China Cuba reported in Gulf oil partnership

China, Cuba reported in Gulf oil partnership
U.S. firms stand by, prohibited from bidding on contracts; lawmakers
propose opening up U.S. coast for drilling.
May 9, 2006: 10:12 AM EDT

NEW YORK (CNNMoney.com) - Plans for foreign oil companies, some from
India and China, to drill off the cost of Cuba are prompting calls from
lawmakers to ease environmental restrictions that prohibit coastal
drilling in most of the U.S., according to a report Tuesday.

At a time of rising soaring gasoline prices caused partly by a lack of
supply, legislators are fuming that Cuba is opening up its continental
shelf for oil and gas exploration while most of the U.S. continental
shelf outside the Gulf of Mexico, which extends 200 miles from shore,
has been off limits for drilling since the early 1980s, the New York
Times reported.

Adding insult to injury, the Times said U.S. firms were invited to bid
on the Cuban contracts, but were barred by the U.S. government due to
the country's longstanding economic embargo of communist Cuba.

"Red China should not be left to drill for oil within spitting distance
of our shores without competition from U.S. industries," Sen. Larry
Craig, Republican of Idaho, told the Times.

Firms from Canada and Spain will also drill off the Cuban coast, the
article said

Craig is introducing a bill to exempt U.S. oil firms from the embargo,
much as food and drug firms are, according to the article.

There are also several bills moving through Congress aimed at opening up
areas more areas of the U.S. to oil and gas exploration, including
coastal waters and Alaska's Arctic National Wildlife Refuge.

Supporters of the bills, including the oil industry, say it would help
bring down oil and gas prices and decrease the country's reliance on oil
imports from the volatile Middle East.

Gasoline prices have soared 33 percent over the last year, while the
price of crude oil has tripled since 2002.

But critics of more drilling say the energy obtained, which they say
would be minimal and wouldn't bring down prices that much, isn't worth
the environmental risks. They also say more drilling for a finite
resource does nothing to promote long term conservation solutions.

Most coastal states also oppose offshore drilling, fearing unsightly
rigs and oil spills will hurt their tourism industries.

The United States Geological Survey estimates the Cuban deal involves
4.6 billion barrels of oil and 9.8 trillion cubic feet of natural gas,
according to the Times. The paper said that's enough oil and gas to
power the U.S. for a few months.

The paper also cited an Interior Department study that said the U.S.
continental shelf contained 115 billion barrels of oil and 633 trillion
cubic feet of natural gas. That would be enough oil to satisfy U.S.
demand, at current consumption levels, for 16 years and enough natural
gas for 25 years, according to the Times.

http://money.cnn.com/2006/05/09/news/economy/oil_cuba/?cnn=yes