Wednesday, October 19, 2011

Oil spill from drilling in Cuban waters could have limited U.S. response,

Posted on Tuesday, 10.18.11

Oil spill from drilling in Cuban waters could have limited U.S. response

How American companies can to respond to an oil spill off Cuba's coast
could affect Florida and the Bahamas.
By Erika Bolstad

WASHINGTON -- As exploratory oil drilling is set to begin in December
off the coast of Cuba, the U.S. government acknowledged Tuesday that
because of chilly diplomatic relations, it could have a limited ability
to control the response to an oil spill there, let alone one the
magnitude of last year's Deepwater Horizon disaster in the Gulf of Mexico.

U.S. regulators said their main leverage to encourage safe drilling
practices in Cuba is with the company doing the first round of offshore
exploration in the communist country: Spain's Repsol oil company.
Because of its other extensive U.S. interests, Repsol is likely to
exercise caution in a prospect less than 100 miles from the Florida
coastline, said Michael Bromwich, director of the agency that oversees
offshore drilling here, the Bureau of Safety and Environmental Enforcement.

Repsol's wide U.S. interests have likely "played a significant role in
why they've been as cooperative as they have," Bromwich told the Senate
Energy and Natural Resources Committee Tuesday morning.

Bromwich also said the company has pledged publically that it will
adhere to U.S. regulations and the highest industry standards while
working in Cuban waters. The company has given U.S. regulators
permission to inspect the rig it will be using, Bromwich said, although
that inspection will have to be done before it enters Cuban waters. The
agency, along with the U.S. Coast Guard, has already participated in a
mock response drill at Repsol's facilities in Trinidad.

Regulators have made it clear they expect the company "to adhere to
industry and international environmental, health, and safety standards
and to have adequate prevention, mitigation, and remediation systems in
place in the event of an incident," Bromwich said.

But others at the hearing warned that spilled oil knows no political
boundaries — or embargoes. And while Congress is most curious about Cuba
because of the limited information available about the country's plans,
other Caribbean and Gulf of Mexico neighbors are also exploring for oil
near U.S. waters. They include Jamaica, the Bahamas and ongoing
operations in Mexico.

"If we just kind of close our eyes to it here, and say 'it's not going
to happen here,' we're fooling ourselves," said Sen. Lisa Murkowski,
R-Alaska, the top Republican on the Senate Energy and Natural Resources
Committee. "If there is a spill, the impact doesn't necessarily stop at
our borders."

How U.S. companies are allowed to respond to any potential spill in
Cuban waters could be vital in protecting Florida and the Bahamas, said
Paul Schuler, the president and CEO of Clean Caribbean and Americas, a
Fort Lauderdale-based oil-spill response consortium funded by oil
companies. He called for a "loosening up" of the red tape required for
U.S.-based companies to have any sort of involvement with the communist

Schuler's organization, which responded to the 2010 BP spill in the Gulf
of Mexico, has been involved in Cuba since 2001, when Repsol and
Brazil's Petrobras were first doing work there. CCA applied for and
received licenses from the Treasury and Commerce departments to travel
to and export equipment to Cuba. They've been to Cuba recently to work
with Repsol and Petronas, the state-owned Malaysian oil company also
exploring in Cuba, Schuler said.

One of the foremost experts in Cuba's oil drilling capabilities, Jorge
Piñon, warned the committee the U.S. shouldn't "bully" Repsol, which is
not the only oil company to explore in Cuban waters. Piñon pointed out
that the U.S. doesn't have the leverage with state-owned entities like
Petronas that it does with publically traded companies with U.S.
interests, such as Repsol.

"Mexico, Cuba and the Bahamas are in the process of implementing the
most advanced and up to date drilling regulations and standards," said
Piñon, a former Amoco executive and a visiting research fellow with
Florida International University's Latin American and Caribbean Center's
Cuban Research Institute. "But do they have the resources, capabilities,
assets, personnel, and experience to enforce them? Can these countries'
regulatory agencies appropriately police the operators? These are issues
for debate."

Some Republican lawmakers have complained in the past about Cuba's
ability to drill so close to the U.S. coastline even as a 125-mile
buffer zone remains in place in U.S. waters off of most of Florida's
coast. Tuesday, those questions came up again.

"Why not drill there?" asked Sen. Bob Corker, R-Tenn. Bromwich told
Corker the agency would be going forward with lease sales in the western
Gulf of Mexico in December, and in the central Gulf in May or June.

And lawmakers from both parties remain concerned about Repsol's
involvement in Cuba. In September, 34 lawmakers led by U.S. Rep. Ileana
Ros-Lehtinen, R-Miami, asked Repsol in a letter to keep out of Cuban
waters, saying the firm's pending offshore drilling plans would support
the Castro regime and "bankroll the apparatus that violently crushes

She also has introduced legislation that would deny U.S. visas to
non-citizens who've worked in Cuba's oil drilling industry. The bill
would also impose sanctions and other penalties on people and entities
who investing in the development of Cuba's petroleum resources.

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