Energy Efficiency

Having been to Cuba (2006), I am only slightly more aware of the dynamics of the country than readers; Cuba is many things; a progressive beacon, a quixotic underdog, an oppressive tyranny – but no one has called it lucky, until now.  Will it make a difference to the people, or will it be the bane of their lives ?

Mother nature appears to have blessed the island with enough oil reserves to vault it into the ranks of energy powers; there may be more than 20bn barrels of recoverable oil in offshore fields in Cuba’s share of the Gulf of Mexico, more than twice the previous estimate. If confirmed, it puts Cuba’s reserves on par with those of the US and into the world’s top 20.

Drilling is expected to start next year by Cuba’s state oil company Cubapetroleo, or Cupet.

So is it Cuba’s turn to place an embargo on the USA ? Will the oil output be similar Mexico’s giant Cantarell oil field in the Bay of Campeche ? Will the locals be exploited like every other country where oils has been discovered ?

Cuba currently produces about 60,000 barrels of oil daily, covering almost half of its needs and imports the rest from Venezuela in a contra deal for Cuban doctors and sports instructors. Even that barter system puts a strain on an impoverished economy in which Cubans earn an average monthly salary of US$20.  Subsidised grocery staples, health care and education help make ends meet but an old joke – that the three biggest failings of the revolution are breakfast, lunch and dinner – still does the rounds. Hardships are compounded by tropical storms that shred crops and devastate coastal towns.

However there is little prospect of Cuba becoming a communist version of Kuwait as its oil is more than a mile deep under the ocean and difficult and expensive to extract; with falling oil prices, the EROEI (energy return on energy invested) must be factored in. It could be three to five years minimum before there are any meaningful returns and in the grander scheme of things – when you consider that in the last year the world consumed 31billion barrels – its hardly time for celebration.