Richard Branson sits on the top-ten list of the United Kingdom's richest citizens, with an estimated wealth of roughly eight billion dollars. As the company he founded -- Virgin Group -- tries to expand its airline operations into the United States, Branson is committing billions of dollars of the company's future profits to developing renewable energy. VOA's Kane Farabaugh recently spoke to the British entrepreneur at the United Nations in New York about his commitments to helping the environment, and about his plans for the final frontier in tourism -- space.
Richard Branson
He set a record for crossing both the Atlantic Ocean and the English Channel.
An attempt to travel non-stop around the world in a hot air balloon fell short of his dreams in 1999, but his Virgin Global Flyer aircraft, piloted by Steve Fossett, succeeded in 2005.
Richard Branson said before the success, “It is perhaps the last great aviation record left here on Earth."
But when Richard Branson is not flying above the clouds, he is right down to earth in the effort to go green. "There is a danger that mankind could actually be destroyed if we carry on putting too much methane and carbon into the Earth's atmosphere."
At former President Bill Clinton's Global Initiative conference in New York in September, Branson emphasized the need to develop renewable energy. "We have to wean ourselves off our dependence on coal and fossil fuels."
Branson committed the profits over the next 10 years from Virgin Atlantic Airline and other transportation companies in the Virgin Group to the effort. That is an estimated cost of three billion dollars.
And in February, Branson announced the Virgin Earth Challenge, a $25 million prize for the person who develops a working solution to remove greenhouse gases from the Earth's atmosphere. "To devise a way of removing greenhouse gases, at least the equivalent of one billion tons of carbon per year -- hopefully much more, and you will have the satisfaction of saving thousands of species and possibly even mankind itself."
Since the announcement, Branson has received a flood of entries for the competition that is open to the world. "We've had 15,000 people who have sent in their application forms. It only launched a month ago so it's early days to see if anybody's come up with any great ideas, but at least we're getting people thinking. And you know, it would be wonderful if someone had a breakthrough."
Aside from his efforts to promote a cleaner environment, Branson continues to be a man on the move, expanding his business empire.
Almost 35 years after he started his fledgling record company in London, the Virgin name is on everything from music to mobile phones, comics to drinks, trains to planes, and now, the first spacecraft built for tourists.
Called Virgin Galactic, it is scheduled to blast off in 2009. Branson adds, "Myself and my family are fortunate enough, because we own a space company, to be able to take the first flight up there. So 24 months from now my parents and my children and myself shall be popping into space.”
Branson says he is not concerned. “I'm not nervous. I mean, these spaceships will be well tested before we go up. But it's a responsibility. It's a responsibility to take my children up and my parents, and it's going to be a responsibility taking hopefully thousands of people up in the years to come."
Branson is sometimes called the "Rebel Billionaire", a title he has earned partly for the risks he has taken in many of his business ventures.
While the world waits for Virgin Galactic to launch from the Mojave desert in California, Branson is also trying to position Virgin into the U.S. domestic air travel market. Virgin America, based in San Francisco, is trying to win approval from the U.S. Department of Transportation (DOT). The DOT initially opposed the start-up because of regulations preventing foreign citizens from controlling a U.S.-based airline.
In Britain in 2003, Branson also led an unsuccessful effort to keep the supersonic passenger jet Concorde flying. The owner, British Airways, refused to sell the aircraft and forced the fleet into retirement. That put an end to supersonic passenger travel.
But when Richard Branson looks back on a life less ordinary than most, it is not his airlines, his record stores, his space franchise, or his travel speed records he wants people to remember most. He hopes the world will remember the Virgin Earth Challenge. "If somebody could answer this prize, I would be very happy to be known for coming up with a prize that saved the world."
2007年9月19日星期三
Insurance Company Using Technology to Reduce Teen Accidents
A major U.S. insurance company is offering new technology to its customers, which could significantly reduce accidents. The program targets risky teenage drivers by giving parents the ability to view and track their children's driving habits. American Family Insurance Company says its “drive cam” technology could save lives and lower insurance costs. VOA's Mil Arcega reports.
The National Highway Traffic Safety Administration says crashes are the number one killer of U.S. teens.
In fact, new data shows the fatality rate for teenage drivers is four times higher than for drivers 25 years or older. American Family Insurance believes one way to reduce the high rate is to eliminate risky driving behavior among teens.
To do that, they mount a small camera on a rear view mirror -- so parents, such as Dave Hackworthy, can monitor their child's driving habits. "It's held him accountable for driving. It's put him in a position where he knows he's being watched," says the dad.
Rusty Weiss
Rusty Weiss, a director at Drivecam, which developed the technology for consumer use, says the camera only records abrupt maneuvers -- then emails it to parents. "It lets parents set a clear expectation, to drive in a manner that doesn't cause the camera to trigger. Pretty simple message."
Gary Fox, one of 30 teens who took part in a pilot project at Edgewood High School in Madison, Wisconsin, is convinced it works. "It will actually make me a better driver. When you do something wrong, make a sharp turn really fast, stop really fast - then it goes off."
Critics of the program have raised concerns about privacy. But American Family Insurance spokesman Steve Witmer says only parents will have access to the video. "It's sent directly to the parents. Edgewood High School doesn't see the information, American Family Insurance doesn't see the information, but people who need to see the information are the parents and the students."
American Family Insurance is now offering the program free for one year to 30,000 families in selected states. If the system proves effective in preventing accidents, the company says volunteers who use it could see their insurance rates drop.
The National Highway Traffic Safety Administration says crashes are the number one killer of U.S. teens.
In fact, new data shows the fatality rate for teenage drivers is four times higher than for drivers 25 years or older. American Family Insurance believes one way to reduce the high rate is to eliminate risky driving behavior among teens.
To do that, they mount a small camera on a rear view mirror -- so parents, such as Dave Hackworthy, can monitor their child's driving habits. "It's held him accountable for driving. It's put him in a position where he knows he's being watched," says the dad.
Rusty Weiss
Rusty Weiss, a director at Drivecam, which developed the technology for consumer use, says the camera only records abrupt maneuvers -- then emails it to parents. "It lets parents set a clear expectation, to drive in a manner that doesn't cause the camera to trigger. Pretty simple message."
Gary Fox, one of 30 teens who took part in a pilot project at Edgewood High School in Madison, Wisconsin, is convinced it works. "It will actually make me a better driver. When you do something wrong, make a sharp turn really fast, stop really fast - then it goes off."
Critics of the program have raised concerns about privacy. But American Family Insurance spokesman Steve Witmer says only parents will have access to the video. "It's sent directly to the parents. Edgewood High School doesn't see the information, American Family Insurance doesn't see the information, but people who need to see the information are the parents and the students."
American Family Insurance is now offering the program free for one year to 30,000 families in selected states. If the system proves effective in preventing accidents, the company says volunteers who use it could see their insurance rates drop.
Rising Oil Prices Fuel Corn Tortilla Price Hike
Rising world oil prices have sparked interest in alternative fuels, such as ethanol, which can be produced from corn. This has raised demand for the grain, which, in turn, has increased its price as food. VOA's Peter Fedynsky reports that higher prices may not be the only cost associated with corn-based ethanol.
People march in Mexico City to protest recent tortilla price increases, 31 Jan 2007
In January, demonstrators in Mexico converged on the capital to protest the spiraling cost of tortillas, a Mexican national staple made from corn. In response, the country's president, Felipe Calderon, signed an agreement to stabilize tortilla prices.
President Calderon says the 13-point agreement is aimed at protecting Mexican families and the economy from further price hikes on corn.
Mexican tortilla prices have skyrocketed more than 700 percent since 1994. Experts say this is due in part to increased demand for corn to produce ethanol.
Speaking at a recent Capitol Hill news conference in Washington Daniel De La Torre Ugarte, from the Agricultural Policy Analysis Center at the University of Tennessee, warned that price hikes are but one effect of rising demand for corn. He says it can have consequences for agriculture as well.
"Not only because it jeopardizes food security in many countries, but because, at the same time, it also creates a new incentive to expand production to areas that may not be suitable for the crop," said Daniel De La Torre Ugarte. "So, we are going to put undue pressure on natural resources to try to respond with a larger production for corn."
Ugarte is not opposed to bio-fuels as such. Nor is Alexandra Spieldoch, from the Institute for Agriculture and Trade Policy in Minneapolis, Minnesota. But Spieldoch warns of the consequences of over-reliance on a single crop.
"Corn mono-cropping is already eroding U.S. farmland," said Alexandra Spieldoch. "It's water intensive. It increases the amounts of herbicides. It's not considered viable in the long term."
Spieldoch adds, corn prices are not driven by ethanol alone. She says the North American Free Trade Agreement, or NAFTA, as well as U.S. farm subsidies have forced Mexico - a traditional corn exporter - to import the commodity from the United States.
Former Mexican congressman Victor Quintana says NAFTA has favored corporate agribusiness at the expense of poor Mexican farmers, who then seek a better living across the border.
Quintana says that, for each 30-ton container of corn exported to Mexico, the United States receives two undocumented migrants from the Mexican countryside.
Philip Levy, a former member of President Bush's Council of Economic Advisers and currently a scholar at the American Enterprise Institute in Washington, acknowledges the displacement of many Mexican farmers. But he says free trade has helped Mexico as a whole.
"When you're talking about what's good or bad for a country in trade, you have to be careful, and we're seeing this in Mexico right now," he said. "If you are a producer of corn, no matter what the cause, high corn prices are welcome. You want it. If you are a consumer of corn, high corn prices are bad. And you don't want it."
Levy says the demand for ethanol could become so high that no American corn will be exported. This, he says, will encourage Mexican corn production to meet the demand for tortillas, so that, in the end, free trade will provide consumers with food and fuel. And Philip Levy agrees with critics who caution that the rush toward ethanol must not come at the expense of the environment.
People march in Mexico City to protest recent tortilla price increases, 31 Jan 2007
In January, demonstrators in Mexico converged on the capital to protest the spiraling cost of tortillas, a Mexican national staple made from corn. In response, the country's president, Felipe Calderon, signed an agreement to stabilize tortilla prices.
President Calderon says the 13-point agreement is aimed at protecting Mexican families and the economy from further price hikes on corn.
Mexican tortilla prices have skyrocketed more than 700 percent since 1994. Experts say this is due in part to increased demand for corn to produce ethanol.
Speaking at a recent Capitol Hill news conference in Washington Daniel De La Torre Ugarte, from the Agricultural Policy Analysis Center at the University of Tennessee, warned that price hikes are but one effect of rising demand for corn. He says it can have consequences for agriculture as well.
"Not only because it jeopardizes food security in many countries, but because, at the same time, it also creates a new incentive to expand production to areas that may not be suitable for the crop," said Daniel De La Torre Ugarte. "So, we are going to put undue pressure on natural resources to try to respond with a larger production for corn."
Ugarte is not opposed to bio-fuels as such. Nor is Alexandra Spieldoch, from the Institute for Agriculture and Trade Policy in Minneapolis, Minnesota. But Spieldoch warns of the consequences of over-reliance on a single crop.
"Corn mono-cropping is already eroding U.S. farmland," said Alexandra Spieldoch. "It's water intensive. It increases the amounts of herbicides. It's not considered viable in the long term."
Spieldoch adds, corn prices are not driven by ethanol alone. She says the North American Free Trade Agreement, or NAFTA, as well as U.S. farm subsidies have forced Mexico - a traditional corn exporter - to import the commodity from the United States.
Former Mexican congressman Victor Quintana says NAFTA has favored corporate agribusiness at the expense of poor Mexican farmers, who then seek a better living across the border.
Quintana says that, for each 30-ton container of corn exported to Mexico, the United States receives two undocumented migrants from the Mexican countryside.
Philip Levy, a former member of President Bush's Council of Economic Advisers and currently a scholar at the American Enterprise Institute in Washington, acknowledges the displacement of many Mexican farmers. But he says free trade has helped Mexico as a whole.
"When you're talking about what's good or bad for a country in trade, you have to be careful, and we're seeing this in Mexico right now," he said. "If you are a producer of corn, no matter what the cause, high corn prices are welcome. You want it. If you are a consumer of corn, high corn prices are bad. And you don't want it."
Levy says the demand for ethanol could become so high that no American corn will be exported. This, he says, will encourage Mexican corn production to meet the demand for tortillas, so that, in the end, free trade will provide consumers with food and fuel. And Philip Levy agrees with critics who caution that the rush toward ethanol must not come at the expense of the environment.
World's Largest Passenger Aircraft Makes First Landing in US
It is the largest passenger aircraft ever built. With a capacity to hold up to 550 passengers, and with better fuel efficiency than other airliners, the Airbus A380 made a historic first stop in New York on Monday. It is the first of several visits planned throughout the United States this week. VOA's Kane Farabaugh was on the runway as the aircraft touched down at John F. Kennedy (JFK) International Airport on Long Island and files this report.
Airbus A380 in New York
In a weather condition airline pilots call "severe clear," you could see it coming almost ten miles away.
Under heavy security and before hundreds of cameras, the Airbus A380, the world's largest passenger aircraft, made a relatively quiet landing on the runway at JFK International Airport in New York.
The man behind the controls of Lufthansa Flight 8940, Chief Pilot Juergen Raps, compares piloting the aircraft to driving an Italian sports car.
Lufthansa Pilot Juergen Raps
"If you imagine a plane of this size and this weight, you imagine it would move like a bus or like a truck,” Raps says. “But as I said, if you compare it, it would handle like a Ferrari – it's very responsive at the controls, and it reacts very fast. So you can fly very precisely and at the same time it's very stable. Very nice to fly."
The Airbus's arrival at JFK, complete with passengers and a full crew, marks the first visit by the new so-called megaliner to U.S. soil.
Port Authority Executive Director Anthony Shorris says the historic occasion also marks a new beginning in air travel to and from New York. The city hopes to reap an economic benefit after investing tens of millions of dollars in upgrading the airport to accommodate the new aircraft.
"In the first full year of operations for the A380 we hope it will generate as much as $80 million in economic activity, $30 million or more in payroll and perhaps 1,000 jobs," Shorris says.
Airbus is also hoping to reap an economic benefit from a project already plagued with difficulties. Two years behind schedule, Airbus has lost more than an estimated $6 billion in forecasted profits that the A380 was supposed to generate.
Airbus A380
The company is hoping today's successful landing in New York and the subsequent arrival of another A380 at Los Angeles International Airport will help reverse some of the negative publicity generated by the production delays.
Not only is the A380 one of the quieter long-haul planes in the skies, it is also one of the most fuel efficient, consuming about 80 miles [130 kilometers] per gallon per passenger seat.
Singapore Airlines takes delivery of the first A380 in October. Lufthansa will begin regular service with the A380 from Frankfurt to JFK in the summer of 2009.
Airbus A380 in New York
In a weather condition airline pilots call "severe clear," you could see it coming almost ten miles away.
Under heavy security and before hundreds of cameras, the Airbus A380, the world's largest passenger aircraft, made a relatively quiet landing on the runway at JFK International Airport in New York.
The man behind the controls of Lufthansa Flight 8940, Chief Pilot Juergen Raps, compares piloting the aircraft to driving an Italian sports car.
Lufthansa Pilot Juergen Raps
"If you imagine a plane of this size and this weight, you imagine it would move like a bus or like a truck,” Raps says. “But as I said, if you compare it, it would handle like a Ferrari – it's very responsive at the controls, and it reacts very fast. So you can fly very precisely and at the same time it's very stable. Very nice to fly."
The Airbus's arrival at JFK, complete with passengers and a full crew, marks the first visit by the new so-called megaliner to U.S. soil.
Port Authority Executive Director Anthony Shorris says the historic occasion also marks a new beginning in air travel to and from New York. The city hopes to reap an economic benefit after investing tens of millions of dollars in upgrading the airport to accommodate the new aircraft.
"In the first full year of operations for the A380 we hope it will generate as much as $80 million in economic activity, $30 million or more in payroll and perhaps 1,000 jobs," Shorris says.
Airbus is also hoping to reap an economic benefit from a project already plagued with difficulties. Two years behind schedule, Airbus has lost more than an estimated $6 billion in forecasted profits that the A380 was supposed to generate.
Airbus A380
The company is hoping today's successful landing in New York and the subsequent arrival of another A380 at Los Angeles International Airport will help reverse some of the negative publicity generated by the production delays.
Not only is the A380 one of the quieter long-haul planes in the skies, it is also one of the most fuel efficient, consuming about 80 miles [130 kilometers] per gallon per passenger seat.
Singapore Airlines takes delivery of the first A380 in October. Lufthansa will begin regular service with the A380 from Frankfurt to JFK in the summer of 2009.
UN Says Asian Economic Growth Hinges on Investment in
A regional United Nations agency says Asia needs to step up investment in infrastructure to maintain the region's high growth momentum. Anjana Pasricha reports from New Delhi, where the U.N.'s Economic and Social Commission for Asia and the Pacific (ESCAP) recently held a meeting on infrastructure development in Asia.
The U.N. Economic and Social Commission for Asia and the Pacific says a shortage of roads, rail networks, ports and energy projects in rapidly-growing Asia threatens to hold back the region's economies.
At a two-day meeting in New Delhi, the U.N. agency called on Asia to invest more heavily in cross-border infrastructure projects to spur trade and investment in the region.
Representatives of 20 countries attended the meeting, where a new study by Research and Information Systems, a New Delhi-based research institute, highlighted the infrastructure deficit in Asia.
For example, lack of sufficient cross-border surface transportation among Central, South and East Asia forces Asian countries to rely heavily on shipping by sea, pushing up the cost of moving goods.
The study says Asian countries should cooperate to develop a dense network of roads and rails, in the same way European countries have.
Similarly, countries should share energy resources, because several resource-rich countries have low demand, while their neighbors have high demand.
Nagesh Kumar heads Research and Information Systems. He uses South Asia as an example to show how cross-border initiatives could bring vast benefits to the region.
"We could build a connecting road, say, from Afghanistan to Pakistan to India to Bangladesh to Myanmar [Burma], which would link up all these countries. It would become a Silk Road, for instance, providing the connectivity to the people, promoting businesses and livelihoods. In energy, for instance, you could be developing hydro power in Nepal and bringing it to India, which is perennially short of energy," said Kumar.
International agencies have estimated that the region could use approximately $200 billion for infrastructure investment every year over the next five years in addition to what countries are already spending.
ESCAP head Kim Hak Su suggests that the region could use a part of its huge foreign exchange reserves to fund infrastructure projects.
"The crucial thing is Asia has net saving. Net saving as of 2005 is three $350 billion. This will grow more as the economies grow," he said. "So how to tap this net Asian saving?"
ESCAP has suggested the establishment of an Asian infrastructure investment bank to help finance major trans-Asian road and rail links and other projects in the region.
The U.N. Economic and Social Commission for Asia and the Pacific says a shortage of roads, rail networks, ports and energy projects in rapidly-growing Asia threatens to hold back the region's economies.
At a two-day meeting in New Delhi, the U.N. agency called on Asia to invest more heavily in cross-border infrastructure projects to spur trade and investment in the region.
Representatives of 20 countries attended the meeting, where a new study by Research and Information Systems, a New Delhi-based research institute, highlighted the infrastructure deficit in Asia.
For example, lack of sufficient cross-border surface transportation among Central, South and East Asia forces Asian countries to rely heavily on shipping by sea, pushing up the cost of moving goods.
The study says Asian countries should cooperate to develop a dense network of roads and rails, in the same way European countries have.
Similarly, countries should share energy resources, because several resource-rich countries have low demand, while their neighbors have high demand.
Nagesh Kumar heads Research and Information Systems. He uses South Asia as an example to show how cross-border initiatives could bring vast benefits to the region.
"We could build a connecting road, say, from Afghanistan to Pakistan to India to Bangladesh to Myanmar [Burma], which would link up all these countries. It would become a Silk Road, for instance, providing the connectivity to the people, promoting businesses and livelihoods. In energy, for instance, you could be developing hydro power in Nepal and bringing it to India, which is perennially short of energy," said Kumar.
International agencies have estimated that the region could use approximately $200 billion for infrastructure investment every year over the next five years in addition to what countries are already spending.
ESCAP head Kim Hak Su suggests that the region could use a part of its huge foreign exchange reserves to fund infrastructure projects.
"The crucial thing is Asia has net saving. Net saving as of 2005 is three $350 billion. This will grow more as the economies grow," he said. "So how to tap this net Asian saving?"
ESCAP has suggested the establishment of an Asian infrastructure investment bank to help finance major trans-Asian road and rail links and other projects in the region.
Mexico's State Oil Company in Financial Trouble
Mexico's state-owned oil company, Petroleos Mexicanos, better known as Pemex, celebrated its 69th birthday on March 18, amid concerns that it is on the brink of insolvency and its production is falling. As VOA's Greg Flakus reports from Houston, Mexico, still has plenty of oil, but internal politics prevent the investment needed to develop the resources.
Petroleos Mexicanos, PEMEX, oil rig
At the close of President Bush's visit to Mexico two weeks ago, a Mexican reporter asked if the two men had discussed the issue of oil. President Bush, for his part, said oil had not been a topic of discussion since energy is a Mexican domestic issue, not a bilateral issue. President Calderon repeated his oft-stated position on energy reform.
He said he does not have any plan to privatize Pemex, but he said Mexico will have to address the problem of falling production at some point and that this will be a matter of discussion between the president and the Congress.
Mr. Calderon has made clear that he, like Presidents Vicente Fox and Ernesto Zedillo before him, sees a need for energy reform. When Mexico expropriated the oil industry in 1938, the idea was to keep the resources in Mexican hands and enrich the nation with oil profits. In recent years, however, it has become clear that Pemex is not up to the task of finding and developing all the resources under the ground, or more to the point, under the waters of the Gulf of Mexico, where its largest producing field, known as Cantarell, is now in sharp decline.
But nationalist politicians have blocked reform, claiming any change in the constitution that would even allow a slight opening to private investment would eventually lead to full privatization of the state-owned energy sector.
George Baker, an oil analyst who publishes the Mexico Energy Intelligence newsletter in Houston, says Mr. Calderon's razor-thin victory in last year's election and subsequent charges of fraud from the opposition have put him in a tough spot.
"There is still a very strong shadow from the 2006 elections and that means that it would be politically delicate for the government, at this point, so early in its career, to push forward a radical change, which this would be, in petroleum policy," Baker said.
In Mexico, many citizens still respond to the old slogan that "the oil is ours," even though they see no direct benefits. Oil revenue accounts for about a third of the government's receipts, but Mexicans generally pay more for gasoline than people in neighboring countries and there is no dividend payment distributed to the citizens from oil revenue.
Some Mexican politicians have argued that all Pemex needs is internal reform, but George Baker says that won't work.
"To improve Pemex, you need to have a view that is not Pemex-centric," he said. "You need to have a view that looks beyond Pemex and that any particular effort to reform Pemex, as an effort in itself, will not succeed."
Pemex owes creditors $107 billion, equal to almost all its assets. Petroleum reserves are the state's, not Pemex's, property. Since the government takes most of its revenue, Pemex does not have the money to pay its debts, let alone develop the technology it would need to find and produce more petroleum.
Baker says Mexico's hand may soon be forced by private development on the border between the United States-controlled area of the Gulf and Mexican waters. The Shell Oil company has a well on the US side of the boundary that could go into operation as early as 2010. Although no one can know for sure, it is possible that such a well would also draw some oil from deep rock on the Mexican side.
In a conference call this week, Pemex officials said they have identified 230 prospects for drilling in Mexico's Gulf waters, but the company only drilled four wells last year. At that rate, George Baker says, it would take 58 years to exploit those resources. The Houston analyst says Mexico needs to allow outside oil companies to operate there.
"In the Mexican side of the Gulf of Mexico, there is room for 20 or 30 companies to be actively drilling," Baker said. "Pemex, by its own, cannot drill 230 deepwater prospects. Pemex is not prepared to deal with deepwater exploration on a major scale and it is certainly not prepared to deal with deepwater production because it has never done that before and it does not have the experience or the resources to make that happen."
Baker says one proposal that might find support in Mexico would involve opening 20 percent of the energy sector to private companies, with Pemex maintaining 80 percent control. He says private companies, from the United States and elsewhere, have the technology and expertise necessary to develop the resources in Mexico, thereby boosting the country's overall production. He says other countries with state-owned oil companies that have tried this formula, like Norway, found that it not only improved production, but reduced corruption and brought greater efficiency to their operations.
Petroleos Mexicanos, PEMEX, oil rig
At the close of President Bush's visit to Mexico two weeks ago, a Mexican reporter asked if the two men had discussed the issue of oil. President Bush, for his part, said oil had not been a topic of discussion since energy is a Mexican domestic issue, not a bilateral issue. President Calderon repeated his oft-stated position on energy reform.
He said he does not have any plan to privatize Pemex, but he said Mexico will have to address the problem of falling production at some point and that this will be a matter of discussion between the president and the Congress.
Mr. Calderon has made clear that he, like Presidents Vicente Fox and Ernesto Zedillo before him, sees a need for energy reform. When Mexico expropriated the oil industry in 1938, the idea was to keep the resources in Mexican hands and enrich the nation with oil profits. In recent years, however, it has become clear that Pemex is not up to the task of finding and developing all the resources under the ground, or more to the point, under the waters of the Gulf of Mexico, where its largest producing field, known as Cantarell, is now in sharp decline.
But nationalist politicians have blocked reform, claiming any change in the constitution that would even allow a slight opening to private investment would eventually lead to full privatization of the state-owned energy sector.
George Baker, an oil analyst who publishes the Mexico Energy Intelligence newsletter in Houston, says Mr. Calderon's razor-thin victory in last year's election and subsequent charges of fraud from the opposition have put him in a tough spot.
"There is still a very strong shadow from the 2006 elections and that means that it would be politically delicate for the government, at this point, so early in its career, to push forward a radical change, which this would be, in petroleum policy," Baker said.
In Mexico, many citizens still respond to the old slogan that "the oil is ours," even though they see no direct benefits. Oil revenue accounts for about a third of the government's receipts, but Mexicans generally pay more for gasoline than people in neighboring countries and there is no dividend payment distributed to the citizens from oil revenue.
Some Mexican politicians have argued that all Pemex needs is internal reform, but George Baker says that won't work.
"To improve Pemex, you need to have a view that is not Pemex-centric," he said. "You need to have a view that looks beyond Pemex and that any particular effort to reform Pemex, as an effort in itself, will not succeed."
Pemex owes creditors $107 billion, equal to almost all its assets. Petroleum reserves are the state's, not Pemex's, property. Since the government takes most of its revenue, Pemex does not have the money to pay its debts, let alone develop the technology it would need to find and produce more petroleum.
Baker says Mexico's hand may soon be forced by private development on the border between the United States-controlled area of the Gulf and Mexican waters. The Shell Oil company has a well on the US side of the boundary that could go into operation as early as 2010. Although no one can know for sure, it is possible that such a well would also draw some oil from deep rock on the Mexican side.
In a conference call this week, Pemex officials said they have identified 230 prospects for drilling in Mexico's Gulf waters, but the company only drilled four wells last year. At that rate, George Baker says, it would take 58 years to exploit those resources. The Houston analyst says Mexico needs to allow outside oil companies to operate there.
"In the Mexican side of the Gulf of Mexico, there is room for 20 or 30 companies to be actively drilling," Baker said. "Pemex, by its own, cannot drill 230 deepwater prospects. Pemex is not prepared to deal with deepwater exploration on a major scale and it is certainly not prepared to deal with deepwater production because it has never done that before and it does not have the experience or the resources to make that happen."
Baker says one proposal that might find support in Mexico would involve opening 20 percent of the energy sector to private companies, with Pemex maintaining 80 percent control. He says private companies, from the United States and elsewhere, have the technology and expertise necessary to develop the resources in Mexico, thereby boosting the country's overall production. He says other countries with state-owned oil companies that have tried this formula, like Norway, found that it not only improved production, but reduced corruption and brought greater efficiency to their operations.
US Efforts to Isolate Iran Economically Gaining Momentum
At least five states in the U.S. are following Missouri's lead with proposals to divest public pension funds of shares in companies that do business with Iran. On Capitol Hill, proposed amendments to the Iran Sanctions Act could make it harder for foreign-owned companies to invest in countries that the U.S. State Department considers "sponsors of terror." VOA's Mil Arcega reports.
Mahmoud Ahmadinejad (20 Feb 2007)
Iran's defiance of international demands to suspend its uranium enrichment program is creating momentum in the United States for initiatives aimed at further isolating the oil-rich country.
At a recent Congressional hearing on foreign affairs, committee chairman Tom Lantos outlined new initiatives to limit U.S. investments in companies that do business with Iran. "A variety of means will be used for this purpose from ‘name and shame’ for private funds to mandating divestment of public funds," he said.
Although U.S. companies are already restricted from trading or investing in Iran, Lantos' amendments to the Iran Sanctions Act would eliminate U.S. waivers given to foreign companies that pour money into Iran's energy sector.
Tom Lantos
"If Dutch Shell moves forward with its proposed $10 billion deal with Iran, it will be sanctioned,” said Lantos. “If Malaysia moves forward with a similar deal, it too will be sanctioned. The same treatment will be accorded to China and India should they finalize deals with Iran."
Congresswoman Ileana Ros-Lehtinen of Florida says the aim is to undermine Iran's primary source of income. "Iran's oil sector, which provides for about 85 percent of export revenues, is projected to shrink without huge injections of foreign investment, technology and expertise," the Republican congresswoman says.
"We call it, in my business, chicken soup diplomacy. It sounds good, it makes you feel better but doesn't really cure anything," says Bill Reinsch, the president of the National Foreign Trade Council. He says although the proposals are well intentioned, mixing politics with business could lead to bigger problems.
National Foreign Trade Council President Bill Reinsch
"If you're going to inject political criteria into the investment process, it's not very long before you're going to have people saying we should be divesting from China, we should be divesting from Russia,” says Reinsch. “Any country that has a problematic human rights record is going to be fair game for divestment. Pretty soon there won't be any countries left to invest in.”
Reinsch adds that similar divestment proposals for so-called "terror-free public pension funds" from at least five states will also hurt retirees who can expect to see smaller returns on their investments.
A recent market report shows more than 400 publicly traded companies have financial dealings with countries on the State Department's terror list. They include Iran, North Korea, Sudan and Syria.
Mahmoud Ahmadinejad (20 Feb 2007)
Iran's defiance of international demands to suspend its uranium enrichment program is creating momentum in the United States for initiatives aimed at further isolating the oil-rich country.
At a recent Congressional hearing on foreign affairs, committee chairman Tom Lantos outlined new initiatives to limit U.S. investments in companies that do business with Iran. "A variety of means will be used for this purpose from ‘name and shame’ for private funds to mandating divestment of public funds," he said.
Although U.S. companies are already restricted from trading or investing in Iran, Lantos' amendments to the Iran Sanctions Act would eliminate U.S. waivers given to foreign companies that pour money into Iran's energy sector.
Tom Lantos
"If Dutch Shell moves forward with its proposed $10 billion deal with Iran, it will be sanctioned,” said Lantos. “If Malaysia moves forward with a similar deal, it too will be sanctioned. The same treatment will be accorded to China and India should they finalize deals with Iran."
Congresswoman Ileana Ros-Lehtinen of Florida says the aim is to undermine Iran's primary source of income. "Iran's oil sector, which provides for about 85 percent of export revenues, is projected to shrink without huge injections of foreign investment, technology and expertise," the Republican congresswoman says.
"We call it, in my business, chicken soup diplomacy. It sounds good, it makes you feel better but doesn't really cure anything," says Bill Reinsch, the president of the National Foreign Trade Council. He says although the proposals are well intentioned, mixing politics with business could lead to bigger problems.
National Foreign Trade Council President Bill Reinsch
"If you're going to inject political criteria into the investment process, it's not very long before you're going to have people saying we should be divesting from China, we should be divesting from Russia,” says Reinsch. “Any country that has a problematic human rights record is going to be fair game for divestment. Pretty soon there won't be any countries left to invest in.”
Reinsch adds that similar divestment proposals for so-called "terror-free public pension funds" from at least five states will also hurt retirees who can expect to see smaller returns on their investments.
A recent market report shows more than 400 publicly traded companies have financial dealings with countries on the State Department's terror list. They include Iran, North Korea, Sudan and Syria.
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