Then who is drilling off the coast of Florida?
The argument is now so prevalent I thought I'd do some googling to find out what's really going on. Besides that I thought I read somewhere the Chinese have signed some contracts with Cuba and may actually start drilling some exploratory rigs in the Gulf off Cuba as soon as next year. I envision wingnuts claiming "we were right all along" if that comes to pass.
So here is what I found. Repubs like to quote an old article from May 9, 2006 in the NYT about this:
http://www.nytimes.com/2006/05/09/washington/09drill.html?_r=1&oref=slogin
In that article the Times incorrectly predicted the Chinese would start drilling in the Gulf off the coast of Cuba in 2007. But here's what the Times also said,
"The United States Geological Survey estimates that the energy field on Cuba's side alone may have 4.6 billion barrels of oil and 9.8 trillion cubic feet of natural gas. That much energy is equivalent to just a few months of the United States' total energy consumption."
Jesus how far off can you be? 4.6 billion barrels of oil is equivalent to a few months of our energy needs? According to the US Energy Information Agency we used 20,687,000 barrels/day in 2007. 4.6 billion barrels of oil would amount to about 6 years of our needs. Either the Time's Michael Janofsky or the USGS doesn't know how to add.
Of course that's in Cuban territory and most of it is probably two miles down well out of reach to anybody without the most sophisticated deep sea rigs available. Did I say available? That reminds me oil rig availability seems to be a problem. Prices have skyrocketed for existing rigs 60%. Why is that? What's with too few rigs when everybody has known demand is going way up for years? For some reason they just don't seem to be building oil rigs like they used to.
Let's all remember that Exxon Mobil, the most profitable corporation the planet has ever seen, which sets a new record for quarterly profits it seems every 3 months spent all of $3 billion dollars on R&D over 5 years from 2001 to 2006. Well here's a guess and it's just a guess. Maybe Exxon doesn't think there's enough recoverable oil way down there to justify spending big bucks on a lot of deep sea rigs. Maybe the ROI just doesn't add up.
But let's go back to the beginning shall we? In 1977, the US and Cuba signed a treaty that evenly divided the Florida Straits to preserve each country's economic rights. They included access to vast underwater oil and gas fields on both sides of the line. Damn that Jimmy Carter!
Oh wait, President Bush, renewed the 1977 treaty in December 2005 for two years. Well he's just a jackass defeatocrat in sheep's clothing anyway. Nothing like St. Ronnie right?
Quoting the Times article again: Almost all of the country's Outer Continental Shelf, waters within 200 miles of shorelines, has been off limits to drilling since the early 1980's because of Congressional bans and executive orders.
How'd that happen? Where was Reagan? He was too busy slashing taxes for the rich and getting his ass handed to him in the 1982 midterms after he tried to make Social Security into a welfare program to bother fighting Tip O'Neill over oil nobody was gonna drill for anyway with prices heading for $10 a barrel by the mid 1980s.
The congressional moratorium was enacted in 1982 and has been renewed every year since. It prohibits oil and gas leasing on most of the outer continental shelf, from 3 miles to 200 miles, offshore. Since 1990, it has been supplemented by the first President Bush's executive order. In 1998, President Bill Clinton extended the offshore leasing prohibition until 2012.
What? Not Poppy Bush too! Here's what a June 18, 2008 article in the Int'l Herald Tribune says:
Offshore drilling is blocked by two bans, one imposed by Congress and the other by the first President Bush's executive order. Asked why the current president did not act at once to lift the order imposed by his father, Keith Hennessey, director of the president's economic council, told The Associated Press, "He thinks that probably the most productive way to work with this Congress is to try to do it in tandem."
But the Institute for Energy Research, a nonprofit research organization that promotes "free-market energy and environmental policy," has called for Bush to rescind the executive order and chided him on Wednesday for not doing so.
"The president has chosen to speak softly when American consumers
need him to wield a big stick," the group's president, Thomas Pyle,
said in a statement Wednesday. "This was a missed opportunity."
But back to Cuba. I looked up some articles from long before wingnuts decided to make this a campaign issue. You can't trust the media when
Republicans are making an argument.
According to this article in the Energy Bulletin dated July 5, 2004 :
http://www.energybulletin.net/node/940
it turns out back in 2004 Repsol YPF, the big Spanish oil and gas company, hired a Norwegian drilling platform, the Eirik Raude, at a cost around $200,000 a day to search for oil in Cuban waters, in a narrow sector of the Gulf of Mexico off the northwestern coast. The venture, established with Cubapetróleo, the government-owned oil company was in Cuban waters about 18 miles off their coast about a mile down.
Sadly for Cuba and Repsol YPF they didn't find any commercially viable deposits let alone a gusher.
Here's a few other quotes from that article:
In the meantime, new technology to squeeze more oil from the small existing fields on the island's north coast has increased output to about 75,000 barrels a day from about 10,000 in the early 90's.
More than half of Cuba's oil is now produced by a Canadian company, Sherritt International, which has been active in Cuba for a decade. "We had the advantage of getting in early and sticking with it," said Ernie Lalonde, Sherritt's director of investor relations. He said the company was considering an exploration project similar to Repsol's in the Cuban portion of the Gulf of Mexico, which covers some 43,000 square miles.
Other foreign energy companies that have ventured into Cuba lately have not been as lucky as Sherritt. Brazil's national oil company, Petróleo Brasiliero, or Petrobras, one of the most experienced offshore producers, came up empty-handed after spending $17 million drilling in Cuban waters in 2001.
Keep in mind this was written in 2004.Cuba still depends on imports for about half its oil, nearly all bought on preferential terms under an agreement with the leftist Venezuelan government of President Hugo Chávez. The cost strains Cuba's limited hard-currency earnings, and the country is striving to reduce its dependence on imports.
...
When more than 100 representatives of American agricultural companies attended a trade conference in Havana this spring, senior energy and finance officials in the Cuban government used the opportunity to suggest Cuba as a destination for energy investments. "There is no reason U.S. companies shouldn't take advantage and compete so close to home," said Juan Fleites, a senior executive at Cubapetróleo.
...
An oil discovery large enough to yield exports as well as satisfy Cuba's own energy needs could change that, by significantly improving the economy and adding a major new source of hard currency to the modest amounts Cuba now earns primarily from tourism. With more resources to make payments, the Cubans would have an easier time settling the old claims.
"Put simply, oil would lift Cuba's boat, especially if crude prices
stay high," said Tim Lynch, an expert on the Cuban economy and director
of the Center for Economic Analysis at Florida State University.
"Enough oil would also lessen Cuba's dependence on Venezuela, redrawing
the political and economic map of the Caribbean."
...
A significant find might catapult Cuba into a category of small
countries that are emerging as risky but alluring new targets for oil
development - among them Mauritania, Senegal, Morocco and
Guinea-Bissau, according to Robert W. Esser, director of global oil and
gas resources at Cambridge Energy Research Associates. A dry hole, on
the other hand, would reinforce the conventional wisdom that American
and Mexican waters are the best parts of the gulf for oil.
"Cuba's way out on the frontier of present-day wildcatting," Mr. Esser said.
So how has Cuba's dreams of striking it rich or at least becoming more energy independent gone since 2004?
China's Sinopec oil company does have an agreement with the Cuban government, but it's to develop onshore resources west of Havana, Pinon said. The Chinese have done some seismic testing, he said, but no drilling, and nothing offshore.
Western diplomats in Havana tell McClatchy that to the best of their knowledge, there is no Chinese drilling in or around Cuba.
"I've never heard anything about this," said one diplomat from a country in the hemisphere.
The Western diplomats, who spoke on the condition of anonymity because they were not authorized to speak to the media about energy issues, said they believed there is no new drilling occurring off the coast of Cuba, just exploration.
Cuba's state oil company, Cupet, has issued exploration contracts to companies from India, Canada, Spain, Malaysia and Norway, according to diplomats.
But many oil companies from those countries have expressed reservations about how to turn potential crude oil into product. Cuba doesn't have the refinery capacity, and the Cuban embargo prohibits the oil from coming to U.S. refineries, Pinon said.
The most recent high-profile contract with Cuba went to Brazil's state oil company, Petrobras. Cuba inked a contract with Petrobras in January, allowing the Brazilian energy giant to search for oil in the deep waters of the Gulf of Mexico that are within Cuba's sovereign territory. Brazil's foreign minister, Celso Amorim, traveled to Cuba last month and talked up the oil business, along with a joint venture between Cuba and Petrobras to produce lubricants.
Here's another article from USA Today dated 2/22/07:
They too predicted by the end of last year Cuba would start searching for oil in the Gulf.
A few snippets:
...
In the modern era, Cuba's first significant oil find came in 1971 when Soviet engineers discovered the Varadero field, east of Havana. After the Soviet Union collapsed, Cuba opened its oil program to foreign investment in 1993. Today, companies from Spain, Norway, India, Malaysia and China are involved, either drilling wells onshore or using horizontal drilling to reach reservoirs in shallow coastal waters.
Canada's Sherritt is the most active foreign company with nine fields operating onshore and five exploration or appraisal blocs being drilled, says Michael Minnes, a company spokesman. Daily output from the company's wells averages a modest 30,000 barrels a day, down from about 43,000 in 2004.
"It's like any other foreign jurisdiction or developing nation. There are challenges, and there are opportunities," Minnes said. "We see Cuba as a great environment to do business in."
So far, only one offshore well has been drilled,
in July 2004 by Spanish oil company Repsol. The company said it found
oil at the site 95 miles southwest of Key West, though not in
commercially viable deposits. Since then, the Spanish company has
teamed with Norway's Norsk Hydro, one of a select number of global oil
companies with expertise in deepwater exploration, according to Jorge
Pinon, the former president of Amoco's Latin American operations.
...
Offshore wells aren't cheap: Those envisioned in
Cuban waters will cost $40 million to $50 million, says Pinon, the
former oil executive now affiliated with the University of Miami's
Institute for Cuban and Cuban-American Studies. "This is a very
high-risk, high-reward area," R.S. Butola, managing director of India's
ONGC, said on the company's website.
Since 1981, the U.S. has observed a moratorium
on coastal drilling, except for a portion of the Gulf of Mexico and
limited areas off of Alaska. The drilling ban was enacted after a
series of high-profile oil industry environmental disasters. Perhaps
the most notorious: the 1969 Santa Barbara spill that released 3
million gallons of oil in waters off of California, coating 35 miles of
coastline with oil up to 6 inches thick.
...
One year ago, a U.S.-Cuba Energy Summit attracted representatives from
Exxon and a handful of smaller oil service companies to three days of
meetings in Mexico City. Attendees viewed PowerPoint presentations from
Cuban government ministries including state-owned oil company Cupet
that invited American companies to help exploit "several giant oil and
gas fields."
...
For now, any U.S. involvement remains only
hypothetical. Houston oilman Antonio Szabo, president of Stone Bond
Technologies, says U.S. companies likely would require greater
transparency, a commitment to the rule of law and market economics in
Cuba before investing significant money there.
Some in the oil industry also have long memories when it comes to Cuba. At the 1997 World Petroleum Congress in Beijing, a Cuban official approached Lee Raymond, then Exxon's chief executive, and asked in a jocular tone when the U.S. oil giant might return to Cuba. "When you give us back our (expletive) refinery," Raymond growled.
Cuban officials note they already have willing partners from Canada, Spain, Norway, Brazil, India, Malaysia, Venezuela and China. Rodriguez made clear that the United States has no veto over Cuba's oil plans.
"Everyone knows how advanced is American technology," the Cuban diplomat said. "But we are going to continue with our programs — with American companies or without American companies."
That's all I got. If you've read this far then you have more than enough to show your Republican acquaintances how they're once again living in the past, bleating outdated false information and itching to put scarce expensive deep sea oil rigs in a hurricane alley where not so incidentally the chances of finding a motherload of sweet crude aren't very good.
The fact is all that's keeping US oil companies from exploring Cuban offshore oil fields outside our territorial waters is our embargo against Cuba and that it's an unlikely bet that a big find is anywhere near Cuba. Like Esser the director of global oil and gas resources at Cambridge Energy Research Associates says any good stuff in the Gulf is probably closer to the US and Mexico than Cuba.
