Mexico pipeline sabotage shuts several manufacturers

Houston Chronicle:

Hundreds of companies, including multinationals such as Honda and Hershey's, shuttered operations temporarily on Wednesday after a shadowy rebel group claimed responsibility for a series of explosions of key petroleum pipelines.

Near-simultaneous blasts carried out just after 1 a.m. Tuesday in central Queretaro state cut off natural gas supplies to at least four states in central Mexico. The region was still reeling from a round of pipeline explosions July 5 in neighboring Guanajuato state.

"There can't be fewer than 800 or 1,000 medium and large companies affected," Victor Manuel Lopez, secretary of the National Industrial Chamber, told the Notimex news service. He estimated daily losses of between $5 million and $10 million due to the suspension of gas service, without including the impact on small businesses.

Among multinationals forced to freeze operations were Kellogg's Co., The Hershey Co., Honda Motor Co. and Nissan Motor Co., according to local news reports.

Monterrey-based Vitro SAB, a leading manufacturer of glass containers, reported that the shutdown of two of its factories would cost the company $80,000 a day.

Petroleos Mexicanos, or Pemex, the state-run oil company, sent 150 technicians to try to restore supplies in three pipelines affected Tuesday. In addition to a 36-inch natural gas pipeline, the blasts damaged smaller pipelines carrying liquid petroleum gas and crude oil.

The federal economy secretary, Eduardo Sojo, said he expected gas supplies to be restored by late Wednesday. "This government is committed to ensuring security," he said after business groups warned of potential investor jitters.

A long-dormant rebel group — the People's Revolutionary Army, known by its Spanish acronym EPR — issued a statement Tuesday taking credit for the attacks. They were the start of a "campaign of punishing the interests of the oligarchy and the government," the statement said, sparking debate here as to its veracity.

The federal government was taking the threat seriously.

President Felipe Calderon deployed troops to guard Pemex's strategic installations, including a jet-fuel distribution center in the capital, seen as a potential terrorist target.

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In February, a group claiming allegiance to al-Qaida threatened major U.S. oil suppliers, including Mexico, Canada and Venezuela. Since, the Mexican government has stepped up security around oil refineries and key exploration sites. Some analysts question whether the government can prevent attacks on its 28,000-mile distribution system.

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I would not rule out funding of this operation by other enemies of the US and Mexico including Hugo Chavez and Iran as well as al Qaeda. The attack against Mexican infrastructure is similar to attacks in Iraq on its energy distribution system that have been launched by insurgents.

The Mexican drug insurgents have also been imitating the Iraqi insurgents in their gruesome attacks. By forcing the government to have to commit more resources to protecting vital infrastructure, it pulls the army away from its pursuit of the drug insurgents.