security emerges in Mexico , erases U.S. self-restraint, and lays bare the power asymmetry in the
relationship, and when Mexico willingly ties its own policy-making hands. Under these circumstances, there is no significant
bilateral tension despite considerable U.S. influence in Mexican affairs because Mexico fully understands and
accepts the absolute necessity for cooperation . The aftermath of the terrorist attacks on the World Trade Center and the Pentagon
on September 11, 2001, demonstrates the first case and post-NAFTA economic policy making illuminates the second. Following the 9/11
attacks, the United States immediately circled the wagons to prevent a possible follow-up attack from across its northern or southern
border. As noted above, dramatically increased security at the border significantly constrained cross-border trade for
weeks, making clear the depth of U.S. alarm. In this context, Mexico quickly took steps that demonstrated its willingness to
cooperate fully with U.S. security concerns. It deployed 18,000 troops to protect its air and sea ports despite concerns that this might
make Mexico vulnerable to anti-U.S. terrorist attacks; it provided intelligence on “special interest aliens” of particular concern to the United
States; and it agreed to a “Smart Border Agreement” designed to protect the United States from possible terrorist attacks emanating from
Mexican territory without excessively restricting the cross-border flow of goods. Despite a historic taboo against overt security
cooperation with the United States and despite Mexican reservations about the U.S. perception of risk or the need for such a significant
Mexican investment in counterterrorism operations, the country cooperated without question . Mexican officials understood
that they were “ obliged to respond to U.S. security demands ” of this sort.
Relations Advantage – Neg
Case Defense
Status Quo Solves
Drug Cooperation
Drug cooperation is high now and will continue to grow – Nieto and Obama’s meetings
FNL 7/5 [July 5, 2013. Fox News Latino. “U.S. Wants More Intelligence Cooperation With Mexico, White House
Report States” http://latino.foxnews.com/latino/news/2013/07/05/us-wants-more-intelligence-cooperation-withmexico-white-house-report-states/#ixzz2aos85oqW]
A newly released White House report on the U.S. border with Mexico highlights the Obama administration's
strategic shift toward forgoing a closer working relationship with its southern neighbor. This, despite recent restrictions by Enrique
Peña Nieto's government on who American intelligence services can contact in Mexico. The White House's 2013 National Southwest Border
Counternarcotics Strategy illustrated nine points that focus on interdiction, tackling drug cartels along the border, halting
money laundering, building up stronger communities and strengthening ties between the two nations in terms
of counternarcotics. “The U.S.-Mexican bilateral relationship continues to grow based on strong, multilayered institutional ties,” the report stated. “Based on principles of shared responsibility, mutual trust, and respect
for sovereign independence, the two countries’ efforts have built confidence that continues to transform and
strengthen the bilateral relationship in 2013 and beyond.” While the U.S. report touts a need for greater cooperation, new Mexican security
policies could hamper that. A recent decision by the Mexican government has ordered a halt in direct communications between American intelligence
agencies and their counterparts south of the border. Now instead of directly consulting local law enforcement, agencies like the DEA and FBI will have to
Intelligence sharing, however, was a major
talking point when President Barack Obama met with his Mexican counterpart back in May. Despite scarce details about the meeting, the
two leaders discussed border security and the use of drones along the 1,954-mile shared border. Peña Nieto downplayed the
notion that the new, more centralized arrangement would damage its security partnership with the United States. He
said Obama agreed during their private meeting earlier in the day to "cooperate on the basis of mutual respect" to promote an
contact Mexico's Interior Ministry before being passed along through the proper channels.
efficient and effective strategy. "I think the U.S. government wants to make sure that Peña Nieto is on the same page as Obama, that he wants to pursue the
cartels as consistently and aggressively as [former Mexican President] Calderón did during his presidency," Alex Sanchez, a security analyst at the Council
on Hemispheric Affairs, told ABC News. Even as the Obama administration hopes that Peña Nieto will continue to go on the offensive against the drug
Besides counternarcotics efforts, a solid portion of the
report concerns community building measures along the border, ways to deal with substance abuse and
violence, as well as health and education programs. “The crime and breakdown in public health and safety that affect many border
cartels in Mexico, the report suggests a more humanitarian approach to the drug war.
communities has a close nexus with substance use —including abuse of alcohol and other drugs— can have a far-reaching effect on the resilience of
The report’s focus on
community building seems to go along with Peña Nieto’s strategy in combating the drug war. Instead of the “kingpin”
approach that his predecessor Felipe Calderón took, which focused on apprehending or killing high-ranking cartel members, Peña Nieto has
moved to a plan to reduce the levels of violence in the country and bolster trust of law enforcement among the populace. The
report has some analysts hopeful that there will be better working relations between the U.S. and Mexico, especially in
light of the new rules concerning U.S. intelligence agencies. “The election of Peña Nieto sparked vocal concerns among U.S.
communities,” the report stated. “Heavily Hispanic communities along the border have been particularly hard hit.”
political leaders over his stated desire to move priorities away from arrests and drug seizures, and towards violence reduction, and there have also been
reports of tensions between the incoming government and U.S. officials over the level of U.S. involvement in Mexican security policies,” the Latin
American intelligence website Insight Crime stated. “However, the
U.S. strategy displays no sign of this friction, only expressing
a desire to increase cooperation, which despite the public murmuring is likely to be the case.”
Security cooperation is as good as it’s ever been – new communication methods
AP 7/23 [July 23, 2013. Associated Press. “DHS secretary discusses cooperation with Mexican domestic security
chief at border meeting” http://articles.washingtonpost.com/2013-07-23/world/40859585_1_mexico-city-u-s-borderpatrol-u-s-rep]
Security cooperation with Mexico is as good as it has ever been with the new administration of President
Enrique Pena Nieto, U.S. Homeland Security Secretary Janet Napolitano said Tuesday. Napolitano, who is leaving her post
to head the University of California, met with Mexican Interior Secretary Miguel Angel Osorio Chong in this border city and
announced plans for a bi-national security communications network and coordinated patrols between U.S.
Border Patrol and Mexico’s Federal Police. No details of the programs were released. “What we have been working on is
improved intelligence sharing between our countries on a real-time basis and making sure as, Secretary Osorio Chong
said, that the gaps are filled and they are filled in a timely way,” Napolitano said. “But the emphasis on intel sharing,
information sharing, making risk assessments that address the risk both countries face ... those things I think are
continuing and are even stronger than they have been.” Napolitano’s visit comes one week after the capture of alleged Zeta
leader Miguel Angel Trevino Morales, which appeared to be the result of U.S.-Mexico intelligence sharing. Mexico would not say what
role the U.S. played in the capture, but the arrest and killing of many top capos has come with intelligence from U.S. law enforcement.
Trevino Morales, considered among the most violent of Mexico’s drug lords, was caught July 15 by Mexican marines along with two
others on a dirt road outside Nuevo Laredo, across the border from Laredo, Texas. It was a significant arrest for Pena Nieto, whose
administration has been at pains to show it is not softening the pursuit of organized crime since he took office Dec. 1. His predecessor,
Felipe Calderon, was repeatedly lauded by the U.S. for unprecedented cooperation between the two countries as he led an aggressive
offensive against Mexico’s drug cartels. The Pena Nieto administration in April announced that contact for U.S. law
enforcement would go through a “single door,” Osorio Chong’s office, signaling an end to direct sharing of resources and
intelligence among law enforcement of both nations. U.S. Rep. Henry Cuellar, a Democrat from Laredo, said Tuesday that he had
congratulated Osorio Chong following Trevino Morales’ arrest and called it the latest sign of cooperation. “The
U.S. has helped provide for a while intelligence to make sure that they’re successful in reaching targets,” Cuellar said. The meetings
took place just inside Mexico at the end of an international bridge linking Matamoros and Brownsville, Texas. Security was heavy at
both ends of the bridge, with dog teams inspecting outbound cars on the Brownsville side and soldiers and state and federal police
canvassing the bridge on the Mexican side. Napolitano was scheduled to fly on to Mexico City for meetings with Pena Nieto’s Cabinet.
It will likely be her last visit to Mexico as homeland security secretary since she announced earlier this month that she will be leaving
the post.
New strategic objectives heighten US-Mexico drug cooperation now
Barget 7/3 [July 3, 2013. James Bargent is a freelance journalist based in Colombia. “2013 US Southwest Border
Strategy Calls for More Cooperation with Mexico” http://www.insightcrime.org/news-briefs/2013-us-southwestborder-strategy-calls-for-more-cooperation-with-mexico]
The White House's newly released 2013 National Southwest Border Counternarcotics Strategy continues the Obama
administration's shift towards training, institution building, and civil society investment, and calls for deepening
cooperation between the two countries, despite recent tensions. The report [pdf] describes nine strategic objectives, which
focus on improving interdiction of drugs, arms and cash, and efforts to tackle money laundering, dismantling drug
trafficking organizations operating in the border region, developing "strong and resilient" communities, and
enhancing bilateral counternarcotics cooperation. The plan reiterates the US's refocusing of its Merida initiative
priorities away from providing security equipment and to wards building stronger judicial institutions, training and technical
assistance for law enforcement, and increased support for civil society organizations working in the rule of law and human rights. It also sees the
broadening of the initiative to include assistance to local state level authorities instead of just working on the Federal level. In fitting with the Obama
government's aim of moving to a more humanistic counternarcotics policy, there are also plans to strengthen
communities in the border region, with resources to be dedicated to tackling substance abuse and violence through
health and education programs. The report also contains a particular focus on increased intelligence sharing between
the United States and Mexico, with the El Paso Intelligence Center (EPIC) slated to become a "key node" for intelligence. The
White House strategy report contains few surprises, and is clearly based on Obama's drift away from policies focused almost entirely on security to
include broader social issues that fuel organized crime and the drug trade. One striking aspect is the continued commitment to close cooperation
with Mexico. This section of the report displays no hint of the rhetorical bluster that has surrounded bilateral debate over new Mexican President Enrique Peña
Nieto's security policies. The election of Peña Nieto sparked vocal concerns among US political leaders over his stated desire to move priorities away from arrests and
drug seizures, and towards violence reduction, and there have also been reports of tensions between the incoming government and US officials over the level of US
involvement in Mexican security policies. However, the
US strategy displays no sign of this friction, only expressing a desire to
increase cooperation, which despite the public murmurings is likely to be the case.
No Drug Cooperation
US Doesn’t Want To
Congress isn’t concerned about drugs – no action on either side
Sanchez 7/19 [July 19, 2013. Mary Sanchez is an opinion-page columnist for The Kansas City Star. “Taking out
drug lords is nice, but we need more than perp walks” http://www.chicagotribune.com/news/opinion/sns201307191200--tms--msanchezctnms-a20130719-20130719,0,5645812.column]
While many in the press speculate about who will emerge as Trevino's successor, we need to recognize that taking out cartel leaders is a
little like playing whack-a-mole. Trevino moved into power in October 2012 when Heriberto "The Executioner" Lazcano was killed by
Mexican authorities. Eliminating the personnel is unlikely to solve the problem; eliminating the processes they use to make and
launder their money is more promising. That perspective doesn't get enough attention. Not from media, much less the
Mexican and the U.S. governments. In Congress, it's a bipartisan effort of denial. "We seem to be completely blind to
the danger of economic injury caused by the transnational criminal organizations," said Cameron Holmes, director of the Southwest Border AntiMoney Laundering Alliance. "We're just not even paying attention to it." Voices like Holmes stress that Trevino was one player, a
principal in a transnational criminal organization. And like any enterprise, the motivation is money. Holmes knows something about that, too. He
authored the money-laundering statutes and led the prosecution in Arizona that allowed the state to eventually settle for $94 million with Western
Union. The charge was that the company was being used by drug lords for complicated money transfers to shuffle money across the border. But
that was several cartel business models ago. Holmes stresses the nimble nature of drug traffickers, who are savvy to emerging technology and
adept at using new mechanisms like front-loaded bankcards. Taking out leaders while leaving these operations in place
accomplishes little. Still, Holmes would like to see more more Mexican narcotraffickers extradited to the U.S., where better moneylaundering laws are in place and the courts and law enforcement are much less corrupt. Left to be seen is how closely Mexico's new
president is willing to work with the U.S. government on such measure s. Trevino had a $5 million reward on his head from the
northern side of the border too, where he had been indicted for money-laundering and drug trafficking. But it's safe to say that, in effect, both
nations have been bilaterally complicit in their unwillingness to devote the necessary forces against drug
enterprises like Los Zetas, or any of their rivals. Taking drug lords out is all well and good. (And it would be nice to see Joaquin "El
Chapo" Guzman, leader of the Sinaloa Cartel, be the next one bagged.) But we will not have won until they are put out of business.
Despite importance, counter-drug activity is overlooked by officials
Walser 7/18 [July 18, 2013. Ray Walser, a veteran Foreign Service officer, is a Senior Policy Analyst
specializing in Latin America at The Heritage Foundation. “Arrest of Notorious Zetas Leader Built on U.S.–
Mexican Cooperation” http://blog.heritage.org/2013/07/18/arrest-of-notorious-zetas-leader-built-on-u-s-mexicancooperation/]
The bottom is line is that Los Zetas is a transnational criminal/terrorist organization that has spread terror up and down
Mexico and Central America and continues to pose a serious, if often overlooked, threat to U.S. national security.
Treviño’s arrest represents the first big success against a key Mexican crime figure for President Peña Nieto. And while Peña Nieto’s
administration has sought to play down the costs and consequences of the drug war, the violence continues to be a major national
crisis and a challenge for U.S.–Mexican relations. The force responsible for tracking and capturing Treviño was Mexico’s
equivalent of the Marine Corps, a military strike force that has worked closely with U.S. military trainers. U.S.
intelligence assets may also have played an important, if undisclosed, role in the arrest. Washington will likely request Treviño’s
extradition to the U.S. Despite recent friction, high-level officials from Mexico and the U.S. continue to coordinate
counter-drug activity in the spirit of the Merida Initiative . With the domestic focus on immigration reform and
border security high on the congressional agenda, it is easy to overlook the importance of strong cross-border cooperation,
intelligence sharing, and extraditions of Mexican criminals to the U.S. in order to bring to justice deadly desperados such as Treviño and
respond to the threats posed by transnational criminal organizations such as Los Zetas.
Mexico Doesn’t Want To
US efforts to combat Mexican drug trafficking are counter-productive – new Mexican
administration doesn’t want to work with the US
Priest 5/1 [May 1, 2013. Dana Priest is a national security reporter whose work focuses on intelligence and
counterterrorism. “U.S. role to decrease as Mexico’s drug-war strategy shifts”
http://seattletimes.com/html/nationworld/2020902455_mexicoobamaxml.html]
The new administration has shifted priorities away from the U.S.-backed strategy of arresting kingpins, which sparked an unprecedented
level of violence among the cartels, and toward an emphasis on prevention and keeping Mexico’s streets safe and calm,
Mexican authorities said. Some U.S. officials fear the coming of an unofficial truce with cartel leaders. The Mexicans see it
otherwise. “The objective of fighting organized crime is not in conflict with achieving peace, ” said Eduardo MedinaMora, Mexico’s ambassador to the United States. Two weeks after Peña Nieto assumed office Dec. 1, the new president sent his top five
security officials to an unusual meeting at the U.S. Embassy in Mexico City. The new attorney general and interior minister sat in
silence next to the new leaders of the army, navy and Mexican intelligence agency. Also at the Dec. 15 meeting were representatives from
the U.S. Drug Enforcement Administration (DEA), the CIA, the FBI, the Office of the Director of National Intelligence and other U.S. agencies
charged with helping Mexico destroy the drug cartels that had besieged the country for the past decade. The Mexicans remained stone-
faced as they learned how entwined the two countries had become during the battle against narco-traffickers, and
how, in the process, the United States had been given near-complete access to Mexico’s territory and the secrets
of its citizens, according to several U.S. officials familiar with the meeting. The administration of the previous president, Felipe Calderón,
had granted U.S. spy planes access to Mexican airspace to gather intelligence. Unarmed Customs and Border Protection
drones had flown from U.S. bases in support of Mexican military and federal police raids against drug targets and to track
movements that would establish suspects’ “patterns of life.” The United States had also provided electronic signals technology, ground
sensors, voice-recognition gear, cellphone-tracking devices, data-analysis tools, computer hacking kits and airborne cameras that could read
license plates from three miles away. Under a classified program code-named SCENIC, the CIA was training Mexicans how to target and vet
potential assets for recruitment and how to guard against infiltration by narco-traffickers. In deference to their visitors, the U.S. briefers left out
that most of the 25 kingpin taken off the streets in the past five years had been removed because of U.S.-supplied information, according to
people familiar with the meeting. Also unremarked upon was the mounting criticism that success against the cartels’ leadership had
helped incite more violence than anyone had predicted, more than 60,000 deaths and 25,000 disappearances in the
past seven years. Meanwhile, Mexico remains the U.S. market’s largest supplier of heroin, marijuana and methamphetamine and the
transshipment point for 95 percent of its cocaine. When the Dec. 15 meeting concluded , Mexico’s new security officials remained
poker-faced.
New policies mean the US can’t be more involved in drugs no matter what the aff does
Priest 5/1 [May 1, 2013. Dana Priest is a national security reporter whose work focuses on intelligence and
counterterrorism. “U.S. role to decrease as Mexico’s drug-war strategy shifts”
http://seattletimes.com/html/nationworld/2020902455_mexicoobamaxml.html]
In a visit to Washington two weeks ago, Mexico’s top security team shared the outlines of the new plan with U.S. agencies,
according to U.S. and Mexican officials. It contains many changes. The president will not be nearly as directly involved in
counterdrug efforts as was Calderón, the officials said. The interior minister will coordinate the relationships among
Mexican and U.S. agencies and other Mexican units. Given the corruption of Mexican law enforcement and armed forces, U.S. officials
said privately they would be unwilling to share sensitive information until they have vetted the people involved. The Mexican government
also plans to create five regional intelligence fusion centers and to build a 10,000-member super police force. This
force would be steeped in military discipline but would use police tactics, rather than military force, to keep violence
to a minimum. Medina-Mora, the Mexican ambassador, said in an interview that his nation considers U.S. help in the drug war “a
centerpiece” of Mexico’s counternarcotics strategy. But the Mexican delegation also told U.S. authorities that Americans will no longer
be allowed to work inside any fusion center.
New Mexican goals are geared toward little American involvement – US is ambivalent
towards cooperation
Ljungquist 7/22[July 22, 2013. Christopher S. Ljungquist is a Senior Analyst for Geopolitical Monitor.
He holds a BA in Latin America Area Studies from American University and a MSc. in Comparative Politics (Latin
America) from the London School of Economics, where he wrote on the Bolivarian Revolution in Venezuela. He
has specialized in Latin American civil-military relations, South American security issues and the influence of
religion in geopolitical dynamics. “Calderon, Nieto, and One less Zeta: Recent Shifts in the Mexican Drug War”
http://www.geopoliticalmonitor.com/calderon-nieto-and-one-less-zeta-recent-shifts-in-the-mexican-drug-war-4839/]
It is undeniable that the
United States is more than ambivalent towards the direction the Mexican administration has
taken in its struggle against narco-traffickers. The PRI and its traditional nationalistic prejudice against foreign
encroachment on matters of state security, along with that party’s desperate desire to re-establish its hegemonic
imperium by capitalizing on the electorate’s weariness of a now-stratospheric death toll, have led to Peña Nieto’s call for a new
strategy, the goal of which is not a large-scale interdiction of narcotics and the capture or killing of drug lords, as the U.S. wants, but
rather an amorphous and politically expedient platitude of “reducing violence.” During the presidential campaign and his first
months in power, Peña Nieto promised to de-militarize the war by creating a civilian paramilitary gendarmerie along Colombian lines,
and though he has appointed former Colombian general Oscar Naranjo as his security adviser, the proposed force’s status remains, and is likely to
remain, in limbo. As the country’s economy grows at an impressive annual rate of approximately 3.8%, the unprecedented
violence unleashed during the previous presidential administration has not abetted in any real way . In fact, in many
parts of Mexico it is spreading and increasing, becoming more uniform throughout the country, even though various
cartels’ territorial lines have remained largely static.
Changes to Nieto’s policy make the US unwilling to cooperate
Ljungquist 7/22[July 22, 2013. Christopher S. Ljungquist is a Senior Analyst for Geopolitical Monitor.
He holds a BA in Latin America Area Studies from American University and a MSc. in Comparative Politics (Latin
America) from the London School of Economics, where he wrote on the Bolivarian Revolution in Venezuela. He
has specialized in Latin American civil-military relations, South American security issues and the influence of
religion in geopolitical dynamics. “Calderon, Nieto, and One less Zeta: Recent Shifts in the Mexican Drug War”
http://www.geopoliticalmonitor.com/calderon-nieto-and-one-less-zeta-recent-shifts-in-the-mexican-drug-war-4839/]
Four months after the abovementioned meeting, President Peña Nieto’s team delivered the first changes to the U.S.-Mexico antidrug efforts. The PRI appointees declared that Americans would no longer be allowed to work inside the intelligence fusion
centers, and that direct communication between civilian CIA and DEA agents and their contacts in the Mexican
military was now prohibited. All intelligence purveyed by Americans must go through the Interior Ministry, and
only after that can the director of CISEN transmit the information to those he sees fit. Suffice it to say, such procedural
changes bode ill for the future of the Narco War in Mexico . The United States has responded that while the Mexican
administration has every right to consolidate the flow of information and limit the presence and agency of American
intelligence personnel in their country, the U.S. was also at liberty to withhold intelligence it gathers when it fears it
would simply be put to ill or unreliable use.
No State Collapse Coming
No state collapse coming – drug violence is bad but is improving in the long term
Ljungquist 7/22[July 22, 2013. Christopher S. Ljungquist is a Senior Analyst for Geopolitical Monitor.
He holds a BA in Latin America Area Studies from American University and a MSc. in Comparative Politics (Latin
America) from the London School of Economics, where he wrote on the Bolivarian Revolution in Venezuela. He
has specialized in Latin American civil-military relations, South American security issues and the influence of
religion in geopolitical dynamics. “Calderon, Nieto, and One less Zeta: Recent Shifts in the Mexican Drug War”
http://www.geopoliticalmonitor.com/calderon-nieto-and-one-less-zeta-recent-shifts-in-the-mexican-drug-war-4839/]
Thus, from a purely analytical standpoint, in order to reap any benefit from a Narco-truce, the state must finish re-asserting itself as sovereign, or
else it will be a gesture done in vain. In 2009 the U.S. Joint Forces Command grimly stated that “In terms of worse-case
scenarios for the Joint Force and indeed the world, two large and important states bear consideration for a rapid and sudden
collapse: Pakistan and Mexico.” Although this statement was made only four years ago, Mexico is no longer so
precariously placed as to warrant such a suggestion. It is, however, a testament to the utter devastation and loss of
control the various authorities in Mexico suffered in the first phase of the Narco War, and the Mexican state is not
altogether in the clear, yet.
Drug Cooperation Fails
US-Mexican drug cooperation fails and has opposition from the citizens
Carlsen 7/18 [July 18, 2013. Laura Carlsen is a policy analyst and director of the Americas Program of the
Center for International Policy. “Kingpin arrest will mean more violence in Mexico”
http://www.aljazeera.com/indepth/opinion/2013/07/201371812446923277.html]
Despite all these concerns, the US government immediately congratulated the Pena Nieto government on the bust. It has supported the
Mexican drug war with equipment, training and US agents on the ground and pressured the new Mexican president to continue
the military/police model. This is the second reason to fear a rise in violence. The Trevino Morales arrest and US and Mexican
government statements following it are a joint message that the drug war will continue with support from both administrations despite its failures and growing citizen opposition. President Pena Nieto had attempted to put distance between his policies and the
drug war of his predecessor, Felipe Calderon - and with good reason. The offensive on drug cartels with the deployment of the armed
forces and police has led to more than 100,000 deaths in the country and widespread human rights violations. Drug trafficking
has continued unabated and polls show most Mexicans see no progress in the campaign against drug traffickers.
The US and Mexico are cooperating now, but badly - makes the public collateral damage
and fails to accomplish anything good
Carlsen 7/18 [July 18, 2013. Laura Carlsen is a policy analyst and director of the Americas Program of the
Center for International Policy. “Kingpin arrest will mean more violence in Mexico”
http://www.aljazeera.com/indepth/opinion/2013/07/201371812446923277.html]
Pena Nieto promised to redirect efforts from the drug war to public safety as a cornerstone of the campaign that brought him to
office in July 2012. This explains why this arrest was handled much differently from the past. If before criminals were brought out
bloodied and cuffed with great fanfare, this time the administration sent out a discreet statement with mug shots of Trevino Morales, his two
companions, and a map of where they were captured by Navy and police forces. Videos showed Trevino being led without handcuffs. Eduardo
Sanchez, the spokesperson for the security cabinet, noted that the alleged criminals were charged with "organised delinquency, murder, crimes
against health (drug trafficking), torture, money laundering, illegal possession of arms, among others". He added the assassination of 265
migrants in San Fernando, Tamaulipas in two incidents that shocked Mexican society and the world. The self-congratulatory tone and combative
talk of defeating organised crime was conspicuously absent. Mexican security cabinet spokesman Eduardo Sanchez highlighted
Mexican inter-agency cooperation. He dodged the question on US involvement in Trevino Morales' capture. The New York Times,
citing anonymous sources, said the US government "played a key behind-the-scenes role" and helped confirm the identity of the drug lord
through DNA. Obama on the other hand, welcomed the news as a confirmation of Pena Nieto's commitment to the joint
drug war. President Obama said in an interview with the Spanish-language Univision, "I think what it [the arrest of Trevino Morales]
shows is that the Pena Nieto administration is serious about continuing efforts to interrupt drug operations". The network
interpreted the short interview as a major endorsement of Pena Nieto's continued commitment to US-backed counternarcotic efforts. Obama
stated explicitly that there were questions about that commitment during the campaign. Indeed, US-Mexico cooperation in the drug war has hit
rocky times. In addition to early fears that Pena Nieto would attempt to pact with the cartels, his decision to channel all security
cooperation through the Ministry of the Interior - a move to rein in US agencies' open access to Mexican national security - caused
concern in Washington. Insiders said security assistance was on hold until the picture cleared. This move marks continued access and
cooperation for US government agents under the same drug war model, just when questions about the cooperation are again
emerging in light of leaks that Mexico is among countries routinely spied on by the US National Security Agency. The US government is
heavily invested in the Mexican drug war, not so much due to the more than $2bn dollars it has spent to bolster the disastrous strategy,
but in the enormous expansion of its presence in Mexico. The US security aid package known as the Merida Initiative allowed
many US government agencies to more than double their personnel under a broad umbrella that places US agents in
intelligence-gathering, counternarcotic operations, border control and spying. It represents millions of dollars in contracts to
private defense, security and computer firms. Assuming the crimes attributed to him are proven in a court of law, no one could fail to celebrate
the incarceration of a cold-blooded criminal such as Miguel Angel Trevino Morales. But that the arrest signals the continued alliance
the US and Mexican governments in a security effort that uses the public as collateral damage is bad news for us
all.
of
Oil DA
Link
The plan opens up drilling in a massive oil field – prices are affected rapidly
Vargas ‘12 [Jorge A. Vargas is a Professor of Law at the University of San Diego School of Law. Fall 2012,
“ARTICLE: The 2012 U.S.-Mexico Agreement on Transboundary Hydrocarbon Reservoirs in the Gulf of Mexico:
A Blueprint for Progress or a Recipe for Conflict?,” San Diego International Law Journal, 14 San Diego Int'l L.J. 3,
p. lexis]
On February 20, 2012, Hillary Rodham Clinton, U.S. Secretary of State, and Patricia Espinoza, Mexican Secretary of Foreign Relations, formally
signed the U.S.-Mexico Agreement on Transboundary Hydrocarbon Reservoirs in the Gulf of Mexico. In the remarks made at the signing
of this agreement, Secretary of State Clinton said: If a reservoir straddles the boundary, then there would be disputes over who should do the
extraction and how much they should extract. The agreement we sign today helps prevent such disputes. It also helps promote the safe,
efficient, and equitable exploration and production of cross-boundary reservoirs. Each country maintains its own right to
develop its own resources... . This agreement creates new opportunities. And for the first time, American companies will be able to
collaborate with PEMEX, their Mexican counterpart. n2 [*6] The signing of this truly unprecedented agreement is unique for the following
reasons: (a) The agreement offers the prospects of opening up for commercial exploitation submarine oil and natural gas
reservoirs deemed to be the fourth largest in the world; n3 (b) The agreement removes uncertainties regarding the
development of transboundary resources of nearly 1.5 million acres of the U.S. Outer Continental Shelf; n4 (c) The
agreement establishes a legal regime whereby companies of both countries will be able to jointly develop transboundary reservoirs; (d) The
agreement allows U.S. oil companies to invest and to enter into contracts with PEMEX for the exploration and
exploitation of these reservoirs, a most unprecedented legal change in the legislative history of Mexico; (e) And, finally,
this agreement moves the United States and Mexico closer to completing all the needed maritime boundary delimitations between both countries
in the Gulf of Mexico and the Pacific Ocean regarding marine waters, the continental shelf and the corresponding seabed and subsoil areas. Given
the agreement's significant importance, on May 19, 2010, President Barack Obama announced his intention to negotiate the agreement following
the Joint Statement adopted by Presidents Obama and Calderon at the conclusion of President Calderon's State Visit to Washington on May 19,
2010. n5 From the Mexican side, the Secretariat of Energy (SENER) reported that six bilateral technical meetings and three formal negotiating
reunions by the corresponding teams of Mexico and the United States were [*7] necessary to agree on the numerous legal questions included in
the final text of this long and technical agreement. n6 The negotiation of this bilateral instrument was a most difficult task for both SENER and
the Secretariat of Foreign Affairs (SRE). Nine days after the agreement was signed, the Secretariat of the Interior (Secretaria de Gobernacion)
transmitted the 2012 Agreement to the Mexican Senate n7 with the purpose of obtaining the "Senate's Approval" required by Article 76,
Paragraph I, and Article 133 of Mexico's Political Constitution. n8 Scientifically, the Gulf of Mexico has virtually become a "marine
province" of the United States, because of its peculiar configuration, its geographical contiguity to the U.S., and especially because of
its valuable resources, in particular oil and natural gas. In a foremost scientific compilation by the Department of Geological Sciences of the
University of Texas at Austin, published under the auspices of The Geological Society of America in 1991, these statements are made regarding
the petroleum resources known to exist in that Gulf: [*8] The Gulf of Mexico basin is one of the foremost petroleum provinces
of the world. As of the end of 1987, it has demonstrated ultimate known recovery of of 112.7 billion barrels of crude oil,
22.5 billion barrels of natural gas liquids (for a total of 136.6 billion barrels of petroleum liquids, and 523.8 cubic feet of natural gas), for a total
of 222.5 billion barrels oil equivalent. ... . As a producing petroleum province, the Gulf of Mexico basin belongs in the same rank as the ArabianIranian province of the Middle East and the West Siberian province of the Soviet Union. The Gulf of Mexico basin contains approximately 9% of
the world's known recovery of petroleum liquids (crude oil and natural gas liquids) and approximately 11% of the world's known recovery of
natural gas. ... . The Gulf of Mexico basin is primarily an oil-producing petroleum province. Of the 222.5 billion barrels oil equivalent ultimate
recovery as of the end of 1987, 50.7% were crude oil, 10.1 were natural gas liquids, and only 40.2% were natural gas. The relative importance of
petroleum liquids and natural gas varies substantially across the basin. The southern half (in Mexico) is highly oil prone, with more than 81% of
its oil equivalent known ultimate recovery consisting of crude oil and natural gas. By comparison, the northern half (in the United States) is more
gas prone, gas providing more than 52% of its oil equivalent ultimate known recovery. n9 These authoritative scientific statements leave
no doubt as to the importance the Gulf of Mexico plays regarding its oil and natural gas deposits not only for today but
especially for the next seven or eight decades to come, when the scarcity of oil will increase on a global scale, a serious
consideration that underlines the clear strategic value of this basin for the United States and Mexico. In a world that is already
witnessing the alarming increase in the costs of oil and natural gas due to the rapid diminution of oil reserves, the 2012
Agreement acquires greater significance as every day that goes by. This agreement may be described as the very first business
partnership between the United States and Mexico. A partnership that lays down fair rules and objective mechanisms to avoid disputes;
establishes a modern legal regime to share a fluid transfrontier resource based on mutually agreed principles, allowing both countries to proceed
with an equitable, safe and efficient utilization of that resource; and, at the same time, promotes and protects the preservation of the marine
environment.
Development in the Gulf increases US oil reserves by 50% - current moratoriums block
drilling, the plan reverses that
McLaughlin ‘7 [Richard J. McLaughlin is the Endowed Chair at the Harte Research Institute for Gulf of Mexico
Studies at Texas A&M University. 3/23/7, “PANEL ON THE WESTERN GAP AND TRANSBOUNDARY
RESOURCES IN THE ULTRA-DEEPWATERS OF THE GULF OF MEXICO,”
http://losi.tamucc.edu/Panels/Panelist%20Abstracts/Abstract%20-%20Richard%20McLaughlin.pdf]
Finding and exploiting oil and gas resources in the ultra-deepwater areas of the Gulf of Mexico is occurring at an
accelerated pace. Huge new discoveries have recently been made in a large geological structure known as the Lower Tertiary
Wilcox Trend that is located in the U.S.-Mexico Maritime Boundary Region. These discoveries have been projected to
boost current U.S. oil reserves by as much as fifty percent. Technological advancements and market conditions have finally
reached a point where production of hydrocarbons in these ultra-deepwaters is commercially feasible. However, due to the transboundary
characteristics of many of these hydrocarbons, some form of bi-national cooperation is necessary to effectively manage the
shared resources, protect the oceanic environment and comply with evolving norms of international law before commercial
production can begin. Well established international customary norms prohibit unilateral exploitation of transboundary oil and gas
resources. Consequently, it is important for the two nations to address these issues today rather than putting them off until they become a critical
political problem in their bilateral relations. The United States and Mexico have already agreed to temporarily cooperate in
the exploration of potential oil and gas resources in one portion of the Gulf of Mexico known as the Western Gap. This is an
area in the center of the Gulf of Mexico that falls outside of the 200 mile exclusive economic zones of the two nations. After scientific studies
provided evidence that the Western Gap qualifies as part of each nation’s extended continental shelf, a Delimitation Treaty was negotiated
and ratified in 2000. This Treaty gave Mexico access to about 62 percent of the Gap, while the U.S. retained about 38 percent. The Treaty also
established a 2.8 nautical mile buffer zone along the new boundary to account for the possibility that straddling oil and gas reservoirs
may be located there. The nations agreed to a ten year drilling moratorium and to share information on the geological and
geophysical characteristics of any reservoirs in the buffer zone. In 2010, the moratorium expires and either side may exploit the resources in the
zone.
The plan’s lifting of the embargo massively increases the amount of US oil exports –
reversal of Obama’s previous policies
Kollipara ’12 [Puneet Kollipara is a Houston Chronicle politics & energy reporter, 2/20/12, “U.S., Mexico, reach
accord on drilling below maritime border,” http://fuelfix.com/blog/2012/02/20/449517/]
The agreement announced today also would lift a moratorium on waters in a buffer area known as the Western Gap that
both nations put off limits for 10 years in a 2000 treaty. That moratorium was extended through 2014 after the Deepwater Horizon oil spill. It
stems from a May 2010 commitment between U.S. President Barack Obama and Mexican President Felipe Calderón. They said it
would include safety insight from the 2010 spill, which started a month earlier. It wouldn’t take force until both nations’ legislatures, the Senate
in the case of the U.S., sign off. “We ought to be able to gather necessary political forces to get the ratification that is needed,” Salazar said
Mexico still faces the problem of how to get at the deepwater oil on its side of the Gulf border. Pemex lacks much of the technology needed for
ultra-deep exploration and production. Also Mexico’s constitution prohibits foreign companies from actually owning any of the oil they produce
in the nation’s waters and on its lands, making many less eager to get involved. “With this we all win, and we guarantee that our oil will be used
to the benefit of Mexicans,” Calderón said Monday. Tommy Beaudreau, director of the Bureau of Ocean Energy Management, said the accord
would “respect” Mexico’s constitution. If Pemex and U.S. countries can’t agree on how to jointly develop a boundary-straddling resource,
another process would determine how each side could develop its share, Salazar said. Sean Shafer, analyst with Sugar Land-based Quest Offshore
Resources, said companies will need a few years to get permits and more leases and start drilling. But he said the area holds vast promise
and some infrastructure is already in the vicinity, as evidenced by Shell’s already-producing Perdido hub project nearby. The
waters, concentrated in the western Gulf, are more oil-heavy than eastern Gulf waters, Shafer said. “Right now natural gas prices are
very low, so operators are more interested in the oilier stuff,” Shafer said. The oil-and-gas industry hailed the
announcement, in a rare moment of praise for the Obama administration, while using the occasion to urge the Interior Department to
open new waters off the East Coast. Although Obama has touted that U.S. oil production is at an eight-year high, industry
groups such as the American Petroleum Institute argue his policies have hurt development offshore and on federal lands, instead
crediting new technologies and rising production on state and private lands. “The administration’s announcement with Mexico is a positive step
that demonstrates the value of opening new areas to responsible and safe domestic offshore development,” Reid Porter, API spokesman, said in
an email. “This shared announcement also shows the need for U.S. energy policy that emphasizes more domestic development — such as areas
offshore Virginia, North Carolina and South Carolina — to maximize U.S. jobs and investment to energy development here at home.” The
waters belonging to the U.S. make up an area “larger than the state of Delaware,” Salazar said, and contain up to 172 million
barrels of oil and 304 billion cubic feet of natural gas. The actual amount is speculative until drilling actually starts, but could far
outstrip the estimate, Shafer said. “I’d say that’s a pretty conservative estimate,” Shafer said.
Oil companies have massive interest in the plan – instantaneous development of the region
Vargas ‘12 [Jorge A. Vargas is a Professor of Law at the University of San Diego School of Law. Fall 2012,
“ARTICLE: The 2012 U.S.-Mexico Agreement on Transboundary Hydrocarbon Reservoirs in the Gulf of Mexico:
A Blueprint for Progress or a Recipe for Conflict?,” San Diego International Law Journal, 14 San Diego Int'l L.J. 3,
p. lexis]
Basically, the 2000 Treaty n94 defines the limits within which each Party may exercise its sovereign rights over the seabed and
the subsoil of the continental shelf in a submarine area located in the western Gulf of Mexico, beyond the limits of their respective exclusive
economic zones extending out to 200 nautical miles (in an area known as the "Western Gap") for the purpose of exploring the continental
shelf and exploiting its natural resources. n95 Under international law, and according to the 1982 U.N. Convention on the Law of the Sea, coastal
states exercise over the continental shelf "sovereign rights for the purpose of exploring it and exploiting its natural resources." n96 When the U.S.
Senate was receiving testimony regarding the 1978 Treaty as part of the ratification proceedings, Dr. Hedberg, former Executive of the Gulf Oil
Corporation, said that "the northwestern part of the central Gulf (located in the Area) (some 25,000 square miles (equivalent to more
than a million acres)) could be by far the most promising deep-water petroleum territory to which the United States
rightfully has claim." n97 This statement generated tremendous interest among the powerful oil industry (including the
American Association of Petroleum Geologists n98), who immediately started lobbing to stop the U.S. Senate from giving its advice and consent
to the 1978 Treaty. n99 The pressure was so intense and successful that said Treaty was withdrawn from consideration on the [*32] Senate floor
on September 16, 1980, and did not receive the advice and consent of the Senate until seventeen years later, on October of 1997. Accordingly, to
reach agreement with Mexico on the precise maritime boundary of the submarine continental shelf in the central and deepest part in the
middle of the "Western Gap," in a submarine area beyond 200 nautical miles known to have rich mineral deposits, was of paramount
importance for both the United States and Mexico, especially when one considers that the maritime boundary of the
submarine continental shelf to be drawn in that part of the Gulf was going to bisect a transboundary hydrocarbon
reservoir to be shared by both countries.
Plan surprises markets – increased oil production immediately shocks markets
Barnes ’11 [Joe Barnes is the Bonner Means Baker Fellow at the James A. Baker III Institute for Public Policy at
Rice University. 4/29/11, “Oil and U.S.-Mexico Bilateral Relations,” http://www.bakerinstitute.org/publications/EFpub-BarnesBilateral-04292011.pdf]
Still, it is important to put the projected decline in Mexican oil production into perspective. Mexico may be an important
producer, but its petroleum output represents less than 5% of the world total . In terms of the Western Hemisphere, any decline
in its production over the next 25 years is likely to offset by increased productions elsewhere, notably Brazil and Canada. An
eventual turnaround in Venezuelan production—almost certainly associated with Hugo Chavez’s exit from power—is also
possible. Venezuela, unlike Mexico, possesses vast oil reserves; it could, under the right circumstances, significantly increase its
output. Venezuela, not Mexico, today surely represents the great lost opportunity” of hemispheric petroleum production. Opening up additional
U.S. coastal areas and nature preserves in Alaska could also help partially offset the decline in Mexico. By way of yet another comparison: The
projected decline in Mexican production is significantly less than the decline in North Sea production between 1999 and 2007. This is not to
downplay the importance for the United States of volume and diversity of supply to world oil markets. It does suggest, however, that the slow
decline of Mexican production is unlikely to precipitate a crisis in international oil markets. This is particularly true as
many observers are already predicting decreasing Mexican output. World markets are well aware of the troubled
condition of Mexico’s oil sector. The only surprise would be if Mexico were to increase its petroleum output.
The Gulf of Mexico is the last reserve that could massively impact global oil production –
plan is key
Estrada ‘9 [Javier Estrada is president of the consulting company Analitica Energética S.C. in Mexico City. He
has 27 years of experience in oil and gas in Mexico, Norway, and the US. July 2009, “Reservoirs that cross country
lines need special agreements,” http://www.offshore-mag.com/articles/print/volume-69/issue-7/latinamerica/reservoirs-that-cross.html]
The GoM is one of the last remaining prolific petroleum provinces in the world. So far the resources have been
identified and produced in the shallow waters of Mexico . In the US, exploration and production in the GoM has taken place since
the 1940s and now is extending southwards near to the border with Mexico. At the same time, technology has evolved to produce at
3,000 m (9,842 ft) water depths, though at very high costs. Mexico, the US, and Cuba share the GoM which may hold trans-boundary
reservoirs, including the Western and Eastern gaps. Mexico and the US executed a bilateral Treaty in the year 2000, to define the area in which
the Western Gap reservoir lies, with a 10-year moratorium that soon will conclude. Thus, Mexico and the US must reach
sharing and unitization schemes pursuant to international practice . Mexico also faces a major challenge in implementing
international practice due to its constitutional and legal framework for hydrocarbons. Both countries have much to gain by solving this
issue fairly, promptly, and functionally. The authorities in both countries are aware of the issue and seem ready to draw a treaty both countries
can live with.
Production Collapses Prices
Increased US production collapses oil prices immediately
Poruban 12 – Steven Poruban "API: Raising US oil supplies key to lowering gasoline prices" 3/26
www.ogj.com/articles/print/vol-110/issue-3c/general-interest/api-raising-us-oil.html
A major component to relieving upward pressure on gasoline prices in the US will come from increasing domestic
oil production and not from raising taxes, American Petroleum Institute Pres. and Chief Executive Officer Jack Gerard told reporters
Mar. 20 during a conference call from Washington, DC.¶ He said President Barack Obama's administration needs a "reality
check" as well as a revision to the unclear signals it is sending the market. This is something that US voters understand
as well, Gerard noted, citing statistics from a poll conducted earlier this month by Harris Interactive on behalf of API among 1,009 registered
voters in the US.¶ "Voters understand that raising taxes is not a solution for high gasoline prices," Gerard said, adding, "No economist in the
world will tell you gas prices can be reduced by increasing taxes, and the Congressional Research Service just released a study saying so,"
Gerard said.¶ "A true all-of-the-above energy strategy would include greater access to areas that are currently off limits, a
regulatory and permitting process that supported reasonable timelines for development, and immediate approval of the
Keystone XL pipeline to bring more Canadian oil to US refineries. This would send a positive signal to the market and
could help put downward pressure on prices ," he said.¶ A large majority of these polled voters, API said, "also believe that more
US oil and natural gas development could reduce gasoline prices (81%), lead to more American jobs (90%), and enhance America's energy
security (84%)."¶ Gerard said, "Most US resources have been placed off-limits. The US oil and natural gas industry is currently
allowed to explore, develop, and produce on less than 15% of the federal offshore areas. More than 85% of those areas are off limits, denying
all Americans the benefits of producing those resources—benefits like greater supplies of crude oil and natural gas, job creation, and
significant returns on our treasury in taxes, rents, royalties, and bonus bids."¶ Market perception¶ The very notion that the
Obama administration is proposing the release of oil supplies from the nation's Strategic Petroleum Reserve or
asking other countries, such as Saudi Arabia, to boost oil production, is a "clear admissions that supply matters"
in the case of relieving gasoline price pressure, Gerard said.¶ Markets are largely driven by perception, Gerard said, and
when Obama in his early days in office sent out the message to the market that oil and gas production from the
Gulf of Mexico, for example, would be higher today than it was then, that is part of the reason we're
experiencing higher gasoline prices in the US.¶ To illustrate this point about clear market signals, Gerard recalled
the example of when US gasoline prices were surpassing $4/gal during George W. Bush's presidency, his administration
lifted the moratorium on offshore drilling and in a matter of days, oil prices fell by $15-16/bbl.
Increased oil production collapses prices to $60---that destroys producers
Rogers 12 – Will Rogers, the Bacevich Fellow at the Center for a New American Security, 11/26/12, “US energy:
What's oil production got to do with national security?,” http://www.csmonitor.com/Environment/EnergyVoices/2012/1126/US-energy-What-s-oil-production-got-to-do-with-national-security
Moreover, the U.S. energy boom could contribute to some longer term instability in the region’s traditional petroleum
producing countries, and U.S. policymakers will need to remain watchful.¶ Although the IEA expects global oil prices to stay
above $100 a barrel for the foreseeable future, it is not inconceivable for the opposite to come true. One can imagine a scenario
where oil prices fall to $60 or $70 a barrel due to much greater tight oil production in America. At those prices, some
of the petro monarchies – from Saudi Arabia to Kuwait – would be in a pinch to raise the revenue needed to pay for social
programs, like fuel subsidies. If those governments are forced to curb social spending, it could exacerbate some of the
socioeconomic and political tensions that have contributed to revolutionary change across the Arab world
recently.
Increased oil production creates a glut and drops prices globally
Sterman ’13 [May 10, 2013. David Sterman is has worked as an investment analyst for nearly two decades. “Oil
prices are primed to drop” http://money.msn.com/top-stocks/post.aspx?post=bc42a487-4bd3-4f3d-882147225ecffc2c]
Much of the analysis of the recent shale/fracking revolution has focused on its stunning alteration of the natural gas landscape. Yet many gas
wells also produce prodigious amounts of crude oil as well, which explains our nation's steady surge in oil production. The
U.S. produced 6.5 million barrels of crude every day in 2012, and the EIA expects that figure to rise to 7.3 million this year and 7.9 million in
2014. That's a 22% increase in just two years. Of course, rising domestic production means that oil importers will send less
crude our way. Yet oil is a globally fungible commodity, and as more oil is redirected to other markets, the stage may be set
for a glut that send global oil prices well lower. The long-term picture gets brighter. Now, let's look at these two factors over the
longer haul. First, domestic oil production is expected to keep on rising, as the shale revolution grows yet deeper. That's why some economists
think we may become energy-independent within five or six years. The United States is the world's largest oil importer, and removing the
largest buyer from the market would have profound effects in pricing and demand.
High US oil supplies drag global prices down
Fahey ’13 [July 10, 2013. John Fahey is an energy writer for AP. “Oil surpasses $106 a barrel on big drop in US
crude supplies; pump prices expected to rise” http://www.startribune.com/business/214908891.html]
Still, analysts see signs that the high prices might not last. While U.S. supplies of crude and gasoline have fallen recently, they are
still higher than their five-year averages for this time of year. "We would not give too much weight to the larger-than-expected
drawdown in US crude stocks in the recent data," wrote Julian Jessop, a commodities analyst at Capital Economics, in a report Wednesday.
"Inventories are still unusually high." Jessop wrote that ample supplies and still-sluggish global economic activity
"should drag oil prices lower again by the end of the year." Tom Kloza, chief oil analyst at GasBuddy.com, thinks the surge in
gasoline demand over the past two weeks may be temporary, brought on by a July 4 holiday that followed terrible spring weather in much of the
country. "It was such poor weather for four months that people had cabin fever," Kloza said. He expects demand to moderate in the coming
weeks. He also notes that U.S. refiners are making more gasoline than they have since 1997, so supplies should remain high. Eric Lee,
an oil analyst at Citigroup, had expected oil prices to rise this summer as refiners around the world drew down oil supplies so they could ramp up
production, but he also expects the price of crude to weaken in the coming months. "We would expect it to stay here in the short term and then
ease off in the next month or two," he said.
Free flowing oil means US oil affects global prices
Casselman ’13 [June 29, 2013. Ben Casselman is an economics reporter for the Wall Street Journal. “Number of
the Week: U.S. Oil Boom Affecting Global Prices” http://blogs.wsj.com/economics/2013/06/29/number-of-theweek-u-s-oil-boom-affecting-global-prices/]
The U.S. oil boom is finally affecting global energy prices — but don’t expect cheap prices at the pump as a result. U.S. oil
production peaked in the early 1970s and has been on a more or less steady decline ever since. Or at least, that was the case until five years
ago, when the fracking boom in North Dakota and elsewhere led to a sudden surge in domestic crude production. The U.S. pumped 6.5 million
barrels a day of oil last year, according to the Energy Information Administration, the most since the mid-1990s, and production has continued
to surge; April’s figure of 7.4 million barrels per day marked the best month in more than two decades. (Other sources suggest an even bigger
increase.) You might think all that extra oil would be good news for drivers, but so far that hasn’t happened. The price of a gallon of regular
gasoline averaged $3.62 in 2012, the highest on record. Moreover, gas prices have kept on rising even as improved fuel efficiency, a weak
economy and other factors have kept demand growth in check. What gives? Part of the explanation has to do with a key but often-ignored piece
of the oil industry: infrastructure. Oil is a globally traded commodity, which in theory means that prices should be the same
everywhere. If demand spikes in China, for example, then prices there will rise, and oil traders will sell them more oil
until prices even out again. Similarly, if the industry discovered a huge new oilfield off the coast of Marseille, French prices would fall,
leading to lower imports (or, if the field was big enough, more exports), once again equalizing prices.
A2 Link Non-Unique
Status quo development doesn’t link because of uncertainty – TBHA ratification key to
huge amounts of new oil
Snow ‘13 [Nick Snow is a Washington Editor, Oil & Gas Journal, 3/14/13, “House panel asks Obama to take
energy steps with Mexico, Canada,” http://www.ogj.com/articles/2013/03/house-panel-asks-obama-to-take-energysteps-with-mexico--canada.html]
Approving and implementing TBHA soon is very important, hearing witnesses told the subcommittee. “Approving the treaty
will create new levels of legal certainty for US and Mexican firms operating in Gulf of Mexico border regions, encouraging
them to engage in the risk-taking required to produce oil from deep water, ” said Duncan Wood, director of the Mexico Institute
at the Woodrow Wilson International Center for Scholars. TBHA also has far-reaching implications in terms of regulatory cooperation between
the two countries that is fundamentally necessary in the aftermath of the 2010 Macondo deepwater oil well accident and spill, and is crucial for
boosting Mexican standards, he continued. US ratification before Mexico begins its energy reform debate in earnest will encourage that
process, while waiting until it is actually under way may complicate the debate, Wood said. Facilitate joint ventures Ratifying TBHA also
would encourage US independents and Mexico’s state-owned Petroleos Mexicanos (Pemex) to jointly develop resources in
the gulf, noted Kyle Isakower, American Petroleum Institute’s vice-president for regulatory and economic policy. “This agreement will
provide legal certainty to US [independents], which will encourage investment in new energy development, creating jobs and
spurring economic growth,” he said. The president should resolve lingering uncertainty over whether he intends TBHA to be a treaty or an
executive agreement, Isakower added. “Appropriate legislative action should then quickly be taken to ratify the treaty, if applicable, and pass
implementing legislation,” he said. When Salmon asked him if API members see chances to work with Pemex if Mexico makes the necessary
reforms, Isakower replied: “I believe they see many opportunities going forward. [TBHA] is only the first step. Working with Pemex
on trans-boundary projects is very important because it may provide opportunities to work with Pemex long-term on other plays.”
Full TBHA implementation matters most as a vehicle for cooperation between the two countries, suggested Daniel R. Simmons, regulatory and
state affairs director for the Institute for Energy Research. “Mexico has an estimated 10.5 billion bbl of proven oil reserves, but
that amount could double when unconventional and deepwater resources become proven reserves ,” he said. “[TBHA]
is important for the production of some of these deepwater resources.”
Mexican oil production is declining now - Gulf drilling reverses current trendsMartin ’11 [Jeremy Martin is the Director of the Energy Program at the Institute of the Americas; and Sylvia
Longmire, a Mexico Security Expert & President, Longmire Consulting, 3/15/11, “The Perilous Intersection of
Mexico’s Drug War & Pemex,” Journal of Energy Security,
http://www.ensec.org/index.php?option=com_content&view=article&id=283:the-perilous-intersection-of-mexicosdrug-war-aamp-pemex&catid=114:content0211&Itemid=374]
To further answer the question of what happens in Mexico beyond Cantarell, the current predicament and context must be
acknowledged. Indeed, estimates have pointed to oil production average decline rates of about 5 percent per year, beginning
in 2010. In the last few years, talk has emerged that Mexico will likely cease to be an oil exporter by the end of the current decade.
The Energy Information Administration, however, indicates that may be an optimistic premise: In its International Energy Outlook 2010, it
estimated that Mexico could become a net importer by 2015, with imports surpassing 1 mbd by 2035. It is also worth noting that
Mexico’s stated plan to deal with the foregoing scenarios and its hope to reverse these ominous trends lie in the deep waters
on Mexico’s side of the Gulf. The touted “treasure at the bottom of the sea” bandied about during the 2008 energy reform debate
remains the true “X factor” for any legitimate answers to what happens beyond Cantarell, and whether or not the EIA forecast for imports
in 25 years holds true.
Status quo production isn’t enough to massively affect prices – aff is key
Casselman 6/29/13 [June 29, 2013. Ben Casselman is an economics reporter for the Wall Street Journal.
“Number of the Week: U.S. Oil Boom Affecting Global Prices”
http://blogs.wsj.com/economics/2013/06/29/number-of-the-week-u-s-oil-boom-affecting-global-prices/]
In other words, rising U.S. production is having a moderating effect on global prices. But don’t expect to see a big impact at
your local filling station. The fracking boom has boosted U.S. production by roughly 2 million barrels per day over the past
five years. That’s a big increase by domestic standards, but it represents just over 2% of worldwide oil consumption —
hardly enough to cause a big drop in prices. Moreover, the U.S. may be seeing rising supplies and moderating demand, but the rest of
the world is just the opposite. Global demand is rising, driven by economic growth in China and other emerging economies. And supplies outside
of North America have been held in check by the decline of older oil fields and efforts by the OPEC cartel to maintain high prices through
production limits. None of that is likely to change anytime soon.
Natural Gas Advantage – Neg
Natural Gas Exports Bad
1NC – Relations
US LNG exports are perceived as competition with Russia – destroys opportunities for
energy cooperation and broader relations
Weitz ’13 [January 29, 2013. Richard Weitz is a senior fellow and director of the Center for Political-Military
Affairs at Hudson Institute. “Global Insights: Oil Sector a Challenge for Russia, Opportunity for U.S.,” World
Politics Review. http://www.worldpoliticsreview.com/articles/12672/global-insights-oil-sector-a-challenge-forrussia-opportunity-for-u-s]
In the view of Russians interviewed by the authors, this paucity of cooperation results from perceived impediments erected by the U.S.
government. Similarly, Russian officials see the shale gas revolution as a conspiracy on the part of the United States to
undermine Russia’s role in energy markets. Absent forward momentum, the Russia-U.S. energy relationship might even
deteriorate. The United States could soon become a major energy exporter again, which would lead to direct energy
sales competition between Russia and the United States for the first time in history. One major opportunity for enhanced
partnership, as opposed to competition, is the deal reached last August between Exxon Mobil and Rosneft. The project has only
recently begun the preliminary seismic surveys, technical assessments and environmental studies that would allow any substantial drilling to start.
Bringing the project to fruition, and augmenting it with near-term cooperation on tight oil and other energy projects, is important for both sides.
Concrete Russia-U.S. energy collaboration could help dispel mutual misconceptions and perhaps spur U.S. and
Russian economic cooperation in other areas. That in turn could help to increase the number of stakeholders in both
countries that share an interest in maintaining good relations. These kinds of private-sector ties, as much as political will in
Washington and Moscow, will contribute to the health of bilateral ties moving forward.
Russian relations are key to preventing extinction
Allison 11 [October 30, 2011. Graham Allison is Director of the Belfer Center for Science and International
Affairs at Harvard’s Kennedy School of Government. “10 reasons why Russia still matters,”
http://dyn.politico.com/printstory.cfm?uuid=161EF282-72F9-4D48-8B9C-C5B3396CA0E6]
That central point is that Russia matters a great deal to a U.S. government seeking to defend and advance its national interests. Prime
Minister Vladimir Putin’s decision to return next year as president makes it all the more critical for Washington to manage its
relationship with Russia through coherent, realistic policies. No one denies that Russia is a dangerous, difficult, often disappointing state to
do business with. We should not overlook its many human rights and legal failures. Nonetheless, Russia is a player whose choices
affect our vital interests in nuclear security and energy. It is key to supplying 100,000 U.S. troops fighting in Afghanistan and
preventing Iran from acquiring nuclear weapons. Ten realities require U.S. policymakers to advance our nation’s interests by
engaging and working with Moscow. First, Russia remains the only nation that can erase the United States from the map in
30 minutes. As every president since John F. Kennedy has recognized, Russia’s cooperation is critical to averting nuclear war.
Second, Russia is our most consequential partner in preventing nuclear terrorism. Through a combination of more than $11
billion in U.S. aid, provided through the Nunn-Lugar Cooperative Threat Reduction program, and impressive Russian professionalism,
two decades after the collapse of the “evil empire,” not one nuclear weapon has been found loose. Third, Russia plays an
essential role in preventing the proliferation of nuclear weapons and missile-delivery systems. As Washington seeks to
stop Iran’s drive toward nuclear weapons, Russian choices to sell or withhold sensitive technologies are the difference
between failure and the possibility of success. Fourth, Russian support in sharing intelligence and cooperating in operations
remains essential to the U.S. war to destroy Al Qaeda and combat other transnational terrorist groups. Fifth, Russia provides a vital
supply line to 100,000 U.S. troops fighting in Afghanistan. As U.S. relations with Pakistan have deteriorated, the Russian lifeline has grown ever
more important and now accounts for half all daily deliveries. Sixth, Russia is the world’s largest oil producer and second largest gas producer.
Over the past decade, Russia has added more oil and gas exports to world energy markets than any other nation. Most major energy transport
routes from Eurasia start in Russia or cross its nine time zones. As citizens of a country that imports two of every three of the 20 million barrels
of oil that fuel U.S. cars daily, Americans feel Russia’s impact at our gas pumps. Seventh, Moscow is an important player in today’s
international system. It is no accident that Russia is one of the five veto-wielding, permanent members of the U.N. Security Council, as well
as a member of the G-8 and G-20. A Moscow more closely aligned with U.S. goals would be significant in the balance of
power to shape an environment in which China can emerge as a global power without overturning the existing order.
Eighth, Russia is the largest country on Earth by land area, abutting China on the East, Poland in the West and the United States across the
Arctic. This territory provides transit corridors for supplies to global markets whose stability is vital to the U.S.
economy. Ninth, Russia’s brainpower is reflected in the fact that it has won more Nobel Prizes for science than all of Asia, places first in most
math competitions and dominates the world chess masters list. The only way U.S. astronauts can now travel to and from the International Space
Station is to hitch a ride on Russian rockets. The co-founder of the most advanced digital company in the world, Google, is Russian-born Sergei
Brin. Tenth, Russia’s potential as a spoiler is difficult to exaggerate. Consider what a Russian president intent on
frustrating U.S. international objectives could do — from stopping the supply flow to Afghanistan to selling S-300 air
defense missiles to Tehran to joining China in preventing U.N. Security Council resolutions.
1NC – Economy
Russian economy is on the brink – natural gas key
Adomanis 4/7/13 [Mark Adomanis is a contributor to Forbes who specializes in Russian economics and
demographics. “Russia's Economy Is Rapidly Slowing And The Kremlin's Options Are Limited” Forbes.
http://www.forbes.com/sites/markadomanis/2013/04/17/russias-economy-is-rapidly-slowing-and-kremlins-optionsare-limited/]
Russia‘s economy is probably not, as Ksenia Yudaeva, Russia’s representative to the Group of 20 nations told Bloomberg the other day,
“already in recession,” but it’s economy is clearly decelerating: growth for 2012 as a whole was 3.4%, but in the 4th quarter of
2012 it was only around 2.1% and provisional estimates of growth in the 1st quarter of 2013 are only around 1.1%. The
economic slowdown is so significant that it has already been reflected in the Economy ministry’s 2013 growth forecast ,
which was recently slashed from 3.6% to 2.4%. Before proceeding further it seems worth noting that the initial forecast of 3.6% wasn’t bizarrely
optimistic or unrealistic: the IMF’s 2013 projection for Russia was actually marginally higher at 3.7%, and other forecasts generally had Russia in
the 3.5% range of unspectacular but reasonable growth. So what changed? Well one thing that a lot of different outlets seem to agree on is that
“external demand” (i.e. “Europe”) is having a major impact. Here’s Reuters: “Russia’s GDP grew at around one percent in the first
quarter, weighed down by lacklustre investment and a decline in exports of strategic commodities such as natural gas that were hit
by a slump in the European market.” Here’s the same WSJ article I quoted earlier: “The Economy Ministry said weakness across a broad range of
sectors lay behind the cut in the forecast. Exports are stagnating amid weaknesses in Russia’s main market , Europe, where
Russian natural gas is facing newfound competition.” And here’s another Bloomberg article: “Russia’s $2 trillion economy is
growing at the weakest pace since a 2009 contraction as Europe’s debt crisis curbed exports and prompted companies to trim investment”
US LNG exports will apply pressure on Russia and significantly impact their economy
Choi and Robertson ’13 [2013. Tom Choi is a Natural Gas Market Leader at Deloitte MarketPoint LLC. Peter
J. Robertson is an Independent Senior Advisor on Oil & Gas for Deloitte LLP. “Global impacts of LNG exports
from the United States “ Deloitte. http://www.deloitte.com/assets/DcomUnitedStates/Local%20Assets/Documents/Energy_us_er/us_er_GlobalImpactUSLNGExports_AmericanRenaissanc
e_Jan2013.pdf]
Maintaining market share and oil-indexed prices are major concerns for Russia. Russia holds the world’s largest
natural gas reserves and was the largest producer until the U.S. overtook it in 2011 with the growth in U.S. shale gas production. Gas
export is vital to the Russian economy, contributing about $64 billion in revenues in 2011.7 Russia has jealously
guarded its European market share through control of its pipeline transit capacities. By restricting access to its
transit pipelines, Russia is able to prevent supplies from other countries , such as Turkmenistan which holds an estimated 500
Tcf of proved reserves, from reaching lucrative European markets and competing with Russian supplies. The strategy was working well
until several years ago when economic recession caused European gas demand to stagnate and at the same time more LNG supplies,
particularly from Qatar, became available. Qatar had increased its LNG liquefaction capacity in anticipation of exports to the
U.S., but its plans were stymied by U.S. shale gas production which eliminated the need for imports. As a consequence,
European prices fell and Russians were pressured to offer more competitive prices than the contractual oil-indexed prices.
During the past year, several European companies successfully renegotiated their contracts and extracted discounts from Russia. U.S. LNG
exports will likely apply greater pressure on Russia and other gas exporters to transition to competitively set
prices. Based on WGM projections using the two market scenarios, Russian revenues from exports to Europe are estimated to be
significantly impacted by U.S. LNG exports, which will both displace some amount of Russian exports to Europe
and reduce the price Russians receive in Europe. The table in Figure 3.5 shows the projected impact of U.S. LNG exports on Russian
revenues (in 2012 U.S. dollars) from exports to Europe. Of course, the impact is higher when U.S. LNG exports are sent to Europe instead of
Asia since there is direct competition with Russian supply and greater European price impact. Perhaps a bit surprisingly, the impact is higher
under the Competitive Response case than in the BAU scenario. The reason is that under the BAU scenario, in which Russia and other major
current gas exporters adhere to oil-price indexation, Russian exports to Europe are reduced down to the minimum take
volumes as competitively priced supplies displace the oil-indexed flexible volumes. Hence, U.S. LNG exports have
little impact on Russian volumes and most of the impact is through lower prices it receives in European markets for their exports. In the
Competitive Response scenario, Russia is assumed to price more of its supplies on a competitive basis and therefore more Russian volumes are
exported to Europe than under the BAU market scenario. With U.S. LNG exports, some of these non-minimum take volumes are displaced.
Therefore, Russia is hit by both loss of volume and erosion of price under the Competitive Response scenario. These scenarios
indicate that U.S. LNG exports may lead Russia to price its supplies on a competitive basis or be relegated to just
selling its minimum take contracted volumes.
Russian economic crisis leads to nuclear war
Filger 9 – Sheldon, author and blogger for the Huffington Post, “Russian Economy Faces Disastrous Free Fall
Contraction” http://www.globaleconomiccrisis.com/blog/archives/356
In Russia historically, economic health and political stability are intertwined to a degree that is rarely
encountered in other major industrialized economies. It was the economic stagnation of the former Soviet Union that led to its
political downfall. Similarly, Medvedev and Putin, both intimately acquainted with their nation’s history, are unquestionably
alarmed at the prospect that Russia’s economic crisis will endanger the nation’s political stability,
achieved at great cost after years of chaos following the demise of the Soviet Union. Already, strikes and protests are occurring among rank
and file workers facing unemployment or non-payment of their salaries. Recent polling demonstrates that the once supreme popularity
ratings of Putin and Medvedev are eroding rapidly. Beyond the political elites are the financial oligarchs, who have been forced to
deleverage, even unloading their yachts and executive jets in a desperate attempt to raise cash. Should the Russian economy
deteriorate to the point where economic collapse is not out of the question, the impact will go far beyond the obvious
accelerant such an outcome would be for the Global Economic Crisis. There is a geopolitical dimension that is even
more relevant then the economic context. Despite its economic vulnerabilities and perceived decline from superpower status, Russia
remains one of only two nations on earth with a nuclear arsenal of sufficient scope and capability to
destroy the world as we know it. For that reason, it is not only President Medvedev and Prime Minister Putin who will be lying awake
at nights over the prospect that a national economic crisis can transform itself into a virulent and destabilizing
social and political upheaval. It just may be possible that U.S. President Barack Obama’s national security team has already briefed
him about the consequences of a major economic meltdown in Russia for the peace of the world. After all, the most recent national
intelligence estimates put out by the U.S. intelligence community have already concluded that the Global Economic Crisis represents the
greatest national security threat to the United States, due to its facilitating political instability in the world. During the years Boris
Yeltsin ruled Russia, security forces responsible for guarding the nation’s nuclear arsenal went without pay for
months at a time, leading to fears that desperate personnel would illicitly sell nuclear weapons to terrorist
organizations. If the current economic crisis in Russia were to deteriorate much further, how secure
would the Russian nuclear arsenal remain? It may be that the financial impact of the Global Economic Crisis
is its least dangerous consequence.
2NC - Relations
Plan Creates Competition
US encroachment on Russian gas exports triggers volatile competition
Abdelal and Mitrova ’13 [Rawi Abdelal is the Joseph C. Wilson Professor of Business Administration at
Harvard Business School and the Chair of the MBA Required Curriculum. Tatiana Mitrova is the Head of Global
Energy at the Moscow School of Management SKOLKOVO Energy Center and Head of the Center for International
Energy Markets Studies at the Energy Research Institute of the Russian Academy of Sciences, January 2013, “U.S.Russia Relations and the Hydrocarbon Markets of Eurasia,” http://daviscenter.fas.harvard.edu/publications/usrussiafuture/us-russiafuture_working_group_paper_2_EN.pdf]
The emergence of global, rather than regional, gas markets will have a tremendous impact on Gazprom’s negotiating power
in markets where it has exploited its position as a dominant supplier. When and if the United States and Canada become net LNG
exporters,7 they will for the first time directly compete with Russian gas exports in Europe and Asia. Given the
dependence of Russia’s economy on these gas exports, Russian leaders are understandably alarmed at the prospect of such
competition. What role should the United States play in Russia’s relationship with its oil and gas customers? Russian energy strategy is
built on special relationships with buyers in post-Soviet Eurasia and in Europe. Although the United States and the European Union have
at times encouraged states in post-Soviet Eurasia to “move away” from Russia, the West, broadly conceived, has not been prepared to
foot the bill for the subsidized Russian gas these countries depend upon for economic survival.
The plan takes advantage of Russian vulnerability as it inserts US action where their
presence isn’t needed
Abdelal and Mitrova ’13 [Rawi Abdelal is the Joseph C. Wilson Professor of Business Administration at
Harvard Business School and the Chair of the MBA Required Curriculum. Tatiana Mitrova is the Head of Global
Energy at the Moscow School of Management SKOLKOVO Energy Center and Head of the Center for International
Energy Markets Studies at the Energy Research Institute of the Russian Academy of Sciences, January 2013, “U.S.Russia Relations and the Hydrocarbon Markets of Eurasia,” http://daviscenter.fas.harvard.edu/publications/usrussiafuture/us-russiafuture_working_group_paper_2_EN.pdf]
Second, Russia’s relationships with oil and gas customers do not, and will not, have a major impact on U.S. national
interests. The United States is very quickly changing its position from strongly dependent on hydrocarbon imports to much more
self-sufficient (primarily due to the unconventional gas and shale oil production boom). The United States is not— and is unlikely to
become—an important market for Russian energy exports. However, a number of European allies and key partners, as
well as Russia’s neighbors in post-Soviet Eurasia, depend on imported gas and oil from Russia. As European and Eurasian policy
makers and business executives have sought to manage this energy relationship, some U.S. policy makers have attempted to
insert themselves, taking firm positions on the organization of a relationship in which the United States has no
direct role. Third, energy exports are a critical source of revenue for the Russian government , though they are not
(Russian bluster and U.S. alarmism notwithstanding) a significant source of geopolitical power. Taking the bluster at face value, U.S.
policy makers have generally failed to recognize that Russia’s growing dependence on hydrocarbon exports is a sign
of vulnerability, not strength. Moreover, this vulnerability runs deep; the Russian budget depends on the ability of
Russian firms to export oil and gas.
Eurasia Impact
US-Russia energy cooperation is vital for Eurasian stability – spills over to the broader
region
Tsygankov ’12 [Andrei P. Tsygankov is a Professor at the Departments of Political Science and International
Relations, San Francisco State University, January 2012, “The Heartland No More: Russia’s Weakness and
Eurasia’s Meltdown,” Journal of Eurasian Studies, Vol. 3, No. ]
After an initial hesitation, the United States and other Western nations have followed the advice to sideline Russia in the region. Yet the West’s
attempts to secure and stabilize Eurasia after the end of the Cold War should be recognized as a failure. Eurasia has not become stable or peaceful
and continues to disintegrate. The arrogant bureaucrats in Washington and Brussels have failed to understand that they lack the resources,
the will, and the experience to stabilize the complex region. Today – after the Iraq war and the global financial crisis – the United States is
beginning to recognize its over-extension in the world, but it is not at all clear if Washington and Brussels are prepared to act differently in
Eurasia. Rather than being guided by the Russia irrelevance approach, Western diplomacy will do well to recognize that, even while unable to
prevent a further meltdown of Eurasia on its own, Russia remains a critically important and potentially indispensable power.
Russia’s importance in Eurasia can be described in four principal ways. First, Russia continues to possess dominant military and
diplomatic resources which it has already used effectively to resolve several violent conflicts in the region, such as those in Tajikistan and
Moldova in the 1990s and in Georgia in 2008. Second, Russia remains a nation with an incomparable historical experience and cultural capital for
pacifying the volatile territories from the Balkans to Central Asia . The nations of Eurasia go back centuries and have developed
similar cultural experiences. During the Soviet era, they shared external borders, fought the same enemies, and were subject to similar linguistic
and cultural policies. Although the Baltics were independent during the interwar years and preserved a sense of national identity even while a part
of the Soviet empire, other republics’ experience with statehood was too short and fragmented to develop a sufficiently strong sense of cultural
distinctiveness. Russian was the common second language in non-Russian republics and the mother tongue of many professionals and politicians.
Today it remains the common language uniting the former republics. People across the region watch the same Russian-language news broadcasts,
movies, serials, and soap operas. They eat many of the same foods, especially on holidays, and support the Russian football team in international
competitions. The bonds across republics are strongest among business and political elites, many of whom were educated in the same
universities, worked in the same institutions, and served together in the Soviet army.42 Third, Russia is able to serve as a state-building
example in the region. Although it is in no position to offer viable competition to the United States’ liberal democratic ideas, Russia has
been perceived by many in the region as generally successful in accomplishing other state-building tasks, such as providing citizens with order,
basic social services and protection against external threats. This explains why ordinary people and many politicians from Central Asia to
Ukraine often rate Russia’s current leaders higher than their own.43 Even outside the region, the influence of Russia’s state-building experience is
considerable and rising. For instance, the report by the European Council on Foreign Relations provides evidence of Russia and China’s ability to
attract votes at the United Nations. The report notes that since the late 1990s, support for Russian positions has risen from around 50%–76%
today, while support for the EU and US fell from over 70% and 75% to around 50% and a mere 30%, respectively.44 Finally, Russia
possesses enormous energy reserves which it has been successfully exploiting to its advantage. Russia has
approximately 13% of the world’s known oil reserves and 34% of its gas reserves.45 This power resource has gained in importance as global
energy demand and prices have risen. As a result of competition with the Kremlin over resources in Russia and the Caspian region,
American and European companies lost many opportunities. Meanwhile, Russia remained an important oil and gas producer,
preserving its status as a major transit country through which to carry energy from the Caucasus and Central Asia to Europe. Part of
Russia’s negotiating success stems from the fact that the republics used to be linked together in what Soviet planners called a “single economic
complex” that was anchored by Russia. International trade and investment networks from the Soviet era continue to facilitate commerce by
keeping transaction costs low. After the breakup, several republics, including Central Asia’s, Belarus and Armenia, initially opposed the idea of
establishing their own currencies and severing commercial links with Russia. Russia has been slow to withdraw its energy subsidies for the
former Soviet states, and all of them have taken advantage of this discount. Transit states, such as the Baltics, Ukraine, Moldova and Belarus,
profited handsomely by reselling considerable portions of Russian supplies to European consumers at the world market price. Today, millions of
labor migrants from the poorer republics - Moldova, Tajikistan, and Azerbaijan, for example - earn a living in Russia because there are not
enough jobs at home. Of other large powers acting in this part of the world, only Russia remains irreplaceable because it
possesses all the four listed attributes. By contrast, other leading powers, such as China, the United States and the European Union can
only claim two out of four – military and diplomatic tools as well as various components of the state-building experience, but not the
cultural capital and the energy reserves. 8. Preventing Eurasian collapse Given the significance of Eurasia, preventing a collapse of
the region should be a number one priority. Although Russia alone is not the solution, recognizing its critical role in stabilizing
Eurasia is essential. Once this is done in practice, and not rhetorically, many pieces of the region’s puzzle will start falling into their places.
Energy supplies will become more reliable; governments in politically contested areas, like Georgia, Ukraine and Moldova, will obtain a greater
legitimacy; and the so-called frozen conflicts will have a better opportunity to be resolved. Russia’s recent resurgence is a response to its lacking
recognition as as a vital power and partner of the West. Continuously denying Russia a genuine engagement in the region–under
false pretenses of its “neoimperialism” or “irrelevance” – is sure to bring additional counter-productive effects. If nothing
changes on the West’s part and if Russia chooses to dedicate itself to obstructing Western policies in Eurasia, we
will soon see the collapsing dynamics in the region. Ukraine and Moldova may disintegrate, as did Georgia. Belarus
may be reintegrated with Russia. Central Asia and Azerbaijan are likely to be subjected to a much greater degree of
instability with unpredictable consequences. Russia too will suffer greatly as its modernization processes will be derailed. In short, the
region may change beyond recognition – mostly through use of force. Russia, of course, is only a part of the solution. Other major
powers must become involved as participants in establishing a collective security arrangement in Eurasia. From a security perspective, it is
important that the three most prominent actors in the region, NATO, SCO, and the Collective Security Treaty Organization (CSTO), develop a
joint assessment of threat and coordinate their policies. Instead of expanding its reach further, NATO ought to learn its limitations and stop efforts
to solve problems in Afghanistan or elsewhere unilaterally. Without a full- fledged involvement of SCO and CSTO, Afghanistan is likely to turn
into another version of Iraq, with additional negative implications for the U.S. reputation in the world. What is referred to as “Obama’s war” by
pundits46 has the potential of carrying lasting destructive consequences for the larger Eurasian region . Kyrgyzstan may serve as an
example of how great powers mismanage crises in the region. When the country went through its first violent change of power in
March 2005, the event – accompanied by an even worst violence in Uzbekistan’s Andijan in May 2005 – had the potential to spread a
greater instability in the region. Yet the large powers were unable to agree on a unified response. The change of power was
strongly supported by the United States and the European Union, while Russia and China viewed the event as directed against their power and
security. When another, even more violent round of power struggle occurred in Kyrgyzstan in June 2010, it again elicited no serious response
from key powers or international organizations in the region. In the meantime, the new interim government in Bishkek failed to gain control over
the country, and the southern part – a stronghold of the ousted president Kurmanbek Bakiev – became a de facto independent.47 The new
elections that followed legitimized the situation by empowering Bakiev’s party and delivering a blow to the ruling coalition.48 The absence of an
agreement among key powers49 and a functional collective security system in the region are sure to continue to serve as catalists for
Kyrgyzstan’s continued destabilization. Another key issue is energy security. Although theoretically Russia and the Western
nations in the region could build an energy consortium and even cooperate on the basis of the International Energy Agency (IAE),
in practice they are engaged in a highly competitive zero sum interaction. A new, shared understanding of energy challenges
must be reached which would encourage a mutual respect for each side’s critical interests. Viewing Russia as a potentially reliable
alternative to traditional Middle Eastern sources of energy may serve the West and members of the region better than the
image of a “neo-imperialist” bully that only seeks to subvert its neighbors’ policies. Here, too, one might take advantage of
existing yet poorly exploited arrangements. For instance, the Caspian Pipeline Consortium’s principles allow for a joint exploitation of existing
reserves and transportation routes and may be extended to other projects. Trying to persuade European countries to invest additional billions into
the Russia alternative Nabucco pipeline may well turn out to be a waste of money and time. As the West and Russia continue their scramble for
Caspian resources, both Kazakhstan and Turkmenistan are building pipelines to China and may at some point consider cooperation with the
Asian giant more advantageous to their interests. A more important and potentially unifying idea for all the parties would be to engage in the
construction of acceptable rules and principles of energy security among Eurasia’s powers. Finally, for restoring the region’s capacity to function
and perform basic services for its residents it is critical to curb the Russophobic nationalism. While rebuilding a Russia-centered empire would be
very dangerous, there is hardly an alternative to the emergence of an economically and culturally transparent community of nations with strong
ties to the former metropole. For Russia not to raise the issue of ethnic “reunification” of some 20 million Russians living outside their
“homeland”, it is necessary to facilitate the establishment of conditions for cultural openness across the region. Russians and other ethnic
minorities must be able freely to travel, practice their linguistic and religious needs, and celebrate their historically significant events. The
overall objective of the outside world should be to strengthen Russia’s confidence as a regional great power, while
discouraging it from engaging in revisionist behavior.
Eurasian conflict escalates and goes nuclear – uniquely unstable region
Blank 2K [September 22, 2000. Stephen J. Blank is an Expert on the Soviet Bloc for the Strategic Studies
Institute. “American Grand Strategy and the Transcaspian Region”, World Affairs.]
Thus many structural conditions for conventional war or protracted ethnic conflict where third parties intervene now exist in
the Trans caucasus and Central Asia. The outbreak of violence by disaffected Islamic elements, the drug trade, the Chechen wars,
and the unresolved ethnopolitical conflicts that dot the region, not to mention the undemocratic and unbalanced distribution of
income across corrupt governments, provide plenty of tinder for future fires. Many Third World conflicts generated by local
structural factors also have great potential for unintended escalation. Big powers often feel obliged to rescue their
proxies and proteges. One or another big power may fail to grasp the stakes for the other side since interests here are not as clear as in
Europe. Hence commitments involving the use of nuclear weapons or perhaps even conventional war to prevent defeat of a client
are not well established or clear as in Europe. For instance, in 1993 Turkish noises about intervening on behalf of Azerbaijan induced
Russian leaders to threaten a nuclear war in that case. Precisely because Turkey is a NATO ally but probably could not prevail in a
long war against Russia, or if it could, would conceivably trigger a potential nuclear blow (not a small possibility given the erratic
nature of Russia's declared nuclear strategies), the danger of major war is higher here than almost everywhere else in the CIS or
the "arc of crisis" from the Balkans to China. As Richard Betts has observed, The greatest danger lies in areas where (1) the potential
for serious instability is high; (2) both superpowers perceive vital interests; (3) neither recognizes that the other's perceived
interest or commitment is as great as its own; (4) both have the capability to inject conventional forces; and (5) neither has
willing proxies
capable of settling the situation.77
2NC - Economy
US Exports Tradeoff with Russia
US natural gas exports tradeoff with Russian exports to Europe – natural gas is key to
Russia’s economy
Paltsev ’11 [July 2011. Sergey Paltsev is the Assistant Director and Principal Research Scientist for Economic
Research at the MIT Joint Program on the Science and Policy of Global Change. “Supplementary Paper SP 3.1:
Russia’s Natural Gas Export Potential up to 2050” http://mitei.mit.edu/system/files/NaturalGas_Sup_Paper3.1.pdf]
Energy sectors, including natural gas, play an important role in Russian economy . Energy exports were one of the
driving forces of Russia’s economic recovery from the collapse of 1990 s. The country enjoyed more than 5 percent annual real
economic growth in 2000-2008. However, over-reliance on the revenues from energy exports was also one of the major factors for Russian
economic downturn during a global recession of 2008-2009, when a reduction in demand for fossil fuels, and a collapse of oil and energy prices
greatly contributed to an almost 8 percent GDP loss in 2009. Demand and prices recovered in 2010, leading to a 3.7 percent GDP growth. The
IMF (2011) forecasts 4.5 percent annual GDP growth for Russia for 2011–2012, but the concerns about the viability of Russian growth based on
fossil exports remain. Natural gas exports from Russia get special attention in comparison to other energy exports,
because Russia has less diversified ways to export natural gas in comparison to oil and coal, which are in general easier to
transport. On the demand side, it is also relatively easier to switch from one oil or coal supplier to another, hence the
importers have fewer concerns about relying on a single supplier or a limited number of suppliers. As a result, Russian oil and
coal exports have not had the disruptions seen in the gas transit routes through Ukraine and Belarus. Russia tries to find a way of reducing
reliance on transit countries as disputes with them hurt stable gas supplies. Europe, as the largest importer of Russian gas, tries to find a way of
reducing reliance on Russia by moving to liquefied natural gas (LNG) imports by tankers from Africa, the Middle East, and Latin America. The
development of shale gas in USA has resulted in a substantial price differential between North American and
European (and Asian) natural gas markets. This price differential creates a potential for LNG exports from USA.
Future LNG development and emergence of shale gas pose questions about the ability of Russia to keep gas
exports to Europe at the recent levels, when about 5.5 trillion cubic feet (Tcf)1 out of a production of 19–21 Tcf were destined to
European markets.
Increased US LNG exports pose a threat to Russia
Daly ’13 [July 25, 2013. Dr. John C.K. Daly is the chief analyst for Oilprice.com. “Russia’s Oil and Natural Gas
Industry Facing Market Turmoil” EconoMonitor. http://www.economonitor.com/blog/2013/07/russias-oil-andnatural-gas-industry-facing-market-turmoil/]
The reasons for Gazprom’s change of fortune are myriad and complex, but the simplest immediate answer is that new sources of
natural gas are shortly coming online, broadening EU options. Azerbaijan’s massive Caspian offshore Shah Deniz field is coming online
and new discoveries in Africa and eastern Mediterranean, ranging from Uganda to Israel are also promising for the EU, which currently buys
most of its natural gas imports from the Russian Federation and Norway. Europe is also importing increasing amounts of liquefied natural gas
from Qatar, and the final “wild card” in the mix is that the burgeoning U.S. shale boom could see the U.S. begin LNG
exports in the next several years. Accordingly, if Russia is to retain its dominant EU market share, then it is going to have
to
start behaving more like a reasonable producer subject to the vagaries of the market place rather than continue to
regard its European clientele as option-less consumers to be fleeced as thoroughly as possible at every opportunity.
Russia is particularly vulnerable to US LNG exports
Choi and Robertson ’13 [2013. Tom Choi is a Natural Gas Market Leader at Deloitte MarketPoint LLC. Peter
J. Robertson is an Independent Senior Advisor on Oil & Gas for Deloitte LLP. “Global impacts of LNG exports
from the United States “ Deloitte. http://www.deloitte.com/assets/DcomUnitedStates/Local%20Assets/Documents/Energy_us_er/us_er_GlobalImpactUSLNGExports_AmericanRenaissanc
e_Jan2013.pdf]
Gas exporting countries could suffer a decline in trade revenue due to price erosion and/or supply displacement. Entry of new
supply clearly benefits consumers, but negatively impacts suppliers through price reductions and/or direct displacement of
their export volumes. Even if gas supply in a region is not directly displaced by U.S. LNG exports, its producers
might suffer decline in revenues due to lower prices affecting the region. Furthermore, gas exporting countries could
face increased pressure to adopt market-based gas prices in lieu of oil-indexed prices. As the world’s largest gas
exporter by both volume and revenue and a high cost gas provider into Europe, Russia appears to be particularly
vulnerable, especially if U.S. LNG exports are sent to Europe
US LNG exports would displace Russian exports
Choi and Robertson ’13 [2013. Tom Choi is a Natural Gas Market Leader at Deloitte MarketPoint LLC. Peter
J. Robertson is an Independent Senior Advisor on Oil & Gas for Deloitte LLP. “Global impacts of LNG exports
from the United States “ Deloitte. http://www.deloitte.com/assets/DcomUnitedStates/Local%20Assets/Documents/Energy_us_er/us_er_GlobalImpactUSLNGExports_AmericanRenaissanc
e_Jan2013.pdf]
Notice also that even with U.S. LNG exports assumed to be shipped to Asia, projected supplies from the Former Soviet Union
(FSU), including Russia and gas-rich Caspian republics such as Turkmenistan and Azerbaijan, and Middle East are displaced. The
reductions in volumes are not a result of direct displacement by U.S. LNG exports but rather due to global rebalancing of gas
supplies. Some of the supplies displaced out of Asia by U.S. LNG are diverted to European markets. For example, some of the Middle East
LNG projected to be displaced in Asia are redirected to Europe and displace European sources, such as Russian gas imports. The
interconnectivity and dynamics of global markets imply U.S. LNG exports will have global impacts. If U.S. LNG exports are sent to Europe, the
impacts are quite different. The WGM projects there to be less displacement of LNG supplies and more displacement of domestic and pipeline
imports. The reason is simple: Europe imports far less LNG to meet its demand than does Asia. If U.S. LNG exports are sent to Europe instead of
Asia, there is less displacement of Australian LNG and more displacement of African LNG, which includes supplies from Algeria, Egypt,
Nigeria, Equatorial Guinea, and new supplies from Mozambique and Tanzania. Other displaced supplies include European sources,
primarily contracted flexible supplies from Norway and the Netherlands, and FSU sources, including Russia and Caspian republics. Notice that
Asian supplies are still affected by U.S. exports to Europe because of global gas supply displacement and lower
prices. Russia, the leading gas exporter to Europe, appears to be especially hard hit by U.S. LNG exports. Because
of its huge volumes of gas exports, primarily to Europe, and their high cost to markets, Russia is vulnerable to
supply competition. In Figure 3.4, Russian supplies are estimated to be the high-cost source into European markets
and therefore Russian contract supplies above the minimum-take volumes would be the first to be displaced by
incremental lower cost supply. With current slack European demand, there is already some displacement of Russian imports, as flexible
volumes indexed to oil price have not been utilized by European buyers. U.S. LNG exports to Europe are projected to obviate the
need for Russian and some other oil-indexed flexible supplies.
US production creates competition for Russia – affect Russian economy
Marson and Parkinson 5/1/13 [James Marson is an Energy Reporter at The Wall Street Journal. Joe
Parkinson is a Bureau Chief at The Wall Street Journal. “In Reversal, Neighbors Squeeze Russia's Gazprom Over
Natural-Gas Prices” The Wall Street Journal.
http://online.wsj.com/article/SB10001424127887324240804578414912310902382.html]
In Europe, where Gazprom once had a reputation for hardball tactics and dictating prices, customers are tapping new
sources. Booming shale-gas production in the U.S. has freed up vast quantities of other fuel from around the world,
including American coal no longer needed at home. With that new leverage, Gazprom's European customers have squeezed billions
of dollars in discounts from the company, and they are pressing for more. Europe is Gazprom's most lucrative market. The company
supplies about one-quarter of the European Union's natural gas via a network of pipelines. Gazprom said Tuesday its net profit declined by
$6.5 billion, or 15%, in 2012, as sales to the EU fell by about 9%. Gazprom has been the flagship of Russian leader Vladimir Putin's
drive to make Russia an energy superpower. The company, which also controls Russia's fourth-largest oil producer, was created two
decades ago out of the Soviet Ministry of Gas and is majority-owned by the state. By law, it is the only Russian company permitted to
export gas. The company's current struggles are affecting Russia's economy because it accounts for over 10% of
export revenues. Earlier this year, Mr. Putin criticized Gazprom for letting exports decline, hurting government tax revenues. In March,
government officials warned that stagnant gas exports were a big reason why growth will fall short of Mr. Putin's target of
5% a year. In October, Mr. Putin called on Gazprom to adapt its strategy in response to what he called the "shale revolution."
US exports threaten a national priority of Russia
Weitz ’11 [Richard Weitz is asenior fellow at the Hudson Institute and a World Politics Review senior editor,
November 2011, “Can We Manage a Declining Russia?,” http://www.aei.org/files/2011/12/08/-can-we-manage-adeclining-russia_152701899417.pdf]
Europe is an unavoidable panner. The European market consumes 90% of Russia’s total gas exports and 60% of its crude oil,
which make up only 25 and 15% of Europe’s total demand, respectively. Russia presently does not have any viable alternative
markets remotely equal in size to Europe. Dependence is a two-way phenomenon. “40% of Russian public money” comes from the sale
of oil and gas to Europe, and at least 75% of Russian export revenues are linked to the EU’s energy market in general. Without
any extant alternative markets to exploit in the near-term, Moscow requires European gas revenues to preserve its own financial
solubility. Energy overshadows other concerns. Paillard believes that while the energy trade has, in the past, been “part of a
game of blackmail, lies and fear” between Europe and Russia, its new status as a “question of life or death for Russian
revitalization” and its importance to Europe’s economic growth mean that neither side can afford to use gas supplies as leverage
in other international concerns. In Paillard’s estimation, Brussels and Moscow both regard issues such as human rights or the Chechen conflict as
not being worth risking the energy trade over. Therefore, Russian and the European Union are inextricably bound to one another by their mutual
dependence on the energy trade. Russia cannot absorb the financial consequences of interrupting the EU revenue stream,
while the European Union cannot do without Russian gas supplies. Europe has few alternative suppliers, and cannot develop
alternative energy sources in the near term. Russia, meanwhile, is unlikely to be able to diversify its economy or target new markets
any better than it has in the past.
Russia will be forced to accept lower prices on natural gas
Jaffe and O’Sullivan ’12 [July 2012. Amy Myers Jaffe is the Wallace S. Wilson Fellow in Energy Studies at
the James A. Baker III Institute for Public Policy at Rice University in Houston, Texas. Meghan L. O'Sullivan (is a
former deputy national security adviser on Iraq and Afghanistan, Jeane Kirkpatrick Professor of the Practice of
International Affairs, and senior fellow at Harvard University's John F. Kennedy School of Government Belfer
Center for Science and International Affairs. “The Geopolitics of Natural Gas: Report of the Scenarios Workshop of
Harvard University’s Belfer Center and Rice University’s Baker Institute Energy Forum” Belfer Center for Science
and International Affairs, Harvard Kennedy School. http://www.bakerinstitute.org/publications/EF-pubHKSGeopoliticsOfNaturalGas-073012.pdf]
LNG supplies whose development was anchored to the belief that the United States would be a premium market will continue to be diverted. In
the reference case, the US market remains the lowest priced major market region in the world throughout the model time
horizon. Many US terminals once expected to be actively utilized will remain relatively empty. During the period from
2013 to 2015, US terminals see some growth as new volumes from Australian LNG development push African LNG cargoes to the US market—
a trend exacerbated by growth in LNG supply from West Africa in the 2014-20 15 period. The reference case projects that consumers in Europe
will receive a double benefit from the rise in global gas supply. Not only will Europe increasingly find alternatives to Russian
pipeline supplies, but these alternative supplies will exert pressure on the status quo of indexing gas sales to a
premium marker determined by the price of petroleum products. In fact, Russia has already had to accept lower
prices for its natural gas and is now allowing a portion of its sales in Europe to be indexed to spot natural gas
markets, or regional market hubs, rather than oil prices. This change in pricing terms signals a major paradigm shift.
Yet as Europe moves to gas-on-gas pricing, global marker prices in the reference scenario fail to converge through 2040. Europe’s price premium
will hover at more than SI above henry Hub prices, even as Europe develops its own shale resource and diversifies sources of supply.
Jaffe and O’Sullivan ’12 [July 2012. Amy Myers Jaffe is the Wallace S. Wilson Fellow in Energy Studies at
the James A. Baker III Institute for Public Policy at Rice University in Houston, Texas. Meghan L. O'Sullivan (is a
former deputy national security adviser on Iraq and Afghanistan, Jeane Kirkpatrick Professor of the Practice of
International Affairs, and senior fellow at Harvard University's John F. Kennedy School of Government Belfer
Center for Science and International Affairs. “The Geopolitics of Natural Gas: Report of the Scenarios Workshop of
Harvard University’s Belfer Center and Rice University’s Baker Institute Energy Forum” Belfer Center for Science
and International Affairs, Harvard Kennedy School. http://www.bakerinstitute.org/publications/EF-pubHKSGeopoliticsOfNaturalGas-073012.pdf]
For more than a decade, Russia has been teetering on the brink of dissolution following a succession of unsuccessful
authoritarian leaders in Moscow. The year 2030 delivers the final blow. No longer able to sustain internal weaknesses
and mounting political dissent despite rising oil and gas income, the country collapses into a loose series of warring
autonomous federations and loses all credibility as a gas supplier. Europe now finds itself stripped of its primary
source of gas. Facing economic stagnation and an overstretched military, the United States launches an Energy New
Deal with France that promotes micro-nuclear energy, creating competing technologies to those being launched in Japan. The
program meets with some success, and nuclear energy becomes a more significant part of the energy mix in Europe, Japan. and
the US. Developing economies that cannot pursue expensive nuclear programs grow more internally focused,
resulting in low levels of trade and low economic growth. Global standards of living have deteriorated, and
poverty is on the rise.
Natural Gas K2 Russian Economy
Russia’s natural gas exports are key to economic stability – exports will continue to
increase
Paltsev ’11 [July 2011. Sergey Paltsev is the Assistant Director and Principal Research Scientist for Economic
Research at the MIT Joint Program on the Science and Policy of Global Change. “Supplementary Paper SP 3.1:
Russia’s Natural Gas Export Potential up to 2050” http://mitei.mit.edu/system/files/NaturalGas_Sup_Paper3.1.pdf]
Recent increases in natural gas reserve estimates and advances in shale gas technology make natural gas a fuel with good prospects to serve a
bridge to a low-carbon world. Russia is an important energy supplier as it holds the world largest natural gas reserves and it
is the world’s largest exporter of natural gas. Energy was one of the driving forces of Russia’s recent economic
recovery from the economic collapse of 1990s. The country enjoyed more that 5 percent annual real economic growth for the period
of 2000- 2008. The robust growth with ever increasing energy prices had contributed to a sense of a long-term
economic stability in Russia. These prospects have changed drastically with a global recession, and the resulting reduction in demand for
fossil fuels, and the collapse of oil and gas prices from their peaks of 2008. An additional factor is an ongoing surge in a liquefied natural gas
(LNG) capacity and a development of Central Asia’s and the Middle East gas supplies that can compete with Russian gas in its traditional
(European) and potential (Asian) markets. To study the long-term prospects for Russian natural gas, we employ the MIT Emissions Prediction
and Policy Analysis (EPPA) model, a computable general equilibrium model of the world economy. While we consider the updated reserve
estimates for all world regions, in this paper we focus on the results for Russian natural gas trade. The role of natural gas is explored in the
context of several policy assumptions: a reference case with no greenhouse gas mitigation policy and scenarios of emissions targets in developed
countries where they restrict their greenhouse gas emissions to 50 percent relative to 2005 by 2050. Scenarios where Europe takes on an even
more restrictive target of 80 percent reduction of greenhouse gas emissions relative to 2005 by 2050 and reduces its nuclear-based generation are
also considered. Asian markets become increasingly important for natural gas exports and several scenarios about their potential development are
considered. We found that over the next 20-40 years natural gas can still play a substantial role in Russian exports and there
are substantial reserves to support a development of the gas-oriented energy system both in Russia and in its current and
potential gas importers. In the Reference scenario, exports of natural gas grow from Russia’s current 7 Tcf to 10-12 Tcf in 2030 and 15-18
Tcf in 2050. Alternative scenarios provide a wider range of projections, with a share of Russian gas exports shipped to Asian markets rising to 30
percent by 2030 and more than 50 percent in 2050. Patterns of international gas trade show increased flows to the Asian region
from Central Asia, the Middle East, Australia and Russia. Europe’s reliance on LNG imports increases, while it still
maintains sizable imports from Russia.
Natural gas exports are key to the Russian economy
Shiyakov ’11 [November 17, 2011. E. Shiyakov is a CEIC Anaylst. “Russia to Increase Natural Gas Exports to
Europe via Nord Stream Pipeline” CEIC Data. http://blog.securities.com/2011/11/russia-to-increase-natural-gasexports-to-europe-via-nord-stream-pipeline/]
Stable natural gas exports are crucial for the Russian economy as oil and gas revenues are a key element of the
federal budget. Gazprom, as the only Russian company exporting gas, permanently wrestles with the dilemma of whether to
meet the increasing domestic demand for gas at affordable prices or to increase its gas exports abroad, mainly to Europe
The new Nord Stream pipeline is expected to cut transportation costs and increase the share of Russian gas in Europe up to 30% by 2013. Natural
gas exports depend on the volume of gas extraction and contract obligations. Gas exports reach their peak during winter months due to high
demand: 23.6 billion cubic meters in January 2011 against 10.3 billion cubic meters in August 2011. The monthly share of exported gas is
normally 25%-30% of all natural gas mining.
Exports of natural gas have allowed the Russian economy to become the 5th largest in the
world
Bertini 8/1 [August 1, 2013. Ilaria Bertini joined is completing a master's in science and environmental
journalism; she covers a energy and environmental issues and sustainable investment and green living. “Russia
overtakes Germany to become world’s fifth largest economy” http://blueandgreentomorrow.com/2013/08/01/russiaovertakes-germany-to-become-worlds-fifth-largest-economy/]
Russia has entered the top five of the world’s biggest economies, with its $3.4 trillion GDP leaving fellow European nations
behind, according to the World Bank. The US, China, India and Japan occupy the first four positions, while Germany drops one place into sixth.
Russia has gained ground thanks to its favourable oil prices. The country was previously the sixth largest economy by purchasing
power parity (PPP) – the theory used to determine the relative value of currencies – but has experienced constant growth since the beginning
of the 21st century. This is mainly down to its plentiful natural resources, especially coal, oil and natural gas reserves in remote
areas, which account for a large share of its exports. Despite being defined by the World Bank and the International Monetary Fund
(IMF) as a “developing economy”, Russia has overcome most other European nations in terms of economic growth . The
country’s abundance of fossil fuels and minerals have played a crucial role in the global energy market, making it
become the world’s largest exporters of natural gas. Russia is also the largest oil producer among non-OPEC countries, and is
globally second after Saudi Arabia. The country will enter the Organisation for Economic Co-operation and Development (OECD) in 2015 and
according to the IMF, its economy is set to grow steadily, more than the US and Germany. However, because of its strong reliance on
fossil fuels, it has often been criticised by environmental campaign groups.
Russian Exports Increasing
Russia has a ton of natural gas
Paltsev ’11 [July 2011. Sergey Paltsev is the Assistant Director and Principal Research Scientist for Economic
Research at the MIT Joint Program on the Science and Policy of Global Change. “Supplementary Paper SP 3.1:
Russia’s Natural Gas Export Potential up to 2050” http://mitei.mit.edu/system/files/NaturalGas_Sup_Paper3.1.pdf]
According to BP (2010), more than 50 percent of the global gas reserves of 6600 Tcf lie in three countries: Russia, Iran, and Qatar . Russia has
about 1570 Tcf of natural gas in proved reserves, which are the largest in the world. If gas production remains at the
current levels, Russia has gas for more than 80 years. Figure 1 shows a distribution of reserves aggregated by large regions, where
the former Soviet Union has 2074 Tcf of natural gas in reserves , second to the Middle East reserves of 2690 Tcf. Asia Pacific and
Africa have about 500-600 Tcf each, while North America and South America have about 300 Tcf each. Europe (including Norway)
has about 150 Tcf, which is about 15–20 years of production at the current levels. Gas resources, a more uncertain category as it includes not
only gas that can be recovered under existing economic and operating conditions but also reserves growth and undiscovered gas, are much
bigger than the proven reserves. The MIT Future of Natural Gas study (MIT, 2011) has estimated the resources aggregated by the EPPA
model regions, which are provided in Figure 2, where the four biggest regions in terms of gas resources are the Middle East with about 4,700 Tcf,
Russia with about 3,400 Tcf, USA with around 2,000 Tcf with a substantial contribution of shale gas, and Africa with around 1,000 Tcf. MIT
(2011) does not assess shale gas resources and their costs outside North America, considering them highly uncertain at this time, but the U.S.
Energy Information Administration (EIA, 2011) released a report that provides an Figure 1 Proved Reserves of Natural Gas by Region, Tcf Data
source: BP, 2010; Regional map: EPPA
Russian natural gas exports will continue to increase
Paltsev ’11 [July 2011. Sergey Paltsev is the Assistant Director and Principal Research Scientist for Economic
Research at the MIT Joint Program on the Science and Policy of Global Change. “Supplementary Paper SP 3.1:
Russia’s Natural Gas Export Potential up to 2050” http://mitei.mit.edu/system/files/NaturalGas_Sup_Paper3.1.pdf]
In the scenarios considered here, we found that over the next 20-40 years natural gas can still play a substantial role in
Russian exports and there are substantial reserves to support a development of the gas-oriented energy system both in
Russia and in its current and potential gas importers. In the Reference scenario, exports of natural gas grow from Russia’s current 7 Tcf
to 10–12 Tcf in 2030 and 15–19 Tcf in 2050. Alternative scenarios provide a wider range of projections, with many potential paths after 2020
considering the fate of nuclear and coal regulation in Europe and a level of support of natural gas in Asia. Projections of shale gas development in
China (and in Europe) are still highly uncertain. Depending on the costs of these resources and environmental regulations in place, they may
displace higher cost imports to these regions. At the same time, larger gas reserves in China would facilitate a shift from coal to gas and further
induce gas use in different sectors of the economy, opening a door for additional lower cost imports. By 2030, about a third of Russian
natural gas exports might be destined to Asia, and by 2050 this share can reach more than 50 percent. Patterns of international
gas trade show increased flows to the Asian region from the Middle East, Central Asia, Australia, and Russia.
Europe’s reliance on LNG imports increases, while it still maintains sizable imports from Russia.
Miscellaneous
LNG facilities will be targeted – current security measures solve but growing corruption
makes breaches more likely.
Mark Tempest, 7-06-2007, retired
attorney, retired Navy Reserve Captain (Surface Warfare), writer of the blog
EagleSpeak, “Caribbean basin terrorism concerns?” http://www.eaglespeak.us/2007/07/caribbean-basin-terrorism-concerns.html
A new report by the investigative arm of Congress describes the "growing influence" of Islamic radical groups as a threat to the
Caribbean's maritime security along with more traditional concerns such as organized gangs, illegal migration and drug
low in comparison with what's happening every day" in the rest of the world, Stephen Caldwell, the main author
of the Government Accountability Office report, said Thursday. " But the Islamic radical threat needs a little more focus down there." *** The report, based on
trafficking. "The terrorism threat is
information from U.S. agencies and Caribbean government officials, warns of a radical Muslim group that launched a bloody coup attempt in 1990 and says militant
Caribbean ports would be vulnerable to
attacks because of corruption, lax security and limited resources to maintain equipment. U.S. State Department officials, it
noted, have witnessed open, unattended gates and other security gaps at ports where cruise ships dock. "The threats are not known, but the
vulnerabilities are pretty well known and of concern," Caldwell said. Islands vigorously defend their handling of security at ports
that are the point of entry for many tourists. "The whole country's economy depends on this so we have prioritized ," said Anthony
Belmar of Grenada's Port Authority, which recently installed close-circuit television cameras among other security upgrades.
"It's not something we're sleeping on." More on the report here: Referred to as our "third border," the Caribbean Basin has significant maritime links
organizations including Hezbollah have a presence in such countries as Venezuela and Colombia. It said
with the United States. Given these links and the region's proximity, the United States is particularly interested in ensuring that the ports in the Caribbean Basin-through which goods bound for this country's ports and cruise ships carrying its citizens must travel--are secure. And the report is available in pdf format here.
Excerpts: While intelligence sources report that no specific, credible terrorist threats to maritime security exist in the Caribbean Basin, the officials we spoke to
indicated that there
are a number of security concerns that could affect port security in the region. Caribbean ports
contain a variety of facilities such as cargo facilities, cruise ship terminals, and facilities that handle petroleum products and liquefied
natural gas. Additionally, several Caribbean ports are among the top cruise ship destinations in the world. Given the volume and value of this
maritime trade, the facilities and infrastructure of the maritime transportation system may be attractive targets for a terrorist attack.
Our prior work on maritime security issues has revealed that the three most likely modes of attack in the port environment are a suicide attack using an explosiveladen vehicle or vessel, a standoff attack using small arms or rockets, and the traditional armed assault. Beyond the types of facilities and modes of attack to be
considered, officials we spoke to identified a number of overarching security concerns that relate to the Caribbean Basin as a whole. Among these concerns
are (1) the level of corruption that exists in some Caribbean nations to undermine the rule of law in these countries, (2)
organized gang activity occurring in proximity to or within port facilities, and (3) the geographic proximity of
many Caribbean countries, which has made them transit countries for cocaine and heroin destined for U.S. markets. Other security concerns in the
Caribbean Basin mentioned by U.S. agency officials include stowaways, illegal migration, and the growing influence of Islamic radical groups and other foreign
terrorist organizations.
LNG explosions outweigh nuclear war.
architect, author, economist, one of the founders of the “green architecture” and
“sustainability” movements, his “Factor 10” economic principles have been endorsed by the European Union, the
World Business Council for Sustainable Development and the United Nations Environmental Program, cites a
research study from the Sandia National Laboratories, a Federally Funded Research and Development Center and a
part of the DOE, “LNG Imports: Neither Safe nor Wise,” http://www.tombender.org/societyworthlivingforarticles/lng.pdf
Liquefied natural gas (LNG) is considered by transportation officials to be a "hazardous and noxious substance". The Port of Astoria, and the
Tom Bender, 1-15-2005,
community has been told by Calpine representatives that their proposed Skipanon LNG import terminal would be safe, and that any LNG spills would just fizz and
evaporate "like 7-UP". But a
just-released Sandia research lab study (SAND2004-6258) joins the voices of long-term government
funded researchers to strongly disagree. Although the operational safety of the LNG industry has been good overall, the hazards of our post 9/11
world are not operational safety but intentional acts of destruction. And LNG terminals and tankers are prime terrorist targets. LNG
tankers are huge – as long as the World Trade Center buildings were tall – and contain 35,000,000 gallons or more of LNG. That represents the energy
equivalent of 60 to 80 Hiroshima bombs. Not one, but sixty to eighty Hiroshima bombs! An accident affecting even a tiny part of that
energy can be catastrophic. LNG is less likely to be as "explosive" as a nuclear weapon, but the far greater
amount of energy, and drifting fireballs of burning gas could be even more destructive than Hiroshima. "Terrorist attacks on
tankers carrying liquefied natural gas into a U.S. port could trigger a fire that could burn the skin of people a mile away and cause
major injuries and significant structural damage within about a third of a mile ," says the Washington Post (Dec 22, '04). The Sandia
report, prepared by that Energy Department laboratory, stated that, "terrorists could use rocket-propelled grenades, missiles, planes or boats to break open the tankers."
The Post also quotes James A. Fay, a professor emeritus of mechanical engineering at the Massachusetts Institute of Technology who has studied LNG safety for 35
years, "If there were a
successful attack, then the consequences can be very severe. I think this report has done a lot to get the science of this
An LNG spill can create major hazards that extend over considerable
area. It can cause asphyxiation, cryogenic burns, structural damage and failure, 3000oF fireballs several thousand feet
across and hundreds of feet high, fuel-air (vapor cloud) detonations or explosions that can cover very large distances, and
rapid phase transitions (explosive boiling of the cold liquid). There remains considerable uncertainty about extent of potential hazard depending on rate of
consequence analysis out on the table where everyone can see it."
LNG release, possible ignition sources, wind direction and speed, etc. But the fine print isn't important with fire hazards of that scale. And with abutting property
owner, Weyerhaeuser, having filed for a permit to expand the size of their open-flame boilers, is Warrenton a good location for an LNG terminal? A burning vapor
new report may significantly underestimate
potential damage. It assumes that only three of the five or more holds of a tanker might be affected, and that the hole through which LNG
would be released would not be larger than 5 meters2 – although a hole twenty times as large (100 meter2) had
cloud from an LNG tanker at the Skipinon site could extend beyond Astoria. Even this
already been blown by terrorists in the double-hulled Limberg oil tanker, (below). And the amounts of LNG involved are 100 to
1000 times as large
as any real tests which have ever been performed. The firestorms from bombing Dresden and Tokyo in WWII were not predicted
from the effects of dropping a few single bombs. This 30' (100 meter2) hole blasted by terrorists through the double hull of the French oil tanker Limburg indicates
can be spilled far more rapidly than by the 5 meter2 opening used in government safety studies. The Sandia report also largely
ignores airborne attacks on tankers (where tanks are unprotected by the ship's double hull), and the potential use of fuel-air bombs to disperse the LNG
that LNG
more explosively into the air. The tops of LNG tanker holds are far more vulnerable to terrorist actions than the lower parts, which are protected by double hulls and
bombs that could cause dispersal and detonation of a tanker of LNG
like atomic bombs are used to detonate larger hydrogen bombs. (A GOOGLE on "fuel-air bombs" will give you immediately two New Scientist
articles – "First Test for US Monster Bomb" saying it "creates a mushroom cloud and a shockwave similar to that of a small nuclear
greater amounts of insulation. Fuel-air bombs are shockwave
explosion
" and a second, "Experts Fear Terrorists Are Seeking Fuel-Air Bombs" telling where terrorists can obtain either large or shoulder rocket launched
versions. Reading these reports do not dispel fears of LNG terminal hazards. The "superbomb" fuel-air explosives get their destructive power by dispersing their
"fuel" into the air before detonation. Use
of their shock blast to disperse LNG tanker cargo into the air before detonation has the
potential for the same action on vastly larger scale.
Solvency---Drilling
Drilling is expensive and unlikely to result in anything – legal disputes preclude effective
production
Stratfor ’12 [February 24, 2012. Stratfor. “In Mexico, Obstacles To Developing Offshore
Oil Fields” http://www.opeal.net/index.php?option=com_k2&view=item&id=10288:in-mexico-obstacles-todeveloping-offshore-oil-fields]
However, under the terms of their recent agreement Mexico and the United States can explore and produce in the offshore area either
independently or collaboratively. This could give Pemex crucial hands-on experience under the guidance of more advanced companies. But there
are major obstacles. Offshore exploration and production is expensive and not guaranteed to yield results. Because of
the high financial risks, major oil companies with advanced drilling technology demand an ownership stake in the oil
they are attempting to exploit. But the Mexican Constitution strictly forbids foreign ownership of mineral resources . Under
the current legal framework, any company investing in exploration and production in Mexico must do so under the
auspices of a fee-based contract, meaning the company has no actual ownership of the oil. This reduces the potential assets
available to exploring companies and lowers the incentive to take risks on technologically challenging deposits. To date, this
stipulation has hampered Mexican efforts to explore the Gulf of Mexico. Not even a bilateral agreement with the United States
can fully preclude legal disputes about the unclear nature of oil ownership in deposits that straddle the maritime
border. There are more than just legal challenges to partnering with Pemex. In the first place, any company partnering with Pemex for
deep-sea exploration and production would have to bring the majority of the technological expertise . Furthermore, Pemex is
plagued by persistent corruption and a lack of financial and operational transparency.
Plan is extremely expensive – legal uncertainty deters investment
Simmonds ’13 [April 30, 2013. Daniel Simmonds is a writer for MasterResource“U.S.-Mexico Transboundary
Hydrocarbons Agreement: A Rare Victory for Oil and Gas in the Obama Era”
http://www.masterresource.org/2013/04/u-s-mexico-transboundary-hydrocarbonsagreement/#sthash.t0GLylLf.dpuf]
For example, Mexican confidentiality requirements may forbid the disclosure of the very information that Rule 13q-1 requires American
companies to disclose. This would lead to a situation where companies regulated by the SEC have, at very least, uncertainty about compliance
with both Mexican and American disclosure laws. This uncertainty and potential disclosure conflict would place foreign stateowned oil companies, who are not regulated by the SEC, at a competitive advantage to the companies which operate in the
United States are regulated by the SEC. Because much of the transboundary area is deepwater, it would require multibillion dollar investments to produce the hydrocarbon resources. Any legal uncertainty brought about by disclosure law
could easily dissuade American companies from undertaking what is already an expensive decision, in turn reducing
opportunities for new jobs for Americans. Rule 13q-1 also creates a different type of competitive disadvantage for American companies operating
in the Gulf of Mexico Transboundary area. The rule would allow foreign state-owned oil companies with a competitive advantage to consider
business-sensitive information about American companies’ operations. If Mexico were to allow foreign-owned companies to
extract oil along the deepwater transboundary area, there could very well be competition between U.S. private
companies and foreign-state owned companies. Even though the deepwater technology was developed in the U.S .
deepwater, the U.S. companies would be at a disadvantage. This is like playing poker but being required to show
your cards to your fellow card-players.
AT: Natural Gas Advantage
Status Quo Solves
China has energy security now – Mynamar pipeline
Hook 7/29 [July 29, 2013. Leslie Hook is the Beijing Correspondent covering Chinese energy and commodities
for the Financial Times. “China starts importing natural gas from Myanmar” Financial Times.
http://www.ft.com/intl/cms/s/0/870f632c-f83e-11e2-92f0-00144feabdc0.html#axzz2aSj94Rax]
China has started importing natural gas from Myanmar, a milestone as the world’s largest energy consumer expands
its strategic access to energy resources across the Indian Ocean. The gas pipeline that connects China, Myanmar and the
Indian Ocean has formally begun operations, CNPC, the Chinese state-owned company that operates the pipeline, announced on Monday.
A parallel crude oil pipeline is expected to start next year. The completion of the gas portion of the pipeline opens a
new energy corridor for China, which will now be able to access gas supplies from Myanmar’s offshore gasfields,
and will soon be able to access oil shipments through a giant port on the coast. The pipeline will also deliver a windfall to the
Myanmar government thanks to increased natural gas revenues. Wang Dongjin, the new president of CNPC’s Hong Kong-listed
subsidiary PetroChina, emphasised the pipeline’s contribution to China’s energy security in an interview with state media:
“In future China’s crude oil imports will not have to go through the Strait of Malacca ,” said Mr Wang. “This has great
strategic significance for China’s energy diversification and energy security. The supply of natural gas is equally
important.”
Status quo solves – shale gas boom, coal exports, alleviated tension in the Middle East
Luft 7/25 [July 25, 2013. Gal Luft is co-director of the Washington DC based Institute for the Analysis of
Global Security (IAGS) and Senior Adviser to the United States Energy Security Council (USESC). “What does
America's shale gas revolution mean for China?” Journal of Energy Security.
http://www.ensec.org/index.php?option=com_content&view=article&id=452:what-does-americas-shale-gasrevolution-mean-for-china&catid=137:issue-content&Itemid=422]
Cheap natural gas will surely revive America’s industrial sector, creating new jobs and investment opportunities. In fact, some global
manufacturers have already announced their plans to set up plants in the U.S. to take advantage of its cheap energy. But this should not be viewed
as a threat to China. A more prosperous America means more buying power and a bigger market for Chinese goods. Furthermore, since the
U.S. is unable to utilize all of its domestic energy it can now export more of it to Asia. As the U.S. electricity sector
is shifting from coal to natural gas more coal is available for export. In the past ten years U.S. coal exports more than tripled,
and much more of this surplus of high grade coal could be used in China. The U.S. is in the process of building LNG
export terminals with the goal of exporting some of its gas to Asia, bringing down the price of natural gas for Asian
countries, China included. Similarly, increased U.S. oil production means fewer barrels will have to migrate to the U.S.
increasing the availability of African and Middle Eastern oil to the Chinese market and reducing the risk of tension over
access to energy.
Chinese energy security now – shale gas potential
Luft 7/25 [July 25, 2013. Gal Luft is co-director of the Washington DC based Institute for the Analysis of
Global Security (IAGS) and Senior Adviser to the United States Energy Security Council (USESC). “What does
America's shale gas revolution mean for China?” Journal of Energy Security.
http://www.ensec.org/index.php?option=com_content&view=article&id=452:what-does-americas-shale-gasrevolution-mean-for-china&catid=137:issue-content&Itemid=422]
The American oil and gas boom will benefit China in other ways. Energy exports are likely to boost the U.S. dollar and hence put downward
pressure on oil prices while making China’s exports of manufactured goods more competitive. China should also recognize that it could
benefit from the fracking technology more than any other country. China has the world’s largest reserves of gas shale. The U.S. Energy
Information Administration estimates that China has total reserves of 1,275 trillion cubic feet of shale gas , almost 50 percent
more than the 862 trillion cubic feet in the U.S. And while there are many question marks about the economics and environmental attributes
of shale gas this resource has the potential to transform China’s energy landscape . The U.S. would welcome that. China
and the U.S. already launched in 2009 the U.S.-China Shale Gas Resource Initiative - a joint effort to enhance investment and technical
cooperation aimed at accelerating shale gas development in China - and major U.S. energy companies like Chevron and Conoco Phillips
have signed joint ventures with Chinese energy companies. The 21st century is dubbed by many as the natural gas century. But
China's natural gas sector has a lot of catching up to do. The world’s average for natural gas’ share of a country’s total energy portfolio is 24
percent. In China it is only 5 percent. Along with nuclear power and renewables, natural gas is critical to strengthening China’s
energy security and reducing its dangerous air pollution. Natural gas can also alleviate China’s growing dependence on
imported oil. It can be used directly as automotive fuel in the form of compressed natural gas; it can be used to generate electricity, which can
power electric vehicles and it can be converted to methanol, a liquid fuel that is already widely used in some provinces in China. All of these
opportunities are now possible thanks to shale gas. American innovation has unlocked the gate for China’s
energy future. It is now up to China to embrace this development, take full advantage of it and view shale gas for what it really is: an
opportunity, not a threat.
Pipelines from Mynamar solve Chinese energy security
Kyodo News 7/29 [July 29, 2013. Kyodo News International. “China-built gas pipeline through Myanmar in
operation” http://www.globalpost.com/dispatch/news/kyodo-news-international/130729/china-built-gas-pipelinethrough-myanmar-operation]
China has turned on a 1,100-kilometer gas pipeline that ships natural gas to southern China from Myanmar . The
pipeline, built largely by the state-owned China National Petroleum Corp., gives China a vital overland supply route without passing
through the South China Sea. The 793-km Myanmar section of the pipeline, constructed jointly by six parties from four countries,
including South Korea and India, was commissioned into service on Sunday with a ceremony held at the CNPC office located near Mandalay in
central Myanmar. According to Chinese media reports, the pipeline is capable of transporting 12 billion cubic meters of natural gas to
China annually, about 25 percent of China's total natural gas imports. CNPC, China's largest energy company, is also building a
parallel oil pipeline through Myanmar that can ship 22 million tons of crude to China annually. Construction work is expected
to be completed in September. The $2 billion twin pipeline project is China's most strategically important investment in
Myanmar, an alternative energy route that would reduce Beijing's reliance on shipping through the narrow Malacca Strait
between Malaysia and Singapore, where 80 percent of its oil imports have to go through. Myanmar will receive $6.9 million a year as the right of
way fees for each of the pipelines and $1 for every ton of crude oil in transit fees, according to earlier local media reports quoting official figures.
Under a contract concluded during the previous Myanmar military government, Myanmar has given CNPC exclusive rights to buy
natural gas extracted from the offshore Shwe gas field in the Bay of Bengal . As the Myanmar economy and the nascent
industrial sector have been hit by chronic power shortages, the gas pipeline project has raised public objections in Myanmar since only 20 percent
of the Shwe gas would be freed for domestic consumption, with the rest bound for the southern Chinese province of Yunnan. The Chinese
government is also planning to build a branch gas pipeline that would link the Yunnan provincial capital of Kunming and the
Guangxi provincial capital of Nanning. The twin gas and oil pipelines will help China save shipping costs and cut transport
times compared with the maritime route through the Malacca Strait. The overland pipeline route through Myanmar is also
strategically symbolic as China has been entangled in territorial disputes in the South China Sea with Vietnam and other Southeast Asian
countries.
Chinese LNG terminals solve energy security
Daiss 7/9 [July 9, 2013. Tim Daiss is an Asia-Pacific geopolitical & energy correspondent for US and UK news
agencies. “China Raises Natural Gas Prices, Still Searching for More Supply” Energy Tribune.
http://www.energytribune.com/78049/china-raises-natural-gas-prices-still-searching-for-moresupply#sthash.hS0ZEEXe.dpuf]
On June 13, a Shell China said that Royal Dutch Shell signed a letter of intent with Guanghui Energy Co. Ltd., a private firm, to “explore the
possibility of developing a liquefied natural gas import terminal” in eastern China’s Jiangsu province. Chinese media and international
media ran the story the same day. Reuters, quoting a company statement from early June, said that Guanghui plans to build LNG facilities in
Qidong, Jiangsu province, starting with a 600,000 ton per year storage and transit plant . Then, the company plans to build
a 1.5 million ton per year LNG import facility under a second phase and a 3.5 million ton per year import terminal in a third
stage, pending regulatory approvals. The Shell-Guanghui terminal would be part of at least seven other LNG terminals under
construction or planned. Currently, China has five existing LNG terminals with a total regasification capacity of almost 1,000 Bcf/y (2.7
Bcf/d) as of mid-2012. Once the new terminals are brought online, China’s total LNG regasification capacity will increase
by at least another 2 Bcf/d, according to US Energy Information Agency (EIA) data. All of China’s LNG terminals are on the east coast, stretching north at Dalian,
China’s accelerated LNG plans are
one key element in its approach to ensure natural gas security. Other elements include promoting domestic
production from conventional and unconventional resources, expanding current reserves, constructing gas storage
near the North Korean border, to south on Hainan Island, just northeast of Vietnam across the South China Sea.
facilities and speeding up construction of interregional gas pipelines. According to a June 20 International Energy Agency (IEA) report,
China will account for 30% of the growth of global gas demand. Despite the country’s impressive progress on domestic production, says the IEA, this still puts China
on a path of increasing import dependency. “In the next five years, China absorbs the entire production increase from Central Asia as well as one-third of the global
increase in LNG supply.” China’s
need for more natural gas already intersects North American supplies. The country has
already invested heavily in both Canada and the US to help those efforts, including CNOOC’s recent $15.1 billion acquisition of Calgary-based
Nexen, and in the US Sinopec’s $1 billion joint venture with Chesapeake Energy (which is the second largest natural gas producer in the country) and also Sinopec’s
$2.5 billion deal with Devon Energy in January 2012. One unknown variable at this point in China’s gas equation is American LNG.
Aff Can’t Solve
Can’t solve Chinese energy security – laws preventing exports to non-FTA countries
Colares 7/9 [July 9, 2013. Juscelino Colares is a law professor at Case Western Reserve University. He is a
specialist in the intersystemic aspects of the law on international trade, climate change and civil procedure. “The
U.S. Must Lead on Natural Gas Production and Exports” http://canadafreepress.com/index.php/article/56427]
Existing price differentials should make natural gas exports a reality, but existing trade rules are not so simple. Unlike
ordinary exports, energy exports are subject to a permitting system under the Natural Gas Act that differentiates
between free-trade area (“FTA”) and non-FTA destinations. These rules simplify export licensing to 18 of the 20 countries with which
the United States has the closest trade ties. Licensing exports to other countries is more difficult. In the past two years, the Energy
Department has approved 23 of 25 applications for LNG exports to FTA countries while approving only one non-FTA export
request. It took Cheniere Energy’s Sabine Pass Liquefaction’s non-FTA application 29 months to win approval. Operators of
LNG export terminals undergo other complex administrative hurdles to ensure compliance with environmental and safety requirements, whether
they are proposing to build or modify existing facilities.
Exporting LNG to another country requires a long and costly authorization process –
uncertainty deters investment
Loris ’13 [February 11, 2013. Nicolas Loris is the Herbert and Joyce Morgan Fellow at the Thomas A. Roe
Institute for Economic Policy Studies for the Heritage Foundation. “U.S. Natural Gas Exports: Lift Restrictions and
Empower the States” http://www.heritage.org/research/reports/2013/02/us-natural-gas-exports-lift-restrictions-andempower-the-states]
In order to export natural gas from the United States, companies must obtain approval from both the Federal Energy Regulatory
Commission (FERC) and the Department of Energy's Office of Fossil Energy. The Natural Gas Act of 1938 grants FERC the authorization to
site both import and export facilities in accordance with the National Environmental Policy Act (NEPA) and existing statutes to satisfy
environmental requirements including the Clean Water Act (Sections 401 and 404), the Coastal Zone Management Act (Section 307(c)), the
National Historic Preservation Act, the Endangered Species Act, and the Clean Air Act (Section 502). States have the authority to veto any
approval decision by FERC by denying the facility's environmental permits.[20] The applicant must also satisfy requirements under the Maritime
Transportation Security Act (MTSA) of 2002 as well as the Department of Transportation's Office of Pipeline Safety requirements. FERC will
approve the project if the agency believes the facility is in the public's interest .[21] Section 3 of the Natural Gas Act also gives
the Department of Energy's Office of Fossil Energy (FE) a say in the decision to export natural gas.[22] After a company files an
application with the DOE, the agency must determine whether the project is in the public's interest. The DOE can
arbitrarily deny a permit if the agency believes the total volume of natural gas exported is not in the public's interest.
A facility is automatically authorized if the country the U.S. is exporting to is a recipient nation that has a free trade
agreement (FTA) with the U.S.[23] If the importing country does not have an FTA, the Energy Department must then
publish the notice in the Federal Register for a comment period, and ultimately determine if the facility is in the public's interest.
Houston-based Cheniere Energy filed an application with the DOE in September of 2010 to export LNG to non-FTA countries, and the EPA
conditionally approved the permit in May 2011. Cheniere submitted its review process to FERC in December 2011 and FERC approved the
project in April of 2012.[24] However, after FERC completed its review in 2012, the Sierra Club asked the DOE to reconsider the permit, arguing
that the environmental review was incomplete. The DOE then delayed a decision to stay the permit but ultimately dismissed the Sierra Club's
request.[25] Even without the Sierra Club's obstruction, the DOE review process needlessly added a year to the review
process.
Export permitting process takes forever and means other countries gain opportunities
Loris ’13 [February 11, 2013. Nicolas Loris is the Herbert and Joyce Morgan Fellow at the Thomas A. Roe
Institute for Economic Policy Studies for the Heritage Foundation. “U.S. Natural Gas Exports: Lift Restrictions and
Empower the States” http://www.heritage.org/research/reports/2013/02/us-natural-gas-exports-lift-restrictions-andempower-the-states]
Thus far, the DOE has only granted one permit out of the 17 applications the EPA received to export domestic LNG.
All applications have FTA-approval but are under DOE review for approval to export to non-FTA countries.[26] A number of countries
around the world already have LNG export terminals, and are expanding their export capacity. In fact, 46 LNG export
terminals exist worldwide, with Qatar being the world's largest exporter, and Algeria, Australia, Indonesia, and Malaysia all substantial
exporters as well.[27] Of the 13 LNG export projects currently under construction, eight of them are in Australia.[28] Excluding the terminals
proposed in the United States, there are more than 20 planned in other countries.[29] As the Department of Energy wavers on
approving LNG terminals, other countries are pursuing this valuable opportunity. Of course, natural gas exports are not a
zero-sum game. Companies in other countries expanding their LNG exporting capacity do not necessarily negate opportunities for companies in
the U.S. to do the same. If, however, a slow permitting process needlessly delays export terminals, the economics could
change as exports from other countries lower prices in regions the U.S. wishes to engage. If exporting LNG from U.S. ports
is no longer economically viable as a result of international competition, companies will not seek to build more terminals. But they should not
be forced out of opportunities by an unnecessarily slow DOE.
Shale Cheap
Shale drilling is extremely cheap and profitable
Helman ’12 [June 22, 2012. Christopher Helman is a staffer for Forbes who covers the energy industry. “The
Arithmetic Of Shale Gas” Forbes. http://www.forbes.com/sites/christopherhelman/2012/06/22/the-arithmetic-ofshale-gas/]
But all things considered, the benefits of shale gas appear to far outweigh any costs. Many utilities are finding that burning
natural gas to generate electricity is cheaper (and cleaner) than coal. Cheaper supplies of fuel and feedstocks benefit U.S. industry,
especially manufacturers and chemicals makers which after years of looking for cheap gas abroad have been reinvesting in the U.S. Homeowners
benefit from cheaper heating and cooling and electricity. Drilling for gas has created hundreds of thousands of jobs during this economic malaise
and it’s generated billions of dollars of lease payments and royalties to landowners. A group of Yale economics graduates, many of them energy
industry executives, led by Yale Professor Emeritus Paul W. MacAvoy, were curious about whether they could quantify the economic benefit that
shale gas has on America. So they recently set out to do a cost-benefit analysis, valuing and balancing the pros against the cons. They’ve released
their findings in a paper called “The Arithmetic of Shale Gas.” I’ve parsed all the complicated academic equations so you don’t have to. Their
conclusion: the benefits of continued shale gas development are enormous and dramatically outweigh even worst-case
scenario costs of pollution and clean-up. Some specifics. Consider that back in 2008, before the shale boom really took off, the
nominal price of natural gas (that is, the price at the Henry Hub in Louisiana) averaged $7.97 per mcf. In 2011, the price averaged
$3.95 per mcf. Multiply that price drop of $4.02 per mcf by the 25.6 trillion cubic feet the country consumed in 2008 and you find
that thanks to the shale boom, America is paying $103 billion a year less for natural gas. (With gas prices falling even
further since 2011, in 2012 the benefit will be even greater.) Had drillers not cracked the code on shale gas, the United States
would instead have been forced to do what the experts expected five years ago: import massive quantities of gas, in the form of
LNG from countries like Qatar, Australia, even Russia. Import-dependent nations like Japan and Korea pay upwards of $14 per mcf for LNG —
more than triple U.S. prices. If the U.S. had to supplement domestic supplies with imports, the extra costs could have easily added $50 billion a
year to the national natgas bill. As the report’s authors write: “It is startling to acknowledge that consumer benefits from the technology
of shale gas drilling and new gas production can be expected to exceed $100 billion per year, year in and year out, as long
as present production rates are maintained.”
Natural Gas Advantage Counterplan
1NC
Text: The United States federal government should permit the export of liquefied natural
gas to nations with which the United States does not have a free trade agreement
Text: Congress should remove the DOE’s authority for authorizing natural gas export
permits, and introduce reform that allows the states to control the environmental review
and permitting process for natural gas export facilities
Status quo doesn’t allow for natural gas exports – CP solves
Loris ’13 [February 11, 2013. Nicolas Loris is the Herbert and Joyce Morgan Fellow at the Thomas A. Roe
Institute for Economic Policy Studies for the Heritage Foundation. “U.S. Natural Gas Exports: Lift Restrictions and
Empower the States” http://www.heritage.org/research/reports/2013/02/us-natural-gas-exports-lift-restrictions-andempower-the-states]
Technological advancements in directional drilling and hydraulic fracturing have led to an abundance of natural gas
production in the United States that is fundamentally changing the energy landscape. The result has been more jobs, economic
growth, and consistently low domestic natural gas prices in what has been known to be a historically volatile market. In fact, the
current price of natural gas may be too low to sustain the current rate of development, as producers are flaring gas and in some cases not even
drilling for new dry gas wells. Many producers are seeking to expand to foreign markets where prices are also much higher.
Unfortunately, the current regulatory regime surrounding natural gas has not adjusted to this huge influx of supply,
particularly in the area of export regulations. The Department of Energy (DOE) is delaying decisions to approve
applications due to concerns raised by some policymakers and energy-intensive companies that domestic prices will increase and adversely
affect American energy consumers. In reality, the concerns regarding American natural gas exports are unsubstantiated and
exaggerated and do not outweigh the broad economic benefits for America. Congress should remove the DOE's
authority for authorizing natural gas export permits, and introduce reform that allows the states to control
the environmental review and permitting process for natural gas export facilities.
Solves the advantage – allies are looking to us for energy security but barriers prevent
exports of natural gas
Schmitt and Kennedy 7/25[July 25, 2013. Gary Schmitt co-directs the Marilyn War Center for Security
Studies at the American Enterprise Institute. Adam Kennedy is an economics and national security researcher living
in Washington, D.C. “Our government's foolish view of US energy revolution”
http://www.foxnews.com/opinion/2013/07/25/our-government-foolish-view-us-energy-revolution/]
The fact is, America today is awash in natural gas. Through technological advances in tapping into shale rock formations, the
amount of recoverable natural gas reserves has grown by nearly 800 percent over the past seven years, with estimates that the
United States has more than a century’s worth of supplies on hand . The result has been a sharp and sustained decrease in the
price of gas and, with that drop in energy prices, the prospect of a revitalized American manufacturing base and the jobs that will come with it.
Indeed, America’s natural gas reserves are so great that one study after the other has concluded that the U.S. can export natural
gas with only marginal increases in prices here at home. Not only would exporting gas abroad help reduce the
country’s trade deficit and create additional jobs, but it would also have the strategic benefit of reducing the energy
dependence of friends and allies on Putin’s Russia and states in the unstable Middle East—and, in turn, creating new and deeper ties to
those same friends and allies. When it comes the export of natural gas, U.S. policy is at odds with what’s economically sound for the
country. Countries such as Japan, South Korea and India are lining up to become long-term buyers of American
natural gas if only the U.S. government would clear the path for American companies to build the necessary
infrastructure to liquefy the gas and make it exportable globally. But here’s the rub. Under U.S. law, the decision to
license natural gas exports rests with the Department of Energy and, for a license to be issued, the department must determine that
those exports are in the “public interest.” The only exception being that, for countries with which the U.S. has a free-trade agreement, it’s
assumed that gas exports meet that standard. Allies who have not signed an FTA with the U.S. (such as Japan, the United
Kingdom or Lithuania), or strategic partners (like India and Taiwan) must face a higher hurdle before a license can be
granted. Over the past two years, the Energy Department has granted just two separate authorizations to export domesticsourced natural gas to non-FTA countries, and other approvals have been slow in coming. The export application line is
growing longer by the day, with 20 new license requests having been filed and still under review as of May of this year. The problem
with this slow pace of approvals and the more restrictive guidelines for non-FTA countries is that, when it comes to
natural gas, “you snooze, you lose.” Importing states have potential alternatives, such as acquiring gas from
Australia, Canada, Nigeria and Russia. And once companies make the billions in investments necessary to bring that
gas online and transport it, they have even less incentive to make similar investments here in the United States. In short,
the apparent slow-rolling of approvals by the Obama energy team has significant opportunity costs both
economically and strategically. Moreover, there are real questions about whether the U.S. laws governing the export of natural gas run
afoul of our commitments under the General Agreement on Tariffs and Trade (GATT), whose governing body is the World Trade Organization.
Under Article XI (“General Elimination of Quantitative Restrictions”) of GATT, the United States and other signatories have pledged not to
adopt measures that would curtail the export of any good, with the key exception being the “conservation” of some good or commodity
demonstrably in critical shortage. However, given the glut of domestic gas reserves—a glut that will continue as far as the eye can see—it’s
hardly plausible that the administration could use this GATT exception to justify the current law or policies. Finally, if the U.S. were to claim this
exception, under WTO rules, it would have to impose regulations to curtail domestic production and consumption of gas as a sign that the
government is serious about conserving natural gas. Yet no such regulations or proposed laws have been put forward. Quite the opposite,
domestic manufacturers, electric power companies and chemical firms are pushing for as rapid a development of shale gas
fields as possible. Defending the current export regime for natural gas also requires Washington to ignore its own record of challenging other
countries that have violated GATT’s free-trade provisions. In 2009 the U.S. and several other governments argued that Chinese restrictions on the
export of various raw materials (magnesium, coke, bauxite, zinc, etc.) were contrary to GATT’s Article XI, and the WTO agreed. Then, in July
2012, the U.S., along with Canada, the European Union and Japan, once again challenged Chinese export restrictions—in this case, Chinese
restrictions on “rare earth” minerals that are used in the production of cutting-edge products such as smart phones, high-end engines and
aerospace systems. The expectation is that, once the WTO appeals process is over, China will again be found to be in violation of GATT rules.
So, today, when it comes the export of natural gas, U.S. policy is at odds with what’s economically sound for the
country, contrary to America’s longstanding free-trade commitments, and runs against its larger strategic interests.
Quite a trifecta—but a losing bet for sure.
2NC – Solvency Run
Without the counterplan LNG exports won’t be profitable, lose production – CP solves
trade deficit and jobs
Weinstein 8/1 [August 1, 2013. Bernard L. Weinstein is associate director of the Maguire Energy Institute in
Southern Methodist University’s Cox School of Business and a fellow with the George W. Bush Institute. “Time to
get serious about exporting natural gas”
http://thehill.com/blogs/congress-blog/energy-a-environment/314745-time-to-get-serious-about-exporting-naturalgas]
American consumers and businesses are currently reaping a windfall from the lowest natural gas prices in years.
Cheap gas has reduced heating and electric bills for millions of households, while industries using natural gas as a feedstock or boiler fuel
have realized huge production cost savings. But with dry gas currently selling at less than $4, many drilling
companies have cut back or moved their rigs to more profitable oil plays . As with all commodities, the price of natural gas is
determined by supply and demand. Today the supply is abundant, a consequence of the shale gas revolution, while
demand is muted due to a sluggish economy. Because of America’s large and growing reserves of natural gas,
potential supply will exceed anticipated domestic demand for many years to come . Indeed the Potential Gas Committee, a
coalition of utilities and production companies, recently boosted its estimate of recoverable reserves by 26 percent to 2,384 trillion cubic feet—an
amount equivalent to 90 times last year’s consumption. Though domestic demand for gas may grow only slowly, there’s a huge
global market for the commodity. With Japan retreating from nuclear power after the Fukushima accident, their need for
gas to generate electricity has risen exponentially. Because Germany is planning to phase out nuclear power over the next
decade, that country’s demand for natural gas will escalate as well. China and Korea are also expected to be huge gas
importers for the foreseeable future. To ship American gas across the oceans, of course, it must first be liquefied, requiring huge
investments in liquefaction plants, export terminals and special liquefied natural gas (LNG) carriers. To date, only two projects have been
approved by the U.S. Department of Energy—one in Sabine Pass, Louisiana being developed by Cheniere Energy and another in Freeport,
Texas being developed by a group of limited partners that includes ConocoPhillips and subsidiaries of Dow Chemical and Osaka Gas
Corporation. Both of these projects are secured by long-term supply agreements with companies such as Korea Gas Corporation and Chubu
Electric Power Corporation. 20 other applications are currently being evaluated by the Department of Energy, including potential investments by
Korean and British companies. A new a study by the McKinsey Global Institute provides yet more evidence of the potential for
U.S. LNG exports. The study, Game Changers: Five Opportunities for US Growth, found that boosting exports would decrease the
U.S. trade deficit by between $11 billion and $27 billion each year. Moreover, McKinsey predicts that continued
development of domestic shale gas resources could create 1.7 million jobs in the United States by 2020. But that depends on
the viability of supplies, which, in turn, demands that the U.S. open more of its natural gas resources to the global market. Unfortunately, some
members of Congress, as well as some corporations and environmental groups, are pressuring the DOE to go slow by
claiming that exporting LNG will be bad for the economy and bad for the environment. Sen. Edward Markey (D-Mass.) argues that exports will
push up prices, reduce the competitiveness of U.S. business, and slow the transition away from dirtier fuels. Dow Chemical, one of the most
vocal opponents of LNG exports, says America would be better off using its “cheap” natural gas to boost domestic manufacturing as opposed to
indirectly shifting jobs abroad. These arguments are flawed. First, there’s a big difference between “cheap gas” and the
“dirt cheap” gas available today. Indeed, if prices don’t rebound from their currently depressed levels, we may not
have any gas to export at all. What’s more, since LNG is produced from “dry” gas, exports will not significantly diminish the
availability of natural gas liquids, such as ethane and benzene, which are the principal components of many manufactured products.
Counterplan solves warming – current export applications prevent US companies from
competing internationally
Weinstein 8/1 [August 1, 2013. Bernard L. Weinstein is associate director of the Maguire Energy Institute in
Southern Methodist University’s Cox School of Business and a fellow with the George W. Bush Institute. “Time to
get serious about exporting natural gas”
http://thehill.com/blogs/congress-blog/energy-a-environment/314745-time-to-get-serious-about-exporting-naturalgas]
According to a recent study by the American Council for Capital Formation, a DOE permit to export gas comes after a lengthy process of prefiling and obtaining approvals from many other regulatory agencies. For example, the construction and operations of LNG terminals are overseen
by the Federal Energy Regulatory Commission (FERC). Before an LNG export application can even be submitted to FERC, the
applicant must file 13 required “resource reports” that are then reviewed by up to 20 separate federal and state
agencies, a process that can take several years. Because of this regulatory bottleneck, America is in danger of
“missing the boat” on LNG exports. While we dither, countries like Qatar, Canada, Australia and Russia are rapidly
expanding their export capacity. What’s more, by exporting some of our natural gas, America will also be fighting
climate change. Greenhouse gas emissions (GHGs) in the U.S. are at a 20-year low, even though the economy is one-third larger.
This drop has occurred not because of environmental mandates but because of the substitution of natural gas for coal as a boiler
fuel. Similarly, by exporting gas, the US can help other countries reduce their GHGs, particularly those like China and
India that rely heavily on coal for power generation. At present, though the U.S. is the world’s number one producer of
natural gas, our exports are negligible. Now is the time to get serious about entering the global gas market in a big
way. With gas prices currently averaging $10 in Europe and $15 in Asia, American gas is a bargain. Even if Henry Hub prices should
rise to $6 or $7 over the next decade, American gas will remain competitive in the global market. As an energy-abundant nation,
America should logically be a major energy exporter. This is already the case with coal, and there is no reason we can’t
become one of the world’s largest gas exporters as well, with all the attendant job creation and environmental
benefits that will follow.
Absent the CP LNG can’t be exported to countries – plan fails to show leadership
Colares 7/9 [July 9, 2013. Juscelino Colares is a law professor at Case Western Reserve University. He is a
specialist in the intersystemic aspects of the law on international trade, climate change and civil procedure. “The
U.S. Must Lead on Natural Gas Production and Exports” http://canadafreepress.com/index.php/article/56427]
There are good legal reasons to permit such exports too. To put it bluntly, the U.S. government cannot go on limiting natural gas
exports (formally or otherwise) while domestic production and consumption increase. As a member of the World Trade
Organization (“WTO”), the United States has committed to a number of obligations, including the GATT Article XI prohibition
against adopting quantitative restrictions on exports. This makes it difficult to justify restrictions on exports. Unlike domestic gas
producers who must resort to lobbying (and political contributions), the sovereign members of the WTO can challenge the current operation of
the U.S. FTA/non-FTA system as a de facto export limitation. Furthermore, in light of current and projected increases in domestic gas production
and consumption, the United States will not be able to rely on the traditional exceptions to Article XI, such as adopting export limitations in
tandem with measures designed to conserve exhaustible natural resources or measures necessary to protect human health (Article XX). Worse,
limiting exports would be profoundly inconsistent with the United States’ overall stance on free trade , and, especially,
with the litigation positions it has often taken before the WTO. Take, for instance, the recent United States successful challenge to China’s export
restraints on raw materials and its pending case against similar Chinese restraints on rare earths. In both cases, the United States specifically
targeted the Chinese government’s formal and informal export restricting measures, including protracted export licensing procedures, that seemed
designed to curtail foreign consumption while increasing domestic supplies and consumption. Natural gas exports put the United States
in an important crossroads, where it can show leadership when it matters. It must consider the overlapping, though not
always consistent, goals of upholding its free trade diplomacy by allowing a greater flow of gas exports and addressing a
new set of national and global environmental concerns, especially climate change. Washington knows its trade
partners are watching. It is time to reconcile sound economic policy with pro-environment and WTO-compliant
trade positions.
Now is key – markets are impacted by each day
Rascoe and Volcovici 6/13 [June 13, 2013. Ayesha Rascoe is an energy reporter for Reuters and Valerie
Volcovici is a Washington, DC-based correspondent covering climate/clean energy policy and
carbon/environmental commodity markets in the Americas. “Exxon CEO says delays in gas export permits hurt
U.S.” Reuters. http://www.reuters.com/article/2013/06/13/us-usa-lng-exports-idUSBRE95C1GO20130613]
Delays in approval of more natural gas export projects are costing U.S. companies millions of dollars a day and
giving a leg up to rival countries also looking to boost exports, the chief of Exxon Mobil Corp (XOM.N) said on Thursday.
The comments by Exxon's Rex Tillerson came hours after new U.S. Energy Secretary Ernest Moniz told lawmakers he hopes to "expeditiously"
begin evaluating the more than a dozen applications awaiting approval to export liquefied natural gas (LNG). "It's a very competitive
marketplace. It's not like people are just going to stand at our door like panting dogs just waiting for us to give
this (LNG) to them," Tillerson said while answering questions after an event at the Asia Society focused on Asian energy security.
Tillerson said he left a meeting with Moniz on Wednesday with no clear idea of when the company's Golden Pass LNG project - a $10 billion
joint venture with Qatar Petroleum - would be approved. "I don't want to start on this process if you tell me it's going to take
five years for you to get around to my application," Tillerson said. U.S. companies need authorization from the
Department of Energy to export gas to all but a handful of countries with free trade agreements. Japan and India are
among the countries keen to gain access to U.S. supplies. The Energy Department ended a two-year freeze in reviewing liquefied
natural gas (LNG) export applications in May, when it approved gas exports to all countries from Freeport LNG's terminal in Texas. Shortly after
that move Moniz, who was sworn in on May 21, said he would undertake a thorough review of the gas export review process, promising to
ensure that current data was being used to make these decisions. At his first appearance at a Congressional panel since his swearing-in, Moniz
told lawmakers at a House Energy and Commerce committee hearing on Thursday the review should wrap up soon. "We're getting ready to begin
evaluating the dockets on a case-by-case basis," Moniz said. There would "absolutely" be additional decisions this year, he added, without giving
a more specific time frame. Companies have lined up to export excess gas produced from the nation's shale boom. The
gas can fetch higher prices abroad. Other backers of proposed export projects include Dominion Resources Inc (D.N), Sempra Energy
(SRE.N), BG Group Plc (BG.L) and Veresen Inc (VSN.TO).
CP spurs energy security and the window for the perfect time is closing
Synder and Klump 5/17 [May 17, 2013. Jim Synder is an Energy reporter for Bloomberg News. Edward
Klump is a reporter for Bloomberg news. “Gas Export Approval Not Seen Signaling U.S. Permit Flood” Bloomberg.
http://www.bloomberg.com/news/2013-05-17/u-s-approves-gas-export-terminal-partly-owned-byconocophillips.html]
“The development of U.S. natural gas resources is having a transformative impact on the U.S. energy landscape,
helping to improve our energy security while spurring economic development and job creation around the country ,”
the department said in its news release. Bill Gibbons, a department spokesman, said President Barack Obama’s administration was addressing the
issue “in a responsible way” and would weigh applications on a case-by-case basis. After a preliminary review, it seems “the order provides us
everything that we requested in terms of the authorization and we commend the Department of Energy on the thoroughness of their review and
consideration of exports and getting to the right result,” John Tobola, general counsel of Freeport, said in a telephone interview yesterday. If all
20 projects were to win approval, they could ship the equivalent of 41 percent of the total U.S. production this year ,
according to Energy Department data. The Freeport LNG project must still win approval from the Federal Energy Regulatory Commission. The
big hurdle was thought to be the Energy Department, which must decide if the projects are in the national interest. The department concluded that
exports from the Freeport facility are “likely to yield net economic benefits” to the U.S. Freeport would be able to export as much as
1.4 billion cubic feet of natural gas a day for 20 years. In May 2011, the department conditionally approved Cheniere Energy Inc.’s Sabine Pass
LNG Terminal in Louisiana for a rate of as much as 2.2 billion cubic feet a day. The Energy Department’s action yesterday is “an indication that
other projects, including our own Cameron LNG, will receive this authorization soon,” Mark Snell, president of Sempra Energy, said in a
statement. The power company is awaiting federal approval for exports from a $6 billion to $7 billion expansion of its Cameron LNG project in
Hackberry, Louisiana. ‘Narrow Window’ “There is a narrow window opportunity for U.S. companies to participate in the
global LNG market,” Snell said. In its release, the Energy Department cited an Energy Information Administration forecast projecting
production to reach a record 69.3 billion cubic feet a day in 2013. Senator Ron Wyden, an Oregon Democrat and chairman of the Senate Energy
and Natural Resources Committee, said the Energy Department’s decision to review applications individually was consistent with his view that a
“measured approach on exports will provide the greatest advantage for the U.S. economy.”
Restrictions on LNG exports prevent products from reaching the market
Loris ’13 [February 11, 2013. Nicolas Loris is the Herbert and Joyce Morgan Fellow at the Thomas A. Roe
Institute for Economic Policy Studies for the Heritage Foundation. “U.S. Natural Gas Exports: Lift Restrictions and
Empower the States” http://www.heritage.org/research/reports/2013/02/us-natural-gas-exports-lift-restrictions-andempower-the-states]
The current system is too onerous to allow American LNG exports to reach the market in a timely manner. The DOE's role
in permit authorization is completely unnecessary and U.S. producers should be allowed to export LNG to any country they see
fit. Further, Congress should return jurisdiction to the state governors by allocating authority to state regulators to conduct the environmental
review and provide the permit to construct an LNG facility. Given the large volume of LNG export applications, not only could this take some of
the burden off FERC, it could also spawn an efficient review process that allows these projects to come online more efficiently. In that vein,
Congress should: Lift restrictions on LNG-recipient countries. The distinction that exports to FTA countries are in
the "public interest" while others are not is on the whole an arbitrary one. There are numerous non-FTA nations
with which the U.S. trades regularly. Natural gas should be no different and should be treated as any other good
traded around the world.
2NC – Cheap
Shale drilling is extremely cheap
Ames et. al. ’12 [June 15, 2012. Robert M. Ames is the Vice President of Fuel Commercialization Solazyme,
Inc. Anthony Corridore is Senior Management at Lafarge Corp. Joel Nathan Ephross is a Partner at Duane Morris
LLP. Edward Hirs is the Managing Director of Hillhouse Resources, LLC. Paul W. MacAvoy is the Williams
Brothers Professor Emeritus at the Yale School of Management. Richard Tavelli is a private energy consultant. “The
Arithmetic of Shale Gas”
http://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2085027_code347008.pdf?abstractid=2085027&mirid=1]
The process of production, from recent rapid spread of decades old shale fracturing technology, is not different in kind from natural gas
production methods developed over the last century for extracting gas from non-shale formations. Wells are drilled some distance underground
and the vertical hole encased by pipe and sealed with cement to produce gas under great temperature and pressure. The technology for shale
formations uses pipes stretched horizontally from the base of the vertical pipe to inject at high pressure liquids (water plus proppants and
surfactants specific to the well) to fracture the shale formation that allows the movement of additional methane (and any concomitant natural gas
liquids and oil) to the base of the vertical pipe. Production costs incurred are very likely to be in the range of one dollar per
thousand cubic feet (mcf) of gas produced plus or minus 50-cents depending upon specific drilling and pressure conditions. Table
One shows these costs for five shale gas production companies for which there is information publicly available. In some instances production
cost outlays are less than amortization expenses or interest expenses on capital outlays . Our estimate of marginal costs of
$1.00 per mcf however is similar to those from company to company based on the operations of thousands of wells in various shale basins. In
2010 the natural gas average sales price per company including all gains/losses on financial gas derivatives ($ per mcf) at the
wellhead, regional pipeline market and delivery point was between $4.64 and $5.57 per mcf. Because of substantial differences in the
locations of basins across the country of shale, and new wellhead production points, sales prices differed because of varied delivery costs into
pipeline hubs. Prices also varied because of differences between short and long-term contracts and spot sales. Even so one can make a judgment
that in that year all natural gas together (conventional vertical well gas and shale gas) sold at a hypothetical central market for $5.00
per mcf. This is because natural gas from various sources all sold in a competitive market both at the wellhead and in
commodity exchanges after incurring marginal costs of production of $1.00 per mcf .2
Gains from natural gas are the elephant in the room – it’s extremely profitable
Ames et. al. ‘12 [June 15, 2012. Robert M. Ames is the Vice President of Fuel Commercialization Solazyme,
Inc. Anthony Corridore is Senior Management at Lafarge Corp. Joel Nathan Ephross is a Partner at Duane Morris
LLP. Edward Hirs is the Managing Director of Hillhouse Resources, LLC. Paul W. MacAvoy is the Williams
Brothers Professor Emeritus at the Yale School of Management. Richard Tavelli is a private energy consultant. “The
Arithmetic of Shale Gas”
http://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2085027_code347008.pdf?abstractid=2085027&mirid=1]
There is some indication of very large gains for the economy from shale gas from comparing year to year total consumption.
Within the triangle of consumer surplus there is a rectangle of the difference in prices in successive years times the quantity of earlier
year’s sales. This is a conservative estimate of consumer surplus since it takes no account of the increased consumption that occurs in response to
the reduction in price. But since the elasticity of demand is quite low, that increase is small. The nominal price (that is, the Henry Hub spot
price) in 2008 was $7.97 per mcf and in 2011 was $3.95 per mcf (US Energy Information Administration,)3 so that the difference
in price over three successive years was $4.02 per mcf. Gas production in 2008 was 25.6 tcf so that the surplus to consumers by
the price reduction from shale gas equaled $102.9 billion. This very large amount of consumer gain—over $100
billion—from the new technology induced price reduction in gas is the elephant in the room. It comprised a
substantial majority of total expenditures on this fuel nationwide . In past years those expenditures were limited by the
higher costs of production of gas produced from vertical wells. These were in part producer surplus but most were the costs of
sustaining well operations in the old technology. Even so it is startling to acknowledge that consumer benefits from the technology of
shale gas drilling and new gas production can be expected to exceed $100 billion per year, year in and year out as
long as present production rates are maintained.
Cheap shale gas production transfers into consumer surplus
Ames et. al. ’12 [June 15, 2012. Robert M. Ames is the Vice President of Fuel Commercialization Solazyme,
Inc. Anthony Corridore is Senior Management at Lafarge Corp. Joel Nathan Ephross is a Partner at Duane Morris
LLP. Edward Hirs is the Managing Director of Hillhouse Resources, LLC. Paul W. MacAvoy is the Williams
Brothers Professor Emeritus at the Yale School of Management. Richard Tavelli is a private energy consultant. “The
Arithmetic of Shale Gas”
http://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2085027_code347008.pdf?abstractid=2085027&mirid=1]
In keeping with the national debate on the future of natural gas as a replacement for crude oil, we consider the consumer surplus of
replacing one barrel of oil with its BTU equivalent of 6 mcf of shale gas. We assume that the current price of oil is $100 per
bbl. If we use the gas wellhead price of $5/mcf and multiple it by 6 to get a per bbl of oil equivalent (“boe”) of $30 of cost, the
savings is $100/bbl - $30/boe. Therefore, the gain to consumers of replacing one barrel of oil with a natural gas fuel
equivalent is approximately $70/bbl. Current US consumption of crude oil is approximately 15.0 million bbls per day. Replacing 1.0
million bbls per day of crude oil with the 6 billion cubic feet (bcf”) equivalent of natural gas, would generate approximately
$25.6 billion ($70/bbl*1 million bbls*365 days) of consumer surplus for the US economy over one year.
2NC – A2 Section
A2 Prices
Price increases are marginal – leads to competition which outweighs any negative effects
Loris ’13 [February 11, 2013. Nicolas Loris is the Herbert and Joyce Morgan Fellow at the Thomas A. Roe
Institute for Economic Policy Studies for the Heritage Foundation. “U.S. Natural Gas Exports: Lift Restrictions and
Empower the States” http://www.heritage.org/research/reports/2013/02/us-natural-gas-exports-lift-restrictions-andempower-the-states]
LNG exports will raise domestic prices only minimally, and producers will respond by increasing extraction and development. Exporting
natural gas could increase domestic prices but only marginally: The consulting firm Deloitte found that exports would raise domestic
prices only 1.7 percent over 20 years.[6] The Energy Information Administration projected that, depending on the growth of exports, end-use
consumers in residential, commercial, and industrial sectors combined would pay, on average, an increase of 3 percent to 9 percent
from 2015 to 2035 for natural gas bills compared to a scenario with no exports. Electricity bills by end users would increase on average
from 1 percent to 3 percent over the same time period.[7] While LNG exports would raise domestic prices, those higher prices would act as
incentives for more exploration and production, offsetting some of the price increase, or even keeping prices as low as they
are now, since the gas is still profitable to produce at a low price in some regions of the country. Providing other
countries with cheaper energy would not only lower the prices of products that the U.S. imports (because businesses could
make the products more cheaply), it would also promote economic development in those countries so that they import more
American goods. Simply put, the gains from free trade far outweigh any losses incurred. With respect to natural gas, the
NERA study confirms this by concluding, "Across the scenarios, U.S. economic welfare consistently increases as the volume of
natural gas exports increased. This includes scenarios in which there are unlimited exports."[8] Higher natural gas prices also
open up opportunities for producers of other electricity sources, such as coal, nuclear energy, wind, or solar power. If natural gas
prices rise to a point where other power sources are competitive, the result will be more competition and innovation within the
energy sector.
Politics
Link
1NC Link
The plan sparks backlash over the process of ratification, and requires Presidential
involvement
Taylor, 2013 (Phi,l E&E Reporter, 1/9/13, “E&E: U.S.-Mexico transboundary agreement mired in Congress,”
http://www.bromwichgroup.com/2013/01/ee-offshore-drilling-u-s-mexico-transboundary-agreement-mired-in-congress/)
It is unclear who in the Senate objected to the agreement’s passage, but sources say it was likely out of concern for
the process by which it was being passed rather than the substance of the agreement. That may stem in part from
lingering uncertainty over whether the agreement is a treaty, which would require a two-thirds majority for Senate ratification,
or an executive agreement, which would require implementing legislation to be passed by a majority in both chambers. Regardless, its
failure was a surprise to staff on the ENR Committee who had crafted a news release in preparation for its passage but had to delete it after the
agreement was blocked. According to the report by Foreign Relations Republicans, the Obama administration has yet to say whether
the agreement is a treaty or an executive agreement but appears to prefer the latter. Mexico’s Senate ratified the agreement,
suggesting it was interpreted as a treaty. If it is a treaty, a formal communication would need to be sent from the president
to the Foreign Relations Committee, which would trigger hearings on the matter and allow Congress to interpret any ambiguous
language in the agreement. That is important, because several provisions in the treaty “invite scrutiny and clarification,”
according to the committee report. “The treaty doesn’t have every detail worked out,” said Neil Brown, a former adviser to
Sen. Richard Lugar (R-Ind.) who was ranking member of the committee until his retirement earlier this month. For example, one section of the
agreement calls for “common standards,” but it is unclear whether that requires companies to adopt U.S. safety and environmental standards
or Mexico’s, which are considered less developed. Another area of the agreement creates a dispute resolution process without saying whether
the arbitration is binding, the report said. The agreement would allow joint inspections by Interior’s BSEE and the Mexican government to
ensure compliance with applicable laws. Some on the Foreign Relations Committee said they were miffed that the
administration did not consult with them before pushing the agreement through in the lame duck.
2NC Link
Uncertainty over the mechanism causes Congressional fights that draw in Obama
Brown & Meacham, 2012 (Neil and Carl, Senate Foreign Relations Committee Senior Staff Members, “Oil, Mexico, and the
Transboundary Agreement,” 12/21/12, http://www.foreign.senate.gov/publications/download/oil-mexico-and-the-transboundary-agreement)
The TBA contains numerous provisions in anticipation of disputes on allocation of resources under a unitization
agreement and implementation of those agreements. Legal analysis of these provisions is beyond the scope of this report. However, it is
apparent that lack of clarity on the legal status of the dispute resolution mechanisms should be of concern to the
U.S. Congress . The Obama administration contends that the agreement’s arbitration mechanism is not intended to
produce binding decisions, however, that is not specifically provided for in the text of the agreement and would be
different from arbitration mechanisms in many other international agreements.
Transboundary agreements are inherently politically contentious
Makridis, 2013 (Christos, Research Fellow at the Steyer-Taylor Center for Energy Policy and Finance at Stanford University and
a Ph.D. student at Stanford University's Department of Management Science and Engineering, “A Tale of Two Countries: Markets and
Transboundary Water Governance between the United States and Mexico”, 2/4/2013,
https://people.stanford.edu/cmakridi/sites/default/files/Makridis%20-%20Markets%20and%20Transboundary%20Water.pdf)
Countries have long fought over access to water resources. Water’s unique attributes as a quasi public and private good
distinguish it from other economic goods and services.1 While national and international competition over water resources is not
new, many of the advances in industrial organization and applied microeconomics have not yet been integrated into
the literature on transboundary governance and sustainability. In particular, there is sparse literature that applies market design
elements of incentive compatibility among heterogeneous actors in the context of transboundary water governance. Recent events have
accentuated the importance of developing mutually beneficial policy rules for resolving water resources. First, environmental externalities
associated with water use are increasing. For example, climate change is expected to make water resources much more scarce, relative to their
current scarcity (Backus et al, 2010). Likewise, the recent 2010 Gulf Oil spill resulted in significant economic and
environmental damages both for many years to come (i.e. temporally) and throughout the entire Gulf region (i.e. spatially)
(National Commission, 2011). Second, conflict over water resources seems to be increasing. For example, recent disputes in the South China Sea
(SCS) have captivated the international community’s attention with the prospects of con- flict. Sparked by competition over the SCS water
resource, in part because of its large hydrocarbon reserves, China has contested the property rights of neighboring countries, including: Malaysia,
Brunei, Philippines, Vietnam, and Taiwan (Makridis, 2013). That transboundary governance of water resources is
inherently political and contentious underscores the importance of designing eff ective markets and institutions
capable of promoting efficient and equitable outcomes for involved parties.
2NC Plan Won’t Pass Senate
*(This concedes that the aff is inherent but is a reason why their inherency means they link
to politics/ don’t get a link turn). This could also be used for the Article 20 PIC
Won’t pass the Senate and Obama doesn’t want it-plan wouldn’t be a win
DeFazio, 6/27/2013 (Peter, speech in Congress by Representative Peter Defazio concerning the “OUTER CONTINENTAL
SHELF TRANSBOUNDARY HYDROCARBON AGREEMENTS AUTHORIZATION ACT”,
https://scout.sunlightfoundation.com/item/speech/CREC-2013-06-27-pt1-PgH4096-6.chunk32/rep-peter-defazio-outer-continental-shelftransboundary-hydrocarbon-agreements-authorization-act)
Okay. With that, I would reclaim my time. I could ask to have the record read back, but I won't because it would delay things. But you said this is
what Mexico wanted. You did say that just before as you spoke. Now you're saying that you believe that this is reflecting the spirit of the
agreement. Now I will accept that. You believe that changing the agreement by waiving our financial services law is in the
spirit of the agreement. I don't believe that. Maxine Waters, who serves on the Committee on Financial Services,
doesn't agree with that. And, unfortunately, the President of the United States doesn't agree with that, so this bill is
going nowhere. It's not going to get out of the Senate. They have a bipartisan bill over there that doesn't waive DoddFrank that they could pass by unanimous consent. We could be done with this. But no, we're not going to do that; we're going
to play games. So here's what the President said. He's got something to say about this in the end, he really does: The administration cannot
support H.R. 1613, as reported by the House Committee on Natural Resources because of the unnecessary,
extraneous provisions that seriously detract from the bill. Most significantly, the administration strongly objects to
exempting actions taken by public companies in accordance with the transboundary hydrocarbon agreements from
requirements section 1504 of the Dodd-Frank Act and the Securities and Exchange Commission's natural resource extraction
disclosure rule. As a practical matter, this provision would waive the requirement for the disclosure of any payments made by resource extraction
companies to the United States or foreign governments in accordance with a transboundary hydrocarbon agreement. The provision directly
and negatively impacts U.S. efforts to increase transparency and accountability, particularly in the oil, gas, and
minerals sectors. So if we proceed with this bill in this form, the President will veto the bill, and we'll be back again .
And how many months that'll take, I don't know. But to assert that somehow Mexico wanted this, or the administration wanted it, and they just
kind of forgot to put it in the agreement, and now we're helping them out, even though the administration says they don't want it, and I don't know
what the government of Mexico says--and then there was another issue raised about confidentiality provisions.
The plan won’t pass the senate-waiving Dodd-Frank is extremely unpopular
US Senate, 6/27/2013 (United States Senate, “OUTER CONTINENTAL SHELF TRANSBOUNDARY HYDROCARBON
AGREEMENTS AUTHORIZATION ACT”, http://beta.congress.gov/congressional-record/2013/06/27/senate-section/article/H4096-6)
Mr. DeFAZIO. That was very impassioned, and we can agree with the necessity of moving forward with the agreement. The problem is that
the gentleman ignored the fact that the United States Senate will not pass this bill as written. They will not waive the Dodd-
Frank disclosure rules to allow big oil companies to make secret deals with the Government of Mexico. They're not
going to do that. So you're slowing things down by insisting on repealing part of these vital Wall Street reforms. With
that, I yield as much time as she may consume to the gentlelady from California (Ms. Waters), the ranking member of the Financial Services
Committee, who is an expert on this provision of law. Ms. WATERS. Mr. Speaker, as ranking member of the Financial Services
Committee and a member of the conference committee that passed the Dodd-Frank reform legislation, I rise in
opposition to H.R. 1613. I oppose the bill because of the exemption it includes for companies from the transparency
requirements under section 1504 of Dodd-Frank Act.
Senate Democrats will not pass the plan without a fight-forces Obama to use political capital
on the plan
Gentile, 2012 (Gary, Inside Energy, “Salazar accuses House of living a 'fairy tale'; urges votes on 3 issues,”, 4/30/12, p. lexis)
Interior Secretary Ken Salazar is blaming Congress, especially the Republican-controlled House, for failing to act on
critical energy issues and creating a divide between what he called "the real energy world" and "the imagined, fairy tale
world." In sharply worded remarks last week, Salazar said political rhetoric was blocking progress on legislation that would
reorganize his department's oversight of offshore and onshore energy development, approve a transboundary energy agreement
with Mexico and boost the development of renewable energy. The former Demoratic senator from Colorado directed his scorn at the
House, without mentioning the Republicans by name. He criticized those who he said call for a "drill, drill, drill" policy and oppose President
Barack Obama's proposal to end tax deductions for the oil and natural gas industry. "The good news is that the imagined energy world is
actually very small," Salazar said at a National Press Club luncheon in Washington. "I think you can find its edge, the end of it, when you walk
out of the House of Representatives." Salazar's remarks come as the House considers a number of energy bills as part of a strategy
to make rising gasoline prices an issue in the November elections. The bills, none of which stand much chance in the Democrat-
controlled Senate , include one aimed at forcing the approval of an oil pipeline between Canada and the US and others that would
open new areas , including the Atlantic coast, to energy exploration. A spokesman for Representative Doc Hastings, RepublicanWashington, who chairs the House Natural Resources Committee, declined to comment on Salazar's remarks. Salazar challenged Congress to
act in three areas he called "low-hanging fruit." He said that Congress has failed to codify in law the reorganization of the former Minerals
Management Service in the wake of the 2010 Deepwater Horizon oil spill. "It's inexcusable that Congress has yet to enact one piece of
legislation to make drilling safer," Salazar said. Second, Salazar scolded Congress for failing to ratify a transboundary
agreement with Mexico that resolves disputes that could occur along the maritime border in the Gulf of Mexico. Salazar noted that
Mexico's legislature has already ratified the agreement, but that Congress has not.
DA Turns Case
Immigration Solves PEMEX Reforms
CIR turns PEMEX reform-gives the U.S. leverage
Barbash, 2009 (Shepard, former bureau chief in Mexico City for the Houston Chronicle and author of three books about Mexico,
Autumn 2009, “Helping Mexico Help Itself,” City Journal, online: http://www.city-journal.org/2009/19_4_helping-mexico.html/)
The grim fact is that Mexico must help solve America’s immigration dilemma by becoming a better country
for its
people. But the United States has two big cards to play to encourage Mexico to reform: its legal power to resolve the
status of 7 million Mexicans living here in limbo, and its more pervasive economic power as Mexico’s dominant
trading partner and source of foreign investment. Polls by the magazine Este País show that the Mexican people would be willing to
abandon one of their most cherished convictions and open PEMEX to private investors in exchange for measures that benefit
their relatives in the U.S. Privatizing the oil company would require amending Mexico’s constitution. But energy-sector productivity
would improve dramatically even if the Mexican Congress simply passed laws to eliminate restrictions on the import,
export, and domestic sale of crude, gasoline, basic petrochemicals, electricity, gas, and oil derivatives. If opening the energy sector to foreign
competition proved too controversial, lawmakers could begin with other industries that the OECD identifies as sheltered and inefficient, such as
telecommunications and the media. In return, the U.S. could offer Mexican immigrants various benefits—higher quotas for
work visas or green cards, for example. Like Mexico, it could avoid the more controversial concessions at first, such
as guest-worker programs. Beyond the virtues of any one deal, establishing the principle of linkage—immigration
liberalization in the U.S., conditioned on economic liberalization in Mexico—would change the political
conversations in both countries. Mexicans in the U.S. have influence back home, and surveys show that they are more
likely than the vested interests there to support policies that lead to growth. Americans likewise might be more willing to
accept as truly “comprehensive” an immigration reform that took into account the key variable affecting migrant flows into the U.S.: Mexico’s
own behavior. More broadly, the best way to strengthen Mexico and ease the pressure of illegal immigration is to
stimulate free trade and investment to promote the continent’s competitiveness. The goal should be to create regional mechanisms like
NAFTA that are accountable to each country’s people but that strengthen Mexico’s institutions in a range of areas, including economic
regulation, competition, and monetary policy.
Immigration Turns Drug Violence
CIR turns drug violence
Jenkins, 2009 (Brian Michael, Senior Advisor to the President of the RAND Corporation, “Mexico: Failing State?”, 3/23/2009,
http://security.nationaljournal.com/2009/03/mexico-failing-state.php)
Mexico’s drug traffickers are already in the United States, making drug deals , looking for locations to grow marijuana,
establishing new distribution channels. And the violence has followed, although thus far, it appears to be mostly confined to those
involved in the traffic. What we have not witnessed here—some would add “yet”—is the same kind of violent challenge to police that we see in
Mexico—threats, abductions, assassinations. Nor have we seen a proliferation of ransom kidnappings on this side of the border. Either
development would trigger a reaction the traffickers would be wise to avoid. The United States could, of course,
take two bold steps: It could dramatically reduce the Mexican traffickers’ profits —and therefore their power to corrupt, hire
killers, and buy weapons—by investing more in reducing domestic demand for drugs and partially decriminalizing their
use, as some studies and several Latin American presidents have recommended. As long as U.S. demand remains high, criminals
will draw huge profits. (Others favor vigorous aerial crop destruction.) The United States could also move to legalize and fully
integrate the millions of illegal immigrants in the country, and adopt a system of work visas that reduces the need for
running the border, thereby taking the profit out of human smuggling . However, neither of these approaches seems likely to
implemented.
Legalize Marijuana CP
Solves Drugz
Legalizing marijuana solves their drug violence internal link-a continued strategy of prohibition
inevitably fails
Carden, 2012 (Art, Assistant Professor of Economics at Samford University and a Senior Research Fellow with the Institute for
Faith, Work, and Economics, a Research Fellow with the Independent Institute, a Senior Fellow with the Beacon Center of Tennessee,
“Let's Be Blunt: It's Time to End the Drug War”, Forbes, 4/19/2012, http://www.forbes.com/sites/artcarden/2012/04/19/lets-be-blunt-itstime-to-end-the-drug-war/)
April 20 is the counter-culture “holiday” on which lots and lots of people come together to advocate marijuana legalization (or just get high).
Should drugs—especially marijuana—be legal? The answer is “yes.” Immediately. Without hesitation. Do not pass
Go. Do not collect $200 seized in a civil asset forfeiture. The war on drugs has been a dismal failure. It’s high time
to end prohibition. Even if you aren’t willing to go whole-hog and legalize all drugs, at the very least we should legalize
marijuana. For the sake of the argument, let’s go ahead and assume that everything you’ve heard about the dangers of drugs is completely true.
That probably means that using drugs is a terrible idea. It doesn’t mean, however, that the drug war is a good idea.
Prohibition is a textbook example of a policy with negative unintended consequences . Literally: it’s an example in the
textbook I use in my introductory economics classes (Cowen and Tabarrok, Modern Principles of Economics if you’re curious) and in the most
popular introductory economics textbook in the world (by N. Gregory Mankiw). The demand curve for drugs is extremely inelastic,
meaning that people don’t change their drug consumption very much in response to changes in prices. Therefore,
vigorous enforcement means higher prices and higher revenues for drug dealers. In fact, I’ll defer to Cowen and Tabarrok—
page 60 of the first edition, if you’re still curious—for a discussion of the basic economic logic: he more effective prohibition is at
raising costs, the greater are drug industry revenues. So, more effective prohibition means that drug sellers have more
money to buy guns, pay bribes, fund the dealers, and even research and develop new technologies in drug delivery (like
crack cocaine). It’s hard to beat an enemy that gets stronger the more you strike against him or her . People associate the drug
trade with crime and violence; indeed, the newspapers occasionally feature stories about drug kingpins doing horrifying things to underlings and
competitors. These aren’t caused by the drugs themselves but from the fact that they are illegal (which means the market is
underground) and addictive (which means demanders aren’t very price sensitive).
Current criminalization policies have failed-only legalization can solve the drug war
Kelley, 2012 (Michael, writer for Business Insider, “Weed Legalization Could Set Off A Radical Chain Of Events In Latin
America”, Business Insider, 11/9/2012, http://www.businessinsider.com/weed-legalization-mexico-drug-war-2012-11)
The top advisor to incoming Mexican president Peña Nieto said the world's first full legalization of marijuana in
Colorado and Washington “changes the rules of the game” in the war on drugs , The Washington Post reports. Mexican
officials have called for a review of joint U.S.-Mexico drug policies because, as Mexican Congressman Manlio Fabio
Beltrones pointed out, "the largest consumer in the world has liberalized its laws.” Over the last six years Mexico has
spent billions of dollars per year to combat drug trafficking only to see cartels become stronger and more than 100,000
Mexicans be killed. We reported that U.S. voters may have won the Drug War on Tuesday because one or more states growing weed
could meet most of domestic demand and sink cartel revenues, but Codirector of RAND Drug Policy Research Center Beau
Kilmer reminded us that the U.S. government will have something to say about that. "The scenario where a state or two ends up dominating all of
the U.S. market, that requires some really big assumptions," Kilmer told BI. "I have a hard time imagining that the federal government and other
states would let that happen." Imminent resistance aside, the U.S. government may no longer be in the position to force its drug
crusade on other countries. “What happened on Tuesday was a game changer," drug analyst Alejandro Hope from the
Mexican Institute for Competitiveness told Time. “Now it would be very hard for the U.S. to tell people not to legalize marijuana.” Even prior to
Tuesday, prominent voices including America's closest South American allies, President Obama's drug czar Gil Kerlikowske,
Former President of Mexico Vincente Fox, Prime Minister of Canada Stephen Harper, The Global Commission on Drug Policy and the Council
on Hemispheric Affairs have stated that the U.S.-led drug policy of criminalizing drug use and employing military
tactics to fight traffickers has been a failure. So the U.S. government faces a dilemma: does it double down on a
decades-long losing war or accept failure and rethink it's position on drugs, especially its extreme stance on
marijuana?
US legalization key
US legalization is key to a broader spillover in the region that solves crime
Mayer, 8/2/13 (Andre, CBC news, “Uruguay's pot legalization could be 'tipping point' in war on drugs”,
http://www.cbc.ca/news/world/story/2013/08/01/f-pot-legalization-uruguay.html)
Under its legislation, Uruguay will allow its residents, 18 and over, to buy up to 40 grams of cannabis a month at
licensed drug stores, or grow up to six plants at home. Mark A. R. Kleiman, a professor of public policy at UCLA and the coauthor of Legalizing Marijuana: What Everyone Needs to Know, believes the initial outcome will be mostly positive . "The
immediate consequences are likely to be decreased crime, decreased arrests, decreased illicit activity, increased state
revenue -- and increased drug abuse," he says. Kleiman says the crucial factor will be the market price for cannabis. If it's too low, he says, it
might compel more people to use, and if it's too high, it may create a black market. The Uruguayan government will need to decide
"whether the sales process is designed to maximize sales or protect public health," says Kleiman. Once the Uruguayan
legislation is implemented, anyone who wants to grow, sell or merely purchase marijuana will have to be included in a national registry, "which I
think creates certain privacy concerns," says Hidalgo. "I can see people being skeptical [about] registering as a drug user in a government
registry," he adds. Hidalgo hails the Uruguayan vote as a "positive step," but says broader liberalization across the
Americas requires greater buy-in from the U.S. "So far, Washington is trying to pretend this is not taking place," he says. "But
sooner rather than later, they're going to have to engage in the debate ."
Aff
http://thediplomat.com/2013/05/27/russia-can-the-gas-empire-strike-back/
Relations Advantage
Drug Violence High
Capture of Trevino Morales means a sharp increase in violence and illegal activities
Carlsen 7/18 [July 18, 2013. Laura Carlsen is a policy analyst and director of the Americas Program of the
Center for International Policy. “Kingpin arrest will mean more violence in Mexico”
http://www.aljazeera.com/indepth/opinion/2013/07/201371812446923277.html]
The Mexican government scored a public relations coup when it bloodlessly captured Zeta leader Miguel Angel Trevino Morales on
Monday. But the long-term effects of the capture of the 40-year old man who was arguably the country's most brutal drug lord
will likely lead to more, not less, violence. The arrest sent out two messages that have ominous implications here. First, the blow to
the head of the Zeta cartel signals internal and external rivals that the cartel is dazed and vulnerable to attack. This
leads to surges in homicides, as the battle to control trafficking routes and illegal trade affects not only cartel
members but local citizens and security forces as well. How organised crime responds to a blow like this has nothing to do with the
government narrative of good guys against bad guys. It causes a shake up and resettling that can reduce violence in some places where
another cartel achieves undisputed control, and produce violence in places where turf wars flare up. It causes corrupt
government forces to realign and often participate actively in the turf wars. It does not , however, lead to the
elimination of drug trafficking or organised crime . Everything we know from seven years of drug war points to the
likelihood of more violence due to this trigger effect. The Mexican and US governments both acknowledge that what is known as
"the kingpin strategy"- taking out drug lords -provokes violence. They also know it doesn't work. Although in some cases a specific
cartel could be fragmented or even knocked out of the game, with some $38bn in tax-free income at stake as it is in the sale of prohibited drugs to
the US, people will find a way to keep up the business. In the case of Trevino Morales, the Mexican press reports that he ran the Zetas with his
brother, Omar, who remains at large and will presumably continue. Mexican authorities did not respond to questions about Omar taking on
leadership, saying it is an investigation in progress. But even the director of the US Drug Enforcement Agency in Dallas, Texas noted after the
arrest, "What it means is there are going to be plenty of people who take his place". Even weakening the command center of a criminal
group, presented as a major victory in the arrest of Trevino, often has negative effects on public safety. Central control within the
Zetas has never been as consolidated as in other cartels. This meant a lack of any code of ethics, which sounds like an oxymoron in reference to
criminal groups but functioned for years to restrain Mexican cartels from having much involvement in high profile, anti-social activities beyond
the drug trade. Now with less central control in the Zetas, we can expect not only more infighting, but increased
incursions into illegal activities beside drug trafficking - kidnapping, extortion, preying on migrants, sex trafficking
and others that do immeasurable harm to their victims, to families and to communities.
Drug violence will increase as cartels seek to take over the place of the Zetas
Allison 7/17 [July 17, 2013. Mike Allison is associate professor in the Political Science department at the
University of Scranton in Pennsylvania. “Ending the “ruthless leadership” of the Zetas?”
http://www.aljazeera.com/indepth/opinion/2013/07/201371711446595954.html]
In short, there is great uncertainty surrounding what impact Trevino’s arrest will have on violence in Mexico. Internal
feuding within the Zetas over leadership and drug routes could lead to greater violence . Attempts by the Sinaloa
cartel to take over routes currently dominated by the Zetas could also lead to an increase in violence. The particular
brutality that marked Zetas’ killings might be reduced without Trevino leading the charge, but very few people think that overall levels
of violence will decrease. What is nearly certain is that his arrest will have no effect on the amount of illegal drugs making
its way to the US and that someone else in the organised crime hierarchy will replace him as one of the “new” most
ruthless and most feared drug traffickers. While Trevino’s arrest should be celebrated, it should not derail the growing
conviction in Latin America and the US that there needs to be significant reforms to international drug policies,
including a major reorientation toward treating drug dependency as a public health issue and, perhaps, the
decriminalisation of certain illegal drugs.
Natural Gas Advantage
Natural Gas DA
Russian Influence Bad
EU is overly reliant on Russian natural gas, leading to conflict escalation. U.S LNG is key
to liquefy the market.
Ebinger et al ’12 [May 2012. Charles Ebinger is a senior fellow and director of the Energy Security Initiative at
Brookings, Kevin Massy is Assistant Director of the Energy Security Initiative at Brookings where he manages
research into international energy relations and domestic energy policy, Govinda Avasarala is a Senior Research
Assistant in the Energy Security Initiative at Brookings, “Liquid Markets: Assessing the Case for U.S. Exports of
Liquefied Natural Gas” Brookings.
http://www.brookings.edu/~/media/research/files/reports/2012/5/02%20lng%20exports%20ebinger/0502_lng_expor
ts_ebinger.pdf=]
A large increase in U.S. LNG exports would have ¶ the potential to increase U.S. foreign policy interests in both the
Atlantic and Pacific basins. ¶ Unlike oil, natural gas has traditionally been an ¶ infrastructure-constrained business, giving
geographical proximity and political relations between producers and consumers a high level of ¶ importance. Issues of
“pipeline politics” have ¶ been most directly visible in Europe, which relies on Russia for around a third of its gas.
Previous disputes between Moscow and Ukraine over ¶ pricing have led to major gas shortages in several ¶ E.U. countries in
the winters (when demand is ¶ highest) of both 2006 and 2009. Further disagreements between Moscow and Kiev over the terms ¶ of
the existing bilateral gas deal have the potential ¶ to escalate again, with negative consequences for ¶ E.U. consumers. The
risk of high reliance on Russian gas has been ¶ a principal driver of European energy policy in ¶ recent decades. Among central
and eastern European states, particularly those formerly aligned ¶ with the Soviet Union such as Poland, Hungary, ¶ and the Czech Republic, the
issue of reliance on ¶ imports of Russian gas is a primary energy security concern and has inspired energy policies ¶
aimed at diversification of fuel sources for power ¶ generation. From the U.S. perspective such Russian influence in the affairs of
these democratic ¶ nations is an impediment to efforts at political ¶ and economic reform. The market power of Gazprom, Russia’s stateowned gas monopoly, is evident in these countries. Although they are closer ¶ to Russia than other consumers of Russian gas in ¶ Western
Europe, many countries in Eastern and ¶ Central Europe pay higher contract prices for ¶ their imports, as they are more
reliant on Russian ¶ gas as a proportion of their energy mixes. ¶ In the larger economies of Western Europe, which ¶ consume most of
Russia’s exports, there are efforts ¶ to diversify their supply of natural gas. The E.U. has ¶ formally acknowledged the
need to put in place ¶ mechanisms to increase supply diversity. These ¶ include market liberalization approaches such ¶ as rules mandating
third-party access to pipeline ¶ infrastructure (from which Gazprom is demanding exemption), and commitments to complete a ¶ single
market for electricity and gas by 2014, and ¶ to ensure that no member country is isolated from ¶ electricity and gas grids by 2015.¶ 112¶
Despite these formal efforts, there are several factors retarding the E.U.’s push for a unified effort ¶ to reduce dependence
on Russian gas. National interest has been given a higher priority than ¶ collective, coordinated E.U. energy policy:
the gas ¶ cutoffs in 2006 and 2009 probably contributed to ¶ the acceptance of the Nord Stream project, which carries gas
from Russia into Germany. Germany’s ¶ decision to phase out its fleet of nuclear reactors by 2022 will result in far higher
reliance on ¶ natural gas for the E.U.’s biggest economy. The ¶ environmental imperative to reduce carbon
emissions—codified in the E.U.’s goal of essentially ¶ decarbonizing its power sector by the middle of ¶ century—mean that natural gas
is being viewed ¶ by many as the short-to medium fuel of choice ¶ in power generation. Finally, the prospects for ¶ European
countries to replicate the unconventional gas “revolution” that has resulted in a glut ¶ of natural gas in the United States look uncertain. ¶ Several
countries, including France and the U.K., ¶ have encountered stiff public opposition to the ¶ techniques used in unconventional gas production,
while those countries, such as Poland and ¶ Hungary, that have moved ahead with unconventional-gas exploration have generally seen
disappointing early results. Collectively, these factors ¶ suggest that the prospects for reduced European ¶ reliance on Russian
gas appear dim. ¶ The one factor that has been working to the advantage of advocates of greater European gas diversity
has been the increased liquidity of the global LNG market, discussed above. Russia’s dominant position in the
European gas market is being eroded by the increased availability of LNG. ¶ Qatar’s massive expansion in LNG
production in ¶ 2008, coupled with the rise in unconventional gas ¶ production in the United States as well as a drop ¶ in global energy
demand due to the global recession, produced a global LNG glut that saw many ¶ cargoes intended for the U.S. market
diverted into ¶ Europe. As mentioned previously, with an abundant source of alternative supply, some European ¶ consumers, mainly
Gazprom’s closest partners, ¶ were able to renegotiate their oil-linked, takeor-pay contracts with Gazprom. As figure 10 illustrates, however, in
the wake of the Fukushima natural disaster and nuclear accident in Japan and ¶ a return to growth in most industrialized economies, the LNG
market is projected to tighten considerably in the short-term, potentially returning ¶ market power to Russia. ¶ However, there is a second,
structural change to ¶ the global gas market that may have more lasting ¶ effects to Russia’s market power in the European ¶ gas market.
LNG is one of the fastest growing ¶ segments of the energy sector. The growth of the ¶ LNG market, both through
long-term contract ¶ and spot-market sales, is likely to put increasing ¶ pressure on incumbent pipeline gas suppliers.
A ¶ significant addition of U.S. LNG exports will accelerate this trend. In addition to adding to the ¶ size of the market,
U.S. LNG contracts are likely ¶ to be determined on a “floating” basis , with sales ¶ terms tied to the price of a U.S.
benchmark such ¶ as Henry Hub, eroding the power of providers of ¶ long-term oil linked contract suppliers such as ¶
Russia. While U.S. LNG will not be a direct tool of ¶ U.S. foreign policy—the destination of U.S. LNG ¶ will be determined according to the
terms of individual contracts, the spot-price-determined ¶ demand, and the LNG traders that purchase such ¶ contracts—the addition of a
large, market-based ¶ producer will indirectly serve to increase gas supply diversity in Europe, thereby providing
European consumers with increased flexibility and ¶ market power.
Russia is expanding its monopoly, leading to Russia-Ukraine conflict.
Financial Times ‘13 [January 25, 2013. Roman Olearchyk in Kiev and Neil Buckley in London, “Russia hands
Ukraine $7bn Gas Bill” http://www.ft.com/intl/cms/s/0/6c1111ae-6718-11e2-8b6700144feab49a.html#axzz2J7cIWw3E=]
Russia has demanded that Ukraine pay billions of dollars for failing to import an agreed amount of gas.¶ The move
came just as Kiev has taken a significant step to break free from its reliance on costly Russian gas imports . The bill was
presented as Ukraine signed a deal with Royal Dutch Shell to exploit “unconventional” gas reserves in shale and sandstone that could ultimately involve $10bn-plus in
investment, according to a senior official in Kiev.¶ The
Russian demand threatens to cause a third high-profile energy dispute
between the former Soviet states after Russia twice cut off gas supplies to Ukraine since 2006 amid squabbles over
prices.¶ It comes at a time when both Russia and the EU are trying to persuade Ukraine to form a closer partnership
with them.¶ The bill also threatens to worsen Ukraine’s precarious financial situation, with the potential to hurt its
credit rating and ability to borrow on international markets.¶ Russian gas monopoly Gazprom alleges that Ukraine
imported less gas last year than it was obliged to under a minimum “take or pay” clause in a 2009 supply contract.¶
The Ukrainian official told the Financial Times that Gazprom sent a $7bn demand to Ukraine’s Naftogaz state gas
company on Wednesday as Viktor Yanukovich, the president, was preparing to leave for Davos , where he attended
Thursday’s deal signing with Shell.¶ [The president] decided, nonetheless, to travel to Davos and go forward with Thursday’s signing . . . The geopolitical
battle has started,” the official said.¶ Naftogaz was unlikely to pay the bill, the official added, challenging Gazprom instead to take the issue to
international arbitration.¶ Gazprom’s refusal to reduce prices to its neighbour – though it has done for some west European
clients since 2010 – has forced Ukraine to cut imports, seek alternative supply sources, and boost energy efficiency.¶
Ukraine imported 33 billion cubic metres of gas from Russia last year – down a quarter from 2011 – of which
Naftogaz’s share was 24.9bcm.¶ Naftogaz confirmed that it had a received a “bill for gas which Ukraine did not import” but declined to reveal the value
or volume of the alleged shortfall.¶ We feel that we met all obligations, paying all bills for gas imported from Gazprom in 2012, in full and in a timely fashion¶ Naftogaz¶ “We
feel that we met all obligations, paying all bills for gas imported from Gazprom in 2012, in full and in a
timely fashion,” the company added. It said the company had notified Gazprom in advance that it would not need all its contracted gas, as permitted by its
agreement.
Conflict spills over and goes nuclear.
Kingston et al 09 [2009. Brian Kingston, Peter Loveridge, Joe Sterritt, The Norman Paterson School of
International Affairs – CIFP “UKRAINE: A RISK ASSESSMENT REPORT”
http://www4.carleton.ca/cifp/app/serve.php/1214.pdf=]
Russia: Russia seeks to influence the weakened Ukraine, inflaming ethnic-Russian separatism; Crimea declares ¶
independence; Ukraine resists, perhaps seeing an external war as a distraction from internal strife; Russia comes to the ¶
aid of Crimea/ethnic-Russians resulting in open warfare between Russia and Ukraine . ¶ The West: The West also
suffers from the global recession, but (perhaps following a period of inward looking ¶ protectionism) realizes that it cannot allow
Russian success in Ukraine; open hostilities erupt between Russian and NATO ¶ forces triggering World War III
and the strong possibility of nuclear war, or at least the drawing in of many other countries.
European Diversification Good
LNG exports to Europe good – stability against Russia
Turner ’13 [July 17, 2013. Michael R. Turner is a Republican Representative for Ohio. “More natural gas for
Europe is good for US alliances and jobs” http://thehill.com/opinion/op-ed/311827-more-natural-gas-for-europe-isgood-for-us-alliances-and-jobs]
The United States should help our European allies to diversify their energy sources, specifically natural gas, easing their
dependence on unfriendly or unstable regions and regimes, from Russia to North Africa and the Middle East. Increasing
Europe’s energy security will strengthen U.S. security partnerships, bolster our national security, help our
economy and create job opportunities here at home. That’s why our public policies should encourage two
developments that are increasing Europe’s energy security. First, the Southern Gas Corridor will bring natural gas to Europe from
the Caspian Sea region in central Asia. Second, American natural gas production is booming, creating opportunities to
increase exports and create jobs. Make no mistake: Unstable energy supplies in Europe threaten America’s economic security and
national security. Europe relies on Russia’s monopoly, Gazprom, for about one-third of its natural gas needs. However, Russia
has demonstrated it will use its resource exports to influence other countrie s, and in recent years, it has cutoff natural gas
supplies to parts of Europe. Relying on North Africa and the Middle East can be even riskier. Turkey depends on Iran for 20 percent of its natural
gas imports, and early this year, Islamist militants attacked a natural gas facility in Algeria, which is the third-largest exporter of natural gas to
Europe. Imagine what it will mean when, during an international crisis sometime in the future, the nations of Europe will have
less reason to fear for their energy supplies if they defy the rulers of Russia , Iran or other hostile or shaky foreign governments.
Fortunately, Europe’s energy security is being boosted by recent developments in the central Asian country of Azerbaijan and
here in America. In Azerbaijan, the developers of a major Caspian gas field have decided upon a route for the western section of the pipeline to
Europe, selecting the Trans-Adriatic Pipeline, which will run through Turkey, Greece and Albania to Italy. When the pipeline is completed,
natural gas from the Shah Deniz field, one of the world’s largest, located only 40 miles off the coast of Azerbaijan, will become available
to European consumers. This is good news because Azerbaijan is a reliable trading partner and ally for Europe and the
U.S. Azerbaijan was the first country in the region to open energy resources in the Caspian Sea to American companies and is the home to 7
billion barrels of oil reserves and 30 trillion cubic feet of natural gas reserves. Because Azerbaijan is an important partner on energy, economics
and national security, I have authored a bipartisan Congressional resolution declaring that it is in America’s national interest to work with the
governments of Turkey, Azerbaijan and Georgia and their associates to bring additional oil and gas supplies to European markets.
Link non-unique, shale gas exports have already impacted the market – any more exports
caused by the plan are good
Turner ’13 [July 17, 2013. Michael R. Turner has represented Ohio’s 10th congressional district in the House of
Representatives since 2003. He sits on the Oversight and Government Reform Committee, chairs the Armed
Services subcommittee on Tactical Air and Land Forces, and is chairman of the U.S. Delegation to the NATO
Parliamentary Assembly. “More natural gas for Europe is good for US alliances and jobs”
http://thehill.com/opinion/op-ed/311827-more-natural-gas-for-europe-is-good-for-us-alliances-and-jobs]
Meanwhile, U.S. production of natural gas, particularly shale gas, has increased dramatically. The U.S. is the world’s
largest producer of natural gas, with almost a 100-year supply, according to the U.S. Energy Information Administration. As a
result of increased production, prices have fallen, making U.S. natural gas competitive in the global marketplace and
creating new opportunities to export gas and create American jobs. A recent report commissioned by the Energy Department
found that increasing natural gas exports would not only reduce our trade deficit and create jobs for American workers
but also help our allies diversify their energy resources. The surplus of U.S. natural gas has already had an impact on
global markets. Supplies previously destined for the U.S., but no longer needed as a result of increased production, were diverted to other
markets. This increase in global supply has helped several European countries successfully renegotiate their long-term
contracts with Gazprom. Under current law, companies seeking to export U.S. natural gas to non-Free Trade Agreement countries are
subject to a lengthy regulatory process. Over the last several years, only two such applications have been approved, and there are still 20 pending
before the Department of Energy. We need to tear down these regulatory barriers that make it more difficult for American companies to sell
natural gas overseas. That is why I have authored bipartisan and bicameral legislation, the Expedited LNG [Liquefied Natural Gas] for American
Allies Act, to expedite the natural gas export license process for NATO countries and Japan. The measure also allows natural gas exports to other
countries if the secretary of State, in consultation with the secretary of Defense, determines that it would be in our national security interests. The
Southern Gas Corridor and increased exports of U.S. natural gas can help our allies diversify their energy resources and
bolster our strategic partnerships. It’s time to strengthen these ties for the sake of America’s national security,
America’s allies and America’s workers.
Russia Doesn’t Care
Russia is indifferent to US gas production and exports
Medvedev 8/2 [August 2, 2013. Aleksandr Medvedev is the Gazprom Chief Executive. Answering questions
from RT “Gazprom CEO: Shale gas not Russia's concern this century” http://rt.com/business/medvedev-gazpromshale-russia-947/]
RT: Igor Sechin, chief executive of state oil company RosNeft and one of President Putin’s closest advisors says Gazprom was too late to realize
the threat posed by the US shale gas, and Russia is now risks losing the race for the gas markets if it fails to act – do you feel like you’ve slept
through the shale revolution? ALEXANDR MEDVEDEV (AM): We always are monitoring all the modern tendencies in the gas and
oil market, and other energy markets connected with gas and oil. It’s very strange to hear that we have missed the shale gas revolution.
We’ve always been involved in accommodating our activities to the market realities, but I believe that it may be a nice word –
“revolution” – which these tendencies influence the situation on the American gas market, and also, indirectly, have a certain influence European
markets, but we are not sleeping, we have done what we believed necessary to be done to stay competitive . RT: So you feel like
Russia is not missing out on anything, as far as shale gas is concerned? AM: First of all, I would not exaggerate the influence of the
shale gas on our activity. Obviously, we should change the approach to the American market, because the target market for our Shtokman
project was the North American market. Now, the US looks to be targeting to be self-sufficient, or even considering to export energy, but we
are well prepared to stay competitive and the events of the current year are just confirming how we are restoring our
competitiveness, which actually was not even damaged . RT: But like you said, US shale gas production is booming, while
European countries prohibit it one by one. Why such extreme points of view? Why such a difference? AM: In my opinion it was booming and
now we are seeing a slowdown, not only in production but also in the speed of drilling, and many companies are forced to sell their assets in shale
gas production. Actually, with the current level of price in the US, it’s not possible to have a profitable production in the majority of shale gas
fields. I would like to quote the president of France, who said that as long as he’s president, he will not allow the production of shale gas in
France, and there are quite a number of reasons behind this opinion. I’m rather sure that the French president was supplied with all the available
information about shale gas potential and problems, and number one is that the cost of production of shale gas in Europe is incomparably higher
than in the US and also the situation with the environment is different, because in the US its main production is in unpopulated areas, which are
quite available in the US, but in Europe we can’t find such big unpopulated areas with reach to the water. We shouldn’t also close eyes on the
environmental risks involved, and there are quite a number of disturbing facts associated with production of shale gas. It’s not surprising that in
Poland all the majors actually stepped out of the shale gas exploration. RT: So you feel like the environmental issues are of secondary importance
for the US? AM: In Europe, where the problem of drinking water is very important to put it at risk, the water horizons is the number one priority,
and as I said, there is the environment plus the cost factor, because production of traditional gas in Europe, and I mean first of all Russia, is
incomparably more competitive than production of shale gas – if it will ever happen. RT: But for us – for Russia – we’re not
interested because of environment or because we just have enough gas as it is, we don’t need to extract it, or is it also costly in the technological
drag? What’s the reason? AM: Russia is very rich with shale gas resources, and probably in the next century the time will come when
shale gas production will be considered in Russia, but currently, for the current century, we have enough reserves of traditional
resources, and new areas of offshore fields – not to forget the Arctic, and I’m rather sure that cost effectiveness for these
reserves will be unbeatable, and that’s why we are rather sure that we were, are, and will stay competitive on the oil and gas
market. RT: Meanwhile, as you said, not only America has become self-sufficient in natural gas, but is also about to challenge Middle East and
Russia in exporting gas to Europe. Did you expect that the US would turn into a national gas exporter so quickly? AM: There is a certain
investment cycle before any project can be realized, if you are thinking about the potential of exporting of Azeri gas, it is targeted to start in 2019,
and the volume is marginal compared to our current annual export. This year we are planning to export more than 152 BCM, so that’s why,
especially in view of declining production in Western Europe, which is happening quicker than expected, we are not afraid of
appearance of gas – if it will appear – from any other sources. RT: We still get a sense that with the arrival of the American
gas, plus the Mideast share Europe is ready to manipulate the energy prices – some have already started, like Bulgaria has negotiated 20%
discount. AM: It was normal price negotiation procedure which is included in our contracts; both buyer and seller have a right to call for price
revisions in the certain periods of time, subject that it is justified by development of the market conditions. And that’s why it is absolutely normal
to see price revision negotiations on both sides. In our practice we have reached agreements on the prices, when the price was low and when price
was high, and during negotiations in order for us to be in position to keep our market share, and also that the market will continue to develop to
correct the price. I don’t see any problem in making a correction of the price, depending on from which level this correction is done. RT: You just
mentioned Azerbaidzhan, recently a consortium was chosen to path gas from Azerbaijan to Western Europe, further reducing dependence on
Russian supplies – are you not concerned at all, because people are getting the sense the world is sort of trying to push Russia out of the
competition. AM: I’m rather sure that the share of Russian gas in gas consumption in Europe can only grow and we
believe that from the current level of 26% of our share in gas consumption in Europe would grow up to 30 or maybe
even a higher percentage. It again is a reflection of the fact that we have a portfolio of our long-term contracts which on the level of takeor-pay – not on an annual contractual volume, but on a take-or-pay level – it is exceeding 4 trln cubic meters of gas, and with the validity beyond
2030-2035. So the share of import will inevitably grow in the European gas consumption and among suppliers Russia
has the best ability to deliver additional volume of gas, subject that our buyers will claim this additional volume. RT: What if the
European economy goes down? AM: We are calculating these forecasts based on the conservative scenario, and we see that Europe is
experiencing serious economic problems after 2008, and, actually, we don’t see a lot of factors for potential recovery, some people even speak
about the potential “Sunset of Europe” in the sense of industrial production, due to the lack of competitiveness. And energy is one of the major
factors of the competitiveness, and if Europe would like to keep economic growth, they should seriously consider increasing the share of natural
gas in the energy balance not to throw billions and billions of euros to subsidize alternative renewable sources of energy. And we already see the
negative result of these subsidies on the budgetary situation of many European countries, not only small but also big.
Alt Cause Russia Relations
US-Russian relations doomed – Snowden
Gorst and Warrick 8/1 [August 1, 2013. Isabel Gorst is a Caspian and Central Asia Correspondent at
Financial Times. Joby Warrick writes about the Middle East, diplomacy and national security for The Post’s
National desk. “Snowden granted asylum in Russia, leaves Moscow airport”
http://www.washingtonpost.com/world/europe/snowden-leaves-moscow-airport-to-live-inrussia/2013/08/01/2f2d1aba-faa9-11e2-a369-d1954abcb7e3_story.html]
Russia’s decision to grant temporary asylum to Edward Snowden opened a fresh wound in Moscow’s battered
relations with the United States, even as it ended the bizarre two-month odyssey that began when the former National Security Agency
contractor leaked details of top-secret U.S. surveillance operations. Snowden slipped away in a taxi on Thursday from the Moscow airport that
had been his home since June 23, bearing a Russian refugee certificate granting him permission to stay in the country for one year. It was a
forceful rebuff to a series of private and public appeals by U.S. officials to have Snowden returned to the United
States, where he faces espionage charges. Obama administration officials denounced the decision to protect
Snowden and hinted of repercussions, perhaps including the cancellation of a planned summit between President
Obama and Russian President Vladimir Putin. Reaction from Congress was far harsher, with key lawmakers from both
sides calling for a fundamental rethinking of relations with Moscow. “Russia has stabbed us in the back,” said Sen.
Charles E. Schumer (D-NY). “Each day that Mr. Snowden is allowed to roam free is another twist of the knife.” For
Snowden, 30, the asylum decision was a reprieve from extradition and the prospect of a trial in the United States. But his refu-gee status opens
the possibility of direct meetings between him and U.S. officials to discuss the treatment he could face if he returned home voluntarily. The
former technical contractor and admitted leaker of NSA documents has signaled that he intends to stay. One of his attorneys said Snowden has
discussed taking language classes and perhaps finding work in Russia, a country that has a history of harshly repressing its government critics as
well as a record of mistreating other U.S. citizens who have sought asylum there.
Russian relations have already collapsed – Snowden
Gorst and Warrick 8/1 [August 1, 2013. Isabel Gorst is a Caspian and Central Asia Correspondent at
Financial Times. Joby Warrick writes about the Middle East, diplomacy and national security for The Post’s
National desk. “Snowden granted asylum in Russia, leaves Moscow airport”
http://www.washingtonpost.com/world/europe/snowden-leaves-moscow-airport-to-live-inrussia/2013/08/01/2f2d1aba-faa9-11e2-a369-d1954abcb7e3_story.html]
In Washington, the reaction from the White House was severe. In a news briefing dominated by questions about Snowden, press
secretary Jay Carney said the administration is “extremely disappointed that the Russian government would take this
step” despite “ample legal justification” for returning Snowden to the United States. “This move by the Russian government
undermines a long-standing record of law enforcement cooperation” that had “recently been on the upswing” since the
Boston Marathon bombings in April, he said. Carney insisted that Snowden “is not a dissident,” or a whistleblower, but a suspect in a criminal
case with serious national-security implications. He noted that Snowden “has been . . . in possession of classified information in China and in
Russia,” which is “both a huge risk and a violation” of U.S. law. Asked whether Obama would attend the September summit in
Moscow, Carney said, “Obviously this is not a positive development . . . and we are evaluating the utility of the summit.” Across
town, there was a blistering response on Capitol Hill and calls for retaliatory measures certain to infuriate the
Kremlin. Sen. John McCain (R-Ariz.), long one of the Senate’s leading critics of Moscow, blasted the asylum decision as “a slap
in the face of all Americans” and called on the administration to turn up the pressure on Moscow on a variety of
fronts, including a renewed push for NATO expansion and new missile-defense programs in Europe. “Now is the
time to fundamentally rethink our relationship with Putin’s Russia,” McCain said in a statement released by his office. “We
need to deal with the Russia that is, not the Russia we might wish for. We cannot allow today’s action by Putin to stand without
serious repercussions.”
Russian relations are continually rocky – Snowden is the last straw
Gvosdev 8/2 [August 2, 2013. Nikolas K. Gvosdev is the former editor of the National Interest and a frequent
foreign policy commentator in both the print and broadcast media. He is currently on the faculty of the U.S. Naval
War College. “The Realist Prism: U.S.-Russia Ties at the Breaking Point”
http://www.worldpoliticsreview.com/articles/13135/the-realist-prism-u-s-russia-ties-at-the-breaking-point]
U.S.-Russia relations can't catch a break. No sooner is one set of difficulties navigated than another wave of troubles appears on the
horizon. Earlier this year, differences over Syria appeared to be the rock upon which the bilateral relationship would
founder, as America's insistence on supporting the opposition seeking the overthrow of President Bashar al-Assad—and
Moscow's absolute refusal to abandon the regime in Damascus—seemed to put both countries on a collision course. Then
the flight of NSA contractor Edward Snowden from the long hand of U.S. justice to a limbo in the transit area of Moscow's
Sheremetyevo Airport threatened relations, as the Russian government steadfastly refused repeated U.S. requests to
detain the renegade and return him to the United States. Both disputes ginned up the respective anti-Russian/antiAmerican apparatuses in both countries into their familiar roles: strident denunciations in the U.S. of Russian perfidy and hostility, and
resolute calls from the Russian side for President Vladimir Putin to stand firm against American bullying and arrogance. The first of these
irritants appears to have peaked. Changes on the battlefield in Syria, and the fracturing of the opposition, have made Washington less willing to
push for regime change. As for Snowden, the damage he would cause appeared to have waned, until Moscow granted
him temporary asylum yesterday. It seemed that the latest spats between Moscow and Washington had exhausted
themselves. Like clockwork, however, the next set of troubles have come rolling in.
Relations have slowed – new legislation, and Magnitsky decisions
Gvosdev 8/2 [August 2, 2013. Nikolas K. Gvosdev is the former editor of the National Interest and a frequent
foreign policy commentator in both the print and broadcast media. He is currently on the faculty of the U.S. Naval
War College. “The Realist Prism: U.S.-Russia Ties at the Breaking Point”
http://www.worldpoliticsreview.com/articles/13135/the-realist-prism-u-s-russia-ties-at-the-breaking-point]
Over the past year, the Putin government has shifted the power base of the Russian regime by mobilizing broadly
conservative and traditionalist forces to counter the anti-government opposition movement that sprung up in the aftermath of
the disputed December 2011 legislative elections. The latest manifestation of this trend was the recent passage of legislation
banning "propaganda" for so-called nontraditional relationships, which can be broadly interpreted as criminalizing everything
from gay pride parades to public displays of affection. The law also prohibits gays or single parents living in countries where same-sex marriage
is recognized from adopting Russian children, and provides for the temporary detention of foreigners engaged in flouting these restrictions. While
some U.S. social conservatives have praised the Russian government for taking these steps, the response from American civil society
has generally been overwhelmingly negative. There are now calls for a boycott of the Winter Olympics scheduled to be
held in Sochi next year as a way to protest the Russian legislation . Moreover, there are also calls for the authors of some of
the anti-gay legislation to be added to the so-called Magnitsky List, which would ban them from entry into the United
States and impact any assets they might hold there. Russia has already warned that efforts to expand the list will result in countermeasures; after
all, when the list was first created last year, Russia assembled its own list of U.S. officials barred from entering Russia and
ended the adoption of Russian orphans by U.S. citizens, creating a temporary chill in relations. Sergei Magnitsky, the Russian lawyer
who died in detention and for whom the U.S. legislation is named, is also back in the news, given his recent posthumous conviction for tax
evasion; his client, Bill Browder, head of Hermitage Capital, was also convicted and sentenced to nine years.* Other controversial judicial
procedures include the acquittal of prison officials charged with negligence in Magnitsky's death, and the recent
conviction on embezzlement charges of the opposition activist and anti-corruption blogger Aleksei Navalny in what
appeared to be a highly politicized case. These high-profile cases will certainly lead to another round of U.S. criticism of the
Russian legal system and its commitment to the rule of law. But those criticisms will in all likelihood now be drowned
out by declarations of outrage over the Snowden asylum. In its defense, Russia will raise the issue of why Western governments do
not honor its own requests for extradition. Moscow has already complained that Interpol has not acted on its request to put Browder, of
Hermitage Capital, on a watch list, although Browder resides in the United Kingdom, which has no extradition treaty with Russia. Still,
Moscow’s resentment over what it sees as the West’s inconsistency on the extradition issue makes it even more
unlikely that Russia will be responsive to U.S. requests for Snowden’s return, whether now or a year from now, when his
temporary asylum expires.
Eurasian Union and Ukraine competition have destroyed relations
Gvosdev 8/2 [August 2, 2013. Nikolas K. Gvosdev is the former editor of the National Interest and a frequent
foreign policy commentator in both the print and broadcast media. He is currently on the faculty of the U.S. Naval
War College. “The Realist Prism: U.S.-Russia Ties at the Breaking Point”
http://www.worldpoliticsreview.com/articles/13135/the-realist-prism-u-s-russia-ties-at-the-breaking-point]
There is also trouble looming on the geopolitical horizon. One of the unheralded reasons that the "reset" in U.S.Russia relations occurred in the first place was that Ukraine had been taken off the chessboard after the effective end to
the pro-Western Orange Revolution when Viktor Yanukovych was elected president in 2010. For the past several years,
Ukraine has balanced precariously between Russia and the West. But Putin's recent visit to Ukraine was meant to showcase his
lobbying efforts to get Ukraine to join the Russian-led Eurasian customs union, the linchpin of Putin's proposed
Eurasian Union. Renewed pressure on Kiev to "look east" and to "come home" to Moscow's fraternal embrace has the
potential to reignite the competition between Russia and the West for influence in Ukraine. It will also put pressure
on the Obama administration to decide whether the statements of then-Secretary of State Hillary Clinton opposing Putin's Eurasian plans and
pledging U.S. support to fight a Moscow-led integration process reflects actual U.S. policy, and if so, what Washington is prepared to do
about it. As the criticisms of Russian policy have mounted, Washington began to send signals that it might cancel the
separate bilateral summit meeting between Putin and President Barack Obama scheduled in conjunction with the G-20
summit in St. Petersburg this fall. The Obama administration may have hoped that its willingness to simply consider this
option would be enough to mollify domestic critics of the U.S.-Russia relationship. But in the aftermath of the
Snowden decision, it now has the potential to trap the president, for if Obama goes through with the meeting, he runs
the risk of looking weak. Putin, unlike his predecessor, Dmitry Medvedev, has shown little interest in taking even symbolic
steps that might give Obama political cover for his engagement with Russia. As a result, whatever fragile gains the
initial reset achieved are now more than ever in jeopardy.
No Link
Russia will remain the dominant supplier to Europe no matter what
Soldatkin 8/1 [August 1, 2013. Vladimir Soldatkin is a writer for Reuters. “UPDATE 1-Russia's gas exports to
Europe surge in July” http://www.reuters.com/article/2013/08/01/gazprom-europe-exportsidUSL6N0G22E620130801]
Gazprom increased gas exports to Europe, its main source of revenues , by almost a third in July, even as consumers in Europe
struggle to loosen dependence on Russia’s top gas producer. Gazprom said on Thursday its gas exports to “far abroad” – which under the
company categorisation means the European Union and Turkey – increased by 29 percent to 14.04 billion cubic metres (bcm) from
the same period a year ago. State-controlled Gazprom is facing increasing competition on the European market, while President Vladimir Putin
has announced that it would only be able to increase domestic prices in line with inflation for five years from 2014. The company said its daily
exports stood at 470 million cubic metres in July, which was a five-year high, in Europe, which accounts for over a half of
Gazprom’s total revenues. The company is aiming to restore its gas sales to Europe, where it covers a quarter of gas consumption, to 152
bcm this year from 139 bcm in 2012. Gazprom had said it increased gas exports to Europe by 10 percent in the first half of the year. European
clients have been trying to reduce purchases of gas from Gazprom which sells via pipelines mostly under long-term contracts pegged to the rising
price of oil. Some European companies, including German utility RWE , have successfully challenged Gazprom in courts, winning better supply
terms and price cuts. They have also increasingly been turning to alternative sources of energy, such as coal and liquefied natural gas (LNG).
But Moscow will likely remain Europe’s primary energy supplier for many years and possibly decades as the EU
has so far failed to substantially replace Russian gas and oil exports. Reuters’ own research indicates that in 2023 Russia
will likely remain the dominant supplier, as it boosts exports while output in the EU and Norway falls. Gazprom declined to
comment on Thursday on total gas exports in January-July and on the reasons behind the recent surge, saying only that “consumers usually
receive such volumes during the peak of autumn and winter season”.
Russia will continue being the prominent supplier to Europe despite US increases in
production
Gloystein 7/18 [July 18, 2013. Henning Gloystein is Community Editor for European power, gas and coal in
London. “ANALYSIS-Little chance of Europe breaking Russia's gas dominance”
http://in.reuters.com/article/2013/07/18/energy-gas-europe-idINL6N0FN2RA20130718]
The European Union aims to diversify away from Russian natural gas supplies, yet Reuters research indicates the EU's
biggest provider a decade from now could easily still be Russia. Billions are to be spent on piping gas from
Azerbaijan while new finds in Africa and eastern Mediterranean also promise new supply for the EU, which currently buys mostly from
Russia and Norway. Europe also gets liquefied natural gas (LNG), mostly from Qatar, and the U.S. shale boom could free up LNG
exports from there in coming years, too. But growth in Europe's demand for gas will eat up much of the new
potential supply, and the Russians show little willingness to fade away as they gear up to defend their position
through massive projects, such as the $35 billion South Stream pipeline to Italy. "Russia will continue to remain Europe's
primary energy supplier, including natural gas supplies, for many years and possibly decades," a U.S. congressional
research paper on Europe's energy security said in March. Reuters' own research indicates that in 2023 Russia will likely remain the
dominant supplier, as it boosts exports while EU and Norwegian output declines. Of the EU's current annual demand for 485
billion cubic metres (bcm) of gas, Russia supplies some 150 bcm. Demand could rise to 585 bcm by 2023 with the Russians
supplying as much as 175 bcm, according to Reuters calculations based on data from governments and energy companies, as well as input
from research firms and consultancies. This means that the amount of gas from Russia is not only set to rise, but Russia's share
of Europe's gas market will remain stable around 30 percent. "Gazprom won't face problems in increasing gas
supplies as its reserve base is big," said Valery Nesterov, an analyst with state-owned Sberbank CIB. Some states, such as
Slovakia, the Czech Republic or Bulgaria, rely even more heavily on Russian gas, and have suffered several winter heating
disruptions since 2006 due to disputes between Russian gas monopoly Gazprom and transit country Ukraine. "A major test for Europe could be
how ... to alleviate at least some of that dependence (in) states that are more dependent on Russian energy and are concerned by the political
leverage Russia could exert," the U.S. congressional paper said. "Some of Europe's larger natural gas companies have huge
financial interests in maintaining Russian supplies and do not see a problem in depending so much on one country,"
the paper noted.
Russian Economy High
The Russian economy will pick up soon, avoiding crisis – investment is key
RT 7/22 [July 22, 2013. RT. “Rock bottom: Russian economy hits low, will pick up in July”
http://rt.com/business/rock-bottom-russian-economy-407/]
Russia is nearing the end of stagnation, and the Ministry of Economic Development anticipates the economy will expand more
rapidly in the next two quarters, fueled by investment. In the second quarter, Russia’s economy grew by 1.9 percent, an
improvement from the 1.6 percent growth it posted in the first quarter, but still well below the best case scenario of 3 percent growth. In 2012 the
economy grew 4.7 percent. The growth figures are from RosStat, Russia’s federal service of state statistics. Though higher than forecast, Russia’s
economic performance in Q1 was the worst quarter since 2009. The Ministry of Economic Development expects the economy to
jump start in July, propelled by rising exports and a boost in investment in the second half of the year. Trade promises
strong growth. In June exports rose 0.4 percent to $41.6 billion, and imports rose by 5.7 percent to $27.9 billion,
according to the Ministry of Economic Development. Russian academics say the country has entered a technical recession, as its basic industries
contracted for 6 months in a row. Investment is the bigger challenge and a highly sensitive ingredient to Russia’s growth.
In Q1 investment fell 30 percent, and the pessimistic trend is slated to roll over into July. High inflation has weakened the ruble’s exchange rate,
which the government plans to loosen. In June, the World Bank cut its growth forecast for Russia to less than 2.2 percent in 2013 and 3 percent in
2014, after revising the January forecast the economy would grow by 3.6 percent in and 3.9 percent in 2014. Bloomberg has projected growth of
2.5 percent. “We are taking a conservative path, and in some cases even lower,” Deputy Economic Development Minister
Andrey Klepac said, as GDP in June only grew by 1.5 percent. According to Klepac, almost a third of investment is accrued in
November and December, which will contribute to reviving Russia’s sluggish economy. Russia's economy has been
hit by weaker investment and exports, but is expected to pick up later in the year thanks to stronger budget spending. The
government expects growth to slow to 2.4 percent this year, from 3.4 percent in 2012. Renaissance Capital, a leading investment bank in Russia,
doesn’t foresee the economy growing faster than 2 percent in the coming year. "We anticipate that there will be a turning point in
negative trends in the second quarter and that economic growth will surpass 3% in the second half of the year,"
Andery Belousov, head of the Ministry of Economic Development, said in June. Recent signs of slowdown have
prompted government officials to prepare Russia for recession by inflating the real economy. The new Central Bank chief
Elvira Nabiullina hasn’t budged on changing interest rates, but, under pressure from the Kremlin to increase the credit line to the
economy, will hold its first auction for secured against non-market assets and guarantees on July 29. The monetary easing
policy will offer a floating interest rate set at 5.75 per one-year loan. With $15.3 billion (500 billion rubles) on offer. The new ‘anti-crisis
tool’ has been praised by economists. Rosbank’s Vladimir Kolychev lauded Nabiullina for ‘rolling out the big bazooka’.
The sell-off will hopefully provide more long-term funding for banks, as well as make the ruble more liquid. Moody’s rating service
downgraded the long-term senior debt and deposit ratings of Russia’s key state lender Sberbank (to Baa1 from A3), Bank VTB and VTB24 (to
Baa2 from Baa1) and Russian Agricultural Bank (to Baa3 from Baa1). The outlook for these ratings is stable. "Recession is not
expected. I think that the growth in the second half [of this year] will be higher than in the first [half]," the country's economy minister and
former central bank deputy chairman, Alexey Ulyukayev, told Prime news agency Tuesday.
Russian Economic Decline Inevitable
Russian economic crisis inevitable due to corruption and infrastructure – diversification
key to prevent energy insecurity and nuclear war
Fin ’12 [November 5, 2012. Al Fin runs a number of very successful blogs that cover, energy, technology, news
and politics. “The Inevitable Decline of Russia's Energy Sector” http://oilprice.com/Energy/Energy-General/TheInevitable-Decline-of-Russias-Energy-Sector.html]
Russia has the largest land area of any nation. Its land is not only vast, but rich. Oil, gas, base minerals, diamonds, precious metals, high quality
timber, vast freshwater resources -- Russia has it all. But due to corruption and bad management, most of Russia's production
infrastructure still dates to the Soviet era, old and decrepit. The same is true for most of Russia's vaunted military
infrastructure. And worst of all, the core population of ethnic Russians is shrinking -- being replaced by Central Asian
immigrants with divided loyalties. And so Russia's oil production is doomed to go the way of Mexico's, if Russia refuses
to spend the necessary amount to upgrade its production infrastructure. While a decade of rising oil output and prices fueled the
resurgence of the Russian economy and the Kremlin, a tougher future beckons. The International Energy Agency forecasts a slight
decline in Russian oil output for the next two decades. – WSJ. The corrupt Putin oligarchy is indistinguishable from a third world
dictatorship in the way that it is stripping the country's natural resources for the enrichment of top officials and
their close crony connections. Russia's western Siberian fields—60% of the country's current output—are a declining Soviet
legacy. Offsetting this with new fields in areas like the Arctic offshore will be challenging and, hence, expensive. Lower
exports and rising costs point to smaller margins for oil companies—and a smaller take for a state whose dependence on
energy revenue has increased. Unless Russia can crack modernization and diversification for its economy, this
represents a crisis in the making. –WSJ. If oil production and oil income decline, there will be less booty to pass around
the table of kleptocrats. That would likely shift the attention of the oligarchs to the scavenging of other parts of
Russia's infrastructure -- the military in particular. The comparison of Russia with Mexico is not as far fetched as one
might think. The same loss of control of vast parts of the landscape to criminal organisations that one sees in Mexico, is taking place across
large areas of Siberia -- extending even West of the Urals. Of course in Siberia, Chinese interests are also beginning to insinuate
themselves in a large way. Moscow -- like Mexico City -- is losing its ability to control outlying areas. One of the worst
things that could happen is that the Russian government could intentionally or unintentionally lose control of its
nuclear arsenal. Should that happen, Russia and the rest of the world would have much more to worry about than
the price of oil.
Russian economic crisis inevitable – large oil companies and inefficiencies
Denning ’12 [November 5, 2012. Liam Denning is Deputy Editor for Heard on the Street, Wall Street Journal
who is an expert on commodities and energy. “With Russian Oil, Size Isn't Everything”
http://online.wsj.com/article/SB10001424052970204707104578094970555555666.html]
But unlike diversified Western majors, the Russian state-controlled company's assets are concentrated in its own country. It
hasn't competed aggressively for foreign oil assets in the way other national oil companies such as PetroChina have. Nor is it likely to
soon. Besides taking on more debt to buy TNK-BP, there is too much to do at home. While a decade of rising oil output and
prices fueled the resurgence of the Russian economy and the Kremlin, a tougher future beckons. The International Energy
Agency forecasts a slight decline in Russian oil output for the next two decades. Even achieving this will require a step up in capital expenditure:
$740 billion between 2011 and 2035. Russia's western Siberian fields—60% of the country's current output—are a declining Soviet
legacy. Offsetting this with new fields in areas like the Arctic offshore will be challenging and , hence, expensive. Lower
exports and rising costs point to smaller margins for oil companies—and a smaller take for a state whose
dependence on energy revenue has increased. Unless Russia can crack modernization and diversification for its
economy, this represents a crisis in the making. So a heavy burden rests on Russia's national oil champion to lead the charge in
developing the country's next generation of resources. This was why Rosneft signed the original Arctic partnership with BP in 2011 that led to the
TNK-BP deal. Indeed, for BP, the potential opportunity arising from Rosneft's need for foreign expertise is one rationale for selling its stake.
Rosneft's need also lies behind other recent development deals with the likes of Exxon. Bigger scale should help Rosneft take on some of
these projects, especially in terms of getting financing in place and infrastructure built. But further concentration of Russia's
oil assets in large, state-backed firms raises concerns about efficiency. The stocks of Rosneft and its natural-gas counterpart
Gazprom OGZPY -0.76% trade at persistent discounts to those of their Western and emerging-markets peers on
price/earnings multiples, despite the companies' vast reserves. Moreover, as a vibrant ecosystem of minnows and majors in much of the
rest of the world demonstrates, the biggest companies aren't always the best tools for the job . This is especially true
because of Russia's need to enhance production from its older fields while also striking out for new frontiers.
Elsewhere, it is often the smaller, nimbler companies that take on the mature fields from majors —who have bigger fish
to fry—and squeeze more out of them. This has been the experience in older areas like the North Sea. Smaller companies also
have been at the forefront of America's shale boom. Unfortunately, Russia's longstanding tendency toward gigantism
and state control saw larger oil firms swallow up smaller rivals over much of the past 15 years. Indeed, in "Wheel of Fortune," his
new history of the post-Soviet oil industry, Thane Gustafson writes that small companies produce less than 5% of Russia's oil, and that share is
declining. Rosneft has partnered with Exxon to develop Siberian shale, but it remains to be seen whether two big integrated companies can
replicate the success of the smaller U.S. exploration and production firms. Rosneft's bigger scale is in some ways emblematic of the structural
challenges faced by Russia's oil sector and economy. Far from being a threat, this latest shift in the landscape may represent an opportunity for
western majors.
Monopolies like Gazprom are the manifestation of Putin’s authoritarianism – a “Russian
awakening” will happen with US involvement
Ayvazan 7/15 [July 15, 2013. Vahram Ayvazyan is a 2012 graduate of the Genocide and Human Rights
University Program at the International Institute for Genocide and Human Rights Studies in Toronto. “PUTIN’S
RUSSIA VS. A RUSSIANS’ RUSSIA” http://www.diplomaticourier.com/news/regions/eurozone/1526-putin-srussia-vs-a-russians-russia]
During the first decade of the 21st century Putin could successfully use petrodollars to stabilize the economy and provide the population with
basic services. But since the world energy geopolitics is drastically changing and not, unfortunately for Putin, in favor of Russia
and Gazprom, the social structure of Russia is endangered . As Alexandros Petersen wrote, Gazprom makes up 10 percent of
Russian export revenues, so losses leave Putin with fewer resources to spread throughout his patronage network. Russia 's resurgence
as a great power after the shame and poverty of the tumultuous 1990s is a major pillar of Putin's popularity, but much of that rebound was
based on turning Russia into a petrostate, dependent on Gazprom's profits . As the company falters, the state may not
be far behind. The rise of the urban middle class and upcoming possible economic earthquake could break up the
very foundations of Putin’s Russia. Both domestic and foreign socio-political currents spark that movement of antiPutinism: the Arab Spring and the fall of a number of dictatorships in the Middle East, an African democracy boom, as
well as the faltering Chavismo in Latin America all signal the powerlessness of authoritarian regimes in the new digital age.
To alleviate these possible scenarios, the once popular Putin is trying to stand out in foreign policy endeavors. But here too flaws are
noticeable. As Director of the Carnegie Moscow Center Dmitri Trenin puts it, “The bitter irony is that despite all its efforts and the
money spent, Russia's image in the world is currently much worse than the actual situation in the country warrants.
In the West, this image is plainly disastrous. This was not always the case. Soviet Russia was once attractive to many Western leftleaning intellectuals, as well as social modernizers from the rest of the world. Post-Communist Russia, by contrast, inspired few
admirers. Its 1991 democratic revolution first produced near-chaos, which earned Russia the sobriquet of the "wild East," and was
later followed by stabilization along the lines of soft authoritarianism.” This is an excellent explanation of the incompatibility of failed
domestic politics with a much vaunted foreign policy. Trenin goes further: "In the Western popular imagination, the Mafiosi of the Yeltsin eras
were succeeded by the spooks of Vladimir Putin. Crucially, Russia has failed to develop its economy beyond natural resources,
so even when it started to grow, thanks to the surge in energy prices in the 2000s, it was dismissed as 'Nigeria with snow,'
hardly a significant improvement over its late-Cold War title of an 'Upper Volta with missiles.'" To put a halt to that deteriorating image
of Putin’s Russia, the Kremlin has tried to initiate an abrupt reversal in its foreign policy strategy, instead applying a
“soft power” model. But as IR guru Joseph Nye explains, Putin has told his diplomats that "the priority has been shifting to
the literate use of soft power, strengthening positions of the Russian language." Russian scholar Sergei Karaganov
noted in the aftermath of the dispute with Georgia, Russia has to use "hard power, including military force, because it lives
in a much more dangerous world--and because it has little soft power.". Simply put, an authoritarian regime with a
“flourishing resource economy of the 18th century type” cannot be attractive to the outside world. Moreover, as Lilia
Shevtsova of the Carnegie Moscow Center notes, because Putin’s foreign policy is all about political survival, it has no modernizing dimension.
The covetousness in the search for political longevity of Putinists dominates over prudent economic and socio-political policy. Putin’s Russia
is doing all their utmost to postpone the fall of Russia’s Putin. What seems surprisingly striking, however, is the West’s shortsighted policy vis-à-vis Russia. Instead of engaging the newborn middle class and helping the potentially vibrant civil
society with opening up and democratization, western policymakers have opted for confrontation with and alienation
from Russia. By such a haphazard agenda they do help Putin and his regime to thumb nose at a population looking for
greater political transparency. Instead of making empty remarks on human rights abuses in Russia, the U.S. and EU in particular (as the
latter appears to be more attractive to many Russians) should directly engage with large sectors of Russian society. Although the
leverage of Russian civil society organizations has diminished to a minimum due to the notorious Russian “Foreign Agents” law covering NGOs,
there are other means that the West can reach out, such as visa changes for Russian citizens, more educational programs for Russian students to
study abroad in western universities, the elimination of anti-Russian rhetoric from the Western media, and so on--all could be good steps for
“Russian awakening.” Western policymakers must understand one simple truth: Russia is not Putin and his regime; its territory is larger
than those of the EU and the U.S. combined, and its population is more than any of an EU member state. Russia needs a change, a modernization,
and creative decision-making. A strong Russia is good not only for Russians but for the world as well. As Dmitri Trenin pointed, “As a lone
great power constantly in search of a balance, Russia seeks to diversify its economic and political relationships as
widely as possible, in order to gain more options.” Historically Russia had mindset and heartland of a superpower,
and that is why its collapse and further long-term diminishing role will no longer be tolerated by the Russian
people. They do not need Russia’s Putin and Putin’s Russia any more--they need a Russians’ Russia.
No Econ Decline Instability
No impact – won’t alter their foreign policy
Blackwill 9 – former associate dean of the Kennedy School of Government and Deputy Assistant to the President
and Deputy National Security Advisor for Strategic Planning (Robert, RAND, “The Geopolitical Consequences of
the World Economic Recession—A Caution”,
http://www.rand.org/pubs/occasional_papers/2009/RAND_OP275.pdf)
Now on to Russia. Again, five years from today. Did the global recession and Russia’s present serious economic problems
substantially modify Russian foreign policy? No. (President Obama is beginning his early July visit to Moscow as this paper
goes to press; nothing fundamental will result from that visit). Did it produce a serious weakening of Vladimir Putin’s power and
authority in Russia? No, as recent polls in Russia make clear. Did it reduce Russian worries and capacities to oppose NATO
enlargement and defense measures eastward? No. Did it affect Russia’s willingness to accept much tougher sanctions against Iran? No.
Russian Foreign Minister Lavrov has said there is no evidence that Iran intends to make a nuclear weapon.25 In sum, Russian foreign
policy is today on a steady, consistent path that can be characterized as follows: to resurrect Russia’s standing as a great power; to
reestablish Russian primary influence over the space of the former Soviet Union; to resist Western eff orts to encroach on the space of the
former Soviet Union; to revive Russia’s military might and power projection; to extend the reach of Russian diplomacy in Europe, Asia, and
beyond; and to oppose American global primacy. For Moscow, these foreign policy first principles are here to stay, as they have existed in
Russia for centuries. 26 None of these enduring objectives of Russian foreign policy are likely to be changed in any
serious way by the economic crisis.
Russian stability does not depend on its economy
Goodrich and Zeihan 9 [Lauren Goodrich, Stratfor's Director of Analysis and Senior Eurasia analyst, and
Peter Zeihan, Vice President of Analysis at Stratfor, “The Financial Crisis and the Six Pillars of Russian Strength,”
March 3 2009, http://www.stratfor.com/weekly/20090302_financial_crisis_and_six_pillars_russian_strength]
Politics: It is no secret that the Kremlin uses an iron fist to maintain domestic control. There are few domestic
forces the government cannot control or balance. The Kremlin understands the revolutions (1917 in particular) and
collapses (1991 in particular) of the past, and it has control mechanisms in place to prevent a repeat. This control is seen in
every aspect of Russian life, from one main political party ruling the country to the lack of diversified media, limits
on public demonstrations and the infiltration of the security services into nearly every aspect of the Russian system. This domination was
fortified under Stalin and has been re-established under the reign of former President and now-Prime Minister
Vladimir Putin. This political strength is based on neither financial nor economic foundations. Instead, it is
based within the political institutions and parties, on the lack of a meaningful opposition, and with the backing of the military and
security services. Russia's neighbors, especially in Europe, cannot count on the same political strength because their systems are simply not
set up the same way. The stability of the Russian government and lack of stability in the former Soviet states and much of Central Europe
have also allowed the Kremlin to reach beyond Russia and influence its neighbors to the east. Now as before, when some of its former Soviet
subjects -- such as Ukraine -- become destabilized, Russia sweeps in as a source of stability and authority, regardless of whether this benefits
the recipient of Moscow's attention
Oil DA
Link Non-Unique
Saudi Arabia is already threatened by the shale boom – impact should’ve been triggered –
they’re diversifying to avoid the impact
Fifield 8/1 [August 1, 2013. Anna Fifield is a correspondent for Financial Times. “Shale
potential could alter global trade, says US official” http://www.ft.com/intl/cms/s/0/7c34776c-fac8-11e2-87b900144feabdc0.html#axzz2aq76zudX]
Prince Alwaleed bin Talal, a Saudi Arabian investor, said on Sunday that his country’s oil-dependent economy was
increasingly vulnerable to competition from the US shale revolution. In an open letter addressed to Ali al-Naimi, the Saudi oil
minister, and copied to his uncle, King Abdullah, the prince called on the government to accelerate plans to diversify the
economy. “Our country is facing continuous threat because of its almost total dependency on oil,” he wrote in the letter,
which set him at odds with his country’s oil ministry and Opec officials. Mr Moniz said he had not read the letter, but was familiar with its
premise. He said that logistical challenges could stymie efforts to export gas. “It’s always going to be the case that
the
cost of moving gas relative to its intrinsic value is high, whereas for oil, it’s extremely small,” he said. “So there’s a
fundamental difference when it comes to physics as to why the markets will never be the same in my view.”
Counterplan
Shale Kills Environment
Shale fracking kills the environment – 5 warrants
Brune ’13 [May 29, 2013. Michael Brune is the Executive Director of the Sierra Club. “LNG Exports: The
Wrong Side of History” http://www.huffingtonpost.com/michael-brune/lng-exports-the-wrong-sid_b_3354078.html]
Most Americans have probably heard about the "boom" in natural gas, with U.S. production up by one-third since 2005. Besides historically low
natural gas prices, one consequence is that companies like Exxon Mobil are now pushing the federal government to approve permits for more
than 20 liquefied natural gas (LNG) export terminals. Big fossil fuel's goal is to sell U.S. natural gas overseas, where it can fetch a higher price. Is
that really such a good idea? Future generations will be incredulous that we ever debated the wisdom of increasing LNG exports. The permits that
the Department of Energy is considering would export as much as 45 percent of current U.S. gas production. Once the terminals are built,
trade agreements like the Trans Pacific Partnership currently being negotiated could make it difficult to impossible to
limit how much gas we actually export. The result will be higher domestic prices as well a lot more drilling for natural
gas -- primarily by fracking. So far, the Department of Energy has failed to consider the environmental and health
consequences of such a radical increase in natural gas drilling. They really should, because both the potential risks and the known
harms are enormous. Here are five environmental reasons why LNG exports are a very bad idea: 1. The current shale-gas rush has
already had serious effects on our air quality. As the Department of Energy's own Shale Gas Subcommittee reported:
"Significant air quality impacts from oil and gas operations in Wyoming, Colorado, Utah and Texas are well
documented, and air quality issues are of increasing concern i n the Marcellus region (in parts of Ohio, Pennsylvania, West
Virginia and New York)." Because of natural gas drilling, parts of rural Wyoming now have smog worse than that of
downtown Los Angeles. This air pollution doesn't just spoil the view -- it's been linked to respiratory disease, heart failure,
and premature death. 2. Increased fracking will endanger and further strain increasingly scarce water resources. A
single fracking well can require up to 5 million gallons of water . And because that water is contaminated during the
fracking process, most of it must be considered toxic waste and can never be used for human consumption again.
Meanwhile, contamination of surface and groundwater sources from spills and leaks remains an ever-present risk. 3. Intense
gas production can transform entire regions -- and not for the better. We're talking hundreds of thousands of new wells, along with
a vast infrastructure of roads, pipelines, and support facilities. Pennsylvania's forests have already been decimated by fracking wells -- we
could see that pattern repeated from New York to Monterey. 4. Higher natural gas prices could help revive the fortunes of
the declining coal-fired power industry. At a time when we should be working to move as fast as possible beyond all
fossil fuels, burning more coal is beyond crazy -- it's suicidal. 5. Which brings us to what may be the most important reason of all why
we shouldn't ramp up gas production so we can export LNG: Increased use of any fossil fuel is the wrong move if we want to
limit climate disruption. The International Energy Agency estimates that to have a shot at keeping global warming within a range that is
potentially survivable, we need to keep two-thirds of our known oil, coal, and natural gas reserves in the ground. LNG
export terminals are
the latest example of how the Obama administration's "all of the above" energy approach is misguided and
fundamentally at odds with its stated priority of fighting climate change. How can we justify taking a huge additional
percentage of U.S. fossil fuel reserves and selling them overseas for profit at the expense of countless future generations? Then again, people
once made economic arguments for perpetuating the slave trade and other morally repugnant enterprises. They were profoundly wrong. Let's not
give history a reason to say the same of us.
Shale fracking destroys the environment
NRDC No Date [National Resources Defense Council. “Risky Gas Drilling: Threatens Health, Water Supplies”
http://www.nrdc.org/energy/gasdrilling/]
The oil and gas industry is seeking to expand natural gas production across the nation, as new technology makes it easier to extract gas from
previously inaccessible sites. Over the last decade, the industry has drilled thousands of new wells in the Rocky Mountain region and in the
South. It is expanding operations in the eastern United States as well, setting its sights most recently on a 600-mile-long rock formation called the
Marcellus Shale, which stretches from West Virginia to western New York. Nearly all natural gas extraction today involves a
technique called hydraulic fracturing, or fracking, in which dangerous chemicals are mixed with large quantities of
water and sand and injected into wells at extremely high pressure . Fracking is a suspect in polluted drinking water in
Arkansas, Colorado, Pennsylvania, Texas, Virginia, West Virginia and Wyoming, where residents have reported changes in water
quality or quantity following fracturing operations. NRDC opposes expanded fracking until effective safeguards are in place.
Natural gas producers have been running roughshod over communities across the country with their extraction and
production activities for too long, resulting in contaminated water supplies, dangerous air pollution, destroyed
streams, and devastated landscapes. Weak safeguards and inadequate oversight fail to protect our communities from
harm by the rapid expansion of fossil fuel production using hydraulic fracturing or " fracking." Americans shouldn't have to accept
unsafe drinking water just because natural gas burns more cleanly than coal. Many companies don't play by the rules that do exist
and the industry has used its political power to escape accountability for its actions, leaving the American people
unprotected. And no industry can claim to be part of the solution if it supports exemptions from basic laws designed
to ensure that we have clean water, clean air, and the ability to make our voices heard.
Shale fracking exacerbates greenhouse gas emissions and health problems
Walter ’13 [May 27, 2013. Leighton Walter is a Web Editor and Journalist at Journalist's Resource, Harvard
Kennedy School. “Fracking, shale gas and health effects: Research roundup”
http://journalistsresource.org/studies/environment/climate-change/fracking-shale-gas-health-effects-researchroundup#sthash.XdXFJOy2.dpuf]
Rarely does a new form of energy — shale gas — have such a dizzying range of potential impacts, good and bad. It could significantly
increase America’s level of energy independence and help transition us to a lower-carbon future, but one of its major components,
methane, is a highly potent greenhouse gas. As the journal Nature has reported, research teams continue to find that methane leaks
resulting from the natural gas extraction process pose significant environmental problems. That the United States
has large deposits of shale gas is a blessing for consumers, but exploiting them could have significant environmental and
health impacts, including air and water pollution as well as long-term risks such as cancer and respiratory illnesses.
Even earthquakes have been reported. Part of the risk from shale gas comes from how it’s extracted: Hydraulic fracturing
— better known as fracking — involves drilling down vertically through hundreds of feet of rock and then horizontally through the shale bed.
Millions of gallons of rock, sand and chemicals are then pumped down under high pressure to “frack” the shale bed, releasing
the natural gas trapped within it. But in drilling down to the deposits, wells often pass through aquifers that provide water
to communities, plants and wildlife on the surface. Leakage of shale gas into water supplies isn’t supposed to happen, but reports
may indicate otherwise. And while the surface impacts of natural-gas extraction are nothing compared to, say, mountaintop removal coal mining,
they can be considerable, and deposits’ location frequently magnifies the problem — for example, the Barnet Shale, one of the
richest in the U.S., underlies the entire Dallas-Fort Worth metropolitan area. Residents often have little say over how gas wells are
run, even those on their own property, and truck traffic can be considerable as water is trucked in and waste trucked out . And
as droughts intensify, concerns rise over the massive quantities of water required to extract for hydraulic fracturing .
In February 2013, the EPA reported that petroleum and natural gas systems, including fracking, constituted the second largest sector
in terms of greenhouse gas emissions. (See EPA’s interactive map to locate these facilities.)
Random/Useless
Reuters 4/23 [April 29, 2013. Reuters. “UPDATE 1-U.S.-Mexico deal on expanded Gulf oil drilling still in
limbo” http://uk.reuters.com/article/2013/04/29/usa-mexico-oil-idUKL2N0DG1MR20130429]
To finalize the deal, Congress needs to pass legislation that gives the Interior Department the authority it needs to implement the technical aspects
of the agreement. But in the Senate last year, dissension over an unrelated Law of the Sea treaty and the heated politics of the
U.S. presidential election effectively put the deal on hold. In the waning days of the last Congress, Democrats in the Senate thought
they had found a vehicle to move the bill, but they were foiled by procedural objections, said former Senator Jeff Bingaman, a Democrat who at
the time was the chairman of the Senate Energy Committee. The administration has sent its proposed text to the Republican-led House of
Representatives, which is in favor of expanded oil drilling. Lawmakers from two House committees, natural resources and foreign affairs,
promptly crafted a bill. "It was the administration that failed until five weeks ago to give us the guidance that we needed
to implement the language," said Doug Lamborn, a Republican congressman from Colorado, at a House natural resources
hearing with administration officials last week. In a new twist, the bill includes a measure that would exempt U.S. oil companies
drilling in the area from certain disclosure rules that were part of the 2010 Dodd-Frank financial reform law. Those
disclosures are strongly backed by the White House and Democratic senators. "This small waiver will ensure that enacting
this agreement will create jobs, lower energy prices, and make America more energy independent," said Doc Hastings, the Republican chairman
of the House Natural Resources Committee. Aimed at curbing corruption, the rules require oil and mining companies to report payments to any
foreign government to the Securities and Exchange Commission. Oil and business lobby groups are fighting the rules in court. Interior and State
Department officials did not directly comment on the provision at a hearing last week, saying only that the administration wants to work
with the House on details of the bill so that the deal can be in place in time for the next sale of drilling leases for the
Gulf, expected to be held in August. Bingaman said the exemption "complicates things significantly" for quick passage
of the bill. "They've added in some things that are going to make it difficult to pass in that form," he said, referring to the
exemption. Last week, the Senate energy committee quietly filed a one-page bill reflecting the administration's suggested
language, word for word, with no mention of the disclosure exemption. The timing of next steps is unclear. " It would really be
unfortunate if that process proved to be a protracted one," said Michael Bromwich, Obama's former U.S. offshore drilling regulator, who helped
negotiate the deal. "There's no purpose that's served by further delaying."