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Cuba seeks oil near Keys

Sen. Bill Nelson wants to block exploration and drilling less than 50 miles from Key West that would benefit China.

By SUSAN TAYLOR MARTIN
Published May 8, 2006


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Few Americans paid much attention last year when Cuban President Fidel Castro announced China would help explore potentially large oil reserves off Cuba's northwest coast - not far from the Florida Keys.

But now - with gas prices climbing above $3 a gallon - the prospect of China drilling near the United States has become a hot political issue as two of the world's largest economies vie for new sources of energy.

Some members of Congress warn that China and other countries could lock up oil supplies at a time when U.S. companies are barred from doing business with Cuba because of a 43-year-old trade embargo.

"We sit here watching China exploit a valuable energy resource within eyesight of the U.S. coast,'' said. Sen. Larry Craig, an Idaho Republican.

"I think the American public would be shocked - as this country is trying to reduce dependence on Middle East oil - that countries like China are realizing this energy resource.''

But Sen. Bill Nelson of Florida, worried that a Cuban oil spill could hurt the state's environment and $50-billion tourism industry, wants to block drilling in Cuba's northern waters.

"Any oil spill 45 miles from Key West is going to absolutely devastate all those delicate coral reefs, the fragile Florida Keys, and would endanger pristine beaches all the way up to Fort Pierce,'' said Nelson, a Democrat.

Cuba pumps about 80,000 barrels of oil a day in Havana and Matanzas provinces, but it is of poor quality and meets less than half of the country's needs.

Thus there has been considerable excitement about fields off the northwest Cuban coast that could contain 4.5-billion to 9-billion barrels of oil - almost as much as in the Arctic National Wildlife Refuge in Alaska.

In February 2005, Castro announced that huge Chinese drilling rigs would be used to further explore areas in which a Spanish company had reported promising results. The Cuban government also signed a contract with China's oil and gas company, Sinopec, to work in areas around the island thought to contain oil deposits.

"There's been very little drilling offshore and there's uncertainty over how much oil there is,'' said Chris Schenk of the U.S. Geological Survey. "There's less than in the Gulf of Mexico, but from a Cuban perspective, it would be a lot.''

The offshore fields are also reported to have a higher quality oil than found onshore, making it easier to produce, Schenk said.

While oil has yet to be found in commercially viable quantities, Craig of Idaho told his Senate colleagues April 26 that the United States is jeopardizing its energy security by not letting U.S. oil companies explore potential sources in Cuba.

China, already the world's second-largest energy consumer, ''is using this area off our coast as a strategic commodities reserve,'' Craig said. The result could be "forever closing the door on those resources to the U.S. industry and drastically impacting our foreign policy in the region.''

Nelson fired back two days later with a bill that would bar the Bush administration from renewing a 1977 agreement with Cuba unless it agrees not to drill near the Florida Keys.

Under the agreement, which lets the two countries share control of the 90 miles of sea between the Keys and the island nation, Cuba claims the water 45 miles off its coast. That means it could drill within 20 miles of a U.S. marine sanctuary near the Keys.

To discourage foreign companies from drilling anywhere off Cuba's northern coast, Nelson's bill would keep company executives from entering the United States by authorizing the State Department to deny or revoke visas.

"These are multinational corporations that do business all over the world and that would start to bite them,'' Nelson said.

He and Florida's other senator, Republican Mel Martinez, have worked closely together to block oil and gas exploration within 150 miles of Florida's south coast. However, Martinez has not signed on to his colleague's newest bill.

Though worried about possible oil spills, Martinez is concerned that Nelson's approach "could present problems with the entire Cuban embargo,'' said his press secretary, Ken Lundberg. "There's no question there are some who might use this (oil issue) as leverage to reopen the entire situation.''

The 1963 embargo was designed to punish Castro's communist government and is strongly supported by many Cuban-Americans, who make up a key voting bloc in Florida.

Critics - including Midwest and Western lawmakers who represent agribusiness interests - say the embargo's main effect has been to hurt ordinary Cubans and to keep U.S. companies out of the potentially lucrative Cuban market.

"I think what Craig wants to do is break the embargo and have all his farmers send their crops to Cuba,'' Nelson said of the Idaho senator.

While continuing to push his own bill, Nelson said he also endorses legislation filed Thursday by Ileana Ros-Lehtinen, R-Fla., that would impose sanctions on any person or company investing $1-million or more in Cuba's oil industry.

One expert on Cuban-American issues says it's not surprising that some members of Congress would seize on soaring gas prices and the U.S.-Chinese competition for oil as a reason to relax the Cuban embargo.

"In my research, I said we'd always be tough on Cuba because it never cost us anything and in truth it hasn't to this point,'' said Jonathan Benjamin Alvarado, a political scientist at the University of Nebraska. "But it may cost us now that energy has become the big issue.''

U.S. oil company executives make it clear in private conversations that they would like to do business in Cuba because of the newly discovered fields and unused refining capacity, Alvarado said. Cuba started building a refinery years ago but never finished it because the money ran out.

"I don't think Cuba is going to solve our energy problems, but there are a lot of other types of associated activities that would be useful and help diversify our refining capacity,'' Alvarado said. "If Hurricane Rita had hit Houston, we'd be paying $5 a gallon because it would have completely knocked out our ability to refine petroleum.''

Though he doesn't advocate normalizing relations with Cuba, Alvarado said cooperation on energy matters "only makes sense because we're going to continue to face an energy crisis.''

Other experts, however, say there are valid concerns about drilling along Cuba's western and northern coasts because oil spills could be carried along by strong ocean currents.

"There is a likelihood that anything you would put in the water in that location would indeed flow around the east coast of Florida and up,'' said Robert Weisberg, a University of South Florida marine science professor. "All the rafters that come and visit us know that.''

Apart from environmental concerns, Nelson argues that there isn't enough oil in either Cuban or U.S. gulf waters to long satisfy Americans' voracious appetite for oil.

The United States, which consumes 25 percent of the world's oil yet has just 3 percent of its reserves, would be better served by immediately developing alternate energy sources like ethanol, made from corn or sugar cane, Nelson said.

"The oil industry wants to drill, drill, drill, but you can't solve the problem by drilling more.''

Susan Taylor Martin can be contacted at susan@sptimes.com.

[Last modified May 8, 2006, 05:57:56]


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