AFF Mexican Hydrocarbons BPKW SDI2013

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1AC Inherency

Contention _ is Inherency

House version of the bill will fail due to the Dodd-Frank Act a change in the

bill is necessary to solve.Alic 7/2 (Jen, geopolitical analyst, co-founder of ISA Intel, 7/2/13, Transparency Squabble Stalls US-Mexico Oil & Gas Deal,http://oilprice.com/Geopolitics/North-America/Transparency-Squabble-Stalls-US-Mexico-Oil-Gas-Deal.html)//DR. H

The US House has ratified an agreement governing oil and gas development alongthe US-Mexico border, possibly breaking the moratorium on production here and adding in acontroversial clause that exempts companies from divulging payments made toforeign governments. The US-Mexico Hydrocarbon Transboundary Agreement(TBA) sets up a framework for joint development of oil and gas assets on theshared border in the Gulf of MexicobyUS companies and Mexicos state-run PetroleosMexicanos(Pemex). About 1.5 million acres and an estimated 172 million barrels of oil and304 billion cubic feet of natural gas are covered by the agreement. This area couldostensibly be freed up for leasing, as the legislation effectively ends a treatise moratorium on production here. There is oneglitch, however:While the Republican-led House bill passed by a vote of 256 to171 (with only 28 Democrats voting in favor), there is an alternative bill in the Senate, which doesnot include the disclosure exemption, and which the Obama administrationfavors. Before anything is implemented, these two versions will have to cometogether somehow. The controversy has to do with the Dodd-Frank Act. TheDodd Frank Act Section 1504 requires US companies to disclose payments toforeign governments, subnational governments and the federal government. Opponents of the act, which is prettymuch everyone making money on government contracts, say it harms the competitiveness of US companies in the face of foreigncompanies who are not made to stand up to the same scrutiny. The other argument in favor of the exemption is that Pemex is100% state-owned and the Mexican government may prohibit the very disclosurerequired by the Dodd-Frank Act, thus rendering US companies less competitive.Companies who are not required to disclosure payments may have the advantagein winning contracts. Democrats are worried that it will reverse any progress made towardsgreater transparency and preventing government corruption, which was the intentionof the Dodd-Frank Act in the first place. From the White Houses perspective, the House

version of the bill negatively impacts US efforts to increase transparency andaccountability, and while Obama has not said he would veto the bill, the administration is hoping toamend it before its implemented.What they are really concerned about is what this might mean beyondMexico. It could set a precedent for repealing Section 1504 of the Dodd-Frank Actfor other countries,which could harm national interests, as well as shareholderinterests. Democrats believe the Senate will not pass the House bill withoutamending this exemption. The US-Mexico TAP was brokered by the two countries in February 2012, and its gottenpretty far, pretty fast. If we can get past this last hurdle, it could be a boon for Pemex. Thestate-run company is eyeing the deep-water Perdido fold belt, which could have the potential to expand Mexicos stagnatingdomestic production. Last summer, Pemex announced a major discovery of crude oil in the Perdido fold belt, with preliminaryestimates that the companys Trion-1 well contained 350 million barrels of oil equivalent (proved). The well is about 39 kilometers


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south of US waters.At the time, Pemex noted that the discovery increased certainty towardsthe recovery of prospective resources in the Perdido area project which have beenestimated at up to 10 billion bbl of oil equivalent, and could potentially allowMexico to increase its oil production platform in the medium and long-term.

Mexico Drilling along US-Mexico border inevitable ----- only a question of

cooperation or unilatUrdaneta 10 associate at Grau Garcia Hernandez and Monaco (Law Firm) (Karla, TRANSBOUNDARY PETROLEUM

RESERVOIRS: A RECOMMENDED APPROACH FOR THE UNITED STATES AND MEXICO IN THE DEEPWATERS OF THE

GULF OF MEXICO, Houston Journal of International Law, Volume 32, Number 2, Spring 2010 )

In view of this, Mexico is primarily concerned with reservoirs located outside theWestern Gap, and more specifically, those located in the Perdido fold belt. Nonetheless, it isonly a matter of time until the Western Gap is made available for exploitation and

production by both countries,which will create the same issues for the Western Gapfaced by other areas of the GOM. The principal challenges that Pemex faces with regardto deep-water production include: (i) human resources; (ii) exploration; (iii) exploitation; (iv)technology; and (v) financing.85 These challenges will have to be assumed in theshort termbecause Mexicos oil production is decreasing, and Pemex hasestimated that fifty-five percent of the countrys 54 billion barrels ofequivalentoil from prospective resources86 is located in deep-waters.87 Currently, Mexico cannotcompete with the United States with regard to the development of the resources in the GOM, for it hasnot yet progressed beyond the stage of exploration. In order to strengthenPemexs financial and technical capacities and provide it with more flexibilityfor theperformance of its functions, Mexico began reforming its energy legislation.88 This processended in November 2008. However, the last legislative reform does not endowPemex with the capital and technology necessary to undertake the activities ofexploration and production of deep-waters in the GOM.89 The issue oftransboundary reservoirs has attracted the attention of Mexican lawmakers,politicians, and economists, among others.90 Most of them advise taking promptaction to protect Mexicos rights to its resources.91 Moreover, the exploitation of theresources located in the GOM will be a way for Mexico to increase its levels ofpetroleum production. To summarize, in the GOM (i) there are formations, like thePerdido fold belt, that cross the maritime boundary of Mexico and the UnitedStates, and that will enable production as early as 2010, (ii) substantial exploration

activityhas already been conducted by the United States, (iii) large areas havebeen leased by the United States for exploitation, while others are currently beingexploited, (iv) Mexico has not achieved the levels of resource development that theUnited States has achieved, and (v)both countries need to take advantage of theproduction of their hydrocarbons in the short term.92 In light of thesecircumstances, with the aim of protecting the rights of both countries andoptimizing the use of resources, it would be appropriate for Mexico and the


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United States to cooperate in the development of their transboundary reservoirs.This cooperation will maximize economic benefits, avoid physical waste, increaseenergy security, and avoid international disputes likely to arise if the UnitedStates initiates production of the transboundary reservoirs. Cooperation has ledto beneficial results among other countries that have faced similar dilemmas.

Pemex needs US investment and expertise - oil production is decreasing nowNickMiroff and William Booth 5/7/13 - (Correspondent for The Washington Post covering Mexico aster'sdegree from the UC Berkeley School of Journalism,http://articles.washingtonpost.com/2013-05-07/world/39073749_1_energy-industry-foreign-oil-petroleos-de-mexico)//AP

But while it once was a source of national pride, the state-run monopoly he createdknown as Pemex has become a dinosaur, sapped by debt, sagging output and datedtechnology. The Mexican government siphons off the companys revenue to coverabout one-third of the federal budget, leaving insufficient funds for what has

become a critical task: finding more oil.Mexico remains the third- largest source

of foreign oil for the United States after Canada and Saudi Arabia. But thecountrys easy-pump crude is quickly running dry, and the company lacks thetechnology and know-how to drill for the vast stores of tougher-to-reach depositsthat are thought to existbeneath Mexicos deserts and seas. Fixing the company,formally known as Petroleos de Mexico, has become a top priority for Mexicos new president,Enrique Pea Nieto.With an overhaul plan expected by late summer, U.S. and otherglobal energy companies are waiting to see whether Mexico will once more giveoutsiders a crackat the countrys hydrocarbon treasures, including the massive, virtuallyuntapped beds of shale gas south of the Texas border. At issue iswhether Mexico will embrace theprosperous state-managed model adopted by countries such as Norway and

Brazil where national oil companies can partner with foreign firms and sellshares to investors.The U.S. Energy Information Administrationcalculates thatMexicos gas deposits are the fourth largest in the world, with the potential toensure decades of low-cost energy and give manufacturers an additionalincentive to invest in Mexico over places such as China. For now, though,Mexicos oil exports to the United States are falling, dropping below the million-

barrel-per-day mark for the first time since 1994. For those pushing for change,the challenge is as much political as it is technical. The Mexican constitutionessentially blocks the country from forming joint- venture partnerships withoutsiders, and analysts saysuch restrictions will need to be scrapped if thecountry wants to attract foreign drillers.
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Contention _ is hegemony

Even anti-hegemonic authors agree that in the new political climate the

pursuit of hegemony is inevitablePosen 13 Ford International Professor of Political Science and Director of the Security Studies Program at the MassachusettsInstitute of Technology (Barry R. Posen, January/February 2013, Pull Back: The Case for a Less Activist Foreign Policy, ForeignAffairs,http://www.foreignaffairs.com/articles/138466/barry-r-posen/pull-back) // CB

Despite a decade of costly and indecisive warfare and mounting fiscal pressures, the long-standing consensus among American policymakers about

U.S. grand strategy has remained remarkably intact. As the presidential campaign made clear, Republicans and Democrats may

quibble over foreign policy at the margins, but theyagree on the big picture: that the United States should dominate the world

militarily, economically, and politically, as it has since the final years of the Cold War, a strategy of liberal hegemony. The country,they hold, needs to preserve its massive lead in the global balance of power, consolidate its economic preeminence, enlarge the

community of market democracies, and maintain its outsized influence in the international institutions it helped create.

The pursuit of hegemony is inevitable, sustainable, and prevents great powerwar star this card, it answers all turnsIkenberry, Brooks, and Wohlforth 13 *Stephen G. Brooks is Associate Professor of Government at Dartmouth College,**John Ikenberry is Albert G. Milbank Professor of Politics and International Affairs at Princeton University and Global EminenceScholar at Kyung Hee University in Seoul, **William C. Wohlforth is Daniel Webster Professor of Government at Dartmouth College(Lean Forward: In Defense of American Engagement, January/February 2013, Foreign Affairs,http://www.foreignaffairs.com/articles/138468/stephen-g-brooks-g-john-ikenberry-and-william-c-wohlforth/lean-forward)

Since the end of World War II, the United States has pursued a single grand strategy: deep engagement. In an effort to protect itssecurity and prosperity, the country has promoted a liberal economic order and established close defense ties with partners inEurope, East Asia, and the Middle East. Its military bases cover the map , its ships patrol transit routes across the globe, and tens ofthousands of its troops stand guard in allied countries such as Germany, Japan, and South Korea. The details of U.S. foreign policy have differedfrom administration to administration, including the emphasis placed on democracy promotion and humanitarian goals, but forover 60 years, every president has agreed on the fundamental decision to remain deeply engaged in the world, even as therationale for that strategy has shifted. During the Cold War, the United States' security commitments to Europe, East Asia, and the Middle Eastserved primarily to prevent Soviet encroachment into the world's wealthiest and most resource-rich regions.

Since the fall of the Soviet Union, theaim has become to make these same regions more secure, and thus less threatening to the United States, and to use these securitypartnerships to foster the cooperation necessary for a stable and open international order. Now, more than ever, Washington might betempted to abandon this grand strategy and pull back from the world. The rise of China is chipping away at the United States' preponderance of power,a budget crisis has put defense spending on the chopping block, and two long wars have left the U.S. military and public exhausted. Indeed, even asmost politicians continue to assert their commitment to global leadership, a very different view has taken hold among scholars of internationalrelations over the past decade: that the United States should minimize its overseas military presence, shed its security ties, and give up its efforts to lead

the liberal international order. Proponents of retrenchment argue that a globally engaged grand strategy wastes moneyby subsidizing thedefense of well-off allies and generates resentment among foreign populations and governments.A more modest posture, they contend,would put an end to allies' free-riding and defuse anti-American sentiment. Even if allies did not take over every mission the United Statesnow performs, most of these roles have nothing to do with U.S. security and only risk entrapping the United States in unnecessary wars. In short, those

in this camp maintain that pulling back would not only save blood and treasure but also make the United States more secure. They are wrong. Inmaking their case, advocates of retrenchment overstate the costs of the current grand strategy and understate its benefits. In fact, thebudgetary savings of lowering the United States' international profile are debatable, and there is little evidence to suggest that aninternationally engaged America provokes other countries to balance against it, becomes overextended, or gets dragged intounnecessary wars. The benefits of deep engagement, on the other hand, are legion. U.S. security commitments reduce

competition in key regions and act as a check against potential rivals. Theyhelp maintain an open world economyandgive Washington leverage in economic negotiations. And they make it easier for the United States to secure cooperation for combatinga wide range ofglobal threats. Were the United States to cede its global leadership role, it would forgo these proven upsides whileexposing itself to the unprecedented downsides of a world in which the country was less secure, prosperous, and influential.ANAFFORDABLE STRATEGY Manyadvocates of retrenchment consider the United States' assertive global posture simplytoo expensive. Theinternational relations scholar Christopher Layne, for example, has warned of the country's "ballooning budget deficits" and argued that "its strategiccommitments exceed the resources available to support them." Calculating the savings of switching grand strategies, however, is not sosimple, because it depends on the expenditures the current strategy demands and the amount required for its replacement numbers that are hard to pin down. If the United States revoked all its security guarantees, brought home all its troops, shrank every branch ofthe military, and slashed its nuclear arsenal, it would save around $900 billion over ten years, according to Benjamin Friedman and Justin Logan of theCato Institute. But few advocates of retrenchment endorse such a radical reduction; instead, most call for "restraint," an "offshore balancing" strategy,or an "over the horizon" military posture. The savings these approaches would yield are less clear, since they depend on which security commitments

Washington would abandon outright and how much i t would cost to keep the remaining ones. If retrenchment simply meant shipping foreign-based U.S. forces back to the United States, then the savings would be modest at best, since the countries hosting U.S. forces usually
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cover a large portion of the basing costs. And if it meant maintaining a major expeditionary capacity, then any savings would again besmall, since the Pentagon would still have to pay for the expensive weaponry and equipment required for projecting power abroad.The other side of the cost equation, the price of continued engagement, is also in flux. Although the fat defense budgets of the past decade make an easy

target for advocates of retrenchment, such high levels of spending aren't needed to maintain an engaged global posture. Spendingskyrocketed after 9/11, but it has already begun to fall back to earth as the United States winds down its two costly wars and trims its base level ofnonwar spending. As of the fall of 2012, the Defense Department was planning for cuts of just under $500 billion over the next five years, which itmaintains will not compromise national security. These reductions would lower military spending to a little less than three percent of GDP by 2017,from its current level of 4.5 percent. The Pentagon could save even more with no ill effects by reforming its procurement practices and compensation

policies. Even without major budget cuts, however, the country can afford the costs of its ambitious grand strategy. The significant

increases in military spending proposed by Mitt Romney, the Republican candidate, during the 2012 presidential campaign would still have keptmilitary spending below its current share of GDP, since spending on the wars in Afghanistan and Iraq would still have gone down and Romney'sproposed nonwar spending levels would not have kept pace with economic growth. Small wonder, then, that the case for pulling back rests more on the

nonmonetary costs that the current strategy supposedly incurs. UNBALANCED One such alleged cost of the current grand strategy is that, inthe words ofthe political scientist BarryPosen, it "prompts states to balance against U.S. power however they can." Yet there is no

evidence that countries have banded together in anti-American alliances or tried to match the United States' military capacity ontheir own or that they will do so in the future. Indeed, it's hard to see how the current grand strategy could generate truecounterbalancing. Unlike past hegemons, the United States is geographically isolated, which means that it is far less threateningto other major states and that it faces no contiguous great-power rivals that could step up to the task of balancing against it. Moreover,any competitor would have a hard time matching the U.S. military. Not only is the United States so far ahead militarily in bothquantitative and qualitative terms, but its security guarantees also give it the leverage to prevent allies from giving militarytechnology to potential U.S. rivals. Because the United States dominates the high-end defense industry, it can trade access to itsdefense market for allies' agreement not to transfer key military technologies to its competitors. The embargo that the United States hasconvinced the EU to maintain on military sales to China since 1989 is a case in point. If U.S. global leadership were prompting balancing, thenone would expect actual examples of pushback especially during the administration ofGeorge W. Bush, who pursued a foreignpolicy that seemed particularly unilateral. Yet since the Soviet Union collapsed, no major powers have tried to balance against theUnited States by seeking to match its military might or by assembling a formidable alliance; the prospect is simply too daunting . Instead, they

have resorted to what scholars call "soft balancing," using international institutions and norms to constrain Washington. Setting aside the fact that softbalancing is a slippery concept and difficult to distinguish from everyday diplomatic competition, it is wrong to say that the practice only harmsthe United States. Arguably, as the global leader, the United Statesbenefits from employing soft-balancing-style leverage more than anyother country. After all, today's rules and institutions came about under its auspices and largely reflect its interests, and so they are in fact tailor-madefor soft balancing by the United States itself. In 2011, for example, Washington coordinated action with several Southeast Asian states to oppose

Beijing's claims in the South China Sea by pointing to established international law and norms. Another argument for retrenchment holds thatthe United Stateswill fall prey to the same fate as past hegemons and accelerate its own decline. In order to keep its ambitious strategy inplace, the logic goes, the country will have to divert resources away from more productive purposes infrastructure, education,scientific research, and so on that are necessary to keep its economy competitive. Allies, meanwhile, can get away with lower militaryexpenditures and grow faster than they otherwise would. The historical evidence for this phenomenon is thin; for the most part, pastsuperpowers lost their leadership not because they pursued hegemony but because other major powers balanced against them aprospect that is not in the cards today. (If anything, leading states can use their position to stave off their decline.) A bigger problem withthe warnings against "imperial overstretch" is that there is no reason to believe that the pursuit of global leadership saps economic

growth. Instead, most studies by economists find no clear relationship between military expenditures and economic decline. Tobe sure, if the United States were a dramatic outlier and spent around a quarter of its GDP on defense, as the Soviet Union did in its last decades, its growth and competitivenesswould suffer. But in 2012, even as it fought a war in Afghanistan and conducted counterterrorism operations around the globe, Washington spent just 4.5 percent of GDP ondefense a relatively small fraction, historically speaking. (From 1950 to 1990, that figure averaged 7.6 percent.) Recent economic difficulties might prompt Washington to

reevaluate its defense budgets and international commitments, but that does not mean that those policies caused the downturn. And any money freed up from dropping globalcommitments would not necessarily be spent in ways that would help the U.S. economy. Likewise, U.S. allies' economic growth rates have nothing to do with any securitysubsidies they receive from Washington. The contention that lower military expenditures facilitated the rise of Japan, West Germany, and other countries dependent on U.S.defense guarantees may have seemed plausible during the last bout of declinist anxiety, in the 1980s. But these states eventually stopped climbing up the global economic ranksas their per capita wealth approached U.S. levels -- just as standard models of economic growth would predict. Over the past 20 years, the United States has maintained its leadin per capita GDP over its European allies and Japan, even as those countries' defense efforts have fallen further behind. Their failure to modernize their militaries has only

served to entrench the United States' dominance. LED NOT INTO TEMPTATION The costs of U.S. foreign policy that matter most, of course, are human

lives, and critics ofan expansive grand strategy worry that the United States might get dragged into unnecessary wars. Securing smallerallies, they argue, emboldens those states to take risks they would not otherwise accept, pulling the superpower sponsor into costly conflicts -- a classicmoral hazard problem. Concerned about the reputational costs of failing to honor the country's alliance commitments, U.S. leaders might go to war

even when no national interests are at stake. History shows, however, that great powers anticipate the danger of entrapment and

structure their agreements to protect themselves from it. It is nearlyimpossible to find a clear case of a smaller power luringa reluctant great power into war. For decades, World War I served as the canonical example of entangling alliances supposedlydrawing great powers into a fight, but an outpouring of new historical research has overturned the conventional wisdom, revealingthat the war was more the result of a conscious decision on Germany's part to try to dominate Europe than a case of alliance

entrapment. If anything, alliances reduce the risk of getting pulled into a conflict. In East Asia, the regional security agreementsthat Washington struck after World War II were designed, in the words of the political scientist Victor Cha, to "constrain anticommunist allies in theregion that might engage in aggressive behavior against adversaries that could entrap the United States in an unwanted larger war." The same logic isnow at play in the U.S.-Taiwanese relationship. After cross-strait tensions flared in the 1990s and the first decade of this century, U.S. officials grew

concerned that their ambiguous support for Taiwan might expose them to the risk of entrapment. So the Bush administration adjusted its policy,clarifying that its goal was to not only deter China from an unprovoked attack but also deter Taiwan from unilateral moves toward independence. Formany advocates of retrenchment, the problem is that the mere possession of globe-girdling military capabilities supposedly inflates policymakers'

conception of the national interest, so much so that every foreign problem begins to look like America's to solve. Critics also argue that thecountry's military superiority causes it to seek total solutions to security problems, as in Afghanistan and Iraq, that could be dealt with inless costly ways. Only a country that possessed such awesome military power and faced no serious geopolitical rival would fail to be satisfied with

partial fixes, such as containment, and instead embark on wild schemes of democracy building, the argument goes. Furthermore, they contend, theUnited States' outsized military creates a sense of obligation to do something with it even when no U.S. interests are at stake. As MadeleineAlbright, then the U.S. ambassador to the un, famously asked Colin Powell, then chairman of the Joint Chiefs of Staff, when d ebating intervention in

Bosnia in 1993, "What's the point of having this superb military you're always talking about if we can't use it? " If the U.S. military scrapped its forcesand shuttered its bases, then the country would no doubt eliminate the risk of entering needless wars, having tied itself to the mast like Ulysses. But if itinstead merely moved its forces over the horizon, as is more commonly proposed by advocates of retrenchment, whatever temptations there were to


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intervene would not disappear. The bigger problem with the idea that a forward posture distorts conceptions of the national interest, however, is that itrests on just one case: Iraq. That war is an outlier in terms of both its high costs (it accounts for some two-thirds of the casualties and budget costs of allU.S. wars since 1990) and the degree to which the United States shouldered them alone. In the Persian Gulf War and the interventions in Bosnia,

Kosovo, Afghanistan, and Libya, U.S. allies bore more of the burden, controlling for the size of their economies and populations. Besides, the Iraqwarwas not an inevitable consequence of pursuing the United States' existing grand strategy; many scholars and policymakers who preferan engaged America strongly opposed the war. Likewise, continuing the current grand strategy in no way condemns the United States tomore wars like it. Consider how the country, after it lost in Vietnam, waged the rest of the Cold War with proxies and highly limited interventions.Iraq has generated a similar reluctance to undertake large expeditionary operations -- what the political scientist John Mueller has dubbed "the Iraq

syndrome." Those contending that the United States' grand strategy ineluctably leads the country into temptation need to present

much more evidence before their case can be convincing. KEEPING THE PEACE Of course, even if it is true that the costs of deepengagement fall far below what advocates of retrenchment claim, they would not be worth bearing unless they yielded greater benefits. In fact, they do.

The most obvious benefit of the current strategy is that it reduces the risk of a dangerous conflict. The United States' securitycommitments deter states with aspirations to regional hegemony from contemplating expansion and dissuade U.S. partners fromtrying to solve security problems on their own in ways that would end up threatening other states. Skeptics discount this benefit byarguing that U.S. security guarantees aren't necessary to prevent dangerous rivalries from erupting. They maintain that the high costs of territorialconquest and the many tools countries can use to signal their benign intentions are enough to prevent conflict. In other words, major powers couldpeacefully manage regional multipolaritywithout the American pacifier. But that outlook is too sanguine. If Washington got out of EastAsia, Japan and South Korea would likely expand their military capabilities and go nuclear, which could provoke a destabilizingreaction from China. It's worth noting that during the Cold War, both South Korea and Taiwan tried to obtain nuclear weapons; theonly thing that stopped them was the United States,which used its security commitments to restrain their nuclear temptations.Similarly, were the United States to leave the Middle East, the countries currently backed by Washington notably, Israel, Egypt,and Saudi Arabia might act in ways that would intensify the region's security dilemmas. There would even be reason to worry aboutEurope. Although it's hard to imagine the return of great-power military competition in a post-American Europe, it's not difficult to foreseegovernments there refusing to pay the budgetary costs of higher military outlays and the political costs of increasing EU defense cooperation. The resultmight be a continent incapable of securing itself from threats on its periphery, unable to join foreign interventions on which U.S. leaders might want

European help, and vulnerable to the influence of outside rising powers. Given how easilya U.S. withdrawal from key regions could lead to

dangerous competition, advocates of retrenchment tend to put forth another argument: that such rivalries wouldn't actually hurt the UnitedStates. To be sure, few doubt that the United States could survive the return of conflict among powers in Asia or the Middle East but at what cost?Were states in one or both of these regions to start competing against one another, they would likely boost their military budgets,arm client states, and perhaps even start regional proxy wars, all of which should concern the United States, in part because its lead in militarycapabilities would narrow. Greater regional insecurity could also produce cascades ofnuclear proliferation as powers such asEgypt, Saudi Arabia, Japan, South Korea, and Taiwan built nuclear forces of their own. Those countries' regional competitors mightthen also seek nuclear arsenals. Although nuclear deterrence can promote stability between two states with the kinds of nuclear forces that theSoviet Union and the United States possessed, things get shakier when there are multiple nuclear rivals with less robust arsenals. As the number of

nuclear powers increases, the probability of i llicit transfers, irrational decisions, accidents, and unforeseen crises goes up . The casefor abandoning the United States' global role misses the underlying security logic of the current approach. Byreassuring allies and actively

managing regional relations, Washington dampens competition in the world's key areas, thereby preventing the emergence of ahothouse in which countries would grow new military capabilities. For proof that this strategy is working, one need look no furtherthan the defense budgets of the current great powers: on average, since 1991 they have kept their military expenditures as a percentage of GDPto historic lows, and they have not attempted to match the United States' top-end military capabilities. Moreover, all of the world's most modern

militaries are U.S. allies, and the United States' military lead over its potential rivals is by many measures growing. On top of all this, the currentgrand strategy acts as a hedge against the emergence regional hegemons. Some supporters of retrenchment argue that the U.S. military

should keep its forces over the horizon and pass the buck to local powers to do the dangerous work of counterbalancing rising regional powers.Washington, they contend, should deploy forces abroad only when a truly credible contend er for regional hegemony arises, as i n the cases of Germanyand Japan during World War II and the Soviet Union during the Cold War. Yet there is already a potential contender for regional hegemony -- China --and to balance it, the United States will need to maintain its key alliances in Asia and the military capacity to intervene there. The implication is that theUnited States should get out of Afghanistan and Iraq, reduce its military presence in Europe, and pivot to Asia. Yet that is exactly what the Obama

administration is doing. MILITARY DOMINANCE, ECONOMIC PREEMINENCE Preoccupied with security issues, critics of the current grandstrategy miss one of its most important benefits: sustaining an open global economy and a favorable place for the United States within it. To be sure,

the sheer size of its output would guarantee the United States a major role in the global economy whatever grand strategy it adopted. Yet the country'smilitary dominance undergirds its economic leadership. In addition to protecting the world economy from instability, its militarycommitments and naval superiority help secure the sea-lanes and other shipping corridors that allow trade to flow freely andcheaply. Were the United States to pull back from the world, the task of securing the global commons would get much harder.Washington would have less leverage with which it could convince countries to cooperate on economic matters and less access to themilitary bases throughout the world needed to keep the seas open.A global role also lets the United States structure the worldeconomy in ways that serve its particular economic interests. During the Cold War, Washington used its overseas security commitments to getallies to embrace the economic policies it preferred -- convincing West Germany in the 1960s, for example, to take costly steps to support the U.S. dollaras a reserve currency. U.S. defense agreements work the same way today. For example, when negotiating the 2011 free-trade agreement with SouthKorea, U.S. officials took advantage of Seoul's desire to use the agreement as a means of tightening its security relations with Washington. As onediplomat explained to us privately, "We asked for changes in labor and environment clauses, in auto clauses, and the Koreans took it all." Why? Because

they feared a failed agreement would be "a setback to the political and security relationship." More broadly, the United States wields its securityleverage to shape the overall structure of the global economy. Much of what the United States wants from the economic order is more of the same: forinstance, it likes the current structure of the World Trade Organization and the International Monetary Fund and prefers that free trade continue.Washington wins when U.S. allies favor this s tatus quo, and one reason they are inclined to support the existing system is be cause they value theirmilitary alliances. Japan, to name one example, has shown interest in the Trans-Pacific Partnership, the Obama administration's most important free-trade initiative in the region, less because its economic interests compel it to do so than because Prime Minister Yoshihiko Noda believes that his

support will strengthen Japan's security ties with the United States. The United States' geopolitical dominance also helps keep the U.S. dollarin place as the world's reserve currency, which confers enormous benefits on the country, such as a greater ability to borrow money.This is perhaps clearest with Europe: the EU's dependence on the United States for its security precludes the EU from having the kind of politicalleverage to support the euro that the United States has with the dollar. As with other aspects of the global economy, the United States does not provide

its leadership for free: it extracts disproportionate gains. Shirking that responsibility would place those benefits at risk. CREATING COOPERATIONWhat goes for the global economy goes for other forms of international cooperation. Here, t oo, American leadership benefits m any countries but

disproportionately helps the United States. In order to counter transnational threats, such as terrorism, piracy, organized crime,


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climate change, and pandemics, states have to work together and take collective action. But cooperation does not come abouteffortlessly, especiallywhen national interests diverge. The United States' military efforts to promote stability and its broaderleadership make it easier for Washington to launch joint initiatives and shape them in ways that reflect U.S. interests. After all,

cooperation is hard to come by in regions where chaos reigns, and it flourishes where leaders can anticipate lasting stability. U.S.alliances are about security first, but they also provide the political framework and channels of communication for cooperation onnonmilitary issues. NATO, for example, has spawned new institutions, such as the Atlantic Council, a think tank, that make it easier for Americansand Europeans to talk to one another and do business. Likewise, consultations with allies in East Asia spill over into other policy issues; for example,

when American diplomats travel to Seo ul to manage the military alliance, they also end up discussing the Trans-Pacific Partnership. Thanks to

conduits such as this, the United States can use bargaining chips in one issue area to make progress in others. Thebenefits of thesecommunication channels are especially pronounced when it comes to fighting the kinds of threats that require new forms ofcooperation, such as terrorism and pandemics. With its alliance system in place, the United States is in a stronger position thanit would otherwise be to advance cooperation and share burdens. For example, the intelligence-sharing network within NATO, whichwas originally designed to gather information on the Soviet Union, has been adapted to deal with terrorism. Similarly, after a tsunami inthe Indian Ocean devastated surrounding countries in 2004, Washington had a much easier time orchestrating a fast humanitarian response withAustralia, India, and Japan, since their militaries were already comfortable working with one another. The operation did wond ers for the United States'

image in the region. The United States' global role also has the more direct effect of facilitating the bargains among governments thatget cooperation going in the first place. As the scholar Joseph Nye has written, "The American military role in deterring threats to allies, or ofassuring access to a crucial resource such as oil in the Persian Gulf, means that the provision of protective force can be used in bargaining situations.Sometimes the linkage may be direct; more often it is a factor not mentioned openly but present in the back of statesmen's minds." THE DEVIL WEKNOW Should America come home? For many prominent scholars of international relations, the answer is yes -- a view that seems even wiser in the

wake of the disaster in Iraq and the Great Recession. Yet their arguments simply don't hold up. There is little evidence that the United Stateswould save much money switching to a smaller global posture. Nor is the current strategyself-defeating: it has not provoked theformation of counterbalancing coalitions or caused the country to spend itself into economic decline. Nor will it condemn the UnitedStates to foolhardy wars in the future. What the strategy does do is help prevent the outbreak of conflict in the world's most importantregions, keep the global economy humming, and make international cooperation easier. Charting a different course would threaten all

these benefits. This is not to say that the United States' current foreign policy can't be adapted to new circumstances and challenges. Washington doesnot need to retain every commitment at all costs, and there is nothing wrong with rejiggering its strategy in response to new opportunities or setbacks.That is what the Nixon administration did by winding down the Vietnam War and increasing the United States' reliance on regional partners to containSoviet power, and it is what the Obama administration has been doing after the Iraq war by pivoting to Asia. These episodes of rebalancing belie the

argument that a powerful and internationally engaged America cannot tailor its policies to a changing world. A grand strategy of activelymanaging global security and promoting the liberal economic order has served the United States exceptionally well for the past sixdecades, and there is no reason to give it up now. The country's globe-spanning posture is the devil we know, and a world with a disengagedAmerica is the devil we don't know.Were American leaders to choose retrenchment, they would in essence be running a massiveexperiment to test how the world would work without an engaged and liberal leading power. The results could wellbe disastrous.

Decline causes lashout and collapses global trademakes transnational

problems inevitableBeckley 12Michael, Assistant professor of political science at Tufts, research fellow in the International Security Program at Harvard KennedySchool's. Belfer Center for Science and International Affairs, The Unipolar Era: Why American Power Persists and Chinas Rise Is

Limited, PhD dissertation, AM

One danger is that declinism could prompt trade conflicts and immigration restrictions. Theresults of this study suggest that the United States benefits immensely from the free flow ofgoods, services, and people around the globe; this is what allows Americancorporations to specialize in high-value activities, exploit innovations created elsewhere, and lurethe brightest minds to the United States, all while reducing the price of goods for U.S. consumers.Characterizing Chinas export expansion as a loss for the United States is not just badeconomics; it blazes a trail for jingoistic and protectionist policies. It would be tragically ironic ifAmericans reacted to false prophecies of decline by cutting themselves off from a potentially vital source of American power.

Another danger is that declinism may impair foreign policy decision-making. Iftop

government officialscome to believe that China is overtaking the UnitedStates,theyarelikely to react in one of two ways,both of which are potentially disastrous.The first is that policymakers may imaginetheUnited States faces a closing window ofopportunityand should take action while it still enjoys preponderance and not waituntil the diffusion of power has already made international politics more competitive and unpredictable.315 This beliefmayspur positive action, but it also invites parochial thinking, reckless behavior, and preventive war.316As Robert Gilpin and others have shown, hegemonic struggles have most frequently been triggered by fears of ultimate decline and

the perceived erosion of power.317 By fanning such fears, declinists may inadvertently


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promote the type ofviolent overreaction that they seek to prevent. Theotherpotential reaction is retrenchment the divestment of all foreign policy obligations save those linked to vitalinterests, defined in a narrow and national manner. Advocates of retrenchmentassume, or hope, that the world will sort itself out on its own; that whatever replaces

American hegemony, whether it be a return to balance-of-power politics or a transition to a post-power paradise,

will naturally maintain international order and prosperity. But order and prosperity areunnatural. They can never be presumed.When achieved, theyare the result of determinedaction by powerful actors and, in particular, by the most powerful actor, which is, and will be for some time,the United States.Arms buildups, insecure sea-lanes, and closed markets are only themost obvious risks of U.S. retrenchment. Less obvious are transnationalproblems, such as global warming,water scarcity, and disease, which may fester without a leaderto rally collective action.


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Oil dependence scenario

Scenario _ is Military Oil dependence

Oil Dependence from the Persian gulf is high - Assumes fracking boomKrauss 12 - (Clifford,correspondent for The New York Times currently is a national business correspondent based in Houston,covering energy, "U.S. Reliance on Oil From Saudi Arabia Is Growing Again"http://www.nytimes.com/2012/08/17/business/energy-environment/us-reliance-on-saudi-oil-is-growing-again.html?pagewanted=all&_r=0)//APThe United States is increasing its dependence on oil from Saudi Arabia, raising its imports from the kingdom by more than 20percent this year, even as fears of military conflict in the tinderbox Persian Gulf region grow. The increase in Saudi oil exports to theUnited States began slowly last summer and has picked up pace this year. Until then, the United States had decreased itsdependence on foreign oil, particularly from the Gulf. This reversal is driven in part by the battle over Iran's nuclear program. TheUnited States tightened sanctions that hampered Iran's ability to sell crude, the lifeline of its troubled economy, and Saudi Arabiaagreed to increase production to help guarantee that the price did not skyrocket. While prices have remained stable, and Iran'streasury has been squeezed, the United States is left increasingly vulnerable to a region in turmoil. The jump in Saudi oil productionhas been welcomed by Washington and European governments, but Saudi society faces its own challenges, with the recent deaths ofsenior members of the royal family and sectarian strife in the eastern part of the country, making the stability of Saudi energy andpolitical policies uncertain. The United States has had a decades-long political alliance with the Saudi leadership, one that hasbecome even more pivotal during the turmoil of the Arab spring and rising hostilities with Iran over that nation's nuclear program.(Saudi Arabia and Iran are bitter regional rivals.) The development underscores the U.S. difficulty in lowering its dependence onforeign oil especially the heavy grades of crude that Saudi Arabia exports even as domestic oil production is soaring.

Status quo military oil dependence from the persian gulf decimates power

projectionFitzpatrick 11(Senior Policy Advisor for Clean Energy at Third Way, Josh Freed, Vice President for Clean Energy at Third Way, and Mieke Eoyan,Director for National Security at Third Way, June ,Fighting for Innovation: How DoD Can Advance CleanEnergy Technology... AndWhy It Has To, content.thirdway.org/publications/414/Third_Way_Idea_Brief_-_Fighting_for_Innovation.pdf)

The militarys reliance on oil from unstable and often unfriendly parts of the worldcreatesa significant security threat. Like most consumers, the Pentagon purchases petroleum on the global

market. Some of the largest suppliers in this market are Middle Eastern and North African nations, manyof which are prone to internal political instability and/or tenuous relationships withtheAmerican government. The ten countries with the largest oil reserves, for example, include the likes of Libya,Iran, Nigeria, Venezuela, and Iraq. This leaves the U.S. vulnerable to petroleum pricefluctuations influenced bythe Organization of Petroleum Exporting Countries (OPEC), which currentlyischaired by Iran.6 Supply concerns are particularlyacute in forward-deployed militarylocations, like Afghanistan and Iraq,which rely on the safe transportation of fuel through

volatile regions to power vehicles and generators. Military operations account for 75% of all DoDenergy consumption, requiring immense amounts of fuel to be brought to theater.7 U.S. and allied fuel convoyshave been targeted by militants in Iraq, Afghanistan, and Pakistan, resulting in military andcivilian casualties, as well as disruptions in energy supply to critical operations. InApril of 2011, the Taliban warned of a spring offensive that would include attacks on logistical convoys of the foreign invaderswithin Afghanistan.8 And in May, militants damaged or destroyed over a dozen fuel tankers taking 15 lives in the process.9 It isestimated that over 3,000 American troops and contractors have been killed while protecting supply convoys in Iraq andAfghanistan.10 As Navy Secretary Ray Mabus has said, Fossil fuel is the No. 1 thing we import to Afghanistan, and guarding that

fuel is keeping the troops from doing what they were sent there to do, to fight or engage local people.11 Reliance on oil canalso make the military less responsive and flexible in its operations. For instance, the DefenseScience Board notes that if the Abrams tanks used in operation Desert Shield had been 50% more fuel efficient, there would havebeen a greatly reduced need for fuel and related infrastructure which, in turn, would have cut the militarys build-up time by 20%.12

Between 2000 and 2008, DoDs oil expenditures increased by almost 500%, peaking at nearly $18


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billion.13And estimates show that every $10 increase in the cost of a barrel of oiladds another $1.3 billion to the Pentagons fuel budget, swelling the nationaldeficit and diverting resources from critical defense priorities.14 The rise in spending on fuelby DoD is not solely due to skyrocketing oil prices. The wars in Afghanistan and Iraq, combined with ever-more energy hungryweapons systems, vehicles and communications devices have increased demand to historic levels. Transporting fuel to militaryoperations sites, often via heavily-protected convoys, also contributes significantly to the cost. Unless DoD makes significant strides

to reduce its demand and promote innovative methods of generating and distributing energy, it is on course to spend over $150billion over the next decade on fuel and electricity. Thats up from the roughly $107 billion the Pentagon spent on energy between2000 and 2009, at the height of two overseas conflicts.15

Mexican oil sources trade off with dependency on saudi arabia and is good -

large supplyEstrada 07- President atAnaltica Energtica S.C., (Javier, TRANS-BOUNDARY OIL AND GAS FIELDS BETWEENMEXICO AND THE USA, January 21st, 2007, 27th USAEE/IAEE North American Conference,http://www.usaee.org/usaee2007/submissions/OnlineProceedings/Javier%20Estrada.pdf,//CJD)The USA requires increasing energy sources to meet its energy demandrequirements, specifically oil and natural gas, and preferably should get them

from domestic sources. US politicians have expressed a policy of reducing thecountrys dependency on oil from the Middle East, despite the fact that theregion remains an available and competitive petroleum source. Thus, the US isnow focusing efforts to increase exploration and production within US borders.One possible area available to domestic producers is the deep-water areas of theGoM, which is believed to hold one of the largest oil reserves in the world. TheGoM basin is a nearly circular structural basin, approximately 1,500 km indiameter, filled with sediments from the late Triassic to the Holocene. The GoMis approximately4 million square miles and accounts for roughly ninety percentof US offshore oil and gas production.4About 20% of the Gulf lay in more than3,000 meters of water depth, with the deepest part, the Sigsbee Deep, at morethan 4,000 meters water depth.Although oil companies in both countries have longexplored the shallower depths of the GoM, it had not been technologically oreconomically feasible to pursue oil and gas in the mineral-rich deep waters of theGoM until recently. Small scale oil production in the US GoM started in 1938 andsince then exploration and production has grown considerably. By the 1970s,more than 50% of the discoveries made in the Gulf Coast basins were offshore.By the 1980s exploratory drilling had reached water depths beyond 6,000 feet inthe western part of the GoM and new research focused in sub-salt reservoirs. Activities lowered down during the late 1980s and early 1990s. The GoM wasbelieved to be a mature province. However, advances in platforms, drilling

technology and 3D seismic made it possible to identify commercial fields indeeper waters. By the late 1990s the US GoM oil activities experienced a new

boom, with additional interest in ultra-deep water areas. The Deep WaterRoyalty Relief Act5 provided incentives to develop fields in water depths greaterthan 600 feet, leading to expansion in all the segments of the petroleum valuechain. During the following decade, oil production from deep waters grew by840% and gas production by 1,600%. By 2004 exploration reached the 3,000
http://www.usaee.org/usaee2007/submissions/OnlineProceedings/Javier%20Estrada.pdfhttp://www.usaee.org/usaee2007/submissions/OnlineProceedings/Javier%20Estrada.pdfhttp://www.usaee.org/usaee2007/submissions/OnlineProceedings/Javier%20Estrada.pdf


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meters water depth record. Production in the deep waters has centered on theMississippi delta in fields containing up to 500 million barrels of oil equivalent.Nowthe activities are moving towards the eastern part of the GoM where majordiscoveries like Neptune and Mad Dog are starting to produce. Other fields arein deeper waters (2,300 meters), as for example Spiderman and San Jacinto. Only in

the coast of Florida the offshore activities did not developed as in the rest of the US GoM. This is explained by an environmentally motivated moratorium passedin 1981, expiring in 2012. The area offshore Florida could contain 5 trillion cubicfeet (TCF) of gas, though it is unknown whether the moratorium will be lifted. Many continue to consider the US GoM as a mature hydrocarbon basin with production coming from 1,112 fields and accumulated production of more than 14.6 billion

barrels (MMMB) of oil and 164 TCF of gas since 1938. On the other hand, the2002 figures from the MMS show that proven reserves in the US GoM are 18.75MMMB and 176.8 TCF of gas. Today offshore operations in the GoM representabout 12.5% of the total US oil production and some 25% of the gas produced.

Nowthat the main producing plays and hydrocarbon systems are well known, theGoM is regarded by oil companies as a region with interesting commercialhydrocarbon potentials, even though the projects to obtain them will requirestate of the art drilling technology and new approaches to exploration.Geologists consider that the area continues to present significant prospectiveresources in the deep and ultra-deep waters. New plays have been proved,including sub-salt reservoirs, while producing areas continue to be important.This could be explained by the fact that the average size of fields discovered inthe deep waters ofthe GoM during the last decade are 67 million barrels of oilequivalent (MMboe) compared to 5 MMboe in shallow waters. Theirproductivity is also considerably higher, though the lifting costs are significantdue to expensive exploration and production equipments. But this is notstopping the developments. Many of the new discoveries are at 7,000 feet waterdepths, adding 1.8 billion barrels of oil equivalents in new reserves. The deepand ultra-deep exploratoryefforts have made possible to identify deep shelf gas plays and sub-salt reservoirs

Instability in Persian gulf increasing now - makes oil production unstableSummers 6/23/13 - (Dave, Curators' Professor Emeritus of Mining Engineering at Missouri University of Science and Technology,"Instability in the Middle East Makes Accurate Oil Market Predictions Impossible" http://oilprice.com/Geopolitics/Middle-East/Instability-in-the-Middle-East-Makes-Accurate-Oil-Market-Predictions-Impossible.html)//APThe continuing conflict in Syria, and the slow spread of violence in the region around it, continue to make it difficult to makeaccurate predictions about the future of oil exports from the region. Within Syria itself production had fallen into decline about tenyears ago, before the current struggle began. The precipitate drop over the last two years has, however, been much more dramatic.As Energy Export Data browser noted from the BP statistic review, production fell by 49% last year. As with most oil-producingnations oil consumption had, on the other hand, been steadily rising with net exports (some is exported as crude and re-imported asrefined product) falling to around 100 kbd. The conflict has, however, also reduced internal consumption at similar rates earlier inthe conflict. At the same time that Syrian exports have sensibly disappeared, so the exports from Iran have continued to fall. Datathrough the end of last year shows that sanctions continued to bite, with exports falling 31% last year. Much of the oil from Iran goesto China, India and Turkey. In May 2013 the total exports fell to 700 kbd although individual monthly numbers fluctuate given thecomplexity of now getting oil into the hands of customers. India is hoping that the change in the Iranian Presidency will lead to aneasing of sanctions. In the interim, the exemptions that China, India and Turkey are receiving to some of the sanctions have justbeen extended another six months. Part of this comes from the cuts those countries have already made. India, for example is nowdown to around 117 kbd less than half that of a year ago. Oil imports into China are reported to have increased, perhaps because theChinese have just agreed to buy a number of Chinese drilling rigs. Total exports are projected to fall to 1.3 mbd over the currentIranian fiscal year (which started in March). If Iran is having to store more of its oil in off-shore tankers, this may explain the fall in


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regional tanker availability over the past month. In a recent post I discussed my concern over the likelihood of Iraq being able toachieve the increased volumes of production within the time frame that their Central Government has suggested. However, asLeanan caught recently, Kurdish Iraq is moving more and more toward independent action in regards to their oil. From the Turkishside a pipeline will be allowed, that can go to the border, but not cross it. Mysteriously it will likely then fill, over time, with a flow of1 mbd. Turkey is working with BP to develop the resources of Kurdish Iraq. In the interim Turkish demand has stabilized to a greaterdegree than it has in its southern neighbors. The hope is that a pipeline can be built from Iraq, through Jordan, but that requires thata mutually acceptable line of credit be established, and that appears to be a problem. Egypt has the same soft-credit deal with Libyafor a supply of a million barrels a month. The price, however, will be at that of the world market. Unfortunately as the level of

violence continues to grow one starts to get into an almost inevitable snowball effect, and there is a consequent negative impact onmuch industry, likely including that of oil production. The most likely consequence will be a further fall in the regional export of oil,which has a follow-on consequence in that the customers who have lost this supply (Japan has given up all Iranian oil for example)must then go onto the world market to find an alternate source of supply. As those sources become even scarcer than they arealready, marginal amounts of oil become more critical to maintaining a global balance. But such supplies dont become availab le atthe drop of a hat. It seems to be a drum that I beat perhaps a bit often, but it is a message that bears repeating. Without significantand ongoing investment in the more difficult regions of the world, funds to identify the necessary availability of resource, and then todrill, in a timely manner, to prove the resource and start the process of turning it into a reserve, the oil balance cannot be sustainedat a viable and acceptable price. It does not matter how glowing a set of reports are put out about how we can all relax because theworld has plenty of oil in shale.


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PEMEX economy scenario

PEMEX decline will trigger instability throughout Mexico timeframe is 10

yearsKohl 11-27-12 (Keith, Crisis of Consumption, http://www.energyandcapital.com/articles/mexican-oil-crisis/2833)

Of course,we all know the story behind the Cantarell field's downfall. Once productionstarted to decline, Pemex began injecting nitrogen to boost output. But thisstrategy was short-lived, and production at the field has been dropping sharplysince roughly14% each year for the last six years. Cantarell's decline marked the

beginning of the end for Mexican oil production. The country's new finds have alsoproven underwhelming. The recent discovery by Pemex in Southern Mexico is aperfect example. According to Pemex, the new field holds up to 500 million barrels ofcrude oil, a trifle compared to the billions of barrels Cantarell once held. But thesedays, Mexico will take whatever it can get... and pray it can hold off the decline.Crisis of ConsumptionMexico's declining oil production means there's less oil available

for export.Those 2.5 million barrels flowing from Pemex's wells daily are crucialto the country's stability. When almost 40% of your government budget is paid fromoil revenue, exporting less oil is not an option but that's exactly what'shappening (click charts to enlarge): During the first eight months of 2012,Mexican oil exports to the United States were slightly above one million barrelsper day. Last May oil exports fell below one million barrels per day for the firsttime in 27 years. Barring some miracle taking place in Mexico's oil industry, I

believe the country will be a net oil importer within ten years.

Gulf Drilling will allow PEMEX to restore itself- Latin oil profits and resourcesNegrete and Mndez 6/5- staff writers at Thomas net, (Andrea and Adriana, GE Signs $84 MillionAgreement with PEMEX for Deepwater Exploration Projects in the Gulf of Mexico, 6/5/13, Thomasnet news,http://news.thomasnet.com/companystory/GE-Signs-84-Million-Agreement-with-PEMEX-for-Deepwater-Exploration-Projects-in-the-Gulf-of-Mexico-20009682,//CJD)

CIUDAD DEL CARMEN, CAMPECHE GE Oil & Gas (NYSE: GE) has signed an $84 millionagreement with PEMEX Exploration and Production to supply and to installsubseawellheads for PEMEX's deepwater and ultra-deepwater drilling projectsin the Gulf of Mexico. This marks GE's largest agreement with PEMEX for thesupply of subsea high capacity wellheads. The Gulf of Mexico is a strategic zone forthe hydrocarbon industry, since it is estimated to hold more than 50 percent ofMexico's potential or prospective resources. However, such reserves are locatedin deepwater and ultra-deepwater sites, and advanced technology is needed toextract those resources for the benefit of the country. GE Oil & Gas has become astrategic partner both for PEMEX and for Mexico in the search of newhydrocarbon reserves. By designing high-technology subsea wellheads that provide alarger load, pressure capacity and a full-bore design, unique in the market, GE ishelping drillers reach greater depths. For the latest PEMEX project, GE will supplySMS800 and DWHC 700 high capacity wellheads; similar GE technology has
http://news.thomasnet.com/companystory/GE-Signs-84-Million-Agreement-with-PEMEX-for-Deepwater-Exploration-Projects-in-the-Gulf-of-Mexico-20009682http://news.thomasnet.com/companystory/GE-Signs-84-Million-Agreement-with-PEMEX-for-Deepwater-Exploration-Projects-in-the-Gulf-of-Mexico-20009682http://news.thomasnet.com/companystory/GE-Signs-84-Million-Agreement-with-PEMEX-for-Deepwater-Exploration-Projects-in-the-Gulf-of-Mexico-20009682http://news.thomasnet.com/companystory/GE-Signs-84-Million-Agreement-with-PEMEX-for-Deepwater-Exploration-Projects-in-the-Gulf-of-Mexico-20009682http://news.thomasnet.com/companystory/GE-Signs-84-Million-Agreement-with-PEMEX-for-Deepwater-Exploration-Projects-in-the-Gulf-of-Mexico-20009682


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previously been installed at several other Mexican oil fields including Perdido,Lakach and Kunah. Carlos Arnoldo Morales Gil, Head of PEMEX Exploration andProduction, talks about the importance of such partnership: "PEMEX uses themost advanced technology in the world; our main goal is to optimize thehydrocarbon reserves and the resources we have. This is one of the reasons we've

been using technology and expertise provided by GE Oil & Gas for several yearsnow." "Our focus is to seek partnerships where GE can offer its expertise tosupport the economic development of Mexico," said Joo Geraldo Ferreira, president and CEO for GEOil & Gas Latin America. "Mexico has an increasingly strategic position in our company'sglobal business plans, and PEMEX is one of the most important partners wehave." Octavio A. Meja, regional sales manager for GE Oil & Gas Subsea Systems inLatin America, pointed out that this agreement confirms the trust and theexcellent collaboration between PEMEX and GE Oil & Gas. "During the last six yearsGE has provided top of the line technology and training to PEMEX. So far,wehave provided subsea wellheads and service to more than 24 wells and we expect

to provide many more."Mexican instability hurts US powerKaplan 12 (Robert D., chief geopolitical analyst at Stratfor With the Focus on Syria, Mexico Burns, Stratfor, 3-28-2012,http://www.stratfor.com/weekly/focus-syria-mexico-burns)While the foreign policy elite in Washington focuses on the 8,000 deaths in a conflict in Syria -- half a world away from the UnitedStates -- more than 47,000 people have died in drug-related violence since 2006 in Mexico. A deeply troubled state as well as ademographic and economic giant on the United States' southern border, Mexicowill affect America's destiny in coming decadesmore than any state or combination of states in the Middle East. Indeed, Mexico may constitute the world's seventh-largest economyin the near future. Certainly, while the Mexican violence is largely criminal, Syria is a more clear-cut moral issue, enhanced by itsown strategic consequences. A calcified authoritarian regime in Damascus is stamping out dissent with guns and artillery barrages.Moreover, regime change in Syria, which the rebels demand, could deliver a pivotal blow to Iranian influence in the Middle East, anevent that would be the best news to U.S. interests in the region in years or even decades. Nevertheless, the Syrian rebels are dividedand hold no territory, and the toppling of pro-Iranian dictator Bashar al Assad might conceivably bring to power an austere Sunniregime equally averse to U.S. interests -- if not lead to sectarian chaos. In other words, all military intervention scenarios in Syria arefraught with extreme risk. Precisely for that reason, that the U.S. foreign policy elite has continued for months to feverishly debate

Syria, and in many cases advocate armed intervention, while utterly ignoring the vaster panorama of violence next door in Mexico,speaks volumes about Washington's own obsessions and interests, which are not always aligned with the country's geopoliticalinterests. Syria matters and matters momentously to U.S. interests, but Mexico ultimately matters more, so one would think thatthere would be at least some degree of parity in the amount written on these subjects. I am not demanding a switch in news coveragefrom one country to the other, just a bit more balance. Of course, it is easy for pundits to have a fervently interventionist view onSyria precisely because it is so far away, whereas miscalculation in Mexico on America's part would carry far greater consequences.For example, what if the Mexican drug cartels took revenge on San Diego? Thus, one might even argue that the very noise in themedia about Syria, coupled with the relative silence about Mexico, is proof that it is the latter issue that actually is too sensitive forloose talk. It may also be that cartel-wracked Mexico -- at some rude subconscious level -- connotes for East Coast elites a south ofthe border, 7-Eleven store culture, reminiscent of the crime movie "Traffic," that holds no allure to people focused on ancientcivilizations across the ocean. The concerns of Europe and the Middle East certainly seem closer to New York and Washington thandoes the southwestern United States. Indeed, Latin American bureaus and studies departments simply lack the cachet of MiddleEast and Asian ones in government and universities. Yet, the fate of Mexico is the hinge on which the United States' cultural anddemographic future rests. U.S. foreign policy emanates from the domestic condition of its society, and nothing will affect its societymore than the dramatic movement of Latin history northward. By 2050, as much as a third of the American population could beHispanic. Mexico and Central America constitute a growing demographic and economic powerhouse with which the United Stateshas an inextricable relationship. In recent years Mexico's economic growth has outpaced that of its northern neighbor. Mexico's

population of 111 million plus Central America's of more than 40 million equates to half the population of the United States. Becauseof the North American Free Trade Agreement, 85 percent of Mexico's exports go to the United States, even as half of CentralAmerica's trade is with the United States. While the median age of Americans is nearly 37, demonstrating the aging tendency of theU.S. population, the median age in Mexico is 25, and in Central America it is much lower (20 in Guatemala and Honduras, forexample). In part because of young workers moving northward, the destiny of the United States could be north-south, rather thanthe east-west, sea-to-shining-sea of continental and patriotic myth. (This will be amplified by the scheduled 2014 widening of thePanama Canal, which will open the Greater Caribbean Basin to megaships from East Asia, leading to the further development of Gulfof Mexico port cities in the United States, from Texas to Florida.) Since 1940, Mexico's population has increased more than f ive-fold.Between 1970 and 1995 it nearly doubled. Between 1985 and 2000 it rose by more than a third. Mexico's population is now morethan a third that of the United States and growing at a faster rate. And it is northern Mexico that is crucial. That most of the drug-related homicides in this current wave of violence that so much dwarfs Syria's have occurred in only six of Mexico's 32 states, mostlyin the north, is a key indicator of how northern Mexico is being distinguished from the rest of the country (though the violence in the


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city of Veracruz and the regions of Michoacan and Guerrero is also notable). If the military-led offensive to crush the drug cartelslaunched by conservative President Felipe Calderon falters, as it seems to be doing, and Mexico City goes back to cutting deals withthe cartels, then the capital may in a functional sense lose even further control of the north, with concrete implications for thesouthwestern United States. One might argue that with massive border controls, a functional and vibrantly nationalist United Statescan coexist with a dysfunctional and somewhat chaotic northern Mexico. But that is mainly true in the short run. Looking deeperinto the 21st century, as Arnold Toynbee notes in A Study of History (1946), a border between a highly developed society and a lesshighly developed one will not attain an equilibrium but will advance in the more backward society's favor. Thus, helping to stabilizeMexico -- as limited as the United States' options may be, given the complexity and sensitivity of the relationship -- is a more urgent

national interest than stabilizing societies in the Greater Middle East. If Mexico ever does reach coherent First World status, then itwill become less of a threat, and the healthy melding of the two societies will quicken to the benefit of both. Today, helping to thwartdrug cartels in rugged and remote terrain in the vicinity of the Mexican frontier and reaching southward from Ciudad Juarez (acrossthe border from El Paso, Texas) means a limited role for the U.S. military and other agencies -- working, of course, in fullcooperation with the Mexican authorities. (Predator and Global Hawk drones fly deep over Mexico searching for drug productionfacilities.) But the legal framework for cooperation with Mexico remains problematic in some cases because of strict interpretation of19th century posse comitatus laws on the U.S. side. While the United States has spent hundreds of billions of dollars to affecthistorical outcomes in Eurasia, its leaders and foreign policy mandarins are somewhat passive about what is happening to a countrywith which the United States shares a long land border, that verges on partial chaos in some of its northern sections, and whosepopulation is close to double that of Iraq and Afghanistan combined. Mexico, in addition to the obvious challenge of China as arising great power, will help write the American story in the 21st century. Mexico will partly determine what kind of society Americawill become, and what exactly will be its demographic and geographic character, especially in the Southwest. The U.S. relationshipwith China will matter more than any other individual bilateral relationship in terms of determining the United States' place in theworld, especially in the economically crucial Pacific. If policymakers in Washington calculate U.S. interests properly regarding thosetwo critical countries, then the United States will have power to spare so that its elites can continue to focus on serious moralquestions in places that matter less.


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1AC trade deficit

Contention _____ is trade deficits

Trade deficit expandingMitchell and Morath 6/4/13 (Josh and Eric, U.S. Trade Deficit Widens as Global Demand Falters , WSJ,http://online.wsj.com/article/SB10001424127887324563004578524983651869220.html)//JaviAmericans' appetite for foreign goods, including cars and cellphones, pushed imports higher and widened the U.S. trade deficit inApril, while slower growth abroad restrained overseas demand for U.S. products. Imports rose 2.4% from March, to $227.7 billion,

and exports increased just 1.2%, to $187.4 billion, the Commerce Department said Tuesday. As a result, the nation's tradegap expanded by 8.5% from March to $40.3 billion. The report bolstered evidence that U.S. consumers arepowering the nation's economic growth despite higher payroll taxes that took effect inJanuary. The rise in April imports reflected higher consumer demand for foreign cars, clothing, drugsand other consumer goods, showing that Americans appear to be in a spending mood. But the figures also signaledcaution for key parts of the economy. While overall U.S. exports rose for the second time in three months,new signs of trouble emerged in recession-plagued Europe and slower-growing Asianeconomies. "It certainly supports the idea that there isn't a huge amount of demand reallyanywhere," said Dan Greenhaus, chief global strategist at New York-based BTIG LLC. "The data is just broadly in line with amoderately growing economy."

Offshore drilling solves trade deficit reduces necessity for oil importsPriest, 13(Tyler, Should the U.S. Expand Offshore Oil Drilling?http://online.wsj.com/article/SB10001424127887324020504578398610851042612.html)

The U.S. will be the world's largest per-capita consumer of crude oil for theforeseeable future. To help meet this demand and limit reliance on imports, the country will need toincrease exploration for offshore oil. As the 2010 Deepwater Horizon disaster demonstrated, there are risks.

Critics, however, too often

exaggerate the risks, including the impacts of routine drilling operations on ecosystems,

and understate the benefits. Expanding offshore drilling with appropriate site selection, oversightand attention to the lessons from Deepwater Horizonalready embodied in new rules on equipment, drilling and safetyshould

be a central objective of U.S. energy policy. Regardless of the progress we make in limiting our carbonaddiction, kicking the habit won't happen easily or soon. The raw energy produced by a single offshoreoilplatform in 2010BP BP.LN +1.02% PLC's Thunder Horse facility in the Gulf of Mexicowas equivalent tothe electricity generated in 2012by all the wind and solar installations in the U.S.combined. Offshore oil also does more than help satisfy our energyappetite. Annual federal proceeds from offshore leases have ranged as high as$18 billion in recent years, second only to income taxes as a revenue source.And every barrel ofconsumption that isn't imported helps ease the U.S. trade deficit.


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Data proves resolving the deficit solves protectionism

Hufbauer et. al. 10 (Gary, Former Senior Chair at the Council on Foreign Relations,

Author of multiple books on international trade, Peterson Institute for International

Economics, US Protectionist Impulses in the Wake of the Great

Recession, http://www.iie.com/publications/papers/hufbauer201003.pdf)The U.S. unemployment rate more than doubled between the onset of the Great Recession in December 2007 and December 2009,and is now hovering just below 10 percent (figure 1). 1 Considering that this discouraging figure likely understates broaderdeterioration in the U.S. labor market, 2 the absence of sustained Congressional pressure for largescale protectionist measures,beyond Buy American provisions and several smaller companions (all examined in this report), is in some ways surprising. 3 Atleast part of the explanation for the restrained political response is the simultaneous large improvement in the U.S. trade balanceduring 2008 and early 2009. Figure 1 illustrates how the total U.S. deficit in goods and services trade was nearly cut in half duringthis period, creating a political obstacle to kneejerk protectionism. As we will elaborate in section IV, during recessions animproving external balance (from imports falling faster than exports) often acts an automatic international economic stabilizer,which temporarily fulfills an equivalenteconomic function to a Keynesian government stimulus package. The external sector oftheU.S. economy during the early quarters of the Great Recession provided an automatic offset to sliding U.S. economic activity.This probablycaused policymakers to think twice about succumbing to shortterm protectionist instincts. However, figure 1 alsoshows how the improvement in the U.S. trade balance has been only temporary and indeed began to reverse as the U.S. economyexited the Great Recession during the second half of 2009. Crucial for the political threat of protectionism, economic forecastsindicate that the U.S. unemployment rate will probably remain at very high levels over the medium term, despite PresidentObamas emphasis on jobs, jobs, jobs in his State of the Union Address delivered on January 27 th , 2010. 4 A time lag of atleast 12 to 18 months probably separates the point at which the U.S. trade balance showed maximum improvement (spring 2009)and the expected drop in measured unemployment well below 10 percent (fall 2010).Absent the feel good factor of an improvingtrade balance, but facing continuing high unemployment levels, protectionist sentiment in the U.S. Congress may increase in thecoming months, especially as the November 2010 midterm election draws near. This is particularly so, as current economicforecasts suggest a more robust U.S. economic recovery in the coming years, relative to other industrial trading partners (table 1). Alarge and growing deficit in the U.S. external balances will likely persist for some time, while the external balances of other majortrading partners could hold steady or even improve. If the United States thus returns to its precrisis role as the worldsimporter/consumer of last resort, protectionist impulses in the U.S. Congress are destined to escalate. 5 Fresh U.S. protectionistinitiatives, at a time when the U.S. economy is growing at a decent pace, will likelyinvite inkind retaliation byAmericas tradingpartners, despite the relatively muted reaction to the original Buy American provisions in early 2009 and other protectionistmeasures implemented since then. No longer facing a newlyelected U.S. president, who entered office with considerable globalappeal in the midst of an unprecedented economic crisis, foreign leaders are unlikely to give the U.S. an easy pass on future newinstances of U.S. protectionism.

ExtinctionPanzer 8 (Michael J., Faculty New York Institute of Finance, Financial Armageddon: Protect Your Future from EconomicCollapse, p. 137-138)

The rise in isolationism and protectionism will bring about ever more heated arguments anddangerous confrontations over shared sources of oil, gas, and other key commodities as well as factors of productionthat must, out of necessity, be acquired from less-than-friendly nations. Whether involving raw materials used in strategic industriesor basic necessities such as food, water, and energy, efforts to secure adequate supplies will take increasing precedence in a world

where demand seems constantly out of kilter with supply. Disputes over the misuse, overuse, and pollution of the environmentand natural resources will become more commonplace. Around the world, such tensions willgive rise to full-scale military encounters, oftenwith minimal provocation. In someinstances, economic conditions will serve as a convenient pretext for conflicts that stem fromcultural and religious differences. Alternatively, nations maylook to divert attention awayfrom domestic problems by channeling frustration and populist sentiment toward other

countries and cultures. Enabled by cheap technology and the waning threat of American retribution, terrorist groupswill likelyboost the frequency and scale oftheir horrifying attacks, bringing the threat of random violenceto a whole new level. Turbulent conditions will encourage aggressive saber rattling andinterdictionsbyrogue nations running amok. Age-old clashes will also take on a new, more heated sense of urgency.China will likelyassume an increasingly belligerent posture toward Taiwan, whileIran may embark on overt colonization of its neighbors in the Mideast. Israel, for its part, may look todraw a dwindling list of allies from around the world into a growing number of conflicts. Some observers, like John Mearsheimer, apolitical scientists at the University of Chicago, have even speculated that an intense confrontation between the United States and
http://www.iie.com/publications/papers/hufbauer201003.pdfhttp://www.iie.com/publications/papers/hufbauer201003.pdf


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China is inevitable at some point. More than a few disputes will turn out to be almost wholly ideological. Growing cultural andreligious differences will be transformed from wars of words to battles soaked in blood. Long-simmering resentments could also

degenerate quickly, spurring the basest of human instincts and triggering genocidal acts. Terrorists employingbiological or nuclear weapons will vie with conventional forces using jets,cruise missiles, and bunker-busting bombs to cause widespread destruction.Many will interpret stepped-up conflicts between Muslims and Western societies as the beginnings of

a newworld war.

Trade deficit destroys economySherter 5/10/13 (Alain, How the U.S. trade gaps hurts the economy, CBS, http://www.cbsnews.com/8301-505123_162-57431723/how-the-u.s-trade-gaps-hurts-the-economy/)

The global U.S. trade deficit rose in March at its fastest clip in 10 months, as sales ofconsumer goodscoming from overseas outstripped gains in U.S. exports, according to new Commerce Department data.Despite Europe's financial woes, imports from the region jumped nearly 23 percent in March and hit a new high of roughly $35

billion. Since the U.S. economy officially started recovering in 2009, the trade deficit has doubled, notes economistPeter Morici. It's worth noting that many of those clothes, electronic gadgets, and other low-priced products coming into the U.S.from China and elsewhere are, in fact, goods made overseas by American companies. In theory, that should drive job-creation herein the states. The lower the price of, say, a Chinese-made flat-screen TV, the more units American consumers will buy. Rising

demand for nice TVs is supposed to boost hiring, as U.S. companies gear up to fill orders. If only theory jibed better with reality.

With the U.S. economy still showing symptoms of depression, demand has yet to fully rebound. Hiring remains slow.As thetrade deficit has grown, meanwhile, U.S. businesses have moved a lot morejobs abroad in recentyears than they've created at home. Between 1999 and 2008 U.S. multinationals slashed theirdomestic workforce by 1.9 million, while increasing overseas employment by 2.4 million, economist MartinSullivan has shown. And it's not only about wages. The U.S. has lost more manufacturing jobs since 2000 than several countries that

pay their workers more, including Australia, France, Germany, and Sweden. Nor is it only about manufacturing. The

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