By Jazmine Ulloa
The Brownsville Herald
Fuel prices have more than doubled since 2001, when Pedro Purata bought a 16,000-gallon shrimp boat he dubbed the “Alma Marie.”
The wooden boat, coated in layers of peeling black and white paint, now rocks gently on the bayou waters – moored to the dock along with more than half of the Port of Brownsville’s shrimp boats. Although some need repairs, most simply lack the fuel to head to Louisiana, where shrimping season has begun.
“There has never been this many boats tied to the dock during this season,” Purata said in Spanish, pointing to boats along the Port of Brownsville Shrimp Basin. “We just can’t afford the fuel.”
But before the Texas coast kicks off its shrimp season July 15, Purata and many other shrimpers along the Gulf of Mexico’s coastline say they are sailing south.
Like other industries in the United States, shrimping businesses have been hit hard by soaring fuel costs and some are finding relief, if only temporary, by filling up their tanks on Mexican shores. And it’s legal.
“The bottom line is that if we weren’t going to Mexico for fuel we would be out of business,” said Carlton Reyes, president of the Brownsville-Port Isabel Shrimp Producers Association.
Diesel fuel sells for about $2.40 per gallon at Mexican ports, half the price along U.S. coastlines, where costs can reach up to $4.20 a gallon.
Reyes owns six 18,000-gallon shrimp boats and pays $45,000 to fuel each in Tampico, Tamaulipas, as opposed to $75,000 per boat in Brownsville, he said. That saves up to $180,000 for his entire fleet.
His trip to and from Tampico takes four days and costs $5,000 to $6,500, including fuel, port and customs charges. But shrimpers travel to the city from as far as Louisiana, Mississippi and Florida, Reyes said.
Bob Jones, executive director of the Southeastern Fisheries Association in Florida, said low fuel prices in Mexico are worth the trip even for Florida shrimpers.
“It’s available to them, and I hope it’s something that a lot of them do,” he said. “They can’t fish if they have to pay $3 or $4 a gallon. We’d have 80 percent of our boats tied to the docks at that price.”
A host of factors may lie behind Mexico’s lower fuel prices, said Michelle Michot Foss, chief energy economist at the Center for Energy Economics at the University of Texas at Austin.
State-owned petroleum company Petroleos Mexicanos, or PEMEX, distributes Mexican fuel, and the government sets prices. But labor costs and environmental regulations are also less in Mexico than in the United States, Foss said. Modern refining facilities in the United States also cost more to maintain, she said.
Although crude oil is imported from Mexico and refined in the Gulf of Mexico region in the United States, there is no way to track whether the same refined products are going back into Mexico to be sold at lower prices, Foss said.
The only joint venture in which this does happen is at Deer Park Refining in Baytown, Texas. PEMEX and Shell Oil Co. have a “swap agreement,” where crude oil is processed at Shell and sent back to Mexico.
Less than 11 percent of refined diesel fuel is imported into Mexico from the United States, said Eric Potter, associate director for the Bureau of Economic Geology at UT Austin.
Before considering traveling to Mexico, local shrimpers would typically fuel up at S&S Sales shrimping company at the shrimp basin. S&S would sell 8 million to 9 million gallons of diesel fuel a year to local and outside boating companies on credit, office manager Jack Snodgrass said.
The company has not done so this year, however, because it can no longer afford enough fuel in the United States, Snodgrass said. Even its own seven shrimping boats were filled in Tampico, he said.
Without credit, some shrimpers at the port can’t buy fuel up front – not even to get to Tampico. Reyes said some 70 percent of Brownsville shrimp boats remain docked because owners can’t afford the fuel.
Meanwhile, Purata said he was lucky enough to make the trip to Tampico but would sell his boat if anyone would buy it.
“The way the situation is right now, this is isn’t a business,” Purata said. “We know March, April and May are slow, but we also know that the price of diesel fuel won’t go up that much.
“This year is a different story.”
As published June 20, 2008
Photo by Jim Rob