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The World Drills for Cuban Oil While US Maintains Failed Embargo
May 13, 2011 04:12 PM
NOW THIS IS HAPPENING
According to the US Geological Survey, there are roughly 5 billion barrels of oil off the Cuban coast. According to the Cubans, there's even more than that.
NPR reports that
a Chinese-built rig owned by an Italian oil company is set to start drilling this fall,
while Spanish energy company Repsol plans to drill five exploratory wells at the same depth as BP's infamous Deepwater Horizon.
Correspondent Nick Miroff says:
Because the drilling will happen just 60 miles off the Florida coast, John McAuliff of the Fund for Reconciliation and Development, a group that advocates engagement with Cuba, says it's in Washington's best interest to work with Havana on contingency plans. After all, he says, the U.S. has the best cleanup technology and know-how.
"The question is how you minimize the risk, and there's only one way to minimize the risk, and that is to have the kind of collaboration with Cuba that we have with Mexico or the Bahamas or any other country that is exploring for oil in a way that is potentially damaging to the U.S.," McAuliff says.
Cuba-watchers also question the future effectiveness of the already-ineffective trade embargo, now that the island nation could actually become a net exporter of oil.
"[It] adds an additional question to
why that policy still exists
," Marc Frank, a Havana-based reporter for the
says. "What's its purpose? So one would think it would lead to pressure towards changing that policy."
The US consumes 20.8 million barrels of oil each day. Exxon Mobil, Chevron, BP, ConocoPhillips, and Shell are buying tremendous amounts of oil from “dangerous or unstable” states including Syria, Saudi Arabia, Nigeria, Mauritania, Iraq, Congo, Chad, Algeria, and Libya -- but not Cuba, a country with which we have not had serious conflict since the Kennedy administration.
“This is not the 1960s, when the Kennedy administration was protecting the US from a possible missile attack,” says Charles Drevna, executive vice president of the
National Petrochemical and Refiners Association
. "These resources will be developed and produced. Prohibiting US
from developing [Cuban] resources…is an Alice in Wonderland approach to policy that must be revisited.”
Kirby Jones, president of
-- a firm that advises US companies interested in pursuing business opportunities with Cuba when the antiquated embargo is ultimately lifted -- has worked with companies both in the oil industry and otherwise, including Abbott Labs, General Electric, and Caterpillar, to name but a few.
“Maintaining the embargo means that we lose something of strategic importance to us -- oil,” Jones told me last year. “It’s one thing to let people export tractors to Cuba. It’s quite another to decide you don’t want oil sitting mere miles off the US coast that Russia, Canada, and Brazil are taking right now. The Cubans have said they welcome the involvement of US companies. The opportunity is there.”
Money manager Ryan Krueger of Houston’s
Krueger & Catalano Capital Partners
has a decidedly interesting take:
“If you throw a mid-90 mph fastball, we will break laws to get you here, as in the case of Cuban pitcher Aroldis Chapman, who just signed with the Cincinnati Reds,” he says. “But I'll be damned if we fuel our planes, cars, and heavy machinery with Cuban oil? It makes no sense at all.”
Finally, what to make of Cuba’s human rights record when considering a normalization of trade with Cuba?
Daniel Griswold of the Cato Institute
, “In sheer numbers, the Chinese government has jailed and killed far more political and religious dissenters than has the Cuban government. And China is arguably more of a national security concern today than Castro’s pathetic little workers’ paradise.”
The question is, into whose hands should we be putting our dollars in exchange for oil? Ones that are enriching uranium and calling for the destruction of Western democracies? Or ones that are running a “pathetic little workers’ paradise” that poses no danger whatsoever to our national security?
Chances are, most rational minds would choose the pathetic little workers’ paradise.
No positions in stocks mentioned.
CRUDE OIL PRICE
JUST MAKE UP AND BE NICE ALREADY...
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