Governor Herrera frustrated with give and no take relationship with Pemex

At first glance, there seems to be no reason why Veracruz would be one of the poorest states in Mexico. Beyond having 425 miles of coast that tourists around the world would flock to if given the chance, the state is home to Cantarell, ranking a close second to Saudi Arabia's Ghawar field as the largest oil field in the world. The reason for its poor economic position is in large part due to the fact that Veracruz won't see a single cent of the US$26.3 billion that Pemex raked in this past fiscal quarter. While some of its earnings will occasionally makes its way to repairing dilapidated coastal highways or cleaning up an oil polluted stream, the majority of it will slip right through Governor Herrera's hands. Beyond seeing little to none of its earnings, Herrera has recently expressed frustration at the mess, threatening Veracruz's environment but also Veracruzanos themselves, that Pemex has left for the state to use its own resources to clean up.

Herrera has spent the past week pitching his Energy Reform Package to dozens of national reps. Above all, the legislation seeks to elicit the aid of the federal government in improving the efficiency and productivity of Pemex's operations. Two days ago, he announced that Pemex's most recent accident in which an oil rig collided with a stationary oil platform has cost the state US$8 million in damages.

With 14,000 kilometers of pipelines running through Veracruz, the potential for error resulting from Pemex's outdated methods is great. When realized, this potential not only burdens the state with repair costs, but poses a grave threat to the health of the state's environment, and the millions of Veracruzanos that inhabit it. Just two days ago it was made public that 10,000 barrils of oil spilled into the a river that lines the southern town of Coatzacoalcos. The over 800 families that make a living off of selling fish caught in the now infected river are expected to be put out of business. Sadly, this isn't the first time that this very same town has filed similar complaints with Pemex's negligent practices.

While maintaing the objective of forcing the nationally-run Pemex to finance the debt it owes to the state, the Energy Reform is Herrera's alternative to resorting to the more radical measure of physically appropriating control over all Pemex installations in Veracruz.

This is not the path...We are not PRD (the leftist party considered rebellion-happy), we are PRI and the path we choose is through established institutions. Courtesy of Diario de Xalapa (Oct. 31, 2007); Trans. from Sp.

As has been his consistent approach throughout his efforts to demand additional aid from the federal government, in his pleas to national reps he focused on the invaluable service that the state of Veracruz provides to the Republic.

For many years, the state has made a generous contribution to the development of the nation through agreeing to let 14,000 kilometers of oil ducts circulate throughout the state. Daily, more than a million cubic meters of gas generated from Veracruz provide Mexico with a huge portion of its electricity. In addition, we deliver billions upon billions of desperately needed crude oil and petrochemicals to the nation.

Beyond begging the federal government for money, Herrera has shown signs of willingness to step where few have dared step before: on the thin ice of calling for Pemex's privatization. Realizing that his pleas for money from President Fecal's cash strapped government will only get him so far, Herrera has put his political career on the line and begun demanding that Pemex open its doors to outside investment. No doubt, Herrera is tired of submissively footing the bill for Pemex's mistakes and is going to do everything within his power to hold the company accountable.

However, the eerily accommodative tone that he's taken with national reps, arguing that to take some of the pressure off of the federal government private investors be given a stake in the company, reveals the limited extent of his demands. He is totally justified in asking that Pemex pay for the innumerable destruction to Veracruz's environment and people that its latest accident has caused. However, what seems bizarre is that in all of his complaining he hasn't muttered a word about the possibility of Veracruz seeing a portion of Pemex's profits. More than just doing what should be obligatory and paying its debts, Pemex should be pressured to directly finance Veracruz and the other five oil producing states in Mexico, all of which ironically suffer from the Union's highest rates of poverty, as a token of appreciation. But no, for some reason or another, (my host brother is convinced the corrupt tendencies of those damn good for nothing politicians, including Herrera himself, are to blame) the whereabouts of Pemex's earnings are unaccounted for and Herrera refuses to do anything about it.