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PEMEX's outdated technology is starting to catch up with them.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.