Evaluating the prospects for u.s.-cuban energy policy cooperation

Jonathan Benjamin-Alvarado

Research output: Chapter in Book/Report/Conference proceedingChapter

1 Scopus citations


These two quotations, dated nearly five years apart, distill the essence of why the United States should be looking carefully to the development of energy resources in Cuba. For the past fifty years, U.S. policy toward Cuba has relied on the application of cold war measures-economic sanctions, technology denial, and political isolation-in an effort to push Cuba over the tipping point of regime collapse and toward the peace and prosperity that would follow from embracing democracy. This policy, which endures in part to maintain the notion that such measures will foster political change on the island and after nearly half a century is almost quaint, has caused the United States to overlook many of the tectonic shifts that have taken place in Cuba.1 Such a singular focus has in some respects blinded U.S. policymakers to broader strategic changes in the region involving issues that can hardly be understood, much less resolved, without a Cuban presence. These policy areas include immigration, trafficking in human beings and narcotics, economic development, and now, energy. These remarks should not be taken as a suggestion to disregard the international community's long-standing demand for the Cuban government to expand personal liberties, support the rule of law, and extend human rights to all inhabitants of the island, but these demands should be balanced against equally important and perhaps more pressing economic and environmental concerns.2 It is relevant to U.S. energy security and geostrategic interests that 77 percent of proven oil reserves globally are held by national oil companies (NOCs) and that 11 percent of proven oil reserves are held by NOCs with equity access, meaning that these firms retain the contractual rights for exploration, extraction, and production of oil drawn from those reserves. Four of the five largest oil exporters to the United States-Saudi Arabia, Mexico, Venezuela, and Nigeria-are NOCs. There is growing concern about the extent to which imports from those countries are assured, given the potential for political conflict, economic instability, and social upheaval in any or all of those states. This means that only 11 percent of proven oil reserves not already held by NOCs are presently open to international oil companies (IOCs), many of which are based in the United States.3 This political and economic reality heightens the potential importance of U.S. cooperation with Cuba on the issue of energy development. At present Cuba possesses an estimated 4.6 million barrels of oil and 9.3 TFC (total final consumption) of natural gas in North Cuba Basin.4 This is approximately half of the estimated 10.4 billion barrels of recoverable crude oil in the Alaska Natural Wildlife Reserve. If viewed in strictly instrumental terms-namely, increasing the pool of potential imports to the U.S. market by accessing Cuban oil and ethanol holdings-Cuba's oil represents little in the way of absolute material gain to the U.S. energy supply. But the possibility of energy cooperation between the United States and Cuba offers significant relative gains connected to the potential for developing production-sharing agreements, promoting the transfer of state-of-theart technology and foreign direct investment, and increasing opportunities for the development of joint-venture partnerships, and scientific-technical exchanges. The relative gains from increased commercial and technical cooperation obviously increases Cuba's domestic energy capacity, but it also possesses the potential of enhancing the United States' energy security by deepening its links in the region. The future vitality of energy security requires access to energy export markets but also the diffusion and dispersion of technology, innovation, research and development of enhanced productive capacities, alternative energy technologies, and the effective management of resources across the region. The economist Jeremy Rifkin argues that "distributive energy markets," marked by highly collaborative efforts to integrate diverse energy resources based in various proportions everywhere, will come to replace the prevailing model of the highly concentrated, conventional energy elites-coal, oil, natural gas, uranium-which are now found in limited geographical regions and are finite.5 The development of Cuba as an energy partner will not solve America's energy problems. But the potential for improving energy relations and deepening collaborative modalities with other regional partners is enhanced by pursuing energy cooperation with Cuba for two principal reasons. 1. Cuba's increasing leadership role in the Caribbean region and Central America might be used by the United States to promote collectively beneficial efforts to develop a broad range of alternative energy technologies in the Americas. A Cuba-America partnership might also serve as a confidence builder in assuaging the misgivings on the part of regional partners regarding American domination. 2. Cuba's significant human capital resources in the scientific and technological arena have been grossly underused. Cuba possesses the highest ratio of engineers and Ph.D.s to the general population of any country in Latin America, and this can been viewed as a key asset in the challenge of maintaining energy infrastructure across the region. Both Mexico and Venezuela face significant costs in maintaining their sizable energy production, refining, and storage capabilities. The integrity of these two national energy systems is of paramount interest to U.S. energy security concerns because of the potential harm to the economy that would occur if either state were unable to deliver its exports to the American market. In this light, the impetus for normalization of relations writ large between the United States and Cuba is not oil per se, but enhanced energy cooperation, which could pave the way for technical and commercial exchanges that, given the evolving nature of energy resources and energy security, could provide an opening of collaborative efforts that could have mutually beneficial effects. What has the failure to engage Cuba cost the United States in these geostrategic terms? Very little, one could argue. Strategically, Cuba has been a stable entity in the region. Politically, too, it has been a mostly static environment: with the embargo in place, policymakers and elected officials have been able to predict reactions to policy initiatives with relative certainty.U.S. business interests in Cuba since the early 1960s have been negligible, with the exception of a recent increase in humanitarian agricultural and medical sales. But a more central issue is this: In light of growing concerns regarding energy supplies in the United States and demands for domestic and regional exploration to meet American consumption, what is the cost to the United States of maintaining a status quo relationship with Cuba? In economic terms, the cost of the failure to engage Cuba has been considerable. In its 2008 report, Rethinking U.S.-Latin American Relations, the Partnership for the Americas Commission, convened by the Brookings Institution, suggested that the basis for effective partnership between the United States and its Latin American and Caribbean partners is shared common interests. The report states, "Cuba has long been a subject of intense interest in U.S. foreign policy and a stumbling block for U.S. relations with other countries in the hemisphere."6 Specifically, the report pinpoints two key challenges facing the region that are directly relevant to the subject of this book: securing sustainable energy supplies and expanding economic development opportunities. The April 2009 report of the Brookings project on U.S. Policy Toward a Cuba in Transition identified both medium- and long-term initiatives related to energy that directly fulfilled an element of the policy objectives recommended in their report.7 In order to specifically promote what the report termed "a constructive working relationship with the Cuban government to build confidence and trust in order to resolve disputes,with the longterm objective of fostering a better relationship that serves U.S. interests and values," it recommended a medium-term initiative that "allows licenses for U.S. companies to participate in the development of Cuban offshore oil, gas, and renewable energy resources." The report also recommended that a longterm initiative be undertaken to "provide general licenses for the exportation of additional categories of goods and services that enhance the environment, conserve energy, and provide improved quality of life."8 Because of recent developments in Cuba and the growing investments being made there made by regional partners, in particular Venezuela and Brazil, the importance of Cuba's energy development objectives becomes decidedly more pronounced, in terms of both Cuba's national development priorities and the United States' energy and geostrategic priorities.9 One of the recommendations made in Rethinking U.S.-Latin American Relations is especially relevant: developing sustainable energy resources. The report recommends that the United States, in partnership with other governments in the hemisphere, establish a "Renewable Energy Laboratory of the Americas" that would promote hemispheric cooperation on developing solar, wind, and cellulosic-biomass technologies; intensify hemispheric cooperation in the peaceful use of nuclear energy; and promote regulatory regimes that are open to private energy investment and trade in energy technology and services.

Original languageEnglish (US)
Title of host publicationCuba's Energy Future
Subtitle of host publicationStrategic Approaches to Cooperation
PublisherBrookings Institution Press
Number of pages20
ISBN (Print)9780815703426
StatePublished - 2010

ASJC Scopus subject areas

  • General Social Sciences


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