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Cuba drills for oil, but U.S. unprepared for spill

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By William Booth, Published: March 1

As energy companies from Spain, Russia and Malaysia line up to drill for oil in Cuban waters 60 miles from the Florida Keys, U.S. agencies are struggling to cobble together emergency plans to protect fragile reefs, sandy beaches and a multibillion-dollar tourism industry in the event of a spill.

Drawing up contingency plans to confront a possible spill is much more difficult because of the economic embargo against Cuba. U.S. law bars most American companies — including oil services and spill containment contractors — from conducting business with the communist island. The embargo, now entering its 50th year, also limits direct government-to-government talks.

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“We need to figure out what we can do to inflict maximum pain, maximum punishment, to bleed Repsol of whatever resources they may have if there’s a potential for a spill that would affect the U.S. coast,” Rep. David Rivera (R-Fla.) told in January a congressional subcommittee that oversees the U.S. Coast Guard.

An unusual coalition of U.S. environmentalists and oil industry executives have joined forces to push the White House to treat the threat of a spill seriously, while tamping down the anti-Castro rhetoric.

“There is no point in opposing drilling in Cuba. They are drilling. And so now we should be working together to prevent disaster,” said Daniel Whittle, Cuba program director of the Environmental Defense Fund, who has been brokering meetings between Cuban and U.S. officials.

Environmentalists applauded the announcement last week of an agreement between the United States and Mexico to allow for joint inspection of rigs operating in the Gulf of Mexico and the establishment of a common set of safety protocols between the two countries.

Nothing approaching this exists with the Cubans.

Because of the embargo, the talks between Cubans, Repsol and the Coast Guard are taking place in the Bahamas and Curacao — not Havana or Miami — under the auspices of the U.N. International Maritime Organization, paid for by charitable donations from environmental groups and oil industry associations.

A single Florida company is licensed to deliver oil dispersants to Havana. But there are no U.S. aircraft with contracts or permission to fly over Cuban waters. The current plan is to retrofit and deploy aging crop dusters from Cuban farms to dump the dispersants.

Obstacles to a cleanup

Repsol operates leases in U.S. waters in the Gulf of Mexico and has a staff of 300 based in Houston. But because of the embargo, none of the Houston staff is permitted to have anything to do with the Repsol operation in Cuba. Any assistance would have to come from Madrid.

Because of the embargo, and to protect Repsol from economic sanctions, no more than 10 percent of the components on the Scarabeo 9 drilling rig may be manufactured in the United States.

One of those components is the blowout preventer, a vital piece of safety equipment manufactured by National Oilwell Varco in Houston — whose employees cannot service the equipment while it is in Cuban waters.

If a blowout occurred, Repsol would have to await delivery of a capping stack, which would have to travel from Scotland to Cuba and then out to the rig. Experts predict it would take a week at minimum.

Cleanup crews arriving from the United States would be allowed to skim oil from the water and collect surplus oil gushing from the rig, but they’d have to take it someplace. The question is where? The U.S. tankers can’t enter Cuban territorial waters, and if they do, they are prohibited from returning to the United States for six months. The recovered oil would belong to Cuba, and so it can’t travel to the United States.

Modeling of ocean currents by the USGS suggests a spill at the Repsol exploratory well site probably would not affect the Florida Keys but would be swept north by the powerful flow of the Gulf Stream and then begin to deposit oil on beaches from Miami to North Carolina.

“If anything went really wrong out there, I believe there would be a quick political response,” said William K. Reilly, co-chairman of the national commission on the Deepwater spill and head of the Environmental Protection Agency under President George H.W. Bush.

But a lot can happen in a couple of days, Reilly said. “It’s time to face reality. It is, completely, in the interest of the United States that we get this right.”

“This is a disaster waiting to happen, and the Obama administration has abdicated its role in protecting our environment and national security by allowing this plan to move forward,” said Rep. Ileana Ros-Lehtinen (R-Fla.), chairman of the House Foreign Affairs Committee.

Ros-Lehtinen and her colleagues sponsored legislation to deny visas to anyone who helps the Cubans advance their oil drilling plans. They have also sought to punish Repsol.

“We need to figure out what we can do to inflict maximum pain, maximum punishment, to bleed Repsol of whatever resources they may have if there’s a potential for a spill that would affect the U.S. coast,” Rep. David Rivera (R-Fla.) told in January a congressional subcommittee that oversees the U.S. Coast Guard.

An unusual coalition of U.S. environmentalists and oil industry executives have joined forces to push the White House to treat the threat of a spill seriously, while tamping down the anti-Castro rhetoric.

“There is no point in opposing drilling in Cuba. They are drilling. And so now we should be working together to prevent disaster,” said Daniel Whittle, Cuba program director of the Environmental Defense Fund, who has been brokering meetings between Cuban and U.S. officials.

Environmentalists applauded the announcement last week of an agreement between the United States and Mexico to allow for joint inspection of rigs operating in the Gulf of Mexico and the establishment of a common set of safety protocols between the two countries.

Nothing approaching this exists with the Cubans.

Because of the embargo, the talks between Cubans, Repsol and the Coast Guard are taking place in the Bahamas and Curacao — not Havana or Miami — under the auspices of the U.N. International Maritime Organization, paid for by charitable donations from environmental groups and oil industry associations.

A single Florida company is licensed to deliver oil dispersants to Havana. But there are no U.S. aircraft with contracts or permission to fly over Cuban waters. The current plan is to retrofit and deploy aging crop dusters from Cuban farms to dump the dispersants.

Obstacles to a cleanup

Repsol operates leases in U.S. waters in the Gulf of Mexico and has a staff of 300 based in Houston. But because of the embargo, none of the Houston staff is permitted to have anything to do with the Repsol operation in Cuba. Any assistance would have to come from Madrid.

Because of the embargo, and to protect Repsol from economic sanctions, no more than 10 percent of the components on the Scarabeo 9 drilling rig may be manufactured in the United States.

One of those components is the blowout preventer, a vital piece of safety equipment manufactured by National Oilwell Varco in Houston — whose employees cannot service the equipment while it is in Cuban waters.

If a blowout occurred, Repsol would have to await delivery of a capping stack, which would have to travel from Scotland to Cuba and then out to the rig. Experts predict it would take a week at minimum.

Cleanup crews arriving from the United States would be allowed to skim oil from the water and collect surplus oil gushing from the rig, but they’d have to take it someplace. The question is where? The U.S. tankers can’t enter Cuban territorial waters, and if they do, they are prohibited from returning to the United States for six months. The recovered oil would belong to Cuba, and so it can’t travel to the United States.

Modeling of ocean currents by the USGS suggests a spill at the Repsol exploratory well site probably would not affect the Florida Keys but would be swept north by the powerful flow of the Gulf Stream and then begin to deposit oil on beaches from Miami to North Carolina.

“If anything went really wrong out there, I believe there would be a quick political response,” said William K. Reilly, co-chairman of the national commission on the Deepwater spill and head of the Environmental Protection Agency under President George H.W. Bush.

But a lot can happen in a couple of days, Reilly said. “It’s time to face reality. It is, completely, in the interest of the United States that we get this right.”

Source

Rig Hired by Spain’s Repsol Arrives off Cuba

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HAVANA – A deepwater oil rig hired by Spain’s Repsol-YPF for use in Cuba’s Gulf waters has arrived off the island’s coast and will be put into operation shortly.

The Scarabeo-9 platform was about 10 miles off northern Cuba Thursday and could already be seen from the coast.

The rig, built in China and Singapore and initially due to arrive in the summer of 2011, is heading west to an area off the coast of the city of Mariel, an industry official told Efe, adding that exploratory drilling is expected to begin soon.

The platform will be used to determine the crude potential of Cuba’s Exclusive Economic Zone, which is located in the southeastern Gulf of Mexico and estimated to hold up to 9 billion barrels of petroleum in more than a score of commercially significant prospects.

The EEZ covers some 112,000 sq. kilometers (43,240 sq. miles) and is divided into 59 blocks of 2,000 sq. kilometers (772 sq. miles) each, 22 of which have been awarded to foreign companies such as Spain’s Repsol, Venezuela’s PDVSA and PetroVietnam.

Eight onshore blocks also have been awarded to Cuban state oil firm Cupet and five others to foreign companies, according to official figures.

Cuba’s oil and gas output has stabilized over the past five years at a level of 4 million tons of oil equivalent, according to the Basic Industry Ministry.

Last year, several U.S. House Democratic and Republican leaders urged Repsol, which also has leases to drill in U.S. waters of the Gulf of Mexico, to drop plans to explore for oil in Cuban waters and warned the company of possible legal action in the United States.

In a letter sent to Repsol Chairman and CEO Antonio Brufau, 34 House lawmakers said any exploratory drilling the oil company conducts in Cuban waters “will provide direct financial benefit to the Castro dictatorship.”

U.S. officials also have expressed concerns about environmental risks considering the drilling site’s proximity to U.S. soil, just 95 miles from the Florida Keys, although Repsol has pledged to adhere to U.S. regulations and the highest industry standards in its drilling in Cuban territorial waters.

The U.S. Bureau of Safety and Environmental Enforcement and the U.S. Coast Guard inspected the Scarabeo-9 last week and found it to be in compliance with U.S. and international standards governing deepwater drilling.

BSEE director Michael Bromwich told the House and Senate last year that U.S. authorities had witnessed a spill response exercise carried out at Repsol’s office in Trinidad and that during that simulation Repsol technicians demonstrated their ability to respond successfully to a hypothetical spill.

Concerns about Cuba’s plans to tap its offshore oil reserves have grown in the wake of the devastating 2010 BP oil spill in the Gulf of Mexico.

Cuba is hoping crude discoveries will provide a boost to the communist-ruled island’s ailing economy and make it less dependent on imported oil from close ally Venezuela. EFE

Source

Drill, Bebé, Drill

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Cuba is about to drill for offshore oil with “second-tier parts” because of the trade embargo. That’s not good news for U.S. beaches.

Sometime over the next three months, if all goes according to plan, Cuban workers on a Chinese-built, Spanish-owned rig will start drilling for oil in the mile-deep waters just off the north coast of Cuba, 70 miles from the Florida Keys.

If the drill hits a major oil deposit—and all geologic signs indicate it will—the discovery will unleash a cascade of developments with profound political, environmental, and economic consequences.

The Cuban government has long wanted to extract the rich reserves of oil and natural gas believed to lie off its shores. Estimates for oil range from 5 billion to 20 billion barrels, while the estimate for natural gas is 8.6 billion cubic feet. Unlocking that oil could jump-start a nascent Cuban offshore-oil industry—and free the island nation from its energy and political dependence on Venezuela, from which it imports 60 percent of its oil today. A newfound independence from its socialist neighbor and its mercurial president, Hugo Chavez—coming at a time when the Cuban leadership is facing change with the eventual demise of Fidel Castro—is an appealing prospect to the United States.

But the potential of a closer relationship with Cuba comes with a terrifying specter: An oil blowout in Cuban waters could reprise the nightmare that was last year’s Gulf of Mexico oil spill, and send crude spewing to the beaches of Florida, Georgia, and South Carolina. And the likelihood for such a disaster is very real, say oil industry experts, thanks in part to Washington’s 49-year-old embargo on Cuba.

Because of the embargo, U.S. companies cannot drill in Cuba, supply equipment to Cuba, have any say over safety regulations in Cuba, or even take part in helping control a blowout and spill in Cuba. As the island prepares to begin offshore drilling, it has signed contracts with oil companies from Brazil, India, Italy, Russia, and Spain—and is in talks to lease major portions of its coastal water to Chinese companies (continuing China’s pattern of pursuing oil exploration in countries where U.S. drillers aren’t welcome).

Under the embargo’s terms, the oil drilling and safety equipment used by those companies must be less than 10 percent U.S.-made. But all of the most technologically advanced equipment for drilling and preventing or stopping oil spills is made in the United States or by U.S. companies.

“There are not international suppliers of this level of equipment. They will have to buy copycat or second-tier parts,” Lee Hunter, president of the Houston-based International Association of Drilling Contractors, told National Journal. Hunter and other experts say that, to date, it appears that the Cuban government, fearful of the devastation an oil spill could wreak on its economy, wants to use the lessons learned from the BP oil disaster to develop a rigorous safety and oversight program. But it will be nearly impossible for drillers in Cuba’s waters to legally use the safest equipment. “The Cubans want to use good technology; they want to drill safely,” Hunter said. “But … their ability to drill safely is extremely compromised.”

Also deeply compromised is their ability to respond to a disaster should it occur. Even if oil from a Cuban spill laps at Florida’s shores, the U.S. agencies and oil companies that have all-too-hard-won expertise in wrestling a spill—the Coast Guard, the Federal Emergency Management Agency, and the Interior Department—would be banned from crossing into Cuban waters to help. And experts say that the Cuban oil industry and government don’t yet have a fraction of the resources and expertise they would need to deal with such an event on their own.

State Department officials are well aware of the problem, and they are working with Hunter’s group, along with others, to find a way for U.S. companies to get into Cuban waters—if not to drill, at least to help out in case of a spill. One way this could happen is if the Treasury Department issues special advance licenses granting U.S. companies the ability to travel to Cuban waters to give aid in a disaster. Cuban officials are also cautiously indicating interest in cooperating with the U.S. on the plan, despite the embargo.

“This is something that could get Cuba and the U.S. sitting down and talking, finding points of agreement and cooperation,” said Jorge Piñón, a former president of Amoco Oil Latin America and a current visiting research fellow with Florida International University’s Cuban Research Institute.

It is also something that is likely to further ignite the fight over opening up more U.S. waters for drilling, pointed out Piñón and many others. Currently, most of the eastern portion of the U.S. Gulf of Mexico—which borders the water where the Chinese, Indians, and Russians would be operating off Cuba—is closed to drilling. But defenders of the U.S. drilling ban will be hard-pressed to keep it in place, no matter the risks, if two things happen: if oil-producing rigs pop up in Cuban waters, and, in the coming years, in the surrounding waters of Mexico and even the Bahamas, which is now looking into starting offshore drilling.

Original Article

Cuba explores for oil as U.S. watches

Drilling for oil could occur just south of the Florida Keys — in Cuban waters, where the U.S. has little say in operations

By Lesley Clark
lclark@MiamiHerald.com

WASHINGTON — Less than 75 miles off the Florida Keys, Cuba’s plan to explore for oil and gas in waters even deeper than BP’s Deepwater Horizon well has U.S. officials on alert.

U.S. Interior Secretary Ken Salazar acknowledged this past week that Cuba’s oil and gas explorations are an “issue of concern.’’

“We’re watching it closely,” Salazar said. “Obviously, because it’s located 60 miles off the coast of Florida… it’s an issue that we’re monitoring carefully.”

Cuba is eager to explore for energy off its coast near Havana. The Spanish energy giant Repsol, which drilled an exploratory well in 2004, is expected to drill another five to seven such wells as soon as this fall, said Jorge Piñon, an energy expert and visiting research fellow at the Cuban Research Institute at Florida International University.

Piñon, who attended an oil and gas conference in Havana last week, said the Cuban government is cognizant of its tourism-dependent economy and “is reviewing everything it can from the Deepwater Horizon.” But he acknowledged the country doesn’t have the assets to respond to a spill like the one in the Gulf of Mexico.

“Houston is 900 miles from where the well is going to be deployed and equipment could be there in a matter of hours, but it won’t available because we haven’t sat down with Cuba,” Piñon said.

The Unite States and Mexico — which share the Gulf of Mexico with Cuba — have been meeting to strengthen standards for drilling in the Gulf, but Cuba hasn’t been part of the talks.

The U.S. Bureau of Ocean Energy Management, Regulation and Enforcement has talked with Repsol about its plans in Cuba, but agency director Michael Bromwich says there’s no agreement on a drilling standard. He acknowledged U.S-Cuba policy makes direct talks difficult.

The presidential commission that investigated last year’s BP spill recommended that Cuba and the United States. talk about oil drilling.

A spokesman for the State Department says it hasn’t held any discussions with the Cuban government on oil exploration. “However, we expect any company operating in Cuba’s oil and gas sector to adhere to industry environmental, health, and safety standards and have adequate prevention, mitigation, and remediation systems in place in the event of an incident,” spokesman Charles Luoma-Overstreet said. “We will pursue activities within our legal authority in order to minimize risk to U.S. territory.”

Critics of further engagement with Cuba argue that Cuba has proposed offshore drilling for more than a decade without delivering.

“We’ve seen this dog-and-pony show for 10 years and the fact remains, there’s no drilling,” said Mauricio Claver-Carone, director of a leading pro-embargo lobby, the U.S. Cuba Democracy political action committee. He contends the plans are part of a propaganda campaign by the regime to attract investors and to secure the oil industry’s support for joining the lobby against the embargo. The embargo has already affected Cuba’s operations: It had to secure a rig that didn’t violate the U.S. law that prevents vessels with more than 10 percent of U.S. parts from operating in Cuba.

Claver-Carone suggested that if the rig — now in Singapore — approaches Cuba, there’d be time for Congress to make it even more difficult and expensive for Repsol to proceed. Florida lawmakers have already filed legislation aiming to block Cuba by making it more difficult for foreign oil companies to do business there.

“I don’t understand why anyone would want to facilitate the creation of a petro-dictatorship 90 miles away,” he said.

( Original Article )

miamiherald.com

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