Sunday, June 26, 2011

Cuba's oil, our potential mess

Posted on Saturday, 06.25.11
Offshore drilling

Cuba's oil, our potential mess

As Cuba prepares to explore an undersea energy trove, the U.S. frets
about the possibility of a BP-like spill that this country might be
powerless to stanch.
By Cammy Clark

KEY WEST -- In about five months, Spanish oil giant Repsol is scheduled
to begin a risky offshore exploration in Cuba's North Basin, about 60 to
70 miles from Key West and even closer to ecologically fragile waters of
the Florida Keys National Marine Sanctuary.

From a $750 million semi-submersible rig arriving from Singapore,
Repsol will drill through 5,600 feet of seawater with strong currents
and another 14,000 or so feet of layered rock at high pressure.

It's just the start of Cuba's big push to find and produce what
geologists believe is an undiscovered energy treasure trove of oil and
natural gas reservoirs. The prospects are so promising that seven
international consortiums involving 10 countries have partnered with the
communist nation.

In the Florida Keys and up the East Coast, the prospect of potential oil
spills so close to precious coral reefs, fisheries and coastal
communities is frightening. Federal, state and local agencies have been
scrambling to update contingency response plans using the many lessons
learned from last year's economically and environmentally devastating BP
Deepwater Horizon blowout, which took 85 days to contain.

"Deepwater Horizon was 450 miles away and we saw the impact for the
Keys," said U.S. Coast Guard Capt. Pat DeQuattro, commander of Sector
Key West. "This is much, much closer and Cuba is a sovereign nation."

Cuba also is a nation that the United States has embargoed for nearly 50
years, with bitter relations dating to the Kennedy Administration.

As it stands now, a lot of U.S. containment equipment, technology,
chemical dispersants and personnel expertise would not be allowed to
respond to a spill where it likely would be needed most — "at the
faucet," said oil industry expert Jorge R. Pinon, a visiting research
fellow at the Cuban Research Institute at Florida International University.

Politics also would prevent relief wells in Cuban waters from being
built by U.S. companies or with U.S. resources.

"The clock is ticking for the U.S. to rethink its policy," said Dan
Whittle, Cuban program director for the nonprofit Environmental Defense
Fund. "Hoping [Cuban oil exploration] goes away is not good policy."

Even the final report issued in January from the National Commission on
the BP Deepwater Horizon Oil Spill and Offshore Drilling recommended
U.S. cooperation with Cuba's oil industry to protect "fisheries, coastal
tourism and other valuable U.S. natural resources" that could be put at
great risk.

The report said it is in our country's national interest to negotiate
with Cuba on common, rigorous safety standards and regulatory oversight.
The countries also should develop a protocol to cooperate on containment
and response strategies and preparedness in case of a spill.

But direct discussions have not happened, due primarily to a powerful
voting bloc of pro-embargo Cuban-Americans. Among them is U.S. Rep.
Ileana Ros-Lehtinen, a Republican who represents the Florida Keys and
Miami-Dade County and is chairwoman of the House Foreign Affairs Committee.

"You can't trust that evil, awful Castro regime," Ros-Lehtinen said in a
recent phone interview. "It would be dangerously naïve."

Ros-Lehtinen has spearheaded efforts to stop oil drilling in Cuban waters.

Last month, she introduced the Caribbean Coral Reef Protection Act, the
third version of legislation she also tried to get passed in previous
Congresses. It would impose penalties against companies that spend $1
million or more developing Cuba's offshore petroleum resources and deny
U.S. visas to their foreign principals.

"I know it will be hard to pass; I have no delusions of success," she
said. "But it's important to take a stand. … We cannot allow the Castro
regime to become the oil tycoons of the Caribbean."

U.S. Rep. Vern Buchanan, R-Sarasota, also is pushing legislation that
would deny U.S. oil and gas permits to companies that do business with
Cuba. But of the 10 companies that have agreements with Cuba to drill
offshore, only private company Repsol also has leases in the United States.

U.S. Sen. Bill Nelson , the Florida Democrat, has been fighting to stop
Cuban oil exploration for years.

But all the American efforts to stop drilling in Cuban waters have been
unsuccessful. The best the United States has been able to do is push for
safety. Last month, Interior Secretary Ken Salazar met with Repsol
officials in Madrid. He reportedly used leases in U.S. waters as
leverage to obtain assurances the company would follow the same American
safety standards in Cuba. Repsol also has been in contact with the U.S.
Coast Guard regarding how it would deal with a potential spill.

Repsol and the other international companies involved have ample reason
to believe drilling in Cuban waters will be highly profitable. In 2004,
the U.S. Geological Survey estimated that underneath Cuba's North Basin
lie 5.5 billion barrels of oil and 9.8 trillion cubic feet of natural
gas — roughly the same amount as Ecuador's and Colombia's reserves.


Cuban geologists also estimate there is another 10 to 15 billion barrels
of undiscovered oil in their deeper territorial waters in the middle of
the Gulf. However, the amount of recoverable oil and gas is always much
less than what's available.

On June 5, Cuban President Raul Castro watched as Cuba's national oil
company, Cupet, signed an expanded oil agreement in Havana with China's
state-owned oil company. Cupet also has agreements with state-owned
companies from Norway, Russia, India, Vietnam, Malaysia, Canada, Angola
and Venezuela.

U.S. Coast Guard Rear Adm. William D. Baumgartner, commander for the
southeastern United States, said much effort has gone into planning for
a possible spill. But he added: "The diplomatic situation will make our
job more difficult in planning and execution."

Some companies already have special licenses issued by the U.S. Treasury
Department and U.S. Commerce Department to send staffing and other
resources to Cuba in the event of an oil spill. "We've been talking with
them to see what their capabilities are," Baumgartner said.

And if those companies did respond to a spill, Baumgartner said the
Coast Guard would be "well aware of what they are doing inside Cuban
waters and complement what they are doing."

Clean Caribbean Cooperative of Fort Lauderdale was issued both special
licenses in 2003, the last time exploration wells were imminent in Cuban
waters. The 33-year-old nonprofit cooperative of 42 oil companies was a
major player in the Deepwater Horizon cleanup and has a stockpile of
about $10 million to $12 million worth of air mobile equipment, a cadre
of oil spill response supervisors and a network of contractors,
according to cooperative president Paul Schuler.

Pinon, a former oil company executive, said it is imperative that Cuba
be allowed to participate in the "MexUS" joint contingency plan
regarding oil spill response between the United States and Mexico. It
was put together following the Ixtoc spill in 1979 that lasted for
months and tarred Texas and Mexican coastlines.


"The U.S. has worked efficiently with Cuba on hurricane tracking,
narcotics and immigration issues," Whittle of the Environmental Defense
Fund said. "No one is talking about allowing Houston oil companies to
develop oil and gas in Cuba, although an argument could be made for
that. But it's not on anyone's mind at this moment."

Brian Petty, senior vice president of government affairs for the
U.S.-based International Association of Drilling Contractors, argues
that cooperation is crucial because: "It's just one Gulf. Everybody
should be on the same page."

The Bahamas Petroleum Company announced plans earlier this year to begin
exploratory drilling in 2012 in an area just north of the Cuban/Bahamas
maritime boundary.

It's also an area where a spill could threaten the Florida Keys and
other locations up the East Coast.

But the immediate threat comes from Cuba. After several delays, which
included fixing a major leak, the semi-submersible rig called SS
Scarabeo 9 is scheduled to leave Singapore for Cuba this month.

It will take between three and seven years before any commercial oil can
be produced.

The National Ocean and Atmospheric Administration is in the process of
updating computer tracking models of a spill coming from Cuban waters
that were done in 2004 by another agency.

"Even with what the models tell you, you still want to be prepared for
any possibility," said Sean Morton, superintendent of the Florida Keys
National Marine Sanctuary.

Several factors play a part in where oil could go, including the moving
Gulf Stream, two major eddies in the Keys, winds and storms — including

"We've had markers and mooring buoys break lose in Keys waters and they
have ended up as far north as Scotland and also in Alabama," Morton said.

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