Cuba’s waters may be known for their rich biodiversity and healthy coral reefs, but they are now in the news for something different: oil. Geologic surveys suggest there are around five billion barrels of oil off of Cuba’s coast, and exploratory drilling to find those reserves began in late January of this year. A Chinese oilrig has set up in Cuba’s northern waters, just 50 miles from the coast of Florida and has a long list of foreign companies hoping for their chance to strike “black gold.” The first wells are being drilled by a Spanish company, Repsol, which is paying $500,000 a day for the opportunity to keep half the profits from their discoveries.
The discovery of oil has tremendous political and economic implications for Cuba. The collapse of the Soviet Union meant, among other changes, the end of subsidized oil to the Cuban economy. This dearth continued until Cuba became a close ally of Venezuela with the election of Hugo Chavez and the oil-for-doctors arrangement was signed in 2000, through which the services of thousands of Cuban doctors have been exchanged for deeply discounted oil. As long as Chavez remains in power there is the likely guarantee of a continuation of Venezuelan oil subsidies. However, this does not change the overall fact that Cuba’s ability to access the oil needed for industry and transportation remains tenuous. Offshore oil reserves promises to drastically alter Cuba’s economy, and convert the country into a “major regional exporter.”
Due to both the proximity of the wells to Florida and to the economic strength offshore oil deposits will likely confer to the Castro regime, American political leaders have reacted strongly to this development. Cuban-American hardliners like Rep. Ileana Ros-Lehtinen (R-Florida) are calling for actions against Repsol and other companies looking to engage economically with Cuba’s oil industry.
Other people are much more concerned by the possible environmental impacts of Cuba’s drilling. In 2010, the largest marine oil spill in history occurred when there was as explosion at the BP-run Deepwater Horizon operation in the Gulf of Mexico. That oil spill caused liabilities of more than $43 billion dollars and incalculable costs to the marine ecosystem. Cuba is generally considered to be unprepared to deal with a spill, especially one of a similar magnitude, and in the event of a disaster, U.S. sanctions would greatly inhibit clean-up efforts.
Despite the possibility of environmental degradation, Cuba is expected to extract whatever oil is found. This means that there is immense pressure on the United Sates to take steps to normalize relations with Cuba, both from environmentalists who want a U.S. role in ensuring the drilling is done as safely as possible, as well as from representatives of the American oil industry who want a share of the potential profits. Oil promises to drastically change conditions both within Cuba and between Cuba and the rest of the world. Though a potential disaster for Cuba’s environmental health, oil would be tourism would cease to be Cuba’s only means to accessing hard foreign currency, and perhaps lead to a reduction of the inequalities that have risen in Cuba during the Special Period.
References:
http://www.bbc.co.uk/news/world-latin-america-16753646
http://www.bbc.co.uk/news/world-us-canada-15907174
Cuba: What Everyone Needs to Know by Julia E. Sweig, page 200
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