Plans afoot for several mini-refineries in Mexico

 Mexico's geography in the Press, Updates to Geo-Mexico  Comments Off on Plans afoot for several mini-refineries in Mexico
Aug 292016

State-owned Pemex currently has six oil refineries in Mexico, which process around 1.05 million barrels/day (b/d) of crude.

The company has now shelved plans to add a $10-billion refinery at Tula (Hidalgo) owing to doubts about its long-term viability. It does seem that it is unlikely to be needed since Mexico’s energy reforms have led to several private companies submitting proposals to build less expensive, modular “mini-refineries” in Mexico. Each of these mini-refineries is 80-90% smaller than any of the six giant Pemex refineries.

Planned new refineries. Credit: El Economista /

Planned new refineries. Credit: El Economista /

A consortium of U.S. firms, Refinerías Unidas de México (Refmex), plans to invest 11.6 billion dollars to build 9 mini-refineries, starting with a $1.5billion refinery in Campeche with the capacity to refine between 40,000 and 60,000 b/d. Construction would take between 18 and 30 months.

Other proposed locations (map) include Cadereyta (Nuevo León), Dos Bocas (Tabasco), Minatitlán (Veracruz), Lázaro Cárdenas (Michoacán), Manzanillo (Colima), Salina Cruz (Oaxaca), Tula (Hidalgo) and Tuxpan (Veracruz). Several of these locations are in the recently announced federal Special Economic Zones, which offer fiscal incentives to investors.

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Clean energy revolution in Mexico

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Jul 042016

A recent Bloomberg analysis highlights Mexico’s “Clean Energy Revolution”. The analysis of Mexico’s electricity sector finds that total energy demand will rise 72% over the next 25 years, from 305,000 GWh in 2015 to 512,000 GWh in 2040, while installed capacity will triple, to around 247 GW.

Fossil fuels are currently the source of 78% of the electricity generated in Mexico, but renewable energy (including hydro-power) will account for 69% by 2040.

According to Bloomberg, the costs of producing wind and solar energy will become fully competitive with electricity from natural gas power stations by 2025.

The report concludes that the renewable energy sector in Mexico represents an enormous investment opportunity, worth up to $186 billion between now and 2040.

The federal government is increasing its investments in research and development of renewable energy sources each year, up to $310 million in 2020, to build more “energy innovation centers” (Cemies). The five existing Cemies focus on geothermal, solar, wind, bioenergy and ocean energy respectively. Two new Cemies will investigate the use of intelligent networks and carbon capture alternatives.

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All Pemex refineries now making clean fuel

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Jun 302016

Pemex has concluded a round of upgrades to its refineries which means that all fuels made in Mexico are now “clean” (ultra-low-sulfur). Pemex refineries produce 420,000 barrels of vehicle fuels a day, but national demand is for 800,000 barrels a day.


Imported fuels, which come mainly from refineries in Texas, already meet ultra-low-sulfur standards. The state oil giant has invested 1.7 billion dollars in modifying its six refineries to produce only ultra-low-sulfur fuels.

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New era for Federal Electricity Commission as it is split into four divisions

 Mexico's geography in the Press, Updates to Geo-Mexico  Comments Off on New era for Federal Electricity Commission as it is split into four divisions
Feb 112016

Mexico’s state-owned Federal Electricity Commission (Comisión Federal de Electricidad, CFE) has remained the dominant electric utility in Mexico for almost eighty years, even though most Latin American countries ended state monopolies in the 1990s. Now, Mexico’s on-going energy reforms are revamping the CFE behemoth by splitting it into four distinct entities focusing, respectively, on electricity generation, transmission, distribution and commercialization.cfe-619x348

  • Generation: CFE’s total installed capacity is 55,118 MW, coming from 628 generating units in 185 power stations.
  • Transmission: Mexico has 115,400 km of high voltage transmission line.
  • Distribution: CFE currently has 820,602 km of mid- and low-voltage lines, 1910 substations and 1.38 million distribution transformers. Distribution to domestic users is organized via 16 regional units: Baja California, Bajío, Centro Occidente, Centro Oriente, Centro Sur, Centro Norte, Golfo Norte, Jalisco, Noroeste, Norte, Oriente, Peninsular, Sureste, Valle de México Sur, Valle de México Centro and Valle de México Norte.
  • Commercialization: Includes the sales and billing to more than 38 million end-users, as well as the operations of two CFE subsidiaries (CFE Internacional and CFE Energía) involved in international trading.

In related news, Mexico’s energy regulatory body, the Centro Nacional de Control de Energía (CENACE) is introducing a market framework. Long-term energy and capacity Power Purchasing Agreements (PPAs) can now extend 15 years, with guaranteed commercialization of all power produced by each generation unit. This should provide a welcome boost to many renewable energy projects.

Mexico is committed to generating 35% of its energy from renewable sources by 2024. Hydro-electric and geothermal power plants have been important for a long time, and significant solar and wind-energy plants have been added in recent decades. A market system involving tradable Clean Energy Certificates (Certificados de Energías Limpias, CELs) is an integral part of the reforms.

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Pemex works at its Clean Fuels Policy

 Mexico's geography in the Press  Comments Off on Pemex works at its Clean Fuels Policy
May 222014

As part of its Clean Fuels Policy, Pemex is modernizing its refineries in Ciudad Madero, Minatitlán, Salamanca, Salina Cruz and Tula.The total investment involved is 3.4 billion dollars. The plan, which will take 4 years to complete, includes the construction of new plants in several of the locations

Pemex installations in Mexico. (Adapted from Fig 15.5 of Geo-Mexico). All rights reserved.

Pemex installations in Mexico. (Adapted from Fig 15.5 of Geo-Mexico). All rights reserved.

The objective is to produce Ultra Low Sulfur diesel fuel (UBA) in the five refineries, in compliance with Mexican standards. The new technology will reduce vehicle emissions of carbon dioxide and nitrogen oxides by between 50 and 80%.

Since last September, 42,500 barrels/day of ultra low sulfur gasoline is already being produced at the Pemex refinery in Cadereyta, Nuevo León.

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Pemex defines its priority areas for oil and gas

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Apr 212014

Recent reforms to the energy sector have meant that Pemex has had to define its priority areas, those areas where it wishes to continue exploration and development. At a later date, it is then possible for the government to ask for bids from other oil companies, and award contracts to explore and develop oil and gas fields in other areas of Mexico. The first stage is known as Round Zero.

In March, Pemex published its portfolio of areas for exploration for “Round Zero” (Ronda Cero), with preliminary data for 2P (proven, probable) and 3P (proven, probable, possible) reserves as of the start of this year. 2P reserves totaled 24.174 billion barrels of crude equivalent, while 3P reserves totaled 43.8 billion barrels. The figures, slightly lower than the equivalent figures from January 2013, have not yet been confirmed by independent auditors.

Map from Pemex "Round Zero" document

Map from Pemex “Round Zero” document

46% of probable reserves are located in Chicontepec (Proyecto Terciario del Golfo) in Veracruz, and 43% in offshore regions including the Akal, Balam, Ayatsil, Maloob, Kunah and Tsimín fields.

56% of possible reserves are located in Chicontepec, and an additional 34% in offshore regions.

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Latin America’s biggest solar energy plant helps power La Paz

 Mexico's geography in the Press, Updates to Geo-Mexico  Comments Off on Latin America’s biggest solar energy plant helps power La Paz
Mar 312014

Latin America’s largest solar power plant is now supplying power to the city of La Paz in Baja California Sur. The Aura Solar I photovoltaic power plant has an installed capacity of 30 MW. The plant was officially inaugurated on 19 March 2014, and will supply about 82 GWh/year of electricity to around 164,000 residents of La Paz, more than two-thirds the city’s total population of 220,000. It is located a short distance east of the city, and replaces an old, air-polluting thermoelectric plant.

Auro Solar 1 project, La PazThe new power plant, owned by Corporación Aura Solar, is the largest photovoltaic power plant in Latin America, according to company chairman Daniel Servitje Montull. The 100-million-dollar plant occupies 100 hectares (250 acres) and was constructed by engineering firms Gauss Energía and Martifer Solar. The project relies on about 131,800 solar panels and has an estimated operational life of 30 years. About 25% of Mexico’s electricity is currently generated using clean energy sources. Mexico has set a national target of 35% clean energy by 2024, in order to minimize Mexico’s contribution to global climate change.

This 2-minute YouTube video shows various stages in the building of the plant:

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Energy reforms and Mexico-USA Transboundary Hydrocarbons Agreement

 Mexico's geography in the Press, Updates to Geo-Mexico  Comments Off on Energy reforms and Mexico-USA Transboundary Hydrocarbons Agreement
Jan 302014

Mexico recently approved the most significant energy reforms since the nationalization of the oil industry in 1938. The reforms end the 75-year monopoly over the energy industry enjoyed by state oil giant Petroleos Mexicanos (Pemex), opening the way for private investment in petroleum exploration and production.

The proposals do not allow foreign ownership of mineral or oil resources, but do allow private sector firms to participate in refineries and distribution networks, as well as sign profit-sharing contracts with state oil giant Pemex and the Federal Electricity Commission. The reforms include a revised tax regime for Pemex, the world’s fifth-leading oil producer, and its reorganization into two subsidiaries.

Mexico’s oil production has risen recently to 2.5 million barrels/day (b/d) and is expected to reach 3 million b/d by 2018.

The Mexico-USA Transboundary Hydrocarbons Agreement (THA) has been approved by senators in Washington. The accord allows both countries to explore and develop crude reserves that straddle their exclusive economic zones in the Gulf of Mexico. It establishes “an environmentally safe and responsible framework to explore, develop, and share revenue from hydrocarbon resources that lie in waters beyond each country’s exclusive, economic zones,” according to White House National Security Council spokesperson Caitlin Hayden.

location of doughnut holes

The two “doughnut holes” where Mexican and US Exclusive Economic Zone claims overlap

The American Petroleum Institute has hailed the possibility of Mexico-USA joint projects in the Gulf of Mexico. The reserves in the maritime boundary region are believed to total more than 170 million barrels of oil and 15 million metric tons of natural gas, according to the U.S. Department of the Interior’s Bureau of Ocean Energy Management.

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Mexico’s Pemex is one of the most competitive oil firms in the world

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Dec 022013

Despite the criticisms regularly leveled at it, Mexico’s oil giant Pemex is actually one of the most competitive oil firms in the world.

First, its costs of exploration and production are much lower than those of most other major oil companies. Pemex’s production costs in 2012 averaged 6.84 dollars/barrel (d/b) of oil equivalent, well below the costs incurred by international rivals Exxon (9.91 d/b), Chevron (15.16), Total (8.17), Shell (12.47) and British Petroleum (12.50).

pemexPemex’s exploration and development costs are also among the world’s lowest. They fell from 16.13 d/b in 2011 to 13.77 d/b in 2012, mainly due to the discovery of several new reserves. Among major players, only Shell had lower costs (11.75 d/b), with Pemex well ahead of British Petroleum (17.37 d/b), Exxon (19.31), Total (22.68) and Chevron (28.81).

Thirdly, as new fields are fully explored, Mexico’s proven oil reserves are expected to continue to rise for a number of years, from the current level of 13.87 billion barrels to 14.92 billion barrels by 2018. (During this period, Pemex will extract an estimated 6.64 billion barrels, but they will be more than replaced by anticipated new discoveries)

How important is Pemex to the Mexican economy?

One third of Mexico’s national budget comes from the petro industry, which accounted for 7.6% of GDP in 2012.

In 2012, Pemex invested 23.9 billion dollars in Mexico, appreciably more than the 19.2 billion dollars invested that year by América Móvil, Femsa, Walmart, Frisco, Cemex, Liverpool, Alfa and Mexichem, combined.

In terms of revenues, Pemex had revenues in 2012 of 142.4 billion dollars, greater than the 139.1 billion dollars in revenues of América Móvil, WalMart, Femsa, Alfa and Cemex combined.

According to a Bloomberg analysis, between 1973 and 2012, Pemex generated a cash flow (before tax and depreciation) that was 63% higher than the total cash flow of all the firms listed on the Mexican Stock Market. In 2012, the Ebitda (Earnings before Interest, Tax, Depreciation and Amortization) of Pemex was 88.2 billion dolalrs, compared to the combined 54.2 billion dolalrs of Ebitda for América Móvil, Banorte, Femsa, Walmart de México, Grupo Modelo, Cemex, Kof, Televisa, Peñoles and Alfa.

How important is Pemex in the worldwide picture?

According to Petroleum Intelligence Weekly, U.S. Energy Information Administration and U.S. Crude Oil Imports by Country, Pemex is one of the world’s five most important crude oil producers, after Aramco (Sauid Arabia), NIOC (Iran), CNPC (China) and KPC (Kuwait).

Pemex is the third largest oil exporter to the USA, after Canada and Saudi Arabia, but ahead of Venezuela and Nigeria.

Pemex installations in Mexico. (Adapted from Fig 15.5 of Geo-Mexico). All rights reserved.

Pemex installations in Mexico. (Adapted from Fig 15.5 of Geo-Mexico). All rights reserved.

Mexico has the world’s 13th largest crude oil reserves and Pemex has the world’s 15th highest oil company revenues.

Mexico’s proposed energy reforms, which will allow private sector firms more access to some parts of the oil and gas sector, will only serve to boost the competitiveness of Mexico’s oil industry. The major problems facing Pemex are not directly related to revenues or to competitiveness, but are the persistence of corruption and a lack of transparency.

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Mexico has the world’s highest level of energy security among large economies

 Mexico's geography in the Press, Updates to Geo-Mexico  Comments Off on Mexico has the world’s highest level of energy security among large economies
Apr 042013

According to a recently published U.S. Chamber of Commerce study of the largest energy-consuming nations, Mexico is the most energy secure country of the 25 countries in the large energy user group with a score 14% below the OECD average (see graph).

energy security graph (US Congress)

The study compiled an “International Index of Energy Security Risk”, taking into account 28 metrics including fossil-fuel imports, power generation and carbon-dioxide emissions, using data from sources such as the U.S. Energy Information Administration and the Paris-based International Energy Administration.

Other countries with high levels of energy security included the U.K., Norway, New Zealand, Denmark, Australia and the U.S. (Which tanked 7th overall. Energy security was lowest in the Ukraine, followed by Thailand, South Korea, the Netherlands, Brazil, Italy, Turkey and Japan.

Mexico’s energy security has ranked as first or second among the large energy user group of countries every year since 1980. The metrics where Mexico has a significant comparative advantage over other OECD members include:

  • low amount it spends on fuel imports per dollar of GDP generated
  • low energy expenditures per dollar of GDP and per capita are also lower
  • low costs to produce electricity.
  • low amount of energy each person uses, both overall and in the transport sector
  • low amount of carbon dioxide each person emits

As the graph shows, however, Mexico’s energy security is edging closer to that of OECD countries, meaning that Mexico’s comparative advantage in energy security is slowly shrinking.

Mexico is the world’s seventh largest oil producer, and also a major oil exporter. While production levels had been declining, they have begun to rise again in recent months. Mexico also has large reserves of natural gas, but these have not been developed quickly enough to prevent imports of natural gas from rising sharply in recent years as demand for natural gas outstrips domestic supply.

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La Yesca HEP station officially opened

 Mexico's geography in the Press, Updates to Geo-Mexico  Comments Off on La Yesca HEP station officially opened
Nov 122012

The La Yesca dam was officially opened last week by President Calderón. According to the Federal Electricity Commission (CFE), at 208.5 meters (684 feet) high, it is the second highest dam of its kind in the world, 22 meters lower than the dam for the Shibuya hydroelectric plant on the Qingjiang River in China.

The dam is located on the Santiago River, on the border between Nayarit and Jalisco, 105 km NW of Guadalajara (Jalisco) and 23 km NW of the town of Hostotipaquillo (Jalisco). This location is north of the towns of Magdalena and Tequila.

La Yesca dam and reservoir

The reservoir has a total capacity of 2.5 billion cubic meters, of which about half can be used for generating HEP. The surface area of the reservoir is 33.4 square kilometers (13 sq mi).

La Yesca is upstream of two other major HEP dams: El Cajón and Aguamilpa, and represents the latest addition to Mexico’s ambitious plan to increase the proportion of its energy needs coming from renewable sources. La Yesca has a total installed capacity of 750 MW, equivalent to about half the total electricity requirements of Guadalajara, Mexico’s second largest city.

La Yesca dam

The La Yesca HEP scheme represents an investment of about 1.1 billion dollars and was constructed by a consortium led by Mexican firm Ingenieros Civiles Asociados (ICA). Construction began in September 2007. The Santiago River was temporarily diverted in March 2009, and the first generating unit entered service in October 2012. The second unit will enter service this month. The machine house is on the northern side of the river, and the spillway on the southern side.

The three major dams on the River Santiago help to reduce flooding downstream, while also increasing fishing opportunities. According to a CFE study, fish yields from Aguamilpa, the most accessible of the three major dams, have risen from 33.5 metric tons/yr to 5,000 metric tons/yr since the reservoir was completed.

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How many oil refineries does Pemex have?

 Mexico's geography in the Press, Updates to Geo-Mexico  Comments Off on How many oil refineries does Pemex have?
Sep 222012

If many of the press reports about the tragic events that led to the death of 29 Pemex workers in Reynosa (Tamaulipas) are to be believed, the problem was an explosion in a Pemex oil refinery. There is just one small “detail” in these statements: there is no Pemex oil refinery in or near Reynosa!

The accident occurred during maintenance at a gas pipeline distribution center, which is a very different industrial installation to an oil refinery.

For the record, Pemex currently has six oil refineries in Mexico, shown on the map below, and listed here by their 2007 production in barrels/day (b/d):

  • Tula Refinery, Hidalgo (289,000 b/d)
  • Salina Cruz Refinery, Oaxaca (272,000 b/d)
  • Cadereyta Refinery, Nuevo León (217,000 b/d)
  • Salamanca Refinery, Guanajuato (188,000 b/d)
  • Minatitlan Refinery, Veracruz  (170,000 b/d)
  • Ciudad Madero Refinery,  Tamaulipas (141,000 b/d)
Pemex installations in Mexico. (Adapted from Fig 15.5 of Geo-Mexico). All rights reserved.

Pemex installations in Mexico (adapted from Fig 15.5 of Geo-Mexico). All rights reserved.

The six Pemex refineries produce liquid gas, gasoline, diesel, kerosene and other fuels. The state oil giant is expanding its refining capacity by building a second oil refinery, Refinería Bicentenario, in Tula (Hidalgo). Expected to cost around 10 billion dollars in total, it will have the capacity to process 300,000 barrels of crude a day and is expected to be operational sometime in 2016.

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Appropriate technology project supplies solar-powered stoves

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Jul 262012

In a recent post, we mentioned a video on the Global Post website about transport developments in Mexico City. Global Post has published another short video in the same series, that is equally interesting and valuable as a teaching resource:

My first experience of a solar-powered stove was during an environmental education workshop in the state of Michoacán some 25 years ago. I was underwhelmed by its performance, but the more modern (and much more efficient) designs featured in this video definitely merit a much closer look.

The video focuses on the work of Gregor Schäpers, a self-taught solar engineer, and his company Trinysol, that makes solar-powered stoves and boilers. The company, located in the village of El Sauz in the state of Hidalgo, a short distance north-east of Mexico City, is a good example of the development of appropriate technology.

One of Trinysol’s first projects was working with a women’s cooperative in the village of  San Andrés, who produce a sweet  syrup from green agave plants. The process involves hours of cooking, and therefore requires a large input of energy. Prior to the installation of Scheffler reflectors and solar-powered hotplates, the women relied on gas.

Solar reflectors, San Andrés.

Schäpers has since set up hundreds of solar-powered boilers, and dozens of solar stoves in the region. Some are designed for individual families; others are suitable for small-scale industrial use, for example to provide energy for bakeries (panaderias) or tortilla-making plants (tortillerias).

According to the figures offered in the video, it costs about 4,000 dollars to build and install heating for a panadería, but can save the owners up to 5,000 dollars a year in energy costs. The investment is therefore fully recouped within a year. The system should last for 30 years, so a solar-powered system represents a significant improvement to the economics of many small businesses, giving them the opportunity to expand or allocate more of their scarce resources elsewhere.

Mexico and USA sign agreement for development of Gulf of Mexico oil reserves

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Feb 272012

The USA and Mexico share the Gulf of Mexico, with periodic arguments about the precise offshore limits of each country’s jurisdiction. An earlier post includes a brief summary of the history of negotiations over this contentious maritime boundary:

The reason this boundary matters is because the deep waters of the Gulf of Mexico are thought to have massive deep-water oil and gas fields. The USA has encouraged major oil multinationals such as Shell and BP to explore relatively deep parts of the Gulf, those lying more than 500 meters or 1,640 feet below sea level.

location of doughnut holesDeveloping these fields requires advanced, specialist deep-water drilling techniques, which only a small number of major international (multinational) oil firms currently have the expertise to undertake. As was seen not long ago, accidents in these fields can be very difficult to avoid and any resulting damage very difficult to clean up:

The legal battle connected to that spill has been postponed; it had been due to start today (27 February 2012) in a New Orleans court. The April 2010 accident killed 11 oil workers and released up to 5 million barrels of oil into the Gulf.

In the Mexican sections of the Gulf of Mexico, very little oil exploration and development has yet been carried out. All oil exploration and development in Mexico is managed by state-owned oil giant Petroleos Mexicanos (Pemex), though they can contract other firms to undertake work on their behalf if or when needed. Pemex is the world’s third-largest oil producer and the largest contributor to Mexico’s federal budget. It is one of the very few oil companies worldwide that manages all aspects of the productive chain, from exploration to refining and marketing. Pemex has had more than its fair share of serious environmental issues:

Mexican experts believe that up to 29.5 billion barrels of oil might reside in Mexico’s share of the Gulf, but Pemex has little to show for almost a decade of deep-water drilling apart from some relatively minor gas finds.

A few days ago, Mexico and the USA finally signed an accord that, in the words of Mexican President Felipe Calderón, “ensures that each country can develop its corresponding oil and natural gas deposits in the trans-border area of the Gulf of Mexico.” In a joint formal statement, Mexico’s Foreign Affairs and Energy Secretariats said that the “historic” agreement “will generate the necessary legal certainty for the long-term development of resources that may be found in that area.” It remains to be seen just how quickly and efficiently Pemex can actually take advantage of the deep-water drilling opportunities that the new agreement is designed to safeguard.

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Value-added from solid waste in Mexico

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Dec 142011

In a previous post, we looked briefly at the role of plastics recycling in Mexico City’s waste separation program. In this post, we describe two other developments related to solid waste disposal.

Recycling finally reaches the take-off point in Mexico

Nationwide, it took an entire decade for the plastics recycling rate in Mexico to increase from 10 to 15%. Then, in 2010, as more companies sought part of a potentially very lucrative market, the rate shot up to 17%. Admittedly, though, Mexico still lags far behind the 22% rate boasted by the European Union members in this regard.

Mexican industry generates 3.8 million metric tons of plastic waste a year (36% of it in Mexico City). The nationwide recycling capacity for plastics (geared towards hard plastic or PET) currently stands at only 646,000 metric tons, so there is plenty of room for more companies and recycling plants.

Garbage-powered street lights

The World Bank is helping finance a new bio-energy project in Monterrery which will reduce emissions by the equivalent of a million tons of CO2. This is about the same quantity as the annual emissions of 90,000 vehicles, or the amount of CO2 that would be absorbed annually by a forest with an area of 970 hectares.

The project, run by Bioenergía de Nuevo León, uses methane gas given off by decomposing garbage in one of the city’s landfills, in Salinas Victoria, which receives 5000 tons of garbage a day. The power plant’s installed generation capacity of 17mW should be sufficient to supply 90% of the nighttime street lighting in the Monterrey metro area. During the day, power from the project is supplied to the city’s metro system. Any surplus is sold to the Federal Electricity Commission and fed into the national grid.

photo of garbage

Recycling has a long way to go...

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Dec 072011

The federal government has announced a six-year overhaul of Mexico’s domestic natural gas market, coupled with building some major extensions to the existing natural gas pipeline network.

Recent discoveries of massive reserves of shale gas have prompted the government to abandon plans to build more nuclear power stations and focus more attention on natural gas. New combined-cycle power stations are planned, alongside 4,400 km of new pipelines, which will be funded by 8 billion dollars of public-private financing and bring natural gas to more than 5 million potential consumers for the first time.

The expansion of Mexico’s pipeline network will extend the system into four states–Zacatecas, Colima, Sinaloa and Morelos–where natural gas was previously unavailable. The improvements in infrastructure should persuade many businesses to switch from oil and liquid petroleum gas to cleaner and less expensive natural gas.

Projected gas pipeline network, 2020.

Mexico's projected natural gas pipeline network, 2020.

The major projects are shown on the map (green pipelines already exist). The Manzanillo-Guadalajara section (shown in red) is already built and being subjected to final testing before being brought on-stream early in 2012. It will immediately increase the competitiveness of companies in several key parts of central Mexico.

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Mexico reduces emissions with innovative carbon credit project

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Nov 212011

Mexico is rapidly becoming a key market for environmental investments, and now accounts for one in every five projects involving Clean Development Mechanisms (CDMs) in Latin America. A recent Reuters news item gives the basic details of one CDP project:

  • Mexico to earn royalty on light bulb carbon credits

CDMs, established after the Kyoto Protocol, allow companies in developing countries to sell Certified Emission Reduction certificates (CERs) to buyers in industrialized countries, to offset their own emissions control targets. The certificates prove that there has been a reduction in greenhouse gas emissions.

One project involving CERs, started by Australian company Cool nrg International, will reduce Mexico City’s carbon dioxide (CO2) emissions by 16 million tonnes over the next 10 years. The company is distributing 30 million free energy-efficient lightbulbs to 6.5 million low-income households, which will save 33,000 gigawatt hours of electricity.

Watch Nick Francis from Cool nrg explain the plan and why it is a win-win-win for everyone concerned:

Every tonne of CO2 saved generates a CER credit (currently trading at 9 dollars). For every credit, Mexico receives a royalty payment. Cool nrg then sells the CERs to companies in industrialized countries. The project is a world first and its success will be closely monitored by many other countries.

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Nov 162011

Mexico may have major reserves of petroleum but it lacks the necessary refining capacity to supply the domestic market with all the refined products such as vehicle fuels that its industrial, commercial and residential sectors demand.

As a result, Mexico has to import refined petroleum products, mainly from the USA. The high costs of these imports is a constant point of discussion in Mexico. If the country developed sufficient refining capacity, it could spend every dollar that currently goes on petro-based imports on something else, such as social services or infrastructure improvements.

Pemex imports. Credit:
Pemex imports, by month. Figures in millions of US dollars. Credit:

A small fortune is being spent each month on petroleum-related imports (see graph). Over the past year, the cost of imports has risen 12.3%. This is almost entirely due to higher oil prices on international markets; the volume of imports has increased only 1% over the period.

Imports of refined petroleum products will not end any time soon. Mexico does plan to build new refineries and expand its refining capacity, but they will take years to complete. Earlier this year, it was reported that Pemex engineers were adding the final touches to the blueprints for a new refinery in Tula (Hidalgo). Work began with the re-routing of existing irrigation channels and high tension power lines to take them well away from the site. It remains unclear, though, just how long it will take for this project to be completed.

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Gulf of Mexico energy reserves: updates in Mexico’s oil and gas sector

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Oct 252011

PEMEX awards first-ever contracts for the operation of oil fields.

In a move welcomed by international oil analysts, Pemex has awarded British company Petrofac Facilities Management Ltd. a contract to operate the Santuario oil fields in Tabasco. Prior to this contract, all oil field operations in Mexico since 1938 had been directly managed by Pemex.

Operations in two other areas – Magallanes and Carrizo – are also being contracted out. The areas cover 312 square kilometers between them, and have 3P (proven, probable, possible) reserves totaling 207 million barrels of crude oil equivalent. The contractual changes should attract considerable foreign investment in coming years, and are expected to play an important role in boosting national oil production from its current level of 2.5 million barrels a day.

Major natural gas discovery in the Gulf of Mexico

Pemex has announced that its Piklis 1 offshore well, located 150 km northwest of Coatzacoalcos in the Lakach field, has found a massive deposit of natural gas 5,431 meters below the water surface. The deposit holds more than 400 billion cubic feet of gas and, when production begins in 2014, it should yield 700-800 million cubic feet/day, reducing Mexico’s natural gas imports by up to 80% over the next 15 years. Compared to 2009, Pemex’s total revenues in 2010 rose 20.3% to 115 billion dollars, mainly due to high prices for petroleum and related products; export sales were 21.4% higher. Pemex is currently producing about 2.6 billion barrels of crude oil/day.

location of doughnut holes

How much does it cost to produce a barrel of oil?

According to Mexico City daily La Jornada, Pemex has maintained its enviable low costs per barrel of oil obtained (all figures in dollars):

  • 2006 $4.40
  • 2007 $4.90
  • 2008 $6.10
  • 2009 $4.90
  • 2010 $5.20

These costs per barrel are very competitive, and well below the costs recorded for other major firms as Total, BP, Exxon, Statoil, Chevron and Petrobras, who have production costs of between $6.10 and $10.00 a barrel.

Transborder oil fields

Several major oil and gas fields are known to straddle the international border in the Gulf of Mexico. Deepwater wells on the US side have already found massive deposits of oil, but, until recently, Pemex has not had the technology to drill in such deep waters. That is now changing. Pemex has begun drilling from the deepwater “Bicentenario” semi-submersible platform. The first well, Talipau-1, will descend 940 meters to the sea floor and then a further 5,000 meters into oil-bearing strata in the region known as the Cinturón Plegado de Perdido.

Pemex believes that deepwater wells in the Gulf of Mexico will eventually yield several billion barrels of oil.

The Bicentenario, built in South Korea, is capable of operating in water up to 3,000 meters deep; it is 100 meters in length, 78 meters wide and rises 138 meters above the surface, with a total weight of 58,000 metric tons. It will house up to 160 workers at a time.

In related news, bilateral talks were held in Washington DC at the end of August relating to offshore oil fields that straddle the Mexico-USA maritime boundary in the Gulf of Mexico. The talks will set the parameters for efficient and safe exploitation of these hydrocarbon reserves in the future. A formal agreement is expected to be completed before the end of this year.

Related posts:

Aviation history as Mexico’s Aeroméxico uses biofuel for transatlantic passenger flight

 Mexico's geography in the Press  Comments Off on Aviation history as Mexico’s Aeroméxico uses biofuel for transatlantic passenger flight
Aug 132011

Aeroméxico, Mexico’s major international airline, made aviation history in July. Aeroméxico flight AM1, from Mexico City to Madrid, was the first ever commercial transatlantic passenger flight using bio-fuel. The Boeing 777 flew on a mixture of biofuel and regular jet fuel. Earlier this year, another Mexican airline, Interjet, began using renewable jatropha-based biofuel for flights between Mexico City and Tuxtla Gutierrez in the southern state of Chiapas. Jatropha is a genus of plants, mainly shrubs, that grow wild in several parts of Mexico, including Chiapas. Plantations of jatropha require four or five years of cultivation before the plant is sufficiently mature for commercial harvesting.

Jatropha-based biofuel is marketed as “green jet fuel” and is currently significantly more expensive than regular jet fuel. However, the price of biofuel is expected to fall rapidly as more of it is produced. The “life-time” emissions from using jatropha (including its growing period, processing and combustion) are estimated to be at least 60% less than using conventional jet fuel.

Sources of biodiesel.

Sources of biodiesel. Credit: Bayer CropScience

Mexico’s aviation sector will need 40 million liters of biofuel a year by 2015 in order to meet the national target of 1% of all airline fuel coming from renewable sources. The aviation industry’s long-term target is to halve its 2005 carbon footprint by 2050.

Despite Mexico’s recent adoption of jatropha-based biofuel, there is considerable controversy about the plant’s real value as a sustainable source of renewable energy. See, for example, the critique “Hailed as a miracle biofuel, jatropha falls short of hype” on Yale Environment 360, a publication of the Yale School of Forestry & Environmental Studies.

Are women better than men at gathering mushrooms on the slopes of a Mexican volcano?

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Apr 122011

This post summarizes the findings of an article entitled “Sex differences in mushroom gathering: men expend more energy to obtain equivalent benefits”, published in the July 2010 issue of Evolution & Human Behavior.

Men are often thought to have superior spatial abilities to women. However, recent research has suggested that such differences are task dependent. It is now commonly argued that differences in spatial abilities may date back to early human societies during the Pleistocene. At that time, men’s spatial skills became fine-tuned for successful hunting of animals that were constantly on the move, while women’s spatial skill-set developed to ensure success in gathering immobile plant resources.

In a nutshell, men are thought to find their way about using orientation, and women by memorizing landmarks. One study reported that men performed better than women in finding their way through unfamiliar woodland, whereas another study showed how women exploring a farmers market in Santa Barbara, California, could remember where individual food items were more accurately than men.

Despite these earlier studies, the male/female differences in spatial skills had never been tested in appropriate circumstances in the field prior to the research carried out by four enterprising Mexican researchers led by Luis Pacheco-Cabos of the National University (UNAM).

The setting

The team studied the foraging techniques and success rate of men and women from a small village in Tlaxcala as they searched for edible mushrooms on the slopes of La Malinche volcano (Malintzin).

The small rural community of San Isidro Buensuceso has about 8,000 Nᨵatl-speaking inhabitants. The villagers have a long history of collecting mushrooms. Most mushroom collecting takes place during the summer rainy season. The vegetation in collecting areas is relatively open pine-oak forest, though the precise mix of species varies with altitude.

La Malinche Volcano

La Malinche Volcano

Each small group of mushroom collectors was followed by a researcher who recorded their movements and the weight of mushrooms collected. The exercise was carried out at seven different sites, most more than 3000m above sea level, through relatively open forest in terrain that included steep gullies carved into the flanks of volcano. The researchers were continuously monitored to record data enabling the calculation of the energy they expended in kilo-calories (kcal). Collectors gathered up to 9.5 kg of mushrooms in a single trip.

What were the teams key findings?

Although men and women collected similar quantities of mushrooms, men did so at significantly higher cost. They traveled further, to greater altitudes, and had higher mean heart rates and energy expenditure (kcal). They also collected fewer species and visited fewer collection sites.

Women used their superior powers of memorizing object location to collect more species, and visit more collection sites than men, obtaining more mushrooms during the same period of time, with less energy expenditure.

What does this mean?

The results suggest that differences in spatial ability between men and women are task-dependent. In terms of search strategies developed for gathering wild mushrooms, and presumably other wild plants, women outperform men. The women proved to be more efficient foragers than men in energy efficiency terms since they collected significantly more mushrooms while expending significantly less energy in doing so.

The researchers did not publish any calculation for the energy efficiency of mushroom collectors for comparison with the figures quoted in: The energy efficiency of farming in Mexico and elsewhere. However, based on their data, and assuming that 3 grams of raw mushrooms are approximately equivalent to 1 calorie, the energy efficiency for mushroom pickers on the slopes of La Malinche volcano must be somewhere between 0.5 and 1.7, with men tending towards the lower value. An energy efficiency of 1.0 would mean that the energy expended in gathering mushrooms is roughly the same as the calorific energy they contain.

The researchers conclude that similar studies are now needed for other cultural groups, and for the gathering of different resources, such as firewood.


Luis Pacheco Cobos, Marcos Rosetti, Cecilia Cuatianquiz, Robyn Hudson: “Sex differences in mushroom gathering: men expend more energy to obtain equivalent benefits”, Evolution & Human Behavior, July 2010 (Vol. 31, Issue 4, Pages 289-297).

The geography of renewable energy from wind power in Mexico

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Dec 162010

According to the World Association of Wind Power, Mexico grew its wind power sector faster than any other country during 2009, and now has more than 500MW of installed windpower capacity.

Mexico’s goal is to have an installed capacity of 2,500 MW of wind energy by 2012, and to have 26% of the nation’s installed capacity coming from clean energy sources (solar, geothermal, wind, nuclear and large-scale HEP). The Federal Electricity Commission, responsible for the national power grid, is installing two “wind corridors” in Oaxaca to connect several different windpower plants into the grid.

Mexico’s Energy Secretariat recently announced the publication of a new resource of interest to planners and geographers. The Atlas of Wind and Solar power potential is designed to inform investors of the necessary meteorological and climatic background prior to taking significant investment decisions.

According to the Atlas, Mexico’s wind potential is estimated at 71,000 MW. This figure comfortably exceeds the nation’s current installed capacity for all forms of power of 51,000 MW.

The most important single wind-power region in Mexico, and also one of the most important at the global scale is the Isthmus of Tehuantepec, the narrow belt of relatively low-lying land that links the Gulf coast (straddling the Veracruz-Tabasco state boundary) to the Pacific coast in the state of Oaxaca.

La Ventosa wind farm, Oaxaca

La Ventosa wind farm, Oaxaca

Several major wind farms have already been developed in the La Venta section of the Isthmus. Others are being constructed or on the drawing board. For example, Grupo Bimbo (which, with the acquisition of Sara Lee, has become the world’s largest bread- and pastry-maker) announced it is building a wind farm in association with Desarrollos Eólicos Mexicanos (Demex), a subsidiary of Spanish renewable energy firm Renovalia Energy. The “Piedra Larga” wind farm is under construction in Unión Hidalgo, Oaxaca. Costing $200 million, it will have an installed capacity of 90 MW when the first phase is complete, rising to 227 MW when the project is complete. This is sufficient energy to power all Bimbo’s producing and distribution needs in Mexico during the next 18 years at least. The first power will be generated early next year.

Two mining companies are also installing wind farms in Oaxaca, each with an installed capacity of 300MW.

Elsewhere, in Baja California, California-based Cannon Power Group plans is constructing a 1,000MW wind farm in Baja California. The 500 turbines of the 1-billion-dollar Aubanel Wind Project will be located southeast of the town of La Rumorosa, in the mountains between Tijuana and Mexicali. The turbines will supply power to both the USA and Mexico and are a separate project to the 1000MW wind farm planned by Energía Sierra Juárez, a subsidiary of Sempra, for an area north of La Rumorosa.

Currently, Mexico is developing wind power much more quickly than solar power, but this may change in the future, given that much of the country receives between 5 and 6kw/hr/square meter/day in solar energy, which is considerably more than most of the European countries which are now undertaking solar power development.

Related earlier post:

Energy is analyzed in chapter 16 of Geo-Mexico: the geography and dynamics of modern Mexico. and concepts of sustainability are explored in chapters 19 and 30.  Buy your copy today, so you have this handy reference guide to all aspects of Mexico’s geography available whenever you need it.

Sep 302010

Liquefied natural gas (LNG) is natural gas which has been processed to allow for transportation to international markets well beyond the reach of pipelines. The process enables major producers of natural gas such as Australia, Qatar, Indonesia, Malaysia, Brunei, Abu Dhabi and Oman to supply markets almost anywhere in the world.

The stages involved in making and shipping LNG are:

  • 1. Natural gas is extracted from underground deposits.
  • 2. The gas is sent to a processing plant where impurities such as water, oil and carbon dioxide are removed (a process known as  sweetening).
  • 3. The purified gas is cooled to minus 162 degrees C (the temperature of the surface of Saturn). This is accompanied by a dramatic decrease in its volume. The process turns 615 liters of natural gas into a single liter of LNG.
  • 4. The super-cold LNG is kept cold by storage in cryogenic tanks. LNG in this form is not explosive and cannot burn, making it safe to transport.
  • 5. LNG is then transported to markets in special tanks aboard double-hulled tankers. Modern tankers can each transport 50,000 metric tons of LNG.
  • 6. At the market, LNG is put in special tanks where it is allowed to warm up, becoming gaseous again. This gas can then be piped to consumers.

Worldwide, there are currently 17 liquefaction gas terminals preparing LNG for export, and 40 terminals where imported LNG can be reconverted, 35 of them in Japan.

LNG terminal

Altamira LNG terminal. Photo:

Mexico has two existing regasification plants, as well as one currently under construction and several more in the planning stages. Mexico’s first three terminals are in:

  • Altamira, Tamaulipas – this plant opened in 2006 and may be expanded in 2012
  • Ensenada, Baja California – this plant which is 14 miles north of Ensenada opened in 2008
  • Manzanillo, Colima – currently under construction, expected to open in 2011/12

Proposed LNG regasification plants in Mexico are being considered for:

  • Puerto Libertad, Sonora – 60% of the output from this terminal would be piped to the USA, the remainder to cities in northern Mexico
  • Topolobampo, Sinaloa – planned opening date is 2016
  • Offshore of Tamaulipas, in the Gulf of Mexico – this plant would be built 35 nautical miles offshore
  • Lázaro Cárdenas, Michoacán – the proposed LNG terminal would be close to the existing major port
  • Salina Cruz, Oaxaca

LNG means that industries and homes far from Mexico’s own gas fields which are mainly in the north-east of the country can still have access to gas. Supplying them direct from Mexico’s gas fields would require the construction of costly series of pumping stations and pipelines crossing the rugged Western Sierra Madre (Sierra Madre Occidental), where any construction of this kind would be very difficult.

Build-it-yourself wind and solar power for rural Oaxaca

 Mexico's geography in the Press  Comments Off on Build-it-yourself wind and solar power for rural Oaxaca
Sep 212010

Many remote settlements in the mountains of Oaxaca are still not connected to the national electricity grid. A project based in the municipality of Ejutla (60 km south of Oaxaca City) aims to bring affordable renewable energy to isolated hamlets. The innovative scheme relies on a design for a power-producing wind-vane, complemented by a solar panel for when the wind fails to blow.

Wind power in Oaxaca

Wind power in Oaxaca (still from John Dixie's video)

Constructing the system does not require any specialist materials or equipment, but relies on readily available components. For example, the blades for the wind turbine are made of wood which means they are easy to repair and adjust as needed.

More information?

Mexico’s cultural diversity is discussed in chapters 10 and 13 of Geo-Mexico: the geography and dynamics of modern Mexico. Rural areas are the focus of chapter 24 and development indices of various kinds are discussed in chapters 29 and 30. Ask your local library to purchase a copy today!

The energy efficiency of farming in Mexico and elsewhere

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Aug 302010

Corn is one of the world’s major cereal crops and has long been a vitally-important crop to Mexico.

However, is it more efficient in energy terms to be a slash-and-burn farmer of corn in the jungle or a technologically-sophisticated corn farmer on the US or Canadian prairies?

David and Marcia Pimentel have compiled data from a variety of sources and analyzed this question and similar questions in some detail.

In Mexico, they calculated that about 1144 hours of human labor are required to produce 1 hectare (ha) of corn using only hand labor, and no animals or machinery. On the other hand, using machinery, cultivating a hectare of corn requires only 10 hours of labor in the USA.

The total energy required to cultivate a single hectare of corn by hand is 589,160 kcal for the 1144 hours of hand labor, plus 16,570  kcal for making the axe and hoe used by the farmer (this figure assumes a certain lifespan and maintenance needs for such tools), plus 36,608 kcal for the 10.4 kg of seed required. The grand total for energy inputs into the system is 642,336 kcal. [One kcal (kilocalorie) = 4184 joules.]

An average yield for corn in such a non-mechanized system is 1,944 kg/ha, equivalent to 6,901,200 kcal. The ratio between the energy output and the energy expended of this system is almost 11:1.

By way of comparison, the energy inputs (labor, machinery, gasoline, seeds, irrigation, herbicides, etc) in a typical, highly mechanized US or Canadian cornfield total 10,535,000 kcal/ha. The yield of corn is about 7,500 kg/ha, equivalent to 26,625,000 kcal. The energy ratio for this farming system is 2.5:1

Horse-drawn plough, Creel, Chihuahua, 1980

More efficient than a tractor?

Which system is more efficient? This is where it becomes essential to define what is meant by efficiency. In terms of output per hour of labor, the US farm is far more efficient. In terms of yield per hectare, the US farm is more efficient. However, in terms of energy ratios, the Mexican farm is four times more efficient than its US counterpart.

Looking at energy ratios makes it possible to make various generalizations about farming. In general, hand cultivation methods are the most energy efficient, followed by systems where animals are used, followed by systems based largely on machinery. The precise numbers for any type of farming will vary from one country to another, since the labor required and crop yields do depend to some extent on such geographic factors as soil types, terrain and the weather during the growing season.

It is also possible to look at what the additional energy inputs in a highly mechanized system actually achieve. For instance, in the USA, machinery and fuel account for about 20% of all the fossil energy employed; in other words, about 20% of the energy input reduces, or replaces, human and animal labor. The remaining 80% of fossil fuel inputs is employed in increasing corn yields by means of fertilizers, insecticides, herbicides and irrigation.

The table shows the energy ratios which have been calculated for a selection of crops in various countries.

Type of farmingLocationEnergy ratio (output/input)
Corn (human power)Mexico10.7
Corn (human power)Guatemala4,8
Corn (oxen power)Guatemala3.1
Corn (oxen power)Mexico4.3
Corn (animal power)Philippines5.1
Corn (mechanized)USA2.5
Wheat (bullock power)Uttar Pradesh, India1.0
Rice (human power)Borneo7.0
Rice (mechanized)Japan3.0
Sorghum (human power)Sudan14.0
OrangesFlorida, USA2.0
ApplesEastern USA1.0
PotatoesNew York state, USA1.2
Eggs, batteryUK0.15
CatfishLouisiana, USA0.03
Winter lettuce (glasshouse)UK0.0023
All agriculture, 1952UK0.47
All agriculture, 1968UK0.35

An energy ratio below 1.0 for a particular item means that the inputs of energy exceed the output, or in other words more energy is expended on cultivation than is returned via the crop.

As Tim Bayliss-Smith concludes in the The ecology of agricultural systems, the evidence is that, “Only in fully industrialized societies does the use of energy become so profligate that very little more energy is gained from agriculture than is expended in its production.”

Why are energy ratios important?

Energy ratios shed some light on the sustainability of farming. Cultivation relying only on human power, is clearly sustainable virtually indefinitely, provided that land degradation is avoided and yields do not decline. Farming using a mix of animal and human power is also likely to be fully sustainable. However, the same is not true for cultivation relying on power derived from fossil fuels. For mechanized farming, sustainability requires machinery to be powered by renewable sources of energy, such as solar or wind power. Such sources of energy may be impossible to harness in some climatic zones.

Of course, farm systems are not only about energy flows and ratios. As Tim Bayliss-Smith points out, farms ”also provide jobs, incomes and a way of life for agrarian societies, whose social and ideological characteristics cannot be ignored.”

Sources / further reading:

  • Pimentel, David and Pimentel, Marcia H. Food, energy and society (3rd edition) CRC Press, 2008
  • Bayliss-Smith, T.P. The ecology of agricultural systems. Cambridge University Press, 1982.
  • Simmons, I.G. “Ecological-Functional Approaches to Agriculture in Geographical Contexts”, in Geography, 65: 305-316 (Nov. 1980)

Agriculture is analyzed in chapter 15 of Geo-Mexico: the geography and dynamics of modern Mexico. and concepts of sustainability are explored in chapters 19 and 30.  Buy your copy today, so you have this handy reference guide to all aspects of Mexico’s geography available whenever you need it.