Sunday, January 20, 2019

Local gas shortages just a symptom of what ails Mexico's state-owned oil monopoly

When Stew and I left for San Antonio about ten days ago, trepidation was in the air and in our minds. San Miguel's gringo babblesphere buzzed with reports of severe gas shortages throughout Mexico, heightened security problems on the highways, and delays of up to twelve hours at border crossings in Laredo, the latter caused by the shutdown of parts of the U.S. government.

Accordingly, we took with us a five-gallon container of gasoline in our pickup, and Stew periodically checked on the internet for waiting times at the various border crossings, to determine which to avoid. Oh, so much fussing and low-budget drama. If we had worn pith helmets, you could have sworn we were off to the jungle to hunt elephants.

In fact, nothing happened—to us.

Yet the death of 79 people, and just as many injured, as a result of gasoline pipeline explosion north of Mexico City Friday night, illustrates the truly huge problems Mexico's new president faces trying to deal with massive corruption in the country's government-owned fuel production and distribution system. Gas shortages in localities like San Miguel are but an inconvenience at worst.

Mexican Customs Tip #1:
Instant Tapioca? No problema.
Going up to San Antonio, traffic was light except for the usual caravans of semitrailers. And 90 minutes outside of San Miguel, a short piece past Dolores Hidalgo, there was no apparent gasoline shortage at all.

At the Colombia Bridge crossing, west of Laredo/Nuevo Laredo, there was no waiting. Zero. The U.S. border patrol guy may have been relieved that someone finally showed up. If there were highway bandits lurking about, somehow we missed them, or they us.

On our return Thursday, though, we faced some drama of our own making when Mexican customs officers spotted two gasoline containers that we had filled at a truck stop just before reaching the border. According to some subchapter of Mexico's immigration and customs regulations, the importation of fuel is strictly prohibited, even by clueless fools like us.

So we were told to drive our pickup, loaded to the gills with stuff, to an concrete enclosure so it could be X- rayed for any other contraband. As we watched from a safe distance, red and yellow lights blinked, buzzers buzzed ominously, and after this light and sound show, we were told to drive over to yet another area for additional inspections.
Mexican Customs Tip #2:
A piece of a cactus plant from
San Antonio, Texas? Maybe 
a problema
Best to hide 
in your dirty l
aundry. 

What set off all the lights and alarms? The chainsaw we carried for a friend? The dish rack from Bed, Bath and Beyond? Two small boxes of instant tapioca pudding for another friend? A piece of an odd-looking cactus I'd found along a highway in San Antonio? Something that was planted, possibly a trap?
It was those damn gas containers: We had to get rid of them. I put on my best impression of a befuddled gringo pendejo—which friends assure me I do very well, sometimes without even trying—to try to soften up the Mexican customs and immigrations guy. I offered to put the gasoline in his truck, if I could keep the containers, which cost me about $20 each. I mentioned the dire gas shortage in the heart of the Mexican republic.

After a while, the officer went to confer with three or four other colleagues nearby, and then to the squat cinder block customs and immigration police office. I sensed a mordida beginning to circle over my head, but I was wrong. The officer said that, given the fuel shortage, I could keep my gasoline. I shook the guy's hand, thanked him for his comprehension, and rushed off in my pickup, as if I desperately needed a restroom, which, after all the nerve-wracking back and forth, I actually did.

Mexican Customs Tip #3: Plastic
containers filled with gasoline?
BIG problema! If discovered, be
prepared to beg for mercy
From there, and after a overnight stop in Saltillo, the rest of the trip was boring, tiring and uneventful as usual. The bypass around Monterrey was thick with the usual Beijing-on-a-bad-day smog.

But the valley and majestic mountains a half hour south of Saltillo put on special show. The gray, gravid clouds seemed ready to turn the thin drizzle into a serious rain.

Instead, a brilliant hole opened in the clouds and sun rays pierced through and shone on the misty landscape, creating a dramatic spectacle of lights and shadows, waiting to be photographed. It was as if God had cracked open a window in the sky to admire this gorgeous piece of Mexican real estate.

Stopping periodically to top off the gas tank, and buy some doughnuts, we found no sign of a gas shortage until we reached San Miguel on Friday, where most gas stations were indeed closed and one open BP station was mobbed by both cars and people on foot carrying empty plastic containers.

I then began poking around the internet and Mexican newspapers to try piece together an understanding of Mexico's problem with its gasoline distribution system: How could one of the largest oil producers in the world have a gasoline shortage?

The short answer is decades of epic corruption that costs Petróleos Mexicanos, or Pemex, billions of dollars in losses every year. When it was founded in 1938, Pemex was supposed to be a ready source of revenue for the government, obviating the need for comparable personal and business taxes.

Instead Pemex has become a money-losing boondoggle that has failed to make the necessary investment in exploration of new sources and construction of gasoline refineries. The gas shortages in San Miguel indeed are but a minor symptom of the problem.

In a damn-the-torpedoes campaign to clean up Pemex, and particularly the theft of billions of dollars' worth of gasoline flowing through pipelines, Mexico's new president has shut down some pipelines with the most egregious theft problems, and is attempting to instead distribute the gasoline to stations in tanker trucks. The strategy hasn't worked out well so far. There are not enough trucks, and over-the-road driving is not as efficient a delivery system as pipelines.

Never mind tapping the gasoline pipelines. Let's hijack fuel
trucks instead. 
Apparently, pipelines traversing our state of Guanajuato are the most affected, and hence San Miguel, Celaya, Guanajuato, and also parts of the state of Mexico, are experiencing the most serious gas shortages, whereas in other areas we drove through, such as Coahuila, Nuevo León or San Luis Potosí there seemed to be enough gasoline.

Pipelines, most of which are buried, are just the tip of the problem. In the last two weeks, gas thieves have hijacked two tanker trucks in nearby Celaya and there are reports of siphoning of gas from cars at some of the city's parking lots.

One might wonder how do thieves manage to rapidly fence tens of thousands of liters of gasoline stolen from tanker trucks, and the answer also is easy: Some station owners are in cahoots with the hijackers, and pay a deeply discounted price for gasoline, thus doubling or tripling their profits. Everyone's happy—except the hapless consumers.

Friday night, a horrendous explosion killed 79 bystanders near a pipeline near Mexico City that had been tapped by thieves. The geyser of gasoline somehow had caught on fire.

As of Sunday morning, most gas stations in San Miguel seemed to be functioning normally, with no signs of lines or waiting. That blip of a crisis may be over.

But tackling Pemex' protean problems of inefficiency, corruption, security, and failure to invest in new refining facilities, seem like a task insurmountable for any human being, including the new Mexican president, who has vowed to continue his anti-theft campaign even after Friday night's horrible accident.

Wish him luck.

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