II 109th CONGRESS 2d Session S. 2787 IN THE SENATE OF THE UNITED STATES May 11, 2006 Mr. Craig (for himself, Mr. Roberts, Mr. Thune, Mr. Thomas, Mr. Dorgan, Mr. Domenici, Mr. Enzi, Mr. Bennett, Mr. Baucus, and Mr. Burns) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To permit United States persons to participate in the exploration for and the extraction of hydrocarbon resources from any portion of a foreign maritime exclusive economic zone that is contiguous to the exclusive economic zone of the United States, and for other purposes.

1.

Short title

This Act may be cited as the Western Hemisphere Energy Security Act of 2006.

2.

Findings

(a)

Findings

Congress finds that— (1)the United States is the largest oil importer in the world; (2)the Federal Government predicts that, by 2025, 68 percent of the oil used in the United States will be imported; (3)2/3 of the oil reserves of the world are located in the politically unstable Middle East and are controlled by members of the Organization of Petroleum Exporting Countries; (4)global fuel consumption is projected to increase by 100 percent to 150 percent during the next 20 years, driven largely by the Chinese and Indian economies; (5)that increased demand for fuel— (A)will place the United States in ever-greater competition for oil and gas resources; and (B)may result in an extension of Chinese involvement in developing Cuban oil and gas reserves to within a few miles of the coastline of the United States; (6)the United States adheres to the principle that, in a case in which the exclusive economic zone of the United States is contiguous to the exclusive economic zone of another country, a point equidistant to the maritime baselines of the 2 countries demarcates the exclusive economic zone of each; (7)an example of the application of the principle described in paragraph (6) is that the exclusive economic zone of Cuba extends to within— (A)52 miles of the Florida Keys at— (i)south of 24 degrees north latitude; and (ii)east of -81 degrees west longitude; and (B)85.4 miles of the Florida peninsula at— (i)south of 24 degrees north latitude; and (ii)east of -81 degrees west longitude; (8)Cubapetroleo, the state oil company of Cuba, recently— (A)signed an oil production sharing agreement with the China Petroleum and Chemical Corporation; and (B)purchased 3 deep-water drilling rigs from that Chinese state enterprise for use in the exclusive economic zone of Cuba; (9)the exclusive economic zone of Cuba in the Gulf of Mexico is a 112,000-square-kilometer area that has been divided into 59 exploration blocks, each of which is approximately 2,000 square kilometers and an average depth of 2,000 meters (except that some of those blocks have a depth of as great as 4,000 meters); (10)the northernmost of the exploration blocks described in paragraph (9) are located off the southwest coast of the State of Florida; (11)a United States Geological Survey report entitled “Assessment of Undiscovered Oil and Gas Resources of the North Cuba Basin 2004” estimated that between 1,000,000,000 and 9,300,000,000 barrels of undiscovered oil and between 1,900,000,000,000 and 22,000,000,000,000 cubic feet of undiscovered natural gas along the northern coast of Cuba; (12)the national security strategy of the President recognizes the increasing resource needs of China by stating that China is expanding trade, but acting as if they can somehow lock up energy supplies around the world or seek to direct markets rather than opening them up.; (13)the United States embargo on Cuba prohibits United States persons from engaging in the exploration or extraction of hydrocarbon resources from the exclusive economic zone of Cuba; (14)United States oil and gas industries are the world’s leaders in the efficient and environmentally-safe extraction of oil and gas resources from marine deposits; and (15)it is in the energy, national security, and environmental interests of the United States that the oil and gas companies of the United States be permitted to operate in the foreign exclusive economic zones that is contiguous to the exclusive economic zone of the United States. (b)

Purpose

The purpose of this Act is to permit United States persons to participate in the exploration for and the extraction of hydrocarbon resources from any portion of a foreign maritime exclusive economic zone that is contiguous to the exclusive economic zone of the United States.

3.

Definition of United States person

In this Act, the term United States person means— (1)any United States citizen or alien lawfully admitted for permanent residence in the United States; and (2)any person other than an individual, if 1 or more individuals described in paragraph (1) own or control at least 51 percent of the securities or other equity interest in the person.

4.

Authorization of activities and exports involving hydrocarbon resources by United States persons

Notwithstanding any other provision of law (including a regulation), United States persons (including agents and affiliates of those United States persons) may— (1)engage in any transaction necessary for the exploration for and extraction of hydrocarbon resources from any portion of any foreign exclusive economic zone that is contiguous to the exclusive economic zone of the United States; and (2)export without license authority all equipment necessary for the exploration for or extraction of hydrocarbon resources described in paragraph (1).

5.

Travel in connection with authorized hydrocarbon exploration and extraction activities

Section 910 of the Trade Sanctions Reform and Export Enhancement Act of 2000 (22 U.S.C. 7209) is amended by inserting after subsection (b) the following: (c)

General license authority for travel-related expenditures by persons engaging in hydrocarbon exploration and extraction activities

(1)

In general

The Secretary of the Treasury shall, authorize under a general license the travel-related transactions listed in section 515.560(c) of title 31, Code of Federal Regulations, for travel to, from or within Cuba in connection with exploration for and the extraction of hydrocarbon resources in any part of a foreign maritime Exclusive Economic Zone that is contiguous to the United States’ Exclusive Economic Zone. (2)

Persons authorized

Persons authorized to travel to Cuba under this section include full-time employees, executives, agents, and consultants of oil and gas producers, distributors, and shippers. .