Investor's Business Daily: Will Russia Drill Off Florida's Coast?
"The oil and gas resources of the Gulf of Mexico and the Outer Continental Shelf could be fueling cars and heating homes in America, not those in Beijing, Moscow, New Delhi or Havana. If Russia, Cuba and others can drill off the coast of Florida, why can't we?"

WASHINGTON, D.C., August 6, 2009 -

Will Russia Drill Off Florida's Coast?
Investor's Business Daily
August 05, 2009 4:20 PM PT

Two Russian nuclear attack submarines have taken up positions along our East Coast in recent days, another sign of renewed assertiveness by the former communist giant. The move comes as Moscow inks a deal with the communist relic of Cuba to drill for oil we refuse to go after.

The submarines are of the Akula class, a counterpart to the Los Angeles class attack subs of the U.S. Navy. "I don't think they've put two first-line nuclear subs off the U.S. coast in about 15 years," said Norman Polmar, a naval historian and submarine warfare expert.

The subs' appearance may be more symbolic than a real threat. More interesting, perhaps, are the four contracts Russian Deputy Prime Minister Igor Sechin signed in Havana during his recent visit there.

They allow Russia's Zarubezhneft oil concern to work with the Cubanpetroleo monopoly to explore and develop the oil riches of the North Cuban Basin off Florida.

Havana imports more than half its oil, mostly at a subsidized price from Hugo Chavez's Venezuela. Cuba's domestic output is exclusively heavy oil with a high sulfur content. Its offshore Gulf waters could contain large quantities of lighter, sweet crude.

Drilling will be done off America's coast soon enough. But thanks to a treaty signed by President Carter, the new oil and gas resources that will be discovered in the region will be discovered by Russia and Cuba to their economic benefit.

Normally, economic zones extend 200 miles off a country's coastline. In some cases, conflicts can arise based on resources and geography. In 1977, Carter signed a treaty with Cuba that essentially split the difference and created for the communist country an "exclusive economic zone" extending from the western tip of Cuba north virtually to Key West. Cuba has divided its side of the Florida Straits into 59 parcels and put them up for lease.

Foreign countries, including China and India, had acquired the rights to develop 16 of them.

"This is the irony of ironies," complained Charles Drevna, executive vice president of the National Petrochemical & Refiners Association. "We have chosen to lock up our resources and stand by to be spectators while these two come in and benefit from things right in our own backyard."

Repsol-YPF, the Spanish oil company, has been active in Cuba for more than five years. It drilled a test well off the coast in 2004 and was set to start a second well when it postponed it early last month. Now the Russians are coming.

The U.S. Geological Survey recently estimated the North Cuban Basin contains as much as 9 billion barrels of oil and 22 trillion cubic feet of natural gas. Pools of oil and natural gas tend not to obey lines drawn on a map.

It is certain that at least some of Cuba's wells will tap oil pools that straddle the boundary separating our zone from Cuba's. In other words, Havana will get oil that should be ours.

The argument against Gulf drilling has been the potential for oil leaks and spoiled beaches.

Where are the environmentalists to protest this deal? Fact is, more oil bubbles up naturally from the sea floor than has ever leaked from oil platforms in the Gulf.

And those platforms are prime spots for tourist fishing, since they act as artificial reefs for sea life.

The oil and gas resources of the Gulf of Mexico and the Outer Continental Shelf could be fueling cars and heating homes in America, not those in Beijing, Moscow, New Delhi or Havana.

If Russia, Cuba and others can drill off the coast of Florida, why can't we?

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