Football Analogy (Part II)

football-analogy-IIIn this report, we extend use of the terminology of American football to describe the energy history of Mexico, by presidential period, starting with the presidency of José López Portillo in 1976. There are moments in which the ball of energy reform, on either the oil or power sides, was fumbled. There are other moments in which one administration punted the ball of reform to the next administration—a practice that is seen throughout the periods under review, including the present one.

Other terms, such as “drive” and “playbook,” may be nicely applied to the current cycle of reform: Team Peña is moving the ball downfield, tearing out old plays and substituting new ones. The rules of play and competition have been changed, and new umpires are about to enter the field.

The ball (that is, value) of football terminology can be carried only so far, however. Meta-terminology outside the vocabulary of the game itself is needed: Absent a mineral lease, which establishes the lease-owner’s right to production, the oil company is paid as if on a piece rate—like a garment worker—for each net barrel that happens to come out of the ground in his lease area.

Our view is that such an arrangement is unsustainable, if not unworkable. You could say, going back to football, that there are flags on the field.

The table of contents and the section of observations of this report may be downloaded HERE. The entire report is available by subscription or purchase.

Call 832-434-3928 (text/cell) for subscription details or e-mail info@energia.com.

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Mexico Energy Intelligence

Baker & Associates offers niche-market business and policy intelligence related to Mexico's oil and gas, power and chemical industries. Over 1,000 reports have been issued in the last 20 years. Subject matter expert and publisher George Baker, who directs the firm, has carried out consulting assignments starting in the late 1970s at the height of the Oil Boom in Mexico. He brings bilingual and bicultural skill-sets to understanding and responding to challenges of business and public policy, coupled with a deep familiarity with the history and idiosyncrasies of the Mexican operating environment.

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