NIKOLAS KOZLOFF FOR BUZZFLASH
With no end in sight to the environmental catastrophe in the Gulf of Mexico, some may wonder whether BP’s spill could become truly international in scope. That, at least, is the fear in Cuba where people are worried that strong currents could carry the slick to pristine white beaches along the island’s northern coast. In a rare moment of cooperation underscoring the grave seriousness posed by the BP spill, the U.S. and Cuban governments have been holding talks on the matter.
In the event of landfall, the spill could bring not only ecological devastation but also economic havoc: Cuba’s cash-strapped economy relies on tourists flocking to Varadero beach and any financial loss would add to the damage already unleashed by three 2008 hurricanes as well as the global economic slowdown. Ailing Fidel Castro has used the crisis in the Gulf to score some political points. In an opinion piece, the former Cuban leader decried the environmental catastrophe, claiming the spill underscored how capitalist governments were in league with big corporations.
Castro is right on the money in his criticisms. However, the fact is that Cuba, just like Venezuela, is also in thrall to unsustainable oil which places the Gulf of Mexico in environmental peril. Heavily energy dependent on other countries, Cuba has unfortunately sought to lure foreign investment to develop offshore oil deposits. Such investment could add to the region’s already worrying ecological profile. At this point, the last thing the region needs is more offshore oil operations going up just 50 miles off the Florida coast.
Currently, Cuba produces approximately half its energy needs from onshore wells while receiving the remainder from Venezuela at favorable prices. Naturally, Cuba would like to develop more energy sovereignty and sees offshore development as crucial towards that effort. Indeed, according to a recent report issued by the U.S. Energy Information Administration (E.I.A.), “There has been considerable interest in exploration activities in Cuba's offshore basins, especially in the Gulf of Mexico.”
Cuba’s authorities estimate that its offshore basins could contain more than 20 billion barrels of undiscovered reserves, though that figure is somewhat disputed. The deposits are reportedly located in Cuba’s part of the Gulf of Mexico, which abuts the U.S. and Mexican areas of the gulf. “However,” remarks the E.I.A. report, “actual exploratory drilling in the area has been, to date, quite limited.”
That scenario looks likely to change. Just this month, Reuters reported that Spanish oil giant Repsol YPF had contracted an Italian firm to construct an oil rig which could be bound for Cuban offshore oil operations. Back in 2004, Repsol drilled the only exploration well in Cuban waters and subsequently declared that it had found hydrocarbons. Later, other foreign oil companies joined the fray with Norwegian Statoil and a unit of India’s Oil and Natural Gas Corp establishing a partnership with Repsol.
Ever since that first well was drilled, the oil industry has been chafing at the bit to enter Cuban waters full force. Reportedly, Repsol is moving ahead at long last towards drilling a second and maybe even a third exploration well. The work could start as early as the fall, and one source close to the project told Reuters “Things are moving forward, there will be no more delays.”
If Repsol drills that second well it could unleash an ominous Pandora’s Box. In the event the company is successful, Reuters writes that it “will open the door to full-scale exploitation of Cuba's offshore.” Already, Cuba’s section of the Gulf of Mexico has been divided up into 59 blocks and 17 of those have been leased to Repsol and its partners.
One of those partners is Venezuela’s state-owned oil company PdVSA. President Hugo Chávez says he is horrified by BP’s mess and recently declared he would send oil experts to Cuba to advise the island nation on how best to handle the spill. “This is very, very bad,” Chávez said. On the other hand, Venezuela hardly inspires confidence: earlier this month the country had its own rig accident when a natural gas exploration rig leased by PdVSA nearly sank.
Hopefully, the BP disaster will lead Cuba to permanently and irrevocably shelve its plans for offshore oil development. Yet, in order to do so the island nation will have to drastically reverse course from the past few years. In addition to Venezuela, Norway and India there are other significant players who have inked offshore oil agreements including big Russian and Brazilian energy companies.
In the event that Cuba fails to heed the warning of the BP spill and goes ahead with offshore oil exploration in the long-term, it could be years before new wells are developed and significant oil is recovered. Simply put, the island nation lacks needed oil infrastructure, technology and skilled labor. That could be a boon to the environment, but don’t count Cuba out just yet: the authorities are already planning a deep-sea terminal for supertankers in the northern port of Matanzas and seek to upgrade a long pipeline which stretches across the island to an old, Soviet-built refinery.
From an environmental point of view, the prospect of offshore oil development going forward is not something to be taken lightly. Cuba is the most biologically diverse of all Caribbean islands and sports spectacular white sand beaches, vast coral reefs, and a wide range of fish populations. Cuba’s coastline and mangroves serve as breeding grounds for hundreds of species of fish as well as other marine organisms. Ocean currents carry important fish larvae from Cuba into U.S. waters, which in turn help to replenish ailing American fisheries.
The U.S. and Cuba share an ancient deepwater coral system stretching all the way up to North Carolina. In addition, Cuba has more than 4,000 islets which support important reef fish such as grouper. The islets also support sea turtles, dolphins and manatees [the latter already in danger as a result of BP’s oil spill as I recently pointed out]. Crucially important, the islets serve as refuges for endangered species.
If that was not enough reason to press the pause button on offshore oil, consider the plight of Caribbean birds. In recent days, the U.S. public has been subjected to the tragic spectacle of oiled pelicans in the Gulf. If oil production reaches Cuba we could have further disasters since important populations of North American migratory birds spend much of the year on the Caribbean island.
The prospect of Venezuela and others drilling for petroleum in Cuban waters is bad enough. But, what if U.S. oil companies joined the oily mix? Currently that’s impossible since the U.S. continues to maintain an economic embargo on Cuba. Yet, some would like to see a change in policy.
In recent years, some Capitol Hill legislators have proposed that oil companies be exempt from the embargo. In 2006, Jeff Flake, a Republican Congressman from Arizona, and GOP Senator Larry Craig of Idaho introduced twin bills to the House of Representatives and Senate which would have allowed U.S. firms to sell their services to corporations drilling on behalf of Cuba or alternatively to simply drill on their own. In a rebuke to his party, Flake described the embargo as “archaic policy.” “If there are going to be oil rigs within 50 miles of Florida … I'd rather see U.S. oil rigs than Chinese oil rigs, given technological and safety considerations,” Flake said. For his part, Craig remarked, “Red China should not be left to drill for oil within spitting distance of our shores without competition from U.S. industries.”
Since the GOP usually can be counted on to press for the embargo, Craig and Flake’s resolutions on Cuba came as a somewhat bizarre and incongruous development. Concerned about the environmental implications of offshore Cuban oil development Florida Democrats Senator Bill Nelson and Congressman Jim Davis authored their own legislation which would have denied U.S. visas to the executives of foreign oil firms drilling in Cuban waters.
“At risk are the Florida Keys and the state's tourism economy, not to mention the $8bn that Congress is investing to restore the Everglades,” Nelson remarked. In a rebuke to Craig and Flake, Nelson proposed legislation which would have prevented the Bush administration from renewing a 1977 international agreement permitting Cuba from conducting commercial activity near the Florida Keys.
Hopefully, the BP disaster will put a break on the oil lobby and its supporters on Capitol Hill. Yet, other important players have been broadly supportive of offshore oil. For its part, Havana has said it would welcome U.S. investment. Recently, a U.S.-Cuba Energy Summit attracted Exxon officials and others to a meeting in Mexico City. Participants viewed PowerPoint presentations from Cuban government ministries including state-owned oil company Cupet which sought to involve U.S. companies in the exploitation of oil and gas fields. “U.S. oil companies would love to do business there as soon as this thing opens up,” remarked Ron Harper, an energy analyst in Houston. “They're looking at it quietly. They'd be short-sighted not to.”
The debate over Cuban offshore oil puts the political left in a quandary. For years, it’s been an article of faith amongst progressives that the U.S. ought to scrap the embargo. To be sure, economic sanctions have resulted in horrible economic distress for ordinary Cubans. Yet, does the left want to lift sanctions and open the door to yet more destructive offshore petroleum, thereby adding to environmental woes already unleashed by the BP spill? In light of our dire ecological straits, I believe the left must rethink its position on this vital issue and articulate a more broad-based vision for the Gulf which would realistically address both economic and environmental concerns.
Creative solutions must come from other quarters as well. Maybe it’s time for Fidel Castro and Hugo Chávez to stop complaining about evil U.S. corporations, take a hard look at their own wasteful energy priorities and come up with a viable plan to save the Gulf of Mexico. Efforts to support alternative energy on Cuba, including the island’s incipient wind-power industry, should be ramped up.
Realistically, however, neither Cuba nor Venezuela have the necessary technological, economic or logistical know-how which could move us away from the fossil-fuel paradigm. Only the U.S. can achieve such a dramatic revolution, but up until now the political will has been sorely lacking.
In my book No Rain in the Amazon: How South America’s Climate Change Affects the Entire Planet, now hot off the press with Palgrave-Macmillan, I argue that the U.S. needs to increase clean technology transfer to South American countries in order to save the Amazon rainforest from hydropower and oil development. If anything, the BP spill demonstrates the need for even greater U.S. engagement on this issue. We are in the midst of a hemisphere-wide environmental quandary, and Washington needs to expand clean energy transfer not just toward South American countries but also toward all nations bordering the Gulf of Mexico.
Nikolas Kozloff is the author of No Rain in the Amazon: How South America’s Climate Change Affects the Entire Planet (Palgrave, 2010). Visit his website, http://www.nikolaskozloff.com/
NIKOLAS KOZLOFF FOR BUZZFLASH
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