Oil Production in the Americas

The US President is not yet a subscriber to my newsletter. But given his attention to Mexico and Cuba this week, one wonders that he somehow got a copy of my March issue: Saga North America: How The North American Oil Crisis Will Force Ottawa, Washington, and Mexico City to Confront One Another As Never Before.

In that report, I forecast the next oil crisis will unfold as Mexico loses the ability to export oil, starting sometime in late 2011.

North American oil production was at its highest levels this decade in 2003, when oil traded in the 30’s. But then, over the next 6 years as oil rose to 150, North American oil production fell each successive year into 2008 to its lowest point in the last 10 years. And it’s still falling.

In this light, it would make sense that leaders in North America would start thinking about South America. And that means Brazil, and Venezuela. While I remain quite critical of Obama’s Energy and Economics Team, from Steven Chu to Jason Grumet, I have to believe the new administration is quite aware that Mexican oil production is on a collapse path, and that Canadian oil production has stalled.

Or perhaps not. Caption contest to the above photo:

Obama: Hey Hugo, did you ever think destroying your oil industry was not such a good idea? You know, kicking out all the big oil companies? Which you still need to develop your heavy oil in the Orinoco, by the way. You know, The Or-in-o-co?

Chavez: Don’t look at me, man. What about you with all this carbon and climate stuff? That’s gonna take out your army of stripper wells, which together account for nearly 20% of your production.

Photo: Pool photo by Mariamma Kambon via NY Times. Summit of the Americas, this week.

Comments

[a. palmer jr.:]

Or maybe he's making a little inside joke..something about fleecing the American taxpayer. Or something about turning America into a socialist country, or maybe he's giving Hugo a few tips about border enforcement, who knows?

Apr 19 09:44 AM

[Steve W fro...:]

It is incredible to me to see repeated photos of a US President smiling like a naive fool in the face of these buffoonish demagogues like Chavez who have missed no opportunity to accuse the US of the most vile actions and intentions.
Mr Obama appears as a naif when he allows himself to be used in such a manner by men who have set themselves up as enemies of the US and continue to throw rhetorical bombs at our country. Not only is it foolish in the extreme to kowtow to such creatures it is embarrassing in the extreme and will prove counterproductive in the end as these leaders survive by tweaking the "Norte Americanos" and will only exploit Obama's foolish grin.

Apr 19 10:56 AM

[Dr. Charles...:]

I am in the oil business and can tell you that we have enough oil to push gasoline prices down to $$1.75 a gallon if we can drill here (without excessive government interference) and build refineries that are badly needed. Nevada has Saudi type and size field that will be discovered within the next five years. Dr. Charles Laser Deerfield Beach Florida President Laser Exploration Inc.

Apr 19 11:20 AM

[No1:]

Or maybe they are saying...

<Chavez> " I hope you have better luck at resuscitating your economy then you did in trying to overthrow and assassinate me."

<Obama> "Are you still holding that grudge? Let it go"

Apr 19 11:29 AM

[fran:]

LASER--
if you had held "fairly" high position in DC in mid 60s, you'd likely be too old to be on line making ridiculous commentary today. you're zapped "LASER".


On Apr 19 11:20 AM Dr. Charles Laser wrote:

> I am in the oil business and can tell you that we have enough oil
> to push gasoline prices down to $$1.75 a gallon if we can drill here
> (without excessive government interference) and build refineries
> that are badly needed. Nevada has Saudi type and size field that
> will be discovered within the next five years. Dr. Charles Laser
> Deerfield Beach Florida President Laser Exploration Inc.

Apr 19 12:34 PM

[Ferdinand E...:]

Beautiful comment, Gregor. And a wonderful picture of the President and Major Chavez. Please note that everyone in their vicinity seem to be smiling. I call that a good sign.

You see, the people on this forum don't think much of Chavez and President Castro, but talk and thoughts are cheap: I doubt whether many Americans have been hurt by Obama-Chavez chin music, but in the next one hundred years of war in and around Afghanistan, things could take place that make the US military and the US taxpayer very unhappy.

And finally, Mexican oil on a collapse path? One of my students in Bangkok assured me that his boss assured him that this was not so. I won't mention the firm in question, except it attempted to scam the shareholders and a few other drowsy observers into believing that they had discovered more oil in the deeper parts of the Gulf of Mexico than existed in any part of the globe at any time in human history.

Apr 19 12:58 PM

[ETF STER:]

Irrational Exuberance

Apr 19 01:09 PM

[ArtfulDodger:]

Shame!!

Apr 19 06:04 PM

[Dustinian:]

Besides simply having our oil companies drill and produce off the shore of Brazil, there is a tremendous geopolitical opportunity to improve relations with Brazil through Petrobras.
Brazil seems to be continuously finding new oil and gas fields (albeit deep water ones), which the rest of the world is losing significant reserves. Brazil's future as an energy producer is a bright one. Now is as good a time as the US will have strengthen relations with Brazil.
Why not replace Mexico with Brazil once Mexican oil is depleted? Far more attractive than Hugo's Venezuela.

Apr 20 12:13 AM

[Alan von Al...:]

US demand is about 20 million b/d (baseline requirement)
US production of crude and NGL is 7.5 million b/d
Mexico and Canada can supply about 2.5 million b/d, assuming that Canadian development will offset steep Mexican decline

That means we need to import 10 million b/d from OPEC, roughly half of all US civilian air & motor transport, military air & ground ops, plastics, industrial chemicals, railroads, you name it.

I worry in particular about Nigeria and Brazil. The first is in steep decline. The second is a folly. If Venezuela collapses, which I think it will, our fate is entirely dependent on the Arabs.

Apr 20 05:48 AM