Could We Begin Paying Less at the Pumps Soon?

On February 20, the United States and Mexico reached an agreement that could open up more areas for deepwater drilling.  Awaiting ratification by Mexican and American lawmakers is the Transboundary Agreement, which would potentially make close to 1.5 million acres of offshore territory (claimed by the U.S.) available for leasing by the beginning of the summer.  This area holds approximately 172 million barrels of oil and 300 billion cubic feet of natural gas.  As gasoline prices have been rising as of late, these discussions regarding domestic drilling are coming at an opportune time.

One reason that this agreement is advantageous for these countries is because both Mexico and the United States, while maintaining sovereignty and control over their regulatory systems, will be on the same page when it comes to safety protocols utilized by the countries’ rigs in the Gulf of Mexico.  Mexico’s national oil company, Pemex, has been developing deepwater drilling in recent years, but the main concern is its lack of experience and safety.  Ken Salazar, the interior secretary, stated that as the Mexican company embarks on newer, deeper waters, both countries “want to make sure it’s done in a way that protects the environment and is as safe as possible.”  On this point, former president of Amoco Oil Latin America, Jorge Piñon, commented that Mexico doesn’t have resources to deal with a major oil spill should one occur in these deeper waters, but the United States does.  Therefore, this agreement could promote transnational training, equipment, and technology so that the drilling is both “safe and productive.”

In the 1970s and 1980s, the two countries attempted to ratify a treaty that would have clearly defined exploratory rights in border zones.  However, the U.S. Senate did not ratify it in the end.  Obama is also seeking to approve drilling in Alaskan Arctic waters.  What consequences, good and bad, do you feel will result from the ratification of this agreement?  Should we continue to explore offshore drilling?  Will this Mexico-U.S. agreement, if ratified, alleviate the price at the pump?

Original article from The New York Times

2 comments

  1. After the BP oil catastrophe I am astounded that this is even being considered. Yes, gas is expensive, I am among the many that wish it wasn’t $40 to fill my small fuel efficient car. But I am also getting continuously skeptical that we will ever actually try to move away from oil as a main fuel source. It will be hard to do so we will need some sort of huge event to force us to do it… I honestly hoped it was what happened in the Gulf in 2010. It is only 2012 and already more drilling is being proposed. If more drilling is permitted more oil will be produced and it will just be that much longer before any real push is made towards moving away from its use.

  2. I hope that this agreement is approved. Anything that can lower gas prices is a good thing. One concern I have with this agreement, and something that has been brought up with regards to offshore drilling in Alaska, is that the oil will not go to United States consumers but instead be exported to Asian markets. Unless this agreement is going to have a direct impact on oil prices in the United States, it should not be pursued. Oil prices affect the cost of everything in the United States. American citizens need relief. The oil is there and steps need to be taken to go get it. This agreement appears to be a promising development to safely and effectively lower gas prices and it should be pursued.

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