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Can Mexican Oil Save U.S.? MoneyNews
(Headlines - scroll down for full stories)
When President Bush gave his State of the Union address and said that Americans were addicted to oil, some in the media wondered whether the former Texas oilman was merely going through the motions. He couldn't really mean it, could he? Well, it turns out he did. In a speech delivered in Houston earlier this week, Bush's right-hand man on energy, Deputy Secretary of the U.S. Department of Energy Clay Sell, confirmed the President's desire to curb the nation's oil addiction.
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Sell told attendees at the Cambridge Energy Research Associates annual conference in Houston that Bush's energy conservation initiative is "no fantasy." But did he win many converts at the conference? Not really. Consider Keith Rattie, chairman of Salt Lake City-based Questar Corp., a natural gas company, who was in the audience for Sell's sales pitch. "Don't expect any clarity from Washington," Rattie told The Houston Chronicle on Thursday. Rattie is perturbed that the Bush administration is pushing for energy conservation at a time when energy companies still can't drill for new oil and gas resources in "promising" areas inside the United States. "He might as well have said: 'We're addicted to our standard of living and our way of life,' " Rattie said. Where can we look for relief? Maybe Mexico? In the same article, The Chronicle explains that political leaders in that country may finally be willing to allow increased drilling in oil-rich Mexico. "In Mexico, where industries from steel to ceramics to fertilizer have been hard-hit by high natural gas prices, there may finally be the political will to open the country to outsiders who want to explore for more oil and natural gas, according to Fernando Canales Clariond, Mexico's energy secretary," reports The Chronicle. "Most of the countries in the world have done it," Clariond said. "We may be the only country in the world that has stayed a monopoly." American energy companies would partner with Mexico's state-owned energy company, Petróleos Mexicanos (Pemex), to drill for oil and gas. In recent years, Pemex has been hampered in that regard as it struggles to find funds for more drilling after paying 60% of its revenues in taxes to the state. It will take a change in culture to get the ball rolling, however. "In Mexico, outsiders have not been welcome because oil and natural gas are considered a national patrimony," says The Chronicle. "So far there has been little liberalization, and it would take an act of Mexico's Congress to change the nation's constitution to allow for foreign companies to explore." But it's an election year and Mexican President Vicente Fox is already out on the campaign trail touting a plan to slowly open up Mexico's oil fields to outside investors who want to partner with Pemex. Clariond told the newspaper that by the time the new Congress is seated on Sept. 1, some laws governing oil and gas could be changed. "It won't happen all at once, but slowly," he said.
2. Exxon: U.S. Energy Independence 'Not Feasible' Business executives at ExxonMobil took time away from counting their cash – they raked in $12 billion in the last quarter alone – to reassure Americans that the country would continue to rely on foreign oil for its energy needs. In an interview with Reuters, ExxonMobil Senior Vice President Stuart McGill said U.S. attempts to become energy-independent were fruitless. "Realistically, it is simply not feasible in any time period relevant to our discussion today," he said, alluding to what he called the "misperception" that the United States can achieve energy independence. McGill's comments were made at the same Houston conferences at which Sell spoke earlier, and they came a week after President Bush told Congress that America was addicted to oil and needed to slash its Middle East crude purchases by 75% before 2025. But it's not going to happen, says McGill. "Americans depend upon imports to fill the gap," he said. "No combination of conservation measures, alternative energy sources and technological advances could realistically and economically provide a way to completely replace those imports in the short or medium term." McGill, not surprisingly, favors the status quo. "Because we are all contributing to and drawing from the same pool of oil, all nations -- exporting and importing -- are inextricably bound to one another in the energy marketplace," he told Reuters. At a time when a gallon of gasoline costs nearly $3 and home-heating bills are shooting through the roof, Exxon is no doubt happy to shift attention away from the huge profits the company is earning. "At the conference, Exxon again defended its over $36 billion in annual profit last year as far from excessive, pointing out that 2 to 3 million American shareholders enjoyed part of that windfall," reported Reuters.
"It also said its profit margins were in step with the national average for major U.S. industries and that fuel prices are lower than the price of other liquids such as bottled water."
3. Media Bias Hurting Economy? Is it any wonder that a November poll by the American Research Group, a non-political polling organization, showed that 43% of Americans thought the economy was in a recession? Meg Kreikemeier, writing in Tech Central Station this week, asks that very question. Kreikemeier puts her money where her mouth is, analyzing the headlines used by the major media to cover President Clinton in the 1990s, as well as those used to report on President Bush and his handling of the economy in recent months. Kreikemeier used the Lexis-Nexis database to compare media stories evaluating economic recovery for both President Clinton in 1993 and 1994 and for President Bush in 2004 and 2005 – years when the economy began to show significant improvements for both presidents. Her research showed 320 articles on President Clinton and 260 on President Bush. "A review of the magazines revealed that far more articles were written about President Clinton in the weekly news magazines, whereas the bulk of the articles written about President Bush were found in financial and trade magazines and in right-of-center publications like The National Review and The Weekly Standard," says Kreikemeier. The largest discrepancies appeared in U.S. News and World Report and Time Magazine, where more favorable articles on Clinton appeared. Says Kreikemeier: "At a time when unemployment was at 6.5%, and GDP was forecasted to be 3% in 1994, Time Magazine wrote, ‘which would be no boom, but maybe something much better: a pace that could be sustained for a long time, keeping income and employment growing without igniting a new surge in inflation … The circle (of spending, production and hiring) may not spin fast enough to produce a boom – but who wants one anyway? Moderate, steady growth is better.' " She compares that article to a recent Time piece on economic recovery under President Bush titled "How Real is the Squeeze?" "Jonathan Thornton finally found a job this spring after six months of unemployment. ‘My wife and I almost parted ways after 13 years because of the financial strain,' he says. When he started work in April as a crane operator at a screw manufacturer in the Cleveland, Ohio, area, Thornton treated his wife Rita to a few little luxuries – a day at the salon, an evening out with the girls. " ‘My outlook has definitely brightened,' he says. But Thornton's optimism goes only so far. His paycheck has grown, but the family is still just getting by … There's supposed to be an economic recovery underway. But the numbers paint a confusing picture."
Kreikemeier wants to know why "moderate, steady growth is better," particularly when the GDP growth and unemployment rate were better in 2004 than in 1993? Good question – but don't expect Big Media to answer it.
They're too busy trying to undermine the economic success engineered by President Bush – and rewrite history in the process. Editor's Note:
Editor's Note:
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