US-Cuba policy, and the race for oil drilling

By Sarah Stephens,Executive Director of the Center for Democracy in the Americas. Jake Colvin, Vice President for Global Trade Issues at the National Foreign Trade Council – 09/29/11 03:39 PM ET

To protect the national interest — and for the sake of Florida’s beaches and the Gulf of Mexico’s ecosystem — it is time to stop sticking our heels in the sand when it comes to U.S.-Cuba policy.

Before the end of the year, a Chinese-made drilling platform known as Scarabeo 9 is expected to arrive in the Gulf.  Once it is there, Cuba and its foreign partners, including Spain’s Repsol, will begin using it to drill for oil in waters deeper than Deepwater Horizon’s infamous Macondo well.  The massive rig, manufactured to comply with U.S.-content restrictions at a cost of $750 million, will cost Repsol and other companies $407,000 per day to lease for exploration.

They are taking this financial risk because Cuba needs the oil and its partners — Spain, Norway, Russia, India, Vietnam, Malaysia, Canada, Angola, Venezuela, and possibly China — believe that drilling in waters said to contain undiscovered reserves of approximately 5 billion barrels of oil is good business.

In virtually every other country in the world, developments like these would prompt high-level discussions about how to exploit these resources safely or to anticipate a crisis were a disaster to strike. Experts who have studied the currents say a spill in Cuban waters would send 90 percent of the oil into the Keys and up the East Coast of Florida. But the embargo leaves Florida’s sensitive coastal resources defenseless.

Due to the fact that the drilling involves Cuba, American companies and workers cannot lend their expertise to what could be a risky operation.  U.S. economic sanctions prevent our private sector from helping Cuba drill safely and paralyze the U.S. government, which ought to be convening bilateral discussions on best practices and coordinating disaster response.  In fact, the U.S. has no emergency response agreement with Cuba for oil spills.  While some specific licenses have been granted to permit U.S. firms to conduct limited transactions with Cuba, current sanctions bar the United States from deploying the kind of clean-up equipment, engineers, spare parts for blow-out prevention, chemical dispersants, and rigs to drill relief wells that would be needed to address an oil crisis involving Cuba.

One welcomed development came earlier this month, when William Reilly, a former head of the U.S. Environmental Protection Agency and co-chair of the Commission that investigated the Deepwater Horizon disaster, led a group of experts to Cuba to take a look at their plans.  While the administration has done well giving permission to Mr. Reilly, as well as to other experts, to discuss the problem with Cuban counterparts, it should move more aggressively to work with the Cuban government to cooperate on plans for safe drilling and responding to a possible crisis.

Rather than moving forward, some in the U.S. Congress would make the problem worse.  Rep. Ileana Ros-Lehtinen (FL-R), who criticized Mr. Reilly’s visit to Cuba as “giving credibility to the regime’s dangerous oil-drilling scheme,” has offered legislation to try and stop Repsol from drilling.  Rep. Vern Buchanan (FL-R) would deny Repsol the right to drill in U.S. waters if it helped Cuba drill in its waters.   Thirty-four members of both parties have written Repsol directly, threatening the company if it drills with Cuba.
Yet this tactic can’t work.  Even if they could deter Repsol from drilling – which is unlikely – they cannot stop Cuba and partners from countries like China, Russia, and Venezuela, from using the rig and searching for oil.

At some point, it is likely that drilling will begin and the United States ought to do what it can to prepare for that eventuality.  The U.S. government should facilitate access by Cuba and its drilling partners to the resources they need to drill safely.  President Obama should instruct the Treasury Department to issue a blanket general license now that would allow private industry to provide what oil expert Jorge Piñon calls ”any conceivable response” in the event of a crisis.

As we have already done with Mexico and Canada, the U.S. should join Cuba in crafting a crisis response agreement covering on-scene coordinators, a joint response team, response coordination centers, rapid notification protocols, customs and immigration procedures, and communications.  The plan should be written, signed, tested, and implemented as quickly as possible.

Earlier this year, the Deep Water Horizon Commission, which Mr. Reilly co-chaired, said in its final report “that neither BP nor the federal government was prepared to deal with a spill” of its magnitude or complexity; that industry and policy makers were lulled by a “culture of complacency” that resulted in 5 million barrels of oil being dumped into the Gulf.

Having seen this movie once before, complacency is inexcusable.  Politics should not blind Washington to the reality of the situation unfolding off of our shores.

Sarah Stephens is Executive Director of the Center for Democracy in the Americas.  Jake Colvin is Vice President for Global Trade Issues at the National Foreign Trade Council.

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