Oil may grease attitudes toward Cuba trade policy

Oil may grease attitudes toward Cuba trade policy
By Elana Schor

The imminent release of a new Bush administration status report on
U.S.-Cuban relations is re-energizing the anti-embargo lobby, which
believes the skyrocketing price of oil could provide a winning angle in
its fight to relax trade sanctions on the communist island nation.

When the Commission for Assistance to a Free Cuba issued its first
policy recommendations at the president’s behest two years ago, it
resulted in stricter curbs on educational travel and Cuban-Americans’
ability to send money home. But the National Foreign Trade Council
(NFTC), its affiliated business coalition USA Engage and the newly
independent Freedom to Travel Campaign are stumping for a milder report
this time around.

The groups have found a new weapon for their campaign to loosen the
trade embargo that has stood against Havana since the Kennedy
administration. Oil companies from Norway, India, Spain and China (whose
government-controlled petroleum group set off protectionist alarms last
year with its bid to purchase Unocal) recently have signed drilling
deals to explore Cuba’s offshore waters.

“The embargo has the effect of turning our entire back yard over to
other countries — China, India,” USA Engage director Jake Colvin said.
“Cupec [Cuba’s state-owned oil company] is certainly looking for
partners, and it’s better that we are there than that we are not.”

With the appropriations cycle heating up in the House this month, the
annual ritual of amendments offered to ease sanctions on Cuba is sure to
spark a fierce debate. Rep. Jeff Flake (R-Ariz.), a longtime opponent of
the embargo, has raised the stakes with a bill that would allow U.S. oil
and gas giants to profit from Cuban reserves and with a release from the
House Cuba Working Group, which he co-chairs.

Flake and many on K Street are counting on the fearsome specter of
China’s quest for oil to raise support for the Cuba drilling bill. Among
those backing the Senate version, sponsored by Rep. Larry Craig
(R-Idaho), is Energy and Natural Resources Committee Chairman Pete
Domenici (R-N.M.), whom NFTC President Bill Reinsch touted as a powerful
ally.

Cuban waters contain somewhere between 4.6 billion and 9.3 billion
barrels of oil, according to estimates by the U.S. Geological Survey, a
figure comparable to the low end of available resources in the
GOP-coveted Arctic National Wildlife Refuge (ANWR), in Alaska.

“It defies common sense not to explore our options over in Cuban
waters,” Flake spokesman Matthew Specht said. “When we get serious about
ANWR, why can’t we get serious about this?”

Lawmakers working to preserve tight restrictions on Cuban trade and
travel remain influential in both chambers, however, particularly in the
Florida delegation, and Cuban-Americans committed to isolating Cuban
dictator Fidel Castro have revitalized their political activity through
the U.S.-Cuba Democracy PAC. Commerce Secretary Carlos Gutierrez, a
Cuban émigré who leads the White House’s commission along with Secretary
of State Condoleezza Rice, has given to the PAC in recent years.

Mauricio Claver-Carone, one of the PAC’s 25 directors and a pro-embargo
lobbyist for the Cuba Democracy Public Advocacy Corp., dismissed the
political value of Cuba’s oil wealth as a red herring.

“Energy exploration is a big smokescreen issue,” Claver-Carone said. “It
has sucked the whole Cuba policy community in, and I think it’s
something the Jeff Flakes of the world wanted to do on purpose.”

Yet Claver-Carone acknowledged the allure of alleviating sky-high gas
prices to Republicans. He said anti-Castro activists are not expecting
oil exploration to pop up in the administration’s new report, which
officials had expected to release last week.

“I think it will backfire because the oil industry is pretty radioactive
in Congress right now, at least from a lobbying perspective,”
Claver-Carone said. Instead, he is bracing for the report to address
limits on religious travel to Cuba, now regulated more lightly than
trips home to visit family members.

The U.S.-Cuba PAC has already given $347,000 this cycle, including
contributions to four senior House Republicans on the appropriations
panel with jurisdiction over the Treasury Department, a key enforcer of
the embargo. That puts the PAC on pace to more than double its giving
for the 2004 elections.

Anti-sanctions lobbyists claim widespread support for the Cuba drilling
bill among oil and gas companies, but industry sources were hesitant to
confirm this.

“In general, we think it’s good when anyone tries to expand energy
production,” said Bill Bush, a spokesman for the American Petroleum
Institute (API), the oil industry’s trade association. The API has left
the question of a public stance on Cuba drilling to its individual
members, several of whom attended a controversial February meeting with
Cuban officials in Mexico City that was briefly broken up at the Bush
administration’s request.

One of those Mexico attendees, ExxonMobil, is “obviously interested in
exploring for oil anywhere that U.S. law allows us to,” said company
spokesman Russ Roberts. “Right now Cuba is a country the U.S. is not
doing business in. … I’m not sure we would want to go as far as making a
comment on whether we would want the law to change.”

Valero, a Texas oil refiner also reportedly present in Mexico, has no
position on the Cuba drilling legislation, according to a corporate
spokeswoman.

The Freedom to Travel Campaign last month formally split from its parent
think tank, the Center for International Policy, and will continue
organizing congressional trips to Cuba even as the uncertainty of
lobbying-reform negotiations clouds privately sponsored travel. Campaign
Director Sarah Stephens said members not usually considered foes of the
embargo, “people who never vote with us,” are expressing interest in
next month’s Havana trip.

But Cuban-American members have their own current-events hook to play up
in Iranian president Mahmoud Ahmadinejad’s coming visit with Castro,
whom Ahmadinejad considers a crucial international partner.

“All the problems we’re having with Iran right now, and we’re going to
help one of its proudest allies just 90 miles from our shore?” said
Thomas Bean, communications director for Rep. Mario Diaz-Balart
(R-Fla.), one of the Capitol’s most vocal proponents of strengthening
the embargo.

Other pro-sanctions voices include Rep. Lincoln Diaz-Balart (R-Fla.),
Rep. Ileana Ros-Lehtinen (R-Fla.), considered the front-runner to chair
the House International Relations Committee next year, and Florida Sens.
Mel Martinez (R.) and Bill Nelson (D). Nelson and Martinez both have
countered the Senate’s Cuban drilling bill with measures preventing
foreigners involved in Cuban exploration from entering the country.

http://www.thehill.com/thehill/export/TheHill/Business/060706_cuba.html