Laws Keep US From Cuban Oil Bonanza

Every now and then you come across a story that reenforces the enduring stupidity of the United States' decades-long embargo against Cuba. So it is with this story from an oil industry trade journal about how a deep-water drilling rig is beginning its long, slow journey from Singapore to the waters off Cuba to begin exploration in fields off the coast of the island nation. Specifically, the rig will be drilling in waters roughly 20 miles from Havana, and less than 60 miles from Key West, Florida. Surveys estimate there may be more than four billion barrels of oil off the coast of Cuba, along with sizable deposits of natural gas. Cuba is taking steps to exploit these resources with the goal of not only becoming energy independent but also of joining the club of oil exporting nations – a move that could breathe real life into the largely stagnant Cuban economy.

Now logically US-based firms should be all over these Cuban oil fields – with vast experience drilling in the Gulf of Mexico, such a partnership would make perfect sense. But that's not going to happen because of the economic embargo the US slapped on Cuba at the height of the Cold War to protest the takeover of Cuba by Marxist forces led by Fidel Castro. Of course not only has the embargo outlived the Cold War it also in six decades has failed to do the one thing it was designed to do, namely bring down the Castro regime.

But wait, it gets worse. If there were to be an accident with a Cuban well, like the kind that struck BP's Macondo well in the Gulf of Mexico last year, that oil would wind up on the beaches of Florida Keys within a couple of days and would, if enough oil was spilled, slip into the Gulf Stream and spread up the East Coast of the United States. But thanks to the embargo, any companies responding to this hypothetical accident could not request rescue or clean-up equipment from the United States, since that would be perceived as “doing business” with Cuba, something forbidden under the embargo. And, again thanks to the embargo, the United States does not participate in regular oil spill recovery drills with Cuba as it does with another regional oil producer, Mexico.

So not only is the now-pointless Cuba embargo preventing American companies and workers from earning money off the Cuban oil fields, it is also putting the country at risk should there be a spill. Can you say short-sighted government policy?