restricted access 1. Evaluating the Prospects for U.S.-Cuban Energy Policy Cooperation
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These two quotations, dated nearly five years apart, distill the essence of why the United States should be looking carefully to the development of energy resources in Cuba. For the past fifty years, U.S. policy toward Cuba has relied on the application of cold war measures—economic sanctions, technology denial, and political isolation—in an effort to push Cuba over the tipping point of regime collapse and toward the peace and prosperity that would follow from embracing democracy. This policy, which endures in part to maintain the notion that such measures will foster political change on the island and after nearly half a century 1 one Evaluating the Prospects for U.S.-Cuban Energy Policy Cooperation JONATHAN BENJAMIN-ALVARADO The last thing American energy companies want is to be trapped on the sidelines . . . while European, Canadian and Latin American rivals are free to develop new oil resources at the doorstep of the United States. Simon Romero, “Spanish Seek Oil Off Cuba, As Americans Watch Silently,” New York Times, July 7, 2004 As history shows, national security and economic prosperity are inseparable. The simplest answer—undoubtedly still complicated— is finding and drilling more oil from domestic sources, using less oil overall and importing far less than we do today. This requires a national energy strategy that has never existed, one that shifts U.S. consumption from fossil fuels like oil and coal toward carbon-freer solutions like nuclear, wind and solar. “Security Case for a National Energy Plan,” Dallas Morning News, editorial, June 19, 2009 12250-01_CH01_rev2.qxd 9/3/10 12:22 PM Page 1 is almost quaint, has caused the United States to overlook many of the tectonic shifts that have taken place in Cuba.1 Such a singular focus has in some respects blinded U.S. policymakers to broader strategic changes in the region involving issues that can hardly be understood, much less resolved, without a Cuban presence. These policy areas include immigration , trafficking in human beings and narcotics, economic development, and now, energy. These remarks should not be taken as a suggestion to disregard the international community’s long-standing demand for the Cuban government to expand personal liberties, support the rule of law, and extend human rights to all inhabitants of the island, but these demands should be balanced against equally important and perhaps more pressing economic and environmental concerns.2 It is relevant to U.S. energy security and geostrategic interests that 77 percent of proven oil reserves globally are held by national oil companies (NOCs) and that 11 percent of proven oil reserves are held by NOCs with equity access, meaning that these firms retain the contractual rights for exploration , extraction, and production of oil drawn from those reserves. Four of the five largest oil exporters to the United States—Saudi Arabia, Mexico, Venezuela, and Nigeria—are NOCs. There is growing concern about the extent to which imports from those countries are assured, given the potential for political conflict, economic instability, and social upheaval in any or all of those states. This means that only 11 percent of proven oil reserves not already held by NOCs are presently open to international oil companies (IOCs), many of which are based in the United States.3 This political and economic reality heightens the potential importance of U.S. cooperation with Cuba on the issue of energy development. At present Cuba possesses an estimated 4.6 million barrels of oil and 9.3 TFC (total final consumption) of natural gas in North Cuba Basin.4 This is approximately half of the estimated 10.4 billion barrels of recoverable crude oil in the Alaska Natural Wildlife Reserve. If viewed in strictly instrumental terms—namely, increasing the pool of potential imports to the U.S. market by accessing Cuban oil and ethanol holdings—Cuba’s oil represents little in the way of absolute material gain to the U.S. energy supply. But the possibility of energy cooperation between the United States and Cuba offers significant relative gains connected to the potential for developing production-sharing agreements, promoting the transfer of state-of-theart technology and foreign direct investment, and increasing opportunities for the development of joint-venture partnerships, and scientific-technical exchanges. 2 JONATHAN BENJAMIN-ALVARADO 12250-01_CH01_rev2.qxd 9/3/10 12:22 PM Page 2 The relative gains from increased commercial and technical cooperation obviously increases Cuba’s domestic energy capacity, but it also possesses the potential of enhancing the United States’ energy security by deepening...


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Subject Headings

  • Energy policy -- Cuba.
  • United States -- Foreign economic relations -- Cuba.
  • Cuba -- Foreign economic relations -- United States.
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