THA 1AC

Plan: The United States federal government should ratify the Transboundary Hydrocarbons Agreement.

Contention 1: Inherency
THA agreement has stalled and oses the biggest threat to US!"e#ico relations. Peme# drilling is $ey to "e#ico%s economy & but they need the US
-US hasnt been able to pass THA -Best way to put energy into the agenda cooperation -Oil is k2 e!ican "cono#y$%&' o( the budget production -Tech and (inance k2 re)i)e *" "+ -,e)erse causal- .ailure to pass/Setback US- e!ico ,elations

'am ton( 1) 0 1,oberta ,a#pton2 Associated *ress Sta(( 3riter (or ,euters4 April 252 26%'4 7U4S4e!panded 8ul( oil drilling still in li#bo29 http-&&www4reuters4co#&article&26%'&6:&25&usa-#e!ico-oilidUS;2<6=86>?26%'6:25@&&S=;1,euters@ - "ore than a year after the United States

e!ico deal on

and "e#ico signed a much!lauded deal that *ould remove obstacles to e# anding dee *ater drilling for oil in the +ulf of "e#ico( the agreement still has not been finali,ed by the United States.- A
The delay2 (or which people close to the ad#inistration bla#e >ongress while ,epublicans in >ongress bla#e the ad#inistration2 is certain to be discussed when *resident Barack Oba#a )isits e!ican *resident "nriBue *ena <ieto in e!ico >ity on Thursday4 A A "e#ico immediately ratified the act in April 26%22 but the United States has so far been unable

to ass a sim ly *orded( one! age la* to ut the agreement into force. A A The deal2 (or#ally known as the Transboundary Hydrocarbons Agreement( rovides legal guidelines for dee *ater drilling in the %4C #illion acres 1D662666 hectares@ o( the +ulf that straddle the U.S.!"e#ico boundary.- A It is seen as the $ey to o ening a ne* era of coo eration on oil production between the two countries4 e!icoEs state-owned oil co#pany Peme# needs technology and investment to boost its stagnant roduction( and U.S. com anies are eager to hel .- A .The U.S. has a real o ortunity no* to ut energy bac$ on the agenda *ith "e#ico in a way that it really hasnEt been able to be on the agenda (or the last
se)eral years2F said <eil Brown2 who worked on the issue during the last >ongress as lead ,epublican international energy aide in the Senate4A A But the (inal step o( i#ple#enting the deal has languished4 A A FGE# not aware o( strong opposition to it4 G think itEs been a little #ore inertia2F said Hason Bordo((2 a top energy o((icial at the 3hite House until Hanuary who now runs >olu#bia Uni)ersityEs >enter on 8lobal "nergy *olicy4 A A Gn the past se)eral weeks2 there ha)e been so#e signs that the i#ple#enting legislation #ay #o)e (orward2 but there also could be new co#plications related to disclosure reBuire#ents4 A A ="A; >OU;= O*"< TH" =OO,A A /il

is critical for the "e#ican economy ( aying for a third of the government0s budget4 But roduction peaked in 266: at '4: #illion barrels per day and has sli ed below 24D #illion bpd4 P1"12 says it can revive roduction *ith dee *ater *ells in the +ulf( but needs technical and financial hel .- A The cross!border agreement *ould be the first ste to*ard 3oint ro3ects for reservoirs that cross the boundary( roviding a *ay for P1"12 and other oil com anies to share roduction and creating a frame*or$ to solve dis utes that could arise. - A .4ithout the agreement( it creates a barrier to investment 2F said "rik elito2 a director at the A#erican *etroleu# Gnstitute2 the oil industryEs lobby group4 A A The agreement could hel calm "e#ico0s (ears about what is ter#ed the FpopoteF or drinking-straw e((ect - fears that U.S. oil com anies are going to drain reservoirs that e#tend into "e#ico0s side of the border( robbing "e#ico of its share( said =a)id 8oldwyn2 a (or#er
State =epart#ent o((icial who helped launch negotiations4 A A FThis has been an urban #yth in e!ico (or decades2F said 8oldwyn2 now president o( 8oldwyn 8lobal Strategies2 a consulting (ir#4 A A *ena <ieto is working toward re(or#s (or *" "+ that would allow (or #ore production and cooperation in proIects generally - a delicate issue in a country where P1"12 and oil are

symbols of national ride.- A FG( they can see so#e success here 1with the transboundary deal@2 thatEs going to change the political con)ersation in e!ico2F 8oldwyn said4A A 5ailing to im lement the deal( though( *ould be a ma3or setbac$ for U.S.!"e#ico energy relations2 (or#er U4S4 Senator ,ichard ;ugar warned in =ece#ber2 in one o( his
(inal reports as the top ,epublican on the Senate .oreign ,elations >o##ittee be(ore he le(t >ongress4

Contention 6: "e#ico
7rilling in the 4estern +a is inevitable & coo eration is $ey to effectiveness
-US out co#petes e!ico in resource de)elop#ent - "!ploiting is happening now ->o-op/ Urdaneta %18 0 associate at 8rau 8arcia HernandeJ K onaco 1;aw .ir#@ 1Larla2 7T,A<SBOU<=A,M *"T,O;"U ,"S",?OG,S- A ,">O "<="= A**,OA>H .O, TH" U<GT"= STAT"S A<= "+G>O G< TH" =""*3AT",S O. TH" 8U;. O. "+G>O92 Houston Hournal o( Gnternational ;aw2 ?olu#e '22 <u#ber 22 Spring 26%6@
Gn )iew o( this2 "e#ico

is rimarily concerned *ith reservoirs located outside the 4estern +a ( and more s ecifically( those located in the Perdido fold belt. <onetheless2 it is only a matter of time until the 4estern +a is made available for e# loitation and roduction by both countries( *hich *ill create the same issues for the 4estern +a faced by other areas of the +/"4 The principal challenges that *e#e! (aces with regard to deep-water production
include- 1i@ hu#an resourcesN 1ii@ e!plorationN 1iii@ e!ploitationN 1i)@ technologyN and 1)@ (inancing4 1OC@ These challenges will ha)e to be assu#ed in the short ter# because e!icoEs oil production is decreasing2 and *e#e! has esti#ated that (i(ty-(i)e percent o( the countryEs C:

"e#ico cannot com ete *ith the United States *ith regard to the develo ment of the resources in the +/"( for it has not yet rogressed beyond the stage of e# loration. Gn order to
billion barrels o( eBui)alent oil (ro# prospecti)e resources 1OD@ is located in deep-waters4 1OP@ >urrently2 strengthen *e#e!Es (inancial and technical capacities and pro)ide it with #ore (le!ibility (or the per(or#ance o( its (unctions2 e!ico began re(or#ing its energy legislation4 1OO@ This process ended in <o)e#ber 266O4 Howe)er2 the last legislati)e re(or# does not endow *e#e! with the capital and technology necessary to undertake the acti)ities o( e!ploration and production o( deep-waters in the 8O 4 1O5@ The

issue of transboundary reservoirs has attracted the attention of "e#ican la*ma$ers( oliticians( and economists( among others. 9:8; "ost of them advise ta$ing rom t action to rotect "e#ico0s rights to its resources. 15%@ oreo)er2 the e# loitation of the resources located in the +/" *ill be a *ay for "e#ico to increase its levels of etroleum roduction. To su##ariJe2 in the 8O 1i@ there are (or#ations2 like the *erdido (old belt2 that cross the #ariti#e boundary o( e!ico and the United States2 and that will enable production as early as 26%62 1ii@ substantial e# loration activity has already been conducted by the United States( 9iii; large areas have been leased by the United States for e# loitation( *hile others are currently being e# loited( 9iv; "e#ico has not achieved the levels of resource develo ment that the United States has achieved2 and 1)@ both countries need to take ad)antage o( the production o( their hydrocarbons in the short ter#4 152@ In light of these circumstances ( *ith the aim of rotecting the rights of both countries and o timi,ing the use of resources( it *ould be a ro riate for "e#ico and the United States to coo erate in the develo ment of their transboundary reservoirs. This coo eration *ill ma#imi,e economic benefits( avoid hysical *aste( increase energy security( and avoid international dis utes li$ely to arise if the United States initiates roduction of the transboundary reservoirs. Coo eration has led to beneficial results among other countries that have faced similar dilemmas.

P1"12 is failing & <ac$ of roduction "elgar 6$16 QSenior reporter (or A#ericas =ailyhttp-&&www4a#ericasBuarterly4org&node&'PO%@ -S,R "!ploration and *roduction- The Leys to =eeper ,e(or#A The 688= 1nergy 'eform initiated the ma$eover of the "e#ican e# loration and roduction 91>P; industry4 Crucial institutional

arrangements *ere defined( such as the governance of P1"12 2 the establish#ent o( a regulator (or "K*2 the ter#s (or procure#ent2 and the structure o( contracts4A Some of the innovations have since raised ?uestions about their usefulness. @ut they o ened a ath to*ard an institutional architecture that resembles more closely the organi,ation of the oil industry *orld*ide4 e!ico continues to ha)e one o( the #ost$i( not the #ost$closed arrange#ents in the petroleu# industry4 The lac$ of outside investment and in ut in P1"12 1# loration and Production 9P1P;( the cro*n 3e*el subsidiary of P1"12( has hindered innovation and technological advancement. The limits of e#isting arrangements become increasingly evident as traditional areas of roduction decline and ne* o ortunities2 such as in the deep and ultra-deep waters o( the 8ul( o( e!ico2 are pursued under tougher conditions .Preserving the status ?uo$and #aintaining legal coherence$has been made more costly by the refusal to amend the Constitution to allo* some degree of rivate artici ation in the energy sector
$as has been done in BraJil2 <orway and e)en >uba4 e!icos oil industry is accepting ine((iciency while paying a high price to pretend that it can do it all on its own4 A Gn (act2 world-class ser)ice co#panies such as Halliburton2 Schlu#berger2 <oble2 and BakerHughes work closely with pe#e! engineers to keep the oil (lowing4 According to *etroleu# Gntelligence 3eekly ( P1"12 aid

over A1B billion for oil field services in 688C4 *"* is repeatedly the nu#ber-one client o( Schlu#berger4A A central ele#ent o( the 266O "nergy ,e(or# was the de(inition o( a new incenti)e-based contractual (ra#ework4 The model *as develo ed to attract leading oil com anies to the "e#ican mar$et *hile $ee ing the constitutional mandate intact. It relies on a fee! er!barrel rate determined in a bidding rocess( *here o*nershi of hydrocarbons belongs to the "e#ican state. Production( rofits and ris$ are not shared( and there is no reserve boo$ing for the com anies. - Thus (ar2 the new contract #odel has not attracted any #aIor oil co#panies4 It has been a lied to lo*!ris$ ro3ects *here a high recovery rate is ensured. Instead of having a Petrobras or a Chevron *or$ing 3ointly *ith P1"12 in the dee *aters of the +ulf of "e#ico( bidding has gone to mature fields( *ith services com anies such as the United Dingdom%s Petrofac 5acilities "anagement *inning the auction.

1# anding drilling in the 4estern +a is $ey to boost Peme# roduction Iliff %16 9;aurence2 7*e#e! akes Gts .irst Big Oil .ind in =eep 8ul(92 The 3all Street
Hournal2 O-25-26%22 http-&&online4wsI4co#&article&SB%6666OP2'5D'56:::5%:56:CPPD%5P%2P'D:5PC5O4ht#l@ "e#ican state!o*ned oil firm Petroleos "e#icanos( or Peme#( has made its first big crude!oil discovery in the dee *aters of the +ulf of "e#ico( near the "e#ico!U.S. maritime boundary( *resident .elipe >alderon said 3ednesday4 r4 >alderon said the initial estimate of a de osit in the Perdido area on "e#ico0s side of the +ulf *as bet*een 6E8 million and F88 million barrels of light crude( using the industry0s broadest measurement of . roven( robable and ossible(. or )P( reserves4 The e!ploratory well was drilled in 22C66 #eters 1O22C6 (eet@ o( water4 F3e esti#ate that this de osit could belong to one of the most im ortant regions of the dee !*ater +ulf(F he said. The larger . etroleum system. of additional fields( "r. >alderon added2 Fcould have from four billion to 18 billion barrels of crude( *hich bolsters our reserves and *ill allo* "e#ico to maintain and increase etroleum roduction in the medium! and long!term.. The new well2 dubbed FTrion G2F was drilled '5 kilo#eters 12: #iles@ south o( the U4S4- e!ico #ariti#e
border2 and %O6 kilo#eters east o( 8ul( state o( Ta#aulipas2 which also borders the U4S4 On the U4S4 side o( the 8ul(2 ,oyal =utch Shell ,=SB4;< -64%%S *;> operates its *erdido oil-and-gas plat(or# in the region4 The plat(or# has a peak production capacity o( %662666 barrels per day2 according to ShellEs website4 *rior to *e#e!Es disco)ery o( crude oil at Trion2 the oil #onopoly had (ound only natural gas during the recent increase o( its deep-water e!ploratory e((orts4 >arlos orales2 head o( *e#e!Es e!ploration-and-production di)ision2 said in a radio inter)iew that Trion G could be a#ong the top %6 crude-oil disco)eries on either side o( the 8ul(4 He said typically a deposit o( its type would take se)en years to get to the production phase2 but that *e#e! is going to try to do that in (i)e years4 r4 orales said *e#e! began co##itting #ore resources to 8ul( oil e!ploration in 266P with the construction o( special drilling plat(or#s and said he (oresees a r4 orales said ushing aggressively into dee *aters could raise Peme#0s crude!oil roduction to four million barrels a day from the current 6.EE million barrels a day. The dee *aters of the +ulf are seen by analysts Ta#aulipas oil port to ser)ice *e#e!Es (uture operations in the 8ul(4

as one of Peme#0s best bets to have another surge of oil roduction after eight years of steady declines4 *e#e! has traditionally drilled in the shallow waters o( the southern 8ul(2 where the disco)ery o( the supergiant >antarell
co#ple! in the late %5P6s launched e!ico as an oil power4 >antarellEs output peaked at #ore than two #illion barrels o( oil per day in 266: and is now around :662666 barrels a day4 r4 >alderon2 who held up a sa#ple o( crude oil taken (ro# the well2 said hal( o( *e#e!Es petroleu# reser)es could be in the deep waters o(

barrels of oil e?uivalent as of Gan. 1. Its )P reserves *ere F).= billion barrels of oil e?uivalent. Under current la*( "e#ico doesn0t allo* foreign com anies to drill in its territory e#ce t under contract to Peme#2 with strict rules that ban the sharing o( risk or o( oil4 Oil #aIors ha)e e!pressed interest in drilling with *e#e! on the e!ican side o( the 8ul(2 but
the 8ul(4 *e#e! reported pro)en hydrocarbon reser)es o( %'4O billion only under shared-risk contracts4

The lan solvesHthe Transboundary Hydrocarbon Agreement *ould cause P1"12 reforms by giving "e#ico an over*helming economic incentive
"elgar( 16 0 1;ourdes elgar2 director o( the >enter (or Sustainability and Business at
"8A=" Business School o( the TecnolTgico de onterrey4 7The .uture o( *" "+92 A#ericas Uuarterly2 26%22 http-&&www4a#ericasBuarterly4org&node&'PO%@&&S=; 7ee *ater drilling is li$ely to ta$e center stage *ith the signing of the U.S.&"e#ico Transboundary Hydrocarbon Agreement in .ebruary 26%24 The agreement2 rati(ied by the e!ican Senate but still awaiting appro)al in the U4S42 relieves concerns about the so!called Istra*J effect( in *hich "e#ican oil is si ed a*ay by the U.S. as its roduction advances closer to the international maritime border in the +ulf of "e#ico.- The agreement rovides a legal frame*or$ for develo ment of oil and gas reservoirs that cross the #ariti#e border in the +ulf of "e#ico$the (irst such
pact (or both countries4 Gn (act2 it is )iewed as a dress rehearsal (or negotiations the U4S4 will ha)e to undertake with >anada2 ,ussia and e)en >uba to address shared reser)oir e!ploitation4A G#ple#entation will reBuire legal and institutional adIust#ents in e!ico and in the United States4 Since it re?uires 3oint or coordinated roduction( the agreement ossibly

o ens a ne* era of coo eration bet*een P1"12 and international oil com anies. If a transboundary field *ere identified( P1"12 *ould have to *or$ *ith field o erators on the U.S. side. This #akes technological aptitude particularly rele)ant2 since shared reser)oirs are #ore likely to e!ist in the deep and ultra-deep waters o( the 8ul( o( e!ico4A 5or sovereignty( energy security and olitical reasons( "e#ico *ill go the e#tra mile to ensure that its hydrocarbon resources are not lost to its neighbor. This gives it a high incentive to develo the institutional architectureHincluding strengthening the CKHHneeded to im lement the agreement. Identifying and develo ing a 3oint reservoir *ould allo* P1"12 to *or$ in full artnershi *ith com anies at the cutting edge of ultra!dee *ater roduction. The e!perience2 bene(its and know-how that would be gained #ay
reduce the reluctance to undertake Ioint production and other strategic alliances that are banned by *" "+ bylaws4 G#ple#entation o( the treaty could trigger an accelerated trans(or#ation o( the regi#e under which deepwater resources are e!ploited in e!ico4 A 1#citing times are in sight4 The inco#ing ad#inistration will be co#pelled to conduct a debate on the (uture o( *" "+2 and the issue o( constitutional re(or# will ha)e to be a (ull part o( it4 The

"e#ican oil industry can no longer

thrive on amendments to distorted schemes.

Current P1"12 roduction ris$s "e#ican economic decline

Sam les and Littor( 16 0 1Ti# ,4 Sa#ples and Hose ;uis ?ittor2 associate and partners at
Hogan ;o)ells US ;;*4 7"nergy ,e(or# and the .uture o( e!icos Oil Gndustry- The *e#e! Bidding ,ounds and Gntegrated Ser)ice >ontracts92 Te!as Hournal o( Oil2 8as2 and "nergy ;aw2 D-2%-26%22 http-&&tIogel4org&wp-content&uploads&26%2&6P&Sa#ples-.or#attedV.inalVHune%'4pd(@ Gn recent years2 <atin America has seen an u tic$ in interest as a - destination for com anies see$ing ne* o ortunities in the e# loration - and roduction of oil and gas4%A .ro# the disco)ery o(
#assi)e pre-salt oil A (ields o(( the coast o( BraJil to uncon)entional plays in Argentina and A >olo#bia2 the region is generating renewed interest (or the international A energy industry4 .our countries in particular$@ra,il( Colombia( "e#ico( - and

PeruHare moving for*ard *ith bidding rounds for significant - e# loration and roduction contracts with hopes o( attracting technology2 A e!pertise2 and capital (ro# the pri)ate sector4 A The case of *etrTleos e!icanos 1Peme#; and "e#ico is es ecially - com elling4 As a state-controlled #onopoly2 Peme# is the sole roducer - of crude oil( natural gas( and refined roducts in "e#ico42A Peme#( the most im ortant com any in "e#ico( is simultaneously referred to as the - Icash co*J and a Isacred co*J of "e#ico.)- As "e#ico%s cash co*( - Peme# rovides over a third of the federal government%s revenues4:A As A e!icos sacred cow2 Peme# has immense and symbolic national - im ortance( *hich is dee ly rooted in "e#ico%s sense of sovereignty and inde endence.CA Gncreasingly2 these t*o roles are in tension as Peme# - struggles to remain a cash co* *hile sub3ect to the legal and olitical - constraints of a sacred national treasure4DA .or

#ost o( the 26th century2 e!ico (igured a#ong the worlds largest A oil producers and has been a #aIor e!porter (or #uch o( that ti#e4PA Currently2 howe)er2 "e#ico is facing the ros ect of becoming a net - im orter of

etroleum within a decade4OA Peme# has recently undergone - transformations in res onse to declining roduction( but reversing the - tide *ill re?uire a dramatic de arture from the norm45A *olitically A sensiti)e re(or#s to the energy sector and a #aIor shi(t in the traditional A *e#e! paradig# are needed4%6 Together2 "e#ico and Peme# are - entering unfamiliar territory 4%%A 3hile a restricti)e legal (ra#ework has barred co#petition within A e!icos borders2 Peme# is sub3ect to rigid constraints under "e#ican - la* *ith res ect to finance and budgeting( contracting( rocurement( and - cor orate governance.16 The collective *eight of these restrictions has - limited Peme#%s ability to address lagging roduction.%' Gn response2 A under the ad#inistration o( *resident .elipe >alderTn2 legislation A designed
to #oderniJe *e#e! and allow greater pri)ate participation in A the ,e(or#s@4%: e!ican oil industry was passed in <o)e#ber 266O 1the "nergy A

"e#ican economic decline *ill trigger instability throughout "e#ico

Lohl2 %2 0 1Leith2 %%-2P-%24 7>risis o( >onsu#ption29 http-&&www4energyandcapital4co#&articles&#e!ican-oil-crisis&2O''@&&S=; O( course2 we all know the story behind the >antarell (ieldEs down(all4 /nce roduction started to decline( Peme# began in3ecting nitrogen to boost out ut4 But this strategy *as short!lived( and roduction at the field has been dro ing shar ly since $ roughly 1FM each year (or the last si! years4A >antarellEs decline mar$ed the beginning of the end for "e#ican oil roduction. A The countryEs new (inds ha)e
also pro)en underwhel#ing4 The recent disco)ery by *e#e! in Southern e!ico is a per(ect e!a#ple4 According to *e#e!2 the new (ield holds up to C66 #illion barrels o( crude oil2 a tri(le co#pared to the billions o( barrels >antarell once held4 A But these days2 "e#ico *ill ta$e *hatever it can get... and ray it can hold off the decline 4A >risis o( >onsu#ptionA

"e#ico0s declining oil roduction means there0s less oil available for e# ort. - Those 6.E million barrels flo*ing from Peme#0s *ells daily are crucial to the country0s stability .4hen almost F8M of your government budget is aid from oil revenue( e# orting less oil is not an o tion H but that0s e#actly *hat0s ha ening 1click charts to enlarge@-A #e!ico e!ports to u4s4A =uring
the (irst eight #onths o( 26%22 e!ican oil e!ports to the United States were slightly abo)e one #illion barrels per day4 ;ast ay oil e!ports (ell below one #illion barrels per day (or the (irst ti#e in 2P years4 A @arring some miracle ta$ing lace in

"e#ico0s oil industry( I believe the country *ill be a net oil im orter *ithin ten years.

"e#ican stability is critical to U.S. o*er

Da lan( 16 0 1,obert =4 Laplan2 chie( geopolitical analyst at Strat(ord4 73ith the .ocus on
Syria2 e!ico Burns92 Strat(or2 '-2O-26%22 http-&&www4strat(or4co#&weekly&(ocus-syria-#e!icoburns@&&S=;
3hile the (oreign policy elite in 3ashington (ocuses on the O2666 deaths in a con(lict in Syria -- hal( a world away (ro# the United States -- #ore than :P2666 people ha)e died in drug-related )iolence since 266D in e!ico4 A deeply troubled state as well as a de#ographic and econo#ic giant on the United StatesE southern border2 "e#ico *ill affect America0s destiny in

coming decades more than any state or combination of states in the "iddle 1ast4 Gndeed2 "e#ico may constitute the *orld0s seventh!largest economy in the near future4A >ertainly2 while
the e!ican )iolence is largely cri#inal2 Syria is a #ore clear-cut #oral issue2 enhanced by its own strategic conseBuences4 A calci(ied authoritarian regi#e in =a#ascus is sta#ping out dissent with guns and artillery barrages4 oreo)er2 regi#e change in Syria2 which the rebels de#and2 could deli)er a pi)otal blow to Granian in(luence in the iddle "ast2 an e)ent that would be the best news to U4S4 interests in the region in years or e)en decades4A <e)ertheless2 the Syrian rebels are di)ided and hold no territory2 and the toppling o( pro-Granian dictator Bashar al Assad #ight concei)ably bring to power an austere Sunni regi#e eBually a)erse to U4S4 interests -- i( not lead to sectarian chaos4 Gn other words2 all #ilitary inter)ention scenarios in Syria are (raught with e!tre#e risk4 *recisely (or that reason2 that the U.S. foreign olicy elite has continued for months to feverishly

debate Syria( and in many cases advocate armed intervention( *hile utterly ignoring the vaster anorama of violence ne#t door in "e#ico( s ea$s volumes about 4ashington0s o*n obsessions and interests( *hich are not al*ays aligned *ith the country0s geo olitical interests4A Syria #atters and #atters #o#entously to U4S4 interests2 but "e#ico ultimately matters more2 so one
would think that there would be at least so#e degree o( parity in the a#ount written on these subIects4 G a# not de#anding a switch in news co)erage (ro# one country to the other2 Iust a bit #ore balance4 O( course2 it is easy (or pundits to ha)e a (er)ently

inter)entionist )iew on Syria precisely because it is so (ar away2 whereas miscalculation

in "e#ico on America0s art *ould carry far greater conse?uences4 .or e!a#ple2 *hat if the "e#ican drug cartels too$ revenge on San 7iegoN Thus( one might even argue that the very noise in the media about Syria( cou led *ith the relative silence about "e#ico( is roof that it is the latter issue that actually is too sensitive for loose tal$4A Gt #ay also be that cartel-wracked e!ico -- at so#e rude subconscious le)el
-- connotes (or "ast >oast elites a south o( the border2 P-"le)en store culture2 re#iniscent o( the cri#e #o)ie FTra((ic2F that holds no allure to people (ocused on ancient ci)iliJations across the ocean4 The concerns o( "urope and the iddle "ast certainly see# closer to <ew Mork and 3ashington than does the southwestern United States4 Gndeed2 ;atin A#erican bureaus and studies depart#ents si#ply lack the cachet o( iddle "ast and Asian ones in go)ern#ent and uni)ersities4 Met2 the fate of "e#ico is the hinge on

*hich the United States0 cultural and demogra hic future rests.- U.S. foreign olicy emanates from the domestic condition of its society( and nothing *ill affect its society more than the dramatic movement of <atin history north*ard . @y 68E8( as much as a third of the American o ulation could be His anic. "e#ico and Central America constitute a gro*ing demogra hic and economic o*erhouse *ith *hich the United States has an ine#tricable relationshi . Gn recent years "e#ico0s economic gro*th has out aced that of its northern neighbor. e!icoEs population o( %%% #illion plus >entral A#ericaEs o( #ore than :6 #illion eBuates to hal( the population o( the
United States4A Because o( the <orth A#erican .ree Trade Agree#ent2 OC percent o( e!icoEs e!ports go to the United States2 e)en as hal( o( >entral A#ericaEs trade is with the United States4 3hile the #edian age o( A#ericans is nearly 'P2 de#onstrating the aging tendency o( the U4S4 population2 the #edian age in e!ico is 2C2 and in >entral A#erica it is #uch lower 126 in 8uate#ala and Honduras2 (or e!a#ple@4 Gn part because o( young workers #o)ing northward2 the destiny o( the United States could be north-south2 rather than the east-west2 sea-to-shining-sea o( continental and patriotic #yth4 1This will be a#pli(ied by the scheduled 26%: widening o( the *ana#a >anal2 which will open the 8reater >aribbean Basin to #egaships (ro# "ast Asia2 leading to the (urther de)elop#ent o( 8ul( o( e!ico port cities in the United States2 (ro# Te!as to .lorida4@A Since %5:62 e!icoEs population has increased #ore than (i)e-(old4 Between %5P6 and %55C it nearly doubled4 Between %5OC and 2666 it rose by #ore than a third4 e!icoEs population is now #ore than a third that o( the United States and growing at a (aster rate4 And it is northern "e#ico that is crucial4 That

most of the drug!related homicides in this current *ave of violence that so much d*arfs Syria0s have occurred in only si# of "e#ico0s )6 states 2 #ostly in the north2 is a key indicator o( how northern
e!ico is being distinguished (ro# the rest o( the country 1though the )iolence in the city o( ?eracruJ and the regions o( ichoacan and 8uerrero is also notable@4 If the military!led offensive to crush the drug cartels launched by conser)ati)e *resident .elipe >alderon (alters2 as it see#s to be doing2 and e!ico >ity goes back to cutting deals with the cartels2 then the

ca ital may in a functional sense lose even further control of the north( *ith concrete im lications for the south*estern United States4A One #ight argue that with #assi)e border controls2 a
(unctional and )ibrantly nationalist United States can coe!ist with a dys(unctional and so#ewhat chaotic northern e!ico4 But that is #ainly true in the short run4 ;ooking deeper into the 2%st century2 as Arnold Toynbee notes in A Study o( History 1%5:D@2 a

border bet*een a highly develo ed society and a less highly develo ed one *ill not attain an e?uilibrium but *ill advance in the more bac$*ard society0s favor 4 Thus2 hel ing to stabili,e "e#ico -- as li#ited as the United StatesE options #ay be2 gi)en the co#ple!ity and sensiti)ity o( the relationship -- is a more urgent national interest than stabili,ing societies in the +reater "iddle 1ast 4 G( e!ico e)er does
reach coherent .irst 3orld status2 then it will beco#e less o( a threat2 and the healthy #elding o( the two societies will Buicken to the bene(it o( both4A Today2 hel ing to th*art drug cartels in rugged and remote terrain in the vicinity

of the "e#ican frontier and reaching southward (ro# >iudad HuareJ 1across the border (ro# "l *aso2 Te!as@ means a limited role for the U.S. military and other agencies !! *or$ing( of course( in full coo eration *ith the "e#ican authorities4 1*redator and 8lobal Hawk drones (ly deep o)er e!ico searching (or
drug production (acilities4@ But the legal (ra#ework (or cooperation with e!ico re#ains proble#atic in so#e cases because o( strict interpretation o( %5th century posse co#itatus laws on the U4S4 side4 3hile the United States has spent hundreds o( billions o( dollars to a((ect historical outco#es in "urasia2 its leaders and (oreign policy #andarins are so#ewhat passi)e about what is happening to a country with which the United States shares a long land border2 that )erges on partial chaos in so#e o( its northern sections2 and whose population is close to double that o( GraB and A(ghanistan co#bined4 A "e#ico2 in addition to the ob)ious challenge o( >hina as a rising great power2 *ill

hel *rite the American story in the 61st century. "e#ico *ill artly determine *hat $ind of society America *ill become ( and *hat e#actly *ill be its demogra hic and geogra hic character( es ecially in the South*est. The U4S4 relationship with >hina
will #atter #ore than any other indi)idual bilateral relationship in ter#s o( deter#ining the United StatesE place in the world2 especially in the econo#ically crucial *aci(ic4 If olicyma$ers in 3ashington calculate U.S. interests ro

erly regarding those two critical countries( then the United States *ill have o*er to s are so that its elites can continue to focus on serious moral ?uestions in laces that matter less.

Heg solves nuclear *ar @roo$s et al 1)

QStephen 84 Brooks is Associate *ro(essor o( 8o)ern#ent at =art#outh >ollege484 Hohn Gkenberry is the Albert 84 ilbank *ro(essor o( *olitics and Gnternational A((airs at *rinceton Uni)ersity in the =epart#ent o( *olitics and the 3oodrow 3ilson School o( *ublic and Gnternational A((airs4 He is also a 8lobal "#inence Scholar at Lyung Hee Uni)ersity43illia# >4 3ohl(orth is the =aniel 3ebster *ro(essor in the =epart#ent o( 8o)ern#ent at =art#outh >ollege4 7=onEt >o#e Ho#e2 A#erica- The >ase against ,etrench#ent92 3inter 26%'2 ?ol4 'P2 <o4 '2 *ages P-C%2 http-&&www4#itpressIournals4org&doi&abs&%64%%D2&GS">VaV66%6PR

engage#ent is that it pre)ents the e#ergence o( a (ar #ore dangerous global security environment4 .or one thing2 as noted abo)e2 the United States overseas resence gives it the leverage to restrain artners from ta$ing rovocative action4 *erhaps #ore i#portant2 its core alliance co##it#ents also deter states with aspirations to regional hege#ony (ro# conte#plating e!pansion and #ake its partners #ore secure2 reducing their incenti)e to adopt solutions to their security proble#s that threaten others and thus stoke security dile##as 4 The contention that engaged U4S4 power da#pens the bale(ul e((ects o( anarchy is consistent with in(luential )ariants o( realist theory4 Gndeed2 arguably the scariest portrayal o( the war-prone world that would e#erge absent the 7A#erican *aci(ier9 is pro)ided in the works o( Hohn earshei#er2 who (orecasts dangerous #ultipolar regions replete with security co#petition2 ar#s races2 nuclear proli(eration and associated pre)enti)e war te#ptations2 regional ri)alries2 and e)en runs at regional hege#ony and (ull-scale great power war 4 P2 How do retrench#ent ad)ocates2 the bulk o( who# are realists2 discount this bene(itW Their argu#ents are co#plicated2 but two capture #ost o( the )ariation- 1%@
A core pre#ise o( deep U4S4 security guarantees are not necessary to pre)ent dangerous ri)alries and con(lict in "urasiaN or 12@ pre)ention o( ri)alry and con(lict in "urasia is not a U4S4 interest4 "ach response is connected to a di((erent theory or set o( theories2 which #akes sense gi)en that the whole debate hinges on a co#ple! (uture counter(actual 1what would happen to "urasias security setting i( the United States truly disengagedW@4 Although a certain answer is i#possible2 each o( these responses nonetheless a argu#ent (or retrench#ent than ad)ocates acknowledge4 The (irst response (lows (ro# de(ensi)e realis# as well as other international relations theories that discount the con(lict-generating

is

weaker

=e(ensi)e realists #aintain that the high e!pected costs o( territorial conBuest2 de(ense do#inance2 and an array o( policies and practices that can be used credibly to signal benign intent2 #ean that "urasias #aIor states could #anage regional #ultipolarity peace(ully without the A#erican paci(ier4 ,etrench#ent would be a bet on this scholarship2 particularly in regions where the kinds o( stabiliJers that nonrealist theories point to$such as de#ocratic go)ernance or dense institutional linkages$are either absent or *ea$ly resent4 There are three other #aIor bodies o( scholarship2 howe)er2 that #ight gi)e decision#akers pause be(ore #aking this bet4 .irst is regional e!pertise4 <eedless to say2 there is no consensus on the net security e((ects o( U4S4 withdrawal 4 ,egarding each region2 there are
potential o( anarchy under conte#porary conditions4 P' opti#ists and pessi#ists4 .ew e!perts e!pect a return o( intense great power co#petition in a post-A#erican "urope2 but #any doubt "uropean go)ern#ents will pay the political

"urope that is incapable o( securing itsel( (ro# )arious threats that could be destabiliJing within the region and beyond 1e4g42 a
costs o( increased "U de(ense cooperation and the budgetary costs o( increasing #ilitary outlays4 P: The result #ight be a regional con(lict akin to the %556s Balkan wars@2 lacks capacity (or global security #issions in which U4S4 leaders #ight want "uropean participation2 and is )ulnerable to the

3hat about the other parts o( "urasia where the United States has a substantial #ilitary presenceW ,egarding the iddle "ast2 the balance begins to s*ing to*ard essimists concerned that states currently backed by 3ashington $ notably Gsrael2 "gypt2 and Saudi Arabia$ #ight take actions upon U4S4 retrench#ent that would intensi(y security dile##as 4 And concerning "ast Asia2 pessi#is# regarding the regions prospects without the A#erican paci(ier is pronounced4 Arguably the principal concern e!pressed by area e!perts is that Hapan and South Lorea are likely to obtain a nuclear ca acity and increase their #ilitary co##it#ents2 which could stoke a destabili,ing reaction from China4 Gt is notable that during the >old 3ar2 both South Lorea and Taiwan #o)ed to obtain a nuclear weapons capacity and were only constrained (ro# doing so by a still-engaged United States4 PC The second body o( scholarship casting doubt on the bet on de(ensi)e realis#s sanguine portrayal is all o( the research that under#ines its conception o( state pre(erences4 =e(ensi)e realis#s opti#is# about what would happen i( the United States retrenched is )ery #uch dependent on its particular$and highly restricti)e$assu#ption about state pre(erencesN once we rela! this assu#ption2 then #uch o( its basis (or opti#is# )anishes4 Speci(ically2 the prediction o( postA#erican tranBuility throughout "urasia rests on the assu#ption that security is the only rele)ant state pre(erence2 with security de(ined narrowly in ter#s o( protection (ro# )iolent e!ternal attacks on the ho#eland4 Under that assu#ption2 the security proble# is largely sol)ed as soon as o((ense and de(ense are clearly distinguishable2 and o((ense is e!tre#ely e!pensi)e relati)e to de(ense4 Burgeoning research across the social and other sciences2 howe)er2 under#ines that core assu#ption- states ha)e pre(erences not only (or security but also (or restige( status( and other aims( and they engage in trade!offs a#ong the )arious obIecti)es4 PD Gn addition2 they de(ine security not Iust in ter#s o( territorial protection but in )iew o( #any and )aried #ilieu goals 4 Gt (ollows that e)en states that are relati)ely secure #ay ne)ertheless engage in highly co#petiti)e beha)ior4 "#pirical studies show that this is indeed so#eti#es the case4 PP Gn su#2 a bet on a benign postretrench#ent "urasia is a bet that leaders o( #aIor countries will ne)er allow these nonsecurity pre(erences to in(luence their strategic choices4 To the degree that these bodies o( scholarly knowledge ha)e predicti)e le)erage2 U4S4
in(luence o( outside rising powers4

retrench#ent would result in a signi(icant deterioration in the security environmen t in at least so#e o( the worlds key regions4 3e ha)e already #entioned the third2 e)en #ore alar#ing body o( scholarship4 O((ensi)e realis# predicts that the withdrawal o( the A#erican paci(ier will yield either a com etitive regional multi olarity co#plete with associated insecurity( arms racing( crisis instability( nuclear roliferation 2 and the like2 or bids (or regional hege#ony2 which #ay be beyond the ca acity of local great o*ers to contain 1and which in any case would generate intensely co#petiti)e beha)ior2 possibly including regional great o*er *ar@4 Hence it is unsurprising that retrench#ent ad)ocates are prone to (ocus
on the second argu#ent noted abo)e- that a)oiding wars and security dile##as in the worlds core regions is not a U4S4 national interest4 .ew doubt that the United States could sur)i)e the return o( insecurity and con(lict a#ong "urasian powers2 but at what costW uch o( the work in this area has (ocused on the econo#ic e!ternalities o( a renewed threat

decision#akers #ay be rationally reluctant to run the retrench#ent e!peri#ent4 .irst2 o)erall higher le)els o( con(lict #ake the world a #ore dangerous place4 3ere "urasia to return to higher levels of interstate military com etition2 one would see o)erall higher le)els o( #ilitary spending and inno)ation and a higher likelihood o( co#petiti)e regional pro!y wars and ar#ing o( client states$all o( which would be concerning2 in part because it would pro#ote a (aster di((usion o( #ilitary power away (ro# the United States4 8reater regional insecurity could well (eed proli(eration cascades2 as states such as 1gy t( Ga an( South Dorea( Tai*an( and Saudi Arabia all #ight choose to create nuclear (orces4 PO Gt is unlikely that proli(eration decisions by any o( these actors would be the end o( the ga#e- they would likely generate pressure locally (or #ore proli(eration4 .ollowing Lenneth 3altJ2 #any retrench#ent ad)ocates are proli(eration opti#ists2 assu#ing that nuclear
o( insecurity and war2 which we discuss below4 .ocusing on the pure security ra#i(ications2 there are two #ain reasons why deterrence sol)es the security proble#4 P5 Usually carried out in dyadic ter#s2 the debate o)er the stability o( proli(eration changes as the nu#bers go up4 *roli(eration opti#is# rests on assu#ptions o( rationality and narrow security pre(erences4 Gn social science2 howe)er2 such assu#ptions are ine)itably probabilistic4 Opti#ists assu#e that #ost states are led by rational leaders2 #ost will o)erco#e organiJational proble#s and resist the te#ptation to pree#pt be(ore (eared neighbors nucleariJe2 and #ost pursue only security and are risk a)erse4 >on(idence in such probabilistic assu#ptions declines i( the world were to #o)e (ro# nine to twenty2 thirty2 or (orty nuclear states4 Gn addition2 #any o( the other

analysts who are concerned about the destabiliJing e((ects o( nuclear proli(eration $ including the risk o( accidents and the prospects that so#e new nuclear powers will not ha)e truly sur)i)able (orces$see# prone to go up as the nu#ber o( nuclear powers grows 4 O6 oreo)er2 the risk o( 7un(oreseen crisis dyna#ics 9 that could s in out of control is also higher as the nu#ber o( nuclear powers increases4 .inally2 add to these concerns the enhanced danger o( nuclear leakage2 and a world with o)erall higher le)els o( security co#petition beco#es yet #ore worriso#e4 The argu#ent that #aintaining "urasian peace is not a U4S4 interest (aces a second proble#4 On widely accepted realist assu#ptions2 acknowledging that U4S4 engage#ent preser)es peace dra#atically narrows the di((erence between retrench#ent and deep engage#ent 4 .or #any supporters o( retrench#ent2 the opti#al strategy (or a power such as the United States2 which has attained regional hege#ony and is separated (ro# other great powers by oceans2 is o((shore balancing- stay o)er the horiJon
dangers noted by and 7pass the buck9 to local powers to do the dangerous work o( counterbalancing any local rising power4 The United States should co##it to onshore balancing only when local balancing is likely to (ail and a great power appears to be a credible contender (or regional hege#ony2 as in the cases o( 8er#any2 Hapan2 and the So)iet Union in the #idtwentieth

proble# is that >hinas rise puts the possibility o( its attaining regional hege#ony on the table2 at least in the #ediu# to long ter#4 As earshei#er notes2 7The United States *ill have to lay a $ey role in countering China2 because its Asian neighbors are not strong enough to do it by the#sel)es49 O% There(ore2 unless >hinas rise stalls2 7the United States is likely to act toward >hina si#ilar to the way it beha)ed toward the So)iet Union during the >old 3ar49 O2 Gt (ollows that the United States should take no action that would co#pro#ise its capacity to #o)e to onshore balancing in the (uture4 Gt will need to #aintain $ey alliance relationshi s in Asia as well as the (or#idably e!pensi)e military ca acity to inter)ene there4 The i#plication is to get out o( GraB and A(ghanistan2 reduce the presence in "urope2 and pi)ot to Asia$ Iust what the United
century4 The States is doing4 O' Gn su#2 the argu#ent that U4S4 security co##it#ents are unnecessary (or peace is countered by a lot o( scholarship2 including highly in(luential realist scholarship4 Gn addition2 the argu#ent that "urasian peace is unnecessary (or U4S4 security is weakened by the potential (or a large nu#ber o( nasty security conseBuences as well as the need to retain a latent onshore balancing capacity that dra#atically reduces the sa)ings retrench#ent #ight bring4 oreo)er2

switching between

o((shore and onshore balancing could well be di((icult4 Bringing together the thrust o( #any o( the argu#ents discussed so (ar underlines the degree to which the case (or retrench#ent #isses the underlying logic o( the deep engage#ent strategy4 By supplying reassurance2 deterrence2 and acti)e #anage#ent2 the United States lowers security co#petition in the worlds key regions2 thereby pre)enting the e#ergence o( a hothouse at#osphere (or growing new #ilitary capabilities4 Alliance ties dissuade partners (ro# ra#ping up and also pro)ide le)erage to pre)ent #ilitary trans(ers to potential ri)als4 On top o( all this2 the United States% formidable military machine may deter entry by otential rivals. >urrent great power #ilitary e!penditures as a percentage o( 8=* are at historical lows2 and thus (ar other #aIor powers ha)e shied away (ro#
seeking to #atch top-end U4S4 #ilitary capabilities4 Gn addition2 they ha)e so (ar been care(ul to a)oid attracting the 7(ocused en#ity9 o( the United States4 O: All o( the worlds #ost #odern #ilitaries are U4S4 allies 1A#ericas alliance syste# o( #ore than si!ty countries now accounts (or so#e O6 percent o( global #ilitary spending@2 and the gap between the U4S4 #ilitary capability and that o( potential ri)als is by #any #easures growing rather than shrinking4 OC

Plan sets a recedent !! solves US!"e#ico energy coo eration

3ood %2 0 senior associate in the A#ericas progra# at >SGS

1=uncan2 also director o( the international relations progra# at e!icos Autono#ous Gnstitute o( Technology2 78lobal Gnsider- U4S4- e!ico "nergy =eal Sets G#portant *recedent92 3orld *olitics ,e)iew2 :-2:-26%22 http-&&www4worldpoliticsre)iew4co#&trend-lines&%%OO6&globalinsider-u-s-#e!ico-energy-deal-sets-i#portant-precedent@ 3*,- 4hat is the history of energy coo eration bet*een the U.S. and "e#icoN - =uncan 3oodSince the nationali,ation of "e#ican oil in %5'O2 the relationshi between the two countries in energy matters has been sensitive2 to put it #ildly4 4hereas "e#ico has been one of the United States% largest crude oil su liers( and the U.S. in turn is far and a*ay "e#ico0s largest mar$et for oil( o en collaboration between the <A.TA partners beyond e!ports has been restricted. This is largely due to "e#ican sensitivities over sovereignty2 the contentious history o( U4S4 oil (ir#sE in)ol)e#ent in e!ico
prior to nationaliJation and the constitutionally #andated #onopoly in oil production in e!ico granted to the state-owned energy co#pany *e#e!4 Any public state#ent by a United States go)ern#ent o((icial or oil e!ecuti)e has traditionally been greeted with charges o( (oreign inter(erence by e!ican le(tists and nationalists4 A There ha)e2 howe)er2 been a nu#ber o( e!a#ples o( cooperation o)er the years4 Gn the %556s2 *e#e! and Shell went into business together in the United States2 sharing the ownership and operation o( a re(inery in =eer *ark2 Te!as4 This boosted *e#e!Es re(ining capacity and enabled it to collaborate with a large international oil co#pany 1GO>@ outside o( e!ican territory4 3ithin e!ico2 *e#e! has long used i#portant contractors such as Halliburton and Schlu#berger to help disco)er and e!tract oil without surrendering ownership4 Gn gas2 e!ico is an i#portant supplier o( natural gas to the United States through crossborder pipelines4 A Gn the %556s and 2666s2 close cooperation a#ong the U4S4 Agency (or Gnternational =e)elop#ent2 U4S4 research labs and the e!ican go)ern#ent led to progress in renewable energy de)elop#ent in e!ico2 and there is currently a bilateral working group negotiating the Buestion o( crossborder electricity trans#ission4 =uring the e!istence o( the Security and *rosperity *artnership2 e!ico2 the United States and >anada discussed energy issues in the <orth A#erican "nergy 3orking 8roup2 but this initiati)e (iJJled out with the de#ise o( the partnership4A 3*,- 3hat brought about the recent agree#ent between the U4S4 and e!ico to cooperate on energy e!ploration in the 8ul( o( e!icoW A 3ood- The history o( this agree#ent goes back to the %5P6s4 A(ter negotiations in the United <ations o)er the Gnternational ;aw o( the Sea2 the two countries ca#e together to deter#ine ownership o( resources (ound in the border region o( the 8ul( o( e!ico that were beyond their respecti)e 266-#ile e!clusion Jones but entirely surrounded by the# 1thereby not Buali(ying as international waters@4 Gn the late-%556s the two countries agreed to a %6-year #oratoriu# on e!ploration and drilling in order to allow the negotiation o( a settle#ent4 A e!icoEs 266O energy re(or# legislation called on the >alderon ad#inistration to seek a solution to the issue2 and when the %6-year deal e!pired in 2665 the two go)ern#ents agreed to work toward a binding deal4 In the first year of the tal$s( the arties

engaged in a rocess of information e#change( discussing standards( emergency! management rocedures and e#isting seismic data. This data e#change( it is vital to recogni,e( *as not aimed at establishing *hat resources might e#ist in the region( but rather *hat geological structures might e#ist( thereby giving clues to otential oil fields. In 6818( Presidents @arac$ /bama and 5eli e Calderon committed to a negotiated transboundary agreement2 and both sides agreed on an e!tension o( the %555 #oratoriu# (or (our #ore years4 O((icial negotiations were concluded in =ece#ber2 and the treaty was signed on .eb4 262 26%24A 3*,- 4hat is the li$ely olitical and economic im act of increased U.S.!"e#ico energy coo eration N- 3ood- The transboundary agreement is an e#citing ne* de arture for Peme# and for U.S.!"e#ico coo eration. 5irst( it gives Peme# access to much!needed oil reserves in the border region that *ere reviously restricted4 These reser)es are esti#ated to be upward o( 5 billion barrels4 Second( it allo*s Peme# to *or$ directly in artnershi *ith the rivate sector ( foreign firms and articularly I/Cs to e#tract the oil -- arrange#ents prohibited to date4 Third2 the agree#ent sets a precedent (or (urther transboundary talks with >uba in the eastern section o( the gul(2 where e!ico again shares potential reser)es4 A 5or U.S.!"e#ico coo eration( the deal is highly significant( less for the oil involved than for the recedent it sets . ,ather than ri)als2 in this area the United States and "e#ico are artners in oil e# loration and roduction. The lac$ of olitical o osition to the deal *ithin "e#ico demonstrates that the traditionally inflammatory nationalistic rhetoric of olitical forces on the "e#ican left has diminished in recent years( as a consensus emerges over the ressing need to reform the oil sector.

That%s $ey to move U.S. com anies a*ay from corn ethanol to "e#ican biofuels
3ood %6 0 senior associate in the A#ericas progra# at >SGS 1=uncan2 also director o( the international relations progra# at e!icos Autono#ous Gnstitute o( Technology2 "n)iron#ent2 =e)elop#ent and 8rowth- U4S4- e!ico >ooperation in ,enewable

"nergies2 3oodrow 3ilson Gnternational >enter (or Scholars2 =ece#ber 26%62 http-&&wilsoncenter4org&sites&de(ault&(iles&,enewableS26"nergyS26report4pd(@ To date2 howe)er2 there has been only minor - coo eration bet*een the United States and "e#ico at the go)ern#ental le)el4 The United - States 7e artment of Agriculture 1US=A@ A has worked with SA8A,*A on a nu#ber o( A technical issues2 and re ared a re ort on the - "e#ican biofuels sector in 2665 that ointed - to the otential for gro*th in the mar$et - and to the changing regulatory landsca e for - biofuels in "e#ico4 This report highlighted the A prospect o( higher le)els o( de#and (or biodiesel thanks to the setting o( a national goal to A introduce at least C percent o( biodiesel in the A transportation sector by 26%24A But the main interest has come from the - U.S. pri)ate sector2 *hich is loo$ing to invest - in biofuels roduction in "e#ico *ith an eye - to e# orting the roduct either bac$ to the - United States or to "urope4 4ith small!scale - ro3ects o ing u across the country( U.S. - firms have begun to evaluate the otential - for large!scale roduction of biofuels4 8lobal A >lean "nergy 18>"@2
a ;os Angeles-based A (ir# that specialiJes in (eedstocks (or the A production o( bio(uels2 has recently in)ested in two Iatropha (ar#s in e!ico and one in BeliJe4 Hatropha2 a hardy shrub that produces A a nut with )ery high oil content that can be A processed into biodiesel2 is seen by #any as a A per(ect bio(uel (eedstock (or e!ico4 <ati)e to A the esoa#erican region2 the lant gro*s

on - marginal land( is not edible either for humans - or animals( and thus does not generate a foodvs.!fuel controversy2 and can be planted on A land that is also used (or graJing goats or sheep4 A Gn addition to being a
(eedstock (or bio(uels2 A the har)est can be used as a source o( bio#ass A (or producing energy and the nuts the#sel)es A can be deto!i(ied and processed (or ani#al (eed A a(ter their oil has been e!pressed4 A 8>" has C2666 acres under culti)ation A in Mucatan2 and has adopted a sustainable A business #odel that has resulted in Iobs2 A (air wages and co##unity de)elop#ent in A the local area4C2

This is one of the dimensions of the biofuels industry that is only - infre?uently mentioned but that is im ortant to note. It is increasingly common for - businesses focusing on biofuels roduction - to develo a model that em hasi,es both - rofitability and sustainable develo ment4 A *ioneer 8lobal ,enewables2 a U4S4 (ir# A (ro# San .rancisco that has already in)ested A in Iatropha plantations
in the =o#inican A ,epublic2 is also looking to e!pand into A e!ico and has a si#ilar #odel to 8>"2 A (ocusing on local co##unity de)elop#ent2 A (air prices (or har)ests2 and #ini#al negati)e A i#pact on the en)iron#ent4 A Hatropha2 howe)er2 is only one o( a #ultitude o( bio(uels that has potential in e!ico4 A Sugar( a long de ressed industry in the country( - could

receive a significant boost if large scale - ethanol roduction *ere contem lated4 A%2%2%2 e
nu#ber o( sugar #ills are currently lying A dor#ant2 and could be retro(itted relati)ely A cheaply to produce ethanol4 .or e!a#ple-A According to the e!ican SugarcaneA *roducers Association2 only t*o mills have- the ca ability of roducing

ethanol *ith the- technical re?uirements s ecified by P1"122A eBuating to about %6 #illion liters per year4A If these mills u graded their facilities andA operated at (ull capacity and e((iciency2 itA is calculated that total roduction capacityA (or ethanol could reach %P6 #illion litersA peryear4C'A The sugarcane-to-ethanol industry will also A ha)e to o)erco#e labor and ta!ation issues i( it A is to become commercially viable in "e#ico. A At present ethanol is subIect
to a lu!ury ta! A o( C6 percent2 which #akes the production o( A ethanol (or (uel unco#petiti)e at the #o#ent4 A Another option e!ists in the incipient algae A to ethanol industry2 which is recei)ing considerable attention because o( the potential (or A using algae culti)ations as a way to capture A carbon dio!ide2 and can be located in al#ost A any cli#ate4 U4S4 (ir#s that possess the technology to increase e((iciency in this (ield2 such A as *hyco22 a >ali(ornia-based (ir#2 are already A looking into the possibility o( bringing their A product to #arket in e!ico4C:A @iofuels innovations indigenous to "e#ico - *ill also be of interest to

U.S. firms. 'ecent - research into the otential of succulents and( - in articular( agave sho* enormous romise4 A The aga)e plant has )ery high concentrations o( A sugar and produces #ore sugar per acre planted A than
sugarcane4 A research tea# working at the A Uni)ersidad Autono#a de >hapingo has esti#ated that the )ariety Aga)eteBuilanaweber can A yield up to 22666 gallons o( distilled ethanol A per acre per year and (ro# %22666-%O2666 A gallons per acre per year i( their cellulose is A included2 whereas-A >orn ethanol2 (or e!a#ple2 has an energyA balance ratio o( %4' and produces appro!i#ately '66-:66 gallons o( ethanol A per acre4 Soybean biodiesel2 with an energyA balance o( 24C2 typically can yield D6A gallons o( biodiesel per acre while an acreA o( sugarcane can produce D66-O66 gallons A o( ethanol with an energy balance o( O464A An acre o( poplar trees can yield #ore thanA %2C66 gallons o( cellulosic ethanol with A an energy balance o( %2462 according to aA <ational 8eographic study published inA October 266P4CCA Gn addition to the i#pressi)e potential (or A producing ethanol2 aga)e is an attracti)e crop A as it can grow in harsh en)iron#ents2 reBuires A relati)ely little water2 can be used to produce a A wide )ariety o( products2 such as paper2 te!tiles2 A and rope2 and is co##on across e!ico4

@iofuel roduction causes global food rice increases and food insecurity
Dla er( = & 1Bradley S4 Llapper2 Associated *ress Sta(( 3riter4 Septe#ber %62 266O4 7U< e!pert (aults US2 "U bio(uel use in (ood crisis29 http-&&www4kla#athbasincrisis4org&bio(uel&U<(aultsUSbio(uel65%66O4ht#@&&S=;

8"<"?A 1A*@ - A United <ations e!pert said 3ednesday that recent studies indicate that U.S. and "uropean Union targets

for biofuel roduction by their grain farmers have been the biggest cause of the *orld food crisis4A Oli)ier de Schutter2 a Belgian pro(essor2 also said an international monitor may be needed to su ervise the roduction of energy sources such as ethanol 2 which #ay end up being less bene(icial to the en)iron#ent than e!pected2 e)en as they cause global food rices to rise4A >iting )arious reports2 he said said biofuel roduction targets outlined by the United States and "uropean Union ha)e led to increased s eculation on agricultural land and commodities( and diverted cro land and feed a*ay from food roduction4A He said the Gnternational onetary .und esti#ated that C8 ercent of the rise in corn rices *as due to biofuels2 with :6 percent (or soybeans4A The 3orld Bank2 de Schutter added2 concluded that bio(uels
(ro# grains and oilseed in the U4S4 and "U were responsible (or up to PC percent o( changes in co##odity prices4 A FThere is a consensus that these initiatives have had a significant im act 2F said de Schutter2 who reports to the :P-nation U4<4 Hu#an ,ights >ouncil4 His #essage to 3ashington and Brussels- FThey should without (urther delay re)ise their policies4F

1ven a small s i$e in food rices $ills half the o ulation Tam a Tribune2 %-26-:B
On a global scale2 food su lies - #easured by stockpiles o( grain - are not abundant4 Gn %55C2 world production (ailed to #eet de#and (or the third consecuti)e year2 said *er *instrup-Andersen2 director o( the Gnternational .ood *olicy ,esearch Gnstitute in 3ashington2 =4>4 As a result2 grain stockpiles (ell (ro# an a)erage o( %P percent o( annual consu#ption in %55:-%55C to %' percent at the end o( the %55C-%55D season2 he said4 ThatEs troubling2 *instrup-Andersen noted2 since %' percent is well below the %P percent the United <ations considers essential to pro)ide a #argin o( sa(ety in world (ood security4 =uring the (ood crisis o( the early %5P6s2 world grain stocks were at %C percent4 F1ven if they are

merely bli s( higher international rices can hurt oor countries that im ort a significant ortion of their food2F he said4 F'ising rices can also ?uic$ly ut food out of reach of the 1.1 billion eo le in the develo ing *orld *ho live on a dollar a day or less4F
He also said #any people in low-inco#e countries already spend #ore than hal( o( their inco#e on (ood4

Contention ): +ulf Advantage

7ee *ater oil accident inevitable in the +ulf of "e#ico Shields( 16 & 1=a)id2 independent energy consultant4 7UandA- Gs e!ico *repared (or
=eepwater =rilling in the 8ul(W92 Gnter-A#erican =ialogues ;atin A#erican "nergy Ad)isor2 2&26&26%22 http-&&repository4un#4edu&bitstrea#&handle&%52O&26:PP&GsS26 e!icoS26*repared S26(orS26=eepwaterS26=rillingS26inS26theS268ul(4pd(WseBuence/%@&&S=; FThey say that if a country does not defend its borders( then others *ill not res ect those borders4 A That is robably ho* *e should understand Peme#0s decision to drill the a!i#ino-% well in A '2666 #eters o( water in the *erdido .old Belt2 right ne#t to the shared maritime boundary *ith the United States. It is a decision that does not #ake sense in ter#s o( co#petiti)eness or A production goals4 Gt is about defending the final frontier of national sovereignty and stic$ing the - "e#ican flag on the floor of the +ulf of "e#ico to advise U.S. com anies that they have no right - to drill for oil in the ultradee *aters on the "e#ican side4 The recently signed deepwater A agree#ent obliges both
countries to work together and share the spoils o( the de)elop#ent o( transboundary reser)oirs2 i( they actually e!ist4 .or now2 *e#e!2 in line with constitutional A restrictions2 is going alone on the e!ican side4 Sa(ety is a #aIor concern as *e#e! and its A contractors ha)e no e!perience in such harsh en)iron#ents4 Gn (act2 Peme# has never roduced - oil commercially

any*here in dee *ater. It does not have an insurance olicy for *orst!case - scenarios nor does it have emergency measures in lace to deal *ith a ma3or s ill. It does not - fully abide by e#isting "e#ican regulation of its dee *ater activity( *hich cannot be enforced. A On the U4S4 side2 prohibition o( ultradeepwater drilling2 enacted a(ter the =eepwater HoriJon A spill2 has co#e and gone4 The ne#t disaster is 3ust *aiting to ha en..

+ulf%s ecosystems on the brin$H lan $ey to solve another accident

Craig( 11 & 1,obert Lundis >raig2 Attorneys Title *ro(essor o( ;aw and Associate =ean (or
"n)iron#ental *rogra#s at .lorida State Uni)ersity4 7;egal ,e#edies (or =eep arine Oil Spills and ;ong-Ter# "cological ,esilience- A atch ade in Hell92 Brigha# Moung Uni)ersity ;aw ,e)iew2 26%%2 http-&&lawre)iew4byu4edu&articles&%'2D:6C%''V6'craig4(in4pd(@&&S=; These results suggest that *e should be very concerned for the - +ulf ecosystems affected by the "acondo *ell blo*out4 .irst2 and as A this Article has e#phasiJed throughout2 unli$e the 1##on Lalde,- s ill( the 7ee *ater Hori,on oil s ill occurred at great de th( and the - oil behaved unusually com ared to oil released on the surface4 A Second2 considerably more to#ic dis ersants *ere used in connection - *ith the +ulf oil s ill than the Alas$a oil s ill4%D: Third2 humans - could intervene almost immediately to begin cleaning the roc$y - substrate in Prince 4illiam Sound( but human intervention for many - of the im ortant affected +ulf ecosystems( es ecially the dee *ater - ones 1but e)en (or shallower coral ree(s@2 remains im ossible. A .inally2 and perhaps #ost i#portantly2 the Prince 4illiam Sound - *as and remains a far less stressed ecosystem than the +ulf of - "e#ico. Gn 266O2 (or e!a#ple2 <OAA stated that 7QdOes ite the - remaining im acts of the Pstill thenO largest oil s ill in U.S. history( - Prince 4illiam Sound remains a relatively ristine( roductive and - biologically rich ecosystem49%DC To be sure2 the Sound was not A co#pletely
unstressed2 and 7QwRhen the "!!on ?aldeJ spill occurred A in arch %5O52 the *rince 3illia# Sound ecosyste# was also A responding to at least three notable e)ents in its past- an unusually A cold winter in %5OO0O5N growing populations o( reintroduced sea A ottersN and a %5D: earthBuake49%DD <e)ertheless2 the +ulf of "e#ico - is besieged by environmental stressors at

another order of magnitude - 9or t*o;( reducing its resilience to disasters li$e the 7ee *ater - Hori,on oil s ill. As the 7ee *ater Hori,on Commission detailed at - length( the +ulf faces an array of long!term threats( from the loss of - rotective and roductive *etlands along the coast to hurricanes to a - gro*ing Idead ,oneJ 9hy o#ic ,one; to sediment

starvation to sealevel rise to damaging channeling to continual 9if smaller; oil releases from the thousands of drilling o erations4%DP Gn the (ace o( this A plethora o( stressors2 e)en the Commission cham ioned a $ind of - resilience thin$ing( recogni,ing that res onding to the oil s ill alone - *as not enough. It e?uated restoration of the +ulf to Irestored - resilience(J arguing that it Ire resents an effort to sustain these diverse( interde endent activities Pfisheries( energy( and tourismO and - the environment on *hich they de end for future generations49%DOA A nu#ber o( co##entators ha)e catalogued the (ailure o( the A legal and regulatory syste#s go)erning the
=eepwater HoriJonA plat(or# and the acondo well operations4%D5 The =eepwater A HoriJon >o##ission si#ilarly noted that the =eepwater HoriJons A 7de#ise signals the con(licted e)olution$and se)ere shortco#ings$ A o( (ederal regulation o( o((shore oil drilling in the United States49%P6A Gn its opinion2 7QtOhe 7ee *ater Hori,on blo*out( e# losion( and oil -

s ill did not have to ha en49%P% The >o##issions o)erall A conclusion was two-(old4 .irst2 7QtRhe record shows that *ithout - effective government oversight( the offshore oil and gas industry *ill - not ade?uately reduce the ris$ of accidents( nor re are effectively to - res ond in emergencies.J%P2 Second2 7government oversight( alone( - cannot reduce those ris$s to the full e#tent ossible. +overnment - oversight . . . must be accom anied by the oil and gas industry%s - internal reinvention: s*ee ing reforms that accom lish no less than a fundamental transformation of its safety culture. 9%P'

+ulf ecosystems are critical biodiversity hots ots and have a $ey effect on the *orld%s oceans
@renner( = 0 1Horge Brenner2 78uarding the 8ul( o( e!icos )aluable resources92 Sci=e)<et2
'-%:-266O2 http-&&www4scide)4net&en&opinions&guarding-the-gul(-o(-#e!ico-s-)aluableresources4ht#l@&&S=; The +ulf of "e#ico is rich in biodiversity and uni?ue habitats( and hosts the only $no*n nesting beach of Le#pEs ,idley2 the *orld0s most endangered sea turtle.- The +ulf0s circulation attern gives it biological and socioeconomic im ortance: *ater from the Caribbean enters (ro# the south through the Mucatan >hannel between >uba and e!ico and( after *arming in the basin( leaves through the northern 5lorida Strait between the United States and >uba to (or# the 8ul( Strea# in the <orth Atlantic that hel s to regulate the climate of *estern 1uro e.

/cean biodiversity $ey to survival

Craig( ) 0 1,obin Lundis >raig2 Attorneys Title *ro(essor o( ;aw and Associate =ean (or
"n)iron#ental *rogra#s at .lorida State Uni)ersity4 7A,TG>;"- Taking Steps Toward 3ilderness *rotectionW .ishing and >oral ,ee( arine ,eser)es in .lorida and Hawaii29 c8eorge ;aw ,e)iew2 3inter 266'2 ': c8eorge ;4 ,e)4 %CC@&&S=; arine

Biodi)ersity and ecosyste# (unction argu#ents (or conser)ing #arine ecosyste#s also e!ist2 Iust as they do (or terrestrial ecosyste#s2 but these argu#ents ha)e thus (ar rarely been raised in political debates4 .or e!a#ple2 besides signi(icant touris# )alues 0 the

most economically valuable ecosystem service coral reefs rovide( *orld*ide & coral reefs rotect against storms and dam en other environmental fluctuations( services *orth more than ten times the reefs% value for food roduction4 nOCD 3aste treat#ent is another signi(icant2 non-e!tracti)e ecosyste# (unction that intact coral ree( ecosyste#s pro)ide4 nOCP ore generally2 7 ocean ecosystems lay a ma3or role in the global geochemical cycling of all the elements that re resent the basic building bloc$s of living organisms( carbon( nitrogen( o#ygen( hos horus( and sulfur( as *ell as other less abundant but necessary elements 49 nOCO Gn a )ery real and direct sense2 there(ore2 human degradation of marine ecosystems im airs the lanet%s ability to su ort life. "aintaining biodiversity is often critical to maintaining the functions of marine ecosystems 4 >urrent e)idence
shows that2 in general2 an ecosyste#s ability to keep (unctioning in the (ace o( disturbance is strongly dependent on its biodi)ersity2 7indicating that #ore di)erse ecosyste#s are #ore stable49 nOC5 Coral reef ecosystems are articularly

de endent on their biodiversity4 QX2DCR

ost ecologists agree that the

com le#ity of interactions and

degree of interrelatedness among com onent s ecies is higher on coral reefs than in any other marine environment. This im lies that the ecosystem functioning that roduces the most highly valued com onents is also com le# and that many other*ise insignificant s ecies have strong effects on sustaining the rest of the reef system 4 nOD6 Thus2 maintaining and restoring the biodiversity of marine ecosystems is critical to maintaining and restoring the ecosystem services that they rovide. <on-use biodi)ersity )alues (or #arine ecosyste#s ha)e been calculated in the
wake o( #arine disasters2 like the "!!on ?aldeJ oil spill in Alaska4 nOD% Si#ilar calculations could deri)e preser)ation )alues (or #arine wilderness4 Howe)er2 econo#ic )alue2 or econo#ic )alue eBui)alents2 should not be 7the sole or e)en pri#ary Iusti(ication (or conser)ation o( ocean ecosyste#s4 "thical argu#ents also ha)e considerable (orce and #erit49 nOD2 At the (ore(ront o( such argu#ents should be a recognition o( how little we know about the sea 0 and about the actual e((ect o( hu#an acti)ities on #arine ecosyste#s4 The United States has traditionally failed to rotect marine ecosystems because it

*as difficult to detect anthro ogenic harm to the oceans( but *e no* $no* that such harm is occurring & even though *e are not com letely sure about causation or about ho* to fi# every roblem. 1cosystems like the <3HG coral ree( ecosyste# should ins ire la*ma$ers and olicyma$ers to admit that most of the time *e really do not $no* *hat *e are doing to the sea and hence should be reserving marine *ilderness *henever *e can & es ecially *hen the United States has *ithin its territory relatively ristine marine ecosystems that may be uni?ue in the *orld.

The lan solves ! the THA leads to safety coordination bet*een the U.S. and "e#ico
@roder and Drauss( 16 0 business correspondents at the <ew Mork Ti#es
1Hohn 4 Broder and >li((ord Lrauss2 7U4S4 in Accord 3ith e!ico on =rilling92 The <ew Mork Ti#es2 2-26-26%22 http-&&www4nyti#es4co#&26%2&62&2%&world&a#ericas&#e!ico-and-us-agreeon-oil-and-gas-de)elop#ent-in-gul(4ht#lWVr/%andre(/a#ericas@
3ASHG<8TO< $ The United States and e!ico reached agree#ent on onday on regulating oil and gas de)elop#ent along their #ariti#e border in the 8ul( o( e!ico2 ending years o( negotiations and potentially opening #ore than a #illion acres to deepwater drilling4A The agreement( i( rati(ied by e!ican and A#erican law#akers2 *ould for the first time rovide for

3oint ins ection of the t*o countries% rigs in the gulf. Until no*( neither *as authori,ed to oversee the environmental and safety ractices of the other( even though oil s ills do not res ect international borders4A 7"ach o( the nations will #aintain so)ereignty and their own regulatory syste#s29 Len SalaJar2 the interior secretary2 said (ro# ;os >abos2 e!ico2 where the agree#ent was co#pleted4 7But *hat this signifies2 and what #ay be the #ost signi(icant part o( the agree#ent2 is that *e%re moving for*ard 3ointly *ith "e#ico to ensure *e have a common set of safety rotocols. - IAs the "e#icans move into dee *ater develo ment29 r4 SalaJar said2 7*e *ant to ma$e sure it%s done in a *ay that rotects the environment and is as safe as ossible.J- The Transboundary Agree#ent2 as it is called2 will #ake up to %4C #illion
acres o( o((shore territory clai#ed by the United States a)ailable (or leasing as early as Hune2 though the leases will not beco#e acti)e until a pact is rati(ied4 The Gnterior =epart#ent esti#ates that the area contains as #uch as %P2 #illion barrels o( oil and '66 billion cubic (eet o( natural gas2 relati)ely #odest a#ounts by the oil-rich gul(s standards4A "e#ico%s oil roduction has been

a ma3or source for the United States for more than 6E years( and it is the single most im ortant revenue!raiser for the "e#ican government 4 But its output has been in sharp decline in the last
decade2 as energy de#and by its growing #iddle class has risen2 (orcing a decline in e!ports and raising the possibility that e!ico could beco#e a net oil i#porter by the end o( the decade4A *hotoA Gnterior Secretary Len SalaJar2 le(t2 Secretary o( State Hillary ,odha# >linton2 *resident .elipe >alderon o( e!ico and .oreign inister *atricia "spinosa o( e!ico a(ter signing the Transboundary Agree#ent on onday4 A .ernando >astillo&Agence .rance-*resse $ 8etty G#ages A Gn response2 "e#ico%s

national oil com any2 *etrTleos e!icanos2 known as Peme#( has started a dee *ater drilling rogram in recent years des ite concerns that it is not sufficiently e# erienced for the tas$. Under the e!ican >onstitution2 Peme# cannot bring in a foreign artner li$e 'oyal 7utch Shell or 1##on "obil to develo the gulf reserves( even though those com anies have much more e# ertise in drilling in challenging *aters4A *e#e! has drilled #ore than a doJen e!ploratory deepwater wells since
26622 but the results ha)e been #i!ed4 Gt plans to drill si! #ore wells this year2 including two at depths o( #ore than D2666 (eet2 where well pressure is custo#arily high and the possibility o( a blowout is greater than in shallower wells4 A The progra# has been contro)ersial in e!ico2 especially a(ter the B* accident two years ago4 Huan >arlos Yepeda2 e!icos chie( oil regulator2 has warned

that Peme#

is not re ared to control a ossible lea$ from the t*o dee est *ells it is lanning this year and that the <ational Hydrocarbons >o##ission2 the three-year-old agency r4 Yepeda o)ersees2 #ay be o)er#atched
when it co#es to regulating deepwater drilling4 3ith a sta(( o( D62 little logistical capability and a budget o( only ZP #illion2 it has had #ini#al say in how *e#e! operates4A Gn %5P52 a blowout at one o( *e#e!s shallow-water wells called G!toc G in the Bay o( >a#peche resulted in the largest oil spill e)er in the gul( until the B* =eepwater HoriJon disaster in 26%64 A The issue o( sharing oil and gas reser)es in gul( border waters dates (ro# the %5P6s4 The two countries negotiated a treaty that would de(ine their e!ploratory rights in border Jones2 but the United States Senate declined to rati(y it in %5O64A *residents Oba#a and .elipe >alderTn agreed to e!tend a drilling #oratoriu# in the area until they could negotiate a (inal accord4 The Jones are near areas being drilled success(ully2 but they are in water depths reaching %62666 (eet and are considered )ulnerable to hurricanes4A 7"e#ico doesn%t have the

resources to combat a ma3or oil s ill( and the United States does 29 said Horge *i[on2 a (or#er president o( A#oco Oil ;atin A#erica and a current research (ellow at the Uni)ersity o( Te!as4 7Coordination and sharing communications( training( ersonnel( e?ui ment and technology are essential for safe and roductive drilling49A +asoline rices are on the rise( and 'e ublicans have blamed the administration for being slo* to a rove more domestic drilling4 3ith the new agree#ent2 co#ing at a
ti#e when the 3hite House is #o)ing closer to appro)ing drilling in Alaskan Arctic waters2 his policies ha)e led to a surge in do#estic production4 r4 Oba#a was e!pected to argue that

Plan s ills over ast the border to environmental standardi,ation in the entire +ulf of "e#ico
Lelarde( 16 0 1,ogelio ;opeJ ?elarde2 attorney and counselor-at-law2 held )arious positions at
*e#e! during %5OO-%55'2 including that o( .inancial Ad)isor to the .inance =epart#ent2 GnHouse >ounsel in Houston2 Te!as2 Gn-House >ounsel in <ew Mork2 and Head o( the Gnternational ;egal =epart#ent o( *e#e!4 He was honored with the 7 ost =istinguished Attorney Award9 o( *e#e! (or the period %556-%55%2 (or#er >hair#an o( the "nergy >o##ittee o( the e!ican Bar Association2 and currently he is the *resident (or the ;atin A#erica >hapter o( the Association o( the Gnternational *etroleu# <egotiators 1AG*<@2 as ?isiting *ro(essor o( Hudicial *rocess on the e!ican ;egal Studies *rogra# at the Uni)ersity o( Houston ;aw >enter2 and he is currently the director o( the "nergy ;aw Se#inar organiJed between the Uni)ersidad Gberoa#ericana and the e!ican Bar Association4 7US- e!ican treaty on 8ul( o( e!ico transboundary reser)oirs92 Gnternational ;aw O((ice2 '-%5-26%22 http-&&www4internationallawo((ice4co#&newsletters&detail4asp!Wg/b5'2Db(O-(2P(-:'((-b:Ca%b2bP6ccb2%P@&&S=; Peme# has indicated that it has no information to confirm the e#istence of a transboundary field4 Howe)er2 it is unli$ely that both countries *ould ta$e the ste of concluding such a treaty *ithout having geological information to suggest the e!istence o( such a (ield4 /ne of the covenants included in the treaty is particularly signi(icant in this conte!t4 Gt re?uires the t*o federal governments to ado t common norms and standards concerning safety and environmental rotection for the .activity contem lated under this agreement.. "((ecti)ely2 this #eans a harmonised system of offshore technical standards for e# loration and roduction in the +ulf of "e#ico ! it seems highly unli$ely that the relevant authorities in the United States91; and "e#ico96; *ould agree to harmonise a licable standards only in res ect of transboundary reservoirs.

Contention F: Solvency
THA *as 3ust negotiated bet*een the U.S. and "e#icoHit 3ust needs ratification on both sides
7anish et al( 16
1LM;"2 SH";;"M .G=;",2 TO \S >A,BO<";;2 LAGT;G< 8,"882 HA,O;= BU;8",2 T,A>M <A8";BUSH2 7>li#ate2 "nergy2 and Air 3eekly Update 0 .eb 26-2: 26%22 ?an<ess .eld#an ;;*2 2-2P-26%22 http-&&www4)n(4co#&news-policyupdatesDO'4ht#l@&&S=; US2 e!ico ,each Agree#ent on ,egulation o( >ross-Boundary O((shore =rilling4 A ne* ITransboundary AgreementJ bet*een the United States and "e#ico( signed .ebruary 262 rovides for shared regulation of offshore oil and gas roduction in deposits that e!tend across the waters o( both countries4 Under the agree#ent2 3oint teams of ins ectors from the United States and "e#ico *ill oversee e# loration and develo ment activities in cross! boundary de osits to ensure that they com ly *ith a licable environmental re?uirements. ,egulatory agencies (ro# both countries will also ha)e an opportunity to re)iew plans (or oil and gas production in cross-boundary deposits be(ore any drilling acti)ity begin4 ;astly2 the agreement rovides a frame*or$ for U.S. com anies and "e#ico%s state!o*ned oil com any( Peme#( to enter into voluntary agreements for 3oint e# loration and develo ment activities. If ratified by both countries( the Transboundary Agreement *ill remove a legal obstacle to oil and gas roduction in appro!i#ately %4C #illion acres o( o((shore deposits containing an esti#ated %P2 #illion barrels o( oil and '6: billion cubic (eet o( natural gas4 /il and gas roduction in these *aters is resently rohibited under an agree#ent between the two countries that was due to e!pire in 26%:4

The "e#ican Senate has already ratified the THAHits effectiveness is only a ?uestion of U.S. ratification
Lelarde( 16 0 1,ogelio ;opeJ ?elarde2 attorney and counselor-at-law2 held )arious positions at
*e#e! during %5OO-%55'2 including that o( .inancial Ad)isor to the .inance =epart#ent2 GnHouse >ounsel in Houston2 Te!as2 Gn-House >ounsel in <ew Mork2 and Head o( the Gnternational ;egal =epart#ent o( *e#e!4 He was honored with the 7 ost =istinguished Attorney Award9 o( *e#e! (or the period %556-%55%2 (or#er >hair#an o( the "nergy >o##ittee o( the e!ican Bar Association2 and currently he is the *resident (or the ;atin A#erica >hapter o( the Association o( the Gnternational *etroleu# <egotiators 1AG*<@2 as ?isiting *ro(essor o( Hudicial *rocess on the e!ican ;egal Studies *rogra# at the Uni)ersity o( Houston ;aw >enter2 and he is currently the director o( the "nergy ;aw Se#inar organiJed between the Uni)ersidad Gberoa#ericana and the e!ican Bar Association4 7US- e!ican treaty on 8ul( o( e!ico transboundary reser)oirs92 Gnternational ;aw O((ice2 '-%5-26%22 http-&&www4internationallawo((ice4co#&newsletters&=etail4asp!Wg/b5'2Db(O-(2P(-:'((-b:Ca%b2bP6ccb2%Pandredir/%@ The treaty *ill become effective B8 days after the last notification o( appro)al has been #ade by e!ico or the United States4 Gn this regard2 the "e#ican Senate ratified the treaty in A ril 6816Q therefore( the treaty0s effectiveness is sub3ect to a roval and ublication by the United States( *hich to date has neither ratified nor ublished the treaty.