Last Friday a gasoline pipeline in central Mexico exploded, creating a huge fireball. The official death toll keeps rising; as of this writing it is listed as 91. Dozens more people were injured.
The blast was caused by the illegal tapping of the pipeline by fuel thieves, who are known in Mexico as huachicoleros. The practice is a common one, and this is not the first such explosion, simply the deadliest.
As I read the earliest reports about the explosion, a question occurred to me: We have gasoline pipelines in the USA — why don’t things like this happen here? I’m certain there are plenty of unscrupulous down-on-their luck rural entrepreneurs who would consider pipeline-tapping as a career, but they don’t seem to take it up (or not in enough numbers to draw media attention, anyway).
Before examining this larger question, let’s consider some of the details about Friday’s explosion and the practice of pipeline theft in Mexico.
I’ve been reading a lot of articles since the story broke, but didn’t hang on to most of the URLs, so much of what I write here will be unsourced. However, this article from MSN is information-rich, and will serve as a good start for those who want to look into the incident. For further details, do an Internet search on “Tlahuelilpan pipeline explosion” — that will turn up plenty of stories.
The petroleum industry in Mexico is state-run, and the company that manages the pipelines is called PEMEX. The gasoline pipeline along which the explosion occurred runs from Tuxpan on the Gulf coast to Mexico City, making a hard left at Tlahuelilpan in Hidalgo State before continuing to the capital.
The pipeline had been tapped previously more than once at the location in Tlahuelilpan. Whenever that kind of thing happens, PEMEX rigs a patch over the breach and continues pumping. Such patches are easier to tap than an unmarred pipe, so the same spots tend to be used over and over again.
The normal practice is to make a fairly small hole so that the flow of gasoline is not excessive and can be readily utilized. However, on the afternoon before the explosion, one of the fuel thieves became impatient and jammed a piece of rebar into the hole to enlarge it, causing a veritable gusher to spout up twenty feet into the air. In videos of the festive occasion the gasoline plume looks like Old Faithful.
Hundreds of people swarmed the site, carrying large plastic containers to collect the gasoline from the ditch around the pipe. It was not the most intelligent thing to do — the air in the immediate vicinity of the geyser was a dense mass of gasoline vapor, awaiting only a tiny spark to trigger a conflagration.
Which is exactly what happened later that evening. Some reports theorize that the synthetic fabric of the clothes worn by the poor people tapping the pipe generated enough static electricity to create the necessary spark. In any case, without any warning a tremendous fireball exploded over and among the crowd.
The moment of the explosion was captured by someone who had been using an infrared-sensitive video camera to record the night’s festivities. Then, in full living color, you can watch the huge plume of smoke and orange flames rise into the night sky while subsidiary fires spread rapidly at ground level. There appear to be little fireballs rushing away from the center of the blast, but when you look closely, you’ll find that they’re people running away from the explosion. Their clothes, arms, legs, and torsos are engulfed in flame. You can also see people try to extinguish some of the human torches that have collapsed onto the ground. (No, I’m not going to embed the video here; it’s too graphic. But you can find it easily with a YouTube search. And those videos are just the ones that YouTube didn’t pull down — imagine what the others must be like.)
The gasoline vapor was so thick before the explosion that some people passed out, overcome by the fumes. One report says a nearby soldier pulled an unconscious man out of the gasoline-filled ditch and dragged him to safety. Some of the survivors reported that they realized the danger of explosion and hurried out of the area before it was too late.
Such was the Tlahuelilpan pipeline explosion on January 18, 2019. Photos from the following morning show the scorched pipeline and nearby field, with neatly-arranged rows of bodies covered by white sheets.
Illegal pipeline-tapping in Mexico has become a growth industry over the past decade. PEMEX’s pipes are laid shallowly, so that digging down two or three feet will expose the pipe. Local entrepreneurs make the tap, with the support of nearby residents who participate in the collection and sale of illicit gasoline.
The graph below uses data from a useful paper (PDF) published by the Baker Institute for Public Policy at Rice University in 2017. I found the total number of taps for 2017, but the statistics for 2018 are only available through October. In the latter case I extrapolated the total for 12 months and then appended the numbers for both years to the data set to produce this graphic:
That’s clearly an exponential curve. It’s also clear that the theft can’t continue to accelerate at the same rate, because in a few years the gasoline would all be tapped into the thieves’ containers before it could reach the other end of the pipeline.
The recently-inaugurated Mexican president, Andrés Manuel López Obrador, made stopping pipeline thefts a key policy of his new administration. Since he took office last year he has increased military patrols in an attempt to crack down on the illegal taps. He has also been quoted as saying that the fuel-tapping is an “inside job” — that is, corrupt officials within PEMEX are allowing the theft, and presumably taking a cut of the proceeds. The action is so lucrative that even the drug cartels have reportedly gotten into the trade. At this point there is, on average, less than a mile between illegal taps.
The traffic in illicit fuel has become a thriving industry in rural Mexico. According to the Baker Institute’s paper:
In Quecholac, the army clashed with smugglers on May 3, 2017, in an effort to stop fuel theft. However — and as a testament to the difficulties the government is having in curtailing the problem — it was reported that armed gangs and their supporters in the various communities attacked the military, leading to a confrontation where 10 people died (four soldiers and six civilians). The clash shows that huachicoleros, as the fuel thieves are locally known, are in a position to challenge the government and make the liberalization of the gasoline market more difficult.
The rate of theft has increased to the point that there are occasional shortages of gasoline at the locations where it arrives legally, such as fuel depots and gas stations. Part of Mr. Obrador’s anti-theft strategy is to shut down a section of pipeline after a breach so that the problem point can be completely sealed and restored before restarting the flow. Unfortunately, this has exacerbated local shortages, so that even more tapping operations are undertaken, and customers hoard the illicit gasoline against future shortages. It seems to be a vicious circle.
Whether or not the new president is successful in his fight against fuel theft, the problems behind the theft — and the system that generated it — have not yet been addressed. It’s hard to say how the situation will resolve itself, but one thing is clear: things cannot continue for much longer in this fashion.
Back to my original question: Why doesn’t the same thing happen here in the USA?
One obvious factor is the absence of the rule of law in Mexico. Yes, the rule of law is deteriorating here, too, but we have a long way to go to catch up with Mexico. The organized infrastructure required to illegally tap the pipelines and distribute the gasoline would be much harder to establish here. And there is less in the way of official corruption to facilitate the process.
Another factor — possibly the most important one — is that pipelines are privately owned and run in the United States. An explosion such as the one in Tlahuelilpan would create a legal and financial liability of such magnitude that it would probably bankrupt the pipeline company and send its officers and managers to prison. The managers of such a company (and its shareholders) have an enormous incentive to establish preventive measures making certain that illegal breaches in the pipeline are all but impossible to create.
A state-owned corporation is not really liable for anything, not in the normal legal sense. Yes, when disaster strikes, heads will roll, but only the heads of officially chosen scapegoats. Blame for the tragedy is a political process that seeks out the weakest links in the political chain. The most powerful and well-connected people in the system never have to worry about taking a hit.
In a nutshell: We are able to avoid a Tlahuelilpan-level disaster because the rule of law here is stronger, and major energy infrastructure is privately-owned.
There may be other factors that I missed. If so, I invite readers to add them in the comments.
People are desperate for income so go along with pipeline tapping, then are blown up. I’m not sure what to make of that other than these are very stupid people….
It is a shame that they are unable to collectively put their brain power elsewhere.
How about this from someone who has worked in the oil patch, albeit for a very short period, “The corporations that extract the resources are greedy beyond compare and will not suffer fools, wastrels, or incompetents gladly. In fact, they will find ways hitherto unknown to make their lives miserable.” That is why there are no thefts, yet. No one but the corporations know exactly where the pipes are.
Mexico has a fondness for its outlaws – you can see this in the cultural artifacts of old Westerns. It may be a feature rather than a bug.
With government corruption (including law enforcement), no middle-class structure, little hope for the impoverished peasant class (try to picture Mexican peasant entrepreneurs), these conflagrations will continue.
In the U.S., we have the new phenomenon of “porch pirates”, i.e., people who dash up sidewalks and steal packages left by delivery vans. It was a huge thing this past Christmas; Amazon has created local pick-up sites to foil the would-be thieves.
This is an apples/oranges comparison but both situations reflect a scoff-law attitude. In the case of Mexico, they don’t have a history of a middle-class law=abiding citizenry, whereas in this country we’re losing it as the middle class and property laws are beginning to diminish.
The attitude you allude to is of the type the dhimmicrats are trying to create in this country. The scoff-law attitude, otherwise why would the dhimmicrats demand adherence to some laws, and disregard other laws.
Agreed. You can see this exemplified in socialist-democrats like #Occasional Cortex (sorry, couldn’t resist. I promise to be more respectful as soon as she’s elected president).
“An explosion … would create a legal and financial liability of such magnitude that it would probably bankrupt the pipeline company and send its officers and managers to prison…. The managers … (and its shareholders) have an enormous incentive to [make certain] that illegal breaches … are all but impossible to create….”
I am touched by the author’s continued faith in manager- and shareholder-centered, American capitalism. After the financial crisis of 2007–2008 and a myriad of other corporate scandals, I have great difficulty associating myself with most if not all of that thesis.
Yes. Socialism has a great track record of successes throughout the world.
But, by all means, present your alternative.
After the financial crisis of 2007–2008 and a myriad of other corporate scandals, I have great difficulty associating myself with most if not all of that thesis.
It depends on what you mean by “managed American capitalism”. First, “managed” capitalism is an oxymoron. Second, look at specific ‘industries’…the financial markets are part of our growing oligarchy and were protected by government agencies. Same goes for various other giants – Agriculture, Pharmaceuticals, etc. The federal agencies which protect them, subsidize them, etc., are hooked on their beneficence. Anything subsidized or promoted by government is not free-market capitalism, e.g., some Big Pharmas are protected from being sued by individuals who have been harmed by their products, which partially explains the rise of antagonism against vaccine manufacturers.
Corporate “scandals” grown in proportion to corporate protection by government.
If the incestuous relationship between the American federal government and Big Pharma didn’t exist, the rest of the world would be paying a lot more for drugs and there would be substantially fewer pills going out of the country.
Your view is the traditional libertarian view that it is the rules and restrictions by government on competition that actually creates monopolies, and that if the government didn’t favor established businesses over upstarts, or didn’t relax the rules of accountability, that businesses would be more consumer-friendly and less prone to abuses.
Certainly, the panic of 2008 involved government coercion of loans to unqualified minorities, government tolerance of misrepresentation of derivatives based on these horrible loan instruments, and government pouring tens of billions of dollars into the financial industry, just to keep them from failing due to their extreme irresponsibility.
But, even some libertarians are changing their positions that the best government is no government. Stefan Molyneux is followed by hundreds of thousands of people, so it is literally impossible to initiate a limited debate with him. Anyway, counter-libertarian actions are border controls, tariffs and import controls, and the breakup of large companies.
There’s a powerful assertion by some historians that a totally free market and well-protected commercial shipping lanes leads to the devastation of the native farmer, tradesman, and small business class in favor of large landowners, lenders, and oligarchs.
Law of Civilization and Decay
I don’t see the rise of the tech duopolies and the massive interdependence of the tech service companies as a result of government restriction into the market. I see the massive interdependence as a result of a business model combining free services with global markets, and the requirement for a very expensive technological infrastructure.
In essence, the efficiency of consolidation actually does drive out small competitors. Now, the government is totally ignoring its own anti-Trust laws, which is a separate issue. There is no way that selectively squeezing out content providers of a certain political viewpoint is not a restraint of trade.
Perhaps one of the objectives of the Mueller investigation is to keep the Trump administration off-balance so they can’t focus on more than a few major issues.
Where I’m leading is that I think consideration ought to be given to mandating government to break up large companies based on net worth and market integration, and possibly to limit or stop altogether, foreign subsidiaries. As an example, if Facebook wants a corporate presence in Pakistan, it will have to negotiate with a separate company providing similar services, but under Pakistani laws. This will raise the price of products, and introduce inefficiencies, but might be the way to retain indigenous industries and interests.
I’m somewhat libertarian, but not across the board, e.g., I believe in border security (too bad the native Americans didn’t have that idea in their lexicon. God knows the ceaseless inter-tribal warfare kept them poor and divided).
I agree with you re anti-trust actions against huge entities. “Too big to fail” is a poor excuse for rescuing those who make bad decisions. OTOH, government interference in the market via Bloats like Fannie Mae and Freddie Mac cause us all to lose.
It’s a sticky wicket indeed.
All corporations are protected by government. The government strongly limits the officers’ and managers’ liability and the government enforces the corporation’s contracts. Otherwise, the enterprise would not happen, or at least so goes the original thinking.
If I understand him correctly, the author argues that a company directed by corporate officers and run by professional managers, in the interest of the shareholders (as is common in Anglo-American capitalism), has intrinsic incentives that preclude a Tlahuelilpan-like disaster. How am I to believe that, for example, after the BP disaster? If that was an exception that tests (proves) the rule, how is BP not what I just described?
I agree with our anonymous poster from the oil patch that there must be other reason(s) a Tlahuelilpan has not happened in the U.S.
As to my politics, in case that is an issue, I think that the present day world is in a state far short of perfection. I think, so is our understanding of it, which is why much of the world is as it is. I try to be a pragmatist who seeks and promotes whatever works.
Interesting about the BP disaster. If you read detailed accounts, you can see that BP ignored the warnings of its consultants, including my former employer, Halliburton, about the dangers of their plan to plug the well. But, BP was on a roll, it had a strict profits schedule, and they ignored the advice and cut corners.
So, what happened? They lost billions and billions of dollars, and a major part of their reputation. They eventually got it plugged, with no major, lasting damage to the environment. And most important, they taught a good lesson to private companies to always factor in safety by a large margin.
No system is failsafe, but capitalism has a build-in mechanism that always steers it to a safe and effective product and process. Crony capitalism, government-capitalism partnership, is a different story. That’s part of the basis of my argument that perhaps companies that are too large should simply be broken up if they wish to operate in the US. (How other countries operate is their own affair). Once a company becomes too large and too essential, the distinction between government and the company begins to blur.
Such illegal tapping of oil pipelines is (or was) common in the Niger Delta, in southern Nigeria; apart from explosions, it causes massive pollution.
A low-IQ, low impulse-control, high sociopath population produces many individual with no concern whatsoever for the consequences of their actions. Hereditary leadership in advanced societies has somewhat the same effect, but that’s another story.
I think it’s more complicated than that; the locals who tap the pipilines have benefited little from Nigeria’s huge oil revenues. More frustration over the fruits of corruption than sociopathy.
To understand the reason this sort of thing happens in places like Mexico and doesn’t happen here, all you have to do is Google the worldwide price of gasoline per liter and the worldwide average family income…. then compare the US vs Mexico.