The Center for Democracy in the Americas hosted a trip to Cuba that took place July 8th through 12th 2010 for a delegation that consisted of our staff, 2 Congressional staff, and 3 energy experts: Michael Levi of the Council on Foreign Relations, Lisa Margonelli from the New America Foundation, and Ron Soligo of Rice University.
This trip had two dimensions: political and energy-related.
CDA typically visits Cuba two-three times per year, using our Treasury Department license, to conduct research and fact-finding on developments in Cuba and the impact of U.S. policy. Because this trip started the day that the agreement was announced by the Cuban Catholic Church on the release of political prisoners, it turned out to be – quite by accident – a critical moment to be in Cuba. We had several important meetings with the Church, members of civil society, foreign diplomats and others, which bore upon that event and its larger significance.
We wrote about the prisoner release here. Political developments in Cuba, and the U.S. response to them, remains of compelling interest to us.
But the main focus of our visit to Cuba was energy and climate related issues. CDA has been interested in Cuba’s off-shore oil resources for years. We have visited drilling facilities, we have toured Matanzas where imported oil lands from tankers, and met with Cuban energy officials. We published a book in 2009 that used cooperation on energy development to illustrate one of several ways the U.S. could engage with Cuba.
We have been planning to bring energy experts to the island for two years, to meet with Cubans and foreigners, to learn about how Cuba intends to exploit its off-shore oil reserves, its policies on foreign investment, the potential impact for Cuba if oil is found in commercially viable amounts, and the effect of the U.S. embargo – both on Cuba and the U.S. – as an obstacle to Cuba’s oil program.
We are writing a report on that trip. But in this space we will summarize what we learned, with the understanding that a detailed document will be issued by CDA in the near future.
One sentence neatly captures what is happening in Cuba regarding energy and why it should interest and concern us: Repsol, a Spanish oil company is paying an Italian firm, to build an oil rig in China that will be used next year to explore for oil off the shores of Cuba.
What this means is that Cuba has oil. Whether it’s available in commercially viable amounts we do not yet know. Repsol will begin drilling exploratory wells next year. We were told by sources in Cuba that seven such wells will be drilled throughout 2011-2012. If this drilling finds significant oil, production could take place as early as 2014 and as late as 2018 (estimates vary). A significant oil strike, even before production takes place, will likely render the U.S. embargo moot, and change the political and economic climate of the Hemisphere in profoundly important ways. Unless U.S. policy changes, however, American firms will be locked out of the exploration process. Similarly, while Cuba has strong environmental interests and practices in place, current policy only allows for piecemeal approaches that would enable U.S. firms to cooperate with Cuba if there is another disaster like the BP spill. This problem would grow worse if Rep. Ros-Lehtinen’s legislation – which would apply Helms-Burton style sanctions to foreign firms operating in the Gulf – were to become law. Policy makers should instead take positive short-and long-term steps to address this issue in terms of energy development and environmental protection.
We strongly believe that the U.S. has an interest in Cuba finding these resources and having U.S. firms participate in that process, and engaging U.S. expertise in protecting the environment.