by Edward Miller – Global Research, November 4, 2011
Will Cuban oil lubricate the blockade?
Within the current industrial paradigm, oil and economic growth are Siamese
twins. The expansion of global capitalism is completely dependent upon a cheap
and easy source of energy, and over the past hundred years no source of energy
has rivaled oil’s potential to shape our world. What impact will the development
of Cuban oil reserves have on regional geopolitics?
Revolutionary Cuba’s story cannot be told without broaching the question of oil.
Without the supply of Soviet oil, the Cuban Revolution could not have maintained
its position as a bulwark to Northern imperialism. This was graphically
demonstrated with the implosion of the Soviet Union in 1991, where petroleum
imports fell by 90% over the following years and Cuba entered a period of
economic stagnation (`The Special Period’) marked by famine and scarcity. Cuba’s
fate changed after the election of Hugo Chavez in 1998 in Venezuela and Fidel
Castro’s first trip to Venezuela in October 2000 produced an agreement to
exchange Venezuelan oil for Cuban medical and educational services. Solidified
by the dynamic geopolitical alliance ALBA-TCP, this prevented Cuba from slipping
into the dustbin of history.
In October 2008 this renaissance gained a significant boost after the Cuban
government announced the discovery of enormous offshore oil reserves within
their exclusive economic zone. The development of these reserves, set to begin
in the coming year, has the potential to massively alter regional geopolitics,
and potentially end the egregious blockade imposed by the US.
Cuban oil
While the US Geological Survey estimates Cuba’s offshore oil reserves at around
5 billion barrels, Cuban estimates place that figure at around 20 billion
barrels, and, no doubt, a fair amount of natural gas, as the two exist together
in concert wherever oil is found. Both countries have their reasons for
exacerbating these extremes, however were the Cuban estimate to prove correct it
would put them between China (13th, with just over 20 billion barrels) and the
US (14th, with just over 19 billion barrels). The country currently uses about
176,000 barrels of oil per day, putting consumption at 86th in the world on a
per capita basis. Around a third of this is produced locally and the rest comes
from Venezuela’s vast oil reserves. This low per capita consumption is a
residual effect of the Special Period, where minimizing consumption and
recycling became somewhat of a national ideology.
Cuba’s exclusive economic zone is divided into 59 blocks, although only one well
has been tested so far. 21 of these are currently under contract to seven
different companies, including Norwegian, Russian, Spanish, Indian, Brazillian
and Malaysian companies. A Chinese-built rig named Scarabeo 9, designed to
withstand 100 knot winds and 90 foot waves, is currently in transit from
Singapore, and the Spanish company Repsol is preparing to prospect a mere 60
miles from the Florida Keys. These partner companies have been carefully picked:
exploration advice was sought from Norway’s Statoil, a state owned enterprise
from a country that has managed to effectively direct the industry’s profits
into social welfare initiatives.
This oil won’t be easy to extract, since it sits under the seabed, not too far
from where the disastrous BP Deepwater Horizon catastrophe blew out in April
last year. The memory of that spill still hasn’t faded, and indeed it could be
that memory that gives the most realistic chance of ending the abhorrent
economic blockade that has been imposed on Cuba.
The Blockade
Since 1962 the United States has enacted a near-total blockade on all trade with
Cuba, as well as banning US citizens from travelling to Cuba. This was further
reinforced by the 1992 Cuban Democracy Act, which penalizes foreign companies
that do business in Cuba by preventing them from operating in the US. Every year
since 1992 the United Nations General Assembly has condemned the embargo as a
violation of international law (notably the Geneva Convention requirement that
medical supplies intended for civilians receive free passage), most recently on
25 October 2011, with only the United States and Israel voting against the
resolution. Despite the liberal face of the Obama administration and a softening
of travel restrictions (students and religious groups can now visit), the
blockade remains a testament to vehement US repudiation of the right to
self-determination of its former colonies.
Nonetheless the availability of Cuban oil gives rise to two factors which could
compel a change of policy. First, and perhaps most obvious, is the simple fact
that the US Empire relies on a cheap flow of oil to maintain its economic
supremacy, especially in the face of increased competition from developing
economies. One might expect a policy similar to that exercised towards the
Chavez administration, balancing revulsion towards their politics with relish
towards their oil. Whether the Cuban government would allow such a farcical
double standard remains to be seen, and it could be equally likely that the
headstrong Castros would rather sell their oil directly to other developing
countries in an attempt to countervail existing impoverishment.
However there is another factor which, if it registers on the American political
landscape, could undermine the embargo – the possibility of an oil spill and the
potential impact to the US coastline. Unlike most environmental issues, the
Deepwater Horizon blowout is a rare event in that it captured people’s attention
for a sustained period of time. Despite BP’s culture of denial, it has become
clear that the spill stemmed from corporate malfeasance, and could have been
prevented. Were another event of a similar magnitude to occur due to the US’
ideological refusal to engage with Cuba due to an antiquated Cold War policy,
the political fallout could be even more disastrous.
Drilling is currently banned off the Florida coast, and Chairman of the Senate
Committee on Energy and Natural Resources Jeff Bingaman has expressed concern
that the continuing US-Cuba imbroglio might prevent the countries from
responding properly in the event of a spill. It would take only a few days for
an oil slick to reach the Florida Keys, an area characterized by coral reef
(almost half of which has already died) and mangroves – these shallow areas are
particularly vulnerable to oil spills. The embargo currently prevents the two
containment services companies operating in the Gulf from dealing with such an
event and, while exemptions to the embargo are available, the urgency required
to deal with such a spill renders this procedure impracticable. The US
Department of Justice is currently investigating whether Repsol could be held
legally responsible for a spill, and Repsol have agreed to letting US inspectors
examine Scarabeo 9 once it arrives in December. The US and Mexican governments
have a written contingency plan outlining procedures to deal with such an event,
and many experts, including marine biologist David Guggenheim, are pushing for a
government to government meeting to put together a similar plan for US-Cuba
relations. Florida is the most populous presidential swing state, and this issue
may be relevant as presidential elections push closer.
Businessmen have also expressed a desire for the government to reconsider the
embargo, as the discovery of oil tends to provide confidence to traders and
speculators across all commodity markets. Latin American studies expert Mark
Jones from Rice University has stated that,
“[t]he greater the drilling and production, the greater the pressure will be to
engage in a complete overhaul of the trade embargo, either getting rid of it
altogether, or watering it down substantially. I think its fairly realistic,
since the embargo is an anachronism of the Cold War sustained only by a
misguided fear of a backlach from anti-Castro Cuban Americans.”
The Long Durée
With the announcement of 2.9% economic growth from the Cuban Minister for
Foreign Trade and Investment and sugar production bouncing back after recent
hurricane destruction, it would appear that the Cuban star is again rising.
While commentators cannot agree whether Raul Castro’s economic reforms push the
country toward the free market or a form of libertarian socialism, it is clear
that the flow of petrodollars will have a significant impact on the country’s
future, for better or worse. The nation’s resilience in the face of hardship,
and at times direct threat, remains unquestioned, and Cuba could indeed be
heading towards a period of hitherto unknown economic prosperity.
Regardless of the embargo, the contribution of this prosperity to the Latin
American and Caribbean communities at large, in particular the other ALBA-TCP
countries (Venezuela, Bolivia, Ecuador, Nicaragua, Dominica, Antigua and
Barbuda, and St Vincent and the Grenadines) could also prove significant. This
bloc has presented a united front against Northern imperialism, and trade
between these nations has increased massively over the past few years,
undermining traditional mercantilist relations while providing a credible
alternative to the neoliberal model of development. While far from perfect, Cuba
has blazed a trail of resistance that has stood the test of time and endured the
heady wilderness of political alienation, both during the Cold War and after the
Wall came down. Despite its resurgence after uniting with other Latin American
`pink-tide’ governments through ALBA-TCP, many Cubans feel trapped on the
island, prisoners of a communist fiefdom run for the enrichment of central
government officials. With luck, the development of these oil reserves in
accordance with adequate environmental standards and contingency procedures will
alleviate this sense, providing them with renewed vigour to continue the Cuban
social revolution.
Edward Miller is a frequent contributor to Global Research. Global Research
Note from Walter CubaNews :
Cuba may succeed, despite all the pressures against it originating in
Washington, in obtaining enough oil to meet domestic needs and to
have some left over for sales on the world market. Remember, nothing is guaranteed and the campaign in the US Congress to stop
Cuba’s effort to obtain oil cannot be discounted. Washington keeps working 24-7
on ways to overthrow the revolutionary government and re-impose capitalism on
the island. The differences between those who favor keeping and tightening the
blockade, and those who favor tinkering with it, are largely tactical. The island has its own domestic social and economic problems, none of which can
be simply or easily resolved. The oil may be a blessing, but it may well also be
a curse, too. The last thing Washington wants is the maintenance of a small,
militantly independent country of not insubstantial size, right on its very
doorstep. (And, we cannot look at these matters in isolation from the crisis which the
world is experiencing at the same time. No es facil, as they say in Cuba which
means “It isn’t easy.”)
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