Output Falling in Oil-Rich Mexico
The New York Times has a piece today about the plight of Pemex, Mexico's state oil company. The full headline of the article is: Output Falling in Oil-Rich Mexico, and Politics Gets the Blame. That headline is quite misleading, if you happen to know anything about Hubbert Linearization.
The headline makes it seem like, were it not for political issues, Mexico would have no problem increasing oil production. In fact, the Hubbert model forecasts falling production due to geological factors. To put it another way, Mexico has extracted about 50% of the total recoverable oil and is now on the backside of its oil production curve.
The Hubbert models indicate that Mexico does indeed have "tens of billions of barrels of untapped oil reserves" - that much appears to be true. The key thing that most of these writers seem to miss (evade) is the rate of production. Those remaining billions of barrels will be the most difficult oil to reach and take the most time and money to produce. In other words, the 50% that is left is the bottom of the barrel.
I have no doubt that politics plays some kind of role in this story. But it is also obvious to me that geology plays a more significant role. Anyone commenting on oil production rates and history and forward projections should be familiar with the Hubbert model. To ignore that part of the story is to ignore a major piece of relevant information. And that makes for unreliable, misleading reporting.
