Cuba plans to drill near Keys again in 2015

Cuba plans to drill near Keys again in 2015
But U.S. embargo would prevent best, safest equipment from being used
BY DAVID GOODHUE
dgoodhue@keysreporter.comJune 23, 2014

Despite coming up dry during an ambitious series of deep-water oil
searches in the Florida Straits in 2012, Cuba announced earlier this
year that it plans exploratory drilling again near the Keys in late 2015.

Given Cuba's intentions, energy and environmental experts in this
country are urging the Obama administration to relax the Unites States'
decades-old trade embargo against Cuba, at least when it comes to
oil-drilling rigs and other energy-related equipment.

"This is a critical issue which cannot be politicized," said Jorge
Pinon, the director of the University of Texas at Austin's Latin
American and Caribbean Program, and former president of Amoco Oil Latin
America.

Worldwide, the United States is recognized for having some of the best
and safest drilling equipment. But under the embargo, rigs operating
within Cuba's maritime boundaries cannot contain more than 10 percent
U.S.-made parts.

"The 10-percent rule pretty much eliminates the latest generation U.S.
technology used in drilling, except for blowout prevention equipment,"
said Lee Hunt, former president of the International Association of
Drilling Contractors.

One of the only known rigs that meets the embargo standard is the
Scarabeo-9. The giant semisubmersible is an Italian-owned rig that was
made in China. It was used by a series of international energy
companies, led by Spain's Repsol, to drill for oil in the Florida
Straits two years ago.

None of the companies were successful in finding enough economically
viable crude to continue operations in the deep waters between Cuba and
Key West.

The Scarabeo-9 is likely booked for the next few years in other parts of
the world. This leaves the worrying possibility that less-advanced rigs
would be used to drill off Cuba.

Hunt said Brazil has about 19 deep-water drilling rigs under
construction that may or may not meet the embargo's standards. But it's
not clear if Brazil is willing to invest millions of dollars to explore
for oil in areas where others have made similar investments and failed.

But Cuba is heavily dependent on allies like Venezuela for its energy
needs. Cuban leaders are confident large pools of oil are in the area,
and are determined to find it.

Graham's view

Former Florida governor and senator Bob Graham co-chaired the National
Commission on the Deepwater Horizon Oil Spill and Offshore Drilling
created by President Obama after the BP oil spill in the Gulf of Mexico
in 2010.

He went to Cuba in January to discuss preparing for oil spills and how
to prevent them on a trip coordinated by the private Council on Foreign
Relations.

"I have met with a White House representative on this issue and the
Obama administration is reviewing the prospects of Cuban exploration,
consequences for the United States and the restraints which the embargo
might place on the U.S.'s ability to enhance the safety of the
exploration and response to an accident," he told the Reporter.

The U.S. Geological Survey estimated in 2008 that there are between 7
billion and 14 billion barrels in the Northwest Cuba Basin. The Cubans
think there are more than 20 billion barrels.

What is for certain is that if the oil is there, it is far beneath the
ocean floor and in very deep water.

The 2010, the BP Deepwater Horizon disaster in the Gulf of Mexico
happened in about 5,000 feet of water. The oil sought in the Straits is
even deeper -- in more than 6,000 feet.

Risky business

Deep-water drilling is extremely risky. And while some experts say the
Cubans are committed to drilling safely and with the environment in
mind, they also say the Castro regime is willing to begin its search for
offshore oil with or without help from United States companies.

"They're very committed to getting it right," said Dan Whittle, director
of the Cuban program for the Environmental Defense Fund. "But they're
also committed to moving forward."

Hunt and others say the 10-percent rule puts the Keys and Florida's
beaches at risk should a Cuban-sponsored oil drilling operation go bad
in the Straits.

"Never mind that less-than-optimal equipment may or may not be used,"
Hunt said. "In any case, a wrong step and the 'doomsday' spill scenario
is live. It is imperative, now, that U.S. emergency planning and spill
response technology be made commercially available to the foreign –
non-Cuban—oil operators in charge of drilling the next spate of
deepwater offshore wells in the Cuban" exclusive economic zone.

The good news is that despite the embargo, five nations, including Cuba
and the United States, signed an agreement in January aimed at
streamlining international cooperation should an offshore spill impact
the Caribbean. The agreement, known as the Multi-Lateral Technical
Operating Procedure, contains protocol regarding what happens when a
spill extends beyond a country's territory.

According to Hunt, the agreement contains items such as pre-planning for
air and vessel control, worker visa and immigration clearance and
non-levy of taxes on emergency equipment. But the deal has critical
limitations, he said.

"None of the governments actually own or operate the spill-response
portfolio of equipment, technology and personnel," Hunt said. "That is
privately held by commercial entities, mostly U.S.-based."

An oil spill impacting Florida's coast would be both an environmental
and economic disaster. Pinon slammed proponents of keeping the
10-percent rule for stubbornly adhering to Cold War politics.

"I would very much like to hear the response that local politicians
would give their local constituents in South Florida once they lose
their jobs and businesses due to an oil spill which we could have helped
to prevent and/or contain," Pinon said.

Hunt agrees.

"Emergency spill-response preparedness. That, and that alone, is the
crucial subject for reconsidering and amending, legislatively or
administratively, the embargo," he said.

Source: Cuba plans to drill near Keys again in 2015 | News | KeysNet -
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