Crosspost: Mexico's Cartels and the Lake of Fire

In case you missed it on the Latin America blog, Rich just posted on Mexico:

International headlines focused on Mexico yesterday as an attempt at stealing oil from one of PEMEX’s pipelines resulted in 28 deaths and a town being covered in petrol and flames.According to sources, an organised gang made an attempt at stealing fuel directly from the pipeline in Puebla state, damaging 115 houses, and destroying completely at least 32 houses while injuring 52 and killing 28. While many might think this was an accident, it was in fact the result of many successful attempts by organised gangs to steal fuel from Mexico’s energy infrastructure, with this recent attempt resulting in pressure in the lines and the loss of control by the thieves which burst into lakes of petrol and fire destroying the local town.

Theft of petroleum is not uncommon in Mexico. It is noted that over 5 million barrels have been stolen from PEMEX in 2008, equalling over US$750 million in 2008 alone. It is so common that in 2010, over 550 incidents of tapping the pipeline were recorded by PEMEX this year. It is believed that links to drug cartels might explain some of the increased tapping over the last few years. With the number of deaths from Mexico’s latest drug war reaching 30,196 since President Calderon took office, this latest lake of fire might just be added as a causality of the violence, taking 28 additional victims with the over 30,000 already claimed in Mexico’s drug violence.

After Canada, Mexico is the second largest exporter of fuel products to the US. Despite this latest incident it is stated by PEMEX and government officials that production will not change and that things will run smoothly. PEMEX exports over 85% of its production to the US and despite the increase in tappings and this latest incident, it claims that production will not be hurt and that new pipelines and refineries will be built in the near future. With this recent incident and over 30,000 deaths, it might be the case that the markets will still provide Mexico with the investment it needs to keep on growing its economy despite violence. Many claim that the tappings have been promoted by specific cartels as an additional revenue stream. This could be a result of creating more income for the cartels, or it might supplement some losses in their main trafficking business but there is no doubt that tapping oil pipelines and human trafficking has become a notable problem for those countries that have strong links to cartels and violence within their borders.

It has been argued by some academics that the eventual legalisation of the drug trade might be a more productive option for countries like Mexico and Colombia as drugs travel to the US and Canada and firearms are returned to Mexico as a result. The point of view that is shared by some is that treating local addicts is a lot cheaper and safer than buying a Blackhawk helicopter or using an Army to fight cartels. It is also noted that many of the addicts are in developed countries, and that locals in Latin America should not have to give up their lives and children to drug violence for a problem that is sourced outside their borders and towns. The new industries of pipeline tapping and human trafficking might become the main revenue stream for these cartels if legalisation takes hold in the lingua franca of Latin America policymakers, but it is doubtful that this will happen anytime soon. In the meantime, this incident is not an accident, but there must be some solution so that this new criminal element does not result in another town being turned into a lake of fire.

To see BBC Video on the Pipeline Explosion, click on the link below:

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