Drilling, Cuba policies split Bush supporters

June 16, 2006, 6:28AM

Drilling, Cuba policies split Bush supporters
Oil companies want exemption from embargo
By JAY NEWTON-SMALL
Bloomberg News

High oil prices are driving a wedge between energy companies and the
Cuban-American community, two pillars of support for President Bush and
his fellow Republicans.
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Companies, including Houston-based Marathon Oil Corp., are lobbying
Congress to be allowed to bid for oil and natural gas deposits in Cuban
waters. They are backed by Republican lawmakers bucking Bush by
supporting legislation to exempt the companies from the 1962 trade
embargo and a ban on drilling within 100 miles of U.S. shores.

The U.S. need for energy and the likelihood that foreign companies will
rush in to drill justifies the exemption, advocates say. "Are we
supposed to sit by and let China drill in our backyard?" asks Sen. Pete
Domenici, R-N.M., chairman of the Senate Energy Committee, a co-sponsor
with 12 other lawmakers of legislation exempting the U.S. companies.

Cuban-American groups, meanwhile, say the legislation would just prop up
the government of communist President Fidel Castro; if anything, they
want the embargo toughened.

'It's hypocritical'
"It is an assault on the embargo, masquerading as an attempt to get
energy because we need energy," says Jose Sorzano, former head of the
Miami-based Cuban American National Foundation, the largest anti-Castro
group. "It's hypocritical to want to go into Cuba and help Castro when
we won't even drill in our own waters first."

U.S. companies have long sought to loosen the embargo. While
agricultural restrictions were eased in 2000, other attempts have been
defeated by the political power of the Cuban-American community and the
desire of Republicans and Democrats to capture Florida's 27 presidential
electoral votes. This time, the combination of public concern over high
gasoline prices and the oil industry's clout may increase prospects for
success.

"When you have a strong domestic industry, whenever they get involved in
the embargo, they win," says Robert Muse, a Washington attorney who
represents U.S. companies with claims against Cuba. "When the farmers
got involved in 2000, they won. The energy industry has the same sort of
clout, if not more so, in Washington. Plus, when you throw in the gas
prices, there's real pressure."

A match for Arctic refuge
The U.S. Geological Survey estimates there may be as many as 4.6 billion
barrels of crude oil and 9.8 trillion cubic feet of natural gas in the
Northern Cuban basin — roughly equivalent to the estimated reserves in
Alaska's Arctic National Wildlife Refuge, which the Bush administration
wants to open to exploration.

Cuba is auctioning 59 lots for exploration, some within 45 miles of
Florida. So far, 12 have been sold to Canada's Sherritt International
Corp. and Spain's Repsol, in partnership with companies from Norway and
India.

Sinopec, China's second-largest oil company, also may bid, says Jose
Borges, first secretary of the Cuban Interest Section, which represents
the island nation in Washington since the U.S. and Cuba don't have
diplomatic relations. Cuba would welcome U.S. companies in the Florida
Straits, Borges says.

Karen Matusic, a spokeswoman for the American Petroleum Institute, says
her group supports the exemption legislation "in the context of
increasing access to oil and gas reserves as a way to ensure U.S.
companies' competitiveness globally."

Roger Pinkerton, director of Gulf of Mexico exploration for Marathon,
wrote in a letter that "the North Cuba Basin is just one in a long list
of areas offshore where wrong-headed policies of the U.S. government
disallow exploration and production."

Penalties proposed
Meanwhile, lawmakers representing Florida's 1 million Cuban-Americans
have introduced measures in the House and Senate that would penalize any
foreign company that signs drilling deals with Cuba by barring them from
obtaining U.S. business visas and loans.

Castro "expresses his hatred of the U.S. every day in every way, and for
us to somehow think that to allow U.S. companies to drill, it would be a
benefit to the United States, it would not," says Rep. Ileana
Ros-Lehtinen, R-Fla., a sponsor of one of the punitive measures.

"We're certainly not going to let a megalomaniac, environment-destroying
murderer like Fidel Castro drill 45 miles off Florida's coast," says Joe
Garcia, a board member of the Cuban American National Foundation.

The Cuban-American lobby has been waiting for more than 40 years for
Castro to die or be removed. Barring companies from participating in the
development of Cuban oil may put the U.S. at a disadvantage when he
finally loses his grip, says Rep. Jeff Flake, R-Ariz., who is sponsoring
House legislation similar to the Senate bill.

http://www.chron.com/disp/story.mpl/politics/3974137.html