278 comments on DrumBeat: November 5, 2007
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278 comments on DrumBeat: November 5, 2007
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Tabasco background info from a human rights site. At least 10 years out of date. More at
http://flag.blackened.net/revolt/mexico/reports/gxhrenv.html
The worldwide oil `crisis` of 1973 marked the start of a new era in Tabasco, leading to the intense exploitation of oil fields in Tabasco, Chiapas, and Campeche.
Since the 1970`s, the coastal plains of Tabasco have been blanketed with oil wells. PEMEX has drilled 3,588 wells in Tabasco, of which 1,013 are currently operational. PEMEX also operates 53 separation batteries, 31 compression stations, eight water-injection plants, five drying plants, three storage and pumping centers, and 13 natural gas collection centers.
There are three petrochemical complexes and a network of transportation tubes that travel through 1,249 miles of legal rights-of-ways that pass through heavily populated areas. The pipelines end at the port of Dos Bocas, where an estimated 450,000 barrels of petroleum are exported daily. In 1994, the average production from the south of Mexico (Tabasco and Chiapas) was 654,000 barrels daily, with Tabasco providing over 80 percent of that total. Fifty-four percent of Tabasco crude is high quality `Olmeca` grade, which obtains a premium price in international markets. The volume of natural gas produced by the region in 1994 was 1.946 billion cubic feet per day, with 1.325 billion cubic feet coming from Tabasco. Tabasco natural gas accounts for 37 percent of the national total.
The economic importance of Tabasco`s petroleum production for the federal government is clear. Between 1973 and 1992, approximately 4.864 billion barrels of oil have come from Tabasco wells, or an average of 666,503 barrels per day. In the last 20 years this production has generated $130 billion in profits for the Mexican Federal Government. Currently, petroleum production in Tabasco generates more than $4.6 billion of revenue annually. For comparison,cattle ranching, a traditional economic mainstay of the state that still utilizes seventy percent of state land, generates just $266 million annually. Despite the wealth extracted from Tabasco`s subsoil, the state ranks as the ninth poorest in Mexico, with 61 percent of its population living in areas designated as marginal. Eighty-nine percent of public investment in the state has supported petroleum infrastructure and operations, while only 5 percent of the population finds employment of any kind in the petroleum industry. Growth of the petroleum industry has not generated a multiplier effect in the state economy. Between 1970 and 1980, the contribution of agriculture, fishing, forestry, and cattle raising has dipped from 19.6 to 3.8 percent of state GNP, despite the dependence of 35 percent of the population on these activities. Twenty years of petroleum extraction that has lacked planning, environmental codes, and attention to social well-being have caused abnormal population growth, badly-skewed income distribution, tremendous escalation of the cost of living, forced relocations, andQmost alarming of allQenvironmental destruction and extremely hazardous living conditions for people who reside in petroleum-producing areas.
Some articles have Pemex saying their oil wells were not affected. Not sure how that can be, when 80% of Tabasco was underwater.
Other articles phrase it as, "they don't know if any of their wells are affected," which makes a little more sense.
Yes...this is a tad odd.
Oil is down as well today...expected at least a small movement up, given that no one truly knows the impact yet...ie. uncertainity.
But, nope...down 1.90 at the moment.
Does this mean they are going to be doubly surprized by this wednesday's weekly petroleum report?
The last two weeks have followed a pattern of oil dropping prior to the Wednesday report (oil dropped Tuesday the previous two weeks) - as much as $3-4, and then roaring back to higher highs following the "surprising" Wednesday report.
I don't get why it's a surprise, however. Robert has essentially told us flat out that the refineries will draw their inventories as much as possible in order to wait out these high prices, so why would anyone be surprised when we see another 3-5 mb draw this Wed? But, I am predicting oil will close above $100 on Wed due to this sort of dynamic.
Agree...this wednesday looks good to break that barrier.
Especially with $5 swings.
We will see.
This is profit taking time. In a few days prices will be up again.
Traders are focused on the dollar at the moment, not the inventory report. In trading terms, Wednesday's inventory report is far far far away. Bloomberg headlines quoted Mishkin of the Fed saying that the recent rate cut could be reversed if it turns out that it wasn't needed (this is b.s., but he's fighting to slow down the decline of the dollar). Plus, the dollar's recent descent was very rapid, and some amount of a rally has been widely expected. We saw the dollar come back a little bit today: http://quotes.ino.com/chart/?s=NYBOT_DX
Tell me if I'm out to lunch here, but having watched oil at >$90 the past two weeks and fall on Tuesday ahead of the inventory report, it seems like there's some fear and uncertainty that arrives just before the report comes out that maybe it will show a decent build, and thus people get out of their oil positions on Tuesday. Any truth in that, do you think?
You are not out to lunch. There is also a lot of poker in very short-term moves when there isn't a lot of volume. At record prices (for example in August when crude was approaching $78, or now), longs are always jumpy, and there is always some analyst providing a headline for them to get even jumpier about. When there isn't much volume, it doesn't take much buying or selling to move the price a couple of bucks. You sell enough to trigger selling, and you buy back cheap Wednesday morning for the inventory report. Or vice versa, depending on conditions.
But this kind of stuff doesn't really matter for very long. The longer a price is manipulated or based on bad information, the bigger the breakout once fundamentals are in charge again.
The wells are generally offshore and therefore should be ok even if currently not in production. It would be the loading facilities onshore that would be down for damage, lack of power and workers. Either way, the impact would be similar for the near future.
Hello Leanan,
Yep, it is sure hard to find detailed FF-info down Mexico way. A quick PEMEX google only brought back this:
http://www.mexidata.info/id1601.html
--------------------------------------
Pemex and Mexico Could Be Drowning in a Sea of Oil
Monday, November 5, 2007
Recently Pemex’s outdated infrastructure was severely damaged by heavy storms in the southern states of Tabasco and Campeche, where the larger part of oil is presently being extracted. The storm caused total havoc by disabling two oil platforms, resulting in the death of 26 workers who could not evacuate because of inoperative escape pods. The squall also shut down the three main tanker shipping ports, impeding the exportation of millions of barrels of crude oil.
----------------------------------------
Obviously, the Mexican national priority is currently focused on saving lives, but if the FF-spiderwebs are badly tattered and difficult to repair: many more lives will eventually be lost. An example of this would be transport-fuel shortages so bad that the govt couldn't move essential food, bottled water, and medicine to the devastated areas.
I hope we can find more detailed PEMEX info soon, but maybe it is now a matter of national security; the data is purposely being suppressed to keep people from really freaking out at what might be happening soon. Who knows?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Regarding that link in your post, the headline writer obviously did not read or understand the story. From the headline, I got the impression that the story would be some cornucopean fantasy. The story is a pretty good review of the problems in the Mexican oil industry.
Hello Sterling,
Thxs for responding. Yep, my initial impression of the headline was the same, but if one peruses Pemex's sad history of oil & gas leaks leading to explosions and/or enviro-devastation, plus all the people currently treading in chemically and sewage-spicey Tabasco sauce--it makes more sense.
Here is just one example with photos:
http://www.semp.us/publications/biot_reader.php?BiotID=356
-------------------------
The Guadalajara 1992 Sewer Gas Explosion Disaster
The blasts measured 7.1 and 7.0 on the Richter scale at the University of Mexico in Mexico City some hundreds of miles away, according to one report. (16)
About 7 miles of sewer pipe exploded. The worst damage at the street level was at Gante and 20 de Noviembre streets. Varley explains that “Gante Street marked the northern edge of an industrial area and the southern edge of an old, tight-knit, densely populated and relatively poor neighborhood in Guadalajara called Analco, which sat above Guadalajara’s sewer main—a pipe 18 feet in diameter.” (14) When the pipe exploded, several city blocks were reduced to ravines containing 230,000 tons of rubble. The blast hurdled cars and busses in the air, some of which landed on nearby rooftops. Adults, children, and pets suddenly dropped out of site beneath the concrete rubble. Easter vacation explains in part the number of children victims who had been playing on the street.
---------------------------------------
Imagine what detrito-terrorists could do in a major American city if they stole a gasoline tanker, then drained it into a major and critical sewer pipe.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
91L is aiming at them again. Hopefully it will burn out over Honduras and Nicaragua.
http://www.wunderground.com/tropical/tracking/at200791_model.html
More water would be bad at this point.
Got to hand it to wiki (the concept) -
Someone has already updated their page with info on the floods of 2007.
http://en.wikipedia.org/wiki/Tabasco
They can do a hell of a lot better than that on current events. The recent conflict in Somalia was written up at a quality that puts to shame some military history textbooks, in real time. I've seen pages sprout up with hundreds of newslinks, and multiple chapters, in a few days on current events. Geopolitics, however, is considered more encyclopedic than natural disasters, so it gets more attention.
Probably, the lack of coverage on Tabasco has something to do with the combination of lack of english, lack of electricity, the raw amount of land flooded, and pre-flood lack of internet access.
Geotagged Flickr, however, is relatively good for coverage of natural disasters.
Hello PeakTO,
Pemex's latest bulletin #159 [auto-translated by google]
http://translate.google.com/translate?hl=en&sl=es&u=http://www.pemex.com...
-------------------------------------
PEMEX sympathizes with the brothers Tabasco
--------------------------------------
IMO, mostly aid-offerings--> no detailed damage assessment, nor mention of restored and smoothly-flowing FFs & electrical spiderwebs.
Sure would be nice to have an ASPO/MEX and/or TOD/MEX to post more timely and accurate info.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
"A 10in (25cm) natural gas pipeline sprung a leak after flooding apparently washed away soil underneath it, but it was unclear if other facilities operated by the state-run Petroleos Mexicanos were damaged."
http://www.breakingnews.ie/archives/?c=WORLD&jp=mhmheysnkfau&d=2007-11-02
Tabasco is the NOGC of Mexico.
Mexico's exports go to zero in 5 years anyway.
This is the most censored story right now in America.
Pakistan running a close second.
From your Pakistan article:
In analysing a crisis of this kind, one should always bear in mind that nothing difficult happens unless there is a real pressure for it to happen. General Musharraf would not have instituted the state of emergency if there had been no Islamic militants.
Chuck Prince would not contemplate resignation unless the bank had lost a great deal of money. The oil price would not be more than $90 a barrel if there were no shortage and no threat of war. Gold would not be above $800 an ounce if people trusted the dollar. Real events force painful decisions to be made."
Carolyn Baker:
"Collapse is a multi-faceted word which I frequently use in my writing and speaking. It is important to use the word and not resist it because the entire construct of civilization is collapsing in front of our eyes. For example, the U.S. has not "entered a recession" but rather the first stages of global economic collapse. Our public schools are not merely turning out undereducated students, the entire educational system is collapsing. It's not that energy depletion will make it more difficult to "grow our economy," but rather that in reality, growth is over! Although we refuse to recognize our limits on planet earth, planet earth is setting limits whether we like it or not. As James Howard Kunstler says in "Escape From Suburbia" in response to Dick Cheney's maxim that "The American way of life is not negotiable," if we refuse to negotiate our way of life, then energy depletion will make sure that we get a new negotiating partner called "reality."
When we refuse to accept the fact of collapse, we armor ourselves from endless opportunities for personal and community growth. Perhaps other collapse watchers would prefer not to hear about "opportunities" inherent in collapse, but I feel compelled to name them! "
Thanx for your Good Work, Leanan!
Keep 'em comin.
James
Arkansaw of Samuel L Clemens
"Interventional Analysis" (www.interventionalanalysis.com) looks for footprints of central bank intervention in the markets.
One metric, the "DIVO", or "Dollar Index Value of Oil" is constructed by taking the daily closing front month Brent contract price, and adjusting it for currency fluctuations using the Federal Reserve's MCDI (Major Currency Dollar Index). A 100 day moving average of this DIVO value shows remarkably straight sections, typically with regression indexes > .99. It is claimed that this is evidence of the markets being steered by computer trading algorithms. Furthermore, the direction often changes on 50 day intervals, one of which is due right now.
I mention this today, because followers of Interventional Analysis was expecting the oil price to dramatically decline over the next two weeks, and low and behold, it started to do that last night DESPITE THE OBVIOUS CATASTROPHE in Tabasco.
It would therefore appear to IA followers that we have a test of wills between reality and the market steering algorithms going on. On the algortihms' side, we have a news blackout, and the usual MSM babble talk about "hedgers" taking profits. On the side of reality, we have refineries and significant oil infrastucture under water at our 3rd most important oil supplier.
I mention this if you are interested - not to start an argument about Interventional Analysis.
Francois.
Reality has a tendency to catch up to traders, just as it does with Wile E. Coyote. If Mexico's exports really are down by more than half, and the ship watchers are right that there's not as much OPEC oil coming by 11/15 as people expect, the market is going to have a (c)rude awakening sooner rather than later (maybe the next inventory report).
A 10in (25cm) natural gas pipeline sprung a leak after flooding apparently washed away soil underneath it, but it was unclear if other facilities operated by the state-run Petroleos Mexicanos were damaged.
http://www.breakingnews.ie/archives/?c=WORLD&jp=mhmheysnkfau&d=2007-11-02
Arkansaw of Samuel L Clemens
Hiaku spasm...
Wile E Coyote
He's a super genius
Sues Acme products
SubKommander Dred
I have real reservations about US Government or US Government funded organization reports. Why would our government, the bureacrats that have suspended publication of M3, rigged the CPI so that food and fuel are not included, and injected many billions of $ into 'self regulating' Wall St schemes to temporarily avoid bankruptcy at the risk of spiraling inflation (currently not showing up in other government reports), stop at fudging on oil inventory reports?
Fibbing and fudging is a slippery slope...
Interesting, thank you.
More, H/T LATOC:
"Villahermosa is the axis of Mexico's oil and gas activities. Nearly the totality of oil and more than 90 percent of natural gas is produced within a 200 km radius of the city. Similarly, due its strategic location and accessibility, Villahermosa is an easy drive to or from the seaports that handle 95 percent of Mexico's crude oil exports.
One of the most relevant attribute of the state of Tabasco is that it is covered by water, and the capital, Villahermosa, is no exception. Nearly a third of Mexico's interior water runs through Tabasco and produces an important share of electric power.
Some of the O&G companies with premises in Villahermosa are: Pemex Exploration and Production (South Region, Drilling Unit, Engineering of Strategic Projects); Mexican Petroleum Institute (IMP), Schlumberger, Halliburton, Baker Hughes, Core Lab, Great Wall Drilling Co., Petrotec, Precision Drilling, CGG, among others.
Clearly, O&G exploration and production activities have been the mainstay of Villahermosa economy. This condition is being reinforced by the important set of exploration and production projects that are being developed both, offshore and onshore, in Southeast Mexico. The triplication of Pemex Exploration and Production (PEP) investment budget in Tabasco (from 2001 to 2002) illustrates this point."
http://www.energycities.org/villahermosa.asp
Arkansaw of Samuel L Clemens
PEMEX has a good web site with monthly figures on Mexico's crude oil production, exports, etc.:
http://www.pemex.com/index.cfm?action=content§ionID=11&catid=67&cont...
The numbers jump around quite a bit month to month, but they show Mexican oil production down 4% from last year, with exports down 4.7%. The latest month reported is September, so none of the recent flooding is reflected yet.
I didn't see this anywhere, and its pretty amazing.
http://www.eltiempo.com/multimedia/galerias/granizada/GALERIAFOTOS-WEB-P...
its in spanish, and its NOT Tabasco, its a freak hail storm in columbia.
Under the picture is a link, its a couple of words (red in firefox) "view more" is a rough translation I guess. lots of other photos of lots of ice in Colombia.
And for the space buffs, comet Holmes the little comet that says I think I can I think I can is...
The comet has brightened over a million times.
The corona seems to be still growing.
right now its confusing as the data shows its much bigger than the sun now. It was at least 70 percent the size of the sun two days ago. It does have a "small" tail now, and its composition is under discussion.
This comet was supposed to be only a couple kilometers wide. so where is all this material and gas coming from for it to grow like this.
very strange indeed.
and one wag had a good line.
Comet Holmes has grown so large and is now the largest object in our solar system.
He suggested we rename it "John Holmes" in honor of its grandness.
http://astrosurf.com/c8/new40/holmes-071105-C8-red0.5-atik16hr-162x10s-u...
link to a photo of the comet and its corona.
I'm almost embarrassed to post this, but The Google giveth ...
http://propheticnews.net/content/view/4457/
I think number three shows someone and the ice is deep,
and this is a link to a color photo of Holmes. very pretty and very large
http://www.spaceweather.com/comets/holmes/04nov07/Chris-Schur2.jpg
the blue outside the main form is the tail.
Sacred Cow Tipper, LOL, you should be ;)
Though it is right out of "day after tomorrow" kind of event.
Cause follows effect in my experience. I have my own invisible friend delusions, but they agree with this statement.
I went outside to look and it almost seems a bit foggy - I can only see the really bright stars tonight. I think I see something new in Perseus, but I'm not all that up on constellation spotting.