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Mexico Hydrocarbons Neg
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On-Case
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Uniqueness Neg
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Status Quo Solves – Hydrocarbon Coop
Mexico and the United States are already working together on oil
Kappler, Associated Press, 12
[Bradley, 2-20-2012, Huffington Post, “U.S., Mexico Agree To Cooperate On Energy,”
http://www.huffingtonpost.com/2012/02/20/us-mexico-agree-to-cooper_n_1288976.html, accessed 623-13, MSG]
United States and Mexico agreed Monday to work together when drilling for oil and gas below their
maritime border in the Gulf of Mexico.
Secretary of State Hillary Rodham Clinton and Mexico's foreign minister signed the deal at a ceremony
in the Mexican resort of Los Cabos as Mexican President Felipe Calderon and U.S. Interior Secretary
Ken Salazar looked on.
The cooperation stems from an understanding that President Barack Obama and Calderon reached in
2010 to share in the profits and work together to avoid spills.
Clinton said the deal would "ensure safe, efficient, responsible exploration of the oil and gas
reservoirs in the Gulf of Mexico."
"These reservoirs could hold considerable reserves that would benefit the United States and Mexico
alike," she said.
But they don't necessarily stop neatly at our maritime boundary," Clinton added. "This could lead to
disputes if a company discovers a reservoir that straddles the boundary – disputes, for example, over
who should do the extraction and how much they should extract."
Clinton said the agreement will prevent such disputes and create new business opportunities.
Calderon said the deal creates clear rules and should erase any fear among Mexicans that their oil will
be appropriated by Americans.
And he stressed that "operations will be done in a safe and responsible manner, with full respect to
the environment."
Under the agreement, U.S. companies will now be allowed to partner with Mexico's national oil
company in drilling. But neither country is constrained by the other.
If the two governments can't agree on how to exploit a reservoir, either can take its share unilaterally.
The U.S. Interior Department said the agreement makes nearly 1.5 million acres of the U.S. Outer
Continental Shelf more accessible for exploration and production activities.
The area could contain 172 million barrels of oil and 304 billion cubic feet of natural gas, it said.
"This is an area larger than the state of Delaware," Salazar said.
Status quo solves – hydrocarbon work already exists
Klapper, Associated Press, 12
(Bradley, A reporter on the State Department for the Associated Press, 2/20/12, The Huffington
Post, “U.S, Mexico Agree To Cooperate on Energy,”
U.S., Mexico Agree To Cooperate On Energy,” http://www.huffingtonpost.com/2012/02/20/us-mexicoagree-to-cooper_n_1288976.html, Accessed: 6/23/13, LPS.)
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Clean Energy and Climate Change: President Obama and President Calderón reaffirmed the strong
commitment of both the United States and Mexico to combat global climate change and create
markets for clean energy technologies. President Obama applauded President Calderón’s leadership on
the successful outcome of the climate negotiations in Cancún, including the creation of the Green
Climate Fund, a new multilateral vehicle to deliver financing to address climate change mitigation and
adaptation in developing countries. The United States strongly supports Mexico’s ongoing leadership in
this area. The Presidents agreed to work together this year to implement the other major agreements
reached in Cancún, including on transparency, technology, adaption, and forest preservation. The
leaders welcomed the achievement of significant milestones under the Bilateral Framework on Clean
Energy and Climate Change, including plans for cooperation on mapping of wind resources in Mexico,
and wind turbine testing and design. Mexico and the United States continue to work together, with
Canada, to complete by April 2012 a North American Carbon Storage Atlas under the North American
Carbon Atlas Partnership (NACAP). President Calderón and President Obama noted progress on the
Cross Border Electricity Task Force to promote a bilateral renewable energy market, increase grid
reliability and resiliency, and make energy use more efficient in both countries. Transboundary Energy
Negotiations: Today, President Obama and President Calderón reaffirmed the desire of the United
States and of Mexico to conclude an agreement on transboundary reservoirs. In May 2010, the
Presidents issued made a joint commitment to the safe, efficient, and equitable exploitation of
transboundary reservoirs with the highest degree of safety and environmental standards, and the two
governments began work on a transboundary agreement. The two leaders have acknowledged the
energy security benefits to both countries of responsible stewardship and development of these
resources and the high level of significance of completing such an agreement for both countries.
President Obama and President Calderón both reiterated their commitment to conclude these
negotiations by the end of 2011.
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Status Quo Solves – US Hydrocarbon Leadership Now
Advantage is non-unique – US is already the leading hydrocarbon producer
Mills, Adjunct Fellow, Manhattan Institute, 12
(Mark P. is an adjunct fellow of the Manhattan Institute and founder and CEO of the Digital Power
Group, a tech-centric capital advisory group. He was the cofounder and former chief tech strategist for
Digital Power Capital, a boutique venture fund. Mills cofounded and served as chairman and CTO of ICx
Technologies, helping take it public in a 2007 IPO. He is a member of the advisory council of the
McCormick School of Engineering and Applied Science at Northwestern University and serves on the
board of directors of the Marshall Institute., 7/1/12, The Manhattan Institute for Policy Research,
“Unleashing the North American Energy Colossus: Hydrocarbons can Fuel Growth and Prosperity,”
http://www.manhattan-institute.org/html/pgi_01.htm, Accessed: 6/24/13, LPS.)
The United States, Canada, and Mexico are awash in hydrocarbon resources: oil, natural gas, and coal.
The total North American hydrocarbon resource base is more than four times greater than all the
resources extant in the Middle East. And the United States alone is now the fastest-growing producer
of oil and natural gas in the world.¶ The recent growth in hydrocarbons production has already
generated hundreds of thousands of jobs and billions in local tax receipts by unlocking billions of
barrels of oil and natural gas in the hydrocarbon-dense shales of North Dakota, Ohio, Pennsylvania,
Texas, and several other states, as well as the vast resources of Canada’s oil sands. ¶ It is time to
appreciate the staggering potential economic and geopolitical benefits that facilitating the
development of these resources can bring to the United States . It is no overstatement to say that jobs
related to extraction, transport, and trade of hydrocarbons can awaken the United States from its
economic doldrums and produce revenue such that key national needs can be met—including renewal
of infrastructure and investment in scientific research.
US is already poised to become a major hydrocarbon exporter
National Center for Policy Analysis, 5/13
(National Center for Policy Analysis, 5/31/13, National Center for Policy Analysis, “New Global Energy
Leader: The United States,” http://www.ncpa.org/sub/dpd/index.php?Article_ID=23232, Accessed:
6/25/13, LPS.)
In the last few years, the United States has blown past Russia to become the world's largest producer
of natural gas, and America will shortly occupy the number one position in oil production as well. The
United States is poised to become a major hydrocarbon exporter to an energy-hungry world, says
Mark Mills, a senior fellow at the Manhattan Institute.
There are concerns that the new U.S. position on the world energy stage has major downsides. Notably,
we're told that this radical change could destabilize many of the world's fragile hydrocarbon exporters,
from Russia to Nigeria and from Venezuela to the Middle East. These experts warn that the loss of oil
revenue will cause shockwaves in countries that have increased spending (and mischief making) on the
prospect of eternally selling $100 per barrel oil to the world, especially to America.
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U.S. energy abundance is an unalloyed good for the American economy. The United States can start
eviscerating its whopping $750 billion a year trade deficit, which rivals the combined deficits of the
next 30 largest nations. It is a terrible drag on U.S. growth. And 40 percent of our deficit comes from
just one import: oil.
We can now eliminate those costs by:
Status quo solves – increased supply
Mills, Adjunct Fellow, Manhattan Institute, 12
(Mark P. is an adjunct fellow of the Manhattan Institute and founder and CEO of the Digital Power
Group, a tech-centric capital advisory group. He was the cofounder and former chief tech strategist for
Digital Power Capital, a boutique venture fund. Mills cofounded and served as chairman and CTO of ICx
Technologies, helping take it public in a 2007 IPO. He is a member of the advisory council of the
McCormick School of Engineering and Applied Science at Northwestern University and serves on the
board of directors of the Marshall Institute, 6/3/13, National Review Online, “Unleash the Energy-Export
Revolution,” http://www.nationalreview.com/node/349931, Accessed: 6/26/13, LPS.)
Liquefied-natural-gas exporters are eager to capitalize on the U.S.’s ridiculously abundant supply.
Consider: Since 2010, U.S. natural-gas production from the three major shale fields has risen 250
percent. In order to sell some of that abundance to eager overseas buyers, exporters must spend
billions of dollars on enormous facilities to supercool and liquefy the gas so it can be carried on ships.
The DOE’s decision to grant the second permit ever for that activity was met with cautious praise,
especially by those hoping for more permits to dribble out.
Congressional hearings and government and private studies have parsed the economic benefits of
exporting natural gas, as have innumerable articles and blogs. But this whole controversy is based on
outdated laws and assumptions.
The DOE’s control over natural-gas exports — and the Department of Commerce’s over crude oil —
comes not from some fundamental constitutional principle, but from legislation that dates back to 1938
and 1975. The underlying motivation then was a misconception about the imminent exhaustion of
domestic oil and natural-gas resources (this outdated idea is still cherished by some — call them
“clingers”).
Status quo solves- US is already investing over $150 Billon in the foreign investment of
hydrocarbons alone- and we’re on the track to cumulative $5 Trillion
National Center for Policy Analysis, 5/13/13
(National Center for Policy Analysis, 5/31/13, National Center for Policy Analysis, “New Global Energy
Leader: The United States,” http://www.ncpa.org/sub/dpd/index.php?Article_ID=23232, Accessed:
6/25/13, LPS.)
Doing everything possible to encourage yet more production of hydrocarbons to cut imports.
Using cheap domestic fuel to manufacture and export more energy-intensive products like chemicals
and fertilizers.
Joining the small club of crude oil and natural gas exporting nations.
The problem with the last deficit-killing strategy is that exporting American natural gas or crude oil is
illegal.
A 1975 law prevents crude oil exports, with only rare exceptions.
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Last year the United States became a net exporter of gasoline and diesel; exporting refined
petroleum products is permitted. Oil in the heartland sells up to $40 below world prices, but cannot be
exported to willing buyers.
The American energy sector is on track over the coming 10 years to see private investments reach a
cumulative $5 trillion -- without subsidies or taxpayer assistance. It makes no sense to restrain this
sector. T he past four years alone have seen $150 billion of foreign investment in U.S. hydrocarbon
domains. No government stimulus or infrastructure investment begins to match this scale of private
activity. Imagine if, instead of constrained, it were encouraged.
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Natural Gas Answers
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Pipelines – Status Quo Solves
Status quo solves pipeline capacity
Platts, benchmarking firm for the commodities market, 2/8/13
(Platts is a leading global provider of energy, petrochemicals, metals and agriculture information, and a
premier source of benchmark price assessments for those commodity markets. Since 1909, Platts has
provided information and insights that help customers make sound trading and business decisions and
enable the markets to perform with greater transparency and efficiency, “US gas export capacity to
Mexico could more than double, report says”, accessed 6-26-13, http://www.platts.com/latestnews/natural-gas/Houston/US-gas-export-capacity-to-Mexico-could-more-than-6133846, RRR)
Several new pipeline systems designed to move US natural gas supplies to Mexican demand centers
could add up to 4.8 Bcf/d of US export capacity into Mexico by 2015, Goldman Sachs said in a report
released Friday.
The increasing exports will continue to help reduce the oversupply of natural gas in the United States
going forward, the report said.
US exports into Mexico have been growing in recent years in response to a boost in Mexican demand
spurred by economic growth and increased gas-fired power generation.
In terms of US/Mexico cross-border points, existing capacity is close to 3 Bcf/d for flows into Mexico,
according to the Mexican government's Secretaria de Energia, the report said.
Close to 1.6 Bcf/d of the capacity is in South Texas, another 800,000 Mcf/d is in southern California,
with the rest split between Arizona at 400,000 Mcf/d and West Texas at 200,000 Mcf/d.
However, actual flows from the US into Mexico averaged just 1.7 Bcf/d in 2012, in part because of
constraints on the Mexican side of the border, Goldman Sachs said.
Three major pipeline projects south of the border approved by the Mexican government will allow
more gas to reach downstream demand centers.
Current US-Mexico natural gas lines are under-utilized
Munoz-Melendez, Imperial College Department of Earth Science and Engineering
Professor et al 12
[Gabriela, Margarito Quintero-Núñez, University of Baja California School of Engineering Professor, Al
Sweedler San Diego State University International Programs Vice President, “The US-Mexican Border
Environment: Progress and Challenges for Sustainability”, p. 291,
http://www.scerp.org/pubs/m16/Chap.%206,%20Ojeda-Revah%20and%20Brown%20145-186.pdf,
6/24/13, ALT]
Mexico and the U.S. have 15 interconnection points with a maximum distribution capacity of 3,349
million cubic feet per day (MMcf/d) for importation to Mexico. Eight of these interconnections are not
connected to the Mexican national grid of natural gas. In Tamaulipas, the Kinder Morgan, Tetco, and
Tennessee gas pipelines (connected to the national grid) are bidirectional and capable of exporting a
maximum gas volume of 750 MMcf/d to southern Texas. During 2007, total imports were 844 MMcf/d,
while exports reached 139 MMcf/d; both exports and imports used the gas pipelines located at the
border region (SENER 2008a). Regarding the use of interconnections, in 2007, for the third year in a
row, the interconnections of Gulf Terra and Tetco (for imports) were not used. The Tijuana gas
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pipeline has not been used since 2002, as Baja California is using the Algodones gas pipeline for
imports (see Table 1 and Figure 1).
Status quo solves—Privates already constructing cross border pipeline.
Thornock, Investor Relations Journalist, 12
(Mindy Mills Thornock and Kinder Morgan Energy Partners, November 14, 2012, Yahoo Finance, “Kinder
Morgan’s El Paso Natural Gas Pipeline Signs Long-Term Contract to Serve Customers in Mexico,”
http://finance.yahoo.com/news/kinder-morgan-el-paso-natural-170000543.html, accessed June 30,
2013, EK)
El Paso Natural Gas (EPNG), owned by Kinder Morgan Energy Partners, L.P. (KMP) and Kinder Morgan,
Inc. (KMI), has entered into a 25-year transportation precedent agreement in connection with plans to
build a new pipeline to serve customers in Mexico. Terms call for EPNG, acting through its affiliate
Sasabe Pipeline Company, to initially provide approximately 200 million cubic feet per day of firm
transportation capacity via a new, 60-mile, 36-inch diameter lateral pipeline that would extend from
EPNG’s existing south mainlines, near Tucson, Ariz., to the U.S.-Mexico border, terminating at Sasabe,
Ariz. The proposed Sasabe Pipeline would interconnect via a new international border crossing with a
36-inch diameter natural gas pipeline to be built in Mexico.
According to Mark Kissel, president of Kinder Morgan’s Natural Gas Pipelines West Region, this natural
gas infrastructure project would benefit both the United States and Mexico. “This agreement supports
the ongoing development of the approximately $200 million Sasabe Lateral pipeline, which would
create new jobs in Arizona, and also provide a market for transporting abundant, low-priced U.S. gas
production to Mexico. In addition, the project will help Mexico meet its environmental goals of
converting existing fuel-oil-fired power generation plants to efficient, clean burning natural gas and
also having natural gas supplies available for new plants in the future.”
Status quo solves pipelines
U.S. Energy Information Administration 6-20-13 (Pork Network, “FERC approves operation of
natural gas export pipeline to Mexico” http://www.porknetwork.com/pork-news/FERC-approvesoperation-of-natural-gas-export-pipeline-to-Mexico-212391471.html?view=all accessed 6-30-13 KR)
The United States later this summer will add close to 10% to its natural gas export capacity to Mexico
following the June 14 approval of a 0.37 billion cubic feet per day (Bcf/d) pipeline that crosses the
border at a point in far western Texas. The Federal Energy Regulatory Commission approved a request
by Kinder Morgan's El Paso Natural Gas Co. to begin operations on the export pipeline that crosses the
border from El Paso County, Texas.
Norte Crossing is one of several natural gas pipeline export projects planned through the end of 2014,
which together could add up to 3.3 Bcf/d of additional export capacity to Mexico—almost doubling
the 2012 U.S. export capacity to Mexico of 3.8 Bcf/d. U.S. exports of natural gas to Mexico have
increased by 0.34 Bcf/d from March 2012 to March 2013, and now average 1.81 Bcf/d. The highest
year-on-year increases in monthly export volumes to Mexico between 2012 and 2013 have come from
three pipeline crossings immediately to the south of the Eagle Ford Shale play in the Western Gulf
Basin of South Texas. The Norte Crossing differs in that it is located in the Permian Basin in West Texas.
Mexico has increasingly relied on pipeline gas imported from the United States because its natural gas
consumption has risen faster than production. Much of the increased consumption is the result of the
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country's plans to add 28 gigawatts of new electric generating capacity between 2012 and 2027. Norte
Crossing will interconnect with the 0.85 Bcf/d Chihuahua Corridor pipeline in Mexico, scheduled for
completion this summer, according to Mexican government reports. This corridor will increase natural
gas supply to electric generation facilities in Chihuahua and the neighboring states of Durango and
Coahuila.
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Development – Long Time Frame
Plan takes too long
Stratfor Global Intelligence, 6/13
(Stratfor Global Intelligence, 6/13/13, “Mexico Builds Out its Natural Gas Pipeline Network,”
http://www.stratfor.com/analysis/mexico-builds-out-its-natural-gas-pipeline-network, Accessed:
6/29/13, LPS.)
Mexico's Federal Electricity Commission has called for the construction of natural gas-fired power
plants by 2024 to generate an additional 14,235 megawatts. Since Mexico's current capacity is 52,211
megawatts, this would represent a significant jump that would require an additional 100 million cubic
meters of natural gas per day to operate, conveniently provided by the new pipelines. Once
operational, the three pipelines will reduce pressure on Pemex to increase natural gas production,
freeing the company to focus attention on boosting upstream oil production. Even if Mexico makes
progress in reforming its energy sector, it would be years before the country could provide enough
natural gas domestically to satisfy growing demand. Barring a massive technological development or
a glut in global liquefied natural gas supplies that leads to a significant drop in the price of liquefied
natural gas, Mexico will continue to look to the north to meet its growing demand for cheap,
pipelined energy.
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No Solvency – Pemex Says No
Any type of investment in shale fields needs permission from PEMEX- which won’t be
granted
Rosenberg, Reuters news reporter 12
(Mica, Reuters, “Analysis: Mexico in no rush to exploit shale oil bonanza” Mon Feb 27, 2012 3:17pm EST,
http://www.reuters.com/article/2012/02/27/us-mexico-shale-idUSTRE81Q20Q20120227, accessed June
30, 2013, QDKM)
(Reuters) - Mexico may be sitting on a vast untapped reserve of shale oil just south of the Rio Grande,
but state monopoly Pemex is showing little urgency to exploit their share of the bounty.
While U.S. energy companies are racing to drill more wells in the oil-rich Eagle Ford shale play that
geologists say extends well south of the border, Mexican energy officials and Pemex executives appear
unrushed.
Mexico has the world's fourth-largest reserve of shale gas, according to the U.S. Energy Information
Administration, in deposits that can contain rich pockets of both natural gas and more profitable oil. But
Mexico has not yet quantified the scale of its resources.
"We don't have an estimate for shale oil," Pemex's head of exploration and production Carlos Morales
said in an interview. "We are hoping by the end of the year we will have a clearer idea of where the
resources are, how big they are and their quality."
But with a spending plan still focused on probing deeper into the Gulf of Mexico's conventional oil
fields, Pemex has little time or money left for onshore shale.
It has drilled one well so far and plans to drill another 175 wells by 2015 in the entire country, while last
year alone Texas issued 2,828 drilling permits just for Eagle Ford.
The county's new energy minister Jordy Herrera has set his sights on shale gas, not oil, even though
north-of-the-border companies have found more liquids than vapor. But drilling for gas is a hard sell at a
time when U.S. prices have slumped to a 10-year low. Imports may be politically unpopular, but they are
cheap.
And even when Pemex does wake up to the potential, it will face a cruel fact: the border state of
Coahuila where the most promising shale is found is one of Mexico's driest areas and water may be too
scarce to use thousands of gallons per well in the extraction process known as "hydraulic fracturing."
So for the moment, and likely for the next several years, Mexico's energy industry, will watch from
afar as a shale revolution sweeps across the United States.
"Politically and practically (Mexico is) just not ready to get into this. It's clear they have to find shale oil,
that has increasingly become the case in the United States," said Mexico-based energy analyst David
Shields.
More than a dozen new onshore shale fields are expected to raise U.S. domestic crude output by more
than 20 percent over the next decade.
Those kinds of returns are tempting for Mexico, which relies on oil to fund around a third of its
government budget and frets over a dramatic drop in crude production at its largest, traditional fields.
The world's No. 7 oil producer has seen output drop to around 2.55 million barrels per day (bpd) from a
peak of 3.4 million bpd in 2004.
But the lumbering state oil monopoly Pemex is a very different operator from the small, private
companies drilling in the United States and will have a hard time being limber enough to go after
unconventional resources.
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No Solvency – Siphoning
US trade causes siphoning- that leads to the loss of billions of dollars
Goforth, international political economy professor at Coastal Carolina University, 11
(Sean, teaches international political economy at Coastal Carolina University and blogs on Latin America
for the Foreign Policy Association, World Politics Review, “Latin America Narco-Traffickers Diversify,
Again: Part II,” http://www.worldpoliticsreview.com/articles/8461/latin-americas-narco-traffickersdiversify-again-part-ii, Accessed: 6/30/13, LPS.)
All too often things don't go that well. Human rights groups and a variety of media outlets have reported
that untold numbers of migrants disappear every year in Mexico. Last August a group of 72 migrants
were shot on a ranch in the state of Tamaulipas; the sole survivor was a 19-year-old Ecuadorian who
played dead after being shot twice. He told authorities that before pulling the trigger on the U.S.-bound
migrants, the murderers first tried to recruit them into the drug gang known as the Zetas, offering to pay
them $2,000 a month. ¶ The rising pressure on migrants is as much an act of desperation for some drug
gangs as it is a tactic to diversify revenue. Like the FARC in Colombia, Mexico's criminal gangs have been
pushed out of their traditional sources of illicit income and are seeking to coopt an otherwise legal
trade. Whereas the FARC has moved into illegal gold mining as a new source of revenue, Mexico's
criminal gangs have been increasingly linked to thefts of Mexico's key export, oil. In general, oil is
pilfered by tapping an unprotected pipeline in the desert. Last year Pemex, Mexico's state-owned oil
monopoly, detected 712 pipeline taps, a five-fold increase since 2005. ¶ Here, too, the Zetas have left
their mark. In 2009 the Mexican government broke up an operation linked to the Zetas suspected of
stealing $46 million worth of oil in the previous two years. A U.S.-Mexican probe in 2010 put the amount
of income generated by the Zetas from stolen oil at $42 million over the past two years, on par with the
group's estimated revenue from drug sales.¶ Broader estimates of Mexico's stolen oil vary widely. Pemex
puts its losses at less than 1 percent of its total oil production. But given that it exported more than
$100 billion in oil to the United States alone in 2010, that could still amount to more than a billion
dollars. Private energy analysts, meanwhile, put the figure between $2 billion and $4 billion annually.
They point out that the government has been slow to come to grips with the extent of pipeline tapping
given the pressing demands of the raging drug war. Whatever the figure, few doubt the conclusion of
the Mexican attorney general's office: Hundreds of millions of dollars from oil theft are going toward
the wrong side in the drug war.
US engagement causes siphoning
Goforth, international political economy professor at Coastal Carolina University, 11
(Sean, teaches international political economy at Coastal Carolina University and blogs on Latin America
for the Foreign Policy Association, World Politics Review, “Latin America Narco-Traffickers Diversify,
Again: Part II,” http://www.worldpoliticsreview.com/articles/8461/latin-americas-narco-traffickersdiversify-again-part-ii, Accessed: 6/30/13, LPS.)
In one important way, pipeline tapping in Mexico resembles illegal gold mining by the FARC and other
groups in Colombia: Oil and gold are legally traded commodities, so illicitly procured supplies are
virtually indistinguishable from legally generated production once they are reintroduced into the
market. But while it is easy to sell flecks, nuggets or even bars of gold without rousing suspicion,
hawking gas is more of a chore. For this reason, bandits are suspected of unloading much of their oil at
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half-price within Mexico. Selling the tapped oil to Pemex franchise stations is another tactic. Most
ambitious of all are attempts by some to broker deals to transfer the gas to the U.S. Since 2009, a
handful of American businessmen have been indicted for buying stolen gas condensate from Mexico
for resale in the States.
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AT – Natural Gas Solves Energy Security
Natural gas doesn’t solve energy security, and also causes warming
Dyer, freelance journalist, 1/3/13
(Gwynne, 1/3/13 “Natural Gas Fables and Energy Independence Myths”,
https://www.commondreams.org/view/2013/01/03-10, accessed: 6-30-13, IGM)
In that case, the prediction that the United States will be the world’s biggest oil producer by 2017 is
nonsense. Even on an ultra-optimistic estimate of how much “unconventional oil” it can eventually get
out of the shale formations, it will still be importing a large proportion of its oil in 2035.
At the peak of U.S. oil production, in 1970, it produced 10.6 million barrels per day. It currently produces
9.6 million barrels per day, and consumes 21 million bpd. It is preposterous to argue that it can close
that gap by coming up with another 11 million bpd of unconventional oil at an economically viable
price.
“Energy independence”, if it ever comes to the United States, is likelier to come from a combination of
conservation measures (like President Obama’s regulation that will almost double the fuel efficiency of
American-built cars by 2016) and an increased emphasis on renewables (wind, solar, etc.).
And the whole Middle Eastern business is a red herring, because the United States does not depend
heavily on Middle Eastern oil. Most US oil imports come from the Western hemisphere (Canada,
Mexico, Venezuela) or from Africa (Nigeria, Algeria, Angola). Only 15 percent of its oil comes from Saudi
Arabia, Iraq and Kuwait, and virtually none from anywhere else in the Gulf. Whatever America’s various
wars in the region may have been about, they were not about “security of oil supply.”
Which leaves the business about shale gas and oil pushing the world’s greenhouse gas emissions over
the top. They can’t do that, because we are ALREADY over the top. We need only continue on our
present course, without any growth in “unconventional” oil and gas production, and we will be
irrevocably committed to 2 degrees C of warming (3.5 degrees F) within ten years. Within 25 years we
will be committed to +4 degrees C (7 degrees F).
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No Regional Gas Market
No natural gas spread in Latin America
Bailey, managing partner of Energy Narrative, 13
(Jed, managing partner of Energy Narrative, a research and consulting group focused on Latin America's
energy sector based in Cambridge, Mass. His research has been widely quoted in publications ranging
from the Economist and Financial Times to the Iran Daily, and he has appeared on Bloomberg Television
and CNN International, 3/5/13, World Politics Review, “Shale and Beyond: The Next Phase of Latin
American Energy Integration,” http://www.worldpoliticsreview.com/articles/12761/shale-and-beyondthe-next-phase-of-latin-american-energy-integration, Accessed: 6/30/13, LPS.)
The past two decades have demonstrated how quickly the physical, economic and political drivers for
energy integration can change. Today’s expectations for the path forward are no different. Concerns
regarding the environmental effects of shale gas production could curtail its development in one or
more countries, putting some integration projects at risk and supporting others as the regional natural
gas supply equation shifts. Economic growth also remains fragile; a new crisis would slow energy
demand growth and potentially derail support for trade liberalization. A final unknown includes climate
change policies and whether they will treat natural gas as a beneficial, low-carbon transition fuel, or
as a dangerous distraction, giving a false sense of security while making zero-carbon energy
development more difficult.¶ In this state of uncertainty, flexibility and an adaptive approach -- whether
to executing a project, developing corporate strategy or designing country policies -- can provide the
best defense against future change. Continuously testing biases and assumptions to ensure they still
hold true can give early warning of shifting conditions, providing time to adjust to the new landscape
even as it unfolds.
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Natural Gas Bad – Warming
Natural Gas usage causes climate change
Curwood, Award-winning Environmental News Journalist, 6/21/13
(Steve Curwood, June 21, 2013, PRI: Public Radio International, “Environmentalists call for greater
attention to methane leaks, to fight climate change,”
http://www.pri.org/stories/science/environment/environmentalists-call-for-greater-attention-tomethane-leaks-to-fight-climate-change-14166.html, June 29, 2013, EK)
While natural gas is less polluting than coal, it still pollutes, and its main ingredient, methane, often
leaks from wells and pipelines. Eileen Claussen, former assistant secretary of state and now president
of the C2ES, says switching away from coal to natural gas is unquestionably a benefit — but it's not
some solve-all.
"Natural gas is a fossil fuel and burning it does result in greenhouse gas emissions," she said.
And when it comes to methane, it's often leaked out of pipelines and wells — not in huge amounts,
but at rates concerning, she says, because methane is an especially potent greenhouse gas.
"One of the challenges is to make sure there are virtually no leaks of methane as we move natural gas to
the power plant, to the home, to the manufacturing facility," Claussen added.
To date, though, there's been only limited research on where methane leaks come from — fracking, for
example, may lead to methane leaks, but it's not proven — but Claussen said researchers are finally
started to look into it.
"Then we can apply the technological solutions that we know work to wherever those leaks are or could
be," she added.
As it stands, its estimated just 1.5 percent of of methane leaks, but that's still a problem, in part because
methane is released a number of other ways as well. For example, methane is released by landfills and
even by cows.
"Methane is a very potent greenhouse gas with a relatively short lifetime," Claussen said. "It’s more
potent than carbon dioxide, but carbon dioxide lives in the atmosphere much longer. So if you want to
make short term gains in addressing greenhouse gas emissions, dealing with methane is really
important."
Even if methane emissions disappear quickly, the warming caused in the transition
period would cause irreversible damage
Chameides, Duke’s Nicolas School Environment professor 12
(Bill, Dean, and Nicholas Professor of the Environment, Division of Earth & Ocean Sciences, PhD, Yale
University, MS, Yale University, BA, SUNY Binghamton 7/20/12, his personal website, “Natural Gas: A
Bridge to a Low-Carbon Future or Not?”, http://blogs.nicholas.duke.edu/thegreengrok/natgas-cathlesjuly2012/, accessed 6/30/13, JZ)
Cathles’s point about the transient effects of methane fugitive emissions is well taken. But there is a
potential catch and it relates to short-term climate effects. During the transition period, when fugitive
methane from using natural gas would build up in the atmosphere, there is a possibility, depending
upon the magnitude of the methane emissions, that we would experience more short-term warming
than if we were to have stuck with coal and oil. We might think of this as the transient version of the
Howarth argument.
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Now, as long as the fugitive emissions are small or the Earth system is “reversible,” the transient
Howarth scenario does not seem all that worrisome. But what if the emissions are large? And what if
the disturbances from global warming are not reversible? Then we would have a problem. The
transition to natural gas would lead to more warming for a period of time until natural gas is phased out
and the excess methane is removed from the atmosphere. With the exit of the excess methane, the
extra warming would also go away. Cathles seems to argue that all would be well:
“Even when methane leakage is so large (L = 10% of consumption) that substituting gas for coal and oil
increases global warming in the short term, the benefit of gas substitution returns in the long term.”
But it is not all that obvious that the impacts from global warming are reversible. If fragile ecosystems
like coral reefs are decimated by a decade or two of extra methane-induced warming, can we be sure
that they will recover once the methane is flushed from the atmosphere? Probably not.
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Pipelines Bad – Biodiversity
Natural gas pipelines destroy local biodiversity.
Slonecker et al., US Geological Survey Research Geographers, 12
(E.T. Slonecker, L.E. Milheim, C.M. Roig-Silva, A.R.Malizia, D.A. Marr, and G.B. Fisher, September 5, 2012,
U.S. Geological Survey, “Landscape Consequences of Natural Gas Extraction in Bradford and Washington
Counties, Pennsylvania, 2004–2010,” http://pubs.usgs.gov/of/2012/1154/of2012-1154.pdf, June 29,
2013, EK)
Fragmentation of forest and habitat is a primary concern resulting from current gas development.
Habitat fragmentation occurs when large areas of natural landscapes are intersected and subdivided
by other, usually anthropogenic, land uses leaving smaller patches to serve as habitat for various
species.
As human activities increase, natural habitats, such as forests, are divided into smaller and smaller
patches that have a decreased ability to support viable populations of individual species. Habitat loss
and forest fragmentation can be major threats to biodiversity, although research on this topic has not
been conclusive (With and Pavuk, 2011).
Although many human and natural activities result in habitat fragmentation, gas exploration and
development activity can be extreme in their effect on the landscape. Numerous secondary roads and
pipeline networks crisscross and subdivide habitat structure. Landscape disturbance associated with
10shale-gas development infrastructure directly alters habitat through loss, fragmentation, and edge
effects, which in turn alters the flora and fauna dependent on that habitat. The fragmentation of
habitat is expected to amplify the problem of total habitat area reduction for wildlife species, as well
as contribute towards habitat degradation. Fragmentation alters the landscape by creating a mosaic of
spatially distinct habitats from originally contiguous habitat, resulting in smaller patch size, greater
number of patches, and decreased interior to edge ratio (Lehmkuhl and Ruggiero, 1991; Dale and
others, 2000). Fragmentation generally results in detrimental impacts to flora and fauna, resulting from
increased mortality of individuals moving between patches, lower recolonization rates, and reduced
local population sizes (Fahrig and Merriam, 1994). The remaining patches may be too small, isolated,
and possibly too influenced by edge effects to maintain viable populations of some species. The rate of
landscape change can be more important than the amount or type of change because the temporal
dimension of change can affect the probability of recolonization for endemic species, which are typically
restricted by their dispersal range and the kinds of landscapes in which they can move (Fahrig
and Merriam, 1994).
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Pipelines Bad – Cyber Terrorism Turn
Pipelines encourage Chinese Cyber terrorism—puts U.S. over the edge.
International Business Times, 13
(Angelo Young, February 28, 2013, International Business Times, “Cyberspies, Perhaps Operating In
China, Infiltrated US Natural Gas Network: Such Cybercrime Poses More Than Virtual Threat, It’s
Kinetic,” http://www.ibtimes.com/cyberspies-perhaps-operating-china-infiltrated-us-natural-gasnetwork-such-cybercrime-poses-more, accessed June 30, 2013, EK)
The U.S. Department of Homeland Security suspects that China is behind nearly two dozen attempts
to obtain sensitive information from natural gas pipeline companies, which it says could be used
potentially not just to disrupt operations but also to blow up key parts of the nation's infrastructure.
The latest revelation is an example of how the U.S. government is attempting to take the lead in
establishing cyber-warfare doctrines that include coordinating security measures with universities and
strategically important industries -- especially the energy and transportation industries -- to thwart
potentially harmful attacks by foreign governments or terrorists.
Between December 2011 and June 2012, hackers targeted 23 natural gas companies, which led to the
theft of potentially sensitive information that could be used to take control of the networks that keep
gas flowing safely, according to a confidential government report obtained by the Christian Science
Monitor.
The report stops short of blaming the Chinese military for the cyber-intrusions, but security experts
claim the signatures of the malicious computer code used to obtain the information suggest that a
shadowy Chinese government-linked espionage group is to blame.
The military calls this type of threat the “kinetic effect” of cyber warfare, which goes beyond the theft
of, say, credit card information or sensitive classified government intelligence. The “kinetic effect” is
about taking physical control of an environment: railroad switches, refinery safety valves, power grids
or, in this case, whatever keeps natural gas compressors from overloading and exploding.“Anyone can
blow up a gas pipeline with dynamite. But with this stolen information, if I wanted to blow up not
one, but 1,000 compressor stations, I could,” Wlliam Rush, a retired energy industry scientist who has
worked to boost network security in the natural gas industry, told the Monitor. “I could put the attack
vectors in place, let them sit there for years, and set them all off at the same time. I don’t have to
worry about getting people physically in place to do the job, I just pull the trigger with one mouse
click.”
While this may sound like the plot to the next Michael Bay action film, U.S. intelligence is taking it
seriously.
A 2010 report from the U.S. Department of Homeland Security says the threat to so-called ICS, or
Industrial Control Systems, is real.
Gives way to US. Collapse
McClam, NBC News Journalist, 13
(Erin McClam, NBC News Staff Writer, February 19, 2013, U.S. News on NBC News, “Successful hacker
attack could cripple U.S. infrastructure, experts say,”
http://usnews.nbcnews.com/_news/2013/02/19/17019005-successful-hacker-attack-could-cripple-usinfrastructure-experts-say?lite, accessed June 30, 2013, EK)
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The experts say that a successful hacker attack taking out just a part of the nation’s electrical grid, or
crippling financial institutions for several days, could sow panic or even lead to loss of life.
“I call it cyberterrorism that makes 9/11 pale in comparison,” Rep. Mike Rogers, a Michigan Republican
and chair of the House Intelligence Committee, told NBC News on Tuesday.
An American computer security company, Mandiant, reported with near certainty that members of a
sophisticated Chinese hacking group work out of the headquarters of a unit of the Chinese army outside
Shanghai.
The report was first detailed in The New York Times, which said that the hacking group’s focus was
increasingly on companies that work with American infrastructure, including the power grid, gas lines
and waterworks.
The Chinese embassy in Washington told The Times that its government does not engage in computer
hacking.
As reported, the Chinese attacks constitute a sort of asymmetrical cyberwarfare, analysts said, because
they bring the force of the Chinese government and military against private companies.
“To us that’s crossing a line into a class of victim that’s not prepared to withstand that type of attack,”
Grady Summers, a Mandiant vice president, said on the MSNBC program “Andrea Mitchell Reports.”
The report comes as government officials and outside security experts alike are sounding ever-louder
alarms about the vulnerability of the systems that make everyday life in the United States possible.
Outgoing Defense Secretary Leon Panetta warned in October that the United States was facing a threat
that amounted to “cyber Pearl Harbor” and raised the specter of intentionally derailed trains,
contaminated water and widespread blackouts.
“This is a pre-9/11 moment,” Panetta told business executives in New York. “The attackers are
plotting.”
The Times report described an attack on Telvent, a company that keeps blueprints on more than half the
oil and gas pipelines in North and South America and has access to their systems.
A Canadian arm of the company told customers last fall that hackers had broken in, but it immediately
cut off the access so that the hackers could not take control of the pipelines themselves, The Times
reported.
Dale Peterson, founder and CEO of Digital Bond, a security company that specializes in infrastructure,
told NBC News that these attacks, known as vendor remote access, are particularly worrisome.
“If you are a bad guy and you want to attack a lot of different control systems, you want to be able to
take out a lot,” he said. “The dirty little secret in these control systems is once you get through the
perimeter, they have no security at all. They don’t even have a four-digit pin like your ATM card.”
The 34-minute blackout at the Super Bowl earlier this month highlighted weak spots in the nation’s
power system. A National Research Council report declassified by the government last fall warned that a
coordinated strike on the grid could devastate the country.
That report considered blackouts lasting weeks or even months across large parts of the country, and
suggested they could lead to public fear, social turmoil and a body blow to the economy.
Vital systems do not have to be taken down for very long or across a particularly widespread area, the
experts noted, to cause social disorder and to spread fear and anxiety among the population.
Last fall, after Hurricane Sandy battered the Northeast, it took barely two days for reports of gasoline
shortages to cause hours-long lines at the pumps and violent fights among drivers.
Peterson described being in Phoenix, Ariz., during a three-day gas pipeline disruption “when people
were waiting in line six hours and not going to work. You can imagine someone does these things
maliciously, with a little more smarts, something that takes three months to replace.”
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Similarly, hacking attacks last fall against major American banks — believed by some security experts
and government officials to be the work of Iran — amounted to mostly limited frustration for
customers, but foreshadowed much bigger trouble if future attacks are more sophisticated.
What worries Dmitri Alperovitch, co-founder of the computer security company CrowdStrike, is a
coordinated attack against banks that modifies, rather than destroys, financial data, making it
impossible to reconcile transactions.
“You could wreak absolute havoc on the world’s financial system for years,” he said. “It would be
impossible to roll that back.”
While the report Tuesday focused on China, the experts also highlighted Iran as a concern. That is
because China, as a “rational actor” state, knows that a major cyberattack against the United States
could be construed as an act of war and would damage critical economic cooperation between the
U.S. and China.
“With the Iranians in the game,” Rogers said, “what’s worrisome is they don’t care. They have no
economic lost opportunity.”
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Natural Gas Fracking Answers
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Fracking Bad – Warming
Fracking contributes more to climate change than oil or coal
Cernansky, journalist for TreeHugger, 12
(Rachel, 1/23/12 “Increased Use of Natural Gas Will Make Climate Change Worse, Not
Better, New Study Predicts” http://www.treehugger.com/fossil-fuels/new-studypredicts-increased-use-natural-gas-will-make-climate-change-worse-not-better.html,
date accessed 6/30/13 IGM)
Natural gas has been hyped as a cleaner replacement for coal and oil, a "bridge" between these fossil
fuels and renewable energy. But a new Cornell University study has found that extracting natural gas
from shale is such a large contributor of greenhouse gas emissions that it defeats the purpose—to
provide a cleaner alternative—its proponents have claimed for it.
Based on an analysis of the methane that leaks from shale gas wells, the study concludes that using
more gas would make climate change worse—not better.
Footprint Exceeds That of Oil or Coal
The authors write in the study, which will be published in Climatic Change: “The large GHG footprint of
shale gas undercuts the logic of its use as a bridging fuel over coming decades, if the goal is to reduce
global warming.”
They also say: "The GHG footprint of shale gas also exceeds that of oil or coal when considered at
decadal time scales, no matter how the gas is used.
This study is not the first to publish such findings, but it reinforces and refines past research.
Fracking upsets methane geysers – causes heavy warming
Figueroa, AlterNet editor 12
(Alyssa, 10/22/12 “5 Weird and Frightening Effects of Fracking You May Not Know About”
http://www.alternet.org/fracking/5-weird-and-frightening-effects-fracking-you-may-not-know-about
date accessed 6/30/13 IGM)
This past June, a methane geyser was found in Pennsylvania’s Tioga County. Yes, a geyser — shooting
methane-infused water 30 feet up in the air.
Once the geyser was discovered, the county immediately turned to Shell, which was drilling in three
nearby locations. Shell and the Department of Environmental Protection began investigating, and it
was correctly suspected that an abandoned well from the 1930s contributed to the problem. Last
week, a new report confirmed that Butters well, drilled in 1932, was part of the chain reaction that
triggered the geyser. But the main problem was Shell’s fracking, as it displaced methane pockets
underground, which then moved into Butters well and shot up to the surface.
Improperly abandoned wells, like Butters well, are hard to uncover, as they were drilled long before
permits were required or any kind of records were kept. With as many as 300,000 wells drilled in
Pennsylvania over the past 150 years, it’s unknown how many abandoned wells there may be that
could be dangerous. For example, the DEP informed Shell of Butters well, but there was no information
on whether or not it had been plugged. Meanwhile, regulators don’t require drilling companies to
search for, inspect and plug abandon wells.
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Though abandoned wells provide an easy pathway for methane to reach the earth’s surface, once
displaced by fracking, the harmful gas can also make its way upward through cracks in the ground.
Methane is an odorless, flammable gas that can cause breathing problems at high concentrations and
is more than 20 times more effective in trapping heat and contributing to global warming than carbon
dioxide.
Leaks turn solvency for climate
Goldenberg, US Environment Correspondent, 6/4/13
(Suzanne Goldenberg, June 5, 2013, The Guardian, “Methane leaks could negate climate benefits of US
natural gas boom: Reduction in carbon emissions triggered by America's shift from coal to gas is being
offset by a sharp rise in methane,” http://www.guardian.co.uk/environment/2013/jun/04/methaneleaks-negate-climate-benefits-gas, June 29, 2013, EK)
Methane leaks could undo the climate change benefits of America's natural gas boom, a new report
said on Tuesday.
The report, produced by the Centre for Climate and Energy Solutions (C2ES), said America's shift from
coal to gas had produced important climate gains.
Carbon dioxide emissions fell last year to their lowest point since 1994, according to the Department of
Energy. Energy-related carbon dioxide emissions were 12% below 2005 levels.
But the report said those reductions were not enough, on their own, to escape the most catastrophic
consequences of climate change.
They were also being offset by a sharp rise in methane, the most powerful greenhouse gas on a
human timescale, that was being released into the atmosphere at well sites, compressor stations and
along pipelines.
Methane is up to 105 times more potent than carbon dioxide as a greenhouse gas on a 20-year
timescale.
"We have to deal with the methane emissions – whether they are large, which I think is unlikely, or
whether they are small," said Eileen Claussen, president of C2ES, a Washington DC thinktank.
"Natural gas is a big benefit right now, and you can see it in our emissions. But it doesn't mean that left
to our own natural devices it would be a great thing in 2050 because it wouldn't be – unless you did
some form of carbon capture."
Claussen was also concerned that cheap natural gas would crowd out wind and solar energy.
America's gas boom has posed one of the most divisive in-house issues for environmental groups. The
availability of cheap natural gas has retired a number of old, and highly polluting coal-fired powered
plants. Natural gas emits half as much carbon dioxide as coal when used to make electricity.
Some 29% of America's electricity came from natural gas last year – compared to just 14% a decade ago,
the report said. But it comes at a high cost to the local environment, because of the risks to air and
water quality posed by hydraulic fracturing.
There is also a growing body of evidence that the release of methane gas from well sites and
pipelines is far higher than previously thought.
Methane is a far more powerful gas than carbon dioxide, even though it persists in the atmosphere for
a shorter period of time.
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Fracking Bad – Water Pollution
Fracking ensues a whole host of problems- from oil spills, to water containment that
are increased with low regulation.
Walsh, TIME Correspodent, 11 (Bryan, TIME Magzaine, “The Gas Dilemma” 4/11/2011
http://web.ebscohost.com/ehost/resultsadvanced?sid=9b577ab5-66ed-422a-b3ed5388028a1a4f%40sessionmgr14&vid=6&hid=28&bquery=(TX+(shale+AND+gas))+AND+(TX+(effects))&b
data=JmRiPWE5aCZ0eXBlPTEmc2l0ZT1laG9zdC1saXZl, accessed June 30, 2013, QDKM)
Many environmental activists worry that fracking fluid could somehow contaminate nearby
groundwater. Even though fracking chemicals make up only perhaps 0.5% of the overall drilling fluid,
in a 5 million--gal. (19 million L) job, that would still amount to some 25,000 gal. (95,000 L). It's not
always clear what those chemicals are, because the industry isn't required to release the precise
makeup of its fracking formulas--and drilling-service companies like Halliburton have been reluctant
to reveal the information. (It's not for nothing that a provision in the 2005 energy bill that prevents the
Environmental Protection Agency from regulating hydraulic fracturing has been nicknamed the
Halliburton loophole.) Gas companies compare fracking additives to household chemicals, but some
environmentalists and scientists believe the formulas can contain toxic ingredients. When the fracking
fluid mixes with the shale, it may also become contaminated with radioactivity--the Marcellus is
slightly radioactive--while growing increasingly brackish. "You bring everything the fluid encounters
down there back to the surface along with the gas," Michel Boufadel, an environmental engineer at
Temple University, told TIME last year.
The chance that fracking fluid could directly escape through the deep fractures created by the process
and contaminate groundwater appears remote. The Marcellus Shale is separated from aquifers by
thousands of feet of rock, much of it impermeable, and the gas industry argues that there has never
been a proven case of water contamination through hydraulic fracturing. "I don't think it's scientifically
plausible to suggest that could happen," says Don Siegel, a hydrogeologist at Syracuse University. In a
2009 study, the Ground Water Protection Council, a consortium that includes industry and state
regulators, reported that the chance of aquifer contamination was extremely low, echoing the results of
a 2004 EPA review of hydraulic fracturing. But that EPA report has been criticized, and the science is
open enough that the agency is beginning a comprehensive new study of the relationship between
hydraulic fracturing and drinking water.
Of greater concern is what may be happening closer to the surface. Wells need to be properly
cemented to prevent any gas or fluid from escaping before it's collected. Cementing is one of the
trickiest parts of drilling--a bad cement job helped lead to the Deepwater Horizon blowout last year-and it can and does fail over time. That seems to be what happened in the northeastern Pennsylvania
town of Dimock, where the state government has said poor cementing around well casings by the
drilling company Cabot allowed methane to contaminate the water wells of 19 families. Methane isn't
dangerous to drink, but in high enough concentrations it can cause water to burn and even explode-which is exactly what happened to one Dimock family's well in 2009. (Cabot has denied that it caused
the methane contamination, which the company claimed was naturally occurring, but it did offer the
affected residents compensation.) "We were never forewarned about this risk," says Craig Sautner, one
of 14 affected Dimock residents still suing Cabot. "I worry that this took years off our lives."
Beyond well problems, there's the threat of spills like those that struck the Burnetts and the Johnsons.
The gas industry says such accidents are rare. "We drill 35,000 wells a year, and 95% are fractured," says
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Lee Fuller, executive director of Energy in Depth, a gas trade group. "We need to put this in a context
that reflects all the successes as well as the failures." Still, in 2010 the Pennsylvania department of
environmental protection issued 1,218 violations, out of 1,944 inspected Marcellus wells, for offenses
ranging from littering to spills on drill sites. Wells have blown out, and explosions from methane
contamination have destroyed homes. Shale-gas drilling is an industrial process, and the more wells that
are drilled, the more often something will go wrong--and in a populated state like Pennsylvania, those
accidents will be felt.
Even if everything goes right, hydraulic fracturing can produce over 1 million gal. (3.8 million L) of
toxic, briny wastewater over the lifetime of an individual well. In western states like Texas, companies
can store the wastewater in deep underground control wells, but Pennsylvania's geology makes that
difficult. As a result, drillers have had to ship much of their wastewater to municipal treatment plants-and as a recent New York Times investigation showed, those plants are often incapable of screening all
drilling-waste contaminants. Although Pennsylvania has begun to tighten treatment regulations and gas
companies are recycling increasing amounts of wastewater--reusing it in additional frack jobs--the
problem is still one of the biggest challenges in drilling. "There are only a few thousand wells now, but
there will be far more," says Anthony Ingraffea, a structural engineer at Cornell University. "What will
life be like when there are 100,000 wells here?"
That's the fear of many Pennsylvania residents. It's not just the worries about what might be happening
to their water; it's also what they know is happening to their communities. Trucks crowd country roads,
ferrying drilling fluid and equipment to and from wells. Jobs are up, but some businesses have suffered
as employees have fled for higher-paying jobs in the gas industry. As rig workers have snapped up every
available room in tiny towns, rents have skyrocketed, punishing low-income families who don't own
their homes. Those who had moved to the area for a quiet Pennsylvania--and those who've valued that
peace for generations--feel betrayed. "I think it's been a good thing overall," says John Sullivan, a
commissioner for Bradford County. "But I just wish we could keep the economic benefit and minimize
everything else."
Fracking leads to contaminated drinking water
O’Day & Reece, climate lawyers, 12
(Stephen, Jessica Lee, “Top Environmental Concerns in Fracking” http://www.oilgasmonitor.com/topenvironmental-concerns-fracking/1557/ 6/30/13 IGM)
There is considerable concern that fracking can lead to contamination of groundwater as a result of
spills, faulty well construction, or other means, including disposal into underground injection wells. In
2010, residents of Pavillion, Wyoming complained about the condition of their well water. In December
2011, EPA released a report finding that compounds associated with fracking chemicals had been
detected in the groundwater beneath the community and health officials advised residents not to drink
the water. EPA did emphasize, however, that its findings are specific to the area due to the fact the
fracking activities in Pavillion occurred below the level of the drinking water aquifer and close to water
wells, unlike other locations where drilling is more remote and fracking occurs much deeper than the
level of groundwater that would normally be used. In January 2012, EPA began testing water supplies
for 61 homes in Susquehanna County, Pennsylvania, and provided replacement drinking water supplies
to four homes where water tests raised health concerns. Both the state Department of Environmental
Protection and the driller active in the area are cooperating with the agency.
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Fracking will cause water pollution
Ray, Candidate in Energy Law, University of Aberdeen 13
(Jeffery R. Ray, Esq.
LLM Candidate in Energy Law, University of Aberdeen J.D., Florida A&M University, “Shale Gas: Evolving
Global Issue for the Environment, Regulation and Energy Security” p. 7-13, January 2013,
http://works.bepress.com/cgi/viewcontent.cgi?article=1004&context=jeffery_ray
Accessed June 30, 2013 QDKM)
Fracking creates two distinct problems regarding water and the environment,
water consumption and water pollution.37 Water consumption is particularly a problem
where water scarcity exists, or has a propensity to occur, and when there is “no
alternative drinking water source” than what is being utilized for fracking. 38 Jenner
makes an interesting concession that fracking does use “significantly more water upfront
to unlock gas” than would be done in coal extraction—a competing energy resource.39
However, Jenner explains that the water consumption throughout the lifecycle, extraction
to expenditure, of coal is greater than that of shale gas.40 Wurzer points out that a up to
“90%-95% of [flowback] water… [can be] reused from fracturing treatments” and the
amount of water needed to frack a well may be lowered by cutting edge technology.41
Water pollution appears to be the most controversial issue related to fracking. The
US EPA, as shown above, tracks and regulates water pollution impacts, particularly to the
37 water table, from the Clean Water Act42 and the Safe Water Drinking Act.43 Wurzer
concisely stated the general water pollution issues are: 1) frac fluid contamination
through natural or induced fractures; 2) groundwater contamination after flowback; and
3) well casing failure that contaminates the aquifer directly.44
First, regulation on water pollution due to fracking shale deposits in the U.S. is
fairly unique as it is essentially regulates the effects on the environment, as opposed to
regulating the industry itself. Due to a U.S. Environmental Protection Agency (EPA)
publication, the U.S. Congress enacted the Energy Policy Act of 2005 (2005 Act).45 The
2005 Act amended the Safe Water Drinking Act (SWDA) to exclude fracking generally,
excepting for diesel, from regulation under SWDA unless “such requirements are
essential” to protect “underground sources of drinking water…”.46 There are some statesthat have been
individually regulating fracking, such as Colorado’s regulations that
require a chemical inventory to be kept and disclosed upon demand by the Colorado Oil
and Gas Conservation Commission.47
There was recently a newly suggested link from the EPA that fracking may
impact groundwater. An EPA draft document in Pavillion, Wyoming concluded that
“…the data indicates likely impact to ground water that can be explained by hydraulic
fracturing”.48 However, this first of its kind link required qualifying adjectives and an
alternative theory that would be specific to the geographic continuity of that location.49
Even if the well in Pavillion, Wyoming had a concrete link to partial contaminates from
hydraulic fracturing it would be a statistical outlier. Some authors would say the
possibility is “extremely remote” with regard to the thousands of other hydraulically
fractured wells with no link to groundwater contamination.50
Second, Wurzer suggests that the flowback that is stored from the fracking
process presents a potential for contamination if there were to be a “failure of a storage
tank, a storage pit liner, or the line carrying fluid to the pit”.51 While these possibilities
are present, they seem to be kept in line with industry best practices and if that should
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fail, then an action for negligence, nuisance, or trespass is a direct remedy for persons
affected by the operator’s failure.52 Goddard astutely points out that the “actual disposal
of flowback…” from fracking “is regulated by the National Pollution Elimination
Discharge System permit program under the Clean Water Act.53Third, contamination through poor well
casing construction may lead to
contaminating an aquifer.54 There is little doubt that this could happen. However, the
wellbore can be pressure tested to determine if the integrity has been compromised.55
Even the British Parliament has concluded “that hydraulic fracturing itself does not pose
a direct risk to water aquifers, provided that the well-casing is intact before this
commences” and is “no different to issues encountered when exploring for hydrocarbons
in conventional geological formations”. 56 This issue can be controlled through best
industry practices and private actions for negligence, nuisance, trespass under minimal
governmental regulation.
Fracking will cause water pollution
Ray Candidate in Energy Law, University of Aberdeen 13
(Jeffery R. Ray, Esq.
LLM Candidate in Energy Law, University of Aberdeen J.D., Florida A&M University, “Shale Gas: Evolving
Global Issue for the Environment, Regulation and Energy Security” p. 7-13, January 2013,
http://works.bepress.com/cgi/viewcontent.cgi?article=1004&context=jeffery_ray
Accessed June 30, 2013 QDKM)
Fracking creates two distinct problems regarding water and the environment,
water consumption and water pollution.37 Water consumption is particularly a problem
where water scarcity exists, or has a propensity to occur, and when there is “no
alternative drinking water source” than what is being utilized for fracking. 38 Jenner
makes an interesting concession that fracking does use “significantly more water upfront
to unlock gas” than would be done in coal extraction—a competing energy resource.39
However, Jenner explains that the water consumption throughout the lifecycle, extraction
to expenditure, of coal is greater than that of shale gas.40 Wurzer points out that a up to
“90%-95% of [flowback] water… [can be] reused from fracturing treatments” and the
amount of water needed to frack a well may be lowered by cutting edge technology.41
Water pollution appears to be the most controversial issue related to fracking. The
US EPA, as shown above, tracks and regulates water pollution impacts, particularly to the
37 water table, from the Clean Water Act42 and the Safe Water Drinking Act.43 Wurzer
concisely stated the general water pollution issues are: 1) frac fluid contamination
through natural or induced fractures; 2) groundwater contamination after flowback; and
3) well casing failure that contaminates the aquifer directly.44
First, regulation on water pollution due to fracking shale deposits in the U.S. is
fairly unique as it is essentially regulates the effects on the environment, as opposed to
regulating the industry itself. Due to a U.S. Environmental Protection Agency (EPA)
publication, the U.S. Congress enacted the Energy Policy Act of 2005 (2005 Act).45 The
2005 Act amended the Safe Water Drinking Act (SWDA) to exclude fracking generally,
excepting for diesel, from regulation under SWDA unless “such requirements are
essential” to protect “underground sources of drinking water…”.46 There are some statesthat have been
individually regulating fracking, such as Colorado’s regulations that
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require a chemical inventory to be kept and disclosed upon demand by the Colorado Oil
and Gas Conservation Commission.47
There was recently a newly suggested link from the EPA that fracking may
impact groundwater. An EPA draft document in Pavillion, Wyoming concluded that
“…the data indicates likely impact to ground water that can be explained by hydraulic
fracturing”.48 However, this first of its kind link required qualifying adjectives and an
alternative theory that would be specific to the geographic continuity of that location.49
Even if the well in Pavillion, Wyoming had a concrete link to partial contaminates from
hydraulic fracturing it would be a statistical outlier. Some authors would say the
possibility is “extremely remote” with regard to the thousands of other hydraulically
fractured wells with no link to groundwater contamination.50
Second, Wurzer suggests that the flowback that is stored from the fracking
process presents a potential for contamination if there were to be a “failure of a storage
tank, a storage pit liner, or the line carrying fluid to the pit”.51 While these possibilities
are present, they seem to be kept in line with industry best practices and if that should
fail, then an action for negligence, nuisance, or trespass is a direct remedy for persons
affected by the operator’s failure.52 Goddard astutely points out that the “actual disposal
of flowback…” from fracking “is regulated by the National Pollution Elimination
Discharge System permit program under the Clean Water Act.53Third, contamination through poor well
casing construction may lead to
contaminating an aquifer.54 There is little doubt that this could happen. However, the
wellbore can be pressure tested to determine if the integrity has been compromised.55
Even the British Parliament has concluded “that hydraulic fracturing itself does not pose
a direct risk to water aquifers, provided that the well-casing is intact before this
commences” and is “no different to issues encountered when exploring for hydrocarbons
in conventional geological formations”. 56 This issue can be controlled through best
industry practices and private actions for negligence, nuisance, trespass under minimal
governmental regulation.
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Fracking Bad – Earthquakes
Fracking bad – triggers earthquakes
Philips, Bloomberg Business Week Associate Editor, 13
(Matthew Philips, April 1, 2013, Bloomberg Businessweek, “More Evidence Shows Drilling Causes
Earthquakes,” http://www.businessweek.com/articles/2013-04-01/more-evidence-that-fracking-causesearthquakes, June 29, 2013, EK)
A recent study (abstract here) published in the journal Geology is getting a lot of attention for
conclusions it draws about whether oil and natural gas drilling is causing earthquakes. In particular, the
study examines the biggest quake in the history of Oklahoma, a 5.7 shaker that hit the tiny town of
Prague on Nov. 6, 2011. Ripples from the earthquake were felt across 17 states.
According to the study’s authors, the culprit isn’t the actual drilling itself but the injection of
wastewater back into the ground afterward. Even though wastewater had been injected into old wells
around Prague since the early 1990s, the authors argue that as crevices previously containing oil filled
with water, from 2001 to 2006, the amount of pressure needed to keep pushing water underground
rose tenfold, or 1,000 percent. The resulting pressure change triggered a “jump” in a nearby fault line
known as the Wilzetta fault, and then—boom, earthquake. The well the study examined was not
drilled using the controversial hydraulic fracturing techniques, commonly known as fracking.
A review of the study by Columbia University’s Lamont-Doherty Earth Observatory quotes one of the
study’s authors, geologist Heather Savage of Columbia, saying, “When you overpressure the fault, you
reduce the stress that’s pinning the fault into place and that’s when earthquakes happen.”
There have been a lot of earthquakes recently in parts of the U.S. that traditionally haven’t seen so
many, including Arkansas, Texas, Ohio, and Colorado—all states where fracking activity just happens to
have increased substantially in the past decade. The Geology study estimates that during the last four
years, the number of earthquakes in the middle of the U.S. was 11 times higher than the average rate
over the previous 30 years.
The notion that injecting water deep into the ground causes earthquakes is nothing new, or even very
surprising. Whether you support or oppose fracking, is it difficult to fathom that pumping billions of
gallons of water and other fluids down into the earth over several decades might one day cause things
to shift around, especially when those structures have been virtually untouched for millions of years?
The results of research by the U.S. Geological Survey released last year essentially concluded that a
sharp rise in seismic activity in the middle of the U.S. was the result of injecting water into deep
underground wells. There is also growing concern that gas-drilling in the Netherlands has led to some
recent earthquakes.
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AT – Fracking Solves Energy Independence
The US will still depend on oil imports- not enough shale gas, high demands
Bullis MIT Technology Review staff, 12
(Kevin, 11/15/12, MIT Technology Review, “Production, But It Won’t Bring Energy Independence”,
http://www.technologyreview.com/news/507446/shale-oil-will-boost-us-production-but-it-wont-bringenergy-independence/, accessed 6/30/13, JZ)
The United States could see a surge in oil production that could make it the world’s leading oil producer
within a decade, according to a new report from the International Energy Agency. But that lead will
likely be temporary, and it still won’t allow the United States to stop importing oil. Barring technological
breakthroughs in oil production and major reductions in consumption, the United States will need to
rely on oil from outside its borders for the foreseeable future.
This week’s IEA report predicts that a relatively new technology for extracting oil from shale rock could
make the United States the world’s leading oil producer within a decade, beating the current leader,
Saudi Arabia.
The idea that the U.S. could overtake Saudi Arabia, even temporarily, is a stunning development after
years of seemingly inexorable declines in domestic oil production. U.S. production had fallen from 10
million barrels a day in the 1980s to 6.9 barrels per day in 2008, even as consumption increased from
15.7 million barrels per day in 1985 to 19.5 million barrels per day in 2008. The IEA estimates that
production could reach 11.1 million barrels per day by 2020, almost entirely because of increases in
the production of shale oil, which is extracted using the same horizontal drilling and fracking techniques
that have flooded the U.S. with cheap natural gas.
As of the end of 2011, production had already increased to 8.1 million barrels per day, almost entirely
because of shale oil. Production from two major shale resources in the U.S.—the Bakken formation in
North Dakota and Montana and the Eagle Ford shale in Texas, now total about 900,000 barrels per day.
In comparison, Saudi Arabia is expected to produce 10.6 million barrels per day in 2020.The shale oil
resource, however, is limited. The IEA expects production to start gradually declining by the mid2020s, at which time Saudi Arabia will reclaim the top spot.
Shale oil is creating a surge in U.S. oil production in part because it’s easy to find, says David
Houseknecht, a scientist at the U.S. Geological Survey. The oil is spread over large areas, compared to
the relatively small pockets of more conventional oil deposits in the United States. So whereas
wildcatters drilling for conventional oil might come up empty two-thirds of the time or more, over 95
percent of shale oil wells strike oil.
Just how much shale oil can be produced—and how fast—depends heavily on two factors: the price of
oil, and how easy it is to overcome possible local objections to oil fracking, says Richard Sears, a
former executive at Royal Dutch Shell and a visiting scientist at MIT. Oil shale costs significantly more to
produce than oil in Saudi Arabia and many other parts of the world, so for oil companies to go after
this resource, oil prices need to stay relatively high. It’s hard to put a firm number on it, but Sears
estimates that $50 to $60 a barrel would be enough, compared to the $85 per barrel price of oil now.
Houseknecht puts the cost of production at closer to $70 a barrel. Although costs for producing
conventional oil in the Middle East also vary, they typically don’t change more than $10 per barrel.
The IEA concludes that prices are likely to stay high enough to prompt companies to produce shale oil.
Recent comments from OPEC support this idea. It recently declared that it’s happy with the current
prices, indicating that it’s not likely to increase oil production to bring them down. What’s more,
demand for oil in poor countries is likely to keep growing, putting pressure on oil prices to rise.
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The other potential issue is whether opposition to fracking in local communities might put the brakes
on shale oil development, Sears says. Concerns that fracking will contaminate drinking water have led
to objections in some areas, as have concerns that shale oil requires far more drilling wells than
conventional oil production. Even if the U.S. is able to quickly develop its shale oil resource, it isn’t
likely to be enough to completely eliminate oil imports. The IEA expects that the U.S. will still import
3.4 million barrels per day in 2035. The U.S. consumes nearly 19 million barrels per day, leaving a gap
of more than 7 million even at the expected peak in shale oil production in the mid-2020s. However, the
IEA expects the gap will be reduced partly by increased use of biofuels and natural gas in transportation,
as well as improved vehicle efficiency, which could lower demand for oil.
The IEA does conclude that the United States will nearly be energy self-sufficient by 2035, but that’s
after offsetting oil imports with exports of coal and natural gas. To be truly energy independent, the
United States would have to invest in technology for converting natural gas and coal into the liquid
fuels needed for transportation, or have other technical breakthroughs, such as improved batteries or
biofuels, that would quickly reduce the demand for oil.
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AT – Fracking Solves Economy
Their cards are false- the economic boom from shale gas sales is just a financial bubble
that will explode
Ahmed, The Guardian, Enviromental writer, 13 (NAFEEZ MOSADDEQ AHMED, an environment
writer for The Guardian, where he tracks the geopolitics of environmental, energy and economic crises
via his Guardian hosted blog, Earth Insight. Canadian Dimension. May/Jun2013, Vol. 47 Issue 3, p30-32.
3p., “What Happens When the Shale Boom Goes Boom?” May 2013
http://web.ebscohost.com/ehost/detail?sid=0753915f-e25e-4a22-aff8
412308ff0f0%40sessionmgr13&vid=1&hid=28&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=a9h&A
N=88411862 accessed June 30, 2013, QDKM)
These resources can only be mined at the cost of massive environmental pollution: their extraction
involves hydraulic fracturing ("fracking"; pressurised injection of a mixture of water, sand and
detergents to create new cracks in the rock to force out the gas), using the technique of horizontal
drilling. But their exploitation in the US has brought about the creation of hundreds of thousands of jobs
and offers the advantage of cheap and abundant energy. ExxonMobil's 2013 Energy Outlook says the
shale gas revolution will make the US a net exporter by 2025. But is the shale revolution all it's fracked
up to be? The ongoing fragility of the global economy should give pause for thought. Spain's onceflourishing economy -- the Eurozone's fourth largest in 2008 -- is now in dire straits as its supposedly
unstoppable property bubble burst unexpectedly that same year, with house prices dropping by a third.
But policymakers have learnt few lessons from the 2008 crash, and may be on course to repeat similar
mistakes in the petroleum sector. A New York Times investigation first unearthed major cracks in the
"shale boom" narrative in June 2011, finding that state geologists, industry lawyers and market
analysts "privately" questioned "whether companies are intentionally, and even illegally, overstating
the productivity of their wells and the size of their reserves." According to the paper, "the gas may not
be as easy and cheap to extract from shale formations deep underground as the companies are saying,
according to hundreds of industry e-mails and internal documents and an analysis of data from
thousands of wells." In early 2012, two US energy consultants, writing in the flagship British energy
industry journal Petroleum Review, sounded the alarm. They noted a strong "basis for reasonable
doubts about the reliability and durability of US shale gas reserves" which have been "inflated" under
new Security and Exchange Commission (SEC) rules introduced in 2009. The new rules allow gas
companies to claim reserve sizes without any independent third party audit.
Dodgy economics of fracking
The overestimation of reserve sizes is being used by oil industry majors to obscure the dodgy
economics of fracking. Apart from the harmful effects on the environment, the problem is one of
production rates, which start high but fall fast. In Nature, former UK chief government scientist Sir
David King, co-writing with scientists from his Oxford Smith School of Enterprise and the Environment,
noted that production at wells drops off by as much as 60-90 percent within the first year.
Such a rapid decline has made shale gas distinctly unprofitable. As production declines, operators are
forced to drill new wells to sustain production levels and service debt. Rocketing production at
inception, combined with the economic slowdown, drove US natural gas prices from about $7-8 per
million cubic feet in 2008 down to less than $3 per million cubic feet in 2012.
Finance specialists have not been taken in. "The economics of tracking are horrid," writes US financial
journalist Wolf Richter in Business Inside. "Drilling is destroying capital at an astonishing rate, and
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drillers are left with a mountain of debt just when decline rates are starting to wreak their havoc. To
keep the decline rates from mucking up income statements, companies had to drill more and more, with
new wells making up for the declining production of old wells. Alas, the scheme hit a wall, namely
reality."
Arthur Berman, a petroleum geologist who worked with Amoco (before its merger with BP) says that
"the decline rates [of the] shale reservoirs experience … are incredibly high." Citing the Eagle Ford shale
site in Texas (the "mother of all shale oil plays"), he points out that the "annual decline rate is higher
than 42 percent." Just to keep production flat, they will have to drill "almost 1,000 wells in the Eagle
Ford shale, every year… Just for one play, we're talking about $10bn or $12bn a year just to replace
supply. I add all these things up and it starts to approach the amount of money needed to bail out the
banking industry. Where is that money going to come from?"
"It's all in the red"
Last year saw some of the biggest energy companies suffer due to the bubble economics of the shale
gas boom. ExxonMobil's CEO, Rex Tillerson, complained that the lower prices due to the US natural gas
glut, although reducing energy costs for consumers, were depressing prices and were thus often
insufficient to cover production costs resulting in dramatically decreased profits. Although, in
shareholder and annual meetings, the company had officially insisted it was not losing money on gas,
Tillerson candidly told a meeting at the Council on Foreign Relations: "We are all losing our shirts today.
We're making no money. It's all in the red." Even Chesapeake Energy -- billed as America's shale
pioneer -- found itself in a crisis, forcing it to sell assets to meet its obligations.
How has this been allowed to happen? Analyst John Dizard pointed out in the Financial Times (May 6,
2012) that shale gas producers have spent "two, three, four and even five times their operating cash
flow to fund their land, drilling and completion programmes." To sustain this "deficit financing," too
much money "was borrowed, on complex and demanding terms. Wall Street should have provided
reality checks to the shale gas people; instead, they just provided cashier's cheques with lots of zeroes at
the end." But according to Dizard, the bubble will continue growing due to increasing US dependency on
gas-fired power. "Given the steep decline rates of shale gas wells, compared to conventional wells,
drilling will have to continue. Prices will have to adjust upwards, a lot, to cover not only past debts but
realistic costs of production."
Worst-case scenario
Nonetheless, it is not ruled out that several large oil companies could find themselves facing financial
distress simultaneously. If that happens, according to Berman, "you may have a couple of big
bankruptcies or takeovers and everybody pulls back, all the money evaporates, all the capital goes away.
That's the worst-case scenario."
In other words, the premise of "peak oil" -- the point at which geological constraints and economic
factors will combine to make the black stuff more difficult and expensive to produce -- is far from
undermined by the shale gas boom. Several independent scientific studies released over the last year -largely ignored by the media -- vindicate this conclusion.
The current shale market will expire within 4 years causing the bubble that is the shale
market to burst
Nelson, senior correspondent, EuroActiv, 13
(Arthur, senior correspondent for EuroActiv, a EU news & policy debates organization, “Cheap shale gas
bubble 'will burst within 2-4 years'” May 23, 2013, http://www.euractiv.com/energy/expert-cheapshale-gas-bubble-bu-news-519931, accessed July 1, 2013, QDKM)
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The current shale gas boom which has bathed the US economy in cheap energy will soon go bust, a
former gas industry geologist has told EurActiv.
The future of shale gas in Europe was high on the agenda at an EU summit in Brussels yesterday (22
May), with leaders stressing the “crucial” role that such indigenous energy resources could play in
reviving industry.
But according to David Hughes, a geoscientist and former team leader on unconventional gas for the
Canadian Potential Gas Committee, the US boom on which many base their expectations is founded on
shifting sands.
“The cheap price bubble [in the US] will burst within two-to-four years,” Hughes said. “At a high
enough price, the supply bubble will burst perhaps 10-to-15 years later, when drilling locations
become sparse.”
Supply can be maintained for many years,” he added, “but only at much higher prices with everescalating environmental impacts due to the accelerating number of wells that must be drilled.”
The importance of cheap shale gas-fuelled energy prices has become a constant in EU discourse. In his
presentation to the European summit yesterday, one of the first slides shown by the European
Commission President José Manuel Barroso depicted trends in energy price indexes from 2005-2012.
While gas prices had risen 35% for EU industry, they had plummeted 66% in the US. Similarly, while the
electricity price index for EU industry rose by 38% in the seven-year period, it fell for their US
competitors by 4%.
An initial boom in US shale gas production slashed prices from about $13.50 per mcf (metric cubic foot)
in 2008 to $2 per mcf last year, boosting US industry, but causing a net loss for shale gas extraction
companies of at least $9.3 billion in 2012.
“We are losing our shirts,” ExxonMobil’s chief executive Rex Tillerson complained last July.
Prices have since risen to over $4 per mcf but, according to Hughes, ever-increasing supplies of shale gas
are not compatible with low prices, because the best 'sweet spots' for extracting shale tend to deplete
quickly.
Sweet spots
“The bubble is a result of sweet spots running out of drilling locations at which time drilling must
move to progressively lower quality portions of the ‘play’, requiring ever more wells and ever higher
prices to justify them,” he said.
With the exception of the very best sweet spots, shale was “not very” profitable in Hughes’ view. His
research found that large returns in the industry came from selling assets acquired at low prices early in
the boom, and through joint ventures, and mergers and acquisitions.
The US shale boom then grew so fast because of ‘held-by-production’ lease commitments - sold at
values of up to $25,000 an acre - which amounted to an injunction: “Drill or you lose your investment,”
Hughes argued.
“After wells are drilled they are put on production to generate cash flow and maintain stock prices, even
though they are unlikely to turn a profit,” he said. Some analysts estimate this production decline at
between 60%-90%.
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AT – Fracking Good – Studies
More work is needed to be done before we implement these programs
Schrope, freelance writer and editor, 12
(Mark Schrope is a freelance writer and editor based in Florida writing for the Yale Environmental Study,
“Fracking Outpaces Science on Its Impact” January 2012,
http://environment.yale.edu/envy/stories/fracking-outpaces-science-on-its-impact
accessed June 30, 2013, QDKM)
Just a decade ago, only the smallest sliver of the U.S. population had even heard of hydraulic fracturing,
or fracking. Today, it’s one of the most incendiary environmental topics going. In recent years, wells built
for this form of natural gas extraction have spread by the thousands through various parts of the
country, an expansion many argue outpaces the science done to understand its potential impacts.
Whether fracking can continue spreading without major harm to the environment or public health,
and whether it promises to reduce greenhouse gas emissions, are questions researchers are still
working to answer.
Fracking is a process for extracting natural gas from shale layers typically thousands of feet deep. These
targeted shales aren’t especially permeable, meaning most of the gas is trapped. So drillers blast the
rock layers with highly pressurized water containing chemicals that reduce friction between water and
rock. The chemicals make up only a small fraction of the fluid. A few, such as ethylene glycol, are toxic,
and some constituents of fluid mixes are protected as trade secrets. Sand in the mix helps to prop open
the cracks that will release the natural gas.
Fracking has dramatically increased the amount of natural gas accessible to drillers in the United States.
Indeed, after natural gas imports peaked in 2007, the country has seen a boom in domestic production
and in construction of natural gas power plants. The U.S. Energy Information Administration forecasts
that by 2035 electricity production using natural gas will roughly double to meet about half the
country’s electricity needs.
Key natural gas sources, like the Marcellus-Utica shale beds beneath parts of New York, Pennsylvania,
Ohio and West Virginia, are typically situated beneath rural regions. Some people living in such areas
and benefiting from jobs or sales of drilling rights welcome the expansion. But many other residents
have grown increasingly fearful that natural gas extraction using fracking might unintentionally foul
their water supplies and other environmental resources.
As fracking and associated issues have gained increasing attention, interest in the topic has spread far
beyond those living in the shale regions. “People have widely varying opinions,” says James Saiers,
professor of hydrology at F&ES. “But my experience suggests that these opinions are often not very
informed.” He and others at Yale are taking part in a panel discussion on September 18 on a topic that is
literally reshaping many parts of the country.
“In no case have we made a definitive determination that the fracking process has caused chemicals to
enter groundwater.”
— EPA administrator Lisa Jackson
Perhaps the greatest fear tied to fracking is that the process and associated activities will contaminate
drinking water sources. The Independent Petroleum Association of America, a natural-gas industry
representative, maintained in a recent press release that there have been “… no proven cases of
hydraulic fracturing impacting groundwater.” EPA administrator Lisa Jackson has similarly, though more
equivocally, said, “In no case have we made a definitive determination that the fracking process has
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caused chemicals to enter groundwater.” But there are several routes by which fracking could at least
potentially cause problems.
Despite the high pressures involved with fracking, researchers such as Saiers say it’s unlikely that the
fracking itself, which might occur a mile or more below the surface, could actually blast a path to
drinking water sources, which are typically just a few hundred feet down. “That’s a reasonable
assumption,” says Saiers, based on definitive microseismic studies conducted during fracking operations.
“A lot of qualified hydrologists would believe that.”
But there are other points of concern. If wells aren’t properly installed, specifically if there are problems
with the concrete used to seal the space between the main well pipe and the surrounding earth, then
fracking fluid or methane could find its way toward the surface via the improperly sealed space. Over
time well pipes themselves can also corrode and leak, creating other pathways.
A related issue is that in some fracking regions, oil and natural gas drilling has been going on for
decades or even a century, leaving a legacy of over 150,000 abandoned wells scattered about
Pennsylvania alone. The old pipes or deteriorated concrete casings could be conduits between the
upper and lower reaches. Initial investigation of a recent geyser of methane and water near fracking
operations in Union Township, Penn., suggested that a 70-year-old abandoned and unmapped well
might have been the methane pathway that caused the problem.
And, of course, while most attention focuses on the fracking itself, that process is only one
component of an overall drilling operation. Various stages of fracking that have to do with handling
fluids, for instance, offer at least the potential for spills or leaks that could affect water sources.
There have been some high-profile cases in Pavilion, Wyo., and Dimock, Penn, where government or
other analyses have found elevated levels of volatile organic compounds, such as benzene and
methane, in wells close to natural gas operations but without making definitive connections. And the
documentary Gasland drew attention to cases of families plagued by well-water contamination issues
they believe came about only after drilling began in their areas.
Natural gas companies have settled some legal claims with such homeowners, but without admission of
guilt. Some researchers have raised questions about the accuracy of some of the material in Gasland,
but Saiers says one thing about the film not in question is how it depicts the angst of families struggling
with major water problems. “When it shows how people feel about it, that’s legitimate,” says Saiers.
“And it’s important.”
In most cases, fracking operations are in less affluent rural areas where citizens often rely on private
wells and have fewer resources to address water supply problems or to fight against companies they
feel may be responsible. But Saiers says socioeconomic disparities don’t seem to be a key driver in
where drilling spreads. The richest shale just tends to be in rural areas, and urban areas with far fewer
open spaces are harder to tap anyway. “My impression is that these companies follow the gas,” he says.
There are, however, rich shales in the watershed that supplies New York City. That rural watershed
remains untapped because the state of New York has a temporary moratorium on fracking as debate
continues over the best permanent policy.
Flammable taps resulting from excessive methane are a dramatic display of problems potentially tied to
fracking. Methane can make its way into drinking water through a variety of paths apart from fracking,
such as from abandoned wells, because it exists throughout various subsurface layers. Saiers says peerreviewed studies have found methane in drinking water aquifers prior to shale gas development.
A Duke University study of water wells in New York and Pennsylvania released last year in the
Proceedings of the National Academy of Sciences concluded that methane levels were significantly
higher in wells closer to fracking operations. As important, the researchers found that, at least in some
cases, this methane had a chemical signature closer to that of methane from the deep shale than from
shallower subsurface layers.
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“Not surprisingly the industry wasn’t overjoyed with our conclusions about methane,” says lead author
Robert Jackson, an environmental scientist at Duke. But some environmentalists were upset too, he
says, because the study also concluded there were no signs of fracking fluids in the wells, and some
detractors felt they hadn’t done enough to test for this possibility. Then there were the people that
called him up in tears because they were so thankful that someone was even looking closely at the issue.
Some also criticized Jackson’s team for not comparing their methane measurements against baseline
measurements taken before fracking began, but that’s because the data simply don’t exist. For a variety
of reasons, baseline water-quality measurements and studies have been sparse, though newer
regulations in Pennsylvania do require water quality testing prior to new drilling.
Jackson believes the simplest explanation for his group’s findings is that the methane is coming up
through or around abandoned oil or natural gas wells or new wells that were inadequately cased. He
says that some of the water wells his group has tested were so saturated with methane that the water
bubbled like champagne. So while it’s true that methane can contaminate wells without any help from
fracking, he says even without baseline data, if a person begins seeing such an obvious sign of
contamination as bubbling after fracking begins, it can be a reliable indicator or a connection. Too much
methane in water can cause an explosion, but Jackson says it’s not clear what, if any, health threats that
low concentrations of methane pose.
Technological advances have enabled companies to drill horizontally and reach shale miles away from
the well head. This reduces the surface footprint of operations, but the thousands upon thousands of
these rigs still arrive with consequences.
In Pennsylvania, access roads for fracked wells must often be cut through some of the region’s most
pristine remaining forests. Roadways also typically have to cross streams and, depending on how they
are constructed, can block water flow needed by plants and animals downstream. But a more
widespread concern is the ecological effects of companies tapping waterways to get the millions of
gallons needed for fracking wells.
One potential positive for natural gas is that it burns relatively cleanly. In simplest terms, burning natural
gas produces substantially lower greenhouse gas emissions than coal or oil. Based on this, some have
pointed to a potential role for expanded natural gas use—made possible thanks to fracking—as a
transition to renewable energy. Natural gas also burns much cleaner than coal without releasing
pollutants such as mercury and sulfur dioxide.
But reality rarely plays out in simplest terms. At each step along the natural-gas production line—from
drilling, to transport, to use—there are opportunities for leakage. A key phase comes when drilling and
fracking operations are completed and operators must connect the new well to a production pipeline.
Methane coming from the new well can be lost during this switchover and either burned off or flared,
converting it to carbon dioxide, or vented straight to the atmosphere.
Because methane, which is the main constituent of natural gas, is a much more efficient heat trapper
than carbon dioxide, venting and flaring it can eliminate some of the benefits of lower greenhouse gas
emissions provided by natural gas. These losses, along with other leakage, could be pumping a
substantial amount of methane into the atmosphere, but just how much isn’t clear.
“The bottom line is, there have to be more measurements in many more places to really constrain these
leakage rates,” says Saiers. And transporting huge amounts of water used in fracking, and the resulting
waste, can also lead to significant greenhouse gas emissions and pollution.
Regardless, at least some of the losses might be controlled. Earlier this year the EPA put in place new
regulations to improve poor air quality associated with drilling. Companies will now be required to use
equipment that prevents the leakage of methane and other gases during drilling—techniques known as
“green completions”—though flaring methane into the atmosphere will still be legal during a transition
phase that ends in 2015.
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There’s also a less obvious concern about natural gas’ potential role in climate change. The issue is price.
For now, sustainable power sources, such as wind and solar, remain much more expensive per unit of
energy than fossil fuels. As oil prices have risen in recent years, oil has become nearly as expensive as
renewables, making pursuit of sustainable options more economically feasible.
But the United States’ massive shale natural gas reserves and frenzied expansion of drilling have pushed
natural gas prices down. It’s now so cheap that many power companies have shifted toward greatly
expanded natural gas use. With such a cheap, domestic energy source dominating the U.S. energy
landscape, it could dramatically slow any movement toward more expensive renewables.
Besides green completions rules, there have been other recent regulatory changes to address some
fracking concerns. Pennsylvania beefed up rules for concrete casings for wells and now requires baseline
water sampling around new drilling sites, for instance.
But many still wonder how safely fracking can be done on a larger scale. Researchers say that too many
open questions remain. “As big as the issue is, there is not a tremendous amount of new science on the
environmental impacts of fracking,” says Saiers.
Duke’s Jackson says that even with the uncertainties, the current debate is far more divisive than it
needs to be. “The hydraulic fracturing debate is like our political debate—it’s just unnecessarily
polarized. There are many people out there, I believe, who just want there to be a problem,” he says.
“On the other hand, my frustration with industry is their unwillingness to acknowledge any problems
whatsoever.” That unwillingness, he suggests, complicates research efforts by preventing the release of
some data and makes it look like industry is hiding something.
There have been problems, but Jackson says it’s also important to remember that numerous wells have
been drilled and used without causing any known problems. “The question isn’t ‘can hydraulic
fracturing be done safely?’ It’s ‘will it be done safely?’.”
The fracking industry is a great mystery that even if we did know the answer to, we
would need more time to study and to increase regulation
Walsh, TIME Correspondent, 11
(Bryan, TIME Magzaine, “The Gas Dilemma” 4/11/2011
http://web.ebscohost.com/ehost/resultsadvanced?sid=9b577ab5-66ed-422a-b3ed5388028a1a4f%40sessionmgr14&vid=6&hid=28&bquery=(TX+(shale+AND+gas))+AND+(TX+(effects))&b
data=JmRiPWE5aCZ0eXBlPTEmc2l0ZT1laG9zdC1saXZl, accessed June 30, 2013, QDKM)
Britain, India, China and countries in Eastern Europe have potential shale plays as well, while Australia,
having invested in huge infrastructure projects, has started sending fleets of ships with liquefied natural
gas around the world.
Over all this loom three factors: booming demand for energy as nations such as China and India
industrialize; the accident at the Fukushima nuclear plant in Japan, which has dimmed prospects for a
renaissance of nuclear power; and the turmoil in the oil-rich Middle East. Taken together, they have
opened space for gas as a relatively clean, relatively cheap fuel that can help fill the world's needs during
the transition to a truly green economy. (As important as renewable energy is, it will likely take years for
green power to shoulder the electricity load.) Although gas isn't used for transport, boosters like Texas
tycoon T. Boone Pickens think if heavy-duty vehicles were fueled with natural gas, the U.S. would be
able to cut imports of oil. U.S. utilities worried about meeting regulations on carbon and air pollution are
switching from dirty coal to gas as a power source. In a speech on March 30, President Barack Obama
hailed natural gas as part of the solution to reducing America's oil addiction. "The potential for natural
gas is enormous," he said.
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They Weren't Ready for This
But there's a catch. As shale-gas drilling has ramped up, it's been met with a growing environmental
backlash. There are complaints about spills and air pollution from closely clustered wells and fears of
wastewater contamination from the hydraulic fracturing process--also known as fracking--that is used to
tap shale-gas resources. In the U.S., the gas industry is exempt from many federal regulations, leaving
most oversight to state governments that have sometimes been hard-pressed to keep up with the rapid
growth of drilling. The investigative news site ProPublica has found over 1,000 reports of water
contamination near drilling sites. New York State--spurred by fears about the possible impact of the
industry on New York City's watershed--has put hydraulic fracturing on hold for further study, while
some members of Congress are looking to tighten regulation of drilling. "We were not ready for this,"
says John Quigley, former head of Pennsylvania's department of conservation and natural resources.
"We weren't ready for the technology or the scale or the pace."
And that's what makes this new energy revolution--because that's what it is--so complex. The richest
shale-gas play and potentially the second biggest natural gas field in the world is called the Marcellus,
and its heart runs straight through parts of Pennsylvania and New York. This drilling isn't taking place in
the Gulf of Mexico, the Saudi deserts or lightly populated western Canada. It's happening right in the
backyard of the U.S. Northeast, a densely populated place accustomed to consuming fossil fuels, not
producing them. But if the global appetite for gas and oil keeps growing, rural Pennsylvania won't be the
last unlikely place we'll drill. Because for all our fears of running out of oil, we should be able to find
more than enough fuel to keep the global economy humming--provided we're willing to drill in deeper,
darker, more dangerous or more crowded places. The Arctic, the ultra-deep ocean off Brazil and New
York City's watershed all could go under the drill as we enter what the writer Michael Klare has called
the Era of Extreme Energy. The power will keep flowing--but with environmental and even social costs
we can't yet predict.
It wasn't news to fossil-fuel experts that the Marcellus Shale--a 400 million-year-old narrow band of
black rock that lies thousands of feet deep--could contain gas. Shallow natural gas wells have been
drilled in the Northeast for decades. But shale like that of the Marcellus is made up of deep, hard rock,
and it does not surrender its gas easily. Shale wasn't worth the trouble--until a veteran wildcatter
named George Mitchell began experimenting with the Barnett Shale in Texas in the 1980s. Mitchell
found that a mix of horizontal well drilling and hydraulic fracturing--more on that later--could allow him
to pry gas from the shale. "It was lore in the gas industry that you would hurt a well by putting water
down it," says Terry Engelder, a geoscientist at Penn State University. "These guys discovered that the
more water they used, the better."
Engelder should know; he played a key role in the discovery of the Marcellus Shale. At the beginning of
the last decade, a Texas-based company called Range Resources began experimenting on Marcellus
wells in western Pennsylvania. The company had little more than expensive holes to show for it until it
began tweaking Mitchell's method. By August 2007, Range had a winner, even as Engelder, a gas-shale
expert, began to realize just how huge the Marcellus play could be. During a December 2007 conference
call with investors, Engelder estimated the recoverable amount of natural gas in the Marcellus at 50
trillion cu. ft. (1.4 trillion cu m). Estimates now range up to 10 times as high, which would provide the
energy equivalent of 86 billion barrels of oil. "I remember thinking, Merry Christmas, America," Engelder
says now. "It was absolutely an amazing thing."
The agents of drilling companies had already begun moving into Marcellus territory, snapping up gas
leases. That's not unusual in Pennsylvania--most farmers and other large landholders have leased the
gas rights to their land for decades, often for little more than a few dollars an acre (0.4 hectare). But not
much actual drilling was ever done. (Landholders are paid an up-front bonus per acre for a lease, plus
some percentage of the value of any produced gas as a royalty.) When word got out that the Marcellus
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was for real, the price for leases skyrocketed--rising to $5,000 an acre by the summer of 2008, according
to Engelder--and dozens of gas companies jostled for territory. Once land was leased, the drilling rigs
arrived, clustering in rural areas of southwestern and northeastern Pennsylvania. More than 2,400
Marcellus wells were drilled from 2006 to the end of 2010 in the state, and some 300 were drilled
before March 10 of this year. "It's like a treadmill. Companies have to keep drilling wells and adding
new ones to their inventory," says Tim Considine, an energy economist at the University of Wyoming.
"That's a lot of activity that adds up."
Considine co-authored an industry-sponsored study in early 2010 that estimated that Marcellus drilling
would create or support 88,000 jobs that year and more than 100,000 in 2011, plus billions of dollars in
economic value for the state. Those numbers are debatable, but it's impossible to miss the buzz of
economic activity in drilling regions. Relatively few of those jobs directly involve drilling and fracking-most of that work goes to roughnecks with Texas or Oklahoma license plates on their pickups--but there
are work and wages for local truck drivers, subcontractors, waiters and bartenders. Rural Bradford
County has long been one of Pennsylvania's poorer areas, but last year the county led the state in job
creation. Gregg Murrelle manages the Riverstone Inn and Comfort Inn in Towanda, the Bradford County
seat, and his hotels are fully booked for weeks on end, full of gas workers on 14-day stints. He's building
another unit, and he estimates he's hired an additional 20 employees since the drillers moved in, with
another 15 to 20 needed for the new hotel. "It's just been wonderful that these businesses have come
into the area," says Murrelle, who has leased the land around his properties for drilling. "We're not
being impacted by the recession at all."
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Offshore Drilling Answers
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Offshore Drilling – Status Quo Solves
Status quo solves – drilling now
Upton, Green Energy science freelance writer 2-13 (John Upton, “Shell to drill world’s deepest
offshore oil well in Gulf of Mexico”, February 13, 2013,
http://grist.org/news/new-record-for-shell-worlds-deepest-oil-well-planned-for-gulf-of-mexico/,
accessed: June 28, 2013, QDKM)
It’s getting harder to find the oil to fill ‘er up.
Royal Dutch Shell plans to stick its oil-extracting tentacles deeper under the Gulf of Mexico than any
oil company ever has.
Shell is preparing to drill 9,500 feet — nearly two miles — beneath the surface of the sea to suck oil
out of a reserve that was discovered eight years ago, 200 miles southeast of New Orleans. The deepest
oil well currently in operation, at 8,000 feet deep, is operated nearby in the Gulf, also by Shell.
The quest for deeper wells reflects advancing technology and increasing desperation as shallower
reserves dry up.
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AT – Solves Oil Production
Offshore drilling production is a drop in the barrel—It accounts for a tiny percentage
of overall consumption
Connors, University of Massachusetts Graduate Degree, 9
[Jill, writing experience for this Old House, the Boston Globe, and TreeHugger, February 18th, 2009,
“Offshore Drilling: Is Energy Worth the Ecological Disaster of Oil Spills?,”
http://www.treehugger.com/clean-technology/offshore-drilling-is-energy-worth-the-ecological-disasterof-oil-spills.html, accessed 6/30/13, CB]
The term offshore drilling refers to the extracting of oil from fields that lie beneath the ocean floor,
anywhere from a few hundred feet to 200 miles off the coast. As easily recoverable oil reserves, both
onshore and offshore dwindle, exploration is increasingly turning to deepwater locations a mile or
more beneath the ocean's surface.
The first offshore well was drilled in 1887 from a wooden wharf off Summerland, California; technology
improvements have made it possible to drill in deeper water and farther from shore ever since. Today,
some 4,000 platforms operate in the U.S. federal waters in the Gulf of Mexico, primarily off the
coastlines of Louisiana and Texas, and off the coast of Alaska, producing approximately 565 million
barrels of oil per year, according to the Energy Information Agency. US offshore oil production of 565
million barrels per year equates to roughly 1.5 million barrels per day (30% of total US oil production);
contrast that figure with U.S. current oil consumption of 21 million barrels per day.
The debate about offshore drilling stems from questions over how much oil potentially could be
recovered from underwater fields versus the time and cost, both in dollars and environmental impact,
related to that process.
Political posturing notwithstanding, offshore drilling will not eliminate US demand for foreign oil or
really even make significant strides into reducing that dependency. At current consumption, the US
uses about 8 billion barrels of oil per year; conventionally recoverable oil from offshore drilling is
thought to be 18 billion barrels total, not per year. What's more, offshore oil drilling will not guarantee
lower fuel prices--oil is a global commodity, and US production is not big enough to influence global
prices.
There is no more oil drill in the Gulf, decline has been occurring for years
Garcia, President of ASPO Mexico 4-1-13
(Raúl González García, Raúl González García, Professional Geological Engineer, Director of Mexpetrol
Argentina, Sub Director of Exploration, PEMEX, ASPO-US, 4-1-13, “Reasons Mexico’s Oil Production Has
Stagnated” http://peak-oil.org/2013/04/reasons-mexicos-oil-production-has-stagnated/ accessed June
28, 2013, QDKM)
Mexico´s crude production peaked at 3.455 Mbopd in 2004 and has already declined to 2.568 Mbopd,
(Feb 28, 2013). I believe it will not be possible to return to former production levels, nor even to the
present official forecast of 3 million barrels per day, because of the following reasons:
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The giant and supergiant oil reservoirs, like Cantarell, discovered more than 30 years ago,were
produced irrationally at accelerated rates and are now in an advanced stage of decline or are practically
exhausted.
Other major oil fields, like Ku-Maloob-Zaap, are expected to start declining in the next few years.
The oil fields that will be discovered in the future will be smaller,more difficult and costly to produce.
To date the potential production of shale oil is not known with any certainty. Rigorous evaluation with
sound
scientific, technical and economic basis will be needed before starting such development and
production.
The rate of increased production from new oil discoveries will be slower than the rate of decline of
existing mature oil fields because of delays and inefficiencies in development.
Because of these considerations, I believe that neither opening up exploration and production of mature
fields to private investment nor applying new technologies to development of unconventional resources
(shale oil and tight oil sands) will be able to add significantly to oil production.All that can be hoped for is
that the decline will abate and production will remain well above domestic refining capacity of about
1.5million barrels per day in order to avoid having to import feedstock.
Increasing investments in the belief that they will lead to increased overall production is a grave
strategic error. It will continue to cause enormous value destruction for PEMEX and Mexico.
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Offshore Drilling Fails
Expanding offshore drilling ineffective – no short term relief, small amounts of oil,
refineries are overstretched, trades off with green technology, and not enough drills
Center for American Progress, 8
[September 15th 2008, “Ten Reasons Not to Expand Offshore Drilling,”
http://www.americanprogress.org/issues/green/news/2008/09/15/4894/ten-reasons-not-to-expandoffshore-drilling/, Accessed 6/30/13, CB]
This week, the House of Representatives will consider the Comprehensive American Energy Security and
Consumer Protection Act. The bill would protect our coasts up to 50 miles off shore, but then give states
the option of allowing offshore drilling 50 miles off the coastline.
The compromise bill does include some positive measures, such as a renewable electricity standard that
would require all utilities to generate 15 percent of their electricity from wind, solar, geothermal, or
other renewable energy sources. It would also extend tax incentives for renewable energy and
efficiency, paid for by closing tax loopholes for big oil, and sell oil from the nearly full government
petroleum reserves to lower gas prices.
The nearly 30-year moratorium on oil drilling in the Outer Continental Shelf will expire on September
30th, and President Bush opposes its extension. Nonetheless, offshore oil drilling in areas that have
been off-limits since 1982 is not the way to solve our energy crisis. There are many reasons that
offshore drilling in sensitive coastal areas is a bad idea. These 10 are only the beginning:
1. We can’t drill our way out of the energy crisis.
According to a report by the House Committee on Natural Resources Majority Staff:
“Between 1999 and 2007, the number of drilling permits issued for development of public lands
increased by more than 361 percent, yet gasoline prices have also risen dramatically, contradicting the
argument that more drilling means lower gasoline prices. There is simply no correlation between the
two.”
2. We don’t have enough oil to meet our demand.
The U.S. oil supply-demand balance is insurmountable. We have less than 2 percent of the world’s
known reserves, yet use 25 percent of its oil. Even if we drilled off of every beach, and inside every
national park, refuge, and forest, we could not produce enough oil to offset our growing demand.
3. Oil companies have not utilized the leases they have now.
Why open up new areas to drilling when oil companies hold over 4,000 undeveloped leases in the
western Gulf of Mexico? What’s more, the government already leases 44 million acres offshore, of
which only 10.5 million—or one quarter—are producing oil or gas.
4. Offshore drilling would have an “insignificant” effect on long-term prices.
Offshore drilling in sensitive areas would increase domestic oil production by 3 percent by 2030
compared to a reference case, according to the Energy Information Administration. But “because oil
prices are determined on the international market…any impact on average wellhead prices is expected
to be insignificant.”
5. Drilling could lock us in to a future of expensive gasoline.
By committing to costly recovery, oil companies are betting that oil prices (and gas prices) will stay
high enough to justify their investments. Opening the Outer Continental Shelf could never bring us back
to $2-a-gallon gas, but would ensure that companies that develop the newly available oil have an
interest in keeping gas prices high enough to justify their investments.
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6. Production would be expensive, would not start for a long time, and would have no short-term
effect on oil prices.
The average oil field size in the OCS is smaller than the average in the Gulf of Mexico, which is already
being developed. As a result, much of the oil in the OCS would be expensive to extract, and is only
becoming attractive now as a result of high oil prices.
According the Energy Information Administration, it would take at least five years for oil production
to begin. EIA predicted that there would be no significant effect on oil production or price until nearly
20 years after leasing begins.
7. There isn’t enough drilling equipment.
Due to the high price of oil, existing drilling ships are “booked solid for the next five years,” and
demand for deepwater rigs has driven up the price of such ships. Oil companies just don’t have the
resources to explore oil fields in the OCS.
8. We can’t refine the oil we would extract.
In a June speech, President George W. Bush noted that, “Refineries are the critical link between crude
oil and the gasoline and diesel fuel that drivers put in their tanks.” Yet refineries are already so
stretched that last year, the United States had to import almost 150 million barrels of gasoline. The
Wall Street Journal reported oil companies are not building new refineries because it would be bad for
their bottom line: “Building a new refinery from scratch, Exxon believes, would be bad for long-term
business.”
9. Drilling more oil now is not the path to a future based on alternative energy.
President Bush said in his speech that “in the short run, the American economy will continue to rely
largely on oil,” but “in the long run, the solution is to reduce demand for oil by promoting alternative
energy technologies.” Unfortunately, President Bush opposed efforts to shift tax incentives from big oil
companies to efficiency and clean energy technologies, such as plug-in hybrid electric vehicles. If
alternatives are the future, why propose an oil-based solution to the energy crisis that will not show any
results for years?
10. Debating offshore drilling in sensitive areas distracts from real solutions.
Instead of focusing on offshore drilling in sensitive areas, we should be thinking about both short- and
long-term solutions to the energy crisis. To reduce oil prices, we can burst the speculative bubble by
selling a half million barrels of oil per day from the full Strategic Petroleum Reserve. To help families,
we should close oil company tax loopholes and recover lost royalties on oil and gas from federal waters,
and return these funds to low- and middle-income households in a fuel price “relief bate” program.
Speculators have increased oil prices by up to $30 per barrel, so the administration should make trades
more transparent and increase the “margin” for speculators. In the long run, we must move beyond
oil by investing in clean, sustainable biofuels such as cellulosic ethanol, require and promote super
fuel-efficient cars, and shift tax incentives away from fossil fuels and toward clean alternative energy
and efficiency.
The real solution to the energy crisis—and to the climate crisis—is to innovate, become more efficient,
and move forward. That’s why offshore drilling in sensitive areas is a bad idea. For a long-term plan, it is
remarkably short-sighted.
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Offshore Drilling Bad – Economy
Offshore energy development destroys local and national economies – employment,
wages, and regional revenue
Lowe, research associate at the Cascade Policy Institute, 10 [Eric, 7-22-10, MasterResource,
“The Economic Costs of an Offshore Drilling Moratorium: A Summary of the Mason Study”,
http://www.masterresource.org/2010/08/economic-costs-mason-study/, accessed 6-30-13, HG]
Conducting a state-by-state analysis of lost oil production and its impact on the local economy yields
an estimated total of economic activity loss of $2.1 billion dollars for the Gulf economies, and $2.7
billion nationwide.
In the Gulf economies, upwards of 8,169 jobs are expected to be lost, with an upwards total of 12,046
nationwide. These economic activity–loss and job-loss figures are conservative estimates, as Dr.
Mason’s study assumes the moratorium will last only 6 months at maximum and does not account for
several spillover multipliers (such as lost oil and gas production being used as an input in oil and gas
production elsewhere, or job losses in other states associated with decreased jobs due to the
moratorium).
In an attempt to analyze potential wage decreases amongst distressed economic sectors, Dr. Mason
arrives at a figure of between $65 to $135 million dollars in wage losses per month among those who
are employed. That amounts to some $487 million dollars in lost wages in the Gulf region, and $707
million dollars nationwide.
Obviously, decreased output, fewer jobs and lost wages mean less federal, state and local government
revenue. Dr. Mason estimates $219 million dollars in lost federal tax receipts. He also estimates $97
million dollars in lost state and local tax revenue in Louisiana alone.
Health care, education, and social services will also suffer, as the economic and tax-related impacts of
the moratorium will lead to losses in health care provider and teacher positions, as well as
desperately needed tax revenue.
As mentioned before, these figures are conservative estimates, assuming that the ban will last only 6months (figures for a theorized anticipated 18-month ban are significantly larger), while not taking into
account several spillover multipliers or the value of the economic investment associated with
exploratory drilling. The analysis also does not account for any drilling rigs that simply up and leave the
region due to political uncertainty.
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Oil Spills Answers
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AT – Mexican Drilling Inevitable
Mexico is currently forgoing dangerous deep-water drilling procedures- they’re too
expensive
Padilla, managing director at IPD Latin America, 12
[John D., February 20-24, 2012, Inter-American Dialogues, “Oil Sector News,”
http://advisor.thedialogue.org/docs/energy_advisor/2012/february/LEA120224.pdf, p. 3 Accessed
6/30/13, CB]
"The plan at issue¶ is Pemex's intent to drill in the Perdido Foldbelt area, which abuts the U.S.-¶ Mexico
maritime border. Although the bulk of Pemex's offshore infrastructure is located in the southern Gulf of
Mexico (i.e. near Cantarell and¶ Ku-Maloob-Zaap), Perdido represents the company's most promising
near-term¶ commercial crude oil prospect. The 18 other deepwater wells Pemex has drilled have¶ either
been principally natural gas or heavy oil; those that will be brought online still¶ await commercialization.
Complicating the equation, Pemex is saddled with four latest-generation semisubmersible rigs that
cost $500,000 per day. Because the company has been unable to drill in Perdido's ultra-deepwater,
the rigs have been relegated¶ to drilling in shallower water—work that less sophisticated technology
could accomplish. Ongoing concerns over deepwater drilling in the wake of the Macondo incident,
combined with memories of Pemex's less-than-aggressive response to its 1979¶ Ixtoc spill, have given
authorities on both sides of the U.S.– Mexico border pause. An¶ archaic constitutional ban that
prevents the company from providing the proper balance of risk-reward incentives, coupled with
declining production, leave Pemex few¶ large-scale, near-term alternatives—other than forging into
Perdido on its own. The¶ accord signed by U.S. and Mexican authorities on Monday offers an elegant
way to calm fears on both sides of the border. Whether joint ventures materialize or not, the¶ accord
would permit joint inspection teams the right to ensure compliance with¶ safety and environmental
laws. Will Mexico's Senate approve the accord?"
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Status Quo Solves Safety
Status quo solves safety standards
Hull, Florida A&M University College of Law Professor, 11
[Eric V., June 14th 2011, “Crude injustice in the gulf: why categorical exclusions for deepwater drilling in
the Gulf of Mexico are inconsistent with U.S. and international ocean law and policy.”
http://www.thefreelibrary.com/Crude+injustice+in+the+gulf%3A+why+categorical+exclusions+for+deep
water...-a0258598673, Accessed 6/30/13, CB]
Under UNCLOS, states are obligated to protect and preserve the marine environment. (253) Although
states have a sovereign right to exploit their natural resources, they may only do so in accordance
with their obligation to protect and preserve the environment. (254) States must take "all measures ...
necessary to prevent, reduce and control pollution of the marine environment from any source ... and
must employ the "best practicable means at their disposal and in accordance with their capabilities" to
prevent such pollution. (255) States also have an affirmative obligation "to ensure that activities under
their jurisdiction or control are so conducted as not to cause damage by pollution to other States and
their environment." (256) Further, coastal states have an affirmative obligation to enact and enforce
domestic laws when dealing with pollution from sea bed activities consistent with the certain
environmental provisions of UNCLOS. (257) Collectively, these provisions reveal an international
consensus that coastal states have positive duties and responsibilities to take action to protect and
preserve the marine environment. The obligation of states to control marine pollution extends to all
potential pollution sources, including offshore drilling operations. (258)
Although the United States has not ratified UNCLOS, it has acknowledged that most of the
Convention's provisions reflect binding, customary law and apply to U.S. activities. (259) In his EO
announcing the new U.S. ocean policy, President Obama reiterated the need to ratify UNCLOS to allow
the United States to exercise a more integral role in the preservation and restoration of the world's
oceans. (260)
The accidental release of oil associated with offshore exploration and development activities in the
Gulf presents a constant threat to the natural resources of nations in the wider Caribbean basin. In
recognition of this constant threat, the United States is also a bound by two regional agreements to
protect the Gulf environment from oil pollution. Following the Ixtoc I accident, the U.S. signed an
agreement with Mexico that requires both nations to take steps to prevent harm to the marine
environment from oil spills. (261) The United States, along with twenty-three coastal states on the
Caribbean Sea and Gulf of Mexico, also ratified the Convention for the Protection and Development of
the Marine Environment of the Wider Caribbean Region (Cartagena Convention). (262) That Convention
requires parties to:
[T]ake all appropriate measures in conformity with international
law ... to prevent, reduce and control pollution of the Convention
area and to ensure sound environmental management, using for this
purpose the best practicable means at their disposal and in
accordance with their capabilities. [Art. 4(1)];
[T]ake all appropriate measures to prevent, reduce and control
pollution of the Convention area resulting directly or indirectly
from exploration and exploitation of the sea-bed and its subsoil.
[Art. 8]; and
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[A]ssess within its capabilities ... the potential effects of such
projects on the marine environment, particularly in coastal areas,
so that appropriate measures may be taken to prevent any
substantial pollution of, or significant and harmful changes to,
the Convention area. [Art. 12(2)]. (263)
The Oil Spill Protocol to the Cartagena Convention further requires contracting parties to cooperate in
protecting the marine and coastal environment of the wider Caribbean basin and to ensure they have
the means of responding to oil spill incidents under their jurisdiction. (264)
Service providers already take safety measures to prevent spills in the Gulf
León, Downstream oil at HIS Cera Associate Director for Latin America, 12
[Ajejandra, February 20-24, 2012, Inter-American Dialogues, “Oil Sector News,”
http://advisor.thedialogue.org/docs/energy_advisor/2012/february/LEA120224.pdf, p. 3, 6Accessed
6/30/13, CB]
"The lack of Pemex's experience in deep and ultradeep water¶ operations creates a valid uncertainty
about its capabilities to efficiently¶ handle any accident or crude spill in those types of operations.
However,¶ safe operations do not just depend on Pemex. Service providers play a critical role.¶ As long
as Pemex contracts highly qualified companies to develop deep and ultradeep water activities and the
contracts are clear regarding environmental requirements and other responsibilities, the risk will be
mitigated. In fact, prevention is the¶ very first step in creating strategies for potential accidents or
crude spills. In this¶ sense, the role of the National Hydrocarbons Commission (CNH) is critical. As a¶
regulator, the CNH has created clear and strict rules for deepwater operations, aligning Mexican
standards to the strictest international standards. This is a good first¶ step to prevent any serious
accident or crude spill. The next challenge is to ensure that the regulation will be upheld and¶ here the
question remains if the CNH¶ has the sufficient authority and¶ resources to oversee Pemex's operations¶
and guarantee the rule of law."
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THA Safety Regulations Fail
The Agreement Doesn’t guarantee increases in safety standards
Brown and Meacham, Senate Foreign Relations Committee Senior Staff Members, 12
[Niel Brown and Carl Meacham, December 21st 2012, “ OIL, MEXICO, AND THE TRANSBOUNDARY
AGREEMENT,” http://www.gpo.gov/fdsys/pkg/CPRT-112SPRT77567/html/CPRT-112SPRT77567.htm,
Accessed 6/30/13, CB ]
Congress has a duty and interest in overseeing ¶ international agreements. That holds for the TBA since
several ¶ provisions of the TBA invite scrutiny and clarification, even ¶ as the overall agreement is in the
interests of the United ¶ States.\9\ For example, TBA Article 16 establishes an ``expert ¶ determination''
that is binding whereas Article 17 establishes ¶ an arbitration mechanism without specifying whether the
¶ arbitration is binding. Both provisions could impact U.S. ¶ federal revenues, among other issues. In
another example, the TBA is intended to improve environmental and safety protections, but the plain
language makes no such guarantee. Article 19, for example, instructs adoption of common standards,
but that could mean effectively lowering U.S. standards in the border region if the Interior Secretary is
given unrestricted authority to implement that section.
Vagueness means that THA legislation is not sufficient to solve safety issues
McLaughlin, Harte Research Institute for Gulf of Mexico Studies Endowed Chair, et. al
12
[Richard, November/December 2012, The Houston Lawyer, “Gulf of Mexico Offshore Transboundary
Hydrocarbon Development: Legal Issues Between Mexico & the U.S.,” http://www.law.uh.edu/mexicanlaw/documents/HoustonLawyerarticleNovDec2012.pdf, p. 24-25, Accessed 6/30/13, CB]
The Agreement also allows for inspections by both parties in their respective¶ offshore facilities. The
details of when¶ these inspections can take place, as well¶ as under what procedures and
circumstances, are not specified in the Agreement and further regulation in this¶ matter will be
necessary for adequate¶ implementation.32 The Agreement does,¶ however, set up a procedure in
which¶ inspectors from one country can request¶ that the other party cease activities in¶ case of
emergencies where there is a risk¶ of loss to life, serious bodily injury or¶ damage to the environment.33
Safety and Environmental Protection
Article 10 of the Agreement contains¶ rather broad language concerning safety¶ and environmental
protection. It is somewhat insufficient, as it does not establish any specific environmental or safety¶
regulations and instead provides general¶ language about adopting common standards and
requirements whose adequacy¶ and compatibility is yet to be seen.3"1 As¶ is recurrent in this
Agreement, it leaves¶ the development of specific procedures¶ for the implementation of this Article to¶
a later time.
Termination
The Agreement states that it can be terminated either by mutual agreement or¶ by either country at any
time via written¶ notice within a specified time period.36¶ Interestingly, in the event of termination¶ the
two countries must begin consultations to develop a new agreement ad-¶ dressing transboundary
reservoirs.37
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Conclusion
As is readily apparent from this brief¶ article, offshore transboundary hydrocarbon exploitation
triggers a broad¶ range of legal and policy challenges. The¶ Agreement, while a positive first step, is¶
as notable for what it lacks as for what it¶ contains. Clearly, both nations intended¶ to leave some
areas of ambiguity that¶ could be later developed through negotiations or state practice. Nonetheless,¶
legitimate questions exist as to whether¶ Mexico's current constitutional and legal¶ framework will
allow this Agreement to¶ be carried out in a successful manner.38¶ Similarly, the U.S. has never been a
party¶ to an international agreement to jointly¶ develop hydrocarbon resources that extend across
international boundaries.39¶ Consequently, It will have to develop a completely new regulatory
structure capable of governing the unique set of issues common to international unitization agreements.
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US Doesn’t Solve Spills
Despite status quo measures, the U.S. needs to do more to ensure offshore drilling
safety
Hull, Florida A&M University College of Law Professor, 11
[Eric V., June 14th 2011, “Crude injustice in the gulf: why categorical exclusions for deepwater drilling in
the Gulf of Mexico are inconsistent with U.S. and international ocean law and policy.”
http://www.thefreelibrary.com/Crude+injustice+in+the+gulf%3A+why+categorical+exclusions+for+deep
water...-a0258598673, Accessed 6/30/13, CB]
The accidental release of oil associated with offshore exploration and development activities in the Gulf
presents a constant threat to the natural resources of nations in the wider Caribbean basin. In
recognition of this constant threat, the United States is also a bound by two regional agreements to
protect the Gulf environment from oil pollution. Following the Ixtoc I accident, the U.S. signed an
agreement with Mexico that requires both nations to take steps to prevent harm to the marine
environment from oil spills. (261) The United States, along with twenty-three coastal states on the
Caribbean Sea and Gulf of Mexico, also ratified the Convention for the Protection and Development of
the Marine Environment of the Wider Caribbean Region (Cartagena Convention). (262) That
Convention requires parties to:
[T]ake all appropriate measures in conformity with international
law ... to prevent, reduce and control pollution of the Convention
area and to ensure sound environmental management, using for this
purpose the best practicable means at their disposal and in
accordance with their capabilities. [Art. 4(1)];
[T]ake all appropriate measures to prevent, reduce and control
pollution of the Convention area resulting directly or indirectly
from exploration and exploitation of the sea-bed and its subsoil.
[Art. 8]; and
[A]ssess within its capabilities ... the potential effects of such
projects on the marine environment, particularly in coastal areas,
so that appropriate measures may be taken to prevent any
substantial pollution of, or significant and harmful changes to,
the Convention area. [Art. 12(2)]. (263)
The Oil Spill Protocol to the Cartagena Convention further requires contracting parties to cooperate in
protecting the marine and coastal environment of the wider Caribbean basin and to ensure they have
the means of responding to oil spill incidents under their jurisdiction. (264)
Although the U.S. retains a sovereign right to exploit its natural resources, it must do so in a manner
that does not cause harm to neighboring states. That almost happened during the DWH accident, and
could happen in the future if greater safeguards are not taken. (265) By failing to conduct adequate
environmental reviews and by exempting critical exploration activities from environmental review,
MMS violated its obligations under UNCLOS and regional agreements. Given the increasing industry
activity in the Gulf, and the movement of that activity into the outer Gulf , the risk of harm posed to
other countries from U.S. oil exploration and development activities remains high. The United States
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must take appropriate steps in recognition of its obligations under international law to ensure that
activities occurring under its jurisdiction do not cause harm to neighboring countries.
Both Washington and the oil industry have done little to improve offshore drilling
safety regulations since the Gulf spill in 2010
Oil Spill Intelligence Report, 2012
[May 3, “Post-Deepwater Horizon Assessments Grade US Progress,” Wolters Kluwer Law & Business,
Vol. 35 No. 20, p. 1-3, accessed 6-30-12 on Ebsco, UR]
Post-Deepwater Horizon Assessments Grade US Progress¶ Neither the US government, nor the oil
industry,¶ fared well on “report cards” issued in two recent¶ studies of the nation’s progress toward
improving¶ the regulation and safety of offshore oil drilling and¶ increasing response capabilities over
the two years since the blowout and spill at BP plc’s Macondo/¶ MC252 well in the Gulf of Mexico (see
OSIR,¶ 29 April 2010 and subsequent issues). The highest¶ grade, from Oil Spill Commission Action, was a¶
“B” for both advances in safety and environmental¶ protection, and for the Obama Administration’s
role¶ in effecting change. Similar actions were given a “D”¶ by Oceana, an international advocacy group
working¶ to protect the world’s oceans, with other actions¶ receiving even lower scores in Oceana’s
review.
Oil Spill Commission Action (OSCAction) was formed in March 2012 by the members of the National
Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, established in May 2010 by
President Obama to determine the causes of the incident, which resulted in 11 deaths and a spill
totaling 4.9 million barrels (nearly 206 million gallons) of oil. The findings of the Commission (see OSIR,
18 November 2010 and 24 February 2011) included a number of recommendations aimed at increasing
the odds of averting a future disaster of such magnitude. Commission members formed OSCAction to
ensure that their work was not lost as memories of the spill fade. OSCAction operates with a single staff
person in addition to the (volunteer) former Commission members, with support from the Walton
Family Foundation.
OSCAction’s recent booklet, “Assessing Progress — Implementing the Recommendations of the
National Oil Spill Commission” (17 April 2012), gives Industry a C+, and the US Congress a D for their
accomplishments to date, even “reflecting optimism that the activities currently underway will be
completed successfully.” The assessment reviewed five areas of concern: safety and environmental
protection (B), spill response and containment (B-), impacts and restoration (C), ensuring adequate
[financial] resources (D), and frontier areas — the Arctic (C).
The report gives kudos to the US Department of the Interior (DOI) for reorganizing the dysfunctional
Minerals Management Service into the Bureau of Ocean Energy Management (BOEM) and the Bureau of
Safety and Environmental Enforcement (BSEE), issuing the interim final Drilling Safety Rule in October
2010, and requiring well containment systems and other safety precautions for deepwater wells.
Congress, however, was chastised for failing to take any action to implement the Commission’s
recommendations. In fact, the report says that the US House of Representatives “has passed several
bills … that actually run contrary to what the Commission concluded was essential for safe, prudent,
responsible development of offshore oil resources.” In a recent interview with Platts Energy Weekly TV,
William Reilly, former Commission Co-Chair, expressed chagrin that the House Natural Resources
Committee was “contemptuous of the Commission,” and “considered them an instrument of an antifossil-fuel President.” Congressional action that Reilly and OSCAction would like to see includes passage
of the RESTORE Act (see OSIR, 27 October 2011), which would direct 80% of BP’s fines under the US
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Clean Water Act to Gulf states; “creating a dedicated fee program” using industry tariffs to support
regulatory
operations; raising the Oil Spill Liability Trust Fund’s limit on funds to support the government’s
response to future oil spills; and interpreting sanctions to allow the United States to collaborate on
preventing and responding to spills in Mexican or Cuban waters.
Reilly credited BP with “transforming [the] culture” of drilling safety, and said he believed that the
company had “learned its lesson.” However, Oceana’s assessment of industry’s role in improving
process safety for offshore drilling contrasts sharply with Reilly’s opinion, assigning an F to industry’s
improvements to offshore safety. The group’s recent report, “Offshore Drilling Report Card 2012,”
concludes that, across nine categories of recommendations by the Commission and the National
Academy of Engineering and the National Research Council (collectively NAE, see OSIR, 30 September
2010), “In no area did government or industry perform satisfactorily.”
Oceana issued failing grades for six of the nine categories, including (in addition to industry’s
contributions to safety): advancements in oil spill response, planning and capacity; enhancements in
well-containment measures; ensuring industry’s accountability and financial responsibility;
congressional engagement in developing responsible offshore drilling practices; and oil development
in frontier regions. In many respects, Oceana agrees with OSCAction’s assessments, but it does not
frame its review with optimism, and delivers harsher judgments across the board. “Both industry and
government get F’s,” said Jacqueline Savitz, senior campaign director at Oceana in a recent press
release. “Without stronger regulations, and better inspection and enforcement, oil companies will
continue to put profits over safety and there will be more problems. It’s not a matter of whether
there will be another oil spill, but when.”
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Gulf is Resilient
Gulf ecosystem is self-cleansing— oil eating bacteria growth.
Science Daily 13
[4/8/13, “Gulf of Mexico Has Greater-Than-Believed Ability to Self-Cleanse Oil Spills”,
http://www.sciencedaily.com/releases/2013/04/130408152733.htm, accessed 6/30/13, ALT]
"The Deepwater Horizon oil provided a new source of nutrients in the deepest waters," explained
Hazen, who is with the University of Tennessee in Knoxville. "With more food present in the water,
there was a population explosion among those bacteria already adapted to using oil as a food source.
It was surprising how fast they consumed the oil. In some locations, it took only one day for them to
reduce a gallon of oil to a half gallon. In others, the half-life for a given quantity of spilled oil was 6 days.
This data suggests that a great potential for intrinsic bioremediation of oil plumes exists in the deep
sea and other environs in the Gulf of Mexico."
Hazen spoke at a symposium, "Environmental Fate of Petroleum Oils and Dispersants in the Marine
Environment," that included other reports relating to the Deepwater Horizon spill.
Oil-eating bacteria are natural inhabitants of the Gulf because of the constant supply of food.
Scientists know that there are more than 600 different areas where oil oozes from rocks underlying the
Gulf of Mexico. These oil seeps, much like underwater springs, release 560,000-1.4 million barrels of oil
annually, according to the National Research Council.
Hazen's team used a powerful new approach for identifying previously recognized kinds of oil-eating
bacteria that contributed to the natural clean-up of the Deepwater Horizon spill. In the past, scientists
identified microbes by putting samples of water into laboratory culture dishes, waiting for microbes to
grow and then using a microscope to identify the microbes. The new approach, called "ecogenomics,"
uses genetic and other analyses of the DNA, proteins and other footprints of bacteria to provide a more
detailed picture of microbial life in the water.
"The bottom line from this research may be that the Gulf of Mexico is more resilient and better able
to recover from oil spills than anyone thought," Hazen said. "It shows that we may not need the kinds
of heroic measures proposed after the Deepwater Horizon spill, like adding nutrients to speed up the
growth of bacteria that breakdown oil, or using genetically engineered bacteria. The Gulf has a broad
base of natural bacteria, and they respond to the presence of oil by multiplying quite rapidly."
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Alt Causes to Gulf Destruction
Alt causes to oil spills- sunken ships over last two centuries.
Maritime Passive Safety Association 13
[5/22/12, “US Government body confirms growing request for systematic removal of oil
from sunken ships”, http://www.maritimepassivesafety.com/en/2013/05/22/usgovernment-body-confirms-growing-request-for-systematic-removal-of-oil-fromsunken-ships/, accessed 6/30/13, ALT]
The US National Oceanic and Atmospheric Administration (NOAA) handed earlier this week a new
report to the US Coast Guards showing that sunken ships pose a threat to the environment. The
outcome of the report gives credit to concerns growing within the local shore authorities that oil should
systematically be removed from ships after an accident happens, a trend highlighted earlier this year by
the P&I Working Group on large casualties. As the NOAA study shows, trapped in the tanks and
bunkers of sunken ships, the oil can indeed be a threat to the environment even more than 50 years
after the sinister.
The ships cited as hazards were chosen from 20,000 shipwreck sites in a NOAA database based on
factors including the vessel’s size, the likelihood of significant amounts of oil remaining on board, the
type of fuel used and the potential environmental effects from spills in the surrounding area.
The report by NOAA especially details 87 shipwrecks, most sunk in the first half of the XXth century,
which could pollute US waters with oil. Among them, six leaks, mostly situated around Florida coast,
are considered dangerous for the environment. The agency is now studying whether oil can be
removed from some vessels before they leak while the Coast Guard is including this new info into its
plans for addressing marine environmental issues and determine the most appropriate response.
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Biodiversity Answers
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Inevitable
Biodiversity loss inevitable
Phys.org 10
[10-26-10, Phys.org, “Continuing biodiversity loss predicted but could be slowed”
http://phys.org/news/2010-10-biodiversity-loss.html#nRlv, accessed, 7-01-13 AMS]
A new analysis of several major global studies of future species shifts and losses foresees inevitable
continuing decline of biodiversity during the 21st century but offers new hope that it could be slowed
if emerging policy choices are pursued.
Led by experts Henrique Miguel Pereira and Paul Leadley, the 23-member scientific team from nine
countries, under the auspices of DIVERSITAS, UNEP-WCMC and the secretariat of the CBD compared
results from five recent global environmental assessments and a wide range of peer-reviewed literature
examining likely future changes in biodiversity.
Published today in the journal Science, the analysis found universal agreement across the studies that
fundamental changes are needed in society to avoid high risk of extinctions, declining populations in
many species, and large scale shifts in species distributions in the future.
Says Dr. Leadley, of the University Paris-Sud, France: "There is no question that business-as-usual
development pathways will lead to catastrophic biodiversity loss. Even optimistic scenarios for this
century consistently predict extinctions and shrinking populations of many species."
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Alt Cause – Deforestation
Deforestation is the number one cause of biodiversity loss
Science Heathen 12
[12-13-12, Science Heathen, “Deforestation Effects, Causes, And Examples: Top 10 List”
http://scienceheathen.com/2012/12/13/deforestation-effects-causes-and-examples-top-10-list/,
accessed, 7-01-13 AMS]
Deforestation has been the cause of a truly massive number of species extinctions in modern times
and historical times. Even when the originally deforested area is over time reforested, it always lacks
the large biodiversity of its previous state. With the disappearance of the original forest, many species
go extinct, and many that don’t lose a great deal of their genetic diversity and variation. This has
significant implications for the medical and agricultural industries. Many potential medicines, and
disease and pest resistant varieties of agricultural plants, have been lost as a result of deforestation.
Modern agriculture is almost entirely dependent on a very limited number of crop plants that are
becoming increasingly lacking in genetic diversity, and susceptible to disease, pests, and climatic
changes. With the loss of many related wild species, much genetic diversity is lost that could address
potential future disease outbreaks and climatic changes.
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Alt Cause – Climate Change
Lack of adaptability leads species to be destroyed by climate
Secretariat of the Convention on Biological Diversity 10
[May 2010, Global Biodiversity Outlook 3, Pg, 56 http://www.cbd.int/doc/publications/gbo/gbo3-finalen.pdf, accessed, 7-01-13 AMS]
Climate change is already having an impact on biodiversity, and is projected to become a progressively
more significant threat in the coming decades. Loss of Arctic sea ice threatens biodiversity across an
entire biome and beyond. The related pressure of ocean acidification, resulting from higher
concentrations of carbon dioxide in the atmosphere, is also already being observed.
Ecosystems are already showing negative impacts under current levels of climate change (an increase
of 0.74ºC in global mean surface temperature relative to pre-industrial levels), which is modest
compared to future projected changes (2.4-6.4 ºC by 2100 without aggressive mitigation actions). In
addition to warming temperatures, more frequent extreme weather events and changing patterns of
rainfall and drought can be expected to have significant impacts on biodiversity.
Impacts of climate change on biodiversity vary widely in different regions of the world. For example, the
highest rates of warming have been observed in high latitudes, around the Antarctic peninsula and in
the Arctic, and this trend is projected to continue. The rapid reduction in the extent, age and thickness
of Arctic sea ice, exceeding even recent scientific forecasts, has major biodiversity implications.
Already, changes to the timing of flowering and migration patterns as well as to the distribution of
species have been observed worldwide. In Europe, over the last forty years, the beginning of the
growing season has advanced by 10 days on average. These types of changes can alter food chains and
create mismatches within ecosystems where different species have evolved synchronized interdependence, for example between nesting and food availability, pollinators and fertilization. Climate
change is also projected to shift the ranges of disease-carrying organisms, bringing them into contact
with potential hosts that have not developed immunity. Freshwater habitats and wetlands,
mangroves, coral reefs, Arctic and alpine ecosystems, dry and subhumid lands and cloud forests are
particularly vulnerable to the impacts of climate change.
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No Biodiversity Impact
Their impact claims are wrong, we still can’t fully comprehend biodiversity
National Science Foundation 12
[9-24-12, National Science Foundation, “Stemming the Tide of Biodiversity Loss on Earth”
http://www.nsf.gov/news/news_summ.jsp?cntn_id=125495, accessed, 7-01-13 AMS]
Biodiversity research has often focused on a single dimension. For example, investigators have
concentrated on the taxonomic diversity or phylogenetic history of a clade (an ancestor and all its
descendants), the genetic diversity of a population or a species, or the functional role of a taxon (a
group of one or more populations of organisms) in an ecosystem.
Although this research has yielded important advances, huge gaps exist in our understanding of
biodiversity . We know little about how these various dimensions, individually and in concert,
contribute to environmental health, ecosystem stability, productivity and resilience, and biological
adaptation to rapid environmental change.
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No Extinction
No extinction – biodiversity is recovering
The Economist 09
[1-15-09, The Economist, “Second life Biologists debate the scale of extinction in the world’s tropical
forests” http://www.economist.com/node/12926042, accessed, 7-01-13 AMS]
A RARE piece of good news from the world of conservation: the global extinction crisis may have been
overstated. The world is unlikely to lose 100 species a day, or half of all species in the lifetime of people
now alive, as some have claimed. The bad news, though, is that the lucky survivors are tiny tropical
insects that few people care about. The species that are being lost rapidly are the large vertebrates that
conservationists were worried about in the first place.
This new view of the prospects for biodiversity emerged from a symposium held this week at the
Smithsonian Institution in Washington, DC, but the controversy over how bad things really are has been
brewing since 2006. That was when Joseph Wright of the Smithsonian Tropical Research Institute in
Panama and Helene Muller-Landau of the University of Minnesota first suggested that the damage
might not be as grim as some feared. They reasoned that because population growth is slowing in
many tropical countries, and people are moving to cities, the pressure to cut down primary rainforest
is falling and agriculturally marginal land is being abandoned, allowing trees to grow.
This regrown “secondary” forest is crucial to the pair's analysis. Within a few decades of land being
abandoned, half of the original biomass has returned. Depending on what else is nearby, these new
forests may then be colonised by animals and additional plants, and thus support many of the species
found in the original forest.
Dr Wright and Dr Muller-Landau therefore reckon that in 2030 reasonably unbroken tropical forest will
still cover more than a third of its natural range, and after that date its area—at least in Latin America
and Asia—could increase. Much of this woodland will be secondary forest, but even so they suggest that
in Africa only 16-35% of tropical-forest species will become extinct by 2030, in Asia, 21-24% and, in Latin
America, fewer still. Once forest cover does start increasing, the rate of extinction should dwindle.
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AT – Sea Turtles
Alt cause to turtle decline- climate change.
SeeTurtles.org Non-Profit 13
[2013, “GLOBAL WARMING”, http://www.seeturtles.org/1380/global-warming.html,
accessed 7/1/13, ALT]
The effects of global warming (aka "climate change") will have enormous impacts on sea turtles and
other wildlife. The rate of global warming far exceeds the abilities of animals to adapt naturally to such
dramatic environmental changes. These changes are predicted to cause the extinction of many species
over the next few decades.
Sea level rise from the melting of polar ice is already contributing to the loss of beach and sea turtle
nesting habitat. Weather extremes, also linked to climate change, mean more frequent and severe
storms which alter nesting beaches, cause beach erosion, and inundate, or flood sea turtle nests.
Hotter sand from increasing temperatures results in decreased hatching rates or complete nest
failure. Increased sand temperatures also affect hatchlings by altering natural sex ratios, with hotter
temperatures producing more female hatchlings.
Sea turtles use ocean currents to travel and find prey. Warming ocean temperatures influence
migratory species by altering currents and impacting the distribution and abundance of prey species.
This can result in southerly species being found in more northerly regions, well outside of their normal
range. Warmer water temperatures also affect coral reefs through coral bleaching which are vital to
the survival of species like the hawksbill.
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Energy Independence Answers
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Privates Solve
Private companies will inevitably solve better – energy independence is not necessary
Grossman, Butler University economics professor, 5/6/13
[Peter, 5-6-13, Nuvo, “What is Wrong with U.S. Energy Policy”,
http://www.nuvo.net/GuestVoices/archives/2013/05/06/what-is-wrong-with-us-energypolicy#.UdCl9ZWCKMM, accessed 6-30-13, HG]
There are some good reasons why the government might usefully underwrite research into new energy
technologies. But if and when fossil fuel prices rise high enough, there will be increasing incentives for
entrepreneurs to pursue various technological paths. Crash government programs are generally based
on political panic, arrogance, and misunderstanding, a combination that had led to continuous failure
of U.S. policies.
The pursuit of energy independence is both fruitless and pointless. It is pointless to have an "Apollo"
program to achieve something that cannot be achieved in any way that would make us better off. When
this is understood, energy programs will no longer need to be grandiose, and will no longer be meant to
solve everything from unemployment to a spiritual crisis of the American people.
Because of an unchanging narrative, energy policies never really seem to change. We keep searching
for the holy grail of energy independence, the solution to the imagined problems of the narrative.
Independence has always hinged on the development of a new technology that would be American
and low cost. Nuclear breeder reactors, synfuels, ethanol, solar, wind, electric cars: these have been
touted as the way to energy independence. Yes, President Obama talks about "all of the above" but
lavishes subsidies and mandates on preferred technologies that would be reduced to niche products if
those benefits were removed.
A true all-of-the-above strategy would be one in which no energy technology was subsidized, in which
all of the above would be able to compete in the market.
In reality since our energy policies are misguided, and skewed by politics, we are left worse off than if
we just let the market prevail.
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Wind Solves
New offshore wind solve U.S. energy security
Snyder, Deputy Staff Director for Communications at House Natural Resources
Committee, 6/5/13
[Eben Burnham-Snyder, Deputy Staff Director for Communications at House Natural Resources
Committee, 2013 (“Markey: Offshore Wind Competition Begins in New England,”UPI.com, Energy
Resources, 6-5-13, Available Online at http://www.upi.com/Business_News/EnergyResources/2013/06/05/Offshore-wind-to-boost-US-energy-security/UPI-65961370432001/, Accessed on
June 30, 2013)][SP]
WASHINGTON, June 5 (UPI) -- Offering acreage off the coast of Massachusetts and Rhode Island to
wind energy developers is a boost for U.S. energy security, Rep. Ed Markey, D-Mass., said.
The U.S. Interior Department announced Tuesday it would auction off acreage in the Atlantic Ocean in
July for the development of offshore wind farms.
Markey, D-Mass, ranking member on the House Natural Resources Committee, said he commended the
Interior Department for working on renewable energy developments.
"Offshore wind is a win for American jobs, for American energy security, and for our environment, and
it will start off the coast of New England," he said in a statement released Tuesday evening.
Interior Secretary Sally Jewell said the wind energy lease would add to the benefits of higher U.S. oil
and natural gas production. She said for oil, imports were down to their lowest level since 1988.
"As we experience record domestic oil and gas development. We are also working to ensure that
America leads the world in developing the energy of the future," she said in a statement.
The lease is the first of its kind in U.S. history. The July 31 auction is for 164,750 acres of maritime
acreage off the coast of Massachusetts and Rhode Island.
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AT – Energy Terrorism
The impact is non-unique and inevitable — Energy terrorism happens frequently — it
is too hard to stop
Global Insider 2/5/13
[The Global Insider, The Editors, 2013 (“Global Insider: Why Energy Terrorism is Nothing New and Hard
to Stop,” The Global Insider, World Politics Review, 2-5-13, Available Online at
http://www.worldpoliticsreview.com/trend-lines/12692/global-insider-why-energy-terrorism-isnothing-new-and-hard-to-stop, Accessed on June 30, 2013)]
In mid-January, militants raided Algeria’s In Amenas gas field, sparking a crisis that ended with the
deaths of at least 37 hostages. Anne Korin, co-director of the Institute for the Analysis of Global Security,
an energy security research organization, explained in an email interview why the oil and gas industry is
an attractive target for terrorists.
WPR: What makes the oil and gas industry an attractive target for terrorists?
Anne Korin: In many parts of the world where oil and gas export income is a critical contributor to
regime budgets, attacking oil and gas infrastructure serves to strike a direct and highly visible blow
against the regime and its foreign partners. It also undermines stability, especially in cases of attacks
on infrastructure feeding domestic energy demand such as pipelines that deliver fuel to power plants
and so forth. Oil and gas infrastructure also tends to be sprawling -- pipelines, for example, stretch
across hundreds if not thousands of miles -- and so is tremendously difficult to defend. Finally, oil and
gas ignite easily, creating spectacular fireballs and an impact many multiples of the ammunition used.
WPR: How is responsibility for protecting energy installations like the one attacked in Algeria divided
between the public and private sectors?
Korin: That depends on the country. In parts of the world where oil and gas resources are nationalized,
and foreign energy companies are not welcome, the public sector bears the full security cost burden
while sometimes outsourcing security services to contractors. In areas where international companies
play a large role, the burden is sometimes shared. However, Western companies often face severe
hurdles both locally and due to pressures back home that hamstring their ability to provide adequate
security for their personnel. In general, effective defense against terrorism requires a deep and broad
intelligence effort to identify terrorists and thwart attacks well before they are carried out, and this is
something that the private sector would be hard-pressed to achieve. Security at a site itself is the last
line of defense, if all else fails. Once terrorists get into the execution phase of the attack, it is much
harder to prevent damage. When it comes to offshore operations, where the private sector has no
jurisdiction, the onus of providing security falls on the government.
WPR: Are we likely to see a large-scale effort to increase security at vulnerable energy installations, and
what effect would this have on energy prices?
Korin: Attacks on energy infrastructure are quite common and have been for a long time. Vast
resources are already being spent to secure infrastructure, to little effect in some areas. For example,
in Iraq the energy sector was pummeled by hundreds of terrorist attacks on its pipelines, facilities and
industry personnel, despite vast expenditure on the part of coalition forces in an effort to thwart these
assaults. Security against terrorist attacks on oil and gas infrastructure is tremendously difficult to
achieve, regardless of the expense, if security was not designed into the infrastructure in the first
place. For example, a deeply buried pipeline is a much more difficult target to hit effectively than an
aboveground one. Security is also tremendously difficult to achieve in locales where terrorist attacks
are at least in some part inside jobs. In terms of pricing impact, a fear premium is already factored into
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the cost of particularly frequently targeted commodities, such as oil. The cost of security services
themselves is not a significant factor in the price of a barrel.
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Economy Answers
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AT – Now Key
Status quo U.S. energy policy is sustainable – immediate energy effects are overblown
Grossman, Professor of Economics at Butler University, 5/6/13 [Peter, 5-6-13, Nuvo, “What
is Wrong with U.S. Energy Policy”, http://www.nuvo.net/GuestVoices/archives/2013/05/06/what-iswrong-with-us-energy-policy#.UdCl9ZWCKMM, accessed 6-30-13, HG]
And worse lies ahead. Notwithstanding recent finds, the U.S. is running out oil, possibly quite quickly; if
America is unprepared, it will be catastrophic when the tap runs dry. There is the danger of a gap
between supply and demand - the former falling inexorably, the latter growing exponentially. Growing
nations, notably China and India, will demand more than the world can supply. Therefore, the United
States must begin a crash program, on the order of the Apollo moon landing program, to find alternative
domestic resources of fuel. This effort will move the country forward to the ultimate goal of energy
independence.
This narrative is simply wrong. The United States does depend on the world oil market, but this
dependence is not dangerous, does not mean the country's sovereignty or way of life is threatened.
The market can produce uncomfortable price fluctuations, but these have been transitory.
No country can hold America "hostage." That idea is meaningless. OPEC exporters are far more
dependent on selling their oil than the United States is on buying it. Gas lines were caused by bad U.S.
policies, not by OPEC, and not by big oil companies or by greedy Arab sheikhs; gas lines have not
returned since those policies were abandoned. The embargo was fiasco for the Arab countries, not for
us, though Americans still fear that embargoes and gas lines are coming again.
The United States is not about to run out of oil or other fossil fuels that could partly substitute for oil most notably natural gas. The narrative expresses unwarranted alarm. If in fact resource exhaustion
was near, the effects would be gradual and would play out over decades. Prices would trend upward
inexorably, but the long time frame would allow ample time for adjustment. This will be true also with
rising demand from China and India. The price will rise and they will have to deal with higher, perhaps
much higher prices, which will curb demand and encourage development of supply. The idea of a
supply-demand gap is simply nonsense - although it is repeated often.
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Latin America Economy High
World econ will continue to grow – specifically Latin America is growing at high rates
Westcott and Trostle, USDA, 2/12/13
(Paul, Ronald, 2/12/13 “USDA Agricultural Projections to 2022: Macroeconomic Assumptions”
http://www.ers.usda.gov/media/1013574/oce131b.pdf, date accessed, pg. 1, 7/1/13 IGM)
World GDP growth is projected to increase at an average annual rate of around 3.3 percent over ¶ the
next decade. The strongest growth is anticipated in developing countries. China and India are¶ expected
to remain among the world’s fastest growing economies. Robust economic growth is ¶ also anticipated
across developing regions, including Latin America, the Middle East, and Africa, ¶ the countries of the
former Soviet Union, and other countries in East and Southeast Asia. The ¶ developed countries’ share
of global real GDP is 58 percent at the end of the projection period, ¶ down from 67 percent in 2010.
Following a contraction of about 3.1 percent in 2009, the U.S. economy grew 2.4 percent in 2010, ¶ 1.8
percent in 2011 and an estimated 2.1 percent in 2012. U.S. growth in 2013 is expected to be ¶ 2.4
percent. Stronger growth for the U.S. economy of between 2.7 percent to 3.0 percent is then ¶ assumed
for several years, before moving to longer term growth of 2.6 percent. With U.S. growth ¶ slower than
the rest of the world throughout the projection period, the U.S. share of world GDP ¶ falls from nearly
26 percent in 2012 to 24 percent by 2022.
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US Economy High
Economic collapse is unlikely – projected gains
Lange, Reuter’s economic correspondent, 5/7/13
(Jason, 5/7/2013 “Pickup in hiring points to U.S. economic resilience”
http://uk.reuters.com/article/2013/06/07/uk-us-economy-idUKBRE9560NK20130607, date accessed
7/1/13 IGM)
Officials at the U.S. central bank, who next gather on June 18-19, have intimated they could be close to
reducing their $85 billion in monthly bond purchases even though the recovery is not expected to pick
up steam until late in the year when the sting from government spending cuts begins to fade.
The May job growth figure was just above the median forecast in a Reuters poll of economists, and
U.S. stock prices rose sharply on the report, with the blue chip Dow Jones industrial average .DJI closing
up nearly 1.4 percent.
The dollar also firmed and yields on U.S. government bonds climbed modestly in anticipation of Fed
action later this year.
Of economists polled by Reuters after the data, 42 of 48 said they expected the central bank to trim
bond purchases before year-end. Of those, 21 said a reduction would likely occur in the third quarter; 19
specified September. <FED/R>
Philadelphia Federal Reserve Bank President Charles Plosser told Reuters the jobs figures showed that
fears were overdone of how hard a tightening of fiscal policy would hit the economy. He repeated his
call for the central bank to start easing up on its stimulus sooner rather than later.
"We would all like it to be stronger but there's no reason for us to feel bad about the numbers that
came out," he said.
U.S. economy growing now – mortgage rates, real estate, consumer confidence, and
employment prove
Bloomberg 6/6/13
[6-6-13, Bloomberg News, “Growing Faith in U.S. Economy Underpins Consumer Comfort”,
http://www.bloomberg.com/news/2013-06-06/growing-faith-in-u-s-economy-keeps-comfort-near-fiveyear-high.html, accessed 6-30-13, HG]
The Bloomberg Consumer Comfort Index held at minus 29.7 in the period ended June 2. Sentiment
about the current state of the economy improved to the best level since January 2008, and opinions on
personal finances were at a one-year high.
Rebounds in housing and stocks have helped upper-income Americans recover much of the wealth
lost during the recession, while a drop in firings is probably making the average worker feel more
secure in their jobs. At the same time, wage gains that have barely kept up with inflation and a jump in
interest rates may be starting to suppress buying plans, raising concern about the outlook for spending.
“People are more certain about their own employment and wage prospects,” said Joseph Brusuelas, a
senior economist at Bloomberg LP in New York. “The rising equity and home prices are certainly having
an interesting effect on upper-income Americans, who seem to have captured a portion of the recovery
in overall national wealth.”
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Sentiment for households earning between $75,000 and $100,000 annually reached a five-year high,
eclipsing confidence among the highest income earners.
Fewer Americans filed applications for unemployment benefits last week, indicating companies are
confident demand will be sustained in the face of federal budget cuts and tax increases, other figures
showed today.
Jobless claims decreased by 11,000 to 346,000 in the week ended June 1 from 357,000, the Labor
Department reported. The total number of people receiving benefits declined to 2.95 million. It
reached a five-year low of 2.92 million two weeks ago. Stocks rose as investors consider whether the
Federal Reserve will begin scaling back stimulus. The Standard & Poor’s 500 Index climbed 0.1 percent
to 1,609.98 at 9:54 a.m. in New York. Two of the comfort index’s components improved last week. The
gauge on consumers’ current view about the economy climbed to minus 53 from minus 54.7, while the
measure of personal finances rose to 4.6, its best reading since April 2012, from 2.8. Fewer consumers
said the time was right to purchase needed items, as a measure of the buying climate fell to minus 40.8,
a two-month low, from minus 37.3 a week earlier. The measure reached a more than five-year high of
minus 31.5 four weeks ago.
During that time, mortgage rates have skyrocketed amid concern Federal Reserve policy makers will
scale back on the amount of bonds they buy each month. The rate on a 30-year fixed home loan shot
up to 3.81 percent in the week ended May 30, the highest level in a year, from 3.35 percent in the
week ended May 2, according to figures from Freddie Mac. It reached a record-low 3.31 percent in late
November.
Other reports on buyer sentiment have followed the comfort index in showing improvement. The
Conference Board’s confidence index rose in May to the highest level since February 2008, while the
Thomson Reuters/University of Michigan sentiment gauge reached its highest level since July 2007.
A housing market rebound could be brightening moods. The S&P/Case-Shiller index of property values in
20 cities increased 10.9 percent in the year to March, the biggest 12-month gain since April 2006, a
report showed last month.
Consumer Spending
Household purchases climbed at a 3.4 percent annualized rate in the first quarter, almost twice as fast
as the prior quarter’s 1.8 percent gain. That helped the economy strengthen, with gross domestic
product rising at a 2.4 percent pace compared with a 0.4 percent advance in the last three months of
2012, a Commerce Department report showed last week.
Rising property and stock values are helping Americans cope with an increase in payroll taxes, after the
levy funding social security reverted to its 2010 level of 6.2 percent in January from a reduced 4.2
percent rate.
The gauge for consumers earning between $75,000 and $100,000 climbed to 8.9 last week, its highest
level since November 2007, eclipsing confidence among highest wage earners. Among Americans with
annual incomes of $100,000 or more, the Bloomberg comfort index retreated to 8 from 8.3 a week
earlier.
Households earning between $50,000 and $75,000 a year declined for the fourth week, falling to minus
23.1 from minus 22.4.
Restaurants are among businesses struggling to overcome a tough environment for those in lowerincome brackets.
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Econ Resilient
Econ resilient – housing market, auto industry and stock markets prove
Newman, US News Chief Business Correspondent, 3/5/13
(Rick, 3/5/2013 “Thank the Fed for the 'Resilient' Economy” http://www.usnews.com/news/blogs/ricknewman/2013/03/05/thank-the-fed-for-the-resilient-economy, date accessed 7/1/13 IGM)
1. The housing market has turned around. The housing bust began in 2006 and ended in 2012. Average
prices fell by about 31 percent during that time, according to the Fiserv Case-Shiller index. But housing
has now flipped from a drag on the economy to a sector that's creating jobs and contributing to
growth, which is one of the indirect ways the Fed hopes to lower the unemployment rate.
Three factors are now powering the housing sector: More affordable prices, easing credit standards
that allow more buyers to qualify for mortgages, and low interest rates engineered by the Fed. It took
a long time for the housing market to recover, but there was probably no other way to work through
millions of foreclosures and allow prices to find an equilibrium. Without low interest rates, it almost
certainly would have taken longer.
2. Auto sales are strong. Annual auto sales peaked at more than 17 million in 2005, then fell by 40
percent from that level during the recession. This year, automakers are likely to sell about 15.5 million
cars, which represents a solid recovery that's helping bring back jobs and contribute to growth. The
car industry is recovering faster than housing, because lenders have been more willing to grant auto
loans than mortgages—including to subprime borrowers. As with housing, low rates have lured buyers,
and even prompted them to spend more, since the monthly payments are lower than they'd otherwise
be. TrueCar.com reports that the average price of a new car has risen by more than $2,000 during the
last three years, to nearly $31,000.
3. The stock market is booming. The S&P 500 index has soared by 132 percent from the low point it
reached in March 2009, and the Dow Jones Industrial Average has even eclipsed the prior all-time high
set in Oct. 2007. During the last four years, the rising market has almost directly coincided with
intensifying QE announcements from the Fed. That makes sense, since QE is designed to force investor
money out of low-yielding bonds into riskier assets like stocks. It seems to have worked, and the stockmarket rebound has restored virtually all the financial wealth lost during the market plunge in 2008
and 2009.
No collapse – US is resilient, empirics prove
Turner, Turner Investments chief investment officer, 5/25
(Bob, multinational investment firm, 5/25/2013 “6 reasons to be optimistic about the US”
http://www.morningstar.com.au/funds/article/optimistic-us/6006?q=printme, date accessed 7/1/13
IGM)
Various countries have dominated the global economy over time. But the United States has proven to
be an especially resilient economic power. We believe there are several reasons for American staying
power in the face of economic challenges, including its innovation and disruptive technologies, its
demographic advantage, its stable rule of law and anti-corruption measures, its recent renaissance in
manufacturing, its global dominance in media and entertainment, and its increasing energy
independence.
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Jake LaMotta - the boxer profiled in Martin Scorsese's classic movie Raging Bull - was famous for his
ability to take colossal punishment in his bouts. That ability helped him to become the world's
middleweight champion and never suffer a knockout.
In much the same way, the US has proven time and again its ability to absorb economic blows that
might have KO'ed lesser nations. Over the centuries, various countries have dominated the global gross
domestic product (GDP). Some countries faded, then returned to economic prominence. Others faded
and remained faded.
In all, the US economy has been a remarkably consistent, top-shelf performer over the past 150 years.
It has kept expanding at a steady - if somewhat less-than-spectacular - rate of between 2-5 per cent.
Because of that consistency, it's been difficult to keep the US economy down for long.
U.S. economy resilient – will not escalate
Behravesh, chief global economist and executive vice president for Global Insight, 6
[Nariman, 1-15-6, Newsweek, “The Great Shock Absorber”,
http://www.thedailybeast.com/newsweek/2006/01/15/the-great-shock-absorber.html, accessed 6-3013, HG]
The U.S. and global economies were able to withstand three body blows in 2005--one of the worst
tsunamis on record (which struck at the very end of 2004), one of the worst hurricanes on record and
the highest energy prices after Hurricane Katrina--without missing a beat. This resilience was especially
remarkable in the case of the United States, which since 2000 has been able to shrug off the biggest
stock-market drop since the 1930s, a major terrorist attack, corporate scandals and war.
Does this mean that recessions are a relic of the past? No, but recent events do suggest that the global
economy's "immune system" is now strong enough to absorb shocks that 25 years ago would
probably have triggered a downturn. In fact, over the past two decades, recessions have not
disappeared, but have become considerably milder in many parts of the world. What explains this
enhanced recession resistance? The answer: a combination of good macroeconomic policies and
improved microeconomic flexibility.
Since the mid-1980s, central banks worldwide have had great success in taming inflation. This has
meant that long-term interest rates are at levels not seen in more than 40 years. A low-inflation and
low-interest-rate environment is especially conducive to sustained, robust growth. Moreover, central
bankers have avoided some of the policy mistakes of the earlier oil shocks (in the mid-1970s and early
1980s), during which they typically did too much too late, and exacerbated the ensuing recessions. Even
more important, in recent years the Fed has been particularly adept at crisis management, aggressively
cutting interest rates in response to stock-market crashes, terrorist attacks and weakness in the
economy.
The benign inflationary picture has also benefited from increasing competitive pressures, both
worldwide (thanks to globalization and the rise of Asia as a manufacturing juggernaut) and domestically
(thanks to technology and deregulation). Since the late 1970s, the United States, the United Kingdom
and a handful of other countries have been especially aggressive in deregulating their financial and
industrial sectors. This has greatly increased the flexibility of their economies and reduced their
vulnerability to inflationary shocks. Looking ahead, what all this means is that a global or U.S. recession
will likely be avoided in 2006, and probably in 2007 as well. Whether the current expansion will be able
to break the record set in the 1990s for longevity will depend on the ability of central banks to keep the
inflation dragon at bay and to avoid policy mistakes. The prospects look good. Inflation is likely to
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remain a low-level threat for some time, and Ben Bernanke, the incoming chairman of the Federal
Reserve Board, spent much of his academic career studying the past mistakes of the Fed and has vowed
not to repeat them.
At the same time, no single shock will likely be big enough to derail the expansion. What if oil prices
rise to $80 or $90 a barrel? Most estimates suggest that growth would be cut by about 1 percent--not
good, but no recession. What if U.S. house prices fall by 5 percent in 2006 (an extreme assumption,
given that house prices haven't fallen nationally in any given year during the past four decades)?
Economic growth would slow by about 0.5 percent to 1 percent. What about another terrorist attack?
Here the scenarios can be pretty scary, but an attack on the order of 9/11 or the Madrid or London
bombings would probably have an even smaller impact on overall GDP growth.
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AT – Economic Decline Causes War
Economic decline doesn’t lead to war – empirical evidence proves
Miller, University of Ottawa Economic Professor, 1
(Morris, Jan-Mar 2001, “Poverty a Cause of War?” http://archive.peacemagazine.org/v17n1p08.htm,
date accessed 7/1/13, IGM)
Large-scale armed conflict is so expensive that governments must resort to exceptional sources, such as
drug dealing, diamond smuggling, brigandry, or deal-making with other countries. The reliance on illicit
operations is well documented in a recent World Bank report that studied 47 civil wars that took place
between 1960 and 1999, the main conclusion of which is that the key factor is the availability of
commodities to plunder. For greed to yield war, there must be financial opportunities. Only affluent
political leaders and elites can amass such weaponry, diverting funds to the military even when this runs
contrary to the interests of the population. In most inter-state wars the antagonists were wealthy
enough to build up their armaments and propagandize or repress to gain acceptance for their policies.
Economic Crises? Some scholars have argued that it is not poverty, as such, that contributes to the
support for armed conflict, but rather some catalyst, such as an economic crisis. However, a study by
Minxin Pei and Ariel Adesnik shows that this hypothesis lacks merit. After studying 93 episodes of
economic crisis in 22 countries in Latin American and Asia since World War II, they concluded that
much of the conventional thinking about the political impact of economic crisis is wrong:
"The severity of economic crisis - as measured in terms of inflation and negative growth - bore no
relationship to the collapse of regimes ... or (in democratic states, rarely) to an outbreak of violence...
In the cases of dictatorships and semi-democracies, the ruling elites responded to crises by increasing
repression (thereby using one form of violence to abort another)."
No war from decline – preventative measures like WTO prove
Barnett, Wikistrat military chief analyst, 9
(Thomas P.M., 8/24/2009, “The New Rules: Security Remains Stable Amid Financial Crisis”
http://www.worldpoliticsreview.com/articles/4213/the-new-rules-security-remains-stable-amidfinancial-crisis, date accessed 7/1/13 IGM)
Can we say that the world has suffered a distinct shift to political radicalism as a result of the
economic crisis?
Indeed, no. The world's major economies remain governed by center-left or center-right political
factions that remain decidedly friendly to both markets and trade. In the short run, there were
attempts across the board to insulate economies from immediate damage (in effect, as much
protectionism as allowed under current trade rules), but there was no great slide into "trade wars."
Instead, the World Trade Organization is functioning as it was designed to function, and regional
efforts toward free-trade agreements have not slowed.
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AT – Royal “Economic Decline Causes War”
Their part of the Royal evidence is just a review of other people’s arguments- the
conclusion votes neg
Royal director of Cooperative Threat Reduction 10
(Jedediah, “Economic Integration, Economic Signaling and the Problem of Economic Crises,” Google
Book, page 218-219, KR) [ECST=Economic Cost Signaling Theory]
CONCLUSION The logic of ECST supports arguments for greater economic interdependence to reduce
the likelihood of conflict. This chapter does not argue against the utility of signaling theory. It does,
however, suggest that when considering the occurrence of and conditions created by economic crises,
ECST logic is dubious as an organizing principle for security policy makers. The discussion pulls
together some distinct areas of research that have not yet featured prominently in the ECST literature.
Studies associating economic interdependence, economic crises and the potential for external conflict
indicate that global interdependence is not necessarily a conflict suppressing process and maybe
conflict- enhancing at certain points. Furthermore, the conditions created by economic crises decrease
the willingness of states to send economic costly signals, even though such signals maybe most
effective during an economic crisis.
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Pemex Answers
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Reform Inevitable
Nieto already plans on reforming Pemex despite opposition
Rathbone, Financial Times Latin American Editor, 6/17/13
(John Paul, 6-17-13, Financial Times, “Peña Nieto pledges transformational reform of Pemex,”
http://www.ft.com/intl/cms/s/0/e4d99f60-d767-11e2-8279-00144feab7de.html#axzz2XMMYUMtB,
Accessed 6-26-13, MSG)
Enrique Peña Nieto, the Mexican president, vowed to press ahead with what he claimed would be a
“transformational” reform of Pemex, the state-owned oil monopoly, a controversial move widely
expected to unleash billions of dollars of foreign investment.
Mr Peña Nieto said the need to liberalise Pemex was already agreed under the so-called Pact for
Mexico, a coalition between the country’s three main political parties, and that a more detailed
proposal would be forthcoming within “two to three months.”
“There are different options on what the reform should be, but I am confident . . . It will be
transformational,” he told the Financial Times. Mr Peña Nieto added the reform would include “the
constitutional changes needed to give private investors certainty”.
Oil majors such as ExxonMobil and Royal Dutch Shell, which have been shut out by Mexico’s
protectionist energy policies, have said they are ready to invest if Congress passes the measure, a
keystone of Mr Peña Nieto’s ambitious reform agenda. Pemex, with annual sales of more than $100bn,
is the world’s seventh-largest oil producer but the government’s high tax take has left it struggling to
fund investment.
Since taking office in December, Mr Peña Nieto has already pushed through education, competition
and labour reforms. But liberalising Pemex and possibly allowing for profit-sharing with international
companies would be the most politically charged change of all, given that the industry’s nationalisation
in 1938 remains a point of national pride for many in Latin America’s second-biggest economy.
“Democracy is about respecting the majority, it’s not about unanimity,” Mr Peña Nieto said,
commenting on potential opposition to the measure. “Although the pact does not include everybody,
it includes the most important parties. And there will always be dissident voices – as happens in any
country that is liberal and free.”
Pemex reform inevitable—Nieto already pushing and passage is likely
Cattan, Bloomberg News reporter, & Martin, Bloomberg News reporter, 3/1/13
(Nacha & Eric, 3-1-13, Bloomberg News, “Pena Nieto Pushes Mexico’s Ruling Party to End Pemex
Monopoly,” http://www.bloomberg.com/news/2013-03-01/pena-nieto-pushes-mexico-s-ruling-partyto-end-pemex-monopoly.html, accessed 6-26-13, MSG)
Before taking office Dec. 1 , Pena Nieto was debating whether to promote a constitutional
amendment on Pemex or to rely on smaller legal changes, Luis Videgaray, his then transition team
leader and now finance minister, said in an Oct. 26 interview
Since then, Pena Nieto reached an agreement with all major parties to promote both oil and tax
legislation this year, even though the proposals lack specifics.
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The so-called “Pact for Mexico,” along with the PRI’s likely passage of rule changes this weekend, give
Pena Nieto the momentum needed to push for sweeping reforms, said Duncan Wood of the Woodrow
Wilson International Center for Scholars.
“It looks like Pena Nieto is going to be given the freedom of action by the party to negotiate broader
rather than more restricted reforms,” Wood, director of the center’s Mexico Institute, said in a phone
interview from Washington. “The fact they’ve gone through this preliminary stage is a very, very
important signal for what they’re hoping to achieve.”
Regulatory and energy reform of Pemex likely—allows growth in Mexican natural gas
production
Shively, Enerdynamics president, 5/10/13
(Bob Shively, Enerdynamics Lead Instructor, 5/10/13, “ Mexican Natural Gas – The Next
Paradigm Buster?,” http://blog.enerdynamics.com/2013/05/10/mexican-natural-gas-the-nextparadigm-buster/, Accessed 6/29/13, JC)
Twenty years later, Mexican imports of U.S. gas have grown by a factor of 10, pipeline companies are
rushing to build new pipes from the U.S. into Mexico, and Mexico imports liquefied natural gas
(LNG) from counties such as Qatar and Peru. Meanwhile Mexican industrial and power plant gas
demand has more than doubled in the same timeframe. Does this mean the consultants had it all
wrong? Maybe, but maybe they were just well before their time. Recent discoveries of significant
shale gas resources in northern Mexico, coupled with potential political and regulatory reforms being
pushed by the newly elected President Enrique Peña Nieto, suggest the possibility of significant future
growth in Mexican gas production.
Gas demand in Mexico is largely dominated by use by the national oil company PEMEX, which uses gas
for refineries, petrochemical plants, and oil exploration and production. This accounts for about 40%
of demand. Another 33% is used for electricity generation and the remainder is used mostly by nonPEMEX industrial customers. Mexico used about 2.4 Bcf in 2011 and projections are that gas demand
will continue to grow due to continued construction of gas fired power plants and growth in industrial
output. Gas demand has risen on average by 4% a year between 2007 and 2011. According to
projections by the federal electric monopoly Comisión Federal de Electricidad (CFE), demand for gas
could triple to over 7 Bcf by 2027 just due to power plant growth (2).
Meanwhile, gas production in Mexico has failed to keep up with growing demand despite robust
reserves. In the time frame of 2007 to 2011, gas production grew by 1.2% per year while demand was
growing by 4%. Beginning in the early 2000s, Mexico found it necessary to significantly grow imports
to meet demand, including significant growth in net pipeline imports from the U.S. and construction
of three LNG import terminals.
Mexico has about 17 Tcf of proven reserves. Technologically feasible reserves of conventional natural
gas greater than 60 Tcf (3). Much recent study has gone into the potential for shale gas reserves. An
initial EIA assessment estimated 681 Tcf of technically recoverable shale gas, which is the fourth largest
of any country studied by the EIA (4). And much of this gas is located in regions near the U.S. border.
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Reform Triggers Backlash
PEMEX reform will cause major public backlash – nationalism and constitutionality
Goldberg, Law360 Energy and Environment Senior Reporter, 6/18/13
(Keith, Published June 19, 2013, Law360, “Mexico's Oil Reform Plans Will Attract Intrepid Investors”,
http://www.morganlewis.com/pubs/Law360_MexicoOilReformPlansAttractInvestors_19june13.pdf,
June 26 2013, JB)
Still, ownership of the oil and gas remains with Pemex. Loosening the state's grip on exploration and
production would represent a major sea change in Mexico's energy industry, but there are plenty of
political and legal obstacles, experts say.
Pemex isn't just one of Mexico's biggest moneymakers, it's a source of national pride . The 1938
nationalization was carried out under the auspices of the Mexican constitution, which states that the
country's natural resources belong to the nation.
"It was one of the changes that followed the Mexican Revolution — it’s at the core of Mexican culture,"
Akin Gump Strauss Hauer & Feld LLP global project finance partner Dino Barajas told Law360.
"If you change something that’s been part of the Mexican psyche overnight, there’s likely to be a
public backlash."
Pemex reform leads to major backlash – social and political
Esteves, Forbes Contributor, 6/26/13
(Dolia, Published June 26 2013, Forbes, “Most Mexicans Oppose President Peña Nieto's Plans To Open
Up Pemex To Private Investment”, http://www.forbes.com/sites/doliaestevez/2013/06/26/mostmexicans-oppose-president-pena-nietos-plans-to-open-up-pemex-to-privateinvestment/?ss=business%3Aenergy, June 26 2013, JB)
In London last week, Mexican President Enrique Peña Nieto said he will push for a “transformational”
reform of Petroleos Mexicanos (Pemex), Mexico’s state-owned monopoly in oil and gas exploration
and production. “There are different options on what the reform should be, but I am confident … It will
be transformational,” Peña Nieto told the Financial Times, adding that the reform would include “the
constitutional changes needed to give private investors certainty.”
Foreign oil companies were expropriated by Mexican President Lazaro Cárdenas in 1938, and ever since
Mexico’s vast oil resources — 13.9 billion barrels of crude-oil and possibly the world’s fourth-largest
shale-gas reserves– became forbidden to outsiders. The Wall Street Journal said the announcement
highlights a “willingness to break with the past among young, reformist members” of the PRI, Peña
Nieto’s party. Exxon Mobil and Royal Dutch Shell are reported to be ready to return to Mexico, if
Congress passes the measure. Both were among the group of American and British companies
expropriated 75 years ago.
But Mexicans are less than ready to support Peña Nieto’s most ambitious and controversial reform to
date. A new poll by the Centro de Investigación y Docencia Económicas (CIDE), a research institute,
shows that 65 out of every 100 Mexicans are against opening up Pemex, the world’s seventh-largest oil
producer with annual sales of more than $100 billion. “Energy, particularly oil, continues to be the
stronghold of Mexican nationalism,” said CIDE.
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Peña Nieto is counting on the Pact for Mexico, an alliance of the country’s top three political parties, to
try to get the reform passed. The proposal, which is expected to involve reforming the Constitution, will
need two-thirds support from Mexico’s Congress; the PRI, his party, does not hold a simple majority in
either house. Peña Nieto reported that he’s negotiating to get the political support he needs to break
the state monopoly. However, some analysts believe that the Pacto, which succeeded in getting through
a monopoly-busting telecom reform in May, will not hold up this time. The left-leaning Party of the
Democratic Revolution, or PRD, warned that they will oppose Pemex’s reform. Marcelo Ebrard, a
popular former mayor of Mexico City and likely PRD Presidential candidate in 2018, challenged Peña
Nieto to a televised debate on the oil overhaul. Former PRD Presidential candidate Cuauhtémoc
Cárdenas, Lazaro Cárdenas’ son, presented a counter proposal to “modernize” Pemex without changing
Article 27 of the Constitution to undo the historical ban on privatizing the company. His proposal was
endorsed Tuesday by top PRD politicians, including Ebrard and Mexico City Mayor Miguel Angel
Mancera, and the party’s congressional leaders.
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Reform Fails
Reform fails – Empirically proven
Buchanan and Rathbone, Associated Press, 13
(Ronald Writer in Mexico City for the Financial Times and John Paul writer in London for the Financial
Times, 2/1/13, The Financial Times, “PEMEX Blast Puts Onus on Energy Reforms,”
http://www.ft.com/intl/cms/s/0/eb947824-6c88-11e2-953f-00144feab49a.html#axzz2XIpyuIqh,
Accessed: 6/27/13, LPS.)
“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.
Mr Peña Nieto has promised not to privatise Pemex, but wants to expand the private sector’s role.
ExxonMobil is among foreign majors who have said they would be interested in participating if energy
reform goes ahead. All previous efforts to reform Pemex, which has nearly 150,000 workers and
provides the federal government with a third of its revenues, have failed.
Mexico says no—Nieto can’t stop Pemex’s oil and gas monopoly
World Politics Review 3/21/13
(Sean Goforth, analyst @ Wikistrat, a geostrategic consulting firm; 3/21/13, “Pemex Proves Resistant to
Peña Nieto’s Reform Drive,” http://www.worldpoliticsreview.com/articles/12806/pemex-provesresistant-to-pena-nieto-s-reform-drive, Accessed 6/30/13, JC)
Still, despite the looming drag on the economy and the momentum behind the reform agenda,
restructuring Pemex is a daunting task. Two reform tactics Peña Nieto has used in other sectors
appear unlikely to work here. First, in the case of education, the government advanced reforms by
literally putting a face on the problem. Although Esther Gordillo’s arrest came after Congress passed the
education bill, her surgically enhanced visage, clearly at odds with her official annual salary of less than
$14,000, gave extra momentum to the reform agenda. Pemex, by contrast, is faceless.
Second, Peña Nieto’s reform coalition appears fractured when it comes to Pemex. At the recent PRI
national convention, members voted overwhelmingly to change the party platform to appear receptive
to the idea of opening Pemex to private capital. This would seem to suggest a strong base of support for
Peña Nieto, who in January cooed about turning Pemex into something akin to the partly privatized
Brazilian energy giant Petrobras.
But Peña Nieto’s energy minister, also a member of the PRI, has in recent weeks categorically ruled
out just that sort of privatization. And Mexico’s leftist parties, which together hold 140 of 500 seats in
Congress and proved crucial to passage of the education and telecom reforms, are dead-set against
privatizing Pemex. Doing so would cost jobs, they insist. This week, Peña Nieto, too, ruled out
privatization.
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The tenor of the discussion about reform suggests these challenges will have to be surmounted before
approaching the main hurdle: Mexico’s constitution guarantees Pemex a monopoly on the country’s
oil and gas. Amending it is almost certainly beyond Peña Nieto’s reach.
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AT – Momentum for Reform
Pemex reform will always be unpopular – our evidence is assumptive of their
momentum and coalitional support claims
Goforth, Coastal Carolina University political economy professor, 3/21
(Sean, Published March 21 2013, World Politics Review, “Pemex Proves Resistant to Peña Nieto’s
Reform Drive”, http://www.worldpoliticsreview.com/articles/12806/pemex-proves-resistant-to-penanieto-s-reform-drive, Accessed June 29 2013, JB)
For sure, the state-owned oil company Pemex, one of Mexico’s largest companies and the source of a
third of the government’s revenue, desperately needs reform. The tragic Jan. 31 explosion at Pemex’s
headquarters in Mexico City, which killed 37 people, is just the most acute sign of the company’s creaky
infrastructure.
From a peak of 3.2 million barrels of oil a day in 2004, Pemex’s output is down by nearly 25 percent, a
decline that has come during a period of record high oil prices. At the same time, Mexico’s imports of
natural gas from the U.S. have spiked, increasing by 24 percent last year. Given the current rate of
decline in production, Mexico, which sits atop as much oil as Kuwait, could be a net energy importer
before Peña Nieto leaves office in 2018.
Still, despite the looming drag on the economy and the momentum behind the reform agenda,
restructuring Pemex is a daunting task. Two reform tactics Peña Nieto has used in other sectors
appear unlikely to work here. First, in the case of education, the government advanced reforms by
literally putting a face on the problem. Although Esther Gordillo’s arrest came after Congress passed the
education bill, her surgically enhanced visage, clearly at odds with her official annual salary of less than
$14,000, gave extra momentum to the reform agenda. Pemex, by contrast, is faceless.
Second, Peña Nieto’s reform coalition appears fractured when it comes to Pemex. At the recent PRI
national convention, members voted overwhelmingly to change the party platform to appear receptive
to the idea of opening Pemex to private capital. This would seem to suggest a strong base of support for
Peña Nieto, who in January cooed about turning Pemex into something akin to the partly privatized
Brazilian energy giant Petrobras.
But Peña Nieto’s energy minister, also a member of the PRI, has in recent weeks categorically ruled out
just that sort of privatization. And Mexico’s leftist parties, which together hold 140 of 500 seats in
Congress and proved crucial to passage of the education and telecom reforms, are dead-set against
privatizing Pemex. Doing so would cost jobs, they insist. This week, Peña Nieto, too, ruled out
privatization.
Public extremely against privatization of Pemex
Starr, director of the U.S.-Mexico Network, 9
(Pamela, April 2009, Pacific Council on International Policy, “Mexico and the United States: A Window of
Opportunity?,” http://www.pacificcouncil.org/document.doc?id=35, accessed 6-29-13, MSG)
The question of Pemex reform is further complicated by the firm’s historical ¶ significance and Mexico’s
experience with privatization. Pemex is the physical manifestation ¶ of a nationalist victory over
foreign intervention, of re-establishing Mexican control over its ¶ economic destiny, and hence of
Mexican sovereign pride. Allowing private investors, and ¶ especially foreign investors, to regain
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control over the firm is anathema to the vast majority ¶ of Mexicans. Mexico’s experience with the
sale of public firms to private investors during ¶ the 1990s, meanwhile, was not a reassuring episode
for most of its citizens. Mismanagement ¶ of the newly privatized banks led to their near collapse, an
economic ¶ crisis, and a government bailout. The transfer of the public telephone ¶ monopoly into
private hands created some of the highest phone rates in ¶ the world. The idea of giving private
investors increased control over ¶ Pemex’s future, even through a limited “privatization” of the firm’s ¶
current and future assets, is thus a hard sell. Public polls suggest that a ¶ strong majority of Mexicans
continue to oppose foreign investment in ¶ Pemex and that nearly half oppose private investment
more widely in the ¶ company, although internal government polls carried out during 2007 ¶ apparently
showed some flexibility in these broad attitudes.
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No Constitutional Change
PEMEX privatization is nonstarter – political climate and constitutionality
Goldberg, Law360 Energy and Environment Senior Reporter, 6/18/13
(Keith, Published June 19, 2013, Law360, “Mexico's Oil Reform Plans Will Attract Intrepid Investors”,
http://www.morganlewis.com/pubs/Law360_MexicoOilReformPlansAttractInvestors_19june13.pdf,
June 26 2013, JB)
Privatization of Pemex is a nonstarter, experts say. Reforms are likely to be more modest, such as
allowing joint exploration and production ventures between the private sector and Pemex, or the
government leasing production blocks and collecting royalties.
"In the short term, it would have to be a gradual opening of the market, allowing private companies to
jointly participate along with Pemex, rather than a outright sale of blocks," Barajas said. "I don’t think
political opinion would support that."
Still, the question of whether such reforms could pass constitutional muster is a major concern ,
according to McDermott Will & Emery LLP project finance partner Alex Choinski.
"It would be nice to have a constitutional amendment, but the chances of that happening are politically
challenging," Choinski told Law360. "The bottom line is you want to create some sort of legal and
political stability for investors, especially for capital-intensive deepwater and shale plays, such that their
concession rights aren't going to be challenged constitutionally."
Mexico would never change their constitution and private companies could never
meet their demands
Prensa Latina, 13
(June 21, “Privatizing PEMEX Called Backward Step”,
http://www.plenglish.com/index.php?option=com_content&task=view&id=1537331&Itemid=1,
accessed: 6/26/13, ML)
Mexico, Jun 21 (Prensa Latina) Federal District Head of Government Miguel Angel Mancera called
backward movement the decision to privatize Petroleos Mexicanos (PEMEX) and reiterated his
opposition to change the article 27 of the Constitution, the newspaper La Jornada said today.
In an interview with the Mexican newspaper, Mancera said "the people have gone through many
struggles to be certain that the oil belongs to them."
He said the Mexican left-wing stance, headed by presidential ex-candidate Andres Manuel Lopez
Obrador, is based on the energy reform proposed by Cuauhtemoc Cardenas.
Mancera said the ideas presented by Cardenas take into account participation of the private initiative
to modernize the company and boost the national economy, but without going beyond the limits of
the Constitution.
"I do not see the need to change the constitutional article 27 now. We will need to know what the
proposal is (for a reform by President Peña Nieto). It can not be against the spirit of the oil property in
the hands of Mexicans," said the capital's head of government.
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To Mancera, before thinking to reform the Constitution in that sense, all the mechanisms of
optimization and modernization should be exhausted, and said 70 percent of the profit of the publicsector company go to tax burden, and there is no company that could take that , he said.
Lack of political will to change the constitution prevents effective implementation
Graham, staff writer at Reuters, 6/25/13
(Dave, June 25, “Mexico's main leftist party proposes path to oil reform”, Reuters,
http://www.reuters.com/article/2013/06/26/mexico-pemex-idUSL2N0F124F20130626, accessed:
6/26/13, ML)
President Enrique Pena Nieto's pledge to allow more private capital into Pemex, a symbol of Mexican
self-sufficiency, is one of the most contentious issues on his legislative agenda, even though he has yet
to reveal many details of his plan.
Pena Nieto hopes to pass a reform with the other main groups in Congress, including the leftist Party
of the Democratic Revolution (PRD), which is resisting the president's aim to make changes to the
constitution to open up the industry.
Presenting their reform model in Mexico City, PRD leaders said they saw no need to alter the
constitution to revamp Pemex, whose income makes up about a third of the federal budget.
Still, PRD Chairman Jesus Zambrano said he was ready to listen to the government's ideas, urging Pena
Nieto to spell out his plans for the oil company, whose output has slipped from 3.4 million barrels per
day in 2004 to just over 2.5 million now.
"We have our proposal, now we want to know theirs ... There must be a public debate," Zambrano said.
The PRD argues that corruption, inefficiency, a heavy tax burden and the fact the company is under the
control of the finance ministry are holding back the 75-year-old Pemex.
To end this, the PRD plan envisions cutting Pemex loose to run its own operations, and bringing down
its tax burden.
Senior PRI lawmakers are keen to keep the PRD on board for a reform of the oil monopoly to try and
reduce the impact of protests likely to accompany the launch of the government plan.
Core elements of the PRD plan, such as giving Pemex more independence and reducing the company's
tax burden, are likely to form part of the government's own vision.
The government aims to shift some of that burden onto the public with a tax system overhaul in
tandem with Pemex reform.
Some PRD officials say the party may also be willing to contemplate small tweaks to the constitution
provided Mexico retains control and ownership of its oil reserves.
Advocates of constitutional change say that without it, Mexico will fail to attract the kind of
investment the industry needs, and risks falling further behind countries like the United States that have
ramped up output in recent years.
PROFIT SHARING
Pena Nieto's ruling Institutional Revolutionary Party (PRI) fell short of a majority in Congress when he
won office last year and the president sought to strengthen his hand by forging a loose alliance with
Zambrano and conservative leader Gustavo Madero to work together on economic reforms.
Oil majors are hoping Pena Nieto will deliver a far-reaching shake-up to Pemex that will open the door
to them participating in lucrative exploration and production work in Mexico.
They have held out hope his plan could allow them to book crude reserves that can be used as
collateral - but even the strongest PRI proponents of a business-friendly reform say such a measure is
almost certain to be blocked by Congress.
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Instead, government officials and senior politicians say the reform is likely to set out a framework that
could allow oil majors to enter profit-sharing agreements with Pemex in exchange for the companies
shouldering production and exploration risks.
Ever since the PRI created Pemex when it nationalized the oil industry in 1938, Mexico has been highly
protective of its oil wealth, keeping foreign investors out of the most strategically important parts of the
business.
From the moment he took office in December, Pena Nieto has had to deny accusations he plans to
privatize the company, repeatedly forcing him on the defensive over a reform his government plans to
present by September at the latest.
Leading leftist politicians, such as Andres Manuel Lopez Obrador, the runner-up in the last two Mexican
presidential elections, have pledged to oppose the reform vigorously.
Street protests are likely to be launched against the liberalization of Pemex in the coming weeks.
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Constitution Reform Prerequisite to Reform
No reform without amending the constitution
Stratfor Global Intelligence, 5/22/13
(5-22-13, Stratfor Global Intelligence, “Mexico Pushes for Energy Change”,
http://www.stratfor.com/video/mexico-pushes-energy-change, accessed June 29 2013, JB)
The first question -- whether or not they open up the oil sector to foreign investment -- is going to have
to reside in a question about constitutionality. Right now the Mexican constitution states that subsoil
minerals belong to the state and to the people alone. In order to get foreign investment into Mexico,
Mexico is going to have to change that part of the constitution in order to allow foreign oil companies
to own the oil that they drill. So that's going to have to happen before anything happens with foreign
investment.
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Leadership Answers
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US Latin American Leadership High Now
US regional heg high now—military, economic, soft power
Brand, University of Mainz, et. al 12 [Alexander, Susan Mc Ewen-Fial, University of Mainz,
Wolfgang Muno, University of Erfurt, Andrea Ribeiro Hoffmann, University of Erfurt, 2012“BRICs and
U.S. Hegemony: Theoretical Reflections on Shifting Power Patterns and Empirical Evidence from Latin
America”https://international.politics.uni-mainz.de/files/2012/10/mpiep04.pdf 6/30/13 EYS]
In the military realm, there is no other regional hegemonic contender to the U.S. in sight. U.S.
military capabilities are overwhelming, while Chinese activism towards Latin America has so
far been relatively restricted in the military realm (exchange of personnel, arms trade). In that
sense, it rather serves as a corollary to increased economic interests in the region. In comparison,
Brazilian military ambitions and policies tend to be more in line with establishing itself as a
regional power also in military terms. However, huge gaps remain concerning capabilities, thus
Brazil is hardly in the position to effectively balance the U.S. militarily.
In the economic dimension, the U.S. still is very important for Latin America. What is more,
despite the activities of BRIC states throughout the region, the traditional asymmetrically patterned
relationship still continues to exist: While Latin America on the whole is not the U.S.’s
most important trading partner, Latin American states are still by and large dependent on their
exports to the U.S. market – either heavily (Mexico) or to still impressive degrees. The same
is true for the U.S. as the main source of FDI flows to Latin America; although Brazilian and
Chinese activism is surging, it is still at a comparatively low level. Thus, the very phenomena
that have captured the attention of analysts recently – Chinese FDI targeted to resource and
infrastructure projects, intensified economic exchange between e.g. Brazil and China themselves,
the growth of trade volumes between China and LA as well as Brazil and its regional neighbors
still do not, in essence and so far, signal a fundamental break with the established patterns of
asymmetrical economic relations between the U.S. and Latin America and hence, the strong U.S.
influence in the region. In terms of monetary and currency policy, the U.S. position in terms of
a dominance of the dollar throughout Latin America remains intact so far as well. This means
that fiscal and monetary policies on behalf of the United States still exert considerable influence
within the region, be they intentionally targeted at achieving certain outcomes or not.
China’s relationship (as an external actor) with Latin America is illuminating in this regard, however. It
uses Latin America’s natural resources to sustain China’s economic growth
while establishing alliances to support itself diplomatically. It has expanded its leverage in Latin
America as it becomes an essential market for some of the major states of the region. China
has relied primarily upon economic strategies to create a closer relationship with Latin America
through increased trade and investment. Monetary aspects of economic policies surface from
time to time, but not least given the fact that China (especially its large dollar-denominated
foreign holdings) also depends largely on some measure of dollar stability, no pattern of outright
challenge to U.S. monetary hegemony has emerged so far. Hence, despite its expanded
activities in the region, Latin America does not constitute a primary interest for China in terms
of either economic activity (Watson 2011: 66) or, more general, hegemonic ambitions in the
Latin American region to date.
Concerning institutional innovation and the use of alliances a/o multilateral coordination
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as a means to strengthen one’s influence, things look remarkably different. Here we can detect a
mixture of institutional failure (OAS, FTAA), the fostering of bi- and multilateral trade
institutions as well as non-activism on behalf of the U.S. In contrast, even the Chinese have –
as actors traditionally and geographically external to the region – significantly expanded their
institutional ties to LA lately. State visits, applications for observer status, summits and common
institutional frameworks constitute a relatively significant level of activism. Brazil, on the
other hand, has for years sought to use the institutional level to strengthen its status as regional
power (and potential contender to U.S. regional hegemony). Here, the idea of an intended
counterbalancing of U.S. hegemony is particularly clear.
Interestingly, however, this does not seem to translate into soft power success evenly so
far. Although the U.S. – its foreign and regional policies in particular – still continues to be
the target for a lot of criticism in Latin America, it nevertheless remains attractive in terms of being a
key destination for migration, not least in the university sector with the latter having an
arguably formative impact on the attitudes of educated elites. Despite the fact that LA is hardly
a region overwhelmed by U.S. public diplomacy initiatives – the need to restore “leadership in
the hemisphere” (White House 2012) might be occasionally reaffirmed – the U.S. remains a(n
indirect) leader in terms of lifestyle at least. In comparison, Chinese activism and investment
in “soft power”-related issues has not led to a wholehearted embrace of China. It might be that
China uses the soft power tools at its disposal mainly to pave the way for its economic interests,
but in any case, this has not (yet at least) produced a significant re-orientation of LA towards
Chinese values, language, lifestyle etc. Brazil’s efforts to brand itself as a regional alternative
to the U.S. – at least in South America – have been more successful. With this, however, goes
the ambivalent message of presenting itself precisely not as a hegemon in the traditional sense;
what is more, more often than not, Brazilian has to navigate between playing the “alternative
card” and being in line with key U.S. policy preferences.
In terms of hegemony as described at the outset, this means that the U.S. is still in a
formidable position at least regarding its resource base for regional hegemony. More questionable
given its lack of attention to institutional matters and the intentional forging of soft
power dynamics is the will component, even more the strategic competence if one is to assume
that the U.S. is interested in maintaining its regional hegemony. Concerning the tacit acceptance
necessary to uphold a hegemonic relationship, we find a mixed picture of criticism towards the
U.S. (which sometimes translates into electoral victory in case the anti-U.S. card is being played)
and still high levels of attractiveness ascribed towards the U.S.
China has expanded its regional resource base in economic terms and it has used institutional as well as
soft power instruments to smooth its way towards enhanced economic exchange. In terms of
hegemony, however, it seems to lack most of the ingredients to act as a
regional hegemon, especially since most activities are both modest in size and strictly tied to either
narrow economic or narrow diplomatic goals17; Chinese hegemonic aspirations can hardly
be detected in the Latin American region. Brazil has especially fostered institutional cooperation and
presented itself as an alternative to the U.S.; it thus has signaled at least rhetorically
a will to balance U.S. hegemony. However, it lacks the material power base and quite often –
given a lot of similar policy objectives – a de facto will to challenge the U.S. in Latin America as
a whole.
The US is still the unchallenged military power in Latin America
Brand, University of Mainz, et. al 12
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[Alexander, Susan Mc Ewen-Fial, University of Mainz, Wolfgang Muno, University of Erfurt, Andrea
Ribeiro Hoffmann, University of Erfurt, 2012“BRICs and U.S. Hegemony: Theoretical Reflections on
Shifting Power Patterns and Empirical Evidence from Latin America”https://international.politics.unimainz.de/files/2012/10/mpiep04.pdf 6/30/13 EYS]
The U.S. still is undoubtedly a military superpower, in global as well as in regional terms.
According to SIPRI, U.S.-military expenditure accounted for about $ 700 billion in 2010, which
made up for 42% of the world share (SIPRI 2012).
No other hemispheric country can compete. Although South American military expenditure
had the highest growth rate in the world (according to the same report) with a rise of 5.8%, the
region accounts for only 4% of total worldwide military spending. There is no Latin American
country among the top ten spenders.
Additionally, the United States is the only non-regional country with a permanent military
presence in Latin America. According to official Pentagon data, there is active military personnel in
every Latin American country, in sum about 2.000 soldiers (USDOD 2012). The most
important bases are Guantánamo in Cuba and Soto Cano Air Base in Honduras. Until recently,
Manta Air Base in Ecuador was very important, too. In 1999, the U.S. signed an agreement
with Ecuador for a ten-year-lease of facilities at Manta airport. The leftwing government under
Corrales did not extend this lease, so it ran out in 2009. Currently, a new air base in Colombia,
Palanquero, serves as a substitute for Manta. Six more bases are planned in Colombia. Additionally, socalled “forward operations locations” (which is a euphemism for base) exist in El
Salvador, Puerto Rico, Peru, Costa Rica, Aruba and Curaçao (see Lemoine 2010; Salazar 2011).
Another important military asset is the reestablishment of the Fourth Fleet in 2008 after 58
years, seated in Miami and responsible in particular for the Caribbean Sea.
The military presence is complemented by several security treaties and initiatives like the
Plan Colombia, the Andean Regional Initiative, the Mérida Initiative and the Central American
Security Initiative (see Kurz/Muno 2005; Hoffmann 2008). These security initiatives secured
military influence through financial military aid. Colombia received about $ 5 billion during
the 10 years of Plan Colombia from 1999 until 2009. $ 1.6 billion were authorized by the U.S.
Congress for the first three years of the Mérida Initiative for Mexico, Central America, Haiti and
the Dominican Republic.
For decades, the legitimation of the military presence in Latin America had been the fight
against communism. After the breakdown of communism and the end of the Cold War, the
War on Drugs has replaced anti-communism as the main rationale of U.S. security policy in
the region (see Crandall 2008). Three sub-regional units can be differentiated in the War on
Drugs: the source-countries producing cocaine in the Andes, especially Colombia and Bolivia,
the transit countries in the Caribbean, Central America, and Mexico (including Venezuela), and
the remote countries in the Southern Cone and Brazil, which are less affected.
To sum up, the U.S. is the only non-Latin American country with a permanent military presence in the
region. This military presence gives the United States the capabilities to intervene at
any time in any Latin American country, at least through air strikes. The most important security
issue is the War on Drugs. The transit countries near the U.S.-border and the source countries
in the Andes are the main targets and/or cooperation partners, the more southern countries are
less affected.
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Latin American economies depend on a strong US economy
Brand, University of Mainz, et. al 12
[Alexander, Susan Mc Ewen-Fial, University of Mainz, Wolfgang Muno, University of Erfurt, Andrea
Ribeiro Hoffmann, University of Erfurt, 2012“BRICs and U.S. Hegemony: Theoretical Reflections on
Shifting Power Patterns and Empirical Evidence from Latin America”https://international.politics.unimainz.de/files/2012/10/mpiep04.pdf 6/30/13 EYS]
Given the still impressive preponderance of military means on behalf of the United States in the
regional context, it might be useful to consider economic activities and linkages between Latin
American states and the U.S. on the one hand and China and Brazil on the other. It is not by
chance that surging activism of both BRIC states in this dimension has captured the attention of
analysts lately.
In the field of economy, the U.S. has tried to strengthen its position throughout the last
decades through the promotion of regional integration and free trade. In 1990, George H. W. Bush
initiated the “Enterprise of the Americas” Initiative, proposing a free trade area from
Alaska to Tierra del Fuego by 2005, the FTAA (Free Trade Area of the Americas). The first step
was NAFTA in 1994, the North American Free Trade Agreement between Canada, Mexico and
the U.S. But soon criticism arose in Latin America (and within the United States on the part
of protectionist lobbies and anti-neoliberal organized civil society). At the Fourth Summit of
the Americas in 2005 in Mar del Plata, Argentina, the FTAA was, more or less, buried. Criticism
came from two sides. One was led by Brazil demanding a more rapid opening of the U.S. market,
especially in the agrarian sector, and refusing the partially protectionist, asymmetric free trade
integration scheme which was promoted by the U.S. The second side was led by Venezuela
and was fundamentally against free trade, promoting instead ALBA (Alianza Bolivariana para
los Pueblos de Nuestra América – Tratado de Comercio de los Pueblos, ALBA-TCP), the Bolivarian
Alliance for the People of Our America, which emphasized justice and the social dimension of
trade relations (see Hellinger 2011). Instead of FTAA, the U.S. then pushed for bilateral treaties.
Free trade agreements were contracted with Chile (2004), Central America and the Dominican
Republic (2005), Peru (2006), the treaties with Colombia and Panama were finally ratified in
November 2011 by U.S. Congress.
In general, however, Latin America is not the most important trade partner for the U.S.,
except for the case of Mexico. Mexico accounts for 11.7% of U.S. trade, the rest of Latin America
constitutes only 8.3% (see Hornbeck 2011).The other way round it is different. The U.S. is
the most important trade partner for Latin America as a whole, although we see remarkable
subregional differences (see table).
Considering foreign direct investment (FDI), we see the same pattern (e.g. Rösler 2012).
The U.S. is the single most important investor in Latin America, but investment primarily went
into the Caribbean offshore financial centers (OFCs), second to Mexico, third to Brazil. Latin
America is the second most important investment area for the United States, but data include
OFCs. Excluding OFCs, Asia would be the second most important investment region for U.S.
capital (see table).
In terms of monetary policy, the U.S.-Dollar is the dominant currency worldwide (e.g.
Eichengreen 2011), despite all crises, and so in Latin America, too. With the exception of
Brazil, where the Real is based on a basket of the euro, dollar and yen, we can speak of a solid
dollar bloc. Several countries have pegged their currency to the dollar or are de facto dollarized. Many
Caribbean and Central American countries accept the dollar officially as a second
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currency, so do Peru, Bolivia and Uruguay. Panama, El Salvador and Ecuador even have completely
dollarized their economies, i.e. the U.S. dollar is the official currency. In this respect,
“the dollar standard is alive and well in Latin America” (Click 2007: 30). So far, we have to add
(see Cobarrubia Gómez 2011).
To sum up, we see an asymmetrical economic situation. For Latin America as a whole,
the United States is a pivotal economic partner, while Latin America as a whole is of lesser
importance for the U.S. Differentiating the region, only Mexico plays a central role for the
U.S. economy and, to a lesser extent, Venezuela which supplies one-eighth of U.S. oil imports
(Hellinger 2011). Mexico, Central America and the Caribbean, as well as the Andean countries are
highly dependent on the U.S. economy, both in terms of trade and investment. More southern
countries, on the other side, are more diversified and more oriented towards the EU and
China. However, with the partial exception of Brazil, the U.S. dollar still continues to play a
pivotal role in Latin America.
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No Solvency for Latin America Leadership
No organization or action- Obama doesn’t care
Gvosdev, former editor of the National Interest, 12
(Nicholas, 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, 6/20/12,
World Politics Review, “The Realist Prism: To Reset Latin American Policy, U.S. Must Think Big,”
http://www.worldpoliticsreview.com/articles/11867/the-realist-prism-to-reset-latin-america-policy-u-smust-think-big, Accessed: 6/30/13, LPS.)
U.S. policy toward the Western Hemisphere has suffered a series of setbacks over the past month. The
first, the Washington summit earlier this month between Presidents Barack Obama and Dilma Rousseff
of Brazil, was simply lackluster. The second, last weekend’s Summit of the Americas in Cartagena,
Colombia, was an outright fiasco. Instead of laying out a common agenda for the hemisphere and
rebuilding America’s leadership role in the region, the U.S. found itself isolated in a diplomatic corner
over Cuba, to say nothing of the Secret Service prostitution scandal that soon overshadowed the
proceedings. ¶ More generally, Obama’s Latin America policy is suffering from a lack of what George
H.W. Bush famously called “the vision thing,” compounded by how the administration organizes the
U.S. foreign policy apparatus. The president had an initial opening at his first Summit of the Americas in
Trinidad, in 2009, to reset what had become a very problematic relationship between the United States
and most of the rest of the hemisphere during the George W. Bush administration. Most regional
leaders also made it clear they understood that, given the global financial crisis and the challenges of
winding down America’s involvement in two Middle Eastern wars, Obama could not immediately pivot
U.S. foreign policy to the region. ¶ But as I noted two years ago, “There was insufficient follow-up to take
advantage of the momentum generated by the Trinidad meeting.” Just as candidate George W. Bush’s
rhetoric about the importance of Latin America understandably evaporated after Sept. 11, the Obama
administration, in continuing to react to a series of crises elsewhere in the world, has also put the
Western Hemisphere on the back burner.¶ As a result, according to Sean Goforth, America’s relations
with the region appear to be adrift. “Many countries want and deserve a serious partnership with
Washington. But President Obama is an unconvincing partner. . . . He has stalled on trade treaties with
Latin American countries that still want preferred access to the U.S. market, and he’s made it clear that
his strategic priority is a ‘pivot’ toward Asia.”¶ Worse still, no senior official within the administration,
starting with the president himself, has articulated a clear, compelling and convincing vision for what
a Western Hemispheric partnership would look like, beyond the expected bromides about peace,
democracy and prosperity. What is the desired end state? There is no lack of compelling possibilities to
choose from: free circulation for people, goods and capital from the Yukon to Tierra del Fuego; a greater
push for regional independence, in terms of manufactured goods, services and energy; an arrangement
that mimics the pre-Maastricht European Community.
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Alt Causes - Brazil
Can’t solve Latin American leadership – Brazil
Sabatini, editor-in-chief of Americas Quarterly, 13
(Christopher, the editor-in-chief of Americas Quarterly, published by the Americas Society/Council of the
Americas (AS/COA), 1/8/13, World Politics Review, “In Latin America, Creative Focus Could Pay Off,”
http://www.worldpoliticsreview.com/articles/12609/in-latin-america-creative-focus-could-pay-off,
Accessed: 6/30/13, LPS.)
As the world’s sixth-largest economy and South America’s largest, Brazil is seeking to assert its global
and regional leadership. In its newly muscular foreign policy, Brazil has sought to carve out a role for
itself as the representative of the developing world to the global North, while balancing U.S. influence
in the region and in multilateral institutions. Globally this has manifested itself in Brazil’s resistance to
United Nations efforts in Iran, Libya and Syria. In the Western Hemisphere, it has led to the proliferation
of subregional blocs -- such as UNASUR, underwritten largely by Brasilia -- that pointedly exclude the
United States. Brazil’s bilateral relations with Venezuela and Cuba have also been an effort to carve out
a third way between the U.S. position and that of the Chávez and Castro governments in Venezuela and
Cuba, though at what expense for human rights and regional stability remains to be seen. ¶ ¶ In the past
eight years, the U.S. and Brazil have managed to develop narrowly based common initiatives, such as
educational exchanges, cooperation on aviation and air-traffic control, and business-to-business
relations. But on the larger issues, accommodation with a rising Brazil will not always be easy -- nor
should it be.
¶
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Relations Answers
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Relations High Now
US Mexico Relations good- Obama’s trip to Mexico proves
Guilamo-Ramos, professor at NYU, and López, President of UPAEP, 5/28/13
(Vincent, a professor and co-director of the Center for Latino Adolescent and Family Health at the Silver
School of Social Work at New York University, José Alfredo Miranda he president of Universidad Popular
Autónoma del Estado de Puebla (UPAEP) in Puebla, Mexico, 5/28/13, The Huffington Post, “Vincent
Guilamo-Ramos: The US and Mexico Have Much to Learn from Each Other,”
http://www.huffingtonpost.com/vincent-guilamoramos/us-mexico-relations_b_3347068.html,
Accessed: 6/30/13, LPS.)
Barack Obama's recent visit to Mexico, the fourth of his presidency, represented an important,
deliberate attempt to shift the focus of Mexico-U.S. relations from security to economic
improvement.
But it also represented much more -- a chance to allay the public's profoundly negative conceptions of
Mexico by shifting the conversation to education, labor, environment, and other human-scale issues
that are truly vital to the future of both countries.
While much media coverage focuses on Mexican immigration battles, drug wars and narco-trafficking,
the relationship between the U.S. and Mexico has been evolving in complex and positive ways.
Relations high – Obama’s educational programs
Guilamo-Ramos, professor at NYU, and López, President of UPAEP, 5/28/13
(Vincent, a professor and co-director of the Center for Latino Adolescent and Family Health at the Silver
School of Social Work at New York University, José Alfredo Miranda he president of Universidad Popular
Autónoma del Estado de Puebla (UPAEP) in Puebla, Mexico, 5/28/13, The Huffington Post, “Vincent
Guilamo-Ramos: The US and Mexico Have Much to Learn from Each Other,”
http://www.huffingtonpost.com/vincent-guilamoramos/us-mexico-relations_b_3347068.html,
Accessed: 6/30/13, LPS.)
That is really not so surprising when one considers that the Latino population in the U.S. surpassed 50
million not too long ago, and people of Mexican ancestry account for more than 60 percent of this total.
Mexico's economy and middle class are growing.
And there is Obama's pivotal "100,000 Strong in the Americas" initiative, launched in 2011 to expand
study-abroad exchange opportunities between the U.S. and Latin America. Increasing student
exchange, and building understanding through higher education, offers at least the potential to help
offset the tarnished public perception of bilateral relations. Not incidentally, this cross-border tradition
contributes heavily to both countries' economies.
Obama's trip reminded us that the two neighbors have much to learn from each another. In the U.S.,
about a third of the population is under 25, while in Mexico, half of the population is less than 25, a
bountiful group of potential college attendees. While higher education has long presented a roadmap to
better jobs and futures for young people in America, our increasing educational fees and student debt
loads are making such prospects more difficult to realize, particularly among lower-income families.
Mexico's landscape is of course different. Public education is free, but just 1 out of every 3 individuals of
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eligible age enters college, showing limitations in the existing capacity of the country's education
system.
Despite encouraging macro-economic signs in present-day Mexico, the number of people living in
poverty in the country has been growing. In contrast, the U.S. faces growing disparities in educational
attainment based on income level. Our low-income individuals have less access to higher education, let
alone student exchange programs.
The U.S. can do far more to help prepare young people in both countries to contribute to bilateral
cooperation and a better regional future. In addition, it can and should give a great deal of sustained
attention to low-income youth of both nations who face particularly high hurdles to educational
attainment.
By investing in disadvantaged students in Mexico and the U.S. who are most at risk of involvement in
drug- and gang-related activity, both countries can promote economic development within and without
-- and, not incidentally, lessen the need to focus so heavily on security measures and bad news.
There's a lot riding on Obama's trip, perhaps even more than many people in both countries realize.
Now that he's back, the work of improving bilateral relations for the sake of both Mexico and the U.S.
-- and the people of both lands -- can and should go forward with renewed purpose.
Relations high – drug trafficking efforts
Pace, Associated Press, 5/13/13
(Julie, White House Reporter at The Associated Press ,5/2/13, The Huffington Post, Obama Addresses
Security Issues on Mexico Trip, Says Relationship with the US will ‘Evolve,’”
http://www.huffingtonpost.com/2013/05/02/obama-mexico-trip-security_n_3204250.html, Accessed:
6/30/13, LPS.)
MEXICO CITY — Acknowledging the uncertainty that lies ahead, President Barack Obama said
Thursday that the U.S. will cooperate with Mexico in fighting drug-trafficking and organized crime in
any way Mexico's government deems appropriate.
He recommitted the U.S. to fighting the demand for illegal drugs and the flow of illegal guns across the
border with Mexico even as the southern neighbor rethinks how much access it gives to U.S. security
agencies.
"I agreed to continue our close cooperation on security, even as the nature of that cooperation will
evolve," Obama said at a joint news conference with Mexican President Enrique Pena Nieto. "It is
obviously up to the Mexican people to determine their security structures and how it engages with
other nations – including the United States."
Relations high – coop now
Pace, Associated Press, 5/13/13
(Julie, White House Reporter at The Associated Press ,5/2/13, The Huffington Post, Obama Addresses
Security Issues on Mexico Trip, Says Relationship with the US will ‘Evolve,’”
http://www.huffingtonpost.com/2013/05/02/obama-mexico-trip-security_n_3204250.html, Accessed:
6/30/13, LPS.)
Obama's remarks come as Pena Nieto, in a dramatic shift from his predecessor, has moved to end the
widespread access that U.S. security agencies have had in Mexico to help fight drug-trafficking and
organized crime. The White House has been cautious in its public response to the changes, with the
president and his advisers saying they need to hear directly from the Mexican leader before making a
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judgment about the new arrangement.¶ Pena Nieto, speaking at the news conference in Spanish,
downplayed the notion that the new arrangement would mean less close cooperation with the United
States. "There is no clash between these two goals," he said.¶ He said Obama had said the U.S. will
"cooperate on the basis of mutual respect" to promote an efficient security strategy.¶ The two leaders
met Thursday at Mexico's National Palace on the first day of Obama's three-day trip to Mexico and
Costa Rica.
Status quo solves all impacts to relations
Associated Press 12
(4-3-12, San Francisco Chronicle, “Obama says Mexican drug war could hurt relations”
http://www.sfgate.com/world/article/Obama-says-Mexican-drug-war-could-hurt-relations3454377.php accessed 7-1-13 KR)
"If they're undermining institutions in these countries, that will impact our capacity to do business in
these countries," Obama said following meetings with Calderon and Canadian Prime Minister Stephen
Harper.
The three leaders launched a new bid to pare back regulation and boost North American trade.
After a one-day summit, Obama said the United States has trimmed outdated and burdensome rules
in talks with both its neighbors, but all three countries will now go beyond that.
"Our three nations are going to sit down together, go through the books and simplify and eliminate
more regulations that will make our joint economies stronger ," he said.
Obama noted trade among the three neighbors now tops $1 trillion a year, and he wants to see that
number rise. "This is going to help create jobs ," he said.
The summit ranged broadly across issues of energy and climate change , immigration and the war
on drugs .
Obama warned of a possible "spillover effect" on American tourism and American expatriates living in
Mexico and bordering nations that have also had problems with drug cartels.
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Resilience
Even through the most controversial issues relations prove resilient
Stewart, Stratfor Vice President of Analysis, 13
(Scott, 5-16-13, Forbes, “U.S.- Mexico Cooperation Against Cartels Remains Strong”
http://www.forbes.com/sites/stratfor/2013/05/16/u-s-mexico-cooperation-against-cartels-remainsstrong/ accessed 7-1-13 KR)
Mexican President Enrique Pena Nieto’s approach to combating Mexican drug cartels has been a
much-discussed topic since well before he was elected. Indeed, in June 2011 — more than a year
before the July 2012 Mexican presidential election — I wrote an analysis discussing rumors that, if
elected, Pena Nieto was going to attempt to reach some sort of accommodation with Mexico’s drug
cartels in order to bring down the level of violence.
Such rumors were certainly understandable, given the arrangement that had existed for many years
between some senior members of Pena Nieto’s Institutional Revolutionary Party and some powerful
cartel figures during the Institutional Revolutionary Party’s long reign in Mexico prior to the election of
Vicente Fox of the National Action Party in 2000. However, as we argued in 2011 and repeated in March
2013, much has changed in Mexico since 2000, and the new reality in Mexico means that it would be
impossible for the Pena Nieto administration to reach any sort of deal with the cartels even if it made an
attempt.
But the rumors of the Pena Nieto government reaching an accommodation with some cartel figures
such as Joaquin “El Chapo” Guzman Loera have persisted, even as the Mexican government arrests
key operatives in Guzman’s network, such as Ines Coronel Barreras, Guzman’s father-in-law, who was
arrested May 1 in Agua Prieta, Mexico. Indeed, on April 27, Washington Post reporter Dana Priest
published a detailed article outlining how U.S. authorities were fearful that the Mexican government
was restructuring its security relationship with the U.S. government so that it could more easily reach
an unofficial truce with cartel leaders. Yet four days later, Coronel — a significant cartel figure — was
arrested in a joint operation between the Mexicans and Americans.
Clearly, there is some confusion on the U.S. side about the approach the Pena Nieto government is
taking, but conversations with both U.S. and Mexican officials reveal that these changes in Mexico’s
approach do not appear to be as drastic as some have feared. There will need to be adjustments on
both sides of the border while organizational changes are underway in Mexico, but this does not
mean that bilateral U.S.-Mexico cooperation will decline in the long term.
Relations resilient, interdependence on multiple issues
Seelke, specialist in Latin American Affairs 13
(Clare Ribando, 1-16-13, Congressional Research Service, ‘Mexico’s New Administration: Priorities and
Key Issues in U.S.-Mexican Relations” http://www.fas.org/sgp/crs/row/R42917.pdf, p.9-10, accessed 71-13 KR)
Congress has maintained longstanding interest in a broad range of issues dealing with Mexico, a
country with whom the United States shares a nearly 2,000 mile border and close to $500 billion in
annual trade. In recent decades, the top issues of congressional interest on the bilateral agenda have
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centered upon migration/border security; trade (NAFTA implementation and disputes); and drug
trafficking and security efforts. Since 9/11, security issues have generally overtaken migration and trade
matters. Greater energy cooperation with Mexico has also emerged as a new area of interest.
Some bilateral issues may require immediate congressional action in order to advance, while others
may lend themselves more to long-term oversight. For example, congressional action may soon be
required in order for the U.S.-Mexico Trans-boundary Hydrocarbons Agreement on managing oil
resources in the Gulf of Mexico that was signed in February 2012 to take effect. Migration and border
security cooperation could also be substantially overhauled should Congress consider comprehensive
immigration reform. At the same time, Congress will consider continued funding for the Mérida
Initiative and related domestic initiatives aimed at combating transnational crime and strengthening the
rule of law in Mexico that are well underway. Congressional concern about improving human rights
conditions and strengthening democracy in Mexico also lend themselves to long-term oversight.
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Alt Causes
Alt Causes to relations- corruption and lack of communication
Stewart, Stratfor Vice President of Analysis, 13
(Scott, 5-16-13, Forbes, “U.S.- Mexico Cooperation Against Cartels Remains Strong”
http://www.forbes.com/sites/stratfor/2013/05/16/u-s-mexico-cooperation-against-cartels-remainsstrong/ accessed 7-1-13 KR)
Consolidation and Coordination
As in the United States, the law enforcement and intelligence agencies in Mexico have terrible
problems with coordination and information sharing. The current administration is attempting to
correct this by centralizing the anti-cartel efforts at the federal level and by creating coordination
centers to oversee operations in the various regions. These regional centers will collect information at
the state and regional level and send it up to the national center. However, one huge factor inhibiting
information sharing in Mexico — and between the Americans and Mexicans — is the longstanding
problem of corruption in the Mexican government. In the past, drug czars, senior police officials and
very senior politicians have been accused of being on cartel payrolls. This makes trust critical, and lack
of trust has caused some Mexican and most American agencies to restrict the sharing of intelligence
to only select, trusted contacts. Centralizing coordination will interfere with this selective information
flow in the short term, and it is going to take time for this new coordination effort to earn the trust of
both Mexican and American agencies. There remains fear that consolidation will also centralize
corruption and make it easier for the cartels to gather intelligence.
Alt Cause to relations – drug war
Associated Press 12
(4-3-12, San Francisco Chronicle, “Obama says Mexican drug war could hurt relations”
http://www.sfgate.com/world/article/Obama-says-Mexican-drug-war-could-hurt-relations3454377.php accessed 7-1-13 KR)
Washington -- The explosion of drug-fueled violence along Mexico's border with the United States
could harm relations between the two nations, President Obama said Monday; Mexico's leader
retorted that much of the problem of drugs and guns begins on the U.S. side of the line.
In the thick of political contests in both the United States and Mexico, Obama and Mexican President
Felipe Calderon traded unusually direct claims about the cause and effect of the drug violence that has
consumed a swath of northeastern Mexico. They were cordial and complimentary to one another, but
did not hide the degree of worry on both sides about a six-year spasm of violence that had killed more
than 47,000 people.
"It can have a deteriorating effect overall on the nature of our relationship," Obama said. "And that's
something that we have to pay attention to."
Calderon made a government crackdown on warring drug cartels the hallmark of his six-year term,
which expires later this year. His center-right party has seen its election chances fall in the face of a
wide perception in Mexico that the crackdown has not worked.
The Mexican presidential election that formally began last week will culminate with elections July 1.
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Beyond the terrible human cost, the battling drug cartels in Mexico and in Central America cause
economic problems and political and security concerns for the United States, Obama said.
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Alt Cause: Border
Alt causes- relations won’t be good until borders come first
Dear, Professor at UC Berkeley, 13
(Michael, Professor of City and Regional Planning in the College of Environmental Design, University of
California, Berkeley, 3/19/13, Huffington Post, “Michael Dear: Why Walls Won’t Work: Repairing the
US,” http://www.huffingtonpost.com/michael-dear/why-walls-wont-work-repai_b_2902953.html,
Accessed: 6/30/13, LPS.)
The Wall separating Mexico and the US will come down. Walls always do. Partition is the crudest tool in
the armory of geopolitics, an overt confession of failed diplomacy.
The Wall won't work because the third nation has strong connecting tissue that partition cannot
compromise. The third nation is the place where binational lives and values are being created-organically, readily, and without artifice. The third nation will prevail, and is worth nurturing. It is the
place of being and becoming in the spaces between two nations.
What should be done about the Wall that so rudely interrupts the third nation? The Berlin Wall was torn
down virtually overnight, its fragments sold as souvenirs of a calamitous Cold War; the Great Wall of
China was transformed into a global tourist attraction. Left untended, the US-Mexico Wall would
collapse under the combined assault of avid recyclers, souvenir hunters, and local residents off ended
by its mere presence. Nevertheless, we should preserve sections of the Wall to commemorate that
fraught moment in history when the US lost its moral compass.
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Poverty – Status Quo Solves
Status quo solves- The Millennium Challenge Account was established in 2006 and is
already working to solve poverty in Mexico
Sperling, Lawyer and Democratic Political Figure and Sperling, Foreign Affairs Staff, 3’
(Gene B. Sperling is an American lawyer and Democratic Party political figure, currently serving as
Director of the National Economic Council under President Barack Obama, Tom Harting, Foreign Affairs
Staff, March/April 2003, Foreign Affairs, “A Better Way to Fight Global Poverty: Broadening the
Millennium Challenge Account”, http://www.foreignaffairs.com/articles/58807/gene-sperling-and-tomhart/a-better-way-to-fight-global-poverty-broadening-the-millennium-c, Accessed 6/30/13’, NC)
Last March, at the un-sponsored International Conference on Financing for Development in
Monterrey, Mexico, President George W. Bush pledged to significantly increase U.S. development
assistance to poor nations through the creation of a new Millennium Challenge Account ( MCA ). The
fund would set strict standards of accountability and performance for recipients and would reward a
select set of poor countries with as much as $5 billion in new aid by 2006. This initiative has the
potential to be a step forward in the evolution of U.S. development policy. But, in its current form, the
MCA could also be a step backward in the ongoing U.S. effort to reach out to the majority of poor
countries in a coordinated and effective way.
The proposed MCA is a step forward because it builds on an emerging consensus that development
works best when poor countries have strong policies on governance and economic reform and take
responsibility for reducing poverty and spurring economic growth. This philosophy has helped shape a
number of major development initiatives in recent years, including the Heavily Indebted Poor Country
(HIPC) debt relief program (which reduces debt for countries that develop independent national
poverty-reduction strategies); the Global Fund to Fight aids, Tuberculosis, and Malaria (usually referred
to simply as "the Global Fund," it awards money to countries with the most comprehensive strategies to
combat infectious diseases); and the Education for All (EFA) initiative (which makes funding contingent
on countries' producing credible national plans for achieving universal education).
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Drug Cartels – Status Quo Solves
Drug Cartels are failing in the Status Quo. Nieto’s current policies are weakening them.
Diaz, Reuters Correspondent, 13
(Lizbeth Diaz, April 10, 2013, Reuters, “Mexican drug homicides fall 14 percent at start of Pena Nieto's
term,” http://www.reuters.com/article/2013/04/10/us-mexico-drugs-idUSBRE93916820130410,
accessed June 30, 2013, EK)
Mexico said on Wednesday that killings linked to organized crime fell 14 percent to 4,249 in the first
four months of the presidency of Enrique Pena Nieto, who has vowed to quickly reduce the menace
posed by drug cartels.
The figure refers to killings from December 2012 through March 2013, and compares to the 4,934
organized crime-related killings during the same period a year earlier, said Interior Minister Miguel
Osorio Chong.
"It's still too early to adopt a triumphalist attitude," said Osorio Chong. "The trend is there, but it's still
early and it could surprise us and pick up tomorrow, or even fall."
Pena Nieto's predecessor, Felipe Calderon, staked his reputation on bringing the drug gangs to heel,
sending in the army to crush them soon after taking office in December 2006.
Homicides initially fell under Calderon too, but later jumped sharply and by the end of his term more
than 60,000 people had been killed in drug-related violence.
Pena Nieto has vowed to curb the violence, though he has put the stress on reducing murder,
kidnapping and extortion rather than focusing on the drug gangs. He has dismissed any talk of reaching
some sort of truce with the cartels, however.
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Drug Cartels – No Ties to Hezbollah
Mexican Drug Cartels don’t have ties to Hezbollah or other terrorist groups.
Boyle, Investigative Reporter, 12
(Matthew Boyle, November 20, 2012, The Daily Caller, “Mexico disputes House GOP report alleging Iran,
Hezbollah are using Mexican drug cartels,” http://dailycaller.com/2012/11/20/mexico-disputes-housegop-report-alleging-terrorists-ties-with-drug-cartels/, accessed June 20, 2013, EK)
A spokesman for Mexico’s ambassador to the United States, Arturo Sarukhán, told The Daily Caller his
country’s government disputes a recent House GOP report alleging that Iranian and Hezbollah terror
operatives are using Mexican drug cartels as a conduit to infiltrate the United States.
Last week, the House Homeland Security Committee Subcommittee on Oversight, Investigations and
Management released a report titled “A Line in the Sand: Countering Crime, Violence and Terror at the
Southwest Border.”
The report found that the “Southwest border has now become the greatest threat of terrorist
infiltration into the United States.” It specifically cited a “growing influence” from Iranian and Hezbollah
terror forces in Latin America.
The Mexican government disagreed with that assessment.
“The Government of Mexico, as it has done in the past, reiterates that no such relationship or
presence exists,” Ricardo Alday, a spokesman for Mexico’s ambassador to the United States, wrote in a
letter to The DC.
Alday pointed to the U.S. State Department’s Country Reports on Terrorism to support Mexico’s
argument. “[I]n each and every one of its Country Reports on Terrorism, the US Department of State
has unmistakably established that there is no such relationship.”
Alday quoted the latest such State Department report, issued on July 31 of this year.
“No known international terrorist organization had an operational presence in Mexico and no terrorist
group targeted U.S. citizens in or from Mexican territory,” the State Department report reads. “There
was no evidence of ties between Mexican criminal organizations and terrorist groups, nor that the
criminal organizations had political or territorial control, aside from seeking to protect and expand the
impunity with which they conduct their criminal activity.”
A spokesman for the House subcommittee, chaired by Texas Republican Rep. Michael McCaul, did not
immediately respond to a request for comment in response to the ambassador’s letter.
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Drug Cartels – No Solvency
Reducing drug cartels in the U.S. trades off with Central America & the Caribbean.
Ramsey, Insight Crime Author, 12
[Geoffrey, 10/23/13, Insight Crime, “US: 'Beginning of the End' for Mexico's Cartels,”
http://www.insightcrime.org/news-analysis/us-beginning-of-the-end-for-mexicoscartels, accessed 6/30/13, MC)
The dismantling of cartels in Mexico may be a security gain for US interests, but it has come at a cost
for transit nations that handle cocaine heading northwards. Brownfield claims that there has been a 40
percent reduction in demand for cocaine in the US in the past several years. The fall in US drug
consumption appears to have been taken up by many Latin American nations. Recent years have seen
a rise in local drug consumption in traditional transit nations in the region, which is the result of the
fact that many local transporters are now paid in product, rather than cash. Central America and the
Caribbean alike may suffer increases in transnational organized crime linked to drug trafficking, and it
is likely that the US will face new regional security challenges, even if Mexico manages to defeat its
large scale drug trafficking organizations.
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AT – Nuclear Terrorism
Terrorists can’t acquire or create nuclear weapons.
Krepon, Director of Space Security Program, 9
[Michael, 3/1/09, Washington Post, “5 Myths About All Those Nukes Out There,”
http://articles.washingtonpost.com/2009-03-01/opinions/36860563_1_nuclear-weapons-nuclearwarheads-nuclear-terrorism, accessed 6/30/13, MC)
Fortunately, the darkest nuclear nightmares are also the least likely to occur. During the Cold War,
many Americans lived in fear of a bolt-out-of-the-blue Soviet missile attack; today our anxieties center
on nuclear terrorism. Yet since 9/11, not a single person has died in an act of nuclear terrorism, while
57,000 have been killed and 99,000 injured in a total of 36,000 terrorist attacks involving explosives,
firearms and grenades.
Terrorists have had a hard time getting their hands on nuclear weapons. Although governments and
enterprising freelancers have sold missiles and centrifuges, there is no reliable evidence that they have
auctioned off nuclear weapons to wild men they can't control. More good news: It would be very hard
for a terrorist group to build a nuclear weapon on its own without being discovered in the process.
Terrorists could acquire enough nuclear material to make a dirty bomb, which would use conventional
explosives to spew radioactive material, but they could actually do much more damage with automatic
weapons.
Nuclear war is not an existential risk—no extinction.
Nissani, Degree in Psychology and Philosophy, 92
[Moti, author and Fulbright Scholar from Tribhuvan University, “Lives in the Balance: the Cold War and
American Politics, 1945-1991.,” http://www.is.wayne.edu/MNISSANI/PAGEPUB/CH2.html, accessed
6/30/13, MC]
VIII. Extinction? Extinction of humankind is often mentioned in this context. However, based on what
we know now of the effects of nuclear war, extinction is highly improbable: under any likely set of
assumptions, it seems that some of our kind will be able to pull through the hardships and survive. But
because extinction cannot be completely ruled out, and because it is the worst imaginable outcome of
nuclear war (actually I find it hard to imagine at all-no people walking this earth-forever), it should be
rendered even more improbable by reducing the risk of nuclear war.
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Solvency Neg
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AT – US Key
Mexico is an economic asset to many countries, anyone of them will or can invest,
United States not key
The Economist 12
(11-24-12, “Senores start your engine
Cheaper than China and with credit and oil about to start flowing, Mexico is becoming a Brazil-beater”
http://www.economist.com/news/special-report/21566782-cheaper-china-and-credit-and-oil-aboutstart-flowing-mexico-becoming, accessed June 27, 2013, QDKM)
CUERNAVACA, A ONCE pretty, now sprawling city with volcano views just south of the capital, is a typical
Mexican town. Hernán Cortés stopped off there after toppling the Aztec emperor Moctezuma in 1520;
the conquistador’s stables have since been converted into a smart hotel. Yet on the outskirts of the city,
in an enormous industrial park, a visitor could forget he was in Latin America. Nissan, a Japanese car
giant, has created a factory the size of a village where from next year it will begin turning out thousands
of yellow and chessboard-chequered New York City taxis.
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?
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 bigtime,” 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
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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”.
On the opposite side of Cuernavaca from Nissan’s gigantic factory, Antonio Sánchez plays a smaller role
in Mexico’s motor business. At his carwash customers queue to pay 46 pesos ($3.60) for their cars to
gleam in the ever-present sun. Mr Sánchez seems to have enough business to open another branch, but
credit is scarce and expensive. He explains that banks tend to charge interest rates of 25% or more and
demand collateral worth three times the value of the loan. “It’s complicated, expensive and the risk is
too much,” he says.
Mexican businesses have been fighting with one hand tied behind their backs, thanks to a chronic credit
drought. Lending is equivalent to 26% of GDP, compared with 61% in Brazil and 71% in Chile. The
drought started with the “tequila crisis” of 1994, when a currency devaluation triggered the collapse of
the country’s loosely regulated banking system. Banks spent the best part of a decade dealing with their
dodgy legacy assets and were nervous about making new loans.
But things are looking up. Inflation, now running at 4.6%, has been well under control for ten years.
The conservatively run Mexican subsidiaries of foreign banks such as BBVA, Citigroup and Santander are
all rated higher than their American or European parent companies. Now they are starting to turn on the
credit tap. Loans to companies are growing at 12% a year and to individuals at 23%. Given that many
enterprises are informal, many of these “personal” loans probably go to businesses, according to David
Olivares of Moody’s, a ratings agency. “There are many financing opportunities in Mexico that are not
tapped,” says Agustín Carstens, the governor of the central bank. This gives Mexico an advantage over
other Latin American countries that are deep in debt. Five to six consecutive years of loan growth,
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coupled with macroeconomic stability, would increase Mexico’s annual growth rate by half a percentage
point, the central bank estimates.
As credit starts flowing, so could oil. Since striking black gold in the 1970s, Mexico has been one of the
world’s ten biggest oil producers. The revenues of Pemex, the state-run oil and gas monopoly, provide
about a third of the government’s income. But that is part of the problem. The company is “horribly
run”, says Juan José Suárez Coppel, its director. He complains that successive governments have milked
Pemex rather than let it invest in exploration and technology. It takes between six and eight years from
discovering oil to pumping it, so “no president who invests is going to see the barrels,” Mr Suárez points
out. Each time a new field is discovered the company allows others to go into decline (see chart 3).
Production has slipped from 3.4m barrels a day to 2.5m, and safety is wobbly: in September 30 people
died in a gas explosion in Reynosa, near the Texan border.
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No Solvency – Treaty Key
No solvency – Treaty key to Mexican cooperation
State Department Fact Sheet, 13
[CQ Federal Department and Agency Documents REGULATORY INTELLIGENCE DATA, 5/2/13“U.S.-Mexico
Transboundary Hydrocarbons Agreement,” Lexis, Accessed 6/24/13, MC]
In 2012, the United States and Mexico signed an agreement concerning the development of oil and
gas reservoirs that cross the international maritime boundary between the two countries in the Gulf of
Mexico. The Agreement is designed to enhance energy security in North America and support our
shared interest to exercise responsible stewardship of the Gulf of Mexico. It is built on a commitment
to the safe, efficient, and equitable development of transboundary reservoirs with the highest degree of
safety and environmental standards.
Mexico is consistently one of the top three exporters of petroleum to the United States.
The United States is Mexico's largest supplier of refined oil products, mostly coming from U.S. Gulf Coast
refineries.
Former Secretary Clinton and then Mexican Foreign Secretary Espinosa signed the Agreement in Los
Cabos in February, 2012. Mexico ratified the agreement in April 2012.
The Agreement establishes a framework that promotes unitization of maritime transboundary
reservoirs. Upon entry into force, the current moratorium on oil exploration and production along the
boundary in the Western Gap portion of the Gulf of Mexico will end.
Mexican law currently prohibits Petroleos Mexicanos (PEMEX ) from jointly developing resources with
leaseholders on the U.S. side of the boundary. Mexico opened the door to such cooperation in a 2008
energy reform law, but only if the cooperation takes place pursuant to an international agreement
governing transboundary reservoirs. The Agreement takes advantage of this opportunity.
The Agreement facilitates the formation of voluntary arrangements - unitization agreements - between
U.S. leaseholders and Pemex for the joint exploration and development of transboundary reservoirs. It
also provides appropriate incentives to encourage the formation of such arrangements if a reservoir is
proven to be transboundary and a unitization agreement is not formed. Ultimately, the Agreement
provides that development may proceed in an equitable manner that protects each nation's interests.
The Agreement provides for ongoing cooperation between the two governments related to safety and
the environment, and also provides for joint inspection teams to ensure compliance with applicable laws
and regulations. Both governments will review and approve all unitization agreements governing the
exploration and development of transboundary reservoirs under the Agreement, providing for approval
of all safety and environmental measures.
Both the U.S. House of Representatives and the Senate have introduced bills that would approve the
Transboundary Agreement and give the Secretary of the Interior the necessary authorization to
implement the agreement. The Administration looks forward to speedy passage of the authorizing
legislation.
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No Solvency – Theft
Increase oil production will just be stolen, there is no type of security for the oil pipes
in Mexico
The Economist 12
(8-4-12 “Oil theft in Mexico Black gold on the black market”,
http://www.economist.com/node/21559962?zid=298&ah=0bc99f9da8f185b2964b6cef412227be,
accessed June 27, 2013, QDKM)
DRUGS, extortion, kidnapping, people-smuggling: Mexico’s organised-crime multinationals have a keen
eye for diversification. A growing sideline is stolen oil. In 2011 outlaws made off with 3.35m barrels of
fuel belonging to Pemex, the state-run oil monopoly, up from 2.16m in 2010. The thefts are reckoned
to deprive the company of more than $1 billion per year. Pemex’s profits pay for a third of the federal
government’s budget.
Stealing the fuel, which includes gas condensate and refined oil as well as crude, is not hard. Some
goes missing from lorries that are held up in lonely stretches of desert. More is siphoned out of
lengthy exposed pipelines. Tapping the high-pressure pipes is dangerous: in 2010 a suspected attempt
to puncture one produced an explosion that caused 28 deaths.
Despite such accidents, ever more people are taking the risk. Last year Pemex detected 1,324 taps, over
twice as many as in 2010. The increase was partly down to better detection, the firm says. But robbers
are getting more sophisticated, sometimes pumping water back into the pipes to fool pressure sensors.
Pemex concedes that some sites have been “taken over, practically, by bands of organised criminals”.
Compared with Nigeria, the world capital of oil theft, Mexico has much greater refining capacity.
Refined oil can be hawked on roadsides to motorists, a practice that is illegal but common. Crude oil
and natural-gas condensate are harder to get rid of. Some can be sold for industrial processes, such as
brickmaking. But the stolen product cannot be palmed off on Mexican refineries, because they are all
run by Pemex.
The solution is to smuggle it to the United States to be refined there. Forged documents get the fuel
across the border in rented tankers, often disguised as a different chemical. Once through customs it
goes to unsuspecting or unscrupulous buyers. Solvents are sent the other way, to dilute refined oil that
is to be sold in Mexico.
Pemex is using the American courts to crack down. In 2011 the former head of a Texas oil firm was
convicted of selling stolen condensate. Another case accuses 12 oil and gas companies of dealing in
pilfered fuel. In a court document Pemex says: “In a reversal of the classic Western movie, Mexican
criminals have sought refuge with their ill-gotten gains by crossing the Rio Grande to the north, where
the Mexican government has no authority to follow.” Some defendants have been charged with dealing
knowingly in stolen fuel. Others, such as Shell and ConocoPhillips, are accused of unwittingly handling
the contraband. Both firms decline to comment.
However, to stamp out oil theft, Pemex will have to be as aggressive inside Mexico as abroad. The
company has hired more security staff, invested in monitoring technology and won stiffer penalties
for robbers. It has also recruited the army to scramble its helicopters to investigate pressure losses.
But that leaves much to be done. Over the past decade Pemex has loosened its regulations on who may
transport its fuels, and its oversight of sales at petrol stations. Reversing that would make it easier to
spot where oil is being lost.
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A tougher measure would be purging its staff. In the decade to 2011, over 100 Pemex workers and
subcontractors were tied to oil theft. In 2010 the army seized four tonnes of marijuana at a Pemex plant.
However, the Pemex workers’ union is one of Mexico’s strongest. And with no competitors, the
monopoly’s managers have little reason to pick a risky political fight.
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No Solvency – Exploitation
Energy reform causes massive land exploitation
Godoy, IPS Correspondent 6/18/13
(Emilio, a Mexico-based correspondent who covers the environment, human rights and sustainable
development. He has been a journalist since 1996 and has written for various media outlets in Mexico,
Central America and Spain, 6/18/13, Inter Press Service News Agency, “Rural Mexican Communities
Protest Wind Farms,” http://www.ipsnews.net/2013/06/rural-mexican-communities-protest-windfarms/, Accessed: 6/30/13, LPS.)
MEXICO CITY, Jun 18 2013 (IPS) - “We can’t sow our fields, which they have rented for next to nothing.
What good do we get out of it?” Guadalupe Ramírez complained about wind farms operating in the
southern Mexican state of Oaxaca.¶ Ramírez said, “the governments play favourites with big business;
our land produces more than what the companies are offering … They said they would come to help
us, but that’s a lie,” this 62-year-old Zapotec Indian told IPS when she and other campesinos came to
Mexico City from the municipality of Unión Hidalgo, 560 kilometres to the south, to protest the
situation.¶ The Piedra Larga I wind farm, which has been operating in the town since October 2012,
comprises 145 wind turbines producing 90 MW of power. It is the property of Desarrollos Eólicos
Mexicanos (DEMEX), a subsidiary of the Spanish company Renovalia Energy and the private U.S.
investment firm First Reserve.¶ In 2007 DEMEX approached local people and began to sign rental
contracts with members of the “ejido” or communal land, treating them as if they were independent
smallholders and not communal rights holders, and setting an average monthly rental of 20 dollars a
hectare. The campesinos of Unión Hidalgo farm between three and four hectares each.
Plan causes land exploitation
Godoy, IPS Correspondent 6/18/13
(Emilio, a Mexico-based correspondent who covers the environment, human rights and sustainable
development. He has been a journalist since 1996 and has written for various media outlets in Mexico,
Central America and Spain, 6/18/13, Inter Press Service News Agency, “Rural Mexican Communities
Protest Wind Farms,” http://www.ipsnews.net/2013/06/rural-mexican-communities-protest-windfarms/, Accessed: 6/30/13, LPS.)
But in other municipalities wind energy companies are paying up to 80 dollars a hectare. Moreover,
land tenure in Unión Hidalgo is collective, and all decisions pertaining to ejido land have to be made
by the entire assembly of the ejido members, so the contracts signed are not actually valid – a fact
that at first was not noticed by those who rented out their land.¶ Ejido members farming communal
land in the municipality accuse DEMEX of tricking them by not explaining the clauses of contracts that
were written in Spanish rather than Zapotec, of not calling the obligatory assembly of the ejido
members, of polluting their land and of denying them freedom of movement on their land.¶ In 2014 the
company will begin operating the Piedra Larga II wind farm, occupying 300 hectares in Unión Hidalgo,
which has a population of 13,970, mainly native Zapotec people. A Resistance Committee against the
Wind Farm Project has been created, several of whose members came to the capital to protest on
Wednesday Jun. 12.¶ Their protest shows the increasing discontent of Mexican communities with
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wind energy projects because of their economic, environmental and social consequences. The future
of the sector is turning cloudy, just when Global Wind Day was celebrated on Saturday Jun. 15.
Plan causes massive human rights violations
Godoy, IPS Correspondent 6/18/13
(Emilio, a Mexico-based correspondent who covers the environment, human rights and sustainable
development. He has been a journalist since 1996 and has written for various media outlets in Mexico,
Central America and Spain, 6/18/13, Inter Press Service News Agency, “Rural Mexican Communities
Protest Wind Farms,” http://www.ipsnews.net/2013/06/rural-mexican-communities-protest-windfarms/, Accessed: 6/30/13, LPS.)
However, critics of this strategy argue that the communities where wind parks are installed have the
least to gain.¶ “There is a pattern of human rights violations in the communities. Wind energy
companies advertise themselves well, offering money and jobs, but the jobs are temporary. The
companies’ actions are not transparent, nor do they meet established standards,” Alejandra Ancheita,
the head of Proyecto de Derechos Económicos, Sociales y Culturales (ProDESC – Economic, Social and
Cultural Rights Project), told IPS.¶ Following the wind energy boom in Oaxaca, activists fear the negative
aspects of the model will be repeated in wind farm projects in other states.¶ “They have brought no
benefits. The energy companies violate collective property rights, agrarian laws and the traditional
laws of indigenous peoples,” Bettina Cruz, the founder of the Assembly of Indigenous Peoples of the
Isthmus of Tehuantepec in Defence of Land and Territory (APIIDTT), told IPS.¶ DEMEX has denied the
allegations against it, saying that the contracts are valid and that it has the necessary authorisations for
construction and operation of the wind park.¶ “Conditions in the communities have not improved,” said
Benjamin Cokelet, head of the Project on Organising, Development, Education and Research (PODER),
an NGO for corporate accountability. In his view, the companies may be in violation of international
conventions.
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Off-Case
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CPs
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Consultation CP
Consultation key to bilateral coop
US Mexico Binational Council 1
(Center for Strategic and International Studies, Centro de Investigacion para el Desarrollo, A.C, Instituto
Tecnologico de Mexico, UT @ Austin, “New Horizons in United States-Mexico Relations”, Google Books,
pg 5 IGM)
The U.S-Mexico Inter-Parliamentary Group (IPG), which has been meeting once a¶ year since its founding
in I961, has been an effective vehicle for relationship building among members of Congress from both
nations. The two Congresses play an¶ important role in bilateral issues such as drugs, immigration.
Border infrastructure,¶ and energy policy and therefore should engage in more consultation on
legislation¶ that has bilateral implications. The IPG has been plagued in the past by ad hoc
participation by U.S. members of Congress, in part, in response to the relative¶ weakness of the
Mexican legislative branch—attributed to its uneven partisan distribution and the perpetual turnover
of Mexican legislators due to the prohibition¶ of consecutive reelection. Thus, the IPG has not realized
its full potential as a forum¶ for binational policymaking. The current structure of the IPG has not kept
pace¶ with the maturing of the Mexican Congress which is now more independent and¶ plays a
greater role in policymaking. The IPG should enhance communication and¶ collaboration between the
legislative branches of each country on a year-round¶ basis.
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Texas CP
The time is ripe for Texas to invest in Mexico’s shale gas refineries, both location and a
want to invest are ideal for both Mexico and Texas
Althaus, GlobalPost's senior correspondent for Mexico and Central America, 12 (Dudley
Althaus, GlobalPost's senior correspondent for Mexico and Central America, “Natural gas from Mexico
beckons Texas companiesBY based in Mexico City” July 17, 2012 12:23am
http://www.mysanantonio.com/news/energy/article/Natural-gas-from-Mexico-beckons-Texascompanies-3711053.php, accessed June 30, 2013, QDKM)
MEXICO CITY — A sense of urgency gripping Mexican energy policies could bring big cash to Texas oil
patch companies and eventually might include investments in shale gas deposits near the Rio Grande
and vast petroleum pools beneath the deepest reaches of the Gulf of Mexico.
But those lucrative investments depend upon whether Mexico's divided Congress buys into Presidentelect Enrique Peña Nieto's proposed energy reforms. Analysts and government officials say billions of
dollars in new investments are needed through the next few years to feed the needs of Mexico's
economy and growing population.
Peña's first test likely will be the fate of the northern shale fields, which hold as much as 680 trillion
cubic feet of gas, giving Mexico the world's fourth-largest reserves of nonconventional fuel after China,
the United States and Argentina.
Most of Mexico's shale gas lies in an extension of the Eagle Ford Shale play, where frenzied drilling
and production have undergone a boom.
Nearly 6,000 drilling permits have been issued in Texas for the Eagle Ford, and 550 wells are producing
there. Mexican oil monopoly Petroleos Mexicanos, or Pemex, so far has drilled five exploratory wells on
Mexico's share of the Eagle Ford and hopes to drill 170 more in four years.
American expertise
But Pemex's Mexican contractors aren't experienced in hydraulic fracturing techniques used for shale
gas, and it will need the expertise of the U.S. companies drilling north of the border. Attracting them
might mean allowing them to own a percentage of the gas rather than getting paid straight service fees.
That's currently illegal under the Mexican Constitution.
“Without reforms, you're not going to see a significant amount of foreign capital going into Mexico,”
said Roger Wallace, vice president of Dallas' Pioneer Natural Resources, a major player in the Eagle Ford.
“There are plenty of opportunities in Texas, a lot going on in the United States.”
Even so, some Mexican analysts think the timing isn't right for shale gas, at least now.
“With prices for natural gas so low, developing shale gas fields quickly doesn't make immediate
economic sense,” said Alejandra Leon, an analyst with international energy strategy consulting company
IHS-CERA in Mexico City.
The tens of thousands of eventual shale gas wells proposed by Pemex cost as much as $8 million each.
An ultra-deep-water well runs $250 million. All told, Mexico's petroleum industry will need $155 billion
in investments through the next decade, Mexican Energy Minister Jordy Herrera estimates.
Private investment, many say, is the only answer.
“The potential for Mexican shale is enormous,” said Tony Garza, the Bush administration's ambassador
to Mexico, who previously served as a Texas petroleum regulator. “Simply warming over the service
contract approaches won't attract the kind of capital necessary to expand along the border. ... let alone
what is needed to go offshore and ultra-deep, where their big reserves are.”
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Mexico's long-term energy hopes lie in the Gulf's deep waters. Drillers and oil service companies have
earned billions of dollars over the years providing contract services to Pemex.
That will continue as Pemex struggles to maintain or grow its 2.5 million-barrel-a-day production by
opening new fields and redrilling old ones. But the so-called easy oil and gas wells those companies
helped produce are running dry.
Texas companies have been encouraged by Mexican officials to submit bids on several thousand miles
of new pipelines already planned, and more are in the works. Refineries need to be burnished, built or
bought.
“There will be lots of opportunities,” said Wallace, a former senior U.S. diplomat overseeing commercial
affairs in Mexico City.
Mexican energy experts envision converting Pemex to a private enterprise, such as Brazil's Petrobras or
Norway's Statoil, initially owned by the state.
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Private CP
Private companies can solve, they’re already working with PEMEX
Fielden, RBN Energy Energy Analytics director, 1-10-13
(Sandy, Energy market pricing and fundamental data, Data Integration with ETRM, “Oh Rio, Rio – Gas
Across the Rio Grande – The Mexican Gas Infrastructure Boom”, http://www.rbnenergy.com/oh-rio-riogas-across-the-rio-grand-the-mexican-gas-infrastructure-boom, accessed 6-26-13, RRR)
To increase the flow of gas to meet demand inside Mexico and to ramp up import capacity across the
border, the Mexican government has embarked on an ambitious program to build new pipelines
costing as much as $8B. A mixture of public and private companies is involved in building and
operating this pipeline infrastructure – much of it dedicated to supplying power plants. The expansion
projects center on two “backbone” pipelines – one in the southeast and the other in the northeast of
the country – both of which involve new infrastructure to deliver gas from the US side. PEMEX is using
a Cayman Islands based subsidiary MGI to handle the US projects to avoid red tape and speed things up.
In addition to the backbone projects there are a number of smaller connection projects inside Mexico
that provide service to power plants. Inside Mexico the bidding for these projects is being handled by
PEMEX as well as the state power company Comisión Federal de Electricidad (CFE). Contracts not yet
awarded are currently tied up in political stalemate while the new Mexican President Enrique Pena
Nieto (who took office on December 1, 2012) decides on energy policy priorities.
Private companies can solve – empirics
Fielden, RBN Energy Energy Analytics director, 1-10-13
(Sandy, Energy market pricing and fundamental data, Data Integration with ETRM, “Oh Rio, Rio – Gas
Across the Rio Grande – The Mexican Gas Infrastructure Boom”, http://www.rbnenergy.com/oh-rio-riogas-across-the-rio-grand-the-mexican-gas-infrastructure-boom, accessed 6-26-13, RRR)
On the Mexican side the first section of the Northwest Pipeline project to be built will be from Sasabe
to Guaymas (338 miles). This pipeline will be privately owned and operated under contract from the
state power company CFE. The latter recently awarded 25 year contracts to Sempra International to
construct, own and operate two sections of the pipeline from Sasabe to Guaymas and Guaymas to El
Oro in Northwest Mexico. This section of the pipeline will be 36 inch diameter and ultimately carry 760
MMcf/d. Sempra expects the two projects to exceed $1B of investment. The first section of the pipeline
is expected to be operational in late 2014.
Privates can provide technical expertise to Mexican oil
Aguilar, Texas Tribune, 13
[Julián, March 6, 2013 “Mexico's Energy Reform Drawing Interest in Texas”
http://www.texastribune.org/2013/03/06/mexicos-energy-reform-drawing-interest-texas/ accessed
6/26/13 EYS]
The Mexican ruling party's recent decision to adopt a platform that could open up the country's giant
oil monopoly to private investment has caught the attention of some industry gurus in Texas, who say
the move bodes well for U.S. business interests.
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The Institutional Revolutionary Party, or PRI, remains adamant that the state-owned company, Petróleos
Mexicanos, or PEMEX, will stay under state control. But the proposal, which requires legislative
approval, could mean more oil is exported from Mexico to the U.S., and that Mexico might turn to
Americans for guidance on how to increase production there.
“Any time you allow the private sector more free rein, you see more business,” said WorldCity president
Ken Roberts. “There are examples where too much of a laissez faire attitude can run amok. But generally
speaking, when the private sector gets involved, it tends to always look for a way to do more
business.”
The U.S. and Mexico traded about $494 billion in goods in 2012, with more than $229 billion passing
through the Laredo customs district and an additional $86 billion through the El Paso customs district,
according to WorldCity, a Florida-based company that uses U.S. census data to track trade patterns.
Overall refined and crude oil amounted to more than $57 billion in two-way trade.
Roberts said oil imports from Mexico have more than tripled in value over the last decade, peaking in
2011 at $37.15 billion. He said that despite America’s continued effort to find new sources of energy,
he didn’t see oil production worldwide declining soon.
“As the U.S. continues to become extremely successful in fracking, and if there’s successes in
nontraditional means of powering our vehicles, there are all sorts of factors that can change that,” he
said. “But I think there’s going to be a need for lots and lots of oil for years and years to come.”
Analysts say, however, that interested entities should view the proposal cautiously. Energy reform was
one of the hallmarks of Mexican President Enrique Peña Nieto’s campaign last year, when he
successfully propelled the PRI back to the capital after 12 years out of power.
Duncan Wood, the director of the Mexico Institute at the Woodrow Wilson International Center for
Scholars, said the effects of such a proposal, however, remain unclear.
“They are talking seriously about allowing private investment in the oil sector in general, [but] they want
the state to retain control. So what that actually means in reality is very tough to work out,” he said.
“Because retaining control could be legislative, regulatory; it could be the dominant player. No one is
quite sure what that means.”
Wood added that Peña Nieto’s administration would like to put forth additional reforms, and that those
could affect the political climate leading up to the PEMEX negotiations.
“The PRI is fully aware that it needs to maintain a broad popular support for its agenda, and if it’s going
to engage in fiscal reform, where they are talking about adding value added tax on food and medicine,
that’s going to be hugely unpopular,” he said. “If they also begin talking about opening up the oil sector,
then that’s possible that will cause a reaction from the base as well. And the political party that is best
placed to take advantage of that is the left-wing [Party of the Democratic Revolution]. That could cease
upon an upswell of popular rejection of an opening of the sector.”
Foreign companies are very likely to express interest, Wood said, but he doesn't predict an instant
influx.
“It’s not as in we’re going to see a flood of companies in to Mexico immediately," he said. "They are
going to sit back and analyze and make sure the conditions are right."
But Texas companies have already expressed interest, highlighting their expertise in drilling and
offshore production.
The South Texas Energy and Economic Roundtable, or STEER, a coalition of exploration companies
currently drilling in the Eagle Ford Shale that will officially launch next week, said private investment
would bolster trade between the U.S. and Mexico.
“A reform of Mexico’s energy sector has the potential to have a significant impact on the entire
United States, particularly in the oil and gas region in South Texas that already enjoys strong ties with
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Mexico and has experienced unprecedented industry growth, enhanced modernization and
technological advancements,” said STEER president Omar Garcia.
Those technological advancements will be a key factor for many U.S. interests, said Scott Miller, a
senior adviser at the Center for Strategic and International Studies. Despite having proven oil reserves,
PEMEX has under-produced, he said.
“The capability is there, but what they need is better technology and better access to some of the
more modern techniques, and this is where U.S. energy services companies — many of them located
in and around Houston — would, I think, find a major business opportunity,” he said. “It’s something
that oil and energy development around the world tends to benefit handsomely from U.S. know-how
and U.S. technology.”
Miller added that “state control” of a resource is not something to necessarily be wary of. The largest
private owner of energy reserves, Exxon Mobil, owns only 2 percent of the world’s share.
“Most oil resources or energy resources are in government hands, either state-owned enterprises or
state-controlled enterprises,” he said. “All of Russia, all of Venezuela and Petrobras [in Brazil] and most
of the Middle East. So it’s not unusual to have that. It’s really how they structure it and what access is
providing for oil services. But any opening of any sort will be looked at as an important opportunity.”
But no matter how successful the measure proves, Wood said, complete privatization is unlikely.
"It’s not a credible proposition, just simply because that would go way too far," he said. "Mexicans
would react very badly to that. They don’t want to see the Mexican oil company privatized."
Mexico’s energy reforms provide incentives for privates to provide technological
assistance to oil companies
EIA 12
[US Energy Information Adminstration, October 17, 2012, “MEXICO”,
http://www.eia.gov/countries/cab.cfm?fips=MX 6/26/13 EYS]
Mexico nationalized its oil sector in 1938, and Petróleos Mexicanos (PEMEX) was created as the sole oil
operator in the country. PEMEX is the largest company in Mexico and one of the largest oil companies in
the world. The energy sector is regulated by the Secretaría de Energía (SENER), while the Comisión
Nacional de Hidrocarburos (CNH) provides additional oversight of PEMEX and its oil and gas activities.
In 2008, Mexico enacted new legislation that sought to reform the country's oil sector. The goal of
these reforms was to enable PEMEX to curb the ebb in oil production experienced over the past
several years. The measures included several administrative changes, such as adding new seats to
PEMEX's administrative board for outside industry experts; creating a new advisory board designed to
provide independent coordination of long-term energy strategies; and establishing a new, technicallyoriented, and functionally independent hydrocarbons agency — CNH — to supervise and regulate oil
and gas exploration and production.
The reforms permit PEMEX to create incentive-based service contracts with foreign oil companies.
PEMEX also received greater autonomy, including the ability to establish more flexible mechanisms for
procurement and investment. In March 2011, PEMEX announced Mexico's first production licensing
round in more than 70 years, with 20 blocks to be tendered to international bidders. The foreign firms
will have no ownership rights over any oil they produce, but they are expected to provide Mexican
fields with much needed technological improvements. The first three service contracts under the new
framework, which provides incentives to contractors for increased production, were awarded in August
2011 for relatively small, mature fields in Tabasco state. Debates about the future direction of Mexico's
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oil sector featured prominently in the 2012 presidential election that was won by Enrique Peña Nieto,
who included energy reform as one of the planks of his campaign platform.
Mexican natural gas offers multiple opportunities for the private sector—new laws
Lynch, Department of Energy, 2
(Richard Lynch, U.S. Department of Energy @ Office of Fossil Energy, October 2nd, 2002, Fossil Energy
International, “An Energy Overview of Mexico,”
http://www.geni.org/globalenergy/library/national_energy_grid/mexico/LatinAmericanPowerGuide.sht
ml, Accessed 6/30/13, JC)
In December 1993 Mexico passed a new foreign investment law which promotes competetiveness and
established clear rules for the entry of international capital into productive activities. CRE was created
in October 1995 to regulate the privatization process in electricity and natural gas, as well as to
monitor competition in opened sectors.
International companies (especially from the United States) are expected to play a major role in
bringing online the 12-13 GWe of new generating capacity which CFE says it will need by 2006. The
Mexican Energy Minister stated in early March 1998 that Mexico would require investment of $12 to
$15 billion over the next five years for new electric generating capacity. In November 1997, CFE
announced rate hikes for 1998 of 6.2% in real terms as part of a policy aimed at removing subsidies to
power consumers.
The CRE has been busy defining natural gas distribution zones to be opened to private investment,
and conducting the bidding process for distribution permits. In 1996, a consortium formed by U.S. firms
Enova and Pacific Enterprises and Mexico's Proxima was granted the first natural gas concession
awarded in Mexico, to deliver natural gas in the Mexicali, Baja California area. In March 1997, the same
consortium was granted a permit to distribute natural gas in the Chihuahua-Anahuac-Delicias areas.
In April 1997, Compania Nacional de Gas, S.A. (Conagas) was awarded a permit to distribute natural gas
in the Piedras Negras region of the northern state of Coahuila. Concessions for gas distribution in
Monterrey, the country's third-largest city and most important industrial center, have been granted to
the Mexican subsidiary of Spain's Repsol and Compania Mexicana de Gas. The two companies invested
nearly $220 million, including $180 million to purchase the city's existing gas system from CFE. In 1997,
Repsol won another concession, to distribute gas in Toluca, a rapidly growing industrial city west of
Mexico City. In all, about 30 cities are planning to install natural gas distribution systems. During 1998,
CRE oversaw bidding on gas distribution permits for four of Mexico's largest regions: Mexico City,
Texcoco, Monterrey, and Northern Tamaulipas.
The opening of the energy sector was also aided by the restructuring of PEMEX in 1992, when four
independently operating divisions were created: PEMEX exploration and production, PEMEX Gas and
Basic Petrochemical, PEMEX Refining, and PEMEX Petrochemical (secondary petrochemicals). Mexico,
unlike other countries, makes a distinction between basic and secondary petrochemicals, because the
production of basic petrochemicals is reserved to the state by the Constitution, and is the responsibility
of PEMEX. In order to broaden the scope of private sector investment in the sector, the government
reduced the number of basic petrochemicals by reclassifying a number of them. Since 1986, the
government has reduced the list from fifty substances to eight.
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Japan CP
Japan could do the plan – pipeline capability
Associate Press, 4-10-13
(“Japanese firm to build US-Mexico gas pipeline”, http://fuelfix.com/blog/2013/04/10/japanese-firm-tobuild-us-mexico-gas-pipeline/, accessed 6-26-13, RRR)
MEXICO CITY — Mexico’s president says a Japanese company has been tapped to build a pipeline to
import U.S. natural gas through Arizona. President Enrique Pena Nieto is visiting Japan, where he
made the announcement about the $460 million project Tuesday. Japan’s Mitsui Corporation will
build the pipeline, which will run from Tucson to the Mexican border. The president’s office said in a
brief statement the pipeline will be able to carry 770 million cubic feet of gas per day. Mexico’s gas
network already includes a number of active connections with the United States. Neither Pemex nor
the president’s office would provide any other details on the deal.
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Consult Canada
Energy cooperation should (a) include transparency measures (b) safety and security
measures and (c) include Canada in infrastructure integration.
Senate Committee on Foreign Relations 12
[12/21/12, US Senate Committee on Foreign Relations, “Oil, Mexico, And The Transboundary
Agreement”, http://www.gpo.gov/fdsys/, p. 13, accessed 6/30/13, ALT]
Today, our two nations work closer than ever before. Yet, there are still new areas in which the
bilateral relationship should improve. Interlocutors both from the then-existing Caldero ́n
administration and senior advisers to then-incoming Pen ̃a Nieto administration expressed a similar
desire to expand cooperation in the bilateral relationship. One senior member of the then-incoming
Pen ̃a Nieto administration expressed that it is time to move beyond tourism and drugs, issues which are
so prominent in the bilateral agenda today. Of course, the development of a contemporary,
comprehensive immigration policy ranks high when broadening the agenda is discussed.
The U.S. is well positioned to increase dialogue and cooperation on energy security with Mexico
(included in renewable power and efficiency, which were not part of this review, but which are areas
where cooperation can move forward without significant political obstacles from the Mexican side). Key
recommendations include:
1. The U.S. should approve the Transboundary Agreement. The Obama administration should formally
submit to Congress pro- posed implementing legislation and/or resolution of ratification for the
Transboundary Agreement and request Congressional review through regular order. Congress should
then quickly establish a timetable for consideration of that proposal and approval of the TBA.
2. The State Department should integrate oil and natural gas development into the bilateral agenda.
U.S. Embassy officials are well-versed in energy concerns. The commercial service is al- ready active in
promoting business relationships, and some agencies are building technical relationships. The newly
established Energy and Natural Resources Bureau at the State Department is ably led by a former
Ambassador to Mexico, Carlos Pascual, and the bureau is well-equipped to lead broad U.S.G.
cooperation in areas such as shale gas, transparency, trade, supply emergency coordination, demand
management, and infrastructure integration should the Government of Mexico wish to work with the
United States.
3. The State Department should encourage Mexico to partner in unconventional natural gas issues.
Mexico’s tremendous shale gas potential offers it opportunity for local job creation, economic growth,
and gains in its balance of trade. For the U.S., Mexican development of its shale could offer valuable
commercial opportunities, produce additional valuable liquids, and strengthen North America’s position
in global markets. The State Department’s Unconventional Gas Technical Engagement Program is a
ready vehicle for improved cooperation.
4. The administration should encourage Mexican adoption of international revenue transparency
norms. The Pena Nieto ad- ministration has identified the need for increased government
transparency and anti-corruption as a priority issue area across the government. The energy sector is
not immune from public suspicion, but it is perhaps more complicated because any reform meant to
bring international oil company investment must also overcome suspicion of the companies themselves, ingrained since nationalization of the industry decades ago.
An opportunity to directly build confidence in both the government and potential IOC investors would
be for the Mexican Government to institute strong oil and natural gas revenue transparency
measures. Public disclosure of revenues received by the government from IOCs and PEMEX allow
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citizens to better understand budgetary pressures on the government and demonstrate the value that
Mexicans receive from IOC investment. Some countries have also found that revenue disclosure also
presents useful checks and balances between ministries and can help improve tax collection.
Under the Cardin-Lugar Amendment, Section 1504 of the 2010 Dodd-Frank Act, IOCs would already have
to disclose payments with the U.S. SEC if they invest in Mexico (PEMEX itself is not covered since it is
100% state-owned and operating only within Mexico). Internalizing that process domestically within
Mexico would compound benefits with essentially no ad- ditional cost to IOCs. Additionally, Mexico
could work with the voluntary Extractive Industries Transparency Initiative (of which PEMEX is a
supporting company) to build capacity and confidence with civil society and industry.
5. Further enhancing U.S.-Mexico offshore safety coordination should be a priority for the Obama
administration. An oil spill in the Gulf of Mexico is not contained by international bound- aries, and the
U.S. coast is particularly at risk given circulation patterns.
Mexico is poorly prepared to enforce offshore safety, which would be of particular concern for U.S.
coastal communities if large scale oil operations are developed in areas of Mexico close to the
maritime border (as have been recent deep water discoveries). Comisio ́n Nacional de Hidrocarburos
(CNH), a Mexican safety regulator created in 2008, has only 60 employees and, at the time of authors’
visit, had not received scheduled budget increases from the Finance Ministry. Most troublingly, CNH has
not conducted a single offshore platform inspection. As a senior official stated, ‘‘We are running safety
risks because of under investment in this agency [CNH].’’
Mexico’s CNH and the U.S. Department of Interior’s Bureau of Safety and Environmental Enforcement
should enhance co- operation, including U.S. technical and logistical support for CNH-led inspections of
Mexican offshore facilities, with reciprocal visits to U.S. facilities. Reciprocal visits will be particularly
beneficial to build relationships between CNH and IOCs. The TBA offers one avenue to pursue such an
arrangement, but this could directly be accomplished on an accelerated timeline given eagerness of CNH
leadership.
6. The State Department should offer technical assistance in pipe- line security. Theft of oil is a growing
concern and can form a dangerous intersection with widespread security concerns related to criminal
networks. In 2011, PEMEX detected 1,324 il- legal taps. Approximately 3.35 million barrels were stolen
that year, up a third from 2010, and costing PEMEX over a billion dollars.
7. With Canada, invite Mexico to join a standing process for North American energy security planning.
Inevitable changes in Mexico’s oil portfolio are significant for North American infrastructure planning.
The most obvious change is in volume of oil. Yet, the type of oil is also likely to change. Large new
deep off- shore discoveries contain lighter oil than Mexico’s conventional heavy Mayan product,
whereas U.S. Gulf Coast refinery capacity is equipped with coking capacity for the heavier oil. If future
Mexican exports are likely to be lighter than they have
been previously, then investments in Gulf Coast refineries and infrastructure to connect U.S. and
Canadian refineries will likely reflect that reality.
Numerous trilateral initiatives have been focused on energy or included energy as a component part.
With shifts already underway in U.S. and Canadian oil and natural gas production, and the high
potential of Mexico, communication on energy security planning should be enhanced and formalized
in frequent consultations. Consistent with each of their domestic planning, the U.S., Canada, and
Mexico could jointly analyze resource availability, infrastructure needs, and regulatory needs to pursue
mutually-beneficial strategic planning for North American energy.
To conclude, the potential benefits of the United States and Mexico working more closely on their
respective national energy goals has never been higher. For the United States, thoroughly understanding Mexico’s oil prospects is also vital for our energy security outlook. Mexico’s energy future is in
the hands of Mexicans. The United States can and should talk plainly, as a friend, and offer
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our robust partnership.
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Oil Spill Regulations CP
Status quo improvements aren’t enough for long-term, Congressional action key.
Boesch, University of Maryland Center for Environmental Science President 12
[Donald, 4/17/12, Nature Magazine, “Deep-water drilling remains a risky business”,
http://www.nature.com/news/deep-water-drilling-remains-a-risky-business-1.10464, accessed 6/30/13,
ALT]
There have been some positive responses to the Deepwater Horizon experience. The US Department
of the Interior (DOI) temporarily suspended deep-water drilling in the Gulf until new safeguards,
including a demonstrated capacity to contain blowouts, were put into place. The DOI also reformed its
management and oversight of offshore oil and gas development, separating safety regulation from
developmental decision-making, and has established a new safety and environmental management
system.
The oil industry, in addition to developing the needed containment capacity, has improved its
safety processes. The American Petroleum Institute, the industry body, has created a Center for
Offshore Safety and named Charlie Williams, a seasoned and respected scientist from Royal Dutch Shell,
to head it. We shall see whether this new centre can develop the planned third-party audit process
and if the industry, working with the DOI, will advance cutting-edge research and development (R&D)
of safety technology.
BP has funded an independently managed Gulf Research Initiative to support longer-term research
on the impacts of the Deepwater Horizon oil spill. Through this, and the natural resources damage
assessment being conducted by state and federal agencies, we will learn much about the fate and the
effects of the hydrocarbons released during the blowout. And a task force established by President
Barack Obama has developed the first phase of a Gulf of Mexico Regional Ecosystem Restoration
Strategy to address the long-term degradation of Gulf ecosystems, some of it due to the 60-year
history of oil and gas development in the region.
Unfortunately, the US Congress — caught up in partisan rancour, including debates about
expanding offshore oil drilling — has failed to adopt legislation to address the lessons learned and the
recommendations of the oil-spill commission and others. Such legislation should codify the executive
reforms mentioned earlier into law, increase liability limits, and dedicate sustained funding for oil-spill
research and environmental assessment and monitoring.
No link to politics- costs covered by oil price variability, and empirics prove now is key.
Boesch, University of Maryland Center for Environmental Science President 12
[Donald, 4/17/12, Nature Magazine, “Deep-water drilling remains a risky business”,
http://www.nature.com/news/deep-water-drilling-remains-a-risky-business-1.10464, accessed 6/30/13,
ALT]
Even in the current constrained fiscal circumstances, improved oversight and essential R&D could be
supported by industry fees amounting to pennies per barrel, imperceptible within the daily
fluctuations in price on the world market or at the pump.
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New laws were passed within a year of the 1989 Exxon Valdez spill in Alaska. If important lessons
are not to be lost as the events of 2010 fade from memory, there is a pressing need to change the law
to make such accidents less likely, and our response more effective.
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Data Release CP
Info sharing and data release solves reform best
Snow, Oil and Gas Journal Editor 6-21-13 (Nick, Oil & Gas Journal, “Mexico’s energy reforms will
need to be bold, experts suggest” http://www.ogj.com/articles/2013/06/mexico-s-energy-reforms-willneed-to-be-bold-experts-suggest.html, accessed 6-30-13 KR)
Possible steps
It’s generally assumed that Pemex will continue to own Mexico’s hydrocarbon resources, but
production-sharing contracts and labor reform have been mentioned, according to Marcos.
Downstream private investment also might be allowed, and the national hydrocarbons commission
could have more regulatory power, he said.
“The last time I checked, there were no chemical molecules on Mexico’s flag, but everyone treats it that
way,” said Pardinas. “The challenge the next few months will be to draw a line from oil and other
chemical molecules through a national company with a confused corporate identity.”
The US could help reform efforts by releasing more information about dramatic changes under way in
North American energy so Mexico would understand what it’s missing, he added. Pemex is the only
one in the world that operates from the wellhead to the retailer, Pardinas said. “Even Cuba is more
competitive,” he observed.
The country also badly needs to connect US gas transmission systems with Mexico’s industries , he
said. “In parts of Mexico, we’re paying prices similar to China,” Pardinas said. “It’s essential to build
infrastructure to bring US gas to Mexican industry, not only for energy security but also for economic
growth.”
Marcos said Pemex would like to explore shale gas plays near the US border that are believed to be
extensions of the Eagle Ford field. “My personal opinion is that it should not get involved in shale
because it doesn’t have the technological capacity,” he said. “It’s hiring Schlumberger, Halliburton, and
other service companies to operate field laboratories instead.”
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Renewables DA
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1NC – Climate Shell
A. Uniqueness – Mexico shifting from fossil fuels to renewables development now
Cision, News, 13
[Cision, 06/14/2013, Cision News, “Vision for Renewable Energy in Mexico Looks Promising,”
http://news.cision.com/north-american-production-sharing--inc-/r/vision-for-renewable-energy-inmexico-looks-promising,c9428687, accessed 06/25/13, MC]
The UNEP report on regional surges in green energy investment pointed to spending growing steadily
in Mexico as investments continue to pour in from the U.S. and other foreign countries that
understand the importance of emerging economies when it comes to cost-competitiveness for wind
and solar power manufacturing. In fact, a U.S. Department of Energy report notes how investments in
environmentally friendly energy sources are shifting to developing nations such as Mexico with its
energy grid construction that is also providing huge investment openings for U.S. and other foreign
company investment.
For instance, Mexico has an international reputation as an energy producer. However, the country is
moving away from just focusing foreign investments on its vast natural oil reserves. In turn, Mexico is
presenting investors with an opportunity to invest in its new energy grid construction projects that are
powered by wind and solar sources over previous methods that focused more on oil and other fossil
fuels.
B. Link – Plan signals a reversal and recommitment to hydrocarbon economy Focus on oil and gas production shifts focus away from renewables
Ochoa and Vego, Ernest and Young, 12
(Alberto, Julián, Published December 24 2012, Renewable Energy World, “Renewable Energy Review:
Mexico”, http://www.renewableenergyworld.com/rea/news/article/2012/12/renewable-energyreview-mexico, Accessed June 30 2013, JB)
While few doubt that the new climate change law represents a turning point in Mexico’s energy
agenda, there are some concerns that the country still lacks a clear regulatory framework for attracting
the substantial private investment required to fulfil these ambitious renewable energy and emissions
targets. The Government may find that some sort of financial subsidy is still required to make
renewables projects cost-competitive with more conventional sources such as gas.
Further, there are some concerns around whether Mexico’s incoming Government is likely to implement
much of the climate change reform passed by current President, Felipe Calderon. President-elect, Pena
Nieto, who takes office this December, has publicly affirmed his commitment to fighting climate
change, but some believe his Administration is more likely to focus on conventional fuels given
increasing shale gas production in the US and the prospect of large recoverable reserves in Mexico.
One of Nieto’s main campaign promises had been to reinvigorate oil and gas production by reforming
state-owned giant Pemex to allow more private investment.
This, combined with pressure to deliver GDP growth, may take focus away from the renewables sector
in the short term. However, it is perhaps too premature to dismiss the potential of the recent energy
reforms — the incoming Government has a unique opportunity to establish Mexico as a leading 21stcentury low-carbon economy, and only time will tell the extent to which this opportunity is realized.
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C. Impact – Climate Change
1. Successful shift to renewables in Mexico will be modeled globally
Gibbs, White House press secretary, 9 (Robert, 4/16/9, The White House Office of the Press
Secretary, ”U.S.-MEXICO ANNOUNCE BILATERAL FRAMEWORK ON CLEAN ENERGY AND CLIMATE
CHANGE,” http://www.whitehouse.gov/the-press-office/us-mexico-announce-bilateral-frameworkclean-energy-and-climate-change, Accessed 6/25/13, JC)
During their discussions in Mexico City today, the two leaders agreed on the importance of promoting
clean energy and combating climate change and the value of joint and practical collaboration in
achieving these goals. The Bilateral Framework establishes a mechanism for political and technical
cooperation and information exchange, and to facilitate common efforts to develop clean energy
economies. It will also complement and reinforce existing work between the two countries.
The Bilateral Framework will focus on: renewable energy, energy efficiency, adaptation, market
mechanisms, forestry and land use, green jobs, low carbon energy technology development and
capacity building. The framework will also build upon cooperation in the border region promoting
efforts to reduce greenhouse gas emissions, to adapt to the local impacts of climate change in the
region,, as well as to strengthen the reliability and flow of cross border electricity grids and by
facilitating the ability of neighboring border states to work together to strengthen energy trade.
Senior officials from both countries will be working over the coming weeks to further elaborate the
framework. Specific areas of joint cooperation under the Bilateral Framework may include:
· Collaborating on training/workshops and information exchanges for government officials to explore
possible cooperation on greenhouse gas inventories, various greenhouse gas reduction strategies, and
market mechanisms;
· Through our collaboration in the Border 2012 program, working with our respective border states to
provide opportunities for information exchange and joint work on renewable energy, such as wind and
solar, that could include technical and economic project feasibility studies, project development, and
capacity building in the border region. Other border work could include a bilateral border crossing
planning group to develop strategies to reduce emissions from idling vehicles, among other initiatives
that may be deemed appropriate;
· Expanding our extensive bilateral collaboration on clean energy technologies to facilitate renewable
power generation including by addressing transmission and distribution obstacles between our
countries; fostering Energy Service Company market development; and highlighting existing and
proposed areas for cooperation on clean energy and energy efficiency under the North American Energy
Working Group;
· Promoting academic and scientific exchanges on renewable energy;
· Pursuing projects on adapting to climate change, including coastal or disaster risk reduction activities
as well as adaptation in key sectors; and
· Working jointly with other countries to take advantage of growing Mexican expertise on greenhouse
gas inventories, adaptation and project planning. This work could also possibly include a shared
US/Mexican initiative to help developing countries in the Americas create low carbon development
strategies plans for adaptation to climate change, and monitoring and accounting for the results.
Both countries stressed that a financial architecture to mobilize investment in climate-friendly
technologies is crucial to a successful agreed outcome in Copenhagen. Several countries have made
specific proposals on financial mechanisms, including Mexico. Recognizing Mexico’s leadership on
climate change, the United States announced its support for Mexico to host the Sixteenth United
Nations Climate Change Conference (COP 16) in 2010. The United States was also pleased that Mexico
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will host a meeting of the Major Economies Forum on Energy and Climate (MEF) in preparation for a
Leaders meeting to take place in July after the G-8 meeting in Italy.
2. Climate change causes extinction
Deibel, Professor of IR at National War College 7
(Terry, Foreign Affairs Strategy (Terry L. Deibel, “Conclusion: American Foreign Affairs Strategy Today
Anthropogenic – caused by CO2”)
Finally, there is one major existential threat to American security (as well as prosperity) of a nonviolent
nature, which, though far in the future, demands urgent action. It is the threat of global warming to the
stability of the climate upon which all earthly life depends. Scientists worldwide have been observing
the gathering of this threat for three decades now, and what was once a mere possibility has passed
through probability to near certainty. Indeed not one of more than 900 articles on climate change
published in refereed scientific journals from 1993 to 2003 doubted that anthropogenic warming is
occurring. “In legitimate scientific circles,” writes Elizabeth Kolbert, “it is virtually impossible to find
evidence of disagreement over the fundamentals of global warming.” Evidence from a vast
international scientific monitoring effort accumulates almost weekly, as this sample of newspaper
reports shows: an international panel predicts “brutal droughts, floods and violent storms across the
planet over the next century”; climate change could “literally alter ocean currents, wipe away huge
portions of Alpine Snowcaps and aid the spread of cholera and malaria”; “glaciers in the Antarctic and in
Greenland are melting much faster than expected, and…worldwide, plants are blooming several days
earlier than a decade ago”; “rising sea temperatures have been accompanied by a significant global
increase in the most destructive hurricanes”; “NASA scientists have concluded from direct temperature
measurements that 2005 was the hottest year on record, with 1998 a close second”; “Earth’s warming
climate is estimated to contribute to more than 150,000 deaths and 5 million illnesses each year” as
disease spreads; “widespread bleaching from Texas to Trinidad…killed broad swaths of corals” due to a
2-degree rise in sea temperatures. “The world is slowly disintegrating,” concluded Inuit hunter Noah
Metuq, who lives 30 miles from the Arctic Circle. “They call it climate change…but we just call it breaking
up.” From the founding of the first cities some 6,000 years ago until the beginning of the industrial
revolution, carbon dioxide levels in the atmosphere remained relatively constant at about 280 parts per
million (ppm). At present they are accelerating toward 400 ppm, and by 2050 they will reach 500 ppm,
about double pre-industrial levels. Unfortunately, atmospheric CO2 lasts about a century, so there is no
way immediately to reduce levels, only to slow their increase, we are thus in for significant global
warming; the only debate is how much and how serous the effects will be. As the newspaper stories
quoted above show, we are already experiencing the effects of 1-2 degree warming in more violent
storms, spread of disease, mass die offs of plants and animals, species extinction, and threatened
inundation of low-lying countries like the Pacific nation of Kiribati and the Netherlands at a warming of
5 degrees or less the Greenland and West Antarctic ice sheets could disintegrate, leading to a sea level
of rise of 20 feet that would cover North Carolina’s outer banks, swamp the southern third of Florida,
and inundate Manhattan up to the middle of Greenwich Village. Another catastrophic effect would be
the collapse of the Atlantic thermohaline circulation that keeps the winter weather in Europe far
warmer than its latitude would otherwise allow. Economist William Cline once estimated the damage to
the United States alone from moderate levels of warming at 1-6 percent of GDP annually; severe
warming could cost 13-26 percent of GDP. But the most frightening scenario is runaway greenhouse
warming, based on positive feedback from the buildup of water vapor in the atmosphere that is both
caused by and causes hotter surface temperatures. Past ice age transitions, associated with only 5-10
degree changes in average global temperatures, took place in just decades, even though no one was
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then pouring ever-increasing amounts of carbon into the atmosphere. Faced with this specter, the best
one can conclude is that “humankind’s continuing enhancement of the natural greenhouse effect is akin
to playing Russian roulette with the earth’s climate and humanity’s life support system. At worst, says
physics professor Marty Hoffert of New York University, “we’re just going to burn everything up; we’re
going to het the atmosphere to the temperature it was in the Cretaceous when there were crocodiles at
the poles, and then everything will collapse.” During the Cold War, astronomer Carl Sagan popularized a
theory of nuclear winter to describe how a thermonuclear war between the Untied States and the
Soviet Union would not only destroy both countries but possible end life on this planet. Global warming
is the post-Cold War era’s equivalent of nuclear winter at least as serious and considerably better
supported scientifically. Over the long run it puts dangers form terrorism and traditional military
challenges to shame. It is a threat not only to the security and prosperity to the United States, but
potentially to the continued existence of life on this planet.
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Uniqueness
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Mexican Renewables Transition Now
Renewables investment increasing now
Wood, Director of the Mexico Institute at the Woodrow Wilson International Center,
10
[Duncan, “Environment, Development and Growth: U.S.-Mexico Cooperation in Renewable Energies”,
http://www.statealliancepartnership.org/resources_files/USMexico_Cooperation_Renewable_Energies.
pdf, accessed 6-26-13, HG]
Mexico enjoys one of the world’s most privileged positions in terms of its potential to generate
renewable energy. Possessing tropical, temperate and arid climates, very long coastlines, areas of high
wind velocity and stability, geothermal activity, and high levels of solar irradiation, Mexico is naturally
extremely well endowed. However there has been very little development of the renewable sector in¶
Mexico until very recently (with the exception of hydro‐electric and geothermal electricity generation).¶
This lack of development can be explained by:¶ • The dominance of energy thinking by issues related to
oil and, to a lesser extent, gas¶ • The absence of any consideration of energy security issues due to the
abundance of¶ hydrocarbons¶ • A lack of awareness on the part of the executive branch and legislators of
the potential¶ for renewable energy generation¶ • A low level of environmental consciousness on the
part of government, society and the¶ private sector¶ • The absence of economic and financial incentives
for public or private sector¶ development of renewable resources¶ This is not to say that there have not
been actors in Mexico who have pushed for the construction and¶ consolidation of a national renewable
energy sector. Within civil society and higher education, a wide¶ range of groups have been very active
for years in the development and application of renewable energy technologies. Furthermore, there
are a small number of private businesses that have been active in a variety of renewable energy
technologies since the mid‐ to late 1990s.5
Transition to renewables now – developing countries are uniquely key
Leahy, the lead international science and environment correspondent at IPS, 13
(Stephen, he lead international science and environment correspondent at IPS, where he writes about
climate change, energy, water, biodiversity, development and native peoples. Based in Uxbridge,
Canada, near Toronto, he has covered environmental issues for nearly two decades for publications
around the world. He is a professional member of the International Federation of Journalists, the Society
of Environmental Journalists and the International League of Conservation Writers. He also pioneered
Community Supported Environmental Journalism to ensure important environmental issues continue to
be covered, 1/13/13, Inter Press Service, “Developing Countries Lead Global Shift to Green Energy,”
http://www.ipsnews.net/2013/06/developing-countries-lead-global-shift-to-green-energy/, Accessed:
6/30/13, LPS.)
UXBRIDGE, Canada, Jun 13 2013 (IPS) - Emerging economies such as Mexico and India are shifting
energy investments into renewable resources while industrialised countries hesitate, noted two new
United Nations reports released Wednesday in Nairobi, Kenya.¶ “There is a structural change in the
global energy sector underway,” said Ulf Moslener, head of research of the Frankfurt School in
Germany.¶ “Costs are dropping radically. Renewables represented 6.5 percent of all electricity generated
and reduced carbon emissions by 1 billion tonnes in 2012,” said Moslener, co-author of Global Trends in
Renewable Energy Investment 2013, a report sponsored by the U.N. Environment Programme (UNEP).¶
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Developing countries are finding installing green energy to be far less expensive than relying on fossil
fuels, Moslener told IPS. Poorer countries want to reap the benefits of stable energy costs, new jobs,
improved air quality and reduced health and climate damage.¶ While political debates about the
future of green energy preoccupy countries such as the United States, United Kingdom and Germany,
developing countries have embraced cleaner energy. The move is reflected by a narrowing investment
gap. In 2012, developing countries invested 112 billion dollars in clean energy, compared to developed
economies’ 132 billion dollars.¶ "Around the world, there is a shift to clean energy."¶ -- Michael Liebreich¶
In 2007, developed economies’ investments were two-and-a-half times greater (excluding large hydro)
than those of developing economies.¶ Globally, despite a 12 percent decline in investment, more
renewable energy went online in 2012 than in any previous year, the main reason being a 30 to 40
percent drop in the cost of solar energy.¶ “Around the world, there is a shift to clean energy,” said
Michael Liebreich, chief executive of Bloomberg New Energy Finance.¶ Political complications¶ Investors
understand that clean energy no longer costs more than fossil energy. As such, there is a lot of
excitement about the potential of large-scale projects in wide range of countries.¶ Nevertheless,
investments in clean energy in 2013 would have been higher had governments in Europe and North
America not abruptly pulled back from green energy policies.
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Renewables Shift Now – Comparative Cost
Renewable prices comparatively low, causing shift from hydrocarbons
Downing & Morales, reporters for Bloomberg news 4/21 [Louise and Alex, 4-21-13,
Bloomberg, “Renewables Investment Seen Tripling Amid Supply Glut”,
http://www.bloomberg.com/news/2013-04-21/renewables-investment-seen-tripling-amid-supplyglut.html, accessed 6-26-13, HG]
The plunge in the cost of wind and solar power that bankrupted more than two dozen manufacturers
is forecast to spur a tripling of investment in renewables by 2030 and to reduce the grip fossil fuels
have on world energy supply. Enlarge image Annual spending on clean-energy projects that don’t add
to greenhouse-gas pollution may rise to $630 billion at the end of the next decade from $190 billion
last year, Bloomberg New Energy Finance said in a report today. That’s 37 percent more than estimated
in November 2011 and means renewables would account for half of all generation capacity by 2030. The
findings contrast with production gluts that made most solar and wind manufacturers unprofitable last
year, tipping a unit of Suntech Power Holdings Co. (STP) into bankruptcy and Vestas Wind Systems A/S
(VWS) into record losses. While suppliers are suffering, lower equipment prices are making more
projects profitable to develop and advancing the day when renewables can rival coal and oil on cost.
“The apocalyptic views about what it will cost to shift the world to renewable energy simply aren’t
true,” Michael Liebreich, chief executive officer of New Energy Finance, said in an interview. “Three
years ago, we thought wind and solar would be cheap as chips, and they’ve even gone below that.”
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Mexican Solar Energy Increasing
Mexico developing solar power industry
US Embassy, Mexico City 13 [April 30, 2013 “Renewable Energy Factsheet”
http://photos.state.gov/libraries/mexico/310329/Econ-Apr-13/Renewable-Energy.pdf¶ accessed
6/25/13, UR]
Per Mexico’s National Association of Solar Energy (ANES), ¶ Mexico produced in 2010 28.62 MW of solar
power but has the ¶ potential to reach 6,550 MW given its solar resources. (See ¶ map below). Experts
believe that photovoltaic (PV) electric- ¶ ity and solar thermal will comprise up to 5% of Mexico's
energy matrix ¶ by 2030 and up to 10% by 2050.
There are several solar projects in the works. The Federal Electrical Commission (CFE) plans to
build a 30 MW photovoltaic (PV) plant in Baja California Sur. In March of 2012, U.S.-based SolFocus, Inc.
announced a venture with Mexican land and real estate developer Grupo ¶ Musa and U.S.-based energy
developer Synergy Technologies, LLC to build a ¶ 450MW concentrated photovoltaic (CPV) solar power
plant near Tecate, Baja ¶ California. The plant will be Mexico’s first large-scale PV project. Construc- ¶ tion
began in 2012, and the plant will be built in 50MW stages. Energy pro- ¶ duction is expected to begin by
late 2013. As of January 2012 the state of Du- ¶ rango is seeking to attract USD 462 million in capital to
develop at least four ¶ solar energy plants. According to state officials, Durango’s geographical loca- ¶
tion is ideal for solar plants, since it receives three times more solar radiation ¶ than the world’s
average.
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Mexican Wind Energy Increasing
Mexico is already investing in wind energy
Godoy, IPS Correspondent 6/18
(Emilio, a Mexico-based correspondent who covers the environment, human rights and sustainable
development. He has been a journalist since 1996 and has written for various media outlets in Mexico,
Central America and Spain, 6/18/13, Inter Press Service News Agency, “Rural Mexican Communities
Protest Wind Farms,” http://www.ipsnews.net/2013/06/rural-mexican-communities-protest-windfarms/, Accessed: 6/30/13, LPS.)
The energy ministry estimated on Wednesday Jun. 12 that wind energy generates 1,304 MW in Mexico,
followed by geothermal power with 812 MW, biomass and biogas with 581 MW and mini-hydropower
projects with 450 MW. Without including large hydroelectric power stations, renewable energy
sources contribute five percent of the total national energy supply, and the proportion is increasing. ¶
The strong winds in the isthmus of Tehuantepec, the narrowest part of Mexico which includes parts of
the southern states of Oaxaca, Tabasco, Veracruz and Chiapas, have made it an epicentre for several
wind farm projects. Land ownership in this area is primarily collective and communities are governed by
traditional custom.¶ To date wind energy exploitation occupies 11,000 hectares nationwide, with
investments since 2007 totalling five billion dollars, according to the Mexican Wind Energy Association
(AMDEE).¶ The energy reform of 2008 allows individuals and businesses to generate their own
electricity from renewable sources, supply it to the national grid and be rewarded with preferential
feed-in tariffs.¶ As a result, many companies are buying cheap wind energy to become self-sufficient in
energy and reduce their electricity bills.
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AT – Need Legal Reforms for Renewables Investment
Mexico is ready for investment—a number of legal frameworks are in place
Grieger, International Chamber of Commerce Environment and Energy Committee, 11
(Edmond, partner at Von Wobeser y Sierra, S.C., head of the Energy, Environment and Natural Resources
practices of the firm, member of the Mexican Bar Association, the Environment and Energy Committee
of the ICC, and the Environment and Energy Law Commissions of the IBA, 10-4-11, Corporate LiveWire,
“Mexico’s Renewable Energy Market”, http://www.corporatelivewire.com/top-story.html?id=mexicosrenewable-energy-market, accessed 6/23/13, JZ)
The most popular trend in this market is to develop renewable energy projects under a self-supply or
cogeneration scheme, where joint ventures are incorporated between investors and developers, and
the beneficiaries of such schemes are included as minority shareholders of such joint venture schemes.
The beneficiaries are usually local government bodies, such as municipalities, governmental buildings,
states, as well as a wide branch of companies in the private sector.
To illustrate an example of these schemes, we could mention the BENLESA renewable energy project in
the northern State of Nuevo León, which is considered the first renewable energy project in Mexico and
Latin America using the biogas from a landfill as fuel.
BENLESA is the result of a joint venture between the private company Bioeléctrica de Monterrey, S. A.
de C. V. and the government of the State of Nuevo León. The electric power generated at BENLESA is
destined to about thirteen associated public entities, such as municipalities, Monterrey City Metro
Station and other public buildings. The BENLESA biogas plant was opened in September 2003. The
plant’s current generation capacity is 7 MW, and it has recently modified its cogeneration permit to
expand its generation capacity up to 12.72 MW.
Provided in the country’s renewable regulations, we have several mechanisms to promote foreign and
national investment in renewable energy, such as renewable portfolio standards included in the
aforesaid national policy; net metering methods and specific models for grid interconnection
agreements with the CFE; tax instruments consisting in benefits for the purchase and import of
equipment to be used for the generation of renewable energy; as well as a financial instruments such
as the National Fund for the Energy Transition and Sustainable Exploitation of Energy.
Another important incentive is the initiative between the Mexican Government, the World Bank and the
Global Environment Facility (GEF). The initiative will be supported by a donation of up to USD$70
Million (in two phases) and aims to compensate for the differences that exist between conventional
electricity generation costs and generation utilizing renewable sources.
These instruments, already existing in Mexico, show the efforts the Government is making to develop
a market for renewable energy. However, it is uncertain that these measures are sufficient to attract
the private investment necessary to reach the renewable energy capacity targets established. On the
other hand, we also have several barriers affecting this market, for instance the obligation of the CFE
to find the lowest price for the purchase of energy, the deficiency of infrastructure for grid
connections, the scarcity of financial mechanisms and other economic incentives for this market.
In spite of the fact that there are still some barriers to investment in the branch, the Mexican renewable
market is a fast developing sector which is being significantly supported by the federal government.
In this regard, there are several actions to be implemented in order to offer more incentives, as well as
to provide the adequate infrastructure and financing mechanisms to boost investments in this rising
market.
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AT – Needs US Assistance
Legal framework and US assistance pushing renewables now
O'Keeffe, Arizona State University Renewable Energy Sustainability Research Analyst,
9 (Darragh, Arizona State University, “Renewable Energy: US-Mexico Border Renewable Energy
Development,” http://gis.clas.asu.edu/, Accessed 6/26/13, JC) Note: Date based on most recent citation
According to the U.S. Department of Energy (DOE), Mexico "places great importance on the
development of renewable energy." The DOE believes that the continued growth of Mexico's
renewable energy sector is likely. The 2008 Energy Reform bill included a new Renewable Energy Law
(LAERFTE), aiming at reducing Mexico's fossil fuel dependence by promoting renewable energy
technologies. The new law recognises that renewable energy needs both significant support and
financial incentives to achieve its potential, and it called for the development of a national strategy for
the sustainable use of energy. The generation mix in Mexico is changing significantly, moving away from
fuel-oil generation plants to natural gas-based generation. Traditionally, large hydroelectric and
geothermal energy have been Mexico's most widely used renewable sources. Other renewable energy
sources, such as wind power, solar PV, small hydro, biomass, and biofuels have experienced only slow
growth to date.
In recent years however, contributions by United States government agencies to the development of
renewable energy resources in Mexico have left a significant impact. Most obviously in the wind and
solar sectors, Mexico has benefitted from technical assistance, resource identification and regulatory
guidance. The work of USAID, DOE, Sandia Laboratories and the National Renewable Energy
Laboratories has helped to promote awareness of renewable energies.
US and Mexico push to work on renewables and climate agreements
Klapper, Associated Press, 12
(Bradley, A reporter on the State Department for the Associated Press, 2/20/12, The Huffington
Post, “U.S, Mexico Agree To Cooperate on Energy,”
U.S., Mexico Agree To Cooperate On Energy,” http://www.huffingtonpost.com/2012/02/20/us-mexicoagree-to-cooper_n_1288976.html, Accessed: 6/23/13, LPS.)
Clean Energy and Climate Change: President Obama and President Calderón reaffirmed the strong
commitment of both the United States and Mexico to combat global climate change and create
markets for clean energy technologies. President Obama applauded President Calderón’s leadership
on the successful outcome of the climate negotiations in Cancún, including the creation of the Green
Climate Fund, a new multilateral vehicle to deliver financing to address climate change mitigation and
adaptation in developing countries. The United States strongly supports Mexico’s ongoing leadership in
this area. The Presidents agreed to work together this year to implement the other major agreements
reached in Cancún, including on transparency, technology, adaption, and forest preservation. The
leaders welcomed the achievement of significant milestones under the Bilateral Framework on Clean
Energy and Climate Change, including plans for cooperation on mapping of wind resources in Mexico,
and wind turbine testing and design. Mexico and the United States continue to work together, with
Canada, to complete by April 2012 a North American Carbon Storage Atlas under the North American
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Carbon Atlas Partnership (NACAP). President Calderón and President Obama noted progress on the
Cross Border Electricity Task Force to promote a bilateral renewable energy market, increase grid
reliability and resiliency, and make energy use more efficient in both countries. Transboundary
Energy Negotiations: Today, President Obama and President Calderón reaffirmed the desire of the
United States and of Mexico to conclude an agreement on transboundary reservoirs. In May 2010, the
Presidents issued made a joint commitment to the safe, efficient, and equitable exploitation of
transboundary reservoirs with the highest degree of safety and environmental standards, and the two
governments began work on a transboundary agreement. The two leaders have acknowledged the
energy security benefits to both countries of responsible stewardship and development of these
resources and the high level of significance of completing such an agreement for both countries.
President Obama and President Calderón both reiterated their commitment to conclude these
negotiations by the end of 2011.
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Links
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Link – Hydrocarbon Restrictions
SQ hydrocarbons restrictions spur shift to renewables – plan reverses this trend
Wilson Center 10
[3-24-13, “U.S.-Mexico Cooperation on Renewable Energy: Building a Green Agenda”, Wilson Center,
http://www.wilsoncenter.org/event/us-mexico-cooperation-renewable-energy-building-green-agenda,
accessed 6-26-13, HG]
Mexico's Green Energy Potential
Mexico has large and untapped geothermal, wind, and solar deposits, said Duncan Wood, chair,
Department of International Relations, Instituto Tecnologico Autonomo de Mexico (ITAM), and author
of the Wilson Center report. The country is the world's third-largest producer of geothermal energy and
has large geothermal deposits in Baja California near big U.S. markets, such as San Diego and Los
Angeles. Mexico also offers high promise in wind power, with estimated potential output of 1,800 to
2,400 megawatts for Baja California and 5,000 megawatts for southern Oaxaca state. Though Oaxaca is
far from the U.S. border, it will soon be able to export electricity to U.S. markets as Baja California now
can, given that Mexico's mainland and peninsular electrical grids are expected to be linked in the very
near future. (Right now the Baja California peninsula is connected only to the U.S. grid.) Mexico is rich in
solar energy, and large marketable deposits exist particularly in northeastern Baja California, near the
U.S. border. In biomass, little investment has been made so far, he said. Wood cited recent
developments that have encouraged renewable energy investment in Mexico. Mexico's oil fields are
in long-term and, in some cases, precipitous decline, and the country is plotting a "future as a green
nation," shifting the policy focus toward alternative energy development. Additionally, a U.S.-Mexico
taskforce on renewables was recently formed—its announcement timed with President Felipe
Calderon's May 2010 state visit to Washington—and there has been high-level engagement on the issue
by both administrations. Mexico also will host the next U.N. Climate Change Conference, to be held in
Cancún in fall 2010. Further encouraging investment in renewables, there are not the blanket
prohibitions on private ventures that exist in the hydrocarbons sector, and regulatory adjustments
over the past few administrations have enabled a more robust private stake in electricity generation and
transmission. Collaboration between Mexico and U.S. government agencies, such as the Department
of Energy and the U.S. Agency for International Development, through the framework of the Mexico
Renewable Energy Program, have enabled the richer development of Mexico's renewable resources
while at the same time promoting the electrification and greater general economic development of
parts of rural Mexico, Wood said. Impulses to develop Mexico's renewables sector further align with
regional efforts to make North America energy interdependent.
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Link - Fracking
Fracking trades off with renewable energy investment – reduces cost of fossil fuels
Schrope, Yale School of Forestry & Environmental Studies alumni, 12
(Mark, now a science journalist, Environment: Yale magazine for Yale School of Forestry &
Environmental Studies students, faculty, alumni, “Fracking Outpaces Science on Its Impact”,
http://environment.yale.edu/envy/about/, accessed 6/30/13, JZ)
There’s also a less obvious concern about natural gas’ potential role in climate change. The issue is
price. For now, sustainable power sources, such as wind and solar, remain much more expensive per
unit of energy than fossil fuels. As oil prices have risen in recent years, oil has become nearly as
expensive as renewables, making pursuit of sustainable options more economically feasible.
But the United States’ massive shale natural gas reserves and frenzied expansion of drilling have
pushed natural gas prices down. It’s now so cheap that many power companies have shifted toward
greatly expanded natural gas use. With such a cheap, domestic energy source dominating the U.S.
energy landscape, it could dramatically slow any movement toward more expensive renewables.
Fracking trades off with renewables – low price kills renewable energy research
Hauter, Food and Water Watch Executive Director, 12
(Wenonah, 9/18/12, Huffington Post, “Memo to Fracking Apologists: You're Hurting Renewables (and
You're Greenwashing, Too)”, http://www.huffingtonpost.com/wenonah-hauter/memo-to-frackingapologists_b_1890889.html, accessed 6/30/13, JZ)
Let's talk first about gas as a bridge fuel. Thanks to shale gas drilling, natural gas is cheap -- so cheap
that it's taken investment away from renewables. NextEra Energy Inc. cancelled plans for new wind
power projects thanks to cheap gas, according to Greenwire, and the U.S. government has said that
the low price of natural gas of wind energy.
Wind power comprised approximately 42 percent of the added electricity capacity in the United States
in 2008 and 2009, and this declined to 25 percent in 2010 and 32 percent in 2011. Funding for clean
energy overall plummeted in the first quarter of 2012 to just $27 billion -- down 28 percent from the
previous quarter.
So instead of creating a "bridge" to renewables, what shale gas has done is allow us to substitute one
dirty fuel (coal) for another (fracked gas), likely making climate change even more costly and
destructive in the coming decades.
Fracking is unethical and trades off with renewables
Chomsky, American linguist, philosopher, cognitive scientist, political critic, and
activist, 13
[Noam, this guy is really famous and really smart, 4/5/13, “Global Warming and The Common Good”,
Blog Spot, http://readingchomsky.blogspot.com/2013/04/normal-0-0-2-false-false-false-en-us-ja.html,
accessed: 6/30/13, ML]
Chomsky: …a very interesting topic, I think I mentioned that in Ecuador, where there’s a large
indigenous population, they’ve … [the issue is] not to not be fracking ... they have plenty of oil reserves.
There are efforts by government not to use the oil and keep it underground because the understanding
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of the indigenous population is we’re better off if we don’t use it because every bit of it that we use, it
harms us. It harms our children. It harms the world--and maybe severe harm. So one possibility is to
take the stand of, say, the indigenous tribes in Ecuador and the same much around the world. The
other is to take the stand on which, say, Obama and Romney completely agree: "Let's get all of the
oil, the hydrocarbons that are underground, huge quantities. Let's use them all as efficiently as
possible. It'll give us a hundred years of energy independence. What’s the world going to look like in a
hundred years? That's somebody else’s problem. What’s important is how much money I can make
tomorrow." Incidentally, the oil independence issue is almost totally meaningless. I mean, if all of our oil
came from, say, Saudi Arabia, we'd have no more dependence than we have today. You can easily see
that. The US policies towards the Middle East, say, were exactly the same in the 1950s under
Eisenhower, when we didn’t get any oil from the Middle East. In fact, we were the biggest oil exporter.
And the US at that time, in the 1950s initiated a program to exhaust domestic oil in the interest of
profits for Texas oil producers, so, to use domestic oil, Texas oil, instead of cheaper Saudi oil. Because
Texas oil producers would make more profit and then we’d have big holes in the ground which we could
fill in, later calling them “the strategic energy reserve.”
But the policies towards controlling the Middle East and controlling Middle East oil were the same. So,
forget the energy independent issue. The real issue is “Do we want the consequences of extracting, as
hydrocarbons, natural gas and oil to the maximum extent as possible. Well, you can figure out what
the consequences are. So, take, say, fracking. I mean it has a lot of local affects. You know, I’m sure you
all know about this. It harms water supplies--you know, toxic effects. It's very energy intensive. Natural
gas is more efficient than oil, you know, less CO2, but it also releases methane, which is worse than
CO2, and it's energy intensive to extract it. But there are other effects like the ... You know, the
economic arguments are that fracking and shift to natural gas will give us a transition period in which
we’ll have cheap energy which will enable us to transition to renewable energies. OK, so, therefore it's
....
A couple of problems with that. Namely it has the opposite effect. The main one: it has the opposite
effect. If you have cheap hydrocarbons in a capitalist society, there’s going to be no incentive to
develop renewables. So the more cheap hydrocarbons you have, the longer you put off the time until
we begin to do what we got to do if we want to survive turn to renewables. And what is being done in
other countries? I mentioned that out of 110 countries, the US is the only one that doesn’t have a
national energy policy. If you look elsewhere, countries are doing various things, like in Ecuador. I told
you what they were doing to try to keep the oil underground. In China, which is a huge polluter, but it's
also by now in the lead internationally in solar energy. It’s producing most of the solar panels and
advanced solar panels, the most high-tech, advanced, sophisticated solar panels. So so they’re ahead
in the technology and they’re ahead in the scale. We’ve been falling behind. Germany and Denmark are
pretty much switching to renewables. They're rich countries. So there are plenty of things that can be
done. One of them is to try to maximize the damage, and to put off as long as possible the step
towards trying to repair it, which may mean putting it off until it’s all over. That’s what the fracking is.
And that’s the national consensus. From Obama to Romney, and everyone in between. I think that’s
pathological, frankly.
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Climate Impact Extensions
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Climate – Regional Spillover
Mexico-US cooperation on climate change is key—regional spillover
SRE, Mexican foreign ministry, 12 (Secretaria de Relaciones Exteriores, October 12, “THIRD
MEETING OF THE MEXICO-UNITED STATES BILATERAL FRAMEWORK ON CLEAN ENERGY AND CLIMATE
CHANGE,” Accessed 6/26/13, JC)
Through this bilateral initiative, the governments of Mexico and the United States have strengthened
their cooperation on renewable energy, clean technologies and the fight against climate change. Their
common goal is to ensure sustainable development, a secure energy supply and energy efficiency, and
to progress in strengthening institutional mechanisms that successfully address the complex and
diverse challenges in North America.
At the meeting, implementation of the relevant bilateral projects and initiatives was reviewed. The
participants agreed on the value of the dialogue and the actions taken to date, and they identified areas
of opportunity that could be addressed in the future.
The critical importance of energy for the economic development of countries and the welfare of their
societies was stressed, and the two sides reiterated their commitment to reducing as much as possible
the environmental impact of the production and consumption of energy. The governments agreed to
continue working to consolidate the efforts of the Mexico-United States Coordinating Committee of the
Operational Group for Cross-border Electricity.
The delegations discussed climate change in the current international context, and agreed on the
importance of ensuring the full implementation of the agreements reached at the Cancun and Durban
conferences. They also stressed the need to promote joint efforts to tackle climate change with
transparency and trust, and they reviewed the work that has been done on the Green Climate Fund.
They also acknowledged that bilateral cooperation can make significant contributions to other regional
and multilateral mechanisms. An example of this is the priority given by the Mexican Presidency of the
G-20 to the issue of long-term financing for climate change programs.
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Climate – Renewables Solve
Renewable energy solves climate change
European Renewable Energy Council 4
(umbrella organisation of the major European renewable energy industry, trade and research
associations active in the field of photovoltaics, small hydropower, solar thermal, bioenergy,
geothermal, solar thermal electricity and wind energy, 3/14/04, European Renewable Energy Council
website, “Renewable Energy – A key solution to climate change”,
http://www.erec.org/fileadmin/erec_docs/Documents/Publications/ClimateChangeBriefing.pdf, pg. 2,
accessed 6/30/13, JZ)
Climate change is arguably one of the greatest envi-¶ ronmental threats the world is facing. The
impacts¶ of disruptive change leading to catastrophic events such as¶ storms, droughts, sea level rise and
floods are already¶ being felt across the world.
While the Kyoto Protocol, which aims to reduce green-¶ house gas emissions is slowly impacting on
energy¶ markets,¶ scientists are increasingly advising policymakers¶ that carbon emission reductions of
beyond 60% are nee-¶ ded¶ over the next 40-50 years. How will we achieve¶ such a dramatic reduction in
carbon emissions?
At the heart of the issue is an energy system based on fossil¶ fuels, that is mainly responsible for
greenhouse gas emissions.
On the contrary, renewable energy provides one of the¶ leading solutions to the climate change issue.
By providing¶ ‘carbon-neutral’ sources of power, heat, cooling and¶ transport¶ fuels, renewable
energy options such as wind,¶ solar, biomass, hydro, wave and tidal offer a safe transition¶ to a low
carbon economy.
The concept of a transition to a carbon-free economy has¶ become broadly understood and been
outlined by many¶ actors from G8, the United Nations, the International¶ Energy Agency, Governments
and industry alike. In the¶ long run, renewables are the only energy source that¶ provide a¶
sustainable carbon neutral energy supply.
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Climate – Renewable Electricity Transmission
Transmitting renewables based electricity to US is technologically feasible
Energy Information Administration 5-17-13(EIA, U.S. Energy Information Administration,
“Mexico Week: U.S. –Mexico electricity trade is small, with tight regional focus”
http://www.eia.gov/todayinenergy/detail.cfm?id=11311 accessed 6-24-13, KR)
U.S. electricity trade with Mexico represents a small fraction—less than a hundredth of a percent—of
total U.S. electricity use. A small amount of electricity trade with Mexico exists in California, New
Mexico, and Texas, where transmission lines cross the border (see map):
Between Southern California and Baja California, electricity is generally imported from a few power
plants on the Mexican side to supply demand in the San Diego area. A small portion of the Baja
California, Mexico, grid participates in the Western Electric Coordinating Council, which covers the
western United States as well as Alberta and British Columbia in Canada.
At even lower voltage levels, a few ties connect southern and western Texas with the Mexican states of
Tamaulipas and Chihuahua. However, these ties are asynchronous, meaning that the transmission
systems on either side can operate independently. Trade mainly occurs during periods of constrained
supply within the ERCOT (Texas side) or Mexican transmission systems.
Electricity trade between the United States and Mexico has existed since 1905, when privately owned
utilities located in remote towns on both sides of the border helped meet one another's electricity
demand with a few cross-border low voltage lines. Transmission across the U.S.-Canada border,
meanwhile, is more integrated.
Mexico has been a very small net exporter of electricity to the United States since 2006. Power sales
from Mexico to California more than offset exports from Texas to Mexico in 2010, although 2012 data
suggest that Mexico has begun to import more electricity from the United States. The flow of electricity
from Mexico to the United States could increase, as the Department of Energy recently issued a
presidential permit to a subsidiary of Sempra International for construction, operation, maintenance,
and connection of a 230-kilovolt (kV) transmission line across the U.S.-Mexico border. When
completed, the transmission line will supply electricity from a Mexican wind farm to the California
market.
Unlike in the United States or Canada, the vast majority of power plants in Mexico and the entire
transmission and distribution network are owned and operated by a government-owned monopoly,
the Comisión Federal de Electricidad (CFE). After Mexico passed the Electricity Public Service Act in
1992, independent power producers were allowed to construct electric power plants and sell power
to CFE, leading a number of U.S. companies to build power plants in Mexico across the border from
Southern California.
Electricity emissions key driver of warming
US Green Buildings Council 6
(“Buildings and Climate Change”, California Department of General Services,
http://www.documents.dgs.ca.gov/dgs/pio/facts/LA%20workshop/climate.pdf, accessed 7/1/13)
The commercial and residential building sector accounts for 39% of carbon dioxide (CO2) emissions in
the United States per year, more than any other sector. U.S. buildings alone are responsible for more
CO2 emissions annually than those of any other country except China. Most of these emissions come
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from the combustion of fossil fuels to provide heating, cooling and lighting, and to power appliances
and electrical equipment. By transforming the built environment to be more energy-efficient and
climate-friendly, the building sector can play a major role in reducing the threat of climate change. In
2004, total emissions from residential and commercial buildings were 2236 million metric tons of CO2,
or 39% of total U.S. CO2 emissions—more than either the transportation or industrial sectors. Over the
next 25 years, CO2 emissions from buildings are projected to grow faster than any other sector, with
emissions from commercial buildings projected to grow the fastest—1.8% a year through 2030. When
other CO2 emissions attributable to buildings are considered—such as the emissions from the
manufacture and transport of building construction and demolition materials and transportation
associated with urban sprawl—the result is an even greater impact on the climate.
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Economy Impact Scenarios
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Jobs – Renewables Sector
Renewable Energy and energy efficiency key to create jobs in the short term
BECC 11 [Border Environment Cooperation Commission, 3-11-11, “Energy Efficiency,
Renewable Energy and Transportation: Project Opportunities in the U.S. – Mexico Border Region”,
http://www.cocef.org/Eng/VLibrary/Publications/SpecialReports/BECC%20WP%20%20Nov%202011%20
index.pdf, accessed 6-26-13, HG]
A very compelling 2008 study of job creation in California, conducted by Dr. Roland Holst, suggests that
increases in disposable income related to energy savings for a household can be responsible for the
creation of jobs. His analysis indicated that about 1.5 million full-time equivalent jobs with a total
payroll of $45 billion were generated from energy efficiency savings of $56 billion in the 34-year
period from 1972-2006. This was contained to the State of California, but it demonstrates the
correlation between energy savings in dollars and jobs created from the investment made in energy
efficiency.11
In the clean energy sector, there are several studies that estimate the number of jobs created by
different types of renewable energy, but each uses different assumptions and methodologies and
results vary widely.12 The most relevant focus for our purposes is on short-term jobs (e.g.
construction) and on-going jobs (e.g. operations and maintenance) that are created. Additionally, it is
important to define the term “job- years.” One job-year (‘‘full-time equivalent’’ FTE job) is full time
employment for one person for duration of 1 year. Many times, ‘‘jobs’’ and ‘‘job-years’’ are used
interchangeably; however, referring to ‘‘jobs’’ created without duration can be misleading.13 This
definition is a more comprehensive effort to include a time value for the job created as well as the job.
Development of solar infrastructure is key to creating jobs in the short term
Romero-Hernandez, PhD in Mechanical Engineering, et al. 12 [Sergio, Bernando Duerte
Rodriguez-Grenada, Omar Romero-Hernandez, Duncan Wood, 1-7-12, Wilson Center, “Solar Energy
Potential in Mexico’s Northern Border States”,
http://www.wilsoncenter.org/sites/default/files/Border_Solar_Romero_0.pdf, 6-26-13, HG]
The development of clean energy creates many local jobs. In fact, according to the United Nations
Environment Programme report on green jobs, non-fossil fuel technologies create more jobs per unit
of capacity installed than coal and natural gas.25 Green jobs, which are jobs that
play a direct role in
reducing the negative environmental impact of enterprises and economic sectors, can also protect the
economy from the political and economic risks associated with over-reliance on a limited array of
energy technologies and fuels. Because Solar Energy Projects are new to Mexico, they are hard to
establish, finance and develop. Accurate calculations of the potential of these projects for
job creation
can help overcome these obstacles since reducing poverty levels
and raising employment rates is a
major goal throughout Mexico. Government and private companies are equally interested in fulfilling
this objective, along with raising GDP and income. The development of a solar industry can be analyzed
from three perspectives: 1) the manufacturing of the equipment (either thermal or photovoltaic), 2)
their suppliers, and, 3) the installation and use of the solar solutions. These three are generally
assumed to be independent systems, each with their own supply chain, suppliers, workforce, logistics,
etc. For instance, the copper provider making
the strips in a PV panel is different from the copper
provider who manufactures connecting wires. Another example is a photovoltaic manufacturing plant
that produces several models of panels and
uses local manpower and energy sources. Their suppliers
provide the required goods to produce the panel and its packaging (cells, copper strips, chemicals, EVA,
glass, electronics, aluminum profiles for the frame, cardboard, packaging supplies, etc.). While some of
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these suppliers will be located inthe vicinity of the manufacturing plant,
the selection of suppliers
cannot be based solely on the proximity to the plant or the cost; there are other important dimensions
to be taken into account.
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Wind Defenses
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Wind – Economy
Wind is good for the economy—cheap, demand, jobs
Wood, Wilson Center Mexico Institute director , 12
[Duncan, May 2012, Woodrow Wilson International Center for Scholars, “Re-Energizing the Border:
Renewable Energy, Green Jobs and Border Infrastructure”
http://www.wilsoncenter.org/sites/default/files/RE_Energizing_Border_Wood.pdf, p. 6-9 6/23/13 EYS]
Both in Baja California and other ¶ border states, however, the main driver for ¶ wind energy
development will come from ¶ domestic demand as IPPs sign contracts ¶ with private companies and
public ¶ authorities to sell green electricity at ¶ substantial cost savings. The CFE’s pricing ¶ structure
means that, for both public and ¶ private consumers, wind energy from ¶ IPPs in Mexico is more costeffective than ¶ traditional energy sources, even without ¶ the application of a subsidy. Demand ¶
from municipal governments and large ¶ industrial consumers is growing, and will ¶ continue to
provide an expanding market ¶ for electricity from wind farms. Here ¶ again, the question of
transmission is key. ¶ Major wind projects in Baja California and ¶ Tamaulipas will benefit from the
security ¶ of knowing that transmission capacity will ¶ be provided by the CFE. The recent use ¶ of
“open seasons” in determining demand ¶ for transmission has been effective in ¶ providing certainty for
investors and for ¶ the CFE itself, which in turn justifies ¶ (for the CFE) and guarantees (for the ¶ IPPs)
financing.¶
The prospects for employment ¶ from wind energy development are also ¶ tantalizing. In the projects
that are ¶ already operating or under construction, ¶ hundreds of jobs have been created in the ¶
construction phase and a small number of ¶ high quality permanent jobs (around 3–5 ¶ per 10 MW of
installed capacity) have left ¶ a permanent imprint on labor markets. The ¶ border states have
thousands of megawatts ¶ of potential wind development (Tamaulipas, ¶ for instance, projects that
almost 2000 ¶ MW will be developed in the next decade), ¶ meaning there exists the potential for many
¶ thousands of construction jobs, as well ¶ as hundreds or thousands of permanent ¶ positions in the
operation, management ¶ and servicing of wind plants. It is vital to ¶ recognize that in both the
construction ¶ and operational phases of wind farm ¶ development, skilled and white-collar ¶
positions are created in the technological, ¶ consulting, financing and legal aspects of ¶ the projects.¶
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Wind – Local Communities
Wind key to local relations
Wood, Wilson Center Mexico Institute director, 12
[Duncan, May 2012, Woodrow Wilson International Center for Scholars, “Re-Energizing the Border:
Renewable Energy, Green Jobs and Border Infrastructure”
http://www.wilsoncenter.org/sites/default/files/RE_Energizing_Border_Wood.pdf, p. 6-9 6/23/13 EYS]
The experience of the La Rumorosa ¶ I project in Baja California has shown ¶ another important aspect
of wind energy ¶ development. There the state government ¶ insisted on the use of local firms and
local ¶ labor in the construction and operation of a ¶ 10 MW wind farm. This helped to smooth ¶
relations with the local community, created ¶ a longer-lasting positive imprint in the local ¶ economy,
and set an important precedent ¶ for future wind developers. ¶
In the area of wind turbine and ¶ component manufacturing, border states ¶ (particularly Tamaulipas,
Chihuahua and ¶ Coahuila) have attracted investment from ¶ foreign firms. These investments, however,
¶ which employ hundreds of people, have ¶ been focused on manufacturing wind ¶ turbine components
for export to the ¶ United States and beyond. If the Mexican ¶ border states are to develop a large-scale ¶
wind industry, we can speculate that there ¶ is the potential for Mexican and foreign ¶ firms to produce
turbines and components ¶ within the region, benefiting from the ¶ industrial infrastructure, skilled labor
¶ and manufacturing experience of the ¶ maquiladoras. It is important to note that ¶ this did not occur
with the wind boom ¶ in Oaxaca. Foreign firms led the way in ¶ that state, importing the most valuable ¶
and capital intensive machinery and ¶ components–a missed opportunity for the ¶ Mexican economy in
general and national ¶ firms in particular.¶
But the potential positive benefits of ¶ wind energy development go far beyond ¶ investment and
employment creation. ¶ The La Rumorosa I wind project has been ¶ designed in such a way that the
profits from ¶ the venture are returned to the residents ¶ of the state through two methods. First, ¶
the energy produced is sold to the city ¶ of Mexicali, where it is used to power ¶ public lighting. The
city benefits from ¶ electricity at a significantly lower cost than ¶ that available from the CFE, saving the
¶ municipal authority money which can then ¶ be used in other public projects. Second, ¶ an
innovative subsidy scheme has been ¶ created, called “Tu Energía,” whereby low ¶ income families
receive a payment that can ¶ be used to reduce the monthly cost of their ¶ electricity. Although the
subsidy is relatively ¶ small, it is received by 35,000 families in ¶ Mexicali, helping them to defray the
cost of ¶ much needed air conditioning during the ¶ summer months. The families participating ¶ in
the “Tu Energía” program are families ¶ with single mothers, handicapped members ¶ or old age
pensioners. This smart targeting ¶ of the subsidy has prevented potential ¶ criticism of encouraging
excessive energy ¶ use or being regressive.¶
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AT – Wind Bad – Birds
Alt. causes to bird deaths – office buildings, vehicles, and cats
Lananilla, staff writer for Yahoo News, 5/14/13 [Marc, 5-14-13, Yahoo News, “How do
wind turbines kill birds”, http://news.yahoo.com/wind-turbines-kill-birds190145748.html, accessed 6-29-13, HG]
Of course, birds die from other causes, too: Structures like glass-walled office buildings and utility
towers, vehicular collisions and carnivorous animals (including domestic cats) kill far more birds each
year than wind turbines do.
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Solar Defenses
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Solar – Economy
The solar industry would provide thousands of jobs
Wood, Wilson Center Mexico Institute director , 12
[Duncan, May 2012, Woodrow Wilson International Center for Scholars, “Re-Energizing the Border:
Renewable Energy, Green Jobs and Border Infrastructure”
http://www.wilsoncenter.org/sites/default/files/RE_Energizing_Border_Wood.pdf, p. 9-12 6/23/13
EYS]
Should a more extensive market ¶ for solar energy develop in Mexico, it is ¶ expected that the impact
on employment ¶ will be considerable. The calculations ¶in our paper on solar potential ¶ in the
Mexican border states point to the ¶ possibility of creating thousands of jobs in ¶ the border region in
the coming years in ¶ the manufacture, installation, operation, ¶ and servicing of solar panels. For
large-scale ¶ projects such as that at Tecate, we estimate ¶ that more than seven jobs per MW of ¶
installed capacity will be created. Given that ¶ the long-term plans announced by SolFocus ¶ prevision
350 MW of installed capacity, we ¶ can predict the creation of more than 3,000 ¶ jobs. In the
residential market, the Kyocera ¶ plant in Tijuana employs 350 people in the ¶ production of 300 MW of
capacity of PV ¶ panels every year for export, equating to ¶ more than one job year per MW of capacity
¶ manufactured. Management at the factory ¶ believes that it would be easy to double that ¶ amount if
a strong national market were to ¶ develop in Mexico. Even more intriguing ¶ is the calculation that, for
every MW of ¶ installed solar PV capacity, 35 jobs are created ¶ in installation and
servicing/maintenance.
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Solar – Feasibility
Mexico is in a prime location for development of solar energy
Wood, Wilson Center Mexico Institute director, 12 [Duncan, May 2012, Woodrow Wilson
International Center for Scholars, “Re-Energizing the Border: Renewable Energy, Green Jobs and Border
Infrastructure” http://www.wilsoncenter.org/sites/default/files/RE_Energizing_Border_Wood.pdf, p. 912 6/23/13 EYS]
Solar energy is undeniably the energy source ¶ of the future, with massive and inexhaustible ¶
supplies of solar radiation hitting the planet ¶ each and every day. Until now, though, this ¶ has
remained a largely untapped resource ¶ by energy utilities due to the high cost ¶ of installing photovoltaic
and/or solar ¶ thermal generation facilities. Recently, ¶ however, government and public concerns ¶ over
climate change and the possibilities ¶ for mitigation have spurred countries to ¶ make solar energy more
competitive with ¶ conventional energy sources and with other ¶ renewables through the application of ¶
generous subsidies. Current developments ¶ in Europe, the United States and China ¶ bear testimony to
this tendency, with the ¶ construction of giant solar energy facilities ¶ and heavy investment in the
development of ¶ new and improved technologies.¶
To date, Mexico has not been an ¶ important participant in this tendency. ¶ Despite the country’s
geographic location ¶ within the world’s most important sun-belt ¶ (between 15o¶ N and 35o¶ N), and
knowledge ¶ that large parts of the country receive ¶ enough solar irradiation to make solar ¶ power
generation economically viable, ¶ governmental policy and businesses have, ¶ until recently, focused
on other areas of ¶ renewable energy development. One of the ¶ main reasons for this neglect is that
the cost ¶ structure of solar photovoltaics (PV) has ¶ made generation prohibitively expensive ¶ without
the application of subsidies or feed in tariffs, and the Mexican government has ¶ been unwilling to
legislate the provision of ¶ such support. ¶
This is not to say that the Mexican ¶ federal and state-level governments have ¶ not recognized the
importance of solar power. The Federal government has ¶ frequently referred to estimates showing ¶
that, assuming an efficiency factor of ¶ 15% from solar PV, a 650 km2¶ area of ¶ either Sonora or
Chihuahua covered in ¶ photovoltaic (PV) panels would generate ¶ sufficient electricity to satisfy
national ¶ demand. A 2009 government-sponsored ¶ study estimated that “one should regard ¶ the fact
that a mere 0.06% of the Mexican ¶ national territory would be sufficient to ¶ generate the overall
electricity consumption ¶ of Mexico by the means of photovoltaic, ¶ assuming the consumption data of
the year ¶ 2005” and argued that, despite minimal ¶ development of the resource to date, there ¶ was
the prospect of rapid and large scale ¶ growth in the near future if the costs of ¶ installing PV panels
came down due to ¶ technological advances.7¶ Other studies have ¶ shown that Mexico’s potential for
generating ¶ electricity from solar PV, measured in terms ¶ of kilowatt hours per meter squared
(kWhr/m2¶ ) is around twice as high as that in ¶ countries such as Germany, which has been ¶ a global
leader in solar PV development. ¶
The potential for solar energy production ¶ is even higher in the north of the country. ¶ Whereas on
average Mexico has a solar ¶ irradiation level of around 5 kW-hr/m2¶ , the ¶ border states have average
daily rates of ¶ between 5.06 kW-hr/m2 ¶ in Nuevo León and 6.65 kW-hr/m2¶ in Sonora. This suggests
that ¶ northern Mexico is the region where solar ¶ projects stand the best chance of success, ¶ and the
private and public sectors appear to ¶ recognize this fact. Across the border region ¶ there has been a
recent surge in project ¶ planning and investment in the solar sector ¶ in the states of Baja California,
Sonora and ¶ Chihuahua as technologies have advanced ¶ to the point where, even without state ¶
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subsidies, it is possible to generate electricity ¶ on a large scale that can compete with ¶ power from
traditional sources. ¶
The projects that are planned or already ¶ in operation range from a CFE project ¶ that combines solar
with combined cycle ¶ generation to large scale private plants ¶ for industrial consumption. They even ¶
include projects to integrate solar energy ¶ into high technology industrial parks ¶ and municipal
developments.8¶ Given the ¶ enormous potential for solar energy in ¶ Mexico, however, the current array
of ¶ projects is disappointing. We have not seen ¶ the wholesale movement of solar-based IPPs ¶ into
Mexico, either for the national market ¶ or for export to the United States.¶
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Municipal Waste Defenses
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Municipal Waste Feasibility
New technologies make Municipal Solid Waste a viable renewable option
Wood, Wilson Center Mexico Institute director , 12
[Duncan, May 2012, Woodrow Wilson International Center for Scholars, “Re-Energizing the Border:
Renewable Energy, Green Jobs and Border Infrastructure”
http://www.wilsoncenter.org/sites/default/files/RE_Energizing_Border_Wood.pdf, p.12-14 6/23/13
EYS]
A comparatively unexplored source of ¶ renewable energy that has acquired new ¶ importance around
the world in recent years ¶ is methane and liquid fuels from Municipal ¶ Solid Waste (MSW). The
increasing ¶ pressure on landfills and subsequently ¶ on local and national authorities to find ¶
solutions for garbage disposal, combined ¶ with the harmful social, environmental ¶ and health
impact from open landfill sites ¶ has generated an interest in finding new ¶ methods of addressing
the issue. ¶
Harnessing the energy from MSW in ¶ the form of gas and liquid fuels is one such ¶ method. It provides a
way of turning garbage ¶ into power for the electrical grid and motor ¶ vehicles. Technological and
logistical ¶ advances have made it possible to extract ¶ these fuels in such a way as to:¶
■ reduce the overall footprint of ¶ landfills and to dramatically reduce ¶ their negative impact in the
form ¶ of greenhouse gas (GG) emissions ¶ (methane escaping from landfills is a ¶ major climate change
contributor);¶
■ diminish the offensive smell that ¶ often emanates from them (causing ¶ a beneficial effect on nearby ¶
communities; and, ¶
■ reduce the possibility of water table ¶ contamination from run-off that ¶ would be harmful to the
health of ¶ local populations. ¶
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Municipal Waste – Economy
Waste conversion is cost effective and a job creator
Wood, Wilson Center Mexico Institute director, 12
[Duncan, May 2012, Woodrow Wilson International Center for Scholars, “Re-Energizing the Border:
Renewable Energy, Green Jobs and Border Infrastructure”
http://www.wilsoncenter.org/sites/default/files/RE_Energizing_Border_Wood.pdf, p. 12-14 6/23/13
EYS]
Furthermore, exploiting the ¶ energy potential of municipal landfills ¶ creates new employment and
income ¶ opportunities for the local population and ¶ local entrepreneurs without the need for ¶
massive infrastructure investment that ¶ might otherwise act as a deterrent and ¶ raise the cost of
the final product. Our ¶ report on MSW potential in border states ¶ quotes Professor David Bransby of
Auburn ¶ University who has noted that, “the ¶ infrastructure for collection of municipal ¶ solid waste
(MSW) is already in place and ¶ paid for, and those who collect and dispose ¶ of it get paid for their
services. This results ¶ in very low cost and low risk, making ¶ MSW a no-brainer feedstock for
launching ¶ the cellulosic biofuels industry.”9¶
Waste conversion is good for the environment and the economy
Wood, Wilson Center Mexico Institute director , 12 [Duncan, May 2012, Woodrow Wilson
International Center for Scholars, “Re-Energizing the Border: Renewable Energy, Green Jobs and Border
Infrastructure” http://www.wilsoncenter.org/sites/default/files/RE_Energizing_Border_Wood.pdf, p.
12-14 6/23/13 EYS]
Two main fuel energy products can be ¶ derived from MSW. Using first generation ¶ technologies,
methane can be captured ¶ in the form of landfill gas (LFG) which ¶ can then be burned in the same
way as ¶ natural gas to produce electricity, either ¶ for immediate consumption at the plant ¶ or to be
sold to a client. This capture of ¶ methane has a doubly-beneficial impact in ¶ terms of climate change
mitigation: first, ¶ the methane molecules (an important GG ¶ component) are prevented from
escaping into the atmosphere, and then, their use ¶ to generate electricity substitutes for ¶
traditional fossil fuels that may generate ¶ more pollution. Another form of fuel energy ¶ can be
derived using second generation ¶ biofuel technologies that extract liquids ¶ from the organic
components of landfills ¶ and then convert them into ethanol using ¶ cellulosic conversion techniques.
Ethanol ¶ can be produced at stunningly low costs: a ¶ 2009 University of California study10 shows ¶
that ethanol can be produced from MSW at ¶ a minimum cost of between 60–91 US cents ¶ per gallon
in California. We should expect ¶ this total to be much lower in northern ¶ Mexico, given greater land
availability and ¶ lower labor costs.¶
The abundance of the raw material in ¶ question, garbage, is universal. Mexico and ¶ its border region
have a high level of organic ¶ matter in their garbage, making it possible ¶ to produce very high
amounts of liquid fuel. ¶ As the bioenergy paper in this study argues, ¶ “the border region generates
enough MSW ¶ feedstock to potentially make between 210 ¶ million to 380 million gallons per year of ¶
biofuel,” depending on the technology ¶ used, the quality of the garbage and the ¶ rate of conversion.11¶
In Mexico there is already a welldocumented case of methane capture from ¶ MSW that has been
hailed as a success ¶ nationally and in the United States. The ¶ municipal authority in Monterrey has for ¶
the last nine years benefited from electricity ¶ produced by burning methane captured ¶ from one of the
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city’s landfills, which it is ¶ able to purchase at a cheaper rate than the ¶ one offered by the CFE. The
company that ¶ captures the gas and generates the power, ¶ Bioenergía de Nuevo León, is a joint venture
¶ between a private energy company and a ¶ waste management organization belonging to ¶ the Nuevo
León state government. Beginning ¶ with limited production in 2003, the plant ¶ has since grown to the
point where it is now ¶ generating enough power to satisfy 80% of ¶ the city’s public lighting needs. The
project ¶ was entirely self-financed, setting a precedent ¶ for future projects and highlighting the
attractiveness of such initiatives. It has also ¶ resulted in the mitigation of more than ¶ 800,000 t CO2e
since 2003.12¶
Expanding the use of MSW for energy ¶ generation would also have a significant impact on labor
markets. The bioenergy paper ¶ in our project estimates that 750–1500 jobyears could potentially be
created.13 There ¶ may also be a serendipitous cross-over with ¶ existing skills in Mexican labor markets.
¶ Due to the imprint left by Pemex across the ¶ country in petrochemicals, there are human ¶ resources
and skills available from which ¶ new bio-fuel ventures may benefit.¶
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DA Links
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Politics DA
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THA Controversial
Obama opposes the transboundary agreement, and it negatively impacts United
States industry
Geman, The Hill, 6-25-13
[Ben, The Hill, “White House ‘cannot support’ House US-Mexico drilling bill”
http://thehill.com/blogs/e2-wire/e2-wire/307769-white-house-cannot-support-house-us-mexicodrilling-bill, accessed: 6-26-13 AS]
The White House said Tuesday that it opposes House legislation to implement a 2012 administration
pact with Mexico on Gulf of Mexico drilling cooperation, citing “unnecessary, extraneous provisions
that seriously detract from the bill.”
The formal statement of administration policy backs the “goal” of the bill that’s coming to the House
floor Wednesday to implement the U.S.-Mexico Transboundary Hydrocarbons Agreement.
But it cites provisions in the GOP-crafted bill that exempts oil companies operating under the pact from
controversial federal rules that force energy producers to disclose their payments to foreign
governments.
“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,” the White
House Office of Management and Budget said.
Plan sparks a debate – Obama and House disagree
Boman, Rigzone senior editor, 6/26/13
[Karen Boman, Senior Editor at Rigzone.com, journalism at Texas A&M, 2013 (“White House Cannot
Support Gulf Transboundary Bill,” Rigzone.com, June 26th, Available Online at
http://www.rigzone.com/news/oil_gas/a/127326/White_House_Cannot_Support_Gulf_Transboundary
_Bill, Accessed on June 26, 2013)][SP]
The Obama administration cannot support a bill that would move forward establishing a framework
for oil and gas exploration and production in the transboundary zone in the Gulf of Mexico, the Office
of Management and Budget (OMB) reported Tuesday.
The White House does support the goal set out in H.R. 1613 to provide Congressional approval of the
agreement and allow the Secretary of the Interior to implement the agreement. However, the
administration "strongly objects" to exempting actions taken by public companies in accordance with
transboundary agreements from requirements under 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," OMB said in a statement. "The provision directly and
negatively impacts U.S. efforts to increase transparency and accountability, particularly in the oil, gas
and minerals sectors."
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OMB noted that the Obama administration looks forward to working with Congress to enact
legislation that would focus the U.S.-Mexico Transboundary Agreement, without the inclusion of
extraneous and unnecessary provisions.
H.R. 1613, also known as the Outer Continental Shelf Transboundary Hydrocarbon Agreement
Authorization Act, was proposed earlier this year by U.S. House of Representative members Jeff Duncan
(R-S.C.), House Natural Resources Committee Chairman Doc Hastings (R-Wash.) and House Foreign
Affairs Subcommittee on Western Hemisphere Chairman Matt Salmon (R-Ariz.). The lawmakers see the
bill as a means of helping the United States achieve energy independence and better energy
cooperation with Mexico as well as while lowering energy costs and creating jobs.
Plan causes a battle— unpopular with Dems for abandoning disclosure requirements.
Rampton Reuters 13
[Roberta, 4/29/13, Reuters, “U.S.-Mexico deal on expanded Gulf oil drilling still in limbo”,
http://www.reuters.com/article/2013/04/29/usa-mexico-oil-idUSL2N0DG0CV20130429, accessed
6/30/13, ALT]
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.
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.
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Mexican Politics DA
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Pemex Reforms Cost Political Capital
Pemex investment reforms requires massive political capital
Carter, Energy and Capital, 13
[Jon, 5-28-13, “Investing in Mexico Natural Gas Imports”, Energy and Capital,
http://www.energyandcapital.com/articles/investing-in-mexico-natural-gas-imports/3427, accessed:
6/23/13, ML]
But there are hurdles.
From Delaware Online:
“Lifting the restrictions on foreign oil companies through a constitutional amendment would require
a two-thirds majority in Congress and more than half of the country’s state governors to sign off. Peña
Nieto is expected to face considerable political wrangling from the powerful oil workers union, leftleaning lawmakers and interests groups, which are content with their slice of the status quo, even as
overall production has slipped.”
A drilling boom and production boom is not far-fetched, since the nation has the fourth largest natural
gas reserves in the world.
But state-run oil and gas company Pemex is not exactly known for its efficiency and stellar drilling
practices. The company has also been depleted of assets due to government divestment of funds –
much in the same way Hugo Chavez drained Venezuela’s state-run oil company PDVSA.
Also, the Mexican government currently places greater emphasis on producing more oil.
For now at least, Mexicans will continue rely on natural gas imports from the U.S., and Texas is one
state to keep an eye on – particularly South Texas. Mexico has already increased imports directly from
Texas, and this trend will likely increase in the near future.
Pemex reforms face strong political opposition—require constitutional amendment
US Department of State 13
(BUREAU OF ECONOMIC AND BUSINESS AFFAIRS, February 2013, US Department of State, “2013
Investment Climate Statement – Mexico,”
http://www.state.gov/e/eb/rls/othr/ics/2013/204693.htm, Accessed 6/30/13, JC)
The Mexican Constitution constrains private investment in the hydrocarbon sector. Articles 27 and 28
specifically establish the monopoly control of the State. Mexico’s energy sector faces one of the most
restrictive regimes in the world. During the past 15 years, there have been changes in the law to allow
some private investment in electric co-generation and self-supply, as well as power generation for
export, and, as part of the 2008 energy reform, to permit companies to enter into “performance-linked”
contracts for hydrocarbon exploration and drilling. Amendments to the Petroleum Law opened
transportation, storage, marketing and distribution of natural gas imports and issued open access
regulations for Pemex's natural gas transportation network, as well as retail distribution of Mexico's
natural gas and secondary petrochemical industry. Since 2001, the government allowed national and
foreign private firms to import liquefied petroleum gas duty-free.
There are two main state-owned companies in the energy sector. Mexican Petroleum (Pemex) is in
charge of running the hydrocarbons (oil and gas) sector, which includes upstream, mid-stream, and
downstream operations, and is the most important fiscal contributor to the country. In 2011 and 2012,
Pemex contributed 34% to the Mexican government’s budget, but current declines in productivity will
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have major consequences for the Mexican government as Pemex is Mexico’s largest taxpayer. The
Federal Electricity Commission (CFE) is the other main state-owned company and is in charge of the
electricity sector. As required by the Constitution, the electricity sector is also federally owned, with CFE
controlling most of installed generating capacity. CFE also holds a monopoly on electricity transmission
and distribution. It operates Mexico’s national transmission grid, which consists of 27,000 miles of high
voltage lines, 28,000 miles of medium voltage lines, and 370,000 miles of low voltage distribution lines.
It generates electric power for almost 33.8 million customers (or 100 million people). The infrastructure
to generate electric power is made up of 177 generating plants, having an installed capacity of 51,081
megawatts. Reforms to the electricity sector now permit independent power producers to develop
projects and sell their electricity to CFE, and for CFE to solicit bids from private companies for new
power plant construction: 22.41% of CFE’s current installed capacity stems from 21 plants which were
built using private capital by Productores Independientes de Energía (PIE). Attempts to reform the
sector, including the subsidized rates provided to agricultural users and some consumers, have
traditionally faced strong political and social resistance in Mexico, even though the existence of
subsidies for residential consumers absorbs substantial fiscal resources.
The plan saps Nieto’s capital – requires constitutional reform
Boman, Senior Editor at Rigzone.com, 5/27/13
[Karen May 27, 2013, “Will The Promise of Mexican Energy Reform Be Realized?”,
http://www.rigzone.com/news/oil_gas/a/126669/Will_The_Promise_of_Mexican_Energy_Reform_Be_
Realized/?all=HG2, accessed: 6/26/13, ML]
The narrowest reform that could occur in Mexico would be a reform of PEMEX's administrative
structure that would give the company more financial and operational freedom. In some years, Wood
observed, PEMEX goes into debt to produce and sell oil, since a significant portion of revenue proceeds
are allocated to Mexico's government.
Giving PEMEX more money or restricting the company from multiple entities into one won't solve the
problem. The company can continue on its own with shallow water and onshore prospects, but to
pursue shale and deepwater, the company needs access to technology and know-how it currently
doesn't have.
The private sector really wants deepwater reform that would allow private companies to work
alongside PEMEX, but this would require a change in Mexico's Constitution. With between 30 to 50
billion barrels of reserves left, deepwater is the real prize, Wood noted.
But to get there, "You need a regulator that works, contracts that are rock solid, legal certainty and an
open oil and gas sector," Wood said.
"However, a partial reform will be the most likely scenario to occur," Wood believes, noting that
Mexicans are not ready to discuss completely opening up Mexico's oil and gas sector to private
investment.
To reform Mexico's Constitution to allow for private investment and joint ventures with PEMEX, twothirds majority votes are needed in both of Mexico's congressional houses. The PRI holds slightly less
than 50 percent interest in both houses, and needs the cooperation of the other two parties to achieve
energy reform. PAN will likely seek to get whatever it can out of agreeing to cooperate.
Mexico's shale resources are attractive due to their oil and natural gas liquids, but a significant increase
in production is not possible without opening the sector up to investment – or with global standards of
compensation – a move that is unlikely to happen at this time, Wood noted.
International oilfield service companies such as Schlumberger Ltd. and Petrofac Ltd. have been involved
in Mexico – with Schlumberger active in Mexico since it relocated to the United States in 1940 – where
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they are paid on a fee-per barrel basis. However, the investment vehicle offshore by PEMEX for the
upstream sector since 2003 has failed to attracted major investment by oil and gas operators.
"Mexico must find a way to make the Mexican contract work on the terms of the U.S. Securities and
Exchange Commission and provide the bounce that companies see in stock prices when a big discovery
is made," Baker commented.
Reform could take place in two areas: public oversight and governance and commercial operations.
However, the Mexican government is unlikely to invest the political capital needed to invest political
capital to re-establish the legal figure of a private mineral interest, which is needed to generate large
scale investment in its deepwater and shale, said George Baker, managing principal of Baker &
Associates, Energy Consultants and publish of Mexico Energy Intelligence newsletter, in an interview
with Rigzone. Baker also spoke on the Mexico panel at the Mayer Brown conference, where he and
Wood offered complementary perspectives on Mexico energy reform.
Reform triggers political blood bath
Ghitis, World affairs, 13
Frida, Published January 3 2013, “World Citizen: At Long Last, Mexico's Bright Future”,
http://www.worldpoliticsreview.com/articles/12594/world-citizen-at-long-last-mexicos-bright-future,
accessed June 30 2013, JB)
The biggest and most consequential test, however, will center on oil. The PRI nationalized the oil
industry in 1938, and the constitution says only the state can exploit Mexico’s vast oil wealth. But the
state oil company, Pemex, urgently needs to step up exploration and extraction if it is to reverse
production declines that have lasted for seven years in a row. For this, it needs foreign help, which the
constitution bans.
Adding to the problem, Pemex revenues fund one-third of the national budget. That means the oil
company has to part with needed funds, and the government is too badly dependent on what
amounts to easy money to forego the windfall.
To solve the twin oil and revenue problem, Peña Nieto will have to push through constitutional reforms
to allow more foreign participation in the oil business, and tax reform to find new sources of revenue.
Both efforts will meet stiff resistance, and not everyone is convinced the young president will be up to
the task.
Once again, the entrenched unions, with more than 170,000 members working at Pemex alone, will
surely be one of the top enemies of reform. With their close links to PRI, they will seek to turn the
party’s legislators against the president’s reform efforts.
Previous presidents have tried and failed, but the new administration may just pull it off. PRI
legislators blocked Calderón and PAN’s efforts, but Peña Nieto now enjoys a majority in both houses of
Congress. Constitutional reform would require a two-thirds vote in Congress. If he can maintain party
discipline and join forces with PAN, Peña Nieto and his party could muster the required votes to bring
the long-awaited change. On the oil law, unions will have support from leftist parties, which enjoy
passionate backing and will undoubtedly fight efforts to allow foreign firms to exploit Mexico’s oil
wealth. But the president holds the stronger hand.
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Oil DA
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Link - General
U.S. deepwater production will drastically decrease U.S. oil imports from Canada,
Saudi Arabia, Venezuela, Nigeria, and Mexico
Council on Foreign Relations 11
[1-11-11, Council on Foreign Relations, “U.S. Deepwater Drilling’s Future”, http://www.cfr.org/unitedstates/us-deepwater-drillings-future/p22204#p2, accessed 6-30-13, HG]
Fifty-one percent of U.S. oil consumption came from foreign sources in 2009, primarily Canada, Saudi
Arabia, Venezuela, Nigeria, and Mexico , according to the EIA. The agency expects the percentage of
imports to drop by a third- -from more than 12 billion barrels a day in 2007 to about 8 billion by 2030-and assumes that oil consumption will remain relatively flat, with new demand largely met by
alternative fuels and new domestic production.
A little less than half of U.S. oil consumption currently comes from domestic production, now at more
than 5 million barrels a day. Oil production in the United States is largely concentrated in Texas, Alaska,
California, Louisiana, and North Dakota. Offshore production from the Gulf of Mexico represents 30
percent of all U.S. crude production and more than 90 percent of all U.S. offshore production.
The EIA estimates "a vast majority" of projected increases in U.S. production in the near term will
come from Gulf deepwater fields similar to the site of the Deepwater Horizon spill, which currently
represent about 70 percent of all Gulf oil production. This share is expected to grow in the next few
years. A 2009 U.S. Minerals Management Service (MMS) report forecasting production (PDF) in the Gulf
of Mexico shows that as shallow-water production levels have fallen, deepwater production has taken
up the slack.
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Link – OPEC Collapse
Shale and offshore drilling in the U.S. puts massive pressure on OPEC and forces lower
production leading to loss in profit and destruction of industry
Barasso, Senate Republican from Wyoming, 6/19/13
[John, 6-19-13, Senate Republican Policy Committee, “U.S. Shale Revolution ‘Grave Concern’ for OPEC
Nations”, http://www.rpc.senate.gov/policy-papers/us-shale-oil-revolution-grave-concern-for-opec,
accessed 6-30-13, HG]
America’s shale oil revolution is loosening the grip of the Organization of the Petroleum Exporting
Countries (OPEC) on global oil markets, moderating oil prices, and propelling our nation toward energy
self-sufficiency. Over the past four years, U.S. oil production soared by 30 percent, and U.S. oil imports
from OPEC members fell by 26 percent, as hydraulic fracturing and horizontal drilling enabled energy
producers to tap previously inaccessible shale oil resources. In May, domestic crude output exceeded
imports for the first time in 16 years, and domestic crude inventories climbed to their highest level in 82
years. Last year, crude oil production increased by 790,000 barrels per day -- the largest increase in
annual output since the beginning of the industry in 1859. This market about-face is all the more
remarkable because the shale oil revolution has taken place on state and private lands, not on federal
lands where President Obama and Senate Democrats continue to restrict oil production.
OPEC members are increasingly unnerved by America’s shale oil revolution. At a recent OPEC meeting,
a delegate from the Persian Gulf confessed, “We are heading toward some problems.” The oil minister
from Nigeria, whose exports to the U.S. fell by 59 percent over the last two years, called it a “grave
concern.” The envoy from Iran, which does not supply the U.S. market but is affected by it,
complained that rising U.S. shale oil production combined with tepid demand is bringing “the price
down.” If the price of oil falls below $100 a barrel, the Venezuelan oil minister will push for a cut in
OPEC production. OPEC members are sufficiently worried that they plan to study the projected effects
of the very U.S. oil industry they used to dismiss.
OPEC members are most troubled by the downward pressure on oil prices from booming North
American supply and softening global demand. The Wall Street Journal has summarized the problem:
Each OPEC member has a “break even” price at which oil must sell for that country to balance its
budget. In the past decade, these break-even prices rose rapidly as OPEC countries directed oil revenues
towards massive investments in infrastructure projects and, more recently, in expanded social programs
meant to stave off upheaval caused by the Arab revolutions around them. The higher spending of OPEC
countries has left them vulnerable to a drop in prices.
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Link – Oil Prices
Plan lowers oil prices
CNN 12
(Steve Hargreaves, staff writer, "Mexico's big oil problem,” August 17th, 2012,
http://money.cnn.com/2012/08/17/news/economy/mexico-oil/index.html)
Mexico, one of the largest suppliers of oil to the United States, has a big problem: Its production of
crude is falling fast.¶ In 2008, the country's production peaked at 3.2 million barrels a day, according to
the U.S. Energy Information Administration. Last year, it didn't even produce 3 million a day.¶ The
reason: aging oil fields and years of underinvestment.¶ Industry experts say Mexico could revive
production if it allowed more investment from international oil companies. But under current policy,
EIA says Mexico will have to start importing oil by 2020.¶ For the United States, the decline in Mexico's
oil industry means it will likely be buying more oil from Canada and Saudi Arabia, the No. 1 and No. 2
sources of U.S. oil imports. Mexico is now third.¶ And because oil is a global market, any drop in
production one place could mean higher prices worldwide.¶ The loss of Mexico's current exports of
about 1 million barrels a day would be greater than the amount lost due to sanctions on Iran -- albeit
over a longer time period.¶ Many experts blame the structure of Mexico's oil industry for the decline.
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Link – Middle East
U.S. transition to deepwater oil production will collapse Middle East and Northern
African oil trade by 2020
Seib, bureau chief for The Wall Street Journal, et al. 12
[Gerald, Gregory White, staff writer, Chip Cummins, staff writer, and Keith Johnson, staff writer, 6-27-12,
Wall Street Journal, “Expanded Oil Drilling Helps U.S.Wean Itself From Mideast”,
http://online.wsj.com/article/SB10001424052702304441404577480952719124264.html, accessed 630-13, HG]
HOUSTON—America will halve its reliance on Middle East oil by the end of this decade and could end
it completely by 2035 due to declining demand and the rapid growth of new petroleum sources in
the Western Hemisphere, energy analysts now anticipate.
The shift, a result of technological advances that are unlocking new sources of oil in shale-rock
formations, oil sands and deep beneath the ocean floor, carries profound consequences for the U.S.
economy and energy security. A good portion of this surprising bounty comes from the widespread use
of hydraulic fracturing, or fracking, a technique perfected during the last decade in U.S. fields previously
deemed not worth tampering with.
By 2020, nearly half of the crude oil America consumes will be produced at home, while 82% will come
from this side of the Atlantic, according to the U.S. Energy Information Administration. By 2035, oil
shipments from the Middle East to North America "could almost be nonexistent," the Organization of
Petroleum Exporting Countries recently predicted, partly because more efficient car engines and a
growing supply of renewable fuel will help curb demand.
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Turn - Middle East Stability
Decline in US imports causes Middle Eastern instability
Yakabuski, the Globe, 5/13/13
(Konrad, 5/13/13 “The downsides of U.S. energy independence”
http://www.theglobeandmail.com/commentary/the-downsides-of-us-energyindependence/article11869851/#, date accessed 6/30/13 IGM)
Declining U.S. imports from the Middle East and Africa could, however, wreak political havoc in those
regions. Nigeria and Angola have already seen their oil exports to North America slow to a trickle.
They will increasingly compete with Middle Eastern countries to supply Asian markets, a development
Citigroup analyst Edward Morse predicts will be “highly disruptive.”
In his new book The Power Surge, Michael Levi of the Council on Foreign Relations warns: “If Middle
Eastern oil producers conclude that rising U.S. oil production will weaken U.S. interest in the region,
they’ll take steps to build alliances with other world powers. If leaders in Beijing believe that the
United States will no longer be as interested in protecting critical sea lanes that link Middle Eastern oil
markets to the wider world, they’ll build up their navy more quickly.”
OPEC nations cannot afford to see rising North American production drive down global oil prices,
either. Were that to happen, it would sow political unrest in places like Saudi Arabia that have been
shamelessly buying off their populations to keep the Arab Spring at bay. The consequences of regime
change in Saudi Arabia could be deeply unsettling for global security.
Increased Middle East instability causes war
Steinbach, University of Michigan, 2
(John, 3/3/2, “Israeli Weapons of Mass Destruction: a Threat to Peace”
http://www.converge.org.nz/pma/mat0036.htm, date accessed 7/1/13 IGM)
As Israeli society becomes more and more polarized, the influence of the radical right becomes stronger.
According to Shahak, "The prospect of Gush Emunim, or some secular right-wing Israeli fanatics, or
some some of the delerious Israeli Army generals, seizing control of Israeli nuclear weapons...cannot be
precluded. ...while israeli jewish society undergoes a steady polarization, the Israeli security system
increasingly relies on the recruitment of cohorts from the ranks of the extreme right."(39) The Arab
states, long aware of Israel's nuclear program, bitterly resent its coercive intent, and perceive its
existence as the paramount threat to peace in the region, requiring their own weapons of mass
destruction. During a future Middle Eastern war (a distinct possibility given the ascension of Ariel
Sharon, an unindicted war criminal with a bloody record stretching from the massacre of Palestinian
civilians at Quibya in 1953, to the massacre of Palestinian civilians at Sabra and Shatila in 1982 and
beyond) the possible Israeli use of nuclear weapons should not be discounted. According to Shahak,
"In Israeli terminology, the launching of missiles on to Israeli territory is regarded as 'nonconventional'
regardless of whether they are equipped with explosives or poison gas."(40) (Which requires a
"nonconventional" response, a perhaps unique exception being the Iraqi SCUD attacks during the Gulf
War.)
Meanwhile, the existence of an arsenal of mass destruction in such an unstable region in turn has
serious implications for future arms control and disarmament negotiations, and even the threat of
nuclear war. Seymour Hersh warns, "Should war break out in the Middle East again,... or should any
Arab nation fire missiles against Israel, as the Iraqis did, a nuclear escalation, once unthinkable except as
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a last resort, would now be a strong probability."(41) and Ezar Weissman, Israel's current President said
"The nuclear issue is gaining momentum(and the) next war will not be conventional."(42) Russia and
before it the Soviet Union has long been a major(if not the major) target of Israeli nukes. It is widely
reported that the principal purpose of Jonathan Pollard's spying for Israel was to furnish satellite images
of Soviet targets and other super sensitive data relating to U.S. nuclear targeting strategy. (43) (Since
launching its own satellite in 1988, Israel no longer needs U.S. spy secrets.) Israeli nukes aimed at the
Russian heartland seriously complicate disarmament and arms control negotiations and, at the very
least, the unilateral possession of nuclear weapons by Israel is enormously destabilizing, and
dramatically lowers the threshold for their actual use, if not for all out nuclear war. In the words of Mark
Gaffney, "... if the familar pattern(Israel refining its weapons of mass destruction with U.S. complicity) is
not reversed soon- for whatever reason- the deepening Middle East conflict could trigger a world
conflagration." A2:
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Mexican Oil Revenue DA
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Natural Gas Reduces Oil Consumption
Bolstering natural gas reduces Mexican oil consumption
US Chamber of Commerce 11 (“ENHANCING THE U.S.–MEXICO ¶ ECONOMIC PARTNERSHIP”,
http://www.uschamber.com/sites/default/files/reports/1204EnhancingtheUSMexicoEconomicPartnership.pdf, pg 10, date accessed 6/26/2013 IGM)
PMI, a subsidiary of Mexico’s state-owned oil company, Pemex, has been a 50-¶ 50 joint venture partner
in an oil refinery in Deer Park, Texas, since 1993. This ¶ refinery is the sixth-largest refinery in the United
States, processing crude oil from ¶ a number of sources, including Mexico, into refined products for use
in the United ¶ States and Mexico. ¶
Mexico’s total energy consumption consists of oil (58%), natural gas (30%), ¶ hydroelectric (5%), coal
(4%), nuclear (1%), and other renewables (2%). ¶ Natural gas is increasingly replacing oil as a feedstock
in power generation. ¶ However, Mexico is a net importer of natural gas, so higher levels of natural gas
¶ consumption will likely depend on more imports from the United States or via ¶ liquefied natural
gas.¶
Mexico’s natural gas pipeline network includes 10 active import connections with ¶ the United States. In
2010, Mexico imported 342 billion cubic feet (Bcf) of natural ¶ gas from the United States, while it
exported 30 Bcf to the United States.¶ Conventional thermal generation represents the overwhelming
majority of ¶ Mexico’s electricity generation, though the mix from these sources is gradually ¶ shifting
from oil products to natural gas.
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Gas DA
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US Hydrocarbon Leadership Cause Shocks
US Hydrocarbon leadership causes shocks in Venezuela, Russia, and the Middle Eastturns their oil advantage
Mills, Adjunct Fellow, Manhattan Institute, 12
(Mark P. is an adjunct fellow of the Manhattan Institute and founder and CEO of the Digital Power
Group, a tech-centric capital advisory group. He was the cofounder and former chief tech strategist for
Digital Power Capital, a boutique venture fund. Mills cofounded and served as chairman and CTO of ICx
Technologies, helping take it public in a 2007 IPO. He is a member of the advisory council of the
McCormick School of Engineering and Applied Science at Northwestern University and serves on the
board of directors of the Marshall Institute, 5/24/13, Real Clear Energy, “We Need a 21st Century Energy
Policy,”
http://www.realclearenergy.org/articles/2013/05/24/we_need_a_21st_century_energy_policy.html,
Accessed: 6/25/13, LPS.)
The newly sworn-in Energy Secretary has taken a go-slow posture on natural gas exports. This, after
the U.S. has just blown past Russia to become the world's largest producer. And America will shortly
occupy the number one position in oil production as well. This nation is poised to become a major
hydrocarbon exporter to an energy-hungry world.
But not everyone is eager to embrace the opportunity for America. There are even concerns, raised on
the pages of the New York Times and Foreign Affairs, that the new U.S. position on the world energy
stage has major downsides. Notably, we're told that this radical change could destabilize many of the
world's fragile hydrocarbon exporters, from Russia to Nigeria and from Venezuela to the Middle East.
These experts warn that the loss of oil revenue will cause shock waves in countries that have
increased spending (and mischief making) on the prospect of eternally selling $100 per barrel oil to the
world, especially to America. This was apparently a negligible worry when alternative energy
advocates were touting the importance of (expensive) biofuels and batteries for breaking America's
"addiction" to oil.
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Environment DA
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Pipelines Link
The plan has massive negative effects ecologically
Arizona Daily Star 6-17-13
(“Opponents Of Proposed U.S./Mexico Pipeline Cite Erosion Concerns”,
http://southwest.construction.com/yb/sw/article.aspx?story_id=186830205, Accessed 6-26-13, RRR)
Will a new natural gas pipeline from Tucson to Mexico through this valley cause more erosion?
Ranchers such as Lane say it will. But Kinder Morgan Energy Partners says it's committed to preventing
erosion and to restoring the land once its Sierrita pipeline is constructed.
The company's detailed revegetation-restoration plan will be discussed Tuesday at a public meeting at
Casino del Sol. The event is being held by Federal Energy Regulatory Commission staff members, who
are working on an environmental impact statement for the 59-mile-long project.
One reason for opponents' concern is that they say a section of Kinder Morgan pipeline built in 2007
along Interstate 10 east of Tucson is now barren -- "a huge scar," says Linda Mayro, a Pima County
official, despite what county officials say was extensive restoration.
The company says it can't confirm that the 2007 route is barren. But it has worked closely with local
officials on past pipeline projects here to keep them in harmony with the environment, the company
says.
One example occurred in 2008, when another company that Kinder has since acquired was lauded by
University of Arizona officials for its work on Tumamoc Hill in Tucson, Kinder Morgan says. El Paso
Natural Gas worked with the University of Arizona to preserve natural land on the hill as part of federally
required gas pipeline inspection and maintenance work.
For its Sierrita line, Kinder Morgan has also produced federally required plans for erosion control, weed
control and vegetation monitoring.
But opposition to this pipeline is intense among ranchers, environmentalists and Pima County
officials, who describe the Altar Valley as one of Southern Arizona's least- fragmented landscapes.
Their prime concern is that the pipeline will be a magnet for illegal immigrants and Border Patrol
vehicles pursuing them through the valley.
Lane and six other ranchers, including one at a guest ranch, are its only residents now, in an area
covering 200 square miles of palo verde-saguaro habitat and grasslands from Three Points to Mexico.
"Most ranching families have been here generations. We're working to keep this open space and
productive landscape," Lane said.
Human intrusion along the pipeline route will aggravate erosion, opponents say, by trampling
whatever the company replants.
"It is certain this erosion will occur," said Mayro, director of the county's sustainability office. "There's
200 washes out there, and every time the line crosses one of these, you're interrupting the flow.
"Because there's no cover on a newly bladed pipeline, the soils are going to erode" when storms come
through, she said.
There's no way to permanently restore the land without controlling access to the pipeline route, said
Jenny Neeley, who is with the environmentalist Sky Island Alliance.
Adds Linwood Smith, a Tucson ecological consultant who has worked on other pipeline projects: "People
on the pipeline route, depending on the intensity of use, can completely scotch any reclamation
efforts. I don't know how you could prevent it there."
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Fishing Industry DA
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Uniqueness
Fishing industry recovery is struggling—Large Dead Zone in the Gulf
Houston Business Journal 6/20/13
[Greg Barr, Managing Editor, June 20th, 2013, “Record Gulf of Mexico 'dead zone' may hurt billion-dollar
fishing industry,” http://www.bizjournals.com/houston/news/2013/06/20/gulf-of-mexico-dead-zonemay-reach.html, Accessed 6/30/13, CB]
Researchers say one of the Gulf of Mexico's largest “dead zones” on record is shaping up this summer
— which could affect the billion-dollar fishing industry and help drive up seafood prices.
An annual forecast from the University of Michigan released this week by the U.S. National Oceanic and
Atmospheric Administration says this year’s dead zone — the area of the Gulf that is oxygen-depleted,
or hypoxic, due to farmland runoff containing fertilizer and animal waste — could cover as much as
8,561 square miles. That's about the size of New Jersey.
The heavier-than-usual spring floods across the Midwest are the biggest contributor to the increased
runoff this year, the report says. Last year, due to the extreme drought conditions in the Midwest, the
dead zone was smaller than usual.
The Gulf dead zone forms each spring and summer off the Louisiana and Texas coasts when oxygen
levels drop too low to support most life in bottom and near-bottom waters. Farmland runoff
containing fertilizers and livestock waste is the main source of the nitrogen and phosphorus that fuel the
growth of algae blooms, which, in turn, create the dead zone.
Fish and shellfish either move away from the oxygen-depleted dead zone or die, resulting in losses to
the fishing industry. Commercial fishing in the Gulf was worth $629 million in 2009, while recreational
fishing adds about $1 billion to the Gulf-region economy each year.
According to U.S. Geological Survey estimates, 153,000 metric tons of nutrients flowed down the
Mississippi and Atchafalaya rivers to the Gulf in May — 16 percent more than the average over the past
34 years.
This spring, several Midwest states reported unusually wet spring seasons, with Iowa reporting its
wettest on record.
The fishing industry is on its way to recovery from the BP oil spill, but long term
impacts are difficult to gauge
Business Insider 6/27
[Julie Zeveloff, Staff Writer, June 27th 2013, “I Ate A Boatload Of Gulf Coast Seafood In Mobile,
Alabama,” http://www.businessinsider.com/i-ate-lots-of-gulf-coast-seafood-in-mobile-alabama-2013-6,
Accessed 6/30/13, CB]
Alabama started testing seafood from the Gulf shortly after the spill, and continues to conduct
monthly tests of oysters, crabs, shrimp, and fish from local waters. So far, none of those samples have
shown oil or dispersants above a government-mandated "level of concern," said Chris Blankenship, the
program administrator for the ASMTP (created through a grant from BP) and the director of marine
resources for Alabama.
Despite stories about mutated shrimp — including a disturbing report from Al Jazeera — Blankenship
said he hadn't seen any deformed specimens, or heard complaints from local fishermen.
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"Early on, testing was a major part of our marketing campaign," he said. "But after a year, few people
even asked about test results. Especially along the [Gulf] coast, people don't have as much of a concern
and continue to enjoy their seafood."
But it may still be too early to see the long-term effects of the spill on sea life, because the biggest
impact is often not on stronger adults, but on juvenile populations and eggs, said John Hocevar, a
marine biologist and the Oceans director at Greenpeace.
"One of the difficult things is that it can take a really long time to fully assess the impact of something
like this," Hocevar said. "We still don't know what we're dealing with, and we won't know for several
more years."
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Link
More offshore drilling kills the fishing industry
Grader, Institute for Fisheries Resources Director, and Spain,Pacific Coast Federation
of Fishermen’s Associations Regional Director, 8
[William Grader, Executive Director of the Institute for Fisheries Resources, and Glen Spain, Northwest
Regional Director and Salmon Protection Program Director for Pacific Coast Federation of Fishermen’s
Associations, November, 2008, “Offshore Drilling -- It's Back
"Drill, Baby Drill," Really Burn, Baby Burn for Fisheries,” http://www.pcffa.org/fn-nov08.htm, Accessed
6/30/13/ CB]
The adverse impacts of offshore drilling begin with disruptive seismic survey airgun operations and
continue with routine day-to-day toxic discharges of heavy metals and mutagenic hydrocarbon
compounds into the ocean, even during normal operations. In spite of the much-touted "new
technology" on the Outer Continental Shelf, chronic damage to the marine environment is still very
much a part of every step of offshore drilling activities, including the following:
(1) Seismic Airgun Survey Impacts On Marine Life: The initial exploratory phase of offshore oil and gas
activities involves the discharge of thousands of high-intensity blasts from powerful "airguns," creating
a strong shockwave throughout the ocean that pounds into the seabed.
Because water is an excellent medium for the transmission of sound, seismic airgun exploration has
been directly associated with mass strandings and resulting mortality of whales and other marine
mammals, and with decreased fish catch in the impacted region. Permanent damage to the acoustic
receptors of various fish species has also been well documented, and the hearing capacity of fish
enables them to avoid predators, locate mates, and find prey.
The "Eggs & Larvae Committee," established in the 1980's as a fishing-oil industry collaborative to look
at seismic impacts on fish found that the blasts caused major mortality for young anchovy. Fishermen
were already aware of the "spooking" the testing caused on adult fish stocks of many species.
(2) Routine Discharges Of Offshore Drilling Wastes: During normal drilling operations for oil or gas,
drilling muds are used to cool and lubricate the drill bits. Once the useful properties of drill muds are
exhausted, large volumes of spent drill muds are simply discharged over the side of the drill rig directly
into the ocean. Each well drilled produces, on average, 180,000 gallons of drilling mud and cuttings.
Dumping of spent drill muds spreads plumes of turbidity as the "fine" particles spread throughout the
water column, and the heavier components of the discharge accumulate on the seafloor to smother
benthic organisms and other marine life.
These discharges also customarily contain toxic materials known to bio-accumulate in the ocean food
chain leading to humans. Of primary concern are toxic heavy metals like mercury, chromium, barium,
arsenic, cadmium, and "Polycyclic Aromatic Hydrocarbon" compounds (or PAHs), all found to cause lifecycle mutagenic damage to eggs of pink salmon in the years following the Exxon Valdez oil spill at levels
of only two parts per billion.
In addition, what are known as "produced waters," which originate from subsea aquifers, are brought up
with the oil or gas, and hundreds of thousands of gallons of often toxic produced waters are
subsequently dumped into the ocean.
In many geologic settings in the Gulf of Mexico and elsewhere, produced waters contain radioactive
radium, and the resulting discharge is the source of a radioactive plume trailing from the rig on the
ocean currents. Radium is readily taken up by marine life and also bio-concentrates in the marine food
web.
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While regulations now require drill muds from operations offshore California to be disposed of safely
onshore, the same is not true elsewhere. In the Gulf of Mexico, for example, high levels of mercury
have been found in recreational anglers eating fish caught around oil platforms. Researching and
reporting on the cause in 2000, the Mobile Press-Register not surprisingly found that fish feeding around
the oil rigs had elevated levels of mercury compared to those found elsewhere in the Gulf. The source of
that mercury was determined to be the drill muds.
(3) Accidental Oil Spills From Rigs: In recent years, oil spills from offshore exploratory and production
rigs have often resulted from equipment failure or human error, or a combination of both.
Computerized equipment, not subject to constant monitoring and human oversight, has resulted in
uncontrolled discharges of oil at many operations in various locations.
Drilling advocates (including certain radio talk show hosts) have often cited oil industry propaganda
claiming that there were no oil spills caused by hurricanes Katrina or Rita in 2006. Even a cursory
information search shows that claim to be nonsense. Official government reports demonstrate more
than 741,000 gallons of oil was spilled from offshore oil rigs damaged by Katrina (see:
www.mms.gov/ooc/press/2006/press0501.htm).
After Hurricane Katrina, oil spills were so pervasive that remote sensing equipment using Synthetic
Aperture Radar on the "Radarsat" Canadian orbital satellite detected extensive slicks of highly-toxic
liquid natural gas condensate, a light oil, spreading throughout the Gulf of Mexico from damaged
offshore natural gas drilling infrastructure at the Apache Field. The US Minerals Management Service
listed 113 Gulf of Mexico oil platforms as destroyed in 2006 by hurricanes Katrina and Rita, with
hundreds more seriously damaged.
Hurricanes of the scope and destructive power of Katrina are expected to become more common in the
future, as well as more frequent in higher latitudes, due to the accelerating impacts of worldwide
climate change.
Routine discharges of pollutants to ocean waters and the atmosphere are virtually identical for oil or for
natural gas operations, except that every phase of gas production also releases fugitive emissions to the
atmosphere from leakage from wellheads, compressors, and pipeline and processing components.
Natural gas is a powerful accelerant to global climate warming.
The worst case oil spill from an offshore rig in the US was the Ixtoc I blowout incident on June 3, 1979,
when a US rig operating 600 miles south of Texas lost drilling mud circulation, ran into high pressure gas,
and suffered a blowout in which the oil caught fire and the platform collapsed. In the next few months,
approximately 10,000 to 30,000 barrels of oil per day were discharged into the Gulf of Mexico until the
blowout was finally capped the following year, on March 23, 1980. At one time during this blowout, ten
percent of the surface of the Gulf of Mexico was covered with oil slicks or sheen, and tar balls washed
ashore on the beaches of Padre Island in Texas.
"With the nation now debating whether to open more areas offshore to oil and gas drilling, the oil
industry can rightly claim it has avoided a repeat of that [1969 Santa Barbara Channel spill] catastrophe,
even as offshore activity has ballooned," the Houston Chronicle reported on July 19th, 2008. "But
offshore operators continue to spill thousands of barrels of oil, fuel and chemicals into federal waters
each year, government records show."
(4) Oil Spills From Pipelines And Tankers Transporting Offshore Oil: California's "Torch" pipeline oil
spill, and Alaska's Cook Inlet "Cross-Timbers" oil spill, represent recent examples of highly-automated
subsea oil pipelines that have leaked for extensive periods of time without the source of the leaks
being detected.
Since any oil produced from offshore drilling operations that lie beyond existing pipeline
infrastructure is inevitably transported by barge or tanker to refining centers, there is also a constant
risk of a tanker spill that can originate from any point in transit. Modern oil tankers are much larger
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than the Exxon Valdez that ran aground and spilled its oil 30 years ago, and a spill from one of these
super-takers could be even more catastrophic.
In addition, massive floating offshore oil storage facilities, now being expanded in the Gulf of Mexico
and planned for other regions, represent an increasing risk of very large spills.
(5) Air Pollution From Offshore Drilling Operations: Oil and natural gas drilling and production
operations offshore generate a suite of air pollutants, including ozone, oxides of nitrogen, and sulfur
compounds. Each gas well releases 50 tons of nitrogen oxides (NOx), 13 tons of carbon monoxide, 6
tons of sulfur dioxide, and 5 tons of volatile organic carbons (VOCs) each year. The platforms themselves
annually generate another 50 tons of NOx, 11 tons of carbon monoxide, 8 tons of sulfur dioxide, and 38
tons of VOCs.
Because drilling rigs offshore lie outside of the regulatory jurisdiction of onshore air quality management
districts, coastal states generally have little authority over air emissions from the rigs. Tankering and
barging also generate emissions from the transportation of produced crude oil, both as a result of the
burning of vessel fuel and from fugitive hydrocarbon emissions from the loading and offloading of tank
ships.
In the past the emissions issue has been essentially one for local governments and the environmental
community, but now as we're watching the Arctic ice cap disappear and oceans become more acidic
as carbon is sequestered from the atmosphere, greenhouse gas emissions have to be a concern from
fishermen as well -- both in developing and transporting the oil and gas and in its subsequent burning.
That Spills over and affects the worldwide Fishing Industry
The Environmental Protection Agency, 12
[The Environmental Protection Agency, October 16th, 2012, “General Facts about the Gulf of Mexico,”
http://www.epa.gov/gmpo/about/facts.html, Accessed 6/30/13, CB]
The Gulf of Mexico ecosystem provides a wide array of valuable resources to the nations on its shores.
Fisheries
Gulf fisheries are some of the most productive in the world. In 2010 according to the National Marine
Fisheries Service, the commercial fish and shellfish harvest from the five U.S. Gulf states was
estimated to be 1.3 billion pounds valued at $639 million. The Gulf also contains four of the top seven
fishing ports in the nation by weight. The Gulf of Mexico has eight of the top twenty fishing ports in the
nation by dollar value.
Shrimp: Gulf landings of shrimp led the Nation in 2010 with 177.2 million pounds valued at $340
million dockside, accounting for about 82% of U.S. total. Texas led all Gulf states with 77.0 million
pounds; Louisiana with 74.1 million pounds; Florida (west coast) with 11.8 Alabama with 10.0 million
pounds; and Mississippi with 4.1 million pounds.
Oysters: The Gulf led in production of oysters in 2010 with 15.7 million pounds of meats valued at
$54.5 million and representing 59% of the national total.
Recreational: The Gulf also supports a productive recreational fishery. In 2010, marine recreational
participants took more than 20.7 million trips catching 145.4 million fish from the Gulf of Mexico and
surrounding waters. The total weigh in pounds was over 59.3 million in 2010.
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Economy Impact
Key to the global economy
The Pew Environment Group 10
[The Pew Environment Group, citing Dr. Ussif Rashid Sumaila is Professor and Director of the Fisheries
Economics Research Unit at UBC Fisheries Centre, and AJ Dyck, September 2010 “Marine Fisheries and
the World Economy: A Summary of a New Scientific Analysis,”
http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/News/Press_Releases/Protecting_ocean_li
fe/Pew%20OSS%20World%20Economy%20FINAL.pdf, Accessed 6/30/13, CB]
¶ People in coastal countries depend on ¶ healthy fisheries for their livelihoods. Gross ¶ revenue
globally from marine fisheries has ¶ been estimated during the last decade at ¶ $80 billion to $85
billion* annually. This ¶ estimate, however, reflects only the landed, ¶ or market, value of the fish as
they first leave ¶ the boat, and it underestimates the full economic impact of fisheries. A more
accurate ¶ accounting of the value of the fishing industry to the global economy would incorporate ¶
the indirect effects on related industries that ¶ depend on well-managed fisheries.¶
Andrew Dyck and his co-author, ¶ Rashid Sumaila, of the University of ¶ British Columbia, estimated the
total global ¶ economic activity supported by marine ¶ fisheries (i.e., non-aquaculture, ocean ¶ fisheries).
They found that by considering the ¶ economic impacts of fisheries on other sectors such as boat
manufacturing or canning ¶ industries, the total global value is approximately $240 billion annually, as
calculated ¶ from 2003 data—nearly three times the ¶ landed value. The authors concluded that ¶
considering only the direct value of fisheries ¶ underestimates the true economic impact of ¶ marine
fisheries worldwide. This Pew Ocean ¶ Science Series report is a summary of the ¶ scientists’ findings.
Following a fish through the chain of production ¶ from the ocean to a canning plant to the dinner ¶
table reveals that marine fisheries support economic activity in many sectors. Such industries ¶ as
boating, tin mining and retail services may ¶ be affected by changes in fisheries production. ¶
According to the authors, fisheries can also have ¶ significant economic impacts in other sectors, ¶ such
as agriculture, forestry, manufacturing and ¶ financial services. Therefore, changes in the fishing
industry could affect livelihoods in and the ¶ viability of many economic sectors.
Study Methods
To estimate how changes to the fishing industry may affect other economic sectors such as ¶
manufacturing or finance, the authors compiled ¶ a variety of economic data in coastal countries. ¶
These data included direct revenue from fisheries (e.g., the landed value of the fish) as well as ¶
indirect revenue, such as profits from tin manufacturing for cans. The researchers also estimated ¶
induced impacts from the fisheries industry, such ¶ as changes in household spending by employees ¶
in industries supported by fisheries.
The authors used these data in an inputoutput economic model that considered all of the ¶ direct,
indirect and induced impacts. Using this ¶ model, they estimated the total amount of economic activity
that fisheries support by calculating economic multipliers for a number of major regions of ¶ the world.
These multipliers provide an estimate ¶ of how much more revenue, beyond the landed ¶ value of the
fish, fisheries provide to the economy, ¶ including all of the indirect and induced impacts.
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Food Security Impact
Fishing vital to food security
Pauly and Swartz, University of British Columbia Fisheries Center Professor and PhD
Candidate, 8
[Wilf Swartz, PhD Candidate at the University of British Columbia, and Daniel Pauly, Professor at the
University of British Columbia Fisheries Center, June 23rd 2008, “Who’s Eating All the Fish? The Food
Security Rationale for Culling Cetaceans,”
http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Protecting_ocean_life/daniel_pa
uly_paper_iwc_2008_pdf_doc.pdf, Accessed 6/30/13, CB]
Although countries and dependent territories of the South Pacific have very small populations, ¶ their
EEZs represent a huge area of the Pacific Ocean. Not surprisingly, the issue of fisheries are ¶ of vital
food security and economic interest for the countries in the region, especially for those ¶ with limited
land-based resources. In 2000, the EEZs of the South Pacific island states yielded¶ 426,000 tonnes of fish,
over 200,000 tonnes of which were skipjacks destined for non-domestic ¶ consumption. Our analysis
shows that the domestic market accounts for less than 5% of fish ¶ caught in the region. Japan, with
its renowned taste for sashimi-grade tuna, consumed 30% of the ¶ catch from the region while EU
accounted for 4%. It should be noted, however, that the large¶ portion of the catch destined for ‘other’
markets is based on catches by distant water fleets from ¶ Taiwan and South Korea, as well as exports of
tuna for canning to regional processing bases, for ¶ example in Thailand, and is most likely destined for
markets in Japan, EU and North America ¶ (Figure 5). Indeed, the region and its surrounding high seas
provide about 50 to 70 percent of the ¶ world’s tuna for canning.
In terms of volume and value, the fisheries in the South Pacific are dominated by the industrial ¶ tuna
fisheries, even if taking account of the fact that small scale fisheries catches are strongly ¶
underestimated in official catch statistics (Zeller et al. 2007a, 2007b). However, the vast majority ¶ of
fish caught in the region are by distant water vessels from Asia and the United States, with ¶ countries
hosting these fleets receiving only a fraction of the benefits from the fisheries found in ¶ their waters
as fishing access fees account for 3 to 4 percent of the landed value (Peterson 2005). ¶ Moreover, there
are concerns that the large tuna catches by the distant water fisheries may ¶ adversely impact those of
the small-scale fishers (Gillett et al.). Indeed, a recent report indicates ¶ that local fishers (e.g. Solomon
Islands) are claiming that it is harder to catch tuna now than it ¶ was in the past, and that they have to
go further from shore and fish for longer to get the same ¶ catch, with the commercial tuna fisheries
often blamed for this decline in catch (Barclay & ¶ Cartwright 2007).
The domestic share of catches from its EEZs may be even smaller if illegal catches are to be ¶ included.
The region has minimal patrolling and enforcement capabilities (Kiribati for example ¶ has only one small
patrol boat to monitor its vast EEZ covering an area of over 3.4 million km2¶ ). Thus, illegal fishing,
including illegal activities by distant water vessels, is believed to be ¶ widespread in the region
(Greenpeace 2007).
The region has also seen the development of export-oriented fisheries exploiting the coastal ¶
resources such as sea cucumber, lobsters and (live) reef fishes fuelled by the demand to markets ¶ in
large Asian cities, notably Hong Kong (Ref. ‘WHILE STOCKS LAST’). The local impact of ¶ these fisheries
is substantial, as they are usually characterized by intense exploitation that rapid ¶ reduce the
abundance of the targeted species. There have been numerous problems with the use ¶ of cyanide and
the unsustainable targeting of spawning aggregation. Indeed, these fisheries often ¶ jeopardize the
long-term commercial viability of the other fisheries, and food security of coastal communities.
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Key to poverty reduction and food security
Allison, The WorldFish Center Principal Scientist, 12
[Edward H Allison, January 3rd, 2012, “Aquaculture, Fisheries, Poverty and Food Security,”
http://aquaticcommons.org/7517/1/WF_2971.pdf, Accessed 6/30/13, CB]
World capture fisheries production has been relatively stable in the past decade with the exception of
marked ¶ fluctuations driven by catches of anchoveta – a species extremely susceptible to variations in
oceanographic ¶ conditions. As opportunities for expansion of capture fisheries have diminished and
some stocks have been overexploited, capture fisheries production has no longer shown an increasing
trend. With the recognition of limits ¶ on biological productivity, policy focus has shifted from trying to
increase capture fisheries production, towards ¶ regulating fisheries to achieve increases in value and
profitability from similar or lower levels of production. ¶ Aquaculture continues to be the fastestgrowing animal-food-producing sector and to outpace population ¶ growth, with per capita supply
from aquaculture increasing from 0.7 kg in 1970 to 7.8 kg in 2008, an average ¶ annual growth rate of
6.6 percent (FAO, 2011), with poultry showing the next largest rate of increase over this ¶ period at 5
percent.
The value of production from capture fisheries and from aquaculture in 2008 was roughly similar –
98.4 billion ¶ from aquaculture (excluding aquatic plants) and 93.9 billion tonnes from capture
fisheries. When considering ¶ value-addition and multiplier effects, the estimated total output value of
marine capture fisheries is between 225 ¶ and 240 billion USD per year from current production levels
(Dyck & Sumaila 2010). If similar multipliers apply ¶ to inland fisheries, and to aquaculture production,
then the output value of global fisheries and aquaculture is ¶ likely to be around US$ 600 billion a year.
The capture and production sector employs around 44 million people ¶ or 180 million if jobs in the
supply chain are included. If each income-earner supports an average of three ¶ dependents, then 540
million people are partly or wholly dependent on the sector for income.¶ In 2008, trade in fish and
fishery products was valued at over US$ 102.8 billion dollars – about 10 percent ¶ of the value of total
agricultural exports and 1 percent of world merchandise trade. The share of fishery and ¶ aquaculture
production (live weight equivalent) entering international trade as various food and feed products ¶
increased from 25 percent in 1976 to 39 percent in 2008, and the overall value of trade, in real terms,
has ¶ increased by 50 percent since 1998, reflecting the sector’s growing integration in international
trade (FAO, ¶ 2011).
While the stabilizing of capture fisheries and the rapid rise of aquaculture, the record per capita
global supply, increasing levels of trade and the growing economic contribution of the sector all
suggest a thriving industry, there are serious concerns around overfishing and the environmental and
social impact of aquaculture, and equity concerns around trade. These can only be investigated by
disaggregating the global statistics, and also by also looking at the input costs and profitability of the
sector (See section 3.1).
The global aggregate wealth generated by the sector is considerable, and provides important
contributions to poverty and food security Through four main, interlinked pathways: (i) nutritional
benefits from the consumption of fish; (ii) income to those employed in the sector; (iii) multiplier and
spillover effects in fishery-dependent regions; and (iv) through generation of revenues from exports,
taxation, license fees and from payment for access to resources by foreign fleets or foreign investment
in aquaculture. The harvest, sale and processing of fish thus contribute indirectly to food security by
increasing purchasing power at individual or household level and also regionally, and nationally.
Examples of pathway through which aquaculture can contribute to poverty
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reduction are summarized in Figure 2.
Where fisheries or aquaculture are significant activities, contributions to poverty reduction are in the
form of economic multipliers; for example many fisherfolk are landless and have daily cash incomes
to spend in areas sometimes remote from markets, which helps sustain markets for agricultural
produce, consumption goods and various services and ensures that the income from fishing stays in
the local area (Allison, 2005;
Bene et al., 2007; Thorpe et al., 2007). Taxation on fisheries access and license fees sometimes
contribute to local government revenue. The macro-economic effects of fisheries trade and revenue
generation from taxes, licenses and access agreements contribute towards foreign currency generation
and government budgets. If the revenues are significant and they are spent effectively, they can
contribute towards macro-economic growth as the most effective way of large-scale poverty reduction.
Except in a few cases (e.g. Pacific island states with major tuna resources, countries with large shrimp
farming enterprises) fisheries and aquaculture are unlikely to be a major national ‘engine of growth’, but
they can be at local level. Even when the value of fisheries benefits to trade and GDP can be increased,
the track record of governments in the effective use of natural resource revenues is not always
exemplary, as the persistence of poverty and underdevelopment in oil, mineral and timber-rich states
testifies.
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China DA
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Link
US hydrocarbon production checks China
Mills, Adjunct Fellow, Manhattan Institute, 12
(Mark P. is an adjunct fellow of the Manhattan Institute and founder and CEO of the Digital Power
Group, a tech-centric capital advisory group. He was the cofounder and former chief tech strategist for
Digital Power Capital, a boutique venture fund. Mills cofounded and served as chairman and CTO of ICx
Technologies, helping take it public in a 2007 IPO. He is a member of the advisory council of the
McCormick School of Engineering and Applied Science at Northwestern University and serves on the
board of directors of the Marshall Institute, 5/24/13, Real Clear Energy, “We Need a 21st Century Energy
Policy,”
http://www.realclearenergy.org/articles/2013/05/24/we_need_a_21st_century_energy_policy.html,
Accessed: 6/25/13, LPS.)
There's more: This new reality will reverse the trade and economic positions of the U.S. and China.
America is shrinking net imports and can increase its share of global trade, especially in areas where we
hold unique advantages such as our high-tech "manufacturing" of crude oil and natural gas. China,
migrating towards more domestic consumption instead of exports, is already the world's largest oil
importer. One fact set is predictive: China has fewer than 50 vehicles per 1,000 adults compared to
630 in America. In the future, China will export less in general and import more, especially fuel. We
can do the inverse.
Let's not squander this opportunity through inaction, or worse, by imposing deliberate impediments
to expanding domestic production-and exports-of hydrocarbons.
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Kritiks
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Heg K/ Colonialism Link
US policies are neoliberal colonialism
Alvarado, Diplomatic Courier, 13
[Liza Torres, former diplomat in the Mission of Venezuela to the Organization of American States, 13
May 2013, “The U.S. Must Re-evaluate its Foreign Policy in Latin America”
http://www.diplomaticourier.com/news/regions/latin-america/1457 6/29/13 EYS]
Historically, relations between Latin America and the United States have been complex, yet constantly
evolving. During the 1960s, political changes and social movements challenged the structural basis of
United States’ hegemony in the hemisphere. The election of Salvador Allende in Chile, the arrival of
Peronism in Argentina, and the development of relations between nationalist governments of the time
such as Peru, Bolivia, and Mexico became an obstacle for the United States.
Washington re-established its power in the 1970s by revoking any policy that interfered with U.S.
interests in the region by supporting military figures. The United States needed to suppress every
nationalist, socialist democratic and popular movement, over fears of the spread of Communism in its
backyard. Dictatorships secured financial support through easy access to loans from the World Bank and
the International Monetary Fund. The economic support from United States for certain loyal groups
brought great inequalities, unemployment, and poverty in the region.
During the 1980s social upheavals occurred against Pinochet’s military dictatorship in Chile and
Argentina’s military junta. Citizens demanded free elections and social improvements, such as the
transition to civilian rule and direct popular elections. In both cases, amid economic turmoil, the
military rulers were willing to cede some power to semi-democratic regimes controlled by elites in
exchange for the irreversibility of privatization and respect for the status of the military.
The supremacy of the United States deepened in the 1990s, and neoliberal policies favored
corporations at the expense of disadvantaged populations. The collapse of the Soviet Union deepened
the economic crisis in Cuba, which reduced its support for leftist movements in Latin America. In
Argentina, President Carlos Menem privatized public enterprises, while in Brazil, President Fernando
Henrique Cardoso privatized state companies that generated significant revenue for the country.
President Carlos Salinas in Mexico privatized 110 enterprises and signed the North American Free
Trade Agreement (NAFTA) with the United States, whereby the U.S. was allowed access to raw
materials and other services at very low prices.
These policies provoked action from social movements aligned with the poor. The financial crisis in
Argentina led to the overthrow of Antonio De la Rua. In Bolivia, insurrections demanded the removal of
Sanchez de Lozada, a staunch follower of Washington’s policies. In Ecuador, uprisings prevented the
privatization of oil and gas industries. In Brazil, the peasant movement led to the election of syndical
leader Lula Da Silva as President. In Venezuela, U.S. efforts to destabilize the government of Hugo
Chavez were unsuccessful and instead strengthened the morale of leftist movements across the region.
Subsequently, regional leaders either nationalized industries or broke agreements with international oil
corporations or others revolving around natural resources, as occurred in Bolivia with the gas companies
and in Venezuela with the oil company. As these social movements found solidarity, U.S. influence was
weakened. None of the promises of better standards of living from neo-liberal policies had
materialized, and free market policies had bankrupted farmers. Deregulation destroyed the banks,
and the middle class lost their savings.
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At the hemispheric level, the U.S.’s proposal to remove barriers to trade through the Free Trade Area of
the Americas (FTAA) was subsequently rejected by Venezuela, Ecuador, Bolivia, Argentina, and Brazil in
the mid-2000s. Subsequently, ALBA (Bolivarian Alliance for the Americas) was born as a counterpart to
the FTAA, changing the dynamics in the hemisphere. The Alliance posed as a new model, with the
purpose being international cooperation based on the idea of social and economic integration of Latin
America and the Caribbean countries. China appeared as an alternative market for the sale of raw
materials from Latin America, reducing dependence on U.S. markets.
Failed attempts by the United States to destabilize Chavez’s administration radicalized the Venezuelan
government's position, which privileged sub-regional energy agreements and broke contracts with
American oil companies as the decade progressed. Venezuela became an important counterweight to
the United States, not only for its ability to provide an alternative to U.S. policies in the region, but also
because oil revenues had enabled the country take Cuba’s place in financing an anti-imperialist crusade
across the continent. Ironically, oil prices rose as a result of increased demand caused by the Iraq war,
further helping Venezuela in this mission and weakening the U.S.’s influence in the Western Hemisphere
as it was focused its efforts on dual war fronts on the other side of the globe.
Although there has been a decline in U.S. influence in the region, its presence is still there. In
Venezuela, for example, U.S. oil companies have seen their actions limited, yet they still operate there.
The United States is Venezuela’s top commercial partner, as Venezuela supplies 12 percent of U.S. oil
imports.
Relations between the United States and Latin America have experienced cyclical ups and downs.
Geographically, the United States and Latin America are linked and have a natural shared market, so
there will always be a relationship of one sort or another. The United States will continue to seek to
exert its influence over the region, whether through future plans for the placement of military bases
or the promotion of bilateral trade agreements.
Leftist governments will have to address challenges such as those caused by social divisions and
economic inequality. They will likely continue to focus on implementing their leftist discourse,
particularly in the wake of Venezuelan President Hugo Chavez’s death. However, it is important to
consider that neoliberal philosophies are also still pervasive in many countries of Latin America. This is
an advantage for the United States, giving it an opportunity to push for further privatization, but Latin
American leftist movements should evaluate themselves and take actions to if they are to avoid a return
of neoliberal policies of the 1990s.
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Cap Link
Transboundary Agreement is an exploitative tool of the oil industry
Vargas, University of San Diego Law professor, 12
[Jorge A., October 2012, “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; Fall2012, Vol. 14 Issue 1, Lexis, accessed 6-30-13 AS]
From the U.S. perspective, this agreement had been long awaited by U.S. oil companies for decades
that needed it to provide them with requisite clear and open legal access to the oil rich areas located in
the Western Gap, beyond 200 nautical miles, along the central 135 nautical mile boundary line in the
Gulf of Mexico. It is clear that the government of the United States (through the coordinated work of
the Department of State and the Department of the Interior) simply functioned as the official legal
conduit to negotiate and sign the 2012 Agreement to open up the legal way for American oil
companies to exploit one of the richest and untapped reservoirs in the Gulf of Mexico. The agreement
clearly responded to the interests of the U.S. oil industry and was in conformance with both U.S. law
and international law, including the pertinent provisions of the 1958 U.N. Geneva Convention on the
Continental Shelf and the 1982 U.N. Convention on the Law of the Sea, including those principles
forming a part of customary international law. It can be reasonably assumed that the language of the
Draft Agreement initially submitted by the U.S. Department of State to Mexico had already been
cleared by the American Petroleum Institute on behalf of the U.S. oil industry.