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US Oil-Spill Response Cos Seek Permission to Operate in Cuban Waters

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by  Tennille Tracy

Several U.S. companies are asking the Obama administration for permission to respond to potential oil spills in Cuban waters, a top offshore drilling regulator said Wednesday, hoping to overcome embargo restrictions that currently limit their ability to do so.

The companies’ requests coincide with a growing concern among oil-industry experts who say the U.S. embargo on Cuba could cripple the ability of spill-containment companies to respond to potential spills that start in Cuban waters but then move to U.S. shores.

Speaking at a congressional hearing Wednesday, Bureau of Safety and Environmental Enforcement Director Michael Bromwich said several companies have asked the U.S. Commerce Department for licenses that would allow them to use subsea well containment systems and other types of equipment to respond to spills in Cuban waters.

Bromwich said he had “a high level of confidence” the Commerce Department would approve the licenses, in large part because it had already issued separate approvals for oil-spill containment systems and cleanup items. U.S. government agencies “are very much on alert, looking for the licenses [applications] as they come in and my understanding is that they’re giving them very rapid attention and they’re approving them as promptly as they can.”

The administration’s efforts are not without controversy. The chairman of the House Energy and Mineral Resources Subcommittee, Rep. Doug Lamborn (R., Colo.), said Wednesday that he is concerned “this administration will weaken the U.S. embargo on Cuba.”

Earlier in the week, the head of the House Foreign Affairs Committee sent a letter to President Barack Obama asking him to do more to prevent Cuba’s oil-drilling plans. “This scheme endangers U.S. security and environmental interests, and will enrich the Cuban regime,” Rep. Ileana Ros-Lehtinen (R., Fla.), a Cuban-born American, said.

Many environmental and oil-industry experts have taken a different approach and have urged the administration to give broad flexibility to U.S. companies that are equipped to respond to spills.

They contend Cuba will pursue oil exploration, regardless of whether the U.S. disapproves, so the U.S. should simply prepare for possible accidents.

Cuba’s offshore drilling plans get under way in coming months when Spanish company Repsol starts to conduct exploratory drilling off the country’s northern coast. Repsol is transporting a Chinese-built rig to be used for the exploration work.

Repsol has voluntarily agreed to allow U.S. officials to inspect the rig before it enters Cuban waters. The company has also agreed to comply with U.S. drilling standards.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Cuba Moves Toward Development of its Offshore Oil Resources

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The United States is suffering from high unemployment, high energy prices, stagnant economic growth, and a massive budget deficit.

By expediting the development of offshore oil resources, the government could tackle all four of these problems simultaneously. Yet for some reason, the Administration continues to drag its feet.

In contrast, the Cuban government has no problem providing a hungry world with more oil. This is leading to an awkward situation indeed, especially when some experts who recently visited Cuba report that the Havana government is taking the project seriously and is heeding the lessons of the BP spill.

Rather than taking the Cuban move as a kick in the pants to expedite comparable American efforts, the U.S. government did what it does best—threaten punishment on private companies for daring to provide the world with more energy. According to a story from The Hill:

A bipartisan group of 34 House members is pressuring Spanish oil giant Repsol to abandon its plans to drill in deep waters off Cuba’s northern coast, warning that the company could face liability in U.S. courts.

Their letter to Repsol—which warns that its plans will “provide direct financial benefit to the Castro dictatorship”—joins existing concerns about the environmental risk of spills in the waters 60 miles from Florida’s coast.

The Sept. 27 letter is signed by House Foreign Affairs Committee Chairwoman Ileana Ros-Lehtinen (R-Fla.) and includes a substantial number of Florida lawmakers.

It states:

As to current law, Repsol may be in jeopardy of subjecting itself and its affiliates to criminal and civil liability in U.S. courts. Violations of the Trading with the Enemy Act, the Cuban Liberty and Democratic Solidarity Act (LIBERTAD), the Alien Tort Claims Act and the Trade Sanctions Reform and Enforcement Act can lead to serious ramifications for individuals or businesses that deal with the Cuban regime. Additionally, there are only four U.S.-designated State Sponsors of Terrorism, and the laws that regulate commercial transactions with them, and the grave civil and criminal penalties that those laws impose, are comprehensive.

Repsol plans to begin looking for oil off Cuba’s coast as soon as late 2011, according to press reports.

This is not the place to discuss the pros and cons of the U.S. embargo on Cuba, except to say that if the original purpose of the 1960s policy was to hurt the Castro regime, it doesn’t seem to be working too well.

The important lesson for today is that the other governments of the world aren’t nearly as foolish as the Americans’. They recognize that when you have valuable natural resources located in your jurisdiction, it makes sense to go ahead and develop them.

The U.S. government can continue wagging its finger at everybody else, and lecturing them on how they should emulate our great example in government investments in renewables…or American officials might decide to unshackle entrepreneurs to create jobs and cheaper energy.

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