Myth Blaster – China, Cuba and India Drilling Offshore of America

Joan B., Illinois sent the following email message she received concerning China and Cuba drilling oil off the shores of America while our own Congress refuses to allow US oil drilling companies to do so …

Information from New York Times – Cold Hard Facts:
Thanks to the environmentalist lobby and its influence on Democratic legislators in Congress, the U.S. Has, for decades, been prohibited from drilling for oil in places that we know contain billions of barrels of proven reserves.
China, Cuba, Canada and others continue to drill off our shores where US companies are not allowed to drill because of our policies!

BTW, the US has been invited by Cuba to also bid on these reserves, but because of Fidel, Congress has refused. They deal with some of the worst dictators in the world but not Fidel. Why is that?
Yes, that’s right; China and Cuba are actively exploring oil fields 50 miles from Key West, Florida while U.S. Companies are barred from working in this area because of U.S. Policy. So, instead of allowing the most environmentally responsible companies to operate there and increase our domestic supply, China , who has a dismal environmental record, is preparing to suck our close, lucrative oil reserves dry.
Unbelievable!

Investor’s Business Daily recently explained how irresponsible our congress has been on the energy crisis. They lay into what they consider to be the worst Congress ever for:
~ failing to allow drilling in ANWR. We have, as President Bush noted, estimated capacity of a million barrels of oil a day from this source alone — enough for 27 million gallons of gas and diesel. But Congress won’t touch it, fearful of the clout of the
environmental lobby. As a result, you pay through the nose at the pump so your
representative can raise campaign cash.
~ Refusing to build new refineries.! The U. S. Hasn’t built one since 1976, yet the EPA requires at least 15 unique ’boutique’ fuel blends that can be sold in different areas around the nation. This means that U.S. Refinery capacity is stretched so tight that even the
slightest problem at a refinery causes enormous supply problems and price spikes. Congress has done nothing about this.
~ Turning its back on nuclear power. It’s safe and, with advances in nuclear reprocessing technology, waste problems have been minimized. Still, we have just 104 nuclear plants — the same as a decade ago — producing just 19% of our total energy. (Many European nations produce 40% or more of their power with nuclear.) Granted, nuclear power plants are expensive — about $3 billion each. But they produce energy at $1.72/kilowatt-hour vs. $2.37 for coal and $6.35 for natural gas.
~ Raising taxes on energy producers. This is where a basic understanding of economics would help: Higher taxes and needless regulations, leading to less production of a commodity. So by proposing ‘windfall’ and other taxes on energy companies plus tough new rules, Congress only make our energy situation worse.
These are just a few of Congress’ sins of omission — all while India, China , Eastern Europe and the Middle East are adding more than a million barrels of new demand each and every year. New Energy Department forecasts see world oil demand growing 40% by 2030, including a 28% increase in the U S. Americans who are worried about the direction of their country, including runaway energy and food prices, should keep in mind the upcoming election isn’t just about choosing a new president. We’ll also pick a new Congress. Maybe yes, maybe not. But what we vote in, may or may not solve our energy problems. Our future is in your hands.

Myth Blaster Verdict: TRUE. While the story doesn’t have any links or direct sources, it is based upon 2006 headlines and warnings from major American think tanks, blogs and news sources concerning this issue. [Editor's Note: 7-3-2008 - Ken Renner sent email to point out that China doesn't directly have offshore drilling; however, as stated here it is Cuba that is the principal instrument of the operation for China - it is a deal in the making, not set yet. China has already in control economically regarding the Panama Canal. Good point, Ken, but the quoted articles and sources explains this. Link above provided by Ken Renner via email. Here are the other links:
China-Cuba Rumors Fuel Renewed Offshore Debate - Miami Herald
Yet Another Republican Pushes China-Cuba Oil Myth - Left-leaning TPM Election Central. And, in a Leftist blog, who follows the rhetoric that offshore drilling is bad for the environment and believes the global warming hoax - Appletree. What is happening is that Cuba, in its effort to improve its economy has been planning to expand its offshore drilling, and one of the recipients intended is China. In the meantime, Cuba is using Chinese rigs. Chinese rigs planned was reported in Asiabizblog, July 10th, 2005, but apparently didn't happen. We need more drilling of our own oil. Also see: Free Republic and Is China Really Drilling off Cuba? and Boortz entry.]

Heartland, Cuba, China Drilling for Oil 50 Miles from Florida Shores by James H. Taylor, August 1^st 2006 …

Legislation to relax restrictions on offshore oil and gas recovery passed the U.S. House of Representatives Resources Committee on June 21 by a vote of 29-9. House Resolution 4761, with more than 160 co-sponsors, gained significant attention after Cuba announced it would expand its leasing of oil and natural gas for Chinese drilling within 50 miles of the Florida Keys. The House legislation would end all federal moratoria on resource recovery more than 100 miles from U.S. shores. Individual states would have the option of allowing recovery between 50 and 100 miles from their shores.
Currently, there is no blanket federal prohibition on resource recovery more than 100 miles from shore, but there are patchwork prohibitions established on a case-by-case basis. There is currently a blanket moratorium on resource recovery less than 100 miles from shore. These restrictions amount to a self-imposed moratorium on 85 percent of the nation’s offshore oil reserves.
The presence of Chinese oil rigs, there by agreement with Cuba, within view of the Florida coastline has irked state residents. Cuba has announced it will expand those operations.
“I saw all kinds of wells with Chinese writing on them just south of the Keys,” Leonard Gropper, a Marathon, Florida retiree, told the June 20 Orlando Sun-Sentinel.
With just 90 miles separating Cuba and the Florida Keys, Cuba has legal rights to oil and natural gas reserves in its half of the Florida Strait. Cuba can, therefore, produces or leases for production oil and natural gas reserves as close as 45 miles from U.S. shores.
“China is trying to lock up resources around the world, and they are locking up resources in our own backyard where we can’t even compete and play ball,” Sen. Larry Craig (R-ID) told the Sun-Sentinel. “This is simply wrong. I’ve had enough, and I believe the American people have had enough.”
The U.S. moratorium was imposed during the 1990s when oil prices were low and the need for new production seemed distant. Those days are long gone, observes Heritage Foundation Senior Policy Analyst Ben Lieberman.
“While fears of environmental damage trumped price concerns in the 1990s, times have changed. Technological advances have greatly reduced environmental risks, and oil prices are much higher now and do not appear likely to appreciably decline any time soon,” said Lieberman.
“The changing nature of the situation is being driven home very starkly with the [construction] of Chinese oil rigs within sight of U.S. shores,” Lieberman added. “The Chinese can drill within sight of our coastline, but we cannot. In fact, we cannot drill even twice as far away from the U.S. coastline as the Chinese do. This does not sit well with many people in Florida.”

The US legislators did nothing to correct the situation. With an indication in 2006 of an oil crisis one would think the politicians that the American voter voted for would have been performing their job. Well, like many other issues they weren’t, still don’t and are STILL in office instead of seeking employment elsewhere. C’mon, America tear yourself away from Monday Night Football, Dancing with the Stars and World Wrestling long to participate in your constitutional rights as an American citizen. It’s time to wake up out of that apathetic slumber and start making sure that your reps and senators are doing their job – and that is watching for ALL Americans’ interests as well as important issues like national security and our economic well being. The following are some sources with a links list at the end:

Heritage, Common Sense Over Cuban Drilling by Stephan Johnson, May 11^th 2006 …

Lawmakers on Capitol Hill are grabbing at straws to put off inevitable gasoline price hikes so Americans won’t have to change their consumption habits. Now that China’s state petroleum company, SINOPEC, plans to drill in Cuban waters between Havana and the Florida Keys, they are reacting to foreign competition as well. Some in Congress think the United States should join the Chinese so they don’t recover most of Cuba’s hydrocarbons. Others would block all drilling in the Florida Straits to keep the Chinese from establishing a presence there, safeguard coral reefs, and reassure tourists who don’t want to see oil derricks on the horizon. There is a more practical middle ground:

• To counter current price hikes, regulators should eliminate supply bottlenecks by promoting refinery expansion, eliminating unnecessary gasoline blend requirements, and by easing tariffs on imported ethanol.

• For the long term, the United States should establish environmental and security oversight in its own waters and allow private firms to tap resources responsibly in the eastern Caribbean.

Brazilian, Spanish, and Canadian companies have drilled in Cuba’s Economic Exclusionary Zone for years, ever since geologic surveys suggested potential deposits in the North Cuban Basin between Key West and Havana. …
Until now, few in Washington worried because commercial quantities of lightweight crude had never been found there, but China’s entry into Cuba’s hydrocarbon industry, which was announced in January 2006, has raised expectations. No one doubts the People’s Republic is serious in its desire to fuel its rapidly growing economy or to flex its commercial muscle and even defend its interests near U.S. shores. This past year, Cuba dangled a tempting offer in front of U.S. oil firms. Like other private suitors, these firms were invited to bear all exploration and drilling costs in return for a share of any oil produced in partnership with Cuba’s state petroleum company. Some in Congress favor partial lifting of U.S. trade sanctions against the Castro regime to let American firms enter such arrangements.

Members of Florida’s congressional delegation don’t think exploration in U.S. or Cuban waters is a good idea, and argue that any leaks and loose byproducts could harm marine habitats and threaten Florida’s $50 billion tourism industry. Moreover, nearby Chinese drilling platforms could provide better signal reception for electronic eavesdropping activities now reportedly conducted on the island. Florida lawmakers want to preserve an existing 1980s-era ban on oil and gas exploration and extend the off-limits zone to more than 200 miles off Florida’s shores, which would include the western end of Cuba. New legislation would prevent U.S. renewal of the 1977 agreement that allows Cuba to conduct commercial activity on its side of the Florida Straits. In theory, foreign drillers would have to leave, including the Chinese.

Any response to the issue of oil and gas exploration in the Florida Straits will have long-term ramifications. Lifting U.S. sanctions against the Castro regime to permit joint ventures with the Cuban state raises security concerns and reduces incentives for a transition away from communism when Cuba’s aging dictator dies. If wells produce, U.S. oil platforms would aid a hostile despot who once wrote that his destiny was to make war on the United States. Such wells could also be targets for asset seizure—the regime’s early history of expropriations should be a warning. More recently, Canada-based FirstKey Technologies spent $9 million to figure out how to renovate an old Soviet-built power plant, but then reportedly lost its stake in 1999 when Cuban officials took the plans and used them to shop for other partners.
Elsewhere, Castro ally Hugo Chávez in Venezuela just took over local operations of France’s Total and Italy’s Eni petroleum companies for their unwillingness to pay higher taxes. In April, Bolivian president Evo Morales told foreign gas field operators to hand over more earnings or get out. Ideologically friendly state companies from China and Iran are proving more compatible partners for these regimes. Blocking foreign energy production in Cuban waters may be impractical. The United States could have trouble suddenly laying claim to an economic zone it has ceded to Cuba. As one congressman pointed out, Canadian companies drill as close as 50 miles to American shores near Maine, Washington, and Lake Ontario. Fears of additional 200-mile no-drill zones around the United States could drive gasoline prices higher. In defending such a move, America might have to police waters that extend south of Cuba. Support from allied nations could come at a steep price or not at all since the United States has already called in chits for operations in the Middle East. Likewise, personnel, hardware, and fuel to enforce such a ban are largely tied up.
Instead of debating whether to permit or block drilling in nearby Cuban waters, Congress should:

• Relieve supply line bottlenecks for the near term. Federal policy should promote fuel diversity, so that markets, not government regulations and taxpayer subsidies, determine abundant supply. It should ease complicated regulations that limit refinery expansion and mandate complicated regional recipes for gasoline that have made it difficult for existing refineries to meet growing demands. Congress should eliminate the current 54-cent per gallon tariff on imported ethanol.

• In the long term, promote the responsible development of U.S.-controlled energy resources in the eastern Caribbean and elsewhere to lessen the nation’s dependence on imports and vulnerability to disruptions in supply. The Bush administration and Congress should elaborate appropriate safeguards to protect fragile habitats and ensure that commercial operations remain far enough offshore to avoid impacting tourism. U.S. vigilance in these waters could help safeguard environmental concerns over drilling on both sides of the Straits and alert U.S. decision-makers to possible hostile military or intelligence uses of foreign platforms.

• Allow market forces to shape demand. If gasoline gets too expensive when demand exceeds supply, consumers will change their consumption habits, promoting the development of alternate technologies such as fuel cells and hydrogen power. No one should get too comfortable with the status quo.

… Addressing our own limited refining capacity, complicated blend requirements for fragmented internal markets, and senseless tariffs on imported ethanol will help lower prices more quickly. Depletion of known reserves is a fact, however. To keep our economy moving until renewable energy sources come online, petroleum exploration must continue. The most practical place to look is right here at home. It makes little sense to permit U.S. oil firms to explore Cuban waters, let a hostile dictator reap profits, and then allow him to kick such firms out. Instead, they should be able to tap adjacent U.S. seabeds—where exploration is under U.S. environmental scrutiny—that share the same structures and potential deposits.

Fox News reported on this May 24^th 2006 …

Cuba is leasing oil drilling rights off its northwest shores. Some in the United States say the federal government should swallow its distaste of Fidel Castro and allow U.S. companies to bid on the rights. Others say no one should be drilling just 50 miles off Key West. The U.S. trade embargo is 44 years old. The potential reserve that might be located in the area is more than one billion barrels. “The Cuban government is currently leasing their oil reserves. They’re going to get money. The question is from whom.” said Sen. Larry Craig, R-Idaho, a member of the Senate Committee on Energy and Natural Resources. The 1962 trade embargo, designed to punish the Castro government, has come under attack in recent years from lawmakers in agricultural states who already sell limited amounts of food to Cuba under humanitarian agreements. But the ongoing embargo is supported by Cuban-Americans, a key voting bloc in Florida. Opponents say scrapping the embargo would mean funneling money into a repressive dictatorship. … But Craig said U.S. energy firms should be exploring for oil off Cuba, not only because the U.S. market is a huge and thirsty, but also because American firms must comply with higher safety standards than foreign companies currently involved. The massive rigs from other nations could mean massive oil spills that could threaten a delicate ecology and a $50 billion tourist industry. “China is there. They are now doing some exploratory drilling. It is our belief that the Chinese don’t have the experience that we would expect and want for environmental safety,” he said.
Cuba does not have technology for deep-water drilling. It has signed deals with China as well as companies from Spain and Canada. Industry experts say allowing U.S. firms to compete with foreign state-owned companies off Cuba could ensure U.S. access to what could someday become an important source of oil. “It’s really preserving the opportunity for the U.S. companies to be able to compete for these resources particularly those that are close to the U.S. shores and where the U.S. market would be an obvious place to bring these resources.” said Bob Greco, director of oil and natural gas issues pertaining to exploration and production at the American Petroleum Institute.

Michelle Malkin wrote in her May 22^nd 2008 article …

Alaska GOP Gov. Sarah Palin is taking on the Bush administration’s eco-pandering decision to put polar bears on the threatened species list. Via Reuters comes news that Alaska will file suit to block the move. With staunch, sane, principled conservatives like Gov. Palin and Sen. James Inhofe taking a stand, there’s hope–however dwindling–for the GOP yet. … The Bush administration’s listing was an act of submission in the face of lawsuits from environmental activist groups. As usual with acts of submission, this one didn’t satisfy the demanders. They’ve gone back to court to sue because the listing doesn’t “include steps against global warming.”
GOP presidential candidate John McCain supported the listing: “He said that he strongly supports the move and believes it should have happened ‘long ago.’”
Does he support his radical environmental friends’ latest round of lawsuits?
Ask him!

The circumstance was also reported in the following venues:

CNN-Money – 2006
It’s Official, Cuba Hires China to Drill Offshore – Gateway Pundit
Cuba Plans Offshore Wells Banned in US Waters – New York Times
Burma: Foreign Oil and Gas Investors Shore Up Junta – Human Rights Watch
Sino-Cuba Energy Relations Raise Concern in Washington – Monsters and Critics
China Drills 50 Miles from Key West – Sean Hannity’s Blog
Drilling for Oil off Virginia Shores – Washington Post
Also read what John McCain and other sources says about this and the oil situation –

McCain’s “Federalist” Approach to Offshore Drilling – Blogs for John McCain
Gaseous Bipartisan Demagoguery from the Dems and McCain – Michelle Malkin
The Gas Prices We Deserve – Washington Post – Real Clear Politics
Barack Obama: Calm in the Swirl of History – New York Times
Who is Obama? – Lubbock Online, Mr. Conservative
Hillary Has Plans – Mr. Conservative
Barack Obama on Energy Independence – Gristmill
Lawmakers Split on Drilling for Vast Amounts of Oil in USA – USA Republic
Cuban Offshore Drilling Put Off Until 2009