Wednesday, April 11, 2007

An Asteroid, A Fisherman, Oil and Tortillas


In between posts about maths, Kea has many good posts about our misuse of fossil fuels. Tommaso's trip to the Yucatan inspired some good posts too. Mexico's Cantarell oil field is running out of oil. This story began with an asteroid impact and affects even the price of tortillas.

65 million years ago the Chixculub meteorite struck near Yucatan, ending the age of dinosaurs. It also created a unique geological formation beneath the gulf seabed, cretaceous dolomite thrust upward to form an oil reservoir (pink). In 1971 a fisherman named Rudesindo Cantarell noticed that his nets were getting covered with oil. He had stumbled upon the world's second biggest oil field after Saudi Arabia. Like a subsurface volcano, this gusher produced 2 million barrels of oil per day.

The gift of oil has ruined many a developing country. This follows predictable steps: 1) Nationalise the oil industry under your control, 2) Keep your own party in power by promising the people huge benefits from oil, 3) Make everyone so fat from oil money that they don't develop other industries, 4) Keep out foreign oil expertise until your resource is ruined. Mexico's oil industry is the state monopoly PEMEX. Nearly half of the 53 billion dollars that PEMEX hands to the government comes from Cantarell. This huge sum keeps Mexico's government afloat but prevents investment in technology or exploration.

PEMEX's outdated technology is starting to catch up with them. From January '006 to February '007 Cantarell lost 20% of its production. Oil is one of Mexico's 2 biggest sources of currency, along with remittances from workers in the US. Within 8 years Mexico may become a net oil importer, with disastrous effects for its economy.

Mexico is not alone in mismanaging resources. Iran imports nearly half of its gasoline, having only one petrol-producing refinery within its borders. A single British warship could shut it down and knock out Iran's lights. The US has not built an oil refinery in 30 years. The cost of business in the US makes it more profitable to outsource oil production. From the Middle East to Venezuela, the gift of oil has led many countries to dictatorship.

(According to OPEC, Venezuela's oil production has dropped by 1 million barrels per day since 1999. To keep production going, Venezuela's state-owned oil company borrowed 11 billion dollars this year. The government spends 9 billion annually in subsidies to keep the price of petrol down. This is how to go bankrupt.)

Mexico is the birthplace of corn, but today imports most of its corn from the US. With the price of oil increasing, Americans have taken an interest in ethanol fuel. This has increased the price of corn 80 percent in the past year. Because of speculation and hoarding, the price of tortillas has risen enormously. Paying more for Mexico's staple food hits people straight in the belly.

All this was started by an asteroid that fell from the sky. The chemicals our lives depend on, even water, came from such impacts. From petrol to the food we eat, our lives are intimately connected with Space. The heat that produces oil may originate in a tiny primordial Black Hole. Let us hope that we learn to manage these gifts.

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8 Comments:

Blogger Professor Howdy said...

Hello!
Very good posting.
Thank you - Have a good day!!!

4:50 AM  
Anonymous Anonymous said...

Louise said "... Let us hope that we learn to manage these gifts. ...".

I completely agree.
Cheap easily refinable oil is a very limited resource and alternative fuel development will require significant advances in technology and industrial infrastructure.
I wrote some stuff about that on my web site,
including a page at
www.valdostamuseum.org/hamsmith/OilMilk.html
with an analogy about kittens.

Tony Smith

PS - In my opinion, the main reason that, as Louise says, "... The US has not built an oil refinery in 30 years. ..." is that existing refineries are built to use easy-to-refine oil, which will probably run out during the next decade or two, so that building similar new refineries would be a waste of capital, which could be more profitably spent on development of new technology (or, more likely from the point of view of CEOs and upper management in oil companies, on providing the CEOs etc with more castles on tropical islands, yachts, aircraft, etc). They also probably do not care that the existing plants might begin to fall apart (with safety and pollution risk), if they will just remain productive for the short time remaining for easy-to-refine-oil.

5:57 AM  
Anonymous Sam said...

That was a particularly interesting piece, one that effects all of us directly.

I wanted to pass on a link to a news article on ethanol production in Brasil that I read last year. The Brassilians have been working on ethanol production since the 70s using sugar cane, which is much more effective than corn based ethanol.

On a side note, Biodiesel is another viable option which is rarely considerd. Some diesel engines require no conversion, after all diesel engines were originally designed to run on biodiesel. A friend of mine has been running his van using oil obtained from the local chip shop for almost 2 years.

9:44 AM  
Blogger L. Riofrio said...

Nice that you all enjoyed today's post. Professor, say hello to everyone in Chapel Hill. Great cartoons, too.

Tony, good points.

Sam, your posts put me back on the Big Island. Many people there live completely off the grid. Much of the island's electricity is geothermal, which may be one more way of tapping a Black Hole.

10:38 AM  
Anonymous Sam said...

HELCO, suprisingly, are very keen to help people get off the grid, or even contribute to it. As far as I understand it they will pay you for all your contributions to the grid. Sounds like an electricity bill I'd like to receive.

2:33 PM  
Blogger L. Riofrio said...

Sam, I've not paid a utility bill in years. Water falls from the sky and energy is all around us. Why pay someone else for it?

7:07 PM  
Anonymous Sam said...

Thats one of the great things about Hilo, we are not short of rain around here.

9:19 AM  
Anonymous buy viagra said...

an asteroid impact and affects even the price of tortillas? hahaha it really made me laugh. I find your blog entries very formal, but there is always time to some laughing too, thanks!

6:11 AM  

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