One of the most effective arguments made last year for expanding U.S. access to its energy resources in the Gulf of Mexico was Cuba’s aggressive plan to exploit natural gas and oil in its territorial waters, potentially as close as 50 miles from U.S. shores. (See this post from May and this from last December for just a sample.)
Just staying up to date on things, we note Cuban officials took part last week in a conference on Gulf energy resources with Canadian and Mexican representatives. Companies from Norway, India, Malaysia, Spain and Venezuela have already reserved blocks for petroleum exploration under production-sharing agreements with Cuba, the AP reports. Now the communist government is holding out the possibility of U.S. corporate involvement in energy development.
Basic Industry Minister Yadira Garcia said exploratory drilling in the Gulf of Mexico should start to yield profits by 2011.
“A lot of American companies have been coming, they know about our studies … but we are not the ones limiting them,” Garcia told reporters at an international gathering on earth sciences.
Garcia said it was “a good moment” for Washington to let American oil companies invest in the Cuban market. Currently, a long-standing U.S. trade embargo prohibits most American trade and investment with the communist-run island….
The U.S. Geological Survey has reported that the North Cuba Basin off the island’s coast holds a substantial quantity of oil – 4.6 billion to 9.3 billion barrels of crude and 9.8 trillion to 21.8 trillion cubic feet of natural gas.
Obviously, this rhetoric is mostly about getting the United States to lift the trade embargo, the No. 1 diplomatic priority for the dictatorship.
In that context, we note this recent piece of legislation, S. 875, Security and Fuel Efficiency Energy Act of 2007, sponsored by Sens. Byron Dorgan, D-ND, and Larry Craig, R-ID. There’s lots in the bill (which we haven’t analyzed yet), but the language calling for expanded access to domestic energy resources is certainly worth consideration. From the Shreveport Times:
The legislation also would allow American producers to drill in fields off the northwest Cuban coast that are 45 miles from Key West and could contain as much as 9 billion barrels of oil.
The Cuban offshore fields are now explored by joint ventures between the Cuban government and companies from Spain, India, Norway and other countries. The new offshore bill would ease U.S. trade sanctions against Cuba to allow American oil and gas producers to partner with the Cuban government for access to that area.
“This new access would level the playing field by allowing the United States to compete for resources that are currently available to Cuba and other countries,” a summary of the legislation says.
As farm state senators, Dorgan and Craig have long pressed for the lifting of the U.S. embargo against Cuba in order to sell ag commodities to the Communist government. They’ve both traveled to the island to meet with Castro.
From the energy perspective alone, seems like it would make more sense diplomatically and commercially to first access the tremendous potential of natural gas and oil resources in U.S. domestic waters. But in any case, the legislation prompts a useful discussion.
As an addendum, we note the Cuban government last week was also showing off its energy works on the island to foreign officials. Stories here and here. Not sure whether these people work there or not.
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