National Center for Policy Analysis
Energy Issues
May 11, 2006
COMMUNISTS, OIL AND THE FLORIDA COAST
For years, the United States has refused to explore for oil in the 90-mile-wide waters separating Cuba and Florida. Now, Cuba is enlisting help from China, India and other interested parties in an effort to explore for oil in Cuban waters 50 miles off the Florida coast, says the Washington Post.
How has U.S. petroleum supply and demand changed over the last 20 years?
U.S. crude oil output declined by 43 percent (nearly 4 million barrels per day), falling from 9 million barrels in 1985 to 5.2 million in 2005.
Meanwhile, U.S. demand for petroleum products increased by 31 percent (5 million barrels per day), rising from 15.7 million barrels in 1985 to 20.7 million in 2005. As a result, net imports of petroleum products soared by nearly 200 percent (more than 8 million barrels per day), skyrocketing from 4.3 million barrels in 1985 to 12.4 million in 2005.
One important reason why U.S. crude oil production has fallen so precipitously since 1985 is America's willful refusal to explore for oil where reserves certainly exist, says the Post.
1) Alaska's Arctic National Wildlife Refuge (ANWR) contains a mean expected value of 10.4 billion barrels of technically recoverable oil, whose daily output of nearly 1.4 million barrels would be larger than the current daily onshore oil production of any of the lower 48 states.
2) The Minerals Management Service (MMS) of the Department of Interior estimates that beneath the waters of the U.S. Outer Continental Shelf (OCS) lie some 76 billion barrels of oil in yet-to-be-discovered fields. That's three and a half times U.S. proved oil reserves.
3) Offshore oil reserves in the Gulf of Mexico alone are estimated to be more than 40 billion barrels, much of it precluded from exploration by official U.S. policy.
Source: Editorial, "Communists, Oil and the Florida Coast," Washington Times, May 4, 2006.
For more on Energy Issues:
http://www.ncpa.org/sub/dpd/index.php?Article_Category=22
CHINA STARTS OIL DRILLING OFF FLORIDA
WHILE AMERICA TWIDDLES THUMBS, CHINESE TAP BILLIONS OF BARRELS
By Mike Blair
While Washington dithers over exploiting oil and gas reserves off the coast of Florida, China has seized the opportunity to gobble up these deposits, which run throughout Latin America, the Caribbean and along the U.S. Gulf coast.
The Chinese have forged a deal with Cuban leader Fidel Castro to explore and tap into massive oil reserves almost within sight of Key West, Florida. At the same time, Venezuelan President Hugo Chavez, who controls the largest oil reserves in the Western Hemisphere, is making deals to sell his country’s oil to China, oil that is currently coming to the United States.
Meanwhile, a new left-wing populist regime in Bolivia has nationalized the natural gas industry, threatening to cut off supplies to the United States.
SLANT DRILLING
There are new reports out circulating that Chinese firms are planning to slant drill off the Cuban coast near the Florida Straits, tapping into U.S. oil reserves that are estimated at 4.6 billion to 9.3 billion barrels. This compares with 4 billion to 10 billion barrels believed to be beneath the Alaska National Wildlife Refuge, where drilling is held up in Congress due to the objections of environmental groups which warn of endangering caribou. Permission to drill in the refuge, which experts are certain will not present any environmental hazard, has failed by just two votes in the Senate.
As Chinese business increases its reach around the world, it is seeking oil, which it lacks domestically.
After elections in Mexico in early July, when a new regime hostile to Washington is expected to take power, the United States might be without supplies of Mexican crude oil. The United States gets about 40 percent of its imported oil from Mexico and Venezuela.
China is eager to tap into oil reserves in the Florida Straits and then make a deal with Castro to control it. The Chinese have already reopened an abandoned Russian oil refinery in Cuba. Much of the gas refined there is believed to be destined for Freeport in the Bahamas, where the Chinese, through front company Hutchison-Whampoa, has developed a massive port facility and airfield.
With the refinery reopened and expanded it will also meet the needs of Castro.
Sen. Larry Craig (R-Idaho) has introduced legislation to ease U.S. restrictions that prevent dealing with Cuba to drill in the Florida Straits. It is hoped that Florida regulations that prevent U.S. oil drilling off the state’s coasts could also be eased.
The irony is that Chinese drilling could be even more of an environmental hazard since China is not as concerned about or equipped to deal with any potential ecological disaster as a result of a spill, said Craig.
(Issue #22, May 29, 2006)
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