If you need another example of why America's policy towards Cuba is seriously flawed (ok, seriously stupid), look no further than Tuesday's New York Times and this article about another player signing up for what could be a Cuban oil bonanza. While currently an oil importing nation, recent geologic surveys indicate that there could be huge reserves of oil in deep water fields that would not only break Cuba of their energy dependence on Venezuela and revive their struggling economy, but would also allow the island to join the ranks of oil exporting nations. On Tuesday Russia's state-run energy giant Gazprom announced they were buying a 30% stake in one of the prospective fields in a deal that could run until 2042. Gazprom now joins companies from countries including Spain, Malaysia, and China in drilling for oil in the waters off Cuba.
Of course American oil companies won't be joining in this potential black gold rush because of the now 48-year long trade embargo that the United States has maintained against Cuba, all in the vain hope that maybe this just might be the year the embargo drives Fidel Castro from power. I've written before about the pointlessness of the embargo, so no need to repeat those arguments here, but there are some added reasons why the embargo is especially stupid when it comes to drilling for oil. Beyond the simple fact that it means lost revenues for American companies; US-based firms have decades of experience in drilling for oil in the Gulf of Mexico, something the firms currently holding contracts with Cuba lack. Gazprom especially has precious little experience with offshore drilling, one reason why they signed a partnership deal with Malaysia's Petronas to develop their portion of Cuba's offshore fields; given their experience, American firms could be commanding a premium in such partnership arrangements. Then there's the issue of what happens if something goes wrong with one of these wells. Since many of the fields are adjacent to the Straits of Florida, some projections say that oil from a BP-style leak off Cuba could hit the Florida Keys within just three days, presumably then striking the east coast of the United States soon after. This summer we saw just how difficult it was to cap a deep sea well with abundant resources and technology at your disposal; Cuba lacks any sort of deep water operations equipment, particularly the remote operated vehicles (ROVs) that eventually capped the well, meaning the response to a Cuban spill would likely be much slower.
With both their experience in the region and now in dealing with a deep water blowout, the participation of American firms in oil exploration off Cuba could make the whole venture a much safer process, but thanks to the pointless, politically-motivated embargo (and with Cuban-American Florida Republican Ileana Ros-Lehtinen set to become Chairwoman of the House Foreign Affairs Committee, that’s unlikely to change), American firms won't have that opportunity.
3 days ago