Two Gringos go
south of the border - by Peter Bell - May 2004
This whole adventure started back in 2003 when
I was chatting to a soccer playing pal of mine one Saturday morning drinking
coffee after our pick up game. Adan mentioned that his father lived in
southern Mexico and in a previous adventure, tried to put a sesame seed
growing cooperative together in the 80’s. I got in contact with Adan's
father, Oscar and discussed the possibilities of feedstock production for Biodiesel. Oscar went on a tour of southern Mexico, mainly in the Chiapas
area, confirming that our feedstock plant did grow wild all over the area
and he had found what he called an oil seed growing paradise.
At the start of 2004, Soy
bean oil was trading at $2.70 per gallon which made Biodiesel a $3.50 per
gallon fuel without subsidies in place. Even with subsidies in place we
could only sell the fuel at a price ranging between $2.50 and $3.00 per
gallon, which meant the venture was going to struggle with petrodiesel
selling at the pump for $1.60 per gallon.
You have to want to hug a
tree pretty hard or dislike middle east oil a great deal to pay that kind of price differential.
It seemed like a
good idea to head south of the US border to go in search of low cost
vegetable oil feedstocks. I knew of a feedstock plant that was native to
many parts of southern Mexico and that would yield 4 times more oil per acre
than soy. The Mexican climate is perfect for the plant and there is lots of
low cost, marginal land available for production.
In February of 2004 I met
an Attorney by the name of Don at the National Biodiesel conference
in Palm Springs. I bumped into Don at a table while in discussions with a
Vice President of a small oil company from San Antonio, Texas. Don identified
me as the only person at the conference that was talking about how to make
money out of Biodiesel by making it cost competitive with petrodiesel.
Everywhere I went during the conference, Don mysteriously would appear so I
figured it was worth chatting to him.
It turned out that Don is
part of a potential Home Heating oil buying group and they are looking for a
cheap source of Biodiesel for the coming winter heating season. They are
planning to market an Environmentally friendly home heating oil and try to
take a big slice of what is perceived to be an emerging market that remains
untapped. I mentioned to Don under the cover of a non-disclosure agreement
the name of the feedstock I was planning to use and he went about doing his
research.
Don came to the same
conclusion that I did, where we think a plant that can produce a yield in
excess of 200 gallons per acre from marginal land stands a good chance of
being more cost effective than soy as a Biodiesel feedstock. Soy oil typically yields 55 gallons per
acre and can be profitably produced for $1.80 per gallon. A back of the
envelope calculation indicates that our feedstock oil source could provide
us vegetable oil at 50 cents per gallon and suggested that this opportunity
might be a very profitable one to pursue.
Don agreed and we booked
our flights to Mexico, to see if we could bring this concept to life...
The Route
Trip Itinerary 14th
to 21st April 2004
-
Mexico City - My trip starts in
Dallas, TX and Don’s in State College, PA. Don overnights in Atlanta and
meets me in Mexico City.
-
Puebla - We bus it down to
Puebla staying there one night with the folks from the Mexican Technical
Institute, and then take the bus back to Mexico City.
-
Oaxaca City - Flying onto Oaxaca, rent a car and stay in Oaxaca City.
-
Salina Cruz - Drive to Salina Cruz to pick up Oscar.
-
Chiapas - Drive
to Chiapas to meet a banker in Tonala, overnight in Arriaga and
go meet the famers in the Cameneros center.
-
Huatulco - We
meet our botanist, Silvia, in La Crucecita, Huatulco and drive high into the
mountains above Huatulco where we suspect not too many Gringos have gone
before.
-
Oaxaca and Home - We then drive what has to
be the most twisty road in the world, 175 miles up from the coast back to Oaxaca and then
fly back out to the USA via Mexico City on different days.
Our first stop was Mexico
City and we had arranged to meet at the airport. I stepped off the plane on
April 14th 2004 and Don was there at the
gate to meet me, wow this crazy trip has started absolutely on time and
without a hiccup, it has to be a good omen.
Day 1 -
Mexico City to Puebla.
Don and I walk out of the
arrivals lounge and there is a gentleman holding up a sign with my name on
it. I was never sure from my e-mail correspondence if Alma was male or
female, so I walk up and say hi Alma, but a diminutive lady standing next to
the gentleman holding the sign pipes up and says “I am Alma”.
The gentleman turns out
to be Jorge and works with Alma studying our feedstock plant for his PhD. Back in 2002, I had been
in contact with Alma as she was doing some research into our feedstock and
coincidentally just before we booked our flights to Mexico, re-contacted me
to see if we could cooperate. Alma is based out of the town of Puebla, about
2 hours south east of Mexico City and very kindly agreed to meet us at the
Airport as we had no idea how to find her in the sprawl that is called
Mexico City.
Alma and Jorge guided us
through the maze of Mexico City and we hopped on the bus to Pubela. I was
pleasantly surprised by the bus service, a confirmed seat location, free
peanuts and drinks, security search before boarding and luggage confirmation
tickets, it was better than Southwest Airlines.
It was at this bus
station were we saw one of the first nuances that came to define Mexico for
us. There was a sign on a kiosk advertising translation to help the English
speaking traveler. The sign read “Spoken English” and really gave the
traveler a sense of the losses in the translation process that they might
anticipate if they were to use this service.
The
ride from Mexico City to Puebla was pleasant and we saw great views of the
valleys on the way. Alma booked us into a fantastic place called the
Hotel Colonial,
right in the center of Puebla and we enjoyed our stay here a great deal.
The
hotel has the oldest working elevator in Mexico and as Don trusted his not
inconsiderable bulk to this extremely ancient piece of machinery. We saw the
first of many Holy Mary’s said by Don on this trip as he crossed himself
before uttering “once more going into the breach”.
The hotel was right
opposite the University of Puebla where the fire plug of a personality going
by the name of Minerva is studying.
We met Minerva when we first arrived in Puebla as she was kind enough to pick us up from the bus station and gave us
our first introduction to driving in Mexico. There are many “Alto” signs on
the side of the road indicating that a driver should stop. Minerva explained
that no one paid any attention to stop signs and we only once stopped for
one during our whole trip, until the driver behind us blew his horn in
indignation that we were holding him up stopping for the sign.
The
Hotel Colonial had a fantastic dinning room that was located in a court yard,
right in the middle of the building. The owners of the hotel had built a really
nice dome over the space giving the room a very good atmosphere.
We met a number of
interesting people under this dome including the representatives of the
Puebla coffee growers. Minerva’s husband brought these folks in as he is a
coffee grower and we discovered they represent 43,000 coffee growers in the
Northern part of Puebla.
The coffee prices are
depressed so the growers can only make $300 per hectare compared to $500 in
a good year and there is some doubt whether all of their supply will be
purchased. Our oil seed feedstock plant could turn out to be a huge bonus
for these coffee farmers as they get to diversify their production and still
earn a good return per hectare when coffee prices are strong. Another
benefit is the shade supplied by our plants when one row is planted with oil
seeds the other with coffee, as this helps the coffee plant.
We had a great discussion
about coffee growing and the potential for oil feedstock production. Most of
the conversation was between the coffee growers and Alma, they would occasionally
translate a few sentences of the discussion for our benefit. Don tried to be
tactful over his decline to drink coffee at this meeting as he does not like
coffee. He was saved by Minerva breaking open a wonderful bottle of coffee liquor
mixed
with cream that tastes like Baileys Irish cream and a bottle of straight
coffee liquor that tasted like Amaretto or Kailua.
Don quietly got a good
buzz going at 8am in the morning while the conversation swirled around us in
Spanish, while us gringos had no idea what was being said. We did hear the
word Gringo mentioned by one of the coffee grower representative and he
become very embarrassed when I pointed this out to him. Obviously the
comment was not passed in a polite or complimentary way and gave us a good
indication how some of the folks we meet along the way might just be looking at us as an
ATM machine, rather than business partners.
Don gave himself a fright
as he forgot his jacket in the hotel and it had his passport in the pocket.
Minerva’s husband very
kindly gave me
a bag of coffee for us to take home as a sample which my wife loved, but I had to drag it all the
way around Mexico. We passed through many military check points looking for
drug runners and illegal immigrants. At one check point a soldier actually
looked in my luggage that had the bag of coffee and still did not find it.
It just goes to show that we could have had no travel visas or been carrying
illegal drugs and these guys would never have picked us up.
Unfortunately
we had to leave the town of Puebla with its beautiful two churches right in
the middle of the town square.
We now headed back by bus
to Mexico City with Jorge showing us the way. We were getting back to Mexico
City to catch the flight to Oaxaca for the next part of the trip, deep into
the heart of southern Mexico.
Don was flying on stand-by tickets and AeroMexico
is a partner with Delta but for some unknown reason Don’s flights were
blacked out. He was now stuck in Mexico City, I flew on to Oaxaca on a
virtually empty flight which had plenty of room on it for him in one of the
50 empty seats.
Day 2 – Oaxaca City -
Oaxaca.
Don
made the next flight and found me roughing it at the bar it in the Hotel CasAntica
in the center of Oaxaca City. I was glad to see Don walk in as he had made
such an effort to get this far and to get stuck in Mexico City when the
flights are wide open, would have been a real shame.
This was the first place
I had to drive in Mexico. Trying to keep an eye open for the crazy
drivers as well use the other eye to navigate my way round the maze of one
way streets was interesting to say the least...
It was here that I had my
first encounter with a “Tope” on the way in from the airport and took the
speed bump at nearly 50kms per hour. My head was in the map and watching the
traffic all around, so I was a little surprised by the speed bump placed in
the middle of the main road into the capital city of the state of Oaxaca.
The wheels remained attached to the car, but it was a great demonstration of
why not to buy a used car from a Mexican rental car company.
“Tope” is Spanish for
bump or “sleeping policemen” as they are called in the UK. People put these
speed bumps
on any road they please. Most of the roadside restaurants and shops use them
as an economic development tool as you have to slow down right outside the
owner's store. However, without the speed bumps everywhere, I would imagine
the traffic speeds would be truly terrifying and the death toll on the roads
extraordinary.
I liked Oaxaca City a lot
as it had a very European feel to it, the streets were relatively clean and
the city seems to be doing well economically.
Day 3 – Driving from
Oaxaca to Salina Cruz
The
drive down to Salina Cruz was nice but the trash on the side of the road was
depressing. The trash went on for miles and on this drive, we saw one of the most mind
boggling things of the trip.
The trash collection team was a
group of 4 guys tasked with picking up all the trash along this highway.
Instead of picking up the trash, they would throw it further over the edge
of the road so that when their boss drove by, the road would look clear as
far as he could see. If you drove around the next switch back, the line of
trash would start several feet down from the edge of the road, on what was otherwise a beautiful
hillside. Admittedly these guys had a monumental task in front of them
and I do not blame them for their actions.
We met Oscar at his house
in Salina Cruz. Salina Cruz has to be one of the hottest, windiest and
roughest places on the planet, I was glad we did not have to stay long.
Day 4 - Tonala and Arriaga -
Chiapas
Oscar had arranged for us
to meet the Cameneros of Arriaga, but we had no idea who the Cameneros were.
We were a little apprehensive as to what was going to happen during the
meeting, especially a meeting that we could not understand a word of what
was being said.
The
meeting was a very interesting experience and Don could not keep a straight
face at Oscar’s comment as to how things are going “Ok, but one of the
buggers is asleep”. One farmer then decided to turn around in the middle of
the meeting a spat a huge lurgy on the floor and then turned back to the
meeting like nothing had happened.
At the same time, the
local kids were letting off fire crackers while we were chatting to the
farmers. The farmers did not even blink at the noise while we were getting
ready to run. These guys obviously knew the difference between a fire
cracker and gunfire from experience...
If
you look at the background of this picture you will see a painting of a
Mexican Cowboy on a horse wearing a giant sombrero, this was the only art
work in the entire building, well cool...
After the meeting, most
of the farmers went home on their bikes. Don commented that this was not the
kind of transportation he envisaged that folks that
could be responsible for supplying a great deal of America’s transportation
fuel would rely on.
On the way back from
Arriaga we found the most perfect location for windmills and windsurfing. The wind blew
continuously and 50mph wind speeds were reportedly very common. There were 6 windmills
built in the area, at the time only 4 were operation, I guess down for
maintenance. We commented that if this was Palm Springs, there would a 1,000 windmills
installed in this valley by now.
If you
would like to contribute to help bring the poor out of poverty, Lucy
Billingsley of Dallas is heading up a project to make Micro Finance
available to entrepreneurs in the area. Click the link for more information:
http://www.gfusa.org/programs/chiapas_project/
In a tiny town Juchitan,
we stopped for our last time before dropping Oscar off at his home in Salina
Cruz. The town has a great square and a nice restaurant located in the
quadrangle of an old colonial house.
The square was full of
vendors selling their wares and we witnessed a wedding party parading down
the main street on their way to the the reception party.
We left Oscar in Salina
Cruz and enjoyed the drive along the coast to Huatulco. This area is set up
as an eco development and has lofty goals to ensure the environment is well
protected.
Day 5 -
Huatulco -
Oaxaca
We liked the coastal area
but were unsure that this was a good place to invest in buying a holiday
home. Others, like Hulio Eglasias and ex-President Salinas would disagree
having homes in the area.
The Pacific coast is
wonderful, we just thought it was a shame that people leave their trash everywhere.
Source of All Biodiesel
Feedstock
In a way our next
adventure reminded me of the Monty Python movie, the Meaning of Life. We
drove 2 hours up into the mountains where we saw people living "way off the
grid" and a few of them were armed with guns, so we were not entirely sure
what we had gotten ourselves into.
The we came to the source of all the oil for Biodiesel production in
North America. In the photo to the left, Don, Silvia and her two assistants are standing in front of a
crop that could dramatically reduce the pollution created by diesel powered
engines and go someway towards helping to clean our air in the state of
Texas.
Unfortunately there were
only 5 or 6 bushes growing at the end of this road, so it was a long way to
go to see a plantation of sufficient size to fire up a big rig for more than
3 seconds straight. But, hey is is a start and this stuff seems to
grow pretty well even at these kinds of altitudes, plus survive the cold
evening temperatures.
Day 6 - Back to Oaxaca
We encountered a pair of
enterprising 14 year old girls on Highway 175 from Puerto Angel to Oaxaca
using the town’s festive string and flags as a moveable road block. They set
themselves up at the “Tope” and put the string across the road, only
lowering it after you had made a contribution to their Tope fund. We went
through at 20 mph and the girls lowered the string when the realized the
gringos were not stopping for anything.
The road back from the
coast to Oaxaca was the most twisty road I have ever seen in my life. The drive
is about 7 hours and crosses over the mountains, back down into the Oaxaca
valley. For the whole 7 hour drive, I don't think we ever had the wheel of
the car pointing in a straight line for more than a few seconds at a time.
Don got car sick from this roller coaster ride and even I as the driver was
glad to get out of the car as my inner ear was reeling from the never ending
turns.
On my return to Oaxaca
City after dropping Don off at the airport I actually had a great meal with
good glass of wine. After the sights of southern Mexico, places like Arriaga,
Tonola and Salina Cruz, Oaxaca City seemed like
the cradle of civilization. I managed to find a great rooftop restaurant
and the weather in Oaxaca is superb, so that final experience left me with a
good taste in my mouth (so to speak) for the city.
I hope to return soon...
Day 7 -
Oaxaca and
home
I ran into some fantastic
folks who run a castor bean company. I happened to spot a sign on a wall in
Oaxaca City that said Rural Finance when I was walking around the town. I
popped in and started talking to one of the gentlemen that was sitting at
one of the desks is a room that was very starkly furnished. I discovered
that the company was in “reorganization” after some of the loans it made
went bad and the chap I was talking to was part of the clean up operation.
It turns out that Jesus's
family runs a castor bean growing and processing operation, so he was very
interested in hearing about another oil seed. He said he was keen to get
involved and we might be able to use his family’s castor bean processing
facility for our oil seeds, as the plant was currently sitting idle.
Doing Business in
Mexico
Jesus set up a meeting
for me with the head of FIRA, which is based in Oaxaca, we had met the Chiapas
representative earlier on the trip. I
show up for a meeting at 4.30 and no one knows where the head man of the
operation is. These folks say come back at 6.30, I suspect just to get rid
of me as they did not really know when the head man was due back. I finally got these guys
together and then the head man shows up at 5.30 from another town. He had
set up a meeting knowing full well he would not be attending at the set
time and every one else knew this except me, dumb gringo. The head man then proceeds to open up the meeting with his comments in a
very forthright way, “what do you want?”. I was taken aback by this abrupt
approach, but put it
all down to cultural differences and proceeded with the meeting, which in
the end turned into a very productive meeting. A well..all in a days work
for a Vegetable Oil man.
Don gets home
Don got a good laugh
when the top of his right hand started peeling badly the day after his
return. He could not explain it to his wife who thought he had contracted
some rare jungle skin-eating disease, or worse from some unknown source. It
was quite unusual that the peeling would only be occurring on one part of
his body, why the top of his right hand and no other spot on his body.
Don’s wife was ready to send him to the doctor when Don remembered he had
sun-burned that one hand when he hung it outside the window on our drive to
Salina Cruz, so it turned out to be no big deal at all.
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