Tags: Cuba | oil | drilling | lawmakers

Lawmakers Fret as Cuba Oil-Drilling Plans Advance

Wednesday, 19 Oct 2011 11:31 AM

 

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WASHINGTON — The U.S. government is doing what it can to ensure the first oil rig to drill offshore Cuba will not endanger Florida's pristine beaches only miles away, the top drilling regulator told lawmakers Tuesday.

But the assurances did not completely convince senators at a Capitol Hill hearing that the United States would be prepared to respond to a worst-case oil spill scenario in waters controlled by its long-time Communist foe.

The government is evaluating the safety and emergency plans of Spain's Repsol YPF, which intends to explore for oil in the Gulf of Mexico after a Chinese-made rig arrives later this year, said Michael Bromwich, head of the U.S. Bureau of Safety and Environmental Enforcement.

The development is a delicate environmental issue for the United States as BP's oil blowout in the Gulf last year remains fresh in the minds of U.S. coastal residents. Drilling is also banned off Florida's coast.

It is a sensitive political issue because if there were a spill, U.S. technology might be prevented from being quickly deployed due to the long-running trade embargo with Cuba.

"The question is, are we going to get caught in some kind of political tangle that keeps us from bringing to bear the best response capability needed?" Jeff Bingaman, chairman of the Senate Energy Committee, told reporters after the hearing.

Bingaman said he has long supported an end to the U.S. trade embargo on Cuba that requires U.S. companies to obtain licenses to work in Cuba and use U.S. technology there.

Tuesday's hearing did not explore that issue, although one senator said the embargo was the elephant in the room.

"It seems like there are some policies that we have that are sort of 'Cutting your nose off to spite your face' that may be worth looking at," said Bob Corker, a Republican.

 

U.S. Coast Guard officials and the drilling regulator will inspect Repsol's rig when it reaches Trinidad and Tobago on its way to Cuba, Bromwich said.

"It's not optimal," Bromwich told senators. "But this is a lot better than nothing."

The rig, called Scarabeo 9, is owned by a unit of Italian oil company Eni SpA. Repsol, in partnership with Norway's Statoil and India's ONGC, plans to drill at least one well off Cuba.

Repsol, which also has assets in the United States, has been cooperative with the U.S. regulator, Bromwich said.

"We can't obviously direct Cuba to impose our standards, and so really our exclusive vehicle is through the operator," he said.

The U.S. Justice Department is investigating whether it could hold Repsol liable in the event of a spill in Cuban waters, he said.

If there were a spill, government licenses needed for U.S. companies to help "would be granted very, very quickly", Bromwich said.

But the only U.S. company currently to have a license to assist with a spill was skeptical, and said more flexibility would help with emergency planning for the Repsol project.

"I know of no expedited process today," said Paul Schuler, chief executive of Clean Caribbean and Americas.

"I would want to see that institutionalized, formalized because my experience is not the same," Schuler told Reuters.

 

Cuban exiles oppose any U.S. involvement in the Cuban project, which they argue will support the Communist government.

"I am deeply disappointed that the administration is playing a role in it, rather than working to stop it," said Cuba-born U.S. Representative Ileana Ros-Lehtinen, chairman of the House Foreign Affairs committee, in a statement.

Florida is the most populous of the presidential swing states and a key battleground for the 2012 vote. Barack Obama won the state in 2008.

Cuba believes it may have 20 billion barrels of oil offshore. The U.S. Geological Survey has estimated the reserves at 5 billion barrels.

The U.S. drilling regulator has asked Repsol for proprietary information about the characteristics of the oil reservoir where it will work, its drilling plans and information about its contractors.

"The more information we can get, the more comfortable we'll feel," Bromwich said.

Repsol is providing as much information as it can without breaching confidentiality agreements, said Kristian Rix, Madrid-based spokesman for the Spanish company.

"We're giving them as much information as possible and, especially on safety they have absolute cooperation and access," Rix said.

© 2014 Thomson/Reuters. All rights reserved.

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