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Post Amlo's Crackdown on Gasoline Pipeline Thieves; from Gary Moore
Created by John Eipper on 02/25/19 3:03 AM

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Amlo's Crackdown on Gasoline Pipeline Thieves; from Gary Moore (John Eipper, USA, 02/25/19 3:03 am)

Gary Moore writes:

As things nautical go WAISing from things aerodynamic, first in Cameron Sawyer's awe-inspiring Arctic sail and beautifully taut report (far tauter than Purchas, His Pilgrimage, said to have helped inspire the Ancient Mariner) , and next in Eugenio Battaglia's irreplaceable firsthand look into the technology of oil tankers, I have a question, especially for Eugenio, with his petro-nautics experience.

The question begins with the 16 tankers which, in early January, were said to be anchored impatiently off the oil port of Tuxpan, Mexico. The tankers contained gasoline from the US, part of Mexico's new millennial oil-import hemorrhage, a problem that would have seemed unthinkable to seers a generation ago, when oil-giant Mexico was a behemoth exporter.

Here we approach the reason for the question. It asks just how chaotic Mexico has become, measuring in this case with the dipstick of oil liters, loads, and barrels. The tankers were stuck outside Tuxpan because Mexico's new reformist president, as of December 20, was taking massive--and disruptive--steps against the surprising new millennial scourge of gasoline thieves. He had shut down theft-punctured pipelines that carried gasoline inland from ships, so that obsoletely cramped intake facilities at the port of Tuxpan could not accept the new loads coming in. They were backed up in an oceanic traffic jam. Eugenio's home waters are evoked here because two of the stalled craft, Miss Maria Rosario (300,000 barrels of gasoline) and Hafne Ane (50,000 barrels of diesel) fly the flag of Malta.

In all the shouting (little of it confirmed factually by press-conference smoke), it was said that Mexico had to pay a penalty of $50,000 a day to each ship delayed. So Part A of the question: Does Eugenio find this description credible, in terms of usual practice?

But next Part B, with a deeper keel, also in the slippery matter of quantities and measures:

On February 21 the president, Andres Manuel López Obrador (Amlo), declared victory in his highly confusing two-month war against the nation's now-epidemic gasoline pipeline thieves, said to have made 12,000+ known illegal perforation taps on Mexico's 8,000+ kilometers of gasoline/fuel pipelines in 2018 alone (parsed by some as 40 bleeds a day). Amlo says now he has beat them, massively and decisively, by using 12,000 troops and draconian steps like the Tuxpan port snafu. He and his new director of Pemex (who has no oil experience) showed a hushed auditorium of reporters a series of PowerPoint graphs detailing how, when Amlo took office on December 1, the state oil company, Pemex, was incredibly losing 85,000 barrels of stolen gasoline a day (roughly 7 percent of Mexico's entire national daily gasoline consumption). But then came December 21, said the graphs, when the president's battle plan kicked in, and cities ran dry of gasoline for a desperate moment, narrowly avoiding a buying-and-hoarding panic. As reward for such pain and the sometimes baffling tactics, the graphs showed that after December 20, as the president's new Plan Conjunto took effect, Pemex's level of gasoline thefts suddenly dropped to almost nothing, and stayed there, to yield, by the time of the victory announcement, a theft average of only about 8,000 barrels a day, effectively dropping the old 7 percent theft factor down to 1 percent or less--and hence saving a now-rescued nation. The leaders exulted that such a savings could be projected over the coming year as a saved $2.6 billion US ("if we can keep going like this," the president added unobtrusively). They said it would provide, as if by magic, the new engine for planned social programs and development items, proving that such promises had not been just pie-in-the-sky.

The Question, then, is simple, if surprising: How does Pemex know that it was losing 85,000 barrels a day to theft in the moments before Amlo took office, and, conversely, how does it know it is now losing only a paltry 8,000 barrels or so?

How could such a thing be measured? Maybe expertise finds this answer easy. But maybe not. Mysticism in pipeline fluid dynamics has been recently demonstrated on an unexpected front, by the world-shocking tragedy of January 18, when a Mexican pipeline-theft tap exploded and killed (last count) 130 people. That was the explosion at Tlahuelilpan, two hours north of Mexico City, on which many official voices began shouting that it wasn't their fault. Pemex itself, in this rush, hastened to show how it couldn't even know where a new leak is located. Pemex has a state-of-the-art electronic control room in Mexico City where banks of monitors check every hiccup and gurgle in distant buried tubes. But--as with pipelines in the US--the monitoring technology (called SCADA) is necessarily imprecise about some surprising basics. The majority of pipeline leaks, whether in the US or Mexico, have to be located--well, sort of by footwork, often as citizens notice suspicious pools. The January 18 explosion horror forced Pemex into revealing snatches of this blindspot. Hence the Question, and my hope that somebody can shed some light on the measuring methods, in a way that Mexico's opaque press-conference wisdom does not:

How does Pemex know, day by day, so precisely, that its levels of gasoline pipeline theft have dropped so suddenly--when in fact its literature and old news clips, not just from the January tragedy, are littered with mutterings that they couldn't even find the locations of many taps, whose mysterious supposed sites remain to this day "undiscovered"? After the Tlahuelilpan explosion, Pemex's version of being precise for the shocked public was to use high-school math on the volume of a cylinder (you remember this one: r times r times L times Pi) to announce (without admitting the calculus) what they estimated was their volume of explosion loss. Hundreds of millions of dollars in SCADA technology seemed of little use in their explanation that 10,000 barrels of gasoline had been inside nine miles of punctured pipeline. Clips on US pipeline events, like a spill in Shelby County, Alabama, suggest that this blindness is not a Mexican exception.

So, leaving aside some larger ecological implications for the moment: What kind of flow measurement might lie behind the stunning bar graphs of February 21, announcing victory over gasoline thieves, and promising huge savings for future plans?

Can the wizardry of WAIS help enlighten me on these viscous matters? This is not to say that the triumphant bar graphs are false. They may quite possibly be credible--giving a much-needed glow to Mexico's future. But are they?

JE comments:  First of all, muchas gracias to Gary Moore for monitoring the opening months of the Amlo government.  Amidst all the noise about the Wall, we're somehow overlooking what's going on in Mexico itself.

I share Gary's skepticism about "fixing" all the pipeline leaks.  Did Amlo have his troops inspect every inch of the lines?  Even so, wouldn't the thieves just drill new taps once the troops leave?  (Unless, of course, you shut the pipelines down for good.)

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  • Who Pays for Oil Tanker Delays? (Eugenio Battaglia, Italy 02/26/19 10:25 AM)
    Before trying to answer Gary Moore's questions of February 25th, let me first make it clear that most of my expertise about hydrocarbons has to do with the moment oils flows in and then out of the ship's manifolds. Yet here is what I know with regards to Gary's questions.

    For each hour or day of delay in discharging the cargo due to the fault of the receiver, there is a penalty according to the contract and/or the international rates of freight. So it may indeed be $50,000/day more or less. Perhaps this figure is an average for all the waiting ships or just an approximate number written by a journalist.

    This penalty is applied both ways, as the vessel/owner has to pay for any delay during the loading/ transportation/discharge. This fact places a lot of pressure on the captain. However, I personally never violated any safety or antipollution rules to speed up the process, even at the risk of quarrels with some supervisors from headquarters. I had a strong advantage, however, as the president of the company was a former captain who understood the realities and did not like monkey business. Be always suspicious of presidents of shipping companies who come from the finance departments, as they may demand "shortcuts" of the captains and then shift the blame to them if something goes wrong.

    Once I was speaking with my company's president, informing him that I had an insurance on my license. Due to the power of the company I believed the insurance was unnecessary, but the honest president told me: "Captain, you should always keep your insurance, as the interests of the company may not always coincide with yours."

    With the reference to the flow of gasoline/oil/gas inside the pipelines I have no exact knowledge of the Mexican system, but theoretically, to determine the real quantity flowing in the lines and eventually detecting any loss should be a rather easy task.

    Of course finding the exact place of a perforation by thieves cannot be so easy, but with modern technology it should not be difficult to determine where the loss is. Consider that the places where the theft is possible should be in a spot easily reachable by people. Therefore, it would not occur in a place where the pipe is one meter underground in the middle of the desert. Furthermore there are pumping stations every few kilometers, so the area to be inspected by footwork can be considerably restricted.

    JE comments:  Eugenio Battaglia teaches me so much about life at sea.  Regarding Mexico's pipeline losses, I would assume many of the gasoline "pirates" pay off the pipeline employees--or they (pirates and employees) are the selfsame individuals.

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  • Amlo: The Next Chavez...or the Next Juarez? (from Gary Moore) (John Eipper, USA 02/27/19 3:27 AM)

    Gary Moore writes:

    The logical questions John E asked in his comments on Amlo/pipelines (February 25th) are among the many that, in the press conferences, seem seldom to get asked or answered, with the pronouncements then getting repeated and
    repeated as holy writ.

    Indeed, Amlo is a different kind of president--with
    lengthy morning press conferences, while his predecessor rarely had even
    But in the above regard it looks much the same: words from the papal throne
    endorsed reverently as if they were verified, with the questions then
    into tomorrow's news cycle.

    Who is Amlo? He has carefully avoided the
    kinds of confrontational rant that made Chávez a lightning rod. By manner
    as well as deeds, he seems determined to rescue Mexico's culture
    from its own cynicism. But there is the deeper question, whispering in
    clues of language that may simply be misconstrued artifacts: No matter how
    sincere he is, is he completely sane? Is he able to believe the Marxist
    (he repeatedly scoffs at the "neoliberal" past) because... (fill in the

    I went into this thinking maybe to track a new Chávez, but now grow
    lost in the dust clouds of Mexican chaos, for which some Amlo rhetoric may
    just the inspirational remedy the doctor ordered. Could there be, not a new
    but a new Juárez?

    (And no matter how ineffectual he may wind up being against the chaos, with
    his sermons
    edging close to The New Man, could it be that Mexico will wind up loving him
    ? Could it thus rewrite an envisioned victory in memory? As with
    Juárez. And Cárdenas.
    Beloved for the effort, which is re-envisioned as victory.)

    Much too early for such questions--which can only come when it's much too
    A minefield for the observer. One false step and you wind up either among
    the deluded
    cheerleaders or the smug obstructionists, while Mexico's future hangs over
    the pit.

    JE comments:  Among the Chávez-Juárez-Cárdenas trinity, Amlo is probably closest to Cárdenas (obsession with oil, anyone?).  But it's way too early to tell.  Gary Moore makes two Amlo observations that we should use as metrics for the coming 5+ years:  Will Amlo rescue Mexico from its cynicism?  And for this, will he be celebrated...for trying?

    Gary first sent this comment to me privately, but I insisted on posting.  Gary, may I appoint you WAISdom's official Amlo-Watcher?  We need one.  There is so much noise today about our most populous neighbor, but precious little careful observation.  And almost zero analysis.

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