Will Russia-Cuba agreement produce significant US response?

Will Russia-Cuba agreement produce significant US response?

Could Russian plans to help Cuba produce oil off its coast make the
United States reconsider its Outer Continental Shelf leasing policy? US
independent producers and others hope so.

"More than anything, this agreement must not go unnoticed in
Washington," Independent Petroleum Association of America President
Barry Russell said on Aug 4. "Both in the long and short-term, our
energy priorities must focus on safely expanding American energy
production, especially from the nation's federal onshore and offshore
lands that are owned by all Americans."

Russell said that IPAA strongly urges US Interior Secretary Ken Salazar
to move forward with a five-year OCS plan which opens deep oceans to
responsible development. "Doing otherwise would be a blow to our
struggling economy and a poor decision for our national security," he
warned.

Michael Whatley, vice president of the Consumer Energy Alliance, also
said that it's vital for Salazar's new five-year OCS plan to open more
US offshore tracts for responsible development, especially off Alaska's
coast.

'Padlocked resources'

"As officials in Moscow and Havana work to expand energy production just
miles from the Florida Keys, vast amounts of American energy resources,
both onshore and offshore, remain padlocked by the federal government,"
he noted.

Thomas J. Pyle, president of the Institute for Energy Research,
suggested on Aug. 5 that Washington policymakers have focused more on
governmental economic intervention, such as the cash-for-clunkers
program, than sensible energy policies.

"Washington must get back to the basics, and focus on expanding freedoms
and prosperity, not the size of government and our debt. This agreement
between Russia and Cuba should serve as a wake-up call to Congress and
this administration, especially Secretary Salazar, who is slow-walking a
new offshore energy blueprint for the nation," he said.

In at least one instance, two federal lawmakers may have anticipated the
Russian-Cuban agreement. S. 1517, the OCS revenue-sharing bill which US
Sens. Mary L. Landrieu (D-La.) and Lisa Murkowski (R-Alas.) introduced
on July 27, contains two sections that neither senator emphasized at the
time.

Contiguous zones

Section 6 would allow Americans to explore for oil, extract oil, and
sell equipment for those activities in "any portion of any foreign
exclusive economic zone that is contiguous to the exclusive economic
zone of the United States."

Section 7 mentions travel to, from, and within Cuba "in connection with
exploration for and the extraction of hydrocarbon resources in any part
of a foreign maritime exclusive economic zone" contiguous to the US EEZ.

A US Senate Energy and Natural Resources Committee source confirmed that
the provisions are designed to let US companies compete as Cuba tries to
develop its offshore resources.

That would require US recognition of the island nation's government
after more than 40 years. There have been rumors that the Obama
administration pulled its initial proposal back so it can go further,
possibly because of the Russia-Cuba offshore development deal.

Contact Nick Snow at nicks@pennwell.com

Source:
Oil & Gas Journal
Will Russia-Cuba agreement produce significant US response? (12 August 2009)
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