Control of the energetic resources of the American continent is fundamental for the imperialist strategy of the United States government.  The Plan Puebla-Panama (PPP) is a regional expression of this strategy which is framed within the Free Trade Area of the Americas (FTAA).

In the Inter American Development Bank document titled “Interconnection of the Regional Proposal for Transformation and Modernization of Central America and of the PPP” (April 30, 2001), the studies named “Regional terminals for fuel importation and storage” and “Natural gas supply to the Central American Isthmus” are cited. These documents affirm the intention to, “make more efficient the external acquisition of hydrocarbons” and build, “two gas pipeline, one from Mexico and the other from Colombia, with a respective longitude of 1.117 and 1.310 Km and investments estimated at 593 and 830 million dollars respectively (…).” This is similar to the gas pipeline measuring 1.464 Km planned to be built from Turkmenistan to Pakistan crossing the territories of Afghanistan, and from there another 750 kilometres to reach India. This Asian gas pipeline would transport 20 thousand million cubic metres of gas annually and has already caused the death of hundreds of thousands of people in the region before it has even been built. What will the cost in Latin America and specifically in the case of the PPP?

In another document from the IDB called “Initiative for the Integration of the Basic Infrastructure between Mexico and the countries of the Central American Isthmus” (November 2000) it is stated that “the gas pipelines seem to be the best alternative for the transport of gas (compared to the transport of liquid gas by tankers.”  Additionally, two fundamental elements are mentioned: first, “ The gas pipeline has more local effects and involves collaboration with the Electric Integration System for Central America (SIEPAC, Spanish initials)”. Secondly, it highlights the strategic objective of the FTAA once again: “Enabling the eventual interconnection from Venezuela to the United States: through a gas pipeline between Yucatan and Guatemala, with an extension to the rest of Central America; a underwater gas pipeline from Colombia to Panama with extensions to other Northern countries; and a gas pipeline between Venezuela and Colombia (to supply Panama)”. These projects should put the indigenous and peasant population on their guard as these gas pipelines would cross their homes, cornfields, coffee plantations and forests.

In other words, the way will be cleared for transnational electric corporations to invest in gas projects, which is where the most money will be invested for energy generation in the next decade. The PPP and the FTAA link gas pipelines within the regional electric market because, “the most important market for natural gas in Central America will be for electric production”, according to the PPP. Accordingly, for the Electric Integration System for Central America (SIEPAC), “the electric industry will be the main consumer of natural gas”, and the integration of the system “will facilitate the convergence with the future of the natural gas industry in the region (…) creating incentives for the construction of gas pipelines”. In fact, in Mexico, the Federal Commission of Electricity (FCE) is the main consumer of natural gas in the country.

The previous was later confirmed by Lourdes Melgar, director of International Affairs of the Department of Energy of Mexico (SENER). She stated that the energetic integration between Mexico, Canada and the US would be reachable by march 2002.  At this time, they will present an official analysis of the situation concerning the supply and demand of petrol, gas and electricity in North America, given that they hope to apply the same regulations in the whole region. This is the FTAA in every sense: deregulate the nations by eliminating their laws, in order to create continental regulations that protect the transnational corporations. In the document called “Energetic Profile of North America”, it is established that the “consumption of energy per capita will increase by 10% by the year 2010 in the region of North America”. It also states that the United States has reserves of 167 billion cubic feet of natural gas, Canada 92 billion and Mexico only 30 billion. Therefore, even if the there is more demand for energy in the north and the south, along with the shift of the productive plants and industries towards the south in search of better comparative advantages and cheap labour force, the oil exploration and exploitation will increase in Latin America.

But the Mexican government has other reports. In December 2001, the secretary of Energy, Ernest Martens, informed that the hoped for growth in energy demands in the country from 2000-2010 will be: electricity 70%, 35% in LP Gas, 120% gas and concerning combustible liquids like gasoline, diesel or kerosene they will grow to 45%. Besides he indicated that in order to satisfy the current demand, Mexico imports 27% of its gasoline, 19% of combustibles and 28% of LP (liquid petroleum) gas, of which he also reminded that Mexico is the worlds 1st consumer and needs to import 120 thousand barrels daily. On January 6, 2002, Martens stated that in June of the same year, the department would introduce the first package of international permits for the exploitation and exploration of dry natural gas in Mexico through multiple service contracts. It is hoped that for the next year there will be thousands of millions of dollars of investment. In August of the same year, he informed that the General Management of Mexican Oil Exploration and Production (OEP) had finished the second draft of the multiple service contracts (MSC) that would permit private investment in the exploitation and production of non-associated gas. It was hoped that the final version would be finished by December 2002. By making secondary laws, the Constitution of the Republic is arrogantly overlooking what is said in article 27:

“In the Nation is vested the direct ownership of all natural resources (…) petroleum and all solid, liquid, and gaseous hydrocarbons; (…)In the case of petroleum, and solid, liquid, or gaseous hydrocarbons no concessions or contracts will be granted nor may those that have been granted continue, and the Nation shall carry out the exploitation of these products, in accordance with the provisions indicated in the respective regulatory law.(…) It is exclusively a function of the general Nation to conduct, transform, distribute, and supply electric power which is to be used for public service No concessions for this purpose will be granted to private persons and the Nation will make use of the property and natural resources which are required for these ends.(…)

It is for the above reason that the investors are not at ease until these “tariff barriers” are eliminated according to the demands of the International Monetary Fund (IMF). This is what Fox has elegantly called “providing security for investment”. 

They fear that the Mexican nationalist spirit will by revived by a brave president who would give value to the sovereignty of the nation. But, in any case, for big capital these investments are more urgent and they are taking the risk with the faith that the Mexican government will be their most loyal ally.

The electric energy crisis in California reactivated interest in investing in gas pipelines. In February 2002, the US and Mexican governments agreed to carry out the construction of what is considered to be the largest gas pipeline between both countries. Sempra and Pacific Gas & Electric will take charge of building it in Baja California with a daily capacity for about five million cubic feet of natural gas. It will supply the plants of ‘Termoelectricas’ of Mexicali and ‘La Rosita’, where some four thousand tons of the pollutants will be produced annually. This gas pipeline could transport the gas that the United States and Mexico intend to import from Bolivia and other regions of South America.  The Mexican Government also gave permission to a North American company to build a gas pipeline in Chihuahua, a border state with the US. In August 2002, the Texan company Tidelands Oil and Gas received a bid from the Energy Regulating Commission (CRE) who gave permission for the construction of a gas pipeline measuring 8 km to sell gas to ‘Piedras Negras”, in the Mexican state of Coahuila, which would cut back on the crossing of more than a 100 trucks daily. It took just 1 year to obtain permission for the construction of the gas pipeline that will transport more than 140 thousand cubic metres of natural gas, when in the past this kind of permit has taken up to 3 years

In the same month, it was announced that Ecogas Chihuahua finished the first phase of an investment of more that 50 million dollars, out of a total of 650 million, in the distribution, transport and importation of natural gas as well as the production of electric energy. Ecogas is a co-investment between the American company Sempra Energy International and the Mexican Proxima Gas. The ERC confirmed that Ecogas connected 51 thousand users in the area, which includes the cities of Delicias, Cuauhtemoc, Anahuac, and the capital of the state. The Federal Commission of Mexican Electricity (CFE) has already awarded a license for the construction of the Pemex-Merida-Valladolid gas pipeline, measuring 700 km, to Bechtel and TransCanada; the Rosarito and the Samalayuca gas pipelines, measuring 72 km have been granted to El Paso Energy International and El Paso Natural Gas; and the gas pipeline granted to Enron was then given to Tractebel in Nuevo Leon. Bechtel is the same corporation that intends to keep the water that it bought from the Bolivian government and stole from the Bolivian people who are now filing a suit against the company for millions of dollars. 

THE PROPOSITION OF THE MEXICO THIRD MILENIUM PROJECT

For the Mexico Third Millennium Project (PMTM), the hydroelectric potential of the hydrological systems in the PPP region and its proposal for multifunctional projects, the total supply would be of 18,450 Mw and 56,460 million kW/h/a, equivalent to 51% of the power and 32% of the energy generation in the country. The PMTM proposal would save 94 million barrels of the combustible and would contribute to displacing new steam centrals that consume combustible fossils and need high investment in foreign currencies.

According to the project, in the new energy centres, refineries, thermoelectric centrals, petrochemical plants and associated industries of maximum capacities, feasible treatment and production could be installed in a single area. The PMTM confirms that “by installing themselves in strategic zones, as much for the national electric network as for the processing of hydrocarbons, the two most important industries –PEMEX and FCE- would join their functions and investment with optimal profitability and productivity ratings. In this way, in the existence of compatibility and co-ordination between the expansion programs an efficient and competitive use of the petrol and natural gas would be reached”.

“The capacity of the new energetic centres would assure the complete supply of the combustibles designed for the electric industry; would facilitate the transformation within the country of the hydrocarbons to give them greater added value and processed products would thereby be exported instead of raw petrol. The thermoelectric centrals would have turbo-gas units in order to take better advantage of the residual heat, would consume 8 million barrels of combustible or 1,280 million cubic metres of natural gas for each turbo generator team of 750 MW in order to produce 5000 million

kW per hour” affirms the project.

The alternative sites that fulfil the criteria, norms and essencial concepts for thermoelectric centrals, in order to form efficient and modern energetic centres would be: Punta el Moro in the state of Veracruz (3000 Mw.); Potosi-Zihuatanejo in Guerrero (3000 Mw.); Francisco Zarco in Durango (1500 Mw.); Camargo City in Chihuaha (700 Mw.); Litigu in Nayarit (3000 Mw.); Teapa in Jalisco (1500 Mw.); Patzcuaro in Michoacan (700 Mw.); Rancho de Piedra in Tamaulipas (4500 Mw.); Minatlan II in Veracruz (3000 Mw.) and Isla Tiburon in Sonora (3000 Mw.). The estimated investment would be six million pesos per megawatt to install. Besides the expected investment in nuclear energy in Coronado-south Island to install a subterranean central with turbogenerating groups of 1250 Mw. Today, the nuclear plant in Laguna Verde, Veracruz generates 6% of the country’s electricity, while in France the percentage is of 80%, according to Alfredo Elias Ayub, the general manager of the FCE.

CHIAPAS: Three hydrocarbon projects are intended to be carried out within the framework of the PPP, which should concern the campesino and indigenous population. The objectives of the PMTM are “1. The supply of liquid combustible derived from petrol in the peninsula of Yucatan.  2.  In the ecological sphere to comply with international environmental regulations in the main aquatic oilfields of the country (Mexico) located in the Golf of Mexico (Cantarell oil well, the fifth most important in the world, which produces 70% of the Mexican supply) and yet another to increase the petrol and gas production to 55 thousand barrels daily and 69 million cubic feet daily, respectively, in one of the oil fields located in this region (Grijalve Delta)”, specifically in Chiapas, border state with the state of Tabasco.

Accordingly, the indigenous population from the municipality Centla in the state of Tabasco are in a fight against the Department of Communication and Transport (SCT) who intend to extend the Villahermosa-Border highway by a 50 kilometre stretch. On August 8, 2001, they wrote to Mexican President Vicente Fox: “Knowing about your ambitious Plan Puebla Panama and being conscious of the benefits the transnational corporations will obtain, we call to your conscience and by divine justice we ask you not to permit this plunder. We are prepared to offer our blood, for this is the only inheritance we have to pass on to our children for their survival”. They declare that this road will guarantee access to the port of Frontera, Tabasco, and to the city of Carmen, Campeche, which would provide for the future exploitation of 400 wells in the “Delta” petrol field. The recent halt of the construction of the roads in Guatemala is an unprecedented hope for the peasant communities faced by the attempts to evict them from their lands.

In the south-eastern region of Mexico, including Chiapas, Pemex intends to invest 63 thousand million pesos throughout the next five years, of which almost 32% (20 thousand million pesos) would be used for the drilling and production, starting in the year 2002 with an investment of 6 thousand million (Chiapas produces 17% of the nation’s crude petrol.)  In addition, they have informed that the hydrocarbon reserves have diminished by up to 40% in the southeast due to over exploitation and disinvestment in the last few years. PEMEX denies that there are exploration projects in the Lacandona jungle, although many of these have already taken place and can be seen in the chapter “Maps” on www.ciepac.org.  At the same PEMEX confirm that there are 15 bioprospection projects in the southeastern region. Oil exploration projects in Chiapas have taken place in the municipalities of Palenque, Ocosingo, Benemerito de las Americas (Marques de Comillas), Las Margaritas, Independencia, La Trinitaria y Maravilla Tenejapa. In many of these areas there has been confirmation of the presence of oil fields that were closed prior to the EZLN uprising in January 1994.

Presently there are oil activities in the municipalities of Reforma, Juarez and Pichucalco and the municipalities of Ostuacan and Sunuapa are being incorporated. In Reforma, Ostuacan and Sunuapa, new wells will be opened that would presumably generate six thousand direct jobs and six thousand indirect jobs besides the displacement of populations, the high cost of basic products, environmental contamination and social problems. Therefore, the state-owned business will try to soften the effects by investing 150 thousand pesos in environmental care. Moreover, Pemex will extend the Reforma-Pichucalco highway, putting aside 35 million pesos and investing six this year. New and even worse impacts are foreseeable for the populations of the areas. Keeping in mind that between 1999 and 2000 there were leaks of crude petrol from Pemex, affecting indigenous communities, impacting the environment and increasing the pollution in the Coatzacoalcos river.

GAS AND OIL IN CENTRAL AMERICA

According to Oil Watch, countries that depend on the extraction of petrol soon have profitable economies and have difficulty in overcoming their own crisis, because of a total dependency of the international situation.  This is especially when the petrol prices are not controlled by the producing countries, but rather by armed conflicts, the actions of the petrol companies, the political instability in crude exporting countries, and other factors. On the other hand, the producing countries tend to see a rapid economic growth concentrating big investments in the petrol sector but thereby weakening other sector and simultaneously increasing the external debt. In these countries it is not profitable to produce anything locally; it is cheaper to import everything. When the petrol prosperity comes to an end, the economy lacks competitive sectors and the crisis puts in danger their food sovereignty and leads to great increases in poverty rates. There tends to be high military expenditure, low indicators of Human Development and economic growth, high child mortality rate and malnutrition, low expenditures on health, low education levels and high illiteracy, vulnerability to economic impacts, high levels corruption and authoritarianism, low governmental effectivity as well as high probability of armed violence in these countries.

The seven countries of Central America (Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) depend heavily on the imported petrol. For example, the dependency on imported oil is 100% in the case of Belize and 52% for Costa Rica. On the other hand, the consumption of petrol has doubled in the region since 1980, reaching up to 244 thousand barrels per day in 2000. The consumption is comparable to Chile (245 thousand) although Central America has twice the population; and to Hong Kong (254 thousand) although it is six times smaller than Central America in terms of population of which a large percentage has no access access to electricity. In 1998, the countries of the area had an energy consumption of 0.62 millions of millions of BTU’s (British thermal units per hour) which is equivalent to 0.2% of the world’s total, a number which is similar to its participation in the Gross World Product.

Of the total consumed energy for all of the region, 71% corresponds to petrol, the equivalent of 0.03% of the worlds consumption in petrol; 24% to hydroelectric energy; 0.03% to carbon and 5% to other sources including the geothermics and net importations of electric energy. The region thereby imported 186 thousand barrels of petrol daily and 0.08 tons of cut carbon. Central America has close to 0.05% of the worlds known reserves of petrol and practically has no reserves of natural gas or carbon.

Mexico and Venezuela are the main countries that supply petrol to the region in the framework of the San Jose Pact and the Energy Agreement of Caracas. In the San Jose Pact of 1980, which has been renovated year after year, Venezuela and Mexico committed to export 160 thousand barrels of crude petrol and petrol products to the Central American countries and to 4 Caribbean countries on preferential terms. Within the Energetic Agreement of Caracas signed in October 2000, Venezuela committed to supply additional petrol to the Central American and Caribbean countries with preferential terms and prices for the next fifteen years. So, in the year 2000, the petrol consumption corresponded to approximately 75% of the total energetic consumption in Central America, a region that does not consume natural gases and consumes very little carbon. Since 2001, Florencio Salazar, the co-ordinator of the Plan Puebla Panama in Mexico, confirmed that the government planned the extension of pipelines to increase the sales of hydrocarbons and natural gas to the seven Central American countries. If the transnational corporations take over the lands, the distribution of energy and the production of the electric energy, they would profit from those preferential prices from Venezuela to the region. And that is exactly what they want.

In Central America, the electric energy comes mainly from hydroelectric dams. In 1998, the installed capacity for the generation of electricity was close to 5,517 MW, some 52% of this came from the hydroelectric, 40% from thermoelectric and 4% from the geothermic and biomes. According to the World Commission on Dam (WCD), Mexico has 540 dams for the generation of electric energy, control of floods and irrigation of all sizes, and 3 are being planned; Guatemala has 4 and 9 planned; Belize has one; Nicaragua four; Panama has two and plans to build three more; Costa Rica has 9; Honduras also 9; and El Salvador has 5. This makes a grand total of 574 hydroelectric dams and 15 being planned. Although the tendency in the PPP region is to build more hydroelectric dams, gas is also expected to be a main source for energy production. However, in the late 90’s foreign companies started aggressively entering into the area, especially the Spanish and American transnationals, and the use of thermal production increased rapidly.

Although, for the moment Central America’s energy resources are limited, the region is strategic for the international energy markets as a transport centre of petrol across the Panama canal where 625 thousand barrels of crude petrol and petrol products crossed daily in 1998. This represents 62% of total oil shipping in the direction of the Atlantic to the Pacific and the majority of the petrol products in the opposite direction. But the route between North and South America is equally strategic as is the route between North America and Asia. Therefore the PPP introduces the crossing of all the territory, from the Atlantic to the Pacific, by means of wet and dry canals along with networks of highways and railways. In order to guarantee this, the governments of the region are collaborating extensively Bush’s government, as well as certain ‘non governmental’ organisations (NGOs), to push the Free Trade Agreements (FTA) necessary to open up the way for the commercial transit, the flow of goods and capital, but not the labour force. This is why in May 2000, after 4 years of negotiations, the “Northern Triangle” formed by El Salvador, Guatemala and Honduras signed an FTA with Mexico, and is negotiating another one with the Andean community consisting of Bolivia, Colombia, Ecuador, Peru and Venezuela. On the other hand, the government of the United States is imposing (“negotiating”) upon the Central American governments a Free Trade Agreement, convinced that with this they will get out of poverty, but ignoring or wanting to ignore what will be the results of their actions, which will be to seal their own tombs.  As if it’s no big deal to loose your sovereignty, as the negotiations to interconnect the electric networks of the Central American countries are advancing, administered by the Spanish electric company Endesa.

Faced with serious deforestation, climatic change and other environmental effects, as if extreme poverty in itself were not enough to convince us, those that now criticise and raise their voice against the opponents of the PPP mega-projects say that we are against development, tomorrow they will acclaim them. Because resistance continues. Peasant communities and organisations, indigenous and ecologists from Guatemala dealt a strong blow to the PPP by succeeding in cancelling the construction of two super highways that would unify the tourist circuit Olmeca-Maya, according to information by the newspaper “Tabasco Hoy” in the first days of October 2002. One would go from Tikal to the National Park “El Mirador-Rio Azul” on the border between Guatemala and the Mexican state Campeche. It would connect Tenosique, Tabasco, with the El Naranjo community in Guatemala. Both highways would cross the jungle in Guatemala, which is already threatened by petrol extraction.

Note: If you wish to be placed on a list to receive this English version of the Bulletin, or the Spanish, or both, please direct a request to: ciepac@laneta.apc.org and indicate whether you wish to receive the bulletin in plain text or as a Word 7 for Windows 95 attachment.

Note: If you use this information, cite the source and our email address. We are grateful to the persons and institutions who have given us their comments on these Bulletins. CIEPAC, A.C. is a non-government and non-profit organization, and your support is necessary for us to be able to continue offering you this news and analysis service. If you would like to contribute, in any amount, we would infinitely appreciate your remittance to the bank account in the name of:

CIEPAC, A.C.
Bank: Banamex
Account number: 7049672 Sucursal 386
San Cristóbal de las Casas, Chiapas, México.
You will also need to use an ABA number:
BNMXMXMM

Thank you! CIEPAC

Telephone:
in México: 01 967 674 5168
from outside Mexico:: +52 967 674 5168