Posted on Tue, Oct. 18, 2011
last updated: October 18, 2011 07:22:21 PM
WASHINGTON — As exploratory oil drilling is set to begin in December off the coast of Cuba, the U.S. government acknowledged Tuesday that because of chilly diplomatic relations it could have a limited ability to control the response to an oil spill there, let alone one the magnitude of last year's Deepwater Horizon disaster in the Gulf of Mexico.
U.S. regulators said their main leverage to encourage safe drilling practices in Cuba is with the oil company doing the first round of offshore exploration in the communist country: Spain's Repsol.
Because of its other extensive U.S. interests, Repsol is likely to exercise caution in a project less than 100 miles from the Florida coastline, said Michael Bromwich, director of the federal agency that oversees offshore drilling, the Bureau of Safety and Environmental Enforcement, which is within the Department of Interior.
Repsol's wide U.S. interests have likely "played a significant role in why they've been as cooperative as they have," Bromwich told the Senate Energy and Natural Resources Committee on Tuesday morning.
Bromwich also said the company has pledged publicly that it will adhere to U.S. regulations and the highest industry standards while working in Cuban waters. The company has given U.S. regulators permission to inspect the rig it will be using, Bromwich said, although that inspection would have to be done before it enters Cuban waters. The agency, along with the U.S. Coast Guard, already has participated in a mock response drill at Repsol's facilities in Trinidad.
Regulators have made it clear they expect the company "to adhere to industry and international environmental, health and safety standards and to have adequate prevention, mitigation and remediation systems in place in the event of an incident," Bromwich said.
But others at the hearing warned that spilled oil knows no political boundaries — or embargoes. And while Congress is most curious about Cuba because of the limited information available about the country's plans, other Caribbean and Gulf of Mexico neighbors also are exploring for oil near U.S. waters. They include Jamaica, the Bahamas and ongoing operations in Mexico.
"If we just kind of close our eyes to it here, and say, 'It's not going to happen here,' we're fooling ourselves," said Sen. Lisa Murkowski of Alaska, the committee's top Republican. "If there is a spill, the impact doesn't necessarily stop at our borders."
How U.S. companies are allowed to respond to any potential spill in Cuban waters could be vital in protecting Florida and the Bahamas, said Paul Schuler, the president and CEO of Clean Caribbean and Americas, a Fort Lauderdale, Fla.-based oil-spill response consortium funded by oil companies. He called for a "loosening up" of the red tape required for U.S.-based companies to have any sort of involvement with Cuba's communist government.
Schuler's organization, which responded to the 2010 BP spill in the Gulf of Mexico, has been involved in Cuba since 2001, when Repsol and Brazil's Petrobras were first doing work there.
Clean Caribbean and Americas applied for and received licenses from the Treasury and Commerce departments to travel to and export equipment to Cuba. Company officials also have been to Cuba recently to work with Repsol and Petronas, the state-owned Malaysian oil company also exploring in Cuba, Schuler said.
One of the foremost experts in Cuba's oil-drilling capabilities, Jorge Pinon, warned the committee that the United States shouldn't bully Repsol, which is not the only oil company to explore in Cuban waters.
Pinon pointed out that the United States doesn't have the leverage with state-owned entities like Petronas that it does with publicly traded companies with U.S. interests, such as Repsol.
"Mexico, Cuba and the Bahamas are in the process of implementing the most advanced and up-to-date drilling regulations and standards," said Pinon, a former Amoco executive and a visiting research fellow with Florida International University's Latin American and Caribbean Center's Cuban Research Institute. "But do they have the resources, capabilities, assets, personnel and experience to enforce them? Can these countries' regulatory agencies appropriately police the operators? These are issues for debate."
Some Republican lawmakers have complained in the past about Cuba's ability to drill so close to the U.S. coastline even as a 125-mile buffer zone remains in place in U.S. waters off of most of Florida's coast. Tuesday, those questions came up again.
"Why not drill there?" asked Sen. Bob Corker, R-Tenn. Bromwich told Corker the agency would be going forward with lease sales in the western Gulf of Mexico in December, and in the central Gulf in May or June.
And lawmakers from both parties remain concerned about Repsol's involvement in Cuba. In September, 34 lawmakers led by House Foreign Affairs Committee Chairwoman Ileana Ros-Lehtinen, R-Fla., asked Repsol in a letter to keep out of Cuban waters, saying the firm's pending offshore drilling plans would support the Castro regime and "bankroll the apparatus that violently crushes dissent."
Ros-Lehtinen also has introduced legislation that would deny U.S. visas to non-citizens who've worked in Cuba's oil drilling industry. The bill also would impose sanctions and other penalties on people and entities who invest in the development of Cuba's petroleum resources.
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