A Texan’s Take on Cuba’s Oil Drilling

Graham Sowa

HAVANA TIMES, Jan 28 — The behemoth oil platform came into view from the Havana shoreline last week and I’m still trying to figure out what Cubans feel about its arrival.  The last oil drilling platform to make news here was during the British Petroleum disaster and rumors of sludgy hydrocarbons washing up on the Varadero.

Thus my expectation was that the conversations would quickly take on environmental themes in addition to economic and political speculation.

As usual Cubans are very knowledgeable about the official published facts.  But other than the banal recitation of what I already read in Granma and on Cuba Debate’s Facebook page my conversations about the oil platform do not drill deeply into opinion or speculation.

Maybe this is because I am a Texan, and I am used to talking about oil, natural gas, pipelines, and offshore oil rigs when the opportunity arises.  Texas is synonymous with cowboys and oil.

These popular images of my home state are best amalgamated by the image of a cowboy, arm slung up in the air, hat in hand, as he “rides” an oil pump.  YEEEEEE-HAWWWWWW!!!!!

Long before “Texas Tea” was made famous in my generation by DJ Screw and Three 6 Mafia (their “tea” consisted of codeine, promethazine, Sprite and Jolly Ranchers for taste) the term was an internationally recognized metaphor used to describe oil.

Just as oil composes multitudes of noticed and unnoticed products we daily invite into our lives we often compose our discourse around oil.  The debates center over where to drill for oil, who can drill for oil, what kind of methods they can deploy to do so.  These debates can last for decades without resolution.

A case to make my point is the proposal to drill for oil the Arctic National Wildlife Refuge in Alaska.  I’m sure that the gross amount of energy we have expended arguing for or against this proposal now exceeds the potential pollution (or amount of oil) that would have been incurred (or found) had drilling taken place.

But whatever the risk from oceanic drilling; not many people are wasting their breath in Cuba.

The economic discussion has also been coming up empty, but this has not hindered my opinion making abilities on the matter.

I find the Cuban approach to allowing oil exploration strangely free market.  Yes, there is a 50% tax on what is taken out of the ground.  But apart from that tax the oil companies have been leasing plots of seafloor and they are expected to absorb all costs of exploration and development of the wells.

Is Cuba hoping that competition for getting here first will drive quicker development of the wells, and therefore more tax revenue?  That would be an admission that market forces, in this instance, are preferable.

To my knowledge the oil exploration in Cuba, unlike the United States, is not subsidized directly or indirectly by government spending and concessions.  The United States occupies the Socialist camp when comparing Cuba to the United States in terms of their economic relationships with oil companies.

And even if the new Cuban offshore well comes up dry at least there is a possibility that bilateral relations between Cuba and the United States improved with the arrival of the platform.

The United States Treasury Department allowed permits to companies that sell oil cleaning supplies in services in the eventuality of a spill.  And Cuba allowed the United States to inspect the Repsol purchased and Chinese built platform to make sure it complied with the U.S. embargo on Cuba.  These are meaningful changes.

But I wonder how the same free market orthodox economists who abhor regulation, but also support the United States embargo against Cuba, reconcile their ideologies?

From their point of view I find the scene of U.S. regulators inspecting a Spanish bought and Chinese built oil platform in waters that are not our own incredibly ironic.

Irony or not, it is good to see that petroleum prospecting can do even what a prisoner swap of Alan Gross for the Cuban 5 could not:  bring the two nations in agreement over something.

In such uncertain times it is comforting to know where the common ground can be found:  below the surface of the waters that divide us.