Why Cuba-U.S. Energy Talks Matter

Why Cuba-U.S. Energy Talks Matter

Recent reporting by Bill Loveless of USA Today placed a national spotlight on technical discussions between the United States and Cuba about promoting safe practices in Cuba’s attempts to develop its offshore oil resources.

An October conference in Havana – called Safe Seas/Clean Seas and attended by a broad cross section of Cuban officials and American oil experts – highlighted the role that American technology could play in preventing and limiting the impact of accidents that would threaten human lives, the environment, tourism, and major investments.

In the aftermath of the Macondo disaster, for instance, American drillers are required to have emergency capping equipment on standby. It would be in the best interest of all parties that such technology be shared with Cuba or Mexico, if ever needed.

If the thaw in relations between Cuba and the United States continues as expected, American oil services companies at first and others later will find opportunities to do business in places previously off limits.

There are other energy topics where cooperation between Cuba and the United States makes sense. Even more beneath the radar than the oil talks, Cuba is taking several steps that contribute the global effort to rein in the emissions of greenhouse gases.

The flaring of methane associated with oil production, for instance, is a serious problem around the world. This phenomenon diminishes the quality of life for the people living in the area, damages the atmosphere, and wastes a valuable fuel. The conundrum in many countries has been the lack of gas pipeline infrastructures that can capture and transport the gas.

In places like Texas and Louisiana with existing natural gas pipelines in place, the damages from flaring can be largely curtailed. But in emerging areas of oil production, such as North Dakota, flaring gets out of control and inflicts considerable harm. The situation is even worse in many nations from whom we import oil.

Cuba has recently developed a practical solution to the problem – motivated by the location of drilling near its stunning beaches, a goal of reducing reliance on imported oil, concerns about climate, and opportunities to reduce the cost of electricity.

Rather than construct a system of pipelines that would deliver the gas to customers directly, the Cubans have built an efficient natural gas electric generator adjacent to oil production, requiring only a short pipeline to deliver the gas where needed. A partnership between the state oil and electricity agencies supports these efforts – the overcoming of bureaucratic stovepipes perhaps more impressive than the technology involved.

The solution is deceptively simple and cost effective. It should inspire similar projects in other nations (and in North Dakota) that have flaring problems but limited transportation options for natural gas. We have a lot to learn from Cuban innovation.

Energy discussions between the U.S. and Cuba need not be limited to oil drilling. Cuba late last year announced a bold new goal of 24% renewable energy for electric generation by 2030, which would allow major reductions in oil imports. In practice, this would mean major additions of wind farms, solar water heaters, solar PV panels, biomass (residual sugar cane pulp), some hydropower, and conversion to LED lighting.

The State of Hawaii – in the similar circumstances of trying to wean itself from reliance on expensive electricity from oil – could provide insights on its experienced transitioning its grid to expanded use of renewable energy.

The climate gains from less flaring or more renewable energy in a nation with a low carbon footprint to begin with may not be huge in a global context, but the impacts can be amplified if Cuba becomes a model for island nations around the world.

Lingering restrictions on trade from the American side, most notably a congressionally mandated embargo on trade, inhibit cooperative efforts to protect the environment and expand business opportunities. Overlapping objectives in both countries suggest these remaining constraints on trade should be brought to an end.