Friday, September 23, 2011

Drill, Cuba, Drill

Drill, Cuba, Drill
Posted 09/22/2011 06:32 PM ET

While rich domestic sources of oil remain off-limits to American
producers, a foreign consortium will use this Chinese-built rig to drill
for crude... View Enlarged Image

Energy Policy: Deep-water drilling will resume in the Florida Strait
when a giant, semi-submersible oil rig en route from Singapore arrives
later this fall. The bad news is it will not be American.

While U.S. oil and energy prices "necessarily skyrocket," as President
Obama once said they would under energy policies that have imposed a de
facto ban on offshore drilling, a massive Chinese-built semi-submersible
oil rig is on its way from Singapore to a drilling position off
northwest Cuba perhaps as little as 50 miles from Key West, Fla.

The long-predicted move could come as early as November, as Spanish oil
giant Repsol YPF leads an international consortium that will operate the
rig known as Scarabeo 9. It wants to wait until the hurricane season
ends before it begins drilling.

Six wells are planned to be drilled with this rig by the various
international companies that own exploration rights off the north shore
of the island.

Repsol drilled the only offshore well in Cuba in 2004 and said at the
time it had found hydrocarbons. It plans to drill at depths of more than
5,500 feet, deeper than the blown-out Deepwater Horizon well that spewed
5 million barrels of crude into the Gulf of Mexico two summers ago.

Normally, what are called "economic zones" extend 200 miles off a
country's coastline. In some cases, there are conflicts based on
resources and geography. In 1977, President Carter signed a treaty with
communist Cuba that essentially split the difference and created for
Cuba an "exclusive economic zone" extending from the western tip of Cuba
northward virtually to Key West. Cuba then divided its side of the
Florida Strait into 59 parcels and put them up for lease.

The U.S. Geological Survey recently estimated the North Cuban Basin
contains as much as 9 billion barrels of oil and 22 trillion cubic feet
of natural gas. Other estimates range from 5 billion to 20 billion
barrels of crude. Pools of oil and natural gas tend not to obey lines
drawn on a map. It's certain that at least some of Cuba's wells will be
tapping oil pools that straddle the boundary separating our zone from
Cuba's, meaning Havana will be getting oil that should be ours.
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Meanwhile, the administration persists in pouring money into bankrupt
solar-panel manufacturers as it imposes a seven-year drilling moratorium
in the Eastern Gulf of Mexico and off the Atlantic and Pacific coasts.
The Arctic National Wildlife refuge is off-limits, as are the nearby
Beaufort Sea and most of the Chukchi Sea. What Gulf drilling remains is
slowed by a snails-pace permitting process.

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