Thursday, June 19, 2008

Greasing the wheels

Cuba's plans to drill for oil near Florida could
hasten the end of misguided U.S. trade embargo.

The end of the longest trade embargo in modern history, imposed by the United States on Fidel Castro's communist regime in Cuba in 1962, might finally be in sight. Not because the current administration has finally realized it didn't work, but because Cuba is planning to drill for oil 50 miles from the Florida Keys.

This would provide the impetus for the two estranged countries to come together for mutual advantage, reports Jeff Franks for Reuters, opening up a desperately needed source of oil for the United States and a multibillion-dollar business opportunity.

But getting there would first require a sea change in U.S. policy — a major easing of the embargo. Its foes say this is a distinct possibility, given the combination of economics, energy demands and environmental concerns, as well as the fact that both countries are facing new leadership. But it will not be feasible until President Bush, who has toughened the embargo and threatened to veto legislation, leaves office.

That sea change can't come soon enough. Titled the Cuban Democracy Act, the embargo has nothing to do with democracy. It is a political measure that succeeded in punishing the Cuban people rather than communist ideology, while simultaneously handing the Castro regime a handy scapegoat for all its failings.

When the trade embargo was imposed, it was intended to speedily undermine Castro's government. Heavily sponsored by the Soviet Union, Castro's Cuba survived, and in some respects thrived, especially in the delivery of education and health care; but following the Soviet collapse it has undergone severe economic hardships, exacerbated by the embargo.

It has also succeeded in alienating most nations and many Americans. Canadian and European governments see the Helms-Burton Act of 1996, which penalizes foreign companies that do business in Cuba, as interfering in how other nations conduct trade. American farmers and agribusinesses have long seen Cuba as a desirable market and achieved some lessening of restrictions in 2000. After initially refusing U.S. humanitarian aid, Castro relented in the wake of the ravages of Hurricane Camille, in 2001, and allowed the purchase of food from the United States. Today the United States is Cuba's largest food supplier.

The Cuban oil field is estimated to hold at least 5 billion barrels of recoverable oil and 10 trillion cubic feet of natural gas, and in a few years could be producing 525,000 barrels of oil per day, enough to make that country energy independent and even an oil exporter.

The embargo has stood firm against repeated legislative assaults, including attempts to exempt oil companies, but embargo foe Kirby James, a consultant on Cuba business, told Franks that a big Cuba oil find changes the political equation. "This would be the first time that maintaining the embargo actually cost the United States something," he said. "And we need oil from wherever we can get it, and in this case it's 50 miles off our coast."

In 1967, Fidel Castro told Playboy magazine, "I believe that all of us ought to retire relatively young." He stepped down this year at 81, so he's obviously stretched the limits. So has this trade embargo, but better late than never.

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