Cuban Oil to Break the U.S. Embargo?

Reuters

Cuban Oil to Break the U.S. Embargo?

The prospect of Cuba pumping American oil highlights how disastrously ineffective America’s foreign policy has been with the tiny island nation.

On July 24, the Washington Times reported that Cuba is drilling for oil just 60 miles off the Florida coast.

Amazing as it sounds, Cuba, the nation that the United States has gone to war against and has since embargoed for the last 45 years, may actually end up pumping oil from sovereign U.S. territory.

Although the Cuban sanctioned drill rigs are technically on the internationally recognized Cuban side of the Straits of Florida, if the oil fields are developed some of the oil that will be pumped will probably come from the U.S. side. As Fadi Kabboul, a Venezuelan energy minister, noted, “the oil fields Cuba is plumbing do not respect national borders” (ibid.).

To make an analogy: It is like your neighbor installing a water well just outside your fence line. As your neighbor pumps out the groundwater, the suction will inevitably pull water from your side of the fence.

Unfortunately for Americans, since the drilling platforms on the Cuban leases are not physically encroaching on U.S. territorial waters, the U.S. is unable to stop them. Further frustrating matters is the fact that due to environmental concerns, Florida law makers have banned American oil companies from drilling within 100 miles of the coast (ibid.). So here we have Cubans drilling for oil that may, in part, be within American boundaries—while U.S. oil companies are currently banned from touching it!

According to some predictions, while world oil demand is still rising, global crude oil production will peak over the next few years (Inter Press Service, February 14). Consequently there has been a rush of international oil companies seeking to prospect and drill potential Cuban oil fields, which are estimated to contain more oil than Sudan, a country that has done well at attracting foreign investment despite U.S. sanctions.

Cuba too has been quite successful at attracting foreign trade despite America’s embargo, which most of the world does not support. In fact, 182 of 186 members of the United Nations voted on a resolution calling for the U.S. to end its trade sanctions last year, so it is no wonder that countries as diverse as China, Norway, India, Canada, Spain and Brazil are happily drilling for oil in Cuban waters. The drilling machinery and technology that the Cuban oil company Cubapetroleo uses, for example, is provided by China.

With the help of Canada, Europe and Latin America, Cuba has pumped $1.7 billion into developing its energy sector since 2004 (Associated Press, February 1). Cuba’s oil production has increased from 18,000 barrels per day in 1992 to 75,000 barrels per day today. Cuba now produces approximately half of the oil it needs; an amount set to increase as it develops the 750 million barrels of proved reserves the Energy Information Administration says lay in Cuban territory (New York Times,February 4). Cuba also is a joint claimant with Mexico and the U.S. for the 4.6 billion barrels of oil and 9.3 trillion cubic feet of natural gas that studies suggest may exist in the Gulf of Mexico. In fact, if even a portion of the exploration yields results, Cuba could quickly turn into a net oil exporter.

This has led many Republicans to argue that parts of the Cuban embargo should be rescinded because they hurt American companies more than Cubans. They argue that because of America’s desperate need for oil, and the fact that foreign companies will continue to rush to drill in Cuban waters, American oil firms should be exempt from the Cuban embargo.

Allowing American companies to drill for oil in Cuban waters would result in more rapid development and thus more oil and gas would be available to Americans. Therefore, Americans would pay less for their fuel and be less reliant on the volatile Middle East for energy, or so the theory goes. Conversely, not allowing American companies the chance to bid for and develop Cuban offshore oil lets other foreign nations get control of the resources on the cheap.

“Right on our own border, there is going to be substantial activity in what is probably the last unexplored deposits in the world,” said the president of the U.S.-Cuba Trade Association, Kirby Jones (Associated Press, op. cit.).

“Our choice is: Are we going to let those other countries take that oil? Or are we going to look at our strategic interests and recognize that very close to our shores is a substantial quantity of oil that is going to be exploited?” Jones questioned (ibid., July 29).

“Are we supposed to sit by and let China drill in our own backyard?” asked Sen. Pete Domenici, chairman of the Senate Energy Committee, a co-sponsor of a bill that would allow U.S. energy companies to do business with Cuba. Other Republicans lament “energy-hungry China could gain access to oil ‘within spitting distance’ of the U.S.” (Daily Deal, June 16).

In addition, those who want to get rid of the embargo argue that all it has done is increase other nations’ influence in Cuba. It would be a “far more likely scenario that Cubans transition in a way that we would like to see them, to democracy, if they have closer ties to us than to China,” says Arizona Republican Jeff Flake (Business Day,June 13).

What’s really amazing is how much investment and trade Cuba has been receiving. Other nations certainly don’t seem to be afraid of running the U.S. economic blockade, and seem to be taking full advantage of the lack of U.S. competition in Cuba—and in many other areas besides energy.

In 2005, Cuba’s trade with the world soared 22 percent (Agence France Presse, Nov. 8, 2005). Over 1,800 foreign firms from 43 countries attended Cuba’s 23rd International Trade Fair last year, and hundreds of millions of dollars worth of deals were signed (tass, Nov. 4, 2005).

Cuba was also able to sell over $500 million worth of bonds early this year through the London Stock Market, and the growth of tourism within the country has been the highest of any Caribbean country over the last decade.

One would perhaps think that with the U.S. being the world’s largest economic power, more nations would be hesitant have dealings with Cuba—yet investment still flows into that island nation. Maybe it is because America itself still trades with Cuba.

In 2001, the U.S. watered down its embargo to exclude agricultural exports, food and medicine. Today, Cuba is the U.S.’s 21st-largest agricultural market, with sales growing by 115 percent each year. Cuba, a nation of only 11 million people, imports over 500,000 tons of feed grain annually, millions of dollars worth of poultry, and is also now America’s third-largest rice export market.

Surprisingly, America is Cuba’s 6th-largest trading partner after Venezuela, China, Spain, Canada and the Netherlands, despite the trade embargo. Brazil, Japan, Italy and Vietnam follow closely behind.

So politicians and oil executives ask, if the U.S. is already trading with Cuba, why shouldn’t the exemptions include energy?

Meanwhile, the recent suggestions that the embargo be watered down again has created an uproar among Cuban-Americans and their political representatives, who say that oil money would only help the human-rights-violating Cuban dictator (or his brother) stay in power. “We’re certainly not going to let a megalomaniac, environment-destroying murderer like Fidel Castro drill 45 miles off Florida’s coast,” says one Cuban American National Foundation board member (Business Day, op. cit.).

“It is an assault on the embargo, masquerading as an attempt to get energy because we need energy,” said Jorge Sorzano, former head of the Cuban American National Foundation, when commenting about proposals to exclude oil drilling from America’s Cuban sanctions (ibid.).

Republican Rep. Ileana RosLehtinen agreed, saying Castro “expresses his hatred of the U.S. every day in every way, and for us to somehow think that to allow U.S. companies to drill, it would be a benefit to the U.S., it would not” (ibid.).

On the other hand, Robert Muse, a Washington attorney who represents U.S. companies with claims against Cuba, says the human-rights concern “may be overstated, given the human-rights records of some countries that supply the U.S. with oil. ‘We buy oil from Saudi Arabia, from Venezuela …. To say we buy energy supplies only from countries that continue to meet human-rights standards is nonsense. We’ve never done that,’” he says (ibid.).

In any case, with the amount of foreign investment moving into Cuba, especially in the wake of increasing oil exploration, even if President Bush does not allow U.S. oil companies to bid for drilling rights in Cuban waters, the days of the blockade’s effectiveness may be nearing an end.

Even if Cuba doesn’t strike it as rich in oil and gas as many anticipate, it seems other countries have no hesitance in doing business with Cuba and risking the anger of the United States.

That fact alone shows the decline of effective power and influence that the U.S. is able to project today.

Surely, one would think, after 45 years of embargo, America should have been able to effect regime change in Cuba. Is a superpower really a superpower when it is either unable or unwilling to use its might?

Did you know that your Bible actually says that America will lose its will to fight? For more information on why America is losing its superpower status so quickly, read the book The United States and Britain in Prophecy.