THE BLOG
11/16/2011 01:54 pm ET Updated Jan 16, 2012

Prevention of Cuba's Drilling Best Serves U.S. Interests

Reasonable minds should be able to agree that it's not in the United States' national interest to assist anti-American dictators in searching for oil to support their repressive, failing regimes. It won't drop the price of gas in the United States or do anything to enhance our "energy independence."

Yet American assistance to make oil-drilling in the Florida Straits profitable is exactly what Cuba's dictators Fidel and Raul Castro hope to gain as they use the threat of oil-drilling to maneuver the Obama Administration into once again unilaterally lifting U.S. sanctions on Cuba.

Cuba's search for leverage over the United States is not new. The Castro brothers have been using offshore-drilling as a lure to extract economic and political concessions from various nations since 1991, when the collapse of the Soviet Union ended that country's hefty subsidies to Cuba.

Brazil recently declassified documents showing that in 1993 the Castro regime offered oil rights on the "most promising" areas of Cuba's offshore waters to then-President Itamar Franco and Brazil's national oil company Petrobras. In exchange, Cuba wanted Brazil to shun Cuban dissidents and cancel a meeting of Cuban exiles at Brazil's Washington Embassy. The Franco government all-too-happily complied. Years later, Petrobras exited Cuba empty-handed.

Castro found a new "partner" when Hugo Chavez rose to the presidency of oil-rich Venezuela in 1998. With the backing of Chavez and Venezuela's national oil company PDVSA, the Castro regime resumed its diplomatic offensive signing highly publicized oil-leases with Spain's Repsol, Norway's Statoil, Russia's Gazprom, India's ONGC Videsh, Malaysia's Petronas, Canada's Sherritt, Angola's Sonangol, Vietnam's PetroVietnam, and China's CNPC.

Only one company, however, actually conducted any exploratory drilling: Spain's Repsol in 2004. The company found some oil, but not in any commercially viable quantity. It, too, then pulled out of Cuba. Similarly, Canada's Sherritt and Brazil's Petrobras -- perhaps the most credible and respected of the region's oil companies outside the United States -- publicly abandoned their efforts in 2008 and 2011, respectively, stating Cuban oil production was not "commercially viable."

Why? U.S. sanctions drive up costs of production. Even the Castro regime admits it. Keep in mind that Mexico's Pemex and Venezuela's PDVSA refine most of their heavy crude in the United States, and then repatriate it. As long as U.S. sanctions against the Castro regime are in place, producing and refining any oil found in Cuban waters in the United States isn't an option.

That leads to a question: If off-shore drilling in Cuban waters is not commercially viable for respected regional oil companies experienced in dealing with Cubans, is such drilling really viable for the Angolans, Malaysians or the Chinese? The answer is no.

We learned this in 2006, when the Castro regime seemingly had convinced Washington policymakers, including then-Vice President Dick Cheney and Congressional leaders that the Chinese were ready to drill off Cuba's shores. The drilling never materialized, but the threat served the Castro regime's political interests as Reuters reported: "Havana is eager to see American oil companies join forces with the anti-embargo lobby led by U.S. farmers who have been selling food to Cuba for four years."

It may still be working. The ideological and commercial propaganda currently emanating from the Castros has both hypocritical environmentalists and unscrupulous oil companies lobbying to ease U.S. sanctions. BP's disastrous oil blow-out in the Gulf Mexico last year and the justifiable public outrage that ensued, virtually invited the Castros to employ the threat. Cuban Foreign Minister Bruno Rodriguez confirmed as much in a message to former New Mexico Gov. Bill Richardson, who recently traveled to Havana in an unsuccessful effort to secure the release of American hostage Alan Gross.

In a flashback to 2004, Spain's Repsol is back in Cuba preparing to drill another exploratory well early next year. If Repsol abandons its drilling, the Castros say India's ONGC Videsh or Malaysia's Petronas will step forward. Curiously, Chavez last year granted this peculiar trio extensive oil-rights in Venezuela's Orinoco belt, where proven reserves are estimated at 235 billion barrels. That's about 50 times greater than speculations about all Cuban off-shore reserves. Foul play can certainly be deduced.

Despite the fact that Repsol still faces exploratory hurdles (and gargantuan production costs if oil is found), the United States is cautiously licensing specialty oil mitigation firms to respond quickly to any accident. Commendable as that is, Cuba's search for oil in the Florida Straits could be thwarted altogether if the United States swiftly tightened its sanctions on Cuba by withholding U.S. executive visas for the Castro regime's foreign partners; stripping those partners of drilling rights and concessions in the United States and our off-shore waters; multiplying their legal liabilities; and legally disqualifying use of the drilling rig Scarabeo 9 that is now enroute to Cuba.

Irrespective of whether the United States lifts sanctions or tries again to engage Cuba, the anti-American nature of the Castros' regime is unlikely to provide necessary safeguards for off-shore drilling. Precaution might bring us temporary peace of mind, but prevention would better serve our long-term national interests.