[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]




 
                        NORTH AMERICAN OFFSHORE
                       ENERGY: MEXICO AND CANADA
                       BOUNDARY TREATIES AND NEW
                     DRILLING BY CUBA AND BAHAMAS

=======================================================================

                           OVERSIGHT HEARING

                               before the

                       SUBCOMMITTEE ON ENERGY AND
                           MINERAL RESOURCES

                                 of the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                      Wednesday, November 2, 2011

                               __________

                           Serial No. 112-78

                               __________

       Printed for the use of the Committee on Natural Resources



         Available via the World Wide Web: http://www.fdsys.gov
                                   or
          Committee address: http://naturalresources.house.gov
      


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                     COMMITTEE ON NATURAL RESOURCES

                       DOC HASTINGS, WA, Chairman
             EDWARD J. MARKEY, MA, Ranking Democrat Member

Don Young, AK                        Dale E. Kildee, MI
John J. Duncan, Jr., TN              Peter A. DeFazio, OR
Louie Gohmert, TX                    Eni F.H. Faleomavaega, AS
Rob Bishop, UT                       Frank Pallone, Jr., NJ
Doug Lamborn, CO                     Grace F. Napolitano, CA
Robert J. Wittman, VA                Rush D. Holt, NJ
Paul C. Broun, GA                    Raul M. Grijalva, AZ
John Fleming, LA                     Madeleine Z. Bordallo, GU
Mike Coffman, CO                     Jim Costa, CA
Tom McClintock, CA                   Dan Boren, OK
Glenn Thompson, PA                   Gregorio Kilili Camacho Sablan, 
Jeff Denham, CA                          CNMI
Dan Benishek, MI                     Martin Heinrich, NM
David Rivera, FL                     Ben Ray Lujan, NM
Jeff Duncan, SC                      John P. Sarbanes, MD
Scott R. Tipton, CO                  Betty Sutton, OH
Paul A. Gosar, AZ                    Niki Tsongas, MA
Raul R. Labrador, ID                 Pedro R. Pierluisi, PR
Kristi L. Noem, SD                   John Garamendi, CA
Steve Southerland II, FL             Colleen W. Hanabusa, HI
Bill Flores, TX                      Vacancy
Andy Harris, MD
Jeffrey M. Landry, LA
Jon Runyan, NJ
Bill Johnson, OH
Mark Amodei, NV

                       Todd Young, Chief of Staff
                      Lisa Pittman, Chief Counsel
                Jeffrey Duncan, Democrat Staff Director
                 David Watkins, Democrat Chief Counsel
                                 ------                                

              SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES

                       DOUG LAMBORN, CO, Chairman
               RUSH D. HOLT, NJ, Ranking Democrat Member

Louie Gohmert, TX                    Peter A. DeFazio, OR
Paul C. Broun, GA                    Madeleine Z. Bordallo, GU
John Fleming, LA                     Jim Costa, CA
Mike Coffman, CO                     Dan Boren, OK
Glenn Thompson, PA                   Gregorio Kilili Camacho Sablan, 
Dan Benishek, MI                         CNMI
David Rivera, FL                     Martin Heinrich, NM
Jeff Duncan, SC                      John P. Sarbanes, MD
Paul A. Gosar, AZ                    Betty Sutton, OH
Bill Flores, TX                      Niki Tsongas, MA
Jeffrey M. Landry, LA                Vacancy
Bill Johnson, OH                     Edward J. Markey, MA, ex officio
Doc Hastings, WA, ex officio


                                 ------                                
                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Wednesday, November 2, 2011......................     1

Statement of Members:
    Holt, Hon. Rush D., a Representative in Congress from the 
      State of New Jersey........................................     4
        Prepared statement of....................................     5
    Lamborn, Hon. Doug, a Representative in Congress from the 
      State of Colorado..........................................     1
        Prepared statement of....................................     3
    Markey, Hon. Edward J., a Representative in Congress from the 
      State of Massachusetts.....................................    16
        Prepared statement of....................................    17

Statement of Witnesses:
    Antrim, Caitlyn, Executive Director, Rule of Law Committee 
      for the Oceans.............................................    42
        Prepared statement of....................................    44
    Bromwich, Hon. Michael R., Director, Bureau of Safety and 
      Environmental Enforcement, U.S. Department of the Interior.     6
        Prepared statement of....................................     8
    Claver-Carone, Mauricio, Executive Director, Cuba Democracy 
      Advocates..................................................    26
        Prepared statement of....................................    29
    Pinon, Jorge R., Visiting Research Fellow, Florida 
      International University Latin American and Caribbean 
      Center, Cuban Research Institute...........................    31
        Prepared statement of....................................    33
    Salerno, Vice Admiral Brian, Deputy Commandant for 
      Operations, U.S. Coast Guard...............................    12
        Prepared statement of....................................    13
        Statement before the Senate Energy and Natural Resources 
          Committee dated October 18, 2011, submitted for the 
          record.................................................    15
    Whittle, Daniel J., Senior Attorney and Cuba Program 
      Director, Environmental Defense Fund.......................    37
        Prepared statement of....................................    38

Additional materials supplied:
    Council of the Americas, Washington, D.C., Statement 
      submitted for the record...................................    62
    Rivera, Hon. David, a Representative in Congress from the 
      State of Florida, Statement by Jorge Pinon before the House 
      Oversight and Government Reform Committee's Subcommittee on 
      National Security and Foreign Affairs dated April 29, 2009.    53
    Ros-Lehtinen, Hon. Ileana, Hon. Albio Sires, Hon. Mario Diaz-
      Balart, and Hon. David Rivera, Members of the U.S. House of 
      Representatives, Letter to President Barack Obama submitted 
      for the record.............................................    24
                                    



   OVERSIGHT HEARING ON ``NORTH AMERICAN OFFSHORE ENERGY: MEXICO AND 
    CANADA BOUNDARY TREATIES AND NEW DRILLING BY CUBA AND BAHAMAS.''

                              ----------                              


                      Wednesday, November 2, 2011

                     U.S. House of Representatives

              Subcommittee on Energy and Mineral Resources

                     Committee on Natural Resources

                            Washington, D.C.

                              ----------                              

    The Subcommittee met, pursuant to call, at 10:06 a.m. in 
Room 1324, Longworth House Office Building, Hon. Doug Lamborn 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Lamborn, Broun, Rivera, Duncan of 
South Carolina, Holt, and Markey [ex officio].
    Mr. Lamborn. The Committee will come to order. The Chairman 
notes the presence of a quorum, which under Committee Rule 3[e] 
is two Members.
    The Subcommittee on Energy and Mineral Resources is meeting 
today to hear testimony on an oversight hearing on the North 
American Offshore Energy: Mexico and Canada Boundary Treaties 
and New Drilling by Cuba and Bahamas.
    Under Committee Rule 4[f], opening statements are limited 
to the Chairman and Ranking Member of the Subcommittee. 
However, I ask unanimous consent to include any other Members' 
opening statements in the hearing record if submitted to the 
clerk by close of business today. Hearing no objection, so 
ordered.
    I recognize myself for five minutes.

 STATEMENT OF HON. DOUG LAMBORN, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF COLORADO

    Mr. Lamborn. At a time when world demand for energy is 
increasing, businesses that provide us with the oil and 
electricity that we use every day will continue to seek out new 
places around the world to develop these resources. We want to 
be attracting this energy development to our shores here in the 
United States. That way, the American people can compete for 
the jobs that come from energy development and our nation can 
reap the economic and national security benefits of increased 
U.S. energy development.
    Unfortunately, as previous hearings we have conducted this 
year have so clearly pointed out, uncertainty is forcing 
companies to look elsewhere in globally competitive markets. As 
you can see from today's hearing, you don't have to venture too 
far to find new areas for oil and natural gas development. 
Cuba's lease blocks are only miles from our shores.
    This is the subject of today's hearing. We will cover two 
boundary disputes that are hindering U.S. energy development, 
one with Mexico and one with Canada. It is my hope that an 
expeditious and fair agreement between the U.S. and the other 
countries will give the certainty necessary to move forward 
with energy development along the U.S.-Mexico boundary and open 
the western gap in the Gulf of Mexico and in the disputed areas 
of the Beaufort Sea in Alaska.
    Additionally, we will be discussing Cuba and the Bahamas' 
new pursuit of offshore resources development and what that 
development means to the United States. It is my hope that we 
can hear from BSEE and the U.S. Coast Guard today on the 
implications of this drilling in waters adjacent to the U.S. 
and how the inspection of Cuba's drilling rig announced at the 
Senate hearing on this issue will be conducted and what will 
happen afterwards.
    It was my hope that the Committee would hear from all U.S. 
Government entities involved in issuing licenses and engaged in 
U.S.-Cuba drilling issues. However, the Departments of State, 
Treasury and Commerce all declined to participate in today's 
hearing.
    There has been growing concern that companies will be 
allowed to expand their engagement with Cuba and that this 
Administration is weakening the U.S. embargo on Cuba, a state 
sponsor of terrorism. A recent trip to Cuba by the President's 
own chairman of the Oil Spill Commission and licenses and 
waivers for companies to sell technology to Cuba raise many 
concerns about this Administration's willingness to support the 
drilling efforts of the Cuban regime.
    Companies that are interested in engaging in support of 
Cuba's efforts should be aware that they are under the greatest 
of scrutiny, and efforts to circumvent U.S. law will be closely 
monitored and appropriate actions taken. Like dealings with 
Iran, engagement with a Cuban dictatorship that sponsors 
terrorism is a road fraught with danger.
    Our second panel will answer more philosophical questions 
about the laws of our nation and how we can work within the 
legality of these laws as we look toward the implications of 
Cuba's desire to pursue offshore drilling.
    Offshore energy development in the U.S. is conducted with 
great transparency and extensive regulatory oversight. There is 
an entirely different story in Cuba where very little is 
considered transparent, especially with a brutal regime that 
has a huge list of human rights violations. A public hearing 
such as we are conducting today would not be allowed to occur 
under the Castro regime.
    It is in the interest of this Committee to find out exactly 
how our nation is preparing to mitigate any problems that may 
occur as a result of Cuba's untested pursuit of offshore 
drilling. The Bahamas, Mexico and Canada are completely 
different examples of those nations pursuing offshore drilling 
in waters adjacent to the United States in a transparent and 
open manner that shows how our nations can work together to 
ensure the utmost safety.
    Given the importance of these issues, I greatly look 
forward to the testimony we will hear today, and I thank all 
our witnesses today for answering questions on these diverse 
issues, all of which significantly impact our nation.
    Now I would like to recognize the Ranking Member of the 
Subcommittee, Representative Holt of New Jersey, for five 
minutes.
    [The prepared statement of Mr. Lamborn follows:]

          Statement of The Honorable Doug Lamborn, Chairman, 
              Subcommittee on Energy and Mineral Resources

    At a time when world demand for energy is increasing, businesses 
that provide us with the oil and electricity that we use every day will 
continue to seek out new places around the world to develop these 
resources. We want to be attracting this energy development to OUR 
SHORES here in the United States. That way, the American people can 
compete for the jobs that come from energy development--and our nation 
can reap the economic and national security benefits of increased U.S. 
energy development.
    Unfortunately, as previous hearings we have conducted this year 
have so clearly pointed out: UNCERTAINTY is forcing companies to look 
elsewhere in a globally competitive market. As you can see from today's 
hearing--you don't have to venture too far to find new areas for oil 
and natural gas development. Cuba's lease blocks are only miles from 
our shores.
    This is the subject of today's hearing--we will cover two boundary 
disputes that are hindering U.S. energy development, one with Mexico 
and one with Canada. It is the hope that an expeditious and fair 
agreement between the US and the other countries will give the 
certainty necessary to move forward with energy development along the 
U.S.--Mexico boundary and open the ``western gap'' in the Gulf of 
Mexico and in the disputed areas of the Beaufort Sea in Alaska.
    Additionally, we will be discussing Cuba and the Bahamas' new 
pursuit of offshore resources and development- and what that 
development means to the United States. It is my hope that we can hear 
from BSEE and the U.S. Coast Guard today on the implications of this 
drilling in waters adjacent to the U.S. and how the inspection of 
Cuba's drilling rig announced at the Senate hearing on this issue will 
be conducted and what will happen afterwards.
    It was my hope that the Committee would hear from all US government 
entities involved in issuing licenses and engaged in U.S.--Cuba 
drilling issues. However, the Departments of State, Treasury and 
Commerce all declined to participate in today's hearing. There has been 
growing concern that companies will be allowed to expand their 
engagement with Cuba and that this administration will weaken the U.S. 
embargo on Cuba, a state sponsor of terrorism. A recent trip to Cuba by 
the President's own Chairman of the Oil Spill Commission and licenses 
and waivers for companies to sell technology to Cuba raise many 
concerns about this Administration's willingness to support the 
drilling efforts of the Cuban regime. Companies that are interested in 
engaging in support of Cuba's efforts should be aware that they are 
under the greatest of scrutiny and efforts to circumvent US law will be 
closely monitored and appropriate actions taken. Like dealings with 
Iran, engagement with a Cuban dictatorship that sponsors terrorism is a 
dangerous road.
    Our second panel will answer more philosophical questions about the 
laws of our nation--and how we can work within the legality of these 
laws as we look towards the implications of Cuba's desire to pursue 
offshore drilling.
    Offshore energy development in the U.S. is conducted with great 
transparency and extensive regulatory oversight. This is an entirely 
different story in Cuba where very little is considered 
``transparent''--especially with a brutal regime that has a laundry 
list of human rights violations. A public hearing such as we are 
conducting today on this subject would not be allowed to occur under 
the Castro regime. It is in the interest of this Committee to find out 
exactly how our nation is preparing to mitigate any problems that may 
occur as a result of Cuba's untested pursuit in offshore drilling. The 
Bahamas, Mexico and Canada are completely different examples of a 
nation's pursuing offshore drilling in waters adjacent to the United 
States in a transparent open manner that shows our nation's can work 
together to ensure the utmost safety.
    Given the importance of these issues, I greatly look forward to the 
testimony we will hear today and I thank all of our witnesses today for 
answering questions on these diverse issues--all of which significantly 
impact our nation.
                                 ______
                                 

 STATEMENT OF HON. RUSH D. HOLT, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF NEW JERSEY

    Mr. Holt. Thank you, Mr. Chairman, and I thank the 
witnesses for coming.
    In 2008, Vice President Dick Cheney asserted that China was 
drilling off Cuba. He said that with words dripping with 
import--as close as 60 miles to the Florida Keys--as a way to 
push for expanded drilling off of U.S. beaches on the East 
Coast and the eastern Gulf of Mexico. However, China was not 
actually drilling off Cuba, and Mr. Cheney's claims were 
unfounded.
    Now a Spanish company, along with Norwegian and Indian 
partners, has announced plans to begin exploratory drilling off 
Cuba, roughly 80 miles from Florida, next January. Because of 
the embargo on Cuba, the Chinese-built drill rig will be used 
to conduct the exploration. However, I feel that rather than 
having a real discussion today about the ways we should engage 
Cuba to ensure that drilling takes place safely, we will be 
hearing about, well, the case for expanded drilling in the 
United States.
    The independent blue ribbon BP Oil Spill Commission 
concluded that it is in our country's national interest to 
negotiate now with these near neighbor--meaning Mexico and 
Cuba--to agree on a common, rigorous set of standards and a 
system for regulatory oversight. The same operator adherence to 
effective safety culture called for in this report, along with 
protocols to cooperate on containment and response strategies 
and preparedness in case of a spill.
    We should develop the strongest possible safety standards 
for offshore drilling here in the United States and work with 
countries with whom we share a maritime boundary to see that 
they adhere to such standards. Oil spills don't recognize 
international boundaries. In fact, the Obama Administration is 
already working to develop a protocol to establish a common set 
of safety and environmental standards with Mexico for the Gulf 
of Mexico. These negotiations are ongoing I believe.
    In addition, the Administration is working with Repsol to 
ensure that the United States Coast Guard and Interior 
Departments can inspect any rig, such as the Chinese rig, prior 
to entering Cuban waters. The Administration should also 
consider issuing a general license to allow U.S. companies and 
personnel to provide assistance in the event of a spill.
    In addition, the United States is working to negotiate 
maritime boundaries with countries like Canada in the Arctic 
Ocean, and I am sorry to say Republicans in the Senate are 
weakening our negotiating position. Republican Senators have 
blocked the ratification of the Law of the Sea Treaty, which 
would improve our ability to submit international claims to the 
Continental Shelf beyond 200 miles in places like the Arctic.
    As a result, we are at a disadvantage in working to ensure 
that the United States and U.S. companies can claim those 
resources that are rightfully ours. In fact, what we are seeing 
in the Arctic Ocean as countries move to claim the seabed and 
the minerals below it could only be described as a black gold 
rush, and the United States is sitting on the sidelines because 
Senate Republicans refuse to ratify the Law of the Sea Treaty.
    I expect today that people, some here, will be expressing 
their fears rather than expressing facts and rather than 
looking to solve actual problems. We will hear that Cuba is 
drilling and we are not. We will likely hear these claims 
despite the fact that U.S. oil production is at its highest 
level in nearly a decade and oil production from the Gulf of 
Mexico is higher than it was during the final year of the 
previous Administration.
    In a symbolic move, Russia placed a flag on the sea floor 
at the North Pole in 2007, and both Russia and Canada intend to 
submit claims to the United Nations to extend their Continental 
Shelf in the coming years. If Republicans were serious about 
ensuring that U.S. interests and resources were protected in 
the Arctic, then they would end their opposition to 
ratification of the Law of the Sea Treaty.
    I hope we will be dealing with the facts today. This is 
really not the Committee to be discussing embargoes. It is the 
Committee to discuss the environment and the protection of our 
environment, jobs, and resources. I yield back my time.
    [The prepared statement of Mr. Holt follows:]

       Statement of The Honorable Rush D. Holt, Ranking Member, 
              Subcommittee on Energy and Mineral Resources

    Thank you Mr. Chairman,
    In 2008, Vice President Dick Cheney asserted that China was 
drilling off of Cuba, as close as 60 miles from the Florida Keys, as a 
way to push for expanded drilling off U.S. beaches on the East Coast 
and in the Eastern Gulf of Mexico. However, China was not actually 
drilling off of Cuba and Mr. Cheney's claims were unfounded.
    Now, a Spanish company, Repsol, has announced plans to begin 
exploratory drilling off of Cuba roughly 80 miles from Florida in 
January of next year. Because of the embargo on Cuba, a Chinese-built 
drill rig will be used to conduct the exploration. However, I fear that 
rather than having a real discussion today about the ways that we 
should engage Cuba to ensure that this drilling takes place safely, the 
majority will use this pending action to once again try to make the 
case for expanded drilling off the United States.
    The independent, blue-ribbon BP Oil Spill Commission concluded that 
``it is in our country's national interest to negotiate now with these 
near neighbors [Mexico and Cuba] to agree on a common, rigorous set of 
standards, a system for regulatory oversight, and the same operator 
adherence to the effective safety culture called for in this report, 
along with protocols to cooperate on containment and response 
strategies and preparedness in case of a spill.'' We should develop the 
strongest possible safety standards for offshore drilling here in the 
United States and work with countries with whom we share a maritime 
boundary to see that they adhere to these standards. Oil spills don't 
recognize international boundaries.
    In fact, the Obama Administration is already working to develop a 
protocol to establish a common set of safety and environmental 
standards with Mexico for the Gulf. Those negotiations are ongoing.
    In addition, the Administration is working with Repsol to ensure 
that the U.S. Coast Guard and Interior Department inspectors can 
inspect the Chinese rig prior to it entering Cuban waters. The 
Administration should also consider issuing a general license to allow 
U.S. companies and personnel to swiftly provide assistance in the event 
of a spill.
    In addition, as we are working to negotiate maritime boundaries 
with countries like Canada in the Arctic Ocean, Republicans in the 
Senate are weakening our negotiating position.
    Republican Senators have blocked ratification of the Law of the Sea 
Treaty, which would improve our ability to submit international claims 
to our continental shelf beyond 200 miles in places like the Arctic. As 
a result, we are at a disadvantage in working to ensure that the United 
States and U.S. companies can claim those resources that are rightfully 
ours. In fact, what we are seeing in the Arctic Ocean, as countries 
move to claim the seabed and the minerals below it, could only be 
described as a black gold rush. And the United States is sitting on the 
sidelines because Senate Republicans refuse to ratify the Law of the 
Sea Treaty.
    I expect that we are likely going to hear a lot of the same fear 
mongering today that we heard in 2008. That Cuba is drilling and we are 
not. We will likely hear these claims despite the fact that U.S. oil 
production is at its highest level in nearly a decade and oil 
production from the Gulf of Mexico is higher than it was during the 
final year of the Bush Administration.
    In a symbolic move, Russia placed a flag on the sea floor at the 
North Pole in 2007. And both Russia and Canada intend to submit claims 
to the United Nations to extend their continental shelf in the coming 
years.
    If Republicans were serious about ensuring that U.S. interests and 
resources were protected in the Arctic, they would end their opposition 
to ratification of the Law of the Sea Treaty.
    I yield back.
                                 ______
                                 
    Mr. Lamborn. OK. Thank you. Before I invite the witnesses 
forward, I ask unanimous consent that the gentleman from 
Florida, Mr. Bilirakis, and the gentleman from Nevada, Mr. 
Amodei, who is a member of the Committee but not this 
Subcommittee, be allowed to join the Members of this 
Subcommittee on the dais and participate in the hearing. These 
Members do not count for a quorum and cannot vote. Without 
objection, so ordered.
    I now invite forward The Honorable Michael Bromwich, 
Director of Bureau of Safety and Environmental Enforcement, 
BSEE, and Vice Admiral Brian Salerno, Deputy Commandant for 
Operations, U.S. Coast Guard.
    Like all our witnesses, your written testimony will appear 
in full in the hearing record, so I ask that you keep your oral 
statements to five minutes as outlined in the invitation letter 
to you and under Committee Rule 4[a]. Our microphones are not 
automatic, so you need to turn them on when you are ready to 
begin.
    I will also explain how our timing lights work. When you 
begin to speak, our clerk will start the timer and a green 
light will appear. After four minutes a yellow light appears, 
and at that time you should begin to conclude your statement. 
At five minutes the red light will come on.
    Director Bromwich, thank you for being here, and you may 
begin.

STATEMENT OF HON. MICHAEL BROMWICH, DIRECTOR, BUREAU OF SAFETY 
                 AND ENVIRONMENTAL ENFORCEMENT

    Mr. Bromwich. Thank you very much, Mr. Chairman, Mr. Holt 
and Members of the Committee. I am happy to be here today to 
discuss issues relating to oil and gas exploration in waters 
that border the United States Outer Continental Shelf.
    As you know, the blowout and oil spill from the Macondo 
well last year prompted the most aggressive and comprehensive 
reforms to U.S. offshore oil and gas regulation in our history. 
Our reforms are designed to ensure that the exploration and 
development of oil and gas resources in U.S. waters proceed 
safely and with appropriate protection for ocean environments 
and our coastlines.
    But the risks to U.S. waters and shores posed by offshore 
drilling are not limited to activities on the U.S. OCS. As a 
result, we have taken steps to try to improve drilling 
standards and practices as well as oil spill response 
preparedness for operations in foreign waters that could have 
an impact on our coastline.
    We are working with key agencies across the Federal 
government, including the State Department, Coast Guard, EPA, 
NOAA and others, as well as with industry, oil spill response 
and blowout containment companies and our international 
counterparts in the Gulf of Mexico, in the Arctic and along our 
maritime boundaries with Canada.
    More specifically, we are working closely with other 
Federal agencies to address the threat posed by offshore 
drilling and a potential oil spill in neighboring parts of the 
Gulf of Mexico that could affect U.S. waters, shores and 
interests. Several other countries on or near the Gulf of 
Mexico are expected to move forward with offshore drilling in 
their exclusive economic zones in the near future.
    The Spanish oil company, Repsol, as has been mentioned, has 
announced its intention to drill offshore wells in Cuba's 
waters using a newly constructed mobile offshore drilling unit. 
In the near future, there also will likely be offshore drilling 
activity in the EEZs of the Bahamas and Jamaica and continuing 
offshore activity in Mexico's EEZ.
    The U.S. Government is taking steps to protect our waters 
and coastal resources by promoting safety through prevention 
and by preparing response contingencies in the event of a 
spill. These activities include communicating with Repsol to 
encourage its compliance with U.S. safety and environmental 
standards, cooperating with our regulatory agency counterparts 
in the region, including Mexico, through bilateral and 
multilateral mechanisms to develop common safety standards and 
taking steps to ensure that U.S. resources are available to 
respond to a spill.
    The simple fact is we do not have regulatory authority over 
Repsol's activities in Cuba, but beginning in February of this 
year Repsol has voluntarily provided us information regarding 
its drilling and oil spill response plans. We have had numerous 
contacts with the company, and we have made it clear that we 
expect it to adhere to the highest environmental health and 
safety standards and to have adequate prevention, mitigation 
and remediation systems in place in the event of an incident.
    Repsol officials have stated publicly that in carrying out 
its exploratory drilling plans in Cuban waters it will adhere 
to U.S. regulations and the highest industry standards. Repsol 
has also offered U.S. agencies an opportunity to board the 
mobile offshore drilling unit that it intends to use in Cuban 
waters to inspect the vessel and drilling equipment and to 
review relevant documentation.
    To protect U.S. interests, we have sought to gather 
information on the unit's operation, technology and safety 
equipment. BSEE and the Coast Guard are planning to coordinate 
a joint visit to the unit that would occur shortly before the 
rig is scheduled to enter Cuban waters.
    In addition to keeping BSEE regularly informed of its 
plans, Repsol has expressed a desire to keep U.S. regulators 
and spill response planners apprised of its oil spill 
preparedness activities offshore Cuba. Along with other U.S. 
representatives, BSEE has already witnessed a tabletop spill 
response exercise. During the exercise, Repsol's spill 
management team mobilized to respond to a hypothetical spill.
    Beyond our specific engagement with Repsol, BSEE has been 
engaged with our regulatory counterparts in the Gulf of Mexico 
in an effort to harmonize drilling safety standards in the 
region. BSEE and its predecessor agencies have been 
collaborating with officials from all levels of the Mexican 
Government since the late 1990s, and this cooperation has 
increased substantially since the creation of the new Mexican 
Regulatory Commission.
    The U.S. Government will immediately use all appropriate 
resources and authorities to conduct response operations in the 
event of an oil spill from activities in the region that 
threaten U.S. waters or its coastline. The Administration has 
engaged state and local governments and private parties that 
might be affected by such a spill. We will continue with active 
support of these efforts to ensure that appropriate plans and 
resources are in place to respond promptly and effectively to 
an oil spill that reaches U.S. waters.
    The Gulf of Mexico is not the only area in which we are 
proactively working on issues related to a potential oil spill, 
and my prepared testimony discusses the ways in which DOI and 
BSEE specifically are engaged in a number of multilateral and 
bilateral initiatives for oil spill preparedness and response 
in the Arctic and with Canada.
    We view engagement with our foreign counterparts in the 
areas of shared interest as a central part of our efforts to 
protect U.S. environmental and economic interests. Thank you 
very much, and I look forward to your questions.
    [The prepared statement of Mr. Bromwich follows:]

   Statement of Michael R. Bromwich, Director, Bureau of Safety and 
  Environmental Enforcement, United States Department of the Interior

    Mr. Chairman and Members of the Committee,
    I am pleased to be here today to discuss oil and gas exploration in 
North American waters that border the United States Outer Continental 
Shelf (OCS). As Director of the Bureau of Safety and Environmental 
Enforcement, the agency in charge of enforcing safety and environmental 
regulations on the U.S. OCS, I would like to share with you information 
on the actions we have taken to ensure that oil and gas operations in 
neighboring waters are done in as safe and environmentally responsible 
manner as possible, and to ensure that the U.S. responds appropriately 
to protect U.S. interests in the event of a spill originating in 
foreign waters that may affect adjacent U.S. waters and shorelines.
    As you know, the blowout and oil spill from the Macondo well last 
year prompted the most aggressive and comprehensive reforms to offshore 
oil and gas regulation and oversight in U.S. history. Our new standards 
and other reforms are designed to ensure that the exploration and 
development of oil and gas resources in U.S. waters proceeds safely and 
with appropriate protections for ocean environments and our coastlines.
    Because the risks to U.S. waters and shores posed by offshore 
drilling are not limited to the activities on the U.S. OCS, the 
Department of the Interior (DOI) and my agency have taken steps to 
improve drilling standards and practices, as well as oil spill response 
preparedness, for operations in foreign waters that could have an 
impact our coastline. DOI and the Bureau of Safety and Environmental 
Enforcement (BSEE) are engaged with the key agencies across the federal 
government--including the State Department, United States Coast Guard 
(USCG), Environmental Protection Agency (EPA), National Oceanic and 
Atmospheric Administration (NOAA) and others--as well as with industry, 
oil spill response and blowout containment companies, and our 
international counterparts in the Gulf of Mexico, in the Arctic and 
along our maritime boundaries with Canada.
Status of Response Capability and Readiness in the Gulf of Mexico
    DOI and BSEE are working closely with other federal agencies to 
address the threat of an oil spill in neighboring parts of the Gulf of 
Mexico that could affect U.S. waters, shores and interests. Several 
other countries on or near the Gulf of Mexico are expected to proceed 
with offshore drilling in their exclusive economic zones (EEZ) in the 
near future. As you know, the Spanish oil company Repsol has announced 
its intent to drill offshore wells in Cuba's waters using a newly 
constructed mobile offshore drilling unit (MODU), the Scarabeo 9. In 
the near future, there also likely will be offshore drilling activity 
in the EEZs of the Bahamas and Jamaica and continuing offshore activity 
in Mexico's EEZ, including possible activity along the U.S.-Mexico 
maritime boundary pursuant to a transboundary agreement between the two 
countries, which is currently under negotiation. Formal negotiations of 
the agreement, which would advance the shared commitment of Presidents 
Obama and Calderon to promote the safe, efficient and equitable 
development of transboundary hydrocarbon reservoirs, began in August 
2011. Multiple rounds of negotiations have followed, and the parties 
hope to have a final agreement by the end of the year.
    The U.S. government is taking steps to protect U.S. waters and 
environmental and economic resources by promoting drilling safety to 
prevent spills in the first place and by preparing response 
contingencies in the event of a spill. These activities include: (1) 
communicating with Repsol to encourage its compliance with U.S. safety 
and environmental standards; (2) cooperating with our regulatory agency 
counterparts in the region, including Mexico, through bilateral and 
multilateral mechanisms to develop common safety standards; and (3) 
taking steps to ensure that U.S. resources are available to respond to 
a spill.
1. Engagement with Repsol
    While BSEE does not have regulatory authority over Repsol's 
activities in Cuba, beginning in February of this year, Repsol has 
voluntarily provided us information regarding its plans related to 
drilling and oil spill response. In our numerous communications with 
Repsol, we have made clear that we expect it to adhere to industry and 
international environmental, health, and safety standards and to have 
adequate prevention, mitigation, and remediation systems in place in 
the event of an incident. Repsol officials have stated publicly that in 
carrying out its exploratory drilling plans in Cuban waters, it will 
adhere to U.S. regulations and the highest industry standards. Repsol 
has offered U.S. agencies an opportunity to board the Scarabeo 9 rig 
that Repsol intends to use in Cuban waters to inspect the vessel and 
drilling equipment and to review relevant documentation. Given the 
proximity of drilling to U.S. waters, and considering the serious 
consequences a major oil spill would have on our economic and 
environmental interests, we have welcomed the opportunity to gather 
information on the rig's operation, technology, and safety equipment. 
BSEE and the Coast Guard are coordinating a joint visit to the Scarabeo 
9 that will occur shortly before the rig is scheduled to enter Cuban 
waters.
    In addition to keeping BSEE regularly informed of its plans, Repsol 
has expressed a desire to keep U.S. regulators and spill response 
planners appraised of its oil spill preparedness activities offshore 
Cuba. Along with other U.S. representatives, BSEE has already witnessed 
a table-top spill response exercise held at the Repsol office in 
Trinidad.
    During the exercise, Repsol's spill management team mobilized to 
respond to a hypothetical spill and demonstrated response equipment 
deployment capabilities. Repsol has subsequently invited BSEE and Coast 
Guard officials to observe another emergency drill to be conducted in 
Trinidad related to contingency planning for the drilling.
2. Regional Drilling Safety Initiatives in the Gulf of Mexico
    In addition to our communications with Repsol and in parallel with 
the negotiations of a transboundary agreement, BSEE has been engaged 
with our regulatory counterparts in the Gulf of Mexico in an effort to 
harmonize drilling safety standards in the region. BSEE and its 
predecessor agencies have been collaborating with officials from all 
levels of the Mexican government since the late 1990s on issues related 
to the safe and responsible development of oil and gas resources in the 
Gulf of Mexico. This cooperation has increased substantially in the 
aftermath of Deepwater Horizon and after the creation of the National 
Hydrocarbons Commission (CNH), the Mexican agency responsible for 
regulating offshore drilling safety on Mexico's continental shelf.
    BSEE and CNH are working towards a set of common safety and 
environmental standards through a series of technical workshops. 
Following a workshop held this summer in BSEE's Gulf of Mexico regional 
office, the U.S. and Mexico developed an action plan to define subject 
areas where the creation of common standards would be appropriate. CNH 
officials will be returning to BSEE's offices in the near future for a 
technical exchange about BSEE's Worst Case Discharge analysis.
    In addition to this ongoing cooperation, Secretary of the Interior 
Ken Salazar and I traveled to Mexico for a series of meetings with 
Mexican officials to discuss the development of common safety and 
environmental standards for offshore oil and gas exploration and 
development in the Gulf of Mexico.
3. Spill Response and Preparedness
    The U.S. government will immediately use all appropriate resources 
and authorities to conduct response operations in the event an oil 
spill from activities in Cuban waters or from activities in other 
states in the region that threaten U.S. waters or its coastline. The 
Administration has engaged state and local governments and private 
parties that might be affected by such a spill to ensure awareness and 
mutual cooperation and the adequacy of five different existing Area 
Contingency Plans covering Florida where models predict varying 
probabilities of U.S. shoreline impacts should a spill occur at the 
planned exploratory drilling locations in Cuban waters. BSEE staff is 
also engaged with District Seven USCG staff out of Miami in the 
development of an International Offshore Drilling Response Plan and 
will be participating in an upcoming workshop to validate the plan. We 
will continue with active support of these efforts to ensure that 
appropriate plans and resources are in place to respond in a rapid and 
effective manner to an oil spill that reaches U.S. waters.
    As part of this planning for possible oil spills from deepwater 
drilling off of Cuba, NOAA, in cooperation with the Bureau of Ocean 
Energy Management (BOEM), has run sophisticated trajectory models to 
identify potential landfall areas along the U.S. coasts.
    Using worst case discharge data provided by Repsol, coupled with 
computer model results, the USCG is working with Area Committees in the 
areas that potentially could be affected by such a spill to enhance 
Area Contingency Plans--an effort that requires local and state 
participation in the development of protection strategies and 
establishing priorities for threatened resources.
    The U.S. is also taking measures to ensure that the appropriate 
private industry parties are able to respond quickly in the event of an 
oil spill in Cuban waters. The Department of Commerce and the Treasury 
Department have a long-standing practice of providing licenses to 
address environmental contingencies in Cuban waters. The Department of 
Commerce's Bureau of Industry and Security (BIS) has issued a number of 
licenses for post-incident oil spill containment and cleanup items for 
use by U.S. companies in Cuban waters. These items include booms, 
skimmers, dispersants, pumps and other equipment and supplies necessary 
to minimize environmental damage in the event of a spill. Several such 
applications are currently under review by BIS, including applications 
for a subsea well containment system and related equipment, such as 
remotely operated submersible vehicles and subsea construction, dive 
support, and well intervention vessels.
    In consultation with the Department of State, the Treasury 
Department can issue licenses to U.S. entities to prepare for and to 
operate in the event of an oil spill. The Treasury Department has been 
issuing such licenses for over a decade, including licenses for 
environmental response, maritime salvage, and spill prevention 
activities.
    Finally, BSEE is working closely with other federal agencies on a 
number of regional initiatives with countries in the region, including 
Mexico, Cuba, the Bahamas and Jamaica. For example, planning is 
underway for a Regional Oil Pollution Preparedness, Response and 
Cooperation Seminar to Focus on Developing National Plans for Marine 
Pollution Preparedness and Response Related to Offshore Units and 
Regional Cooperation. This seminar, which is sponsored and conducted by 
the International Maritime Organization, will take place in the Bahamas 
later this year and officials from the Bahamas, Cuba, Mexico, Jamaica 
and the United States have been invited to participate. The seminar 
will provide a valuable opportunity for participating countries to 
learn about other nations' plans for emergency well control and oil 
spill response, which will help us improve our own response planning 
for upcoming offshore drilling expected in the EEZs of participating 
states. We believe a multilateral approach that involves all parties in 
the region contemplating drilling activities that could affect the 
United States is the most effective means of safeguarding our 
interests. We therefore intend to continue to vigorously pursue 
continued multilateral engagements in the Gulf of Mexico.

Status of Response Capability and Readiness in the Arctic and with 
        Canada
    In addition to our activities in the Gulf of Mexico, DOI and BSEE 
are also engaged in a number of multilateral and bilateral initiatives 
for oil spill preparedness and response in the Arctic and with Canada.

1. Arctic Council
    The U.S. is a member of the Arctic Council Ministerial Meeting, 
which is a high-level forum of eight nations--Canada, Russia, Norway, 
Denmark, Iceland, the United States, Sweden and Finland--and their 
indigenous peoples.
    The Arctic Council's meeting in Nuuk, Greenland this past May led 
to the creation of two important initiatives to address oil spill 
prevention, preparedness and response in the Arctic. The first of these 
is the Oil Spill Preparedness and Response Task Force, of which BSEE is 
a member and which intends to develop an international instrument on 
oil pollution preparedness and response in the Arctic. The Task Force 
met in Oslo, Norway last week. In addition, BSEE is participating in 
the Arctic Council Emergency Prevention, Preparedness and Response 
working group, which is developing recommendations on best practices in 
oil spill prevention. The results of both initiatives will be presented 
at the next Ministerial Meeting of the Arctic Council in the spring of 
2013.

2. Bilateral Cooperation with Canada
    BSEE also participates in a number of bilateral initiatives with 
Canada related to oil spill preparedness and response. BSEE's 
Technology Assessment and Research Program has collaborated with Canada 
in over 35 joint research and development projects, many of which 
relate to improving oil spill response and preparedness. For example, 
the Bureau is collaborating with Canada's Department of the Environment 
on a number of joint oil spill response research projects focusing on 
remote sensing and measurement of spilled oil; chemical treating 
agents; the properties and behavior of spilled oil; testing and 
evaluation of oil spill absorbents; cleaning up oil from shorelines; 
mechanical containment and cleanup of spilled oil; and examining 
matters relating to dispersant use. Another project has involved 
collaboration with Canada's Department of Fisheries and Oceans on a 
study of dispersants.
    BSEE's predecessor agencies also initiated and conducted two 
meetings of the US-Canada Northern Oil and Gas Research Forum (Forum). 
The first Forum took place in October 2008 in Anchorage, followed by a 
second Forum in December 2010 in Calgary. The forums focused on 
technical, engineering, and scientific research concerning offshore 
drilling safety, oil spill prevention and management, ice engineering 
and transportation issues, as well as the environmental effects of oil 
and gas exploration and development in the Arctic. These 
multidisciplinary conferences brought together participants from 
government, industry, academia, indigenous groups, and non-governmental 
organizations to discuss research issues of relevance to the management 
of oil and gas activities.
    BSEE has also cooperated in joint projects with the Canadian Coast 
Guard at the Oil and Hazardous Materials Simulated Environmental Test 
Tank (OHMSETT), which is the U.S. oil spill response and renewable 
energy test facility located in New Jersey. One project evaluated 
remote sensing equipment to detect spilled oil; another evaluated the 
oil containment performance of five different types of fire-resistant 
booms. We will continue this engagement under the leadership of BSEE's 
Oil Spill Response Division.
    Finally, BSEE will participate in the annual Arctic and Marine Oil 
Spill Program (AMOP) Technical Seminar with Canada.The Seminar was 
created in 1978 by Canada's environmental ministry to improve the 
knowledge base and technology for combating Arctic and marine oil 
spills. Since then, it has been a useful forum for cooperation and 
information exchange, providing BSEE with the opportunity to engage 
researchers from other countries who have similar Arctic response 
interests, learn about emerging technologies and scientific 
discoveries, inform attendees of findings from BSEE-funded research, 
and identify research gaps and needs. In the last AMOP seminar 
conducted in October 2011, the program included discussions on the use 
of Ohmsett for research related to biofuel spill response and 
dispersant operational research conducted at Ohmsett over the last ten 
years, evidencing the contributions that BSEE has and will continue to 
make to improving oil spill response.
    BSEE is also on the Executive and Planning Committees of the 
International Oil Spill Conference, which is held every three years--
the most recent Conference was held in mid-2011. The conference focuses 
on new technologies and hosts exhibitors and participants from around 
the globe.
    As you can tell from this description of the activities of DOI and 
BSEE, we view engagement with our foreign counterparts in areas of 
shared interest and concern as a central part of protecting U.S. 
environmental and economic interests.
    Thank you and I look forward to your questions.
                                 ______
                                 
    Mr. Lamborn. OK. Perfect timing. You have had a little 
practice here.
    Mr. Bromwich. A little bit.
    Mr. Lamborn. Thank you for your statement and for being 
here.
    And, Vice Admiral Salerno, thank you for being here, and 
please begin your statement.

           STATEMENT OF VICE ADMIRAL BRIAN SALERNO, 
       DEPUTY COMMANDANT FOR OPERATIONS, U.S. COAST GUARD

    Admiral Salerno. Good morning, Chairman Lamborn, Ranking 
Member Holt, Ranking Member Markey from the full Committee and 
distinguished Members of the Committee and full Committee. I am 
very pleased to be here this morning to answer your questions 
on the Coast Guard's response capability and readiness for oil 
spills originating in foreign waters adjacent to the United 
States which may affect or threaten our nation and our natural 
resources.
    Protecting the marine environment from oil spills is an 
important Coast Guard mission. Contingency planning, training 
and exercises are fundamental to our readiness to respond to 
oil spills. These in turn have their foundation in the National 
Oil and Hazardous Substances Pollution Contingency Plan or NCP 
for short.
    Contingency planning under the NCP occurs at several 
levels. Local level planning is conducted by an area committee 
under the guidance of the Coast Guard captain of the port, who 
is also predesignated as the Federal on-scene coordinator in 
coastal areas. The area committee brings together Federal, 
state, local and tribal officials and commercial responders to 
identify risks, sensitive areas to be protected and protection 
strategies.
    At the regional level, Coast Guard districts participate 
with other Federal agencies and state officials through 
regional response teams on such issues as dispersant use and in 
situ burning preauthorizations. And finally, at the national 
level, the Coast Guard serves as the vice chair of the national 
response team, which is comprised of 16 Federal agencies with 
environmental response responsibilities and ensures national 
level capabilities are available as needed to support response 
efforts.
    Each of these organizational levels also has a role to play 
in developing strategies and cooperative relationships with our 
foreign neighbors to enhance preparedness and response to 
transboundary environmental threats. In particular, we have 
well-established relationships with Canada, Russia and Mexico 
to achieve cooperation on potential pollution threats, the 
identification of equipment and personnel resources available 
to respond to incidents and procedures for notification and 
incident management in the event of an actual response.
    In each of these cases, cooperation in controlling the 
source of the pollution is paramount in addressing the 
transnational nature of the threat. Facilitating movement of 
people and equipment to the source is an essential component of 
the aforementioned agreements. Additionally, these agreements 
include regular planning sessions, exercises and support mutual 
cooperation in oil spill research and development.
    Under these agreements, we have concluded a bilateral 
response exercise with Mexico in San Diego just this past 
August. We also successfully completed a joint Coast Guard/
Canadian Coast Guard environmental response summit last month. 
Just yesterday, I hosted a Russian delegation here in 
Washington and signed a bilateral memorandum of understanding 
that will expand our current cooperative response agreements to 
cover boundary waters between the United States and Russia.
    While we can point to successes and healthy relationships 
in the areas already mentioned, we do not have the same 
bilateral ability to engage with all countries which are 
potential sources of transboundary pollution threats. This is 
particularly true in the northern Caribbean and the anticipated 
deepwater drilling in the Cuban EEZ as a primary example.
    However, we are taking steps to engage multilaterally in 
the Caribbean. By working through the International Maritime 
Organization we have garnered support to convene a multilateral 
seminar this December in the Bahamas that will invite Caribbean 
nations to discuss oil spill prevention and response issues.
    At the same time, we are working extensively with our 
domestic response partners to update our contingency plans. We 
are also directly engaged with Repsol related to their response 
strategies, resources and capabilities in support of their 
drilling operations.
    In the event that an oil spill does occur within the Cuban 
EEZ, the Coast Guard would mount an immediate response under 
the national contingency plan in partnership with other 
Federal, state and local agencies. We would focus on combating 
the spill as far offshore and as close to the source as 
possible using all viable response tactics.
    In preparation for such an eventuality, our Seventh 
District in Miami has been working closely with the state and 
local response organizations in southern Florida since March. 
Our district office will conduct a response exercise later this 
month.
    As was highlighted by the Deepwater Horizon oil spill, any 
spill of national significance, regardless of its source, will 
require unity of effort across all levels of government, 
industry and the private sector. Thank you, and I look forward 
to answering your questions.
    [The prepared statement of Vice Admiral Salerno follows:]

                Statement of Vice Admiral Brian Salerno, 
      Deputy Commandant for Operations, United States Coast Guard

    Good Morning Chairman LAMBORN, Ranking Member HOLT, and 
distinguished Members of the Committee. I am pleased to have this 
opportunity to answer any questions you may have on the U.S. Coast 
Guard's response capability and readiness for oil spills originating in 
foreign waters adjacent to the United State that may affect or threaten 
our Nation and our natural resources.

SUMMARY
    Protecting the marine environment from oil spills is an important 
Coast Guard mission. Contingency planning, training, and exercises are 
fundamental to our readiness to respond to oil spills. These in turn 
have their foundation in the National Oil and Hazardous Substances 
Pollution Contingency Plan (NCP).
    Contingency planning under the NCP occurs at several levels:
          Local level planning is conducted by an Area 
        Committee, under the guidance of the Coast Guard captain of the 
        port, who is also pre-designated as the Federal On Scene 
        Coordinator for the coastal zone. The area committee brings 
        together federal, state, local, and Tribal officials and 
        responders to identify risks, sensitive areas to be protected, 
        and protection strategies.
          At the regional level, Coast Guard Districts 
        participate with other federal agencies and state officials, 
        through Regional Response Team, on such issues as dispersant 
        use and in-situ burning pre-authorizations;
          And finally at the national level, the Coast Guard 
        serves as the vice chair of the National Response Team, which 
        is comprised of 16 federal agencies with environmental response 
        functions, and ensures national level capabilities are 
        available as needed to support response efforts.

International Partnerships
    Each of these organizational levels also has a role to play in 
developing strategies and cooperative relationships with foreign 
neighbors to enhance preparedness and response to transboundary 
environmental threats. In particular, we have well established 
relationships with Canada, Russia and Mexico to achieve cooperation on:
          potential pollution threats,
          identification of equipment and personnel resources 
        available to respond to incidents, and
          procedures and protocols for notification, incident 
        management, and coordinating a spill response.
    In each of these cases, cooperation in controlling the source of 
the pollution is paramount in addressing the transnational nature of 
the threat. Facilitating movement of essential people and equipment to 
the source is an essential component of these agreements.
    Additionally, these agreements include regular joint planning 
sessions and exercises; they also help sponsor and support bi-lateral 
cooperation in oil spill research and development.
    For example, we conducted
          a major bi-lateral response exercise with Mexico in 
        San Diego this past August; and
          we successfully completed a joint U.S. Coast Guard/
        Canadian Coast Guard Environmental Response Summit last month.
    Just yesterday I hosted a Russian delegation here in Washington, 
and signed a Bi-lateral Memorandum of Understanding that will expand 
our current cooperative response agreements to cover the entire U.S./
Russian boundary waters.

Preparedness in the Northern Caribbean
    While we can point to successes and healthy relationships in the 
areas already mentioned, we do not have the same bi-lateral ability to 
engage with all countries which are potential sources of transboundary 
pollution threats. This is particularly true in the northern Caribbean, 
and the anticipated deepwater drilling in the Cuban EEZ is the salient 
example. However, we are taking steps to engage multi-laterally in the 
Caribbean. By working through the IMO we have garnered support to 
convene a multilateral seminar this December in the Bahamas that will 
invite Caribbean nations to discuss oil spill prevention and response 
issues.
    Consequently, we are working extensively with our domestic response 
partners to update our contingency plans. We are also engaged directly 
with REPSOL, the Spanish-owned company which plans to drill the first 
well in the Cuban offshore starting in January 2012, related to their 
response strategies, resources, and capabilities in support of their 
drilling operations.
    In the event that an oil spill does occur within the Cuban EEZ, the 
Coast Guard would mount an immediate response under the NCP, in 
partnership with other Federal, State and local agencies. And we would 
focus on combating the spill as far offshore and as close to the source 
as possible, using all viable response tactics. In preparation for such 
an eventuality, our Seventh District in Miami has been working closely 
with state, local and response organizations in Southern Florida since 
March. Our District Office will conduct a response exercise this month.
Conclusion
    As was highlighted by the Deepwater Horizon Oil Spill, any spill of 
national significance, regardless of its source, will require unity of 
effort across all levels of government, industry, and the private 
sector.
    Thank you and I look forward to answering any questions you may 
have.
                                 ______
                                 

    Senate Energy and Natural Resources Committee Hearing on Outer 
Continental Shelf Oil Spill Response Capabilities, Panel 1, October 18, 
                                  2011

SALERNO:
    Good morning, Mr. Chairman, Ranking Member Murkowski, distinguished 
members of the committee. I'm pleased to have this opportunity to 
answer any questions you may have on response capability and readiness 
for oil spills originating in foreign waters adjacent to the United 
States that may affect or threaten our nation or our natural resources.
    Protecting the marine environment from oil spills is an important 
Coast Guard mission. Contingency planning, training and exercises are 
fundamental to our readiness to respond to oil spills. These, in turn, 
have their foundation in the National Oil and Hazardous Substances 
Pollution Contingency Plan, now simply as the NCP. That's a long title.
    Contingency planning under the NCP occurs at several levels. Local 
level planning is conducted by an area committee, under the guidance of 
a Coast Guard captain of the port, who is also pre-designated as the 
federal on-scene coordinator for the coastal zone.
    The area committee brings together federal, state, local and tribal 
officials and responders to identify risks, sensitive areas to be 
protected and protection strategies.
    At the regional level, Coast Guard districts participate with other 
federal agencies and state officials through the regional response 
team. And they consider such issues as dispersant use and in-situ 
burning pre-authorizations.
    And finally at the national level, the Coast Guard serves as the 
vice chair of the National Response Team, which is comprised of 16 
federal agencies with environmental response functions, and ensures 
national level capabilities are available, as needed, to support 
response efforts.
    Each of these organizational levels also has a role to play in 
developing strategies and cooperative relationships with foreign 
neighbors to enhance preparedness and response to trans-boundary 
environmental threats.
    In particular, we have well established relationships with Canada, 
Russia and Mexico to achieve cooperation on potential pollution 
threats, the identification of equipment and personnel needed to 
respond to actual incidents, and procedures and protocols for 
notification, incident management and coordinated spill response.
    Each of these cases involves cooperation in controlling the source 
of the pollution as--as paramount in addressing the trans-national 
nature of the threat. Without controlling the source, you cannot get 
ahead of the problem. So the facilitated movement of people and 
equipment to the source is an essential component of these agreements.
    Additionally, these agreements include regular joint planning 
sessions and exercises. They also help sponsor bilateral cooperation in 
oil spill research and development. Under these agreements, we've 
recently completed a major bilateral exercise with Mexico, held in San 
Diego this past August.
    We also held a joint U.S. Coast Guard/Canadian Coast Guard 
environmental summit this past month. And next month, I plan to meet 
with the Russian delegation here in Washington to sign a bilateral 
memorandum of understanding that will expand our parent cooperative 
agreements to cover the entire U.S./Russian boundary waters.
    We are also working with Russia, Canada and the six other Arctic 
nations through the Arctic Council, to produce an arctic-wide pollution 
preparedness and response instrument that will build on our existing 
bilateral agreements to enhance preparedness throughout the Arctic 
region.
    In light of the growing interest in oil exploration in the northern 
Caribbean, we are also working hard to improve regional cooperation 
there. The anticipated drilling in--off Cuban waters is a salient 
example, but others, like the Bahamas, are also considering deepwater 
drilling operations.
    By working through the International Maritime Organization, we've 
garnered support for a regional, multilateral seminar to be held, to 
which other Caribbean nations will be invited, including the Bahamas, 
Jamaica, Cuba and Mexico, for the purpose of discussing oil spill 
prevention and response issues.
    Meanwhile, we're working extensively with all of our domestic 
response partners to update our contingency plans. We're also engaged 
directly with Repsol, the Spanish company which plans to drill the 
first well off Cuba, starting in January of 2012, to better understand 
their response strategies, their resources and their capabilities.
    In the event an oil spill does occur within Cuban waters, the Coast 
Guard would mount an immediate response under the NCP and partnership 
with other federal, state and local agencies. We would focus on 
combating the spill offshore, using all available response tactics.
    As was highlighted by the Deepwater Horizon spill, any spill of 
national significance, regardless of its source, will require a unity 
of effort across all levels of government, industry and the private 
sector.
    Thank you, and I look forward to answering your questions.
                                 ______
                                 
    Mr. Lamborn. Thank you, Vice Admiral, for your statement 
and for being here today.
    Before we begin our questions, I would like to recognize as 
a courtesy to the Minority the Ranking Member of the full 
Committee, Representative Markey, for five minutes.

    STATEMENT OF HON. EDWARD J. MARKEY, A REPRESENTATIVE IN 
            CONGRESS FROM THE STATE OF MASSACHUSETTS

    Mr. Markey. I thank you. I thank you, Mr. Chairman, very 
much, and I thank our witnesses for being here.
    A few months from now the Spanish oil company, Repsol, will 
begin the first exploratory deepwater drilling in the waters 
off of Cuba, and other companies are now also lining up to 
drill off of Cuba.
    When you think of the oil companies that would be the 
logical candidates to do the first drilling in a new area, most 
people would think of companies like Exxon Mobil, Chevron and 
ConocoPhillips, but which are the companies that are planning 
to drill in the waters off of Cuba a mere 80 miles from 
Florida? They are the state-owned oil companies of Malaysia, 
Vietnam, Venezuela and China.
    Because of a relic of the Cold War, the Cuban embargo, 
American oil companies cannot drill in this area that could 
contain as much as five billion barrels of oil. The Majority 
has been so focused on a make believe moratorium on drilling in 
the Gulf that they have apparently missed the actual decades 
long moratorium on American companies drilling off of Cuba that 
is the result of the embargo.
    Republicans like to claim that U.S. rigs are disappearing 
from the Gulf. Well, there are rigs that are going to be 
flocking to the waters off of Cuba, but they are going to be 
drilling for China and Venezuela because of the embargo. I 
would think that my Republican colleagues would rather have 
this drilling done by Chevron than by Chavez.
    We are fortunate that the Administration has persuaded 
Repsol to agree to allow a single inspection of their drilling 
rig by Coast Guard and Interior Department inspectors before it 
enters Cuban waters. But once the rig crosses the maritime 
boundary with Cuba, our inspectors will not be permitted to 
ever review it again. Once it crosses that line, it will be as 
if it has crossed into a Bermuda Triangle of safety, forever 
disappearing from the site of our inspectors and our 
regulators.
    We should be able to work with Cuba as the independent BP 
Spill Commission has recommended to create the strongest 
possible safety standards and ensure that there can be 
cooperation in the event of a spill. We shouldn't be forced to 
hope that oil spills so close to our shores can be prevented by 
a Cuban Government that has no experience, no experience, in 
regulating the oil industry.
    We should end the Cuban embargo so that American companies 
and American workers can reap the benefits of drilling so near 
to our own shores. I would hope that the Majority's opposition 
to lifting the embargo against Fidel does not outweigh their 
fidelity to creating more jobs for American businesses and 
American workers in our own country.
    I would urge my Republican colleagues to drop their 
opposition to all of the mythical moratoriums and all pretend 
permitoriums and instead join with Mr. Holt and I in supporting 
the repeal of an actual embargo that prevents our American oil 
companies from even competing for these Cuban leases. Thank 
you, Mr. Chairman.
    [The prepared statement of Mr. Markey follows:]

     Statement of The Honorable Edward J. Markey, Ranking Member, 
                     Committee on Natural Resources

    Thank you.
    A few months from now, the Spanish oil company Repsol will begin 
the first exploratory deep-water drilling in the waters off of Cuba. 
And other companies are now also lining up to drill off of Cuba.
    When you think of the oil companies that would be the logical 
candidates to do the first drilling in a new area, most people would 
think of companies like ExxonMobil, Chevron and ConocoPhillips.
    But who are the companies that are planning to drill in the waters 
off of Cuba, a mere 80 miles from Florida? They are the state-owned oil 
companies of Malaysia, Vietnam, Venezuela, and China.
    Because of a relic of the cold war, the Cuban embargo, American oil 
companies cannot drill in this area that could contain as much as 5 
billion barrels of oil.
    The Majority has been so focused on a make-believe moratorium on 
drilling in the Gulf, that they've apparently missed the actual 
decades-long moratorium on American companies drilling off of Cuba that 
is the result of the embargo.
    Republicans like to claim that U.S. rigs are disappearing from the 
Gulf. Well, there are rigs that are going to be flocking to the waters 
off Cuba but they are going to be drilling for China and Venezuela 
because of the embargo.
    I would think that my Republican colleagues would rather have this 
drilling done by Chevron than by Chavez.
    We are fortunate that the Administration has persuaded Repsol to 
agree to allow a single inspection of their drilling rig by Coast Guard 
and Interior Department inspectors before it enters Cuban waters. But 
once the rig crosses the maritime boundary with Cuba our inspectors 
will not be permitted to review it again. Once it crosses that line, it 
will be as if it has crossed into a Bermuda Triangle of safety, forever 
disappearing from the sight of our inspectors and regulators.
    We should be able to work with Cuba, as the independent BP Spill 
Commission has recommended, to create the strongest possible safety 
standards and ensure that there can be cooperation in the event of a 
spill. We shouldn't be forced to hope that oil spills so close to our 
shores can be prevented by a Cuban government that has no experience in 
regulating this industry.
    We should end the Cuban embargo so that American companies and 
American workers can reap the benefits of drilling so near our shores. 
I would hope that the Majority's opposition to lifting the embargo 
against Fidel does not outweigh their ``fidel-ity'' to creating more 
jobs for American businesses and workers.
    I would urge my Republican colleagues to drop their opposition to 
all mythical moratoriums and all pretend permit-oriums and instead join 
me in supporting the repeal of an actual embargo that prevents our 
American oil companies from even competing for these Cuban leases.
                                 ______
                                 
    Mr. Lamborn. Thank you. We will now begin our questioning. 
Members are limited to five minutes for their questions, but we 
may have additional rounds. I now recognize myself for five 
minutes.
    Director Bromwich, I think one of the predominant questions 
that we need to address today is about Cuba moving forward with 
offshore drilling. I know that your agency has been engaging 
directly with Repsol, as you referred to, but from what I 
understand you do not have in your possession their detailed 
exploration plan. Is that true? Have you seen with your own 
eyes Repsol's drilling plans for drilling in Cuban waters?
    Mr. Bromwich. Mr. Chairman, no, we don't have Repsol's 
exploration plan. There are confidentiality agreements that we 
have been advised they have with the Cuban Government.
    We are in the process of discussions with Repsol, and I am 
hopeful that in the near future we will be able to surmount 
their concerns and be able to obtain those materials. So right 
now we don't have it, but we are hopeful we will get it and 
related materials.
    Mr. Lamborn. OK. If you haven't seen their plans for how 
they are going to conduct drilling, how can you say that you 
expect Repsol and the other involved parties to adhere to our 
nation's standards?
    Mr. Bromwich. Well, we have met, as I mentioned in my 
opening statement, we have met with Repsol on a number of 
occasions and have had a number of telephone discussions with 
them in which we have discussed these issues.
    They have pledged to us repeatedly that they will in fact 
adhere to and observe all of the U.S. standards that apply both 
to the submission of exploration plans as well as to the 
submission of permits. They have an interest in backing up that 
pledge with actually doing it because they have interests in 
U.S. waters.
    I think that is certainly one of the reasons that they 
approached us. We didn't approach them. They approached us last 
February telling us of their plans to drill in Cuba, and they 
have been quite cooperative at every stage of the process.
    Mr. Lamborn. But it remains true that we are going strictly 
by their good faith, which I hope is unimpeached. But we have 
absolutely no enforcement capability whatsoever?
    Mr. Bromwich. We will have no enforcement capability no 
matter what, whether we get the exploration plans or other 
geological and geophysical material. That will help us to 
provide feedback to Repsol, which I think they are genuinely 
eager to have, but we have no enforcement authority in Cuban 
waters. No.
    Mr. Lamborn. OK. Just to clarify, and also, Vice Admiral 
Salerno, I would like to ask you a question. I have read a lot 
of press accounts of plans by BSEE and the U.S. Coast Guard to 
inspect Repsol's drilling rig before it enters Cuban waters.
    What happens if you go onto the rig and there are areas 
where your inspectors are not allowed to go? Or what happens if 
you inspect the rig and have serious concerns about what you 
find? It seems to me that with no enforcement capability we 
won't be able to do anything.
    Admiral Salerno. Well, you are correct about the lack of 
enforcement capability. The visit will be consensual on the 
part of the owner of the rig and Repsol. However, Repsol has 
indicated to us that they have every intention of complying 
with U.S. standards.
    So essentially we have their word that they would match our 
standards as if they were operating in the Gulf of Mexico, but 
again this is consensual. We do not have any way to compel them 
to make changes on that rig. It was strictly their goodwill.
    Mr. Lamborn. So what do we do if you are not allowed to go 
into certain areas or you have major concerns?
    Admiral Salerno. Well, again we would communicate that with 
Repsol. We would also communicate that with the flag authority 
of the rig, which has the legal oversight of the rig, as well 
as with the owner and the Classification Society. The 
Classification Society is the recognized organization that 
performs inspection services on behalf of the government, the 
flag under which the vessel is registered.
    Mr. Bromwich. Mr. Lamborn, if I may add I completely agree 
with everything that Admiral Salerno has said, but if Repsol 
was to declare certain parts of the rig off limits, I would 
view that as a breach of what they pledged to us to do. So 
again, we don't have enforcement authority over them, but that 
would be contrary to everything that they have told us. They 
have not attempted to cordon off any aspect of the rig from the 
inspection that the Coast Guard and BSEE will be doing, and a 
last-minute attempt to do that would not be received well.
    Mr. Lamborn. OK. Thank you. Vice Admiral, for 
clarification, who is the flag authority again?
    Admiral Salerno. The flag authority is Bahamas.
    Mr. Lamborn. All right. Thank you.
    I would now like to recognize the Ranking Member for five 
minutes of questions.
    Mr. Holt. Thank you. Thank you, Mr. Chairman.
    It is worrisome, of real concern to some of us that we have 
in place a system to get blowout containment systems, other 
containment and cleanup systems to any Gulf disaster. Help me 
understand how much confidence we have that we could or that 
Repsol would get to their site whatever they need.
    And then let me also ask how much time do we have to get in 
place whatever agreements would be necessary to give us the 
confidence that those would get there? And this is really a 
question for both the Admiral and the Director.
    Mr. Bromwich. Mr. Holt, I have a high level of confidence 
that the necessary licenses will be in place. That is an 
ongoing process that involves Treasury Department and the 
Commerce Department, and both as a result of historical 
licenses as well as some recently granted licenses, there is a 
range of both equipment and services that right now could be 
provided, and those include vessels, other kinds of equipment, 
the capping stack and containment system, which, as you know, 
is an extremely important element of a response.
    One of the things that the Coast Guard and we and the rest 
of the Administration have been involved in over the last 
several months is trying to work to make sure that all of the 
relevant preparations are made and so this has had high-level 
attention for many months, and I think we are in a pretty good 
place right now in terms of getting everything that is needed 
in place.
    Mr. Holt. And before I let the Admiral give his part of the 
answer to this, let me understand clearly. This is because of 
our agreement with Repsol, not because of any agreement with 
Cuba?
    Mr. Bromwich. There is no agreement with Cuba, so these are 
understandings that we have with Repsol, but the licenses are 
really separate and are sought after by other companies that 
are in a position to provide such services.
    Mr. Holt. But is it not true that Repsol's rig will be 
flagged in the Bahamas just like Deepwater Horizon and that all 
safety inspections will be conducted by a third party, so the 
same applies for cleanup? I mean for containment and disaster 
response. Isn't that true? The rig would be inspected by the 
Norwegian company, the same company that BP used in the 
Deepwater case?
    Mr. Bromwich. Yes.
    Mr. Holt. OK. Admiral?
    Admiral Salerno. The only thing I would add, sir, is Repsol 
does have agreements, preexisting agreements, with spill 
response organizations that do have the capabilities that Mr. 
Bromwich mentioned.
    From a Coast Guard perspective, we would mount a response 
as aggressively as possible as close to the source as possible. 
There is really no prohibition for the Coast Guard moving into 
the Cuban EEZ, but there is a problem with commercial pollution 
responders operating in the Cuban EEZ. That is the reason why 
the issue of licenses is so critical and why we are working so 
closely with State Department, Treasury and Commerce on that 
issue. So that is actively being managed.
    So the Coast Guard would not have enough pollution response 
capability in its own inventory to mount a large-scale 
response. We rely very heavily on commercial capabilities to 
work with us in a response.
    Mr. Holt. Admiral, you spoke about a recently signed 
bilateral agreement with Russia. Does that provide for oil 
disaster response?
    Admiral Salerno. Yes, sir, it does. Actually we have a 
longstanding joint contingency plan with the Russian Federation 
for oil spill response in the Bering Sea and in the Chukchi 
Sea. We updated that based on some lessons learned from 
Deepwater Horizon.
    Plus we just signed yesterday a memorandum of understanding 
which expands our levels of cooperation in oil spill R&D, 
mutual cooperation as additional drilling takes place in the 
Arctic and the rest.
    Mr. Holt. And you felt that agreement was useful or 
necessary beyond any licensing agreements, isn't that right, 
and so wouldn't we want an agreement like that with Cuba if we 
could get it?
    Admiral Salerno. Sir, the way we are approaching that is 
multilaterally under the auspices of the Cartagena Convention, 
which covers most of the Caribbean, including Cuba, but also 
the Bahamas, Jamaica, Mexico, the other countries that are 
planning to engage in drilling activity.
    That is the forum for coming to some agreement on mutual 
cooperation, sharing of resources, notifications and joint 
response activity.
    Mr. Lamborn. All right. I now recognize the gentleman from 
Florida for five minutes.
    Mr. Rivera. Thank you, Mr. Chairman. My question is for Mr. 
Bromwich to start off.
    Regarding the inspection that is going to take place on the 
Repsol rig, do we have a more exact timetable of when that is 
going to occur?
    Mr. Bromwich. We don't have an exact timetable because it 
depends on the speed of the vessel coming from foreign waters. 
Our best estimate is sometime in the first half of December, 
but that could slide.
    Mr. Rivera. First half of December?
    Mr. Bromwich. Correct.
    Mr. Rivera. And tell me a little bit about how that 
inspection will take place and how we will know or become aware 
of the results of that inspection.
    Mr. Bromwich. We will have a small team of inspectors, 
together with Coast Guard inspectors, that will actually board 
the vessel and go through the full set of the inspection regime 
that it would conduct on a rig in U.S. waters and go through 
all of that. We will receive the information from that 
inspection. We will also provide feedback to Repsol, pointing 
out any deficiencies that we have observed.
    Mr. Rivera. And when you point out, hypothetically 
speaking, any deficiencies there will be time to address 
deficiencies before it actually enters Cuban waters?
    Mr. Bromwich. Well, it depends on the deficiencies. I think 
for most the answer is yes, but for some, depending on what we 
find, that may take more time. We won't know until we actually 
identify deficiencies if there are any.
    Mr. Rivera. Now we mentioned earlier about enforcement 
capabilities. Going past the inspections, let us say we have 
given them our concerns as to their deficiencies and it enters 
Cuban waters. In terms of enforcement capabilities in national 
waters of other nations, does the United States have any 
enforcement capabilities on rigs in the waters of other nations 
right now: Mexico, Canada, other nations?
    Mr. Bromwich. No.
    Mr. Rivera. So even if Cuba were our best neighbor and Cuba 
was not a state sponsor of terrorism and Cuba was not a nation 
that holds American citizens hostage, as is occurring right 
now, even if all that were not to be true, the United States 
would still not have enforcement capabilities. Is that correct?
    Mr. Bromwich. That is correct. And let me follow up a 
little bit about the inspection. I want to make clear that the 
completeness and the thoroughness of the inspection will not 
match what we are able to do in U.S. waters.
    There are certain aspects of the inspection that you do, 
including, for example, what is called an on-bottom test of the 
blowout preventer that can only be done at the site where the 
rig will actually be doing its work. And since our inspection 
will be many, many miles from where the rig will be drilling 
there are certain things, about a dozen things, that we will 
not be able to do because we are not doing the inspection where 
the drilling will already take place.
    Mr. Rivera. No, I understand.
    Mr. Bromwich. So I want to be clear that in our judgment it 
is a lot better than nothing, but I don't want you or anyone 
else to think it is equivalent to----
    Mr. Rivera. No, I understand that. I am only making the 
point once it enters Cuban waters, because I know some have 
tried to make the argument that if you lift the embargo, for 
example, that somehow that is a panacea in terms of enforcing 
what could happen in Cuban waters.
    And that is just not the case because we do not have 
enforcement capabilities, as you have said, in other nations' 
waters, correct?
    Mr. Bromwich. That is correct, yes.
    Mr. Rivera. Yes? Did you want to add something?
    Admiral Salerno. If I could offer just one caveat to that?
    Mr. Rivera. Yes.
    Admiral Salerno. I agree with everything Mr. Bromwich said. 
However, there is one distinction. If U.S. flag drilling rigs 
are operating in foreign waters, the U.S. does have 
jurisdiction over the rig itself.
    Mr. Rivera. And the flag on this particular rig?
    Admiral Salerno. The flag on this rig is Bahamas.
    Mr. Rivera. OK.
    Admiral Salerno. But if a U.S. flag----
    Mr. Rivera. So we would not have enforcement capabilities?
    Admiral Salerno. Not on this one, no.
    Mr. Rivera.--on this rig irrespective of the current 
relations?
    Admiral Salerno. Correct. That is correct.
    Mr. Rivera. Mr. Bromwich, let me ask you, any assurances 
from Repsol as to this rig's compliance with existing economic 
sanctions against the Castro dictatorship?
    Mr. Bromwich. Yes. My understanding is that they have 
complied with the rules that govern----
    Mr. Rivera. How did you reach that understanding?
    Mr. Bromwich. Based on information supplied by Repsol.
    Mr. Rivera. Repsol has given information regarding the rig 
not being in violation of any U.S. law in terms of the parts on 
the rig?
    Mr. Bromwich. Correct.
    Mr. Rivera. Thank you. Thank you, Mr. Chairman.
    Mr. Lamborn. OK. And with the indulgence of the witnesses, 
let us have a second round, but a truncated second round, two 
and a half minutes per Member. And if the clerk could keep 
track of that? I will begin.
    Mr. Bromwich or I guess Mr. Salerno also, will any other 
agencies be assisting with the inspection that we have been 
talking about? For example, will you be using Commerce or 
Treasury agents to review the equipment and parts of the rig?
    Admiral Salerno. Not to my knowledge, sir. This would be a 
technical exam, and we have the technical expertise within our 
cadre to perform that inspection, as does BSEE from their 
aspect.
    Mr. Bromwich. I agree with that. We have had no 
conversations that I am aware of that Treasury and Commerce 
personnel would be boarding the rig. I am not sure any of them 
has ever done an inspection.
    Mr. Lamborn. OK. Just wanted to clarify that. That is all 
that I have for this hearing, and I would like to now recognize 
the Ranking Member.
    Mr. Holt. Director Bromwich, you said earlier you wouldn't 
be able to conduct an inspection of the rig, so what sorts of 
things would not be covered, and have you been able to talk 
with your counterparts in Cuba say to get some assurance that 
those inspections that you would have conducted perhaps would 
be conducted?
    Mr. Bromwich. There is a list of 12 or 13 items that I got 
from our personnel.
    Mr. Holt. Give us a sense. Do you have a sense?
    Mr. Bromwich. One is the on-bottom test that I mentioned 
before, which is actually an important test. One is we 
generally inspect how the well has been secured. We obviously 
can't do that. There are specific diverter system requirements 
we are not going to be able to check, specific well control 
drill requirements we are not going to be able to check, 
specific drilling fluid program requirements we are not going 
to be able to check and specific casing program requirements 
that relate to the implementation of the drilling program that 
we are not going to be able to check.
    Mr. Holt. And have you been able to talk with counterparts 
in Cuba to see that those are being done?
    Mr. Bromwich. No, we have not.
    Mr. Holt. If there were a bilateral agreement, would you 
expect to have those conversations or even that inspection 
authority?
    Mr. Bromwich. Well, I think it would be likely we would 
have such instructions. I am not sure if we had those kinds of 
discussions around and available and we had confidence in the 
Cuban regulatory regime, I am not sure that we would even be 
doing this inspection.
    Mr. Holt. Director Bromwich, one last thing. This Committee 
has invited the CEOs of BP and other companies involved in the 
Deepwater Horizon disaster to testify this afternoon. The CEOs 
from these four companies have all refused to appear.
    Do you believe that these CEOs should testify before 
Congress on the government's joint investigation report on the 
spill so that the American people can hear from them what 
actions the companies are taking to improve the safety of their 
drilling operations?
    Mr. Bromwich. Well, with the litigation and enforcement 
proceedings going on, I understand their decision, but I am 
quite disappointed by their decision. It is obviously an issue 
of great public importance. I know that Members on both sides 
would like to hear from the CEOs of those companies.
    Mr. Holt. We are disappointed in those decisions too and 
feel the public deserve and really need to hear. Thank you.
    Mr. Lamborn. Thank you. And I am also disappointed that the 
Departments of State, Commerce and Treasury refused to be here 
this morning. I am very disappointed in them.
    I would now like to recognize the gentleman from Florida if 
he has any followup questions.
    Mr. Rivera. Thank you very much. First, before I proceed 
with my question, which will be for the Coast Guard, Mr. 
Chairman, I would like to ask unanimous consent that a letter 
which was sent to President Obama yesterday and signed by my 
colleagues, the Chairman of the Foreign Affairs Committee, 
Ileana Ros-Lehtinen, Congressman Mario Diaz-Balart, Congressman 
Albio Sires, regarding this very issue expressing our concerns 
as to the inspections of the rig and the lack of conformity 
with U.S. law, if that could be entered into the record with 
your permission.
    Mr. Lamborn. If there is no objection, that will be entered 
into the record.
    Mr. Rivera. Thank you very much.
    [The letter submitted for the record by Mr. Rivera 
follows:]

[GRAPHIC] [TIFF OMITTED] T1116.005

[GRAPHIC] [TIFF OMITTED] T1116.006


    Mr. Rivera. And my question for the Coast Guard. In the 
case of a foreign sourced spill, whether it comes from Mexico, 
the Bahamas or Cuba, and that oil reaches American waters and 
beaches, who would pay for that cleanup?
    Admiral Salerno. Two answers on that, sir. One is we 
immediately would open the Oil Spill Liability Trust Fund, so 
we have a source of funding to manage the Coast Guard and 
private contractor response in our EEZ, in our waters and our 
coasts. We would also seek legal avenues to obtain compensation 
from the source.
    When it occurs in a foreign EEZ it becomes very complicated 
legally, very fact-dependent. However, I do know that 
Department of Justice as well as the legal branches of many of 
the involved agencies are working with those issues now and 
running through various scenarios as to how that would be 
applied.
    Mr. Rivera. Now, in terms of the Oil Liability Trust Fund 
that you mentioned, there is a cap on that?
    Admiral Salerno. That is correct. The fund is broken up 
into two parts. There is an emergency fund and a principal 
fund.
    Mr. Rivera. What are the caps?
    Admiral Salerno. There is a $1 billion cap per incident. 
The initial authorization is for $50 million. It can be 
advanced by $100 million and then beyond that requires 
congressional approval, but the overall cap is $1 billion.
    Mr. Rivera. And is there a cap within that $1 billion for 
response?
    Admiral Salerno. That is the response portion of the fund. 
The overall fund is a $2 billion plus fund.
    Mr. Rivera. So there is not a $125 million cap on response?
    Admiral Salerno. Well, the initial authorization is $50 
million. It can be enhanced by $100 million, so that is $150 
million, and then beyond that requires congressional approval.
    Mr. Rivera. I only have a few seconds left, but let me just 
ask you, what was the ultimate cost of the response on the 
Deepwater Horizon?
    Admiral Salerno. The cost to the fund--sorry, I would have 
to get you an exact amount. I don't believe we--we did not 
reach the $1 billion mark.
    BP of course paid about roughly $20 billion in response 
plus another $20 billion for the Gulf Coast restoration, so 
about $40 billion total paid.
    Mr. Rivera. Thank you.
    Mr. Lamborn. All right. I want to thank the panel for their 
testimony, for each of them being here. Members of the 
Committee may have additional questions for the record, and I 
would ask that you respond to these in writing. We appreciate 
your attendance today.
    Mr. Bromwich. Thank you very much, Mr. Chairman.
    Mr. Lamborn. You are welcome.
    Admiral Salerno. Thank you, sir.
    Mr. Lamborn. You are welcome.
    I would now like to invite forward the second panel 
consisting of Mr. Mauricio Claver-Carone, Executive Director of 
the Cuba Democracy Advocates; Mr. Jorge Pinon, Visiting 
Research Fellow, Latin American and Caribbean Center of Cuban 
Research Institute; Mr. Daniel Whittle, Senior Attorney and 
Cuba Program Director, the Environmental Defense Fund; and Ms. 
Caitlyn Antrim, Executive Director of the Rule of Law Committee 
for the Oceans.
    [Pause.]
    Mr. Lamborn. OK. Thank you for being here today. Like all 
our witnesses, your written testimony will appear in full in 
the hearing record, so I ask that you keep your oral statements 
to five minutes as outlined in the invitation letter to you.
    Our microphones are not automatic. Like I was saying 
earlier, you have to turn them on to begin speaking. The way 
our timing lights work is that when you begin to speak the 
clerk will start the timer and a green light comes on. After 
four minutes a yellow light comes on, and after five minutes 
the red light comes on.
    Mr. Claver-Carone, you may begin.

             STATEMENT OF MAURICIO CLAVER-CARONE, 
          EXECUTIVE DIRECTOR, CUBA DEMOCRACY ADVOCATES

    Mr. Claver-Carone. Thank you, Mr. Chairman. It is truly a 
privilege to be here with all of you today. My name is Mauricio 
Claver-Carone, and I am the Executive Director of Cuba 
Democracy Advocates, a nonprofit, nonpartisan organization 
dedicated to the promotion of human rights, democracy and the 
rule of law in Cuba.
    I have held this position for seven years, and throughout 
this time I have been closely monitoring the plans, 
developments and geopolitical motivations behind the Cuban 
regime's efforts to pursue offshore oil exploration.
    However, it is important to note that despite the broad 
media attention given to the Cuban regime's most recent plans, 
which we are discussing here today, its efforts to conduct 
offshore oil exploration date back almost 20 years now, and 
ultimately all of them have been unsuccessful.
    Please allow me to begin with some broader observations. 
Cuba is a totalitarian dictatorship. It is the sole remaining 
dictatorship in the Western Hemisphere. Therefore, it should 
not be viewed through the same lens as its democratic 
neighbors, the Bahamas and Mexico, nor should it be treated in 
the same manner.
    The Bahamas and Mexico are allies of the United States. We 
share a relationship of trust and cooperation with these two 
friendly nations. Meanwhile, the Cuban regime remains under 
U.S. sanctions, which Congress codified into law under the 1996 
Cuban Liberty and Democratic Solidarity Act, due to three 
fundamental reasons: 1] The brutal violations of the Cuban 
people's human, civil, political and economic rights; 2] Its 
hostile anti-American policies; and 3] The illegal 
expropriation of properties belonging to U.S. nationals.
    Moreover, Cuba remains one of four countries designated by 
the U.S. Government as a state sponsor of terrorism based on 
its harboring of fugitives, including the murderers of U.S. law 
enforcement officials, its unwillingness to cooperate with U.S. 
antiterrorism efforts, its intelligence gathering and sharing 
with other rogue regimes and its support for foreign terrorist 
organizations. The other three countries on the state sponsors 
of terrorism list are Iran, Sudan and Syria.
    Considering the background of Cuba's regime, a strong case 
can be made that it is not in our national interest to lift 
sanctions and assist yet another anti-American dictatorship, 
particularly a state sponsor of terrorism, in its ambitions for 
oil exploration. To do so would not ease domestic fuel costs or 
enhance energy independence here at home, which should be the 
goal of U.S. energy policy.
    To the contrary, it would add to the extortionate practices 
that other oil-producing dictatorships have exploited for the 
last half a century. Furthermore, considering that the same 
Cuban regime has already expropriated U.S. oil assets in the 
past, it would send a dangerous message to other hostile 
governments that, in this region alone, would like to do the 
same.
    Now allow me to focus on some of the specifics of the Cuban 
regime's offshore exploration plans, which unfortunately tend 
to get overlooked. Despite the Cuban regime's highly publicized 
efforts over the last 20 years, there have been no commercially 
viable discoveries or extraction of oil in waters off Cuba's 
shores. Moreover, there is currently no drilling taking place 
in waters off Cuba's shores.
    The Cuban regime first began using offshore drilling rights 
to extract political concessions from various nations of the 
world soon after the 1991 collapse of the Soviet Union, which 
ended that country's hefty subsidies to Cuba. According to 
recently declassified documents by Brazilian Foreign Ministry, 
in 1993 the Cuban regime first offered the government of then-
President Itamar Franco the most promising blocks for oil 
exploration to Brazil's national oil company, Petrobras, in 
exchange for their shunning of Cuban dissidents on the island 
and canceling a meeting with Cuban exiles at the Brazilian 
Embassy in Washington, D.C. The Brazilian Government happily 
complied with both, only to exit from Cuba empty-handed years 
later.
    The Cuban regime found a new partner when Hugo Chavez rose 
to the presidency of oil-rich Venezuela in 1998. With the 
backing of Chavez and Venezuela's state oil company, the Cuban 
regime resumed its diplomatic offensive, signing highly 
publicized oil leases with Spain's Repsol, Norway's Statoil, 
Russia's Gazprom, India's ONGC, Malaysia's Petronas, Canada's 
Sherritt, Angola's Sonangol, Vietnam's PetroVietnam and China's 
CNPC.
    However, only one company has actually conducted any 
exploratory drilling, Spain's Repsol in 2004. It found some oil 
but not in any commercially viable quantities. It then pulled 
out of Cuba.
    Similarly, after much initial fanfare, Canada's Sherritt 
and Brazil's Petrobras, perhaps the most credible and respected 
of the region's oil companies outside the United States, 
publicly abandoned their efforts in 2008 and 2011 respectively, 
stating that Cuba offshore drilling was not commercially viable 
and citing poor prospects.
    Much of this can be attributed to U.S. sanctions, which 
dramatically drive up cost of production. The Cuban regime has 
itself admitted that U.S. sanctions make it commercially 
impractical to produce oil in its territorial waters. As long 
as U.S. trade sanctions against Cuba remain in place, producing 
or refining any oil found in Cuban waters isn't an option.
    That leads to the question, if offshore drilling in Cuban 
waters is not commercially viable for the most respectable 
regional oil companies which are located relatively close to 
Cuba and have the most experience in dealing with the Cubans, 
is such drilling really viable for the Angolans, the Malaysians 
or the Chinese? The answer is no.
    Initially, as the Ranking Member noted, we learned this in 
2006 when the Cuban regime had seemingly convinced public 
policy-makers in Washington and many here in Congress that the 
Chinese were ready to drill off Cuba's shores. That threat 
never materialized, but it served the Cuban regime's political 
interests.
    Last year's oil spill in the Gulf of Mexico by BP and the 
justifiable public outrage that ensued has given the regime a 
new and strategic opportunity to use the threat of offshore 
drilling as a means of forcing the U.S. to unilaterally ease 
sanctions.
    Despite the fact that Repsol still faces exploratory 
hurdles, the U.S. is erring on the side of caution. While such 
precautions are necessary, efforts should also be made to 
prevent the Cuban regime from engaging in offshore exploration 
altogether. Precaution might bring us temporary peace of mind, 
but prevention would better serve our long-term national 
interest, and there is legislation filed in Congress to do so.
    Mr. Chairman, this concludes my testimony. Again, I truly 
appreciate the invitation and the opportunity to speak before 
you and the Committee. I will be pleased to respond to any 
questions.
    [The prepared statement of Mr. Claver-Carone follows:]

       Statement of Mauricio Claver-Carone, Executive Director, 
                        Cuba Democracy Advocates

    Thank you, Mr. Chairman.
    It's truly a privilege to be here with all of you today.
    My name is Mauricio Claver-Carone and I'm the Executive Director of 
Cuba Democracy Advocates, a non-profit, non-partisan organization 
dedicated to the promotion of human rights, democracy and the rule of 
law in Cuba.
    I have held this position for seven years and throughout this time, 
I have been closely monitoring the plans, developments and geo-
political motivations behind the Cuban regime's efforts to pursue 
offshore oil exploration.
    However, it's important to note that despite the broad media 
attention given to the Cuban regime's most recent plans, which we are 
discussing here today, its efforts to conduct offshore oil exploration 
date back almost 20 years. And ultimately--all of them have been 
unsuccessful.
    Please allow me to begin with some broader observations.
    Cuba is a totalitarian dictatorship. It is the sole remaining 
dictatorship in the Western Hemisphere. Therefore, it should not be 
viewed through the same lens as its democratic neighbors, the Bahamas 
and Mexico--nor should it be treated in the same manner.
    The Bahamas and Mexico are allies of the United States. We share a 
relationship of trust and cooperation with these two friendly nations. 
Meanwhile, the Cuban regime remains under U.S. sanctions, which 
Congress codified into law under the 1996 Cuban Liberty and Democratic 
Solidarity Act, due to three fundamental reasons: 1. the brutal 
violations of the Cuban people's human, civil, political and economic 
rights. 2. its hostile anti-American policies. 3. the illegal 
expropriation of properties belonging to U.S. nationals.
    Moreover, Cuba remains one of four countries designated by the U.S. 
Government as a state-sponsor of terrorism based on its harboring of 
fugitives (including the murderers of U.S. law enforcement officials); 
its unwillingness to cooperate with U.S. anti-terrorism efforts; its 
intelligence gathering and sharing with other rogue regimes; and its 
support for foreign terrorist organizations. The other three countries 
on the state-sponsors of terrorism list are Iran, Sudan and Syria.
    Considering the background of Cuba's regime, a strong case can be 
made that it is not in our national interest to lift sanctions and 
assist yet another anti-American dictatorship--and state-sponsor of 
terrorism--in its ambitions for oil exploration. To do so would not 
ease domestic fuel costs or enhance energy independence here at home, 
which should be the goals of U.S. energy policy. To the contrary, it 
would add to the extortionate practices that other oil-producing 
dictatorships have exploited for the last half-a-century.
    Furthermore, considering that this same Cuban regime has already 
expropriated U.S. oil assets in the past (Esso and Texaco), it would 
send a dangerous message to other hostile governments that--in this 
region alone (e.g. Hugo Chavez in Venezuela)--would like to do the 
same.
    Now, allow me to focus on some of the specifics of the Cuban 
regime's offshore exploration plans, which unfortunately tend to get 
overlooked.
    Despite the Cuban regime's highly publicized efforts over the last 
20 years, there have been no commercially viable discoveries or 
extraction of oil in waters off Cuba's shores. Moreover, there is 
currently no drilling taking place in waters off Cuba's shores.
    The Cuban regime first began using offshore-drilling rights to 
extract political concessions from various nations of the world soon 
after the 1991 collapse of the Soviet Union, which ended that country's 
hefty subsidies to Cuba.
    According to recently declassified documents by the Brazilian 
Foreign Ministry, in 1993 the Cuban regime first offered the government 
of then President Itamar Franco the ``most promising'' blocks for oil 
exploration to Brazil's national oil company, Petrobras, in exchange 
for their shunning of Cuban dissidents on the island and cancelling a 
meeting with Cuban exiles at the Brazilian Embassy in Washington, D.C. 
The Brazilian government complied with both, only to exit from Cuba 
empty-handed years later.
    The Cuban regime found a new ``partner'' when Hugo Chavez rose to 
the presidency of oil-rich Venezuela in 1998. With the backing of 
Chavez and Venezuela's state-oil company PdVSA, the Cuban regime 
resumed its diplomatic offensive signing highly publicized oil-leases 
with Spain's Repsol, Norway's Statoil, Russia's Gazprom, India's ONGC 
Videsh, Malaysia's Petronas, Canada's Sherritt, Angola's Sonangol, 
Vietnam's PetroVietnam and China's CNPC.
    Only one company, however, has actually conducted any exploratory 
drilling--Spain's Repsol in 2004. It found some oil, but not in any 
commercially viable quantities. It then pulled out of Cuba.
    Similarly, after much initial fanfare, Canada's Sherritt and 
Brazil's Petrobras--perhaps the most credible and respected of the 
region's oil companies outside the United States--publicly abandoned 
their efforts in 2008 and 2011, respectively, stating that Cuba 
offshore drilling was ``not commercially viable'' and citing ``poor 
prospects.''
    Much of this can be attributed to U.S. sanctions, which 
dramatically drive up costs of production. The Cuban regime has itself 
admitted that U.S. sanctions make it commercially impractical to 
produce oil in its territorial waters. Keep in mind that even the 
largest neighboring foreign oil companies, Mexico's Pemex and 
Venezuela's PdVSA, refine the majority of their oil in the U.S. and 
then repatriate it, for they lack the domestic infrastructure to 
process their own heavy crude and the U.S.'s geographical proximity 
enhances profitability. As long as U.S. trade sanctions against Cuba's 
regime are in place, producing and refining any oil found in Cuban 
waters in the United States isn't an option.
    That leads to a question: If off-shore drilling in Cuban waters is 
not commercially viable for the most respectable regional oil 
companies, which are located relatively close to Cuba and have the most 
experience in dealing with Cubans, is such drilling really viable for 
the Angolans, Malaysians or the Chinese? The answer is no.
    Initially, we learned this in 2006, when the Cuban regime seemingly 
had convinced public policymakers in Washington--including many here in 
Congress--that the Chinese were ready to drill off Cuba's shores. The 
threat never materialized, but it served the Cuban regime's political 
interests. As Reuters reported from Cuba at the time: ``Havana is eager 
to see American oil companies join forces with the anti-embargo lobby 
led by U.S. farmers who have been selling food to Cuba for four 
years.''
    Last year's oil spill in the Gulf of Mexico by BP and the 
justifiable public outrage that ensued has given the Cuban regime a new 
and strategic opportunity to use the threat of offshore drilling as a 
means of forcing the U.S. to unilaterally ease sanctions. Cuban Foreign 
Minister Bruno Rodriguez has confirmed this on various occasions and 
relayed as much to former New Mexico Gov. Bill Richardson, who recently 
traveled to Havana in an unsuccessful effort to secure the release of 
American hostage Alan Gross; Gross has been held for nearly two years 
in a Cuban prison for helping the island's Jewish community connect to 
the Internet.
    In a flashback to 2004, Spain's Repsol is back in Cuba preparing to 
drill another exploratory well early next year. This time, the Cuban 
regime is ``threatening'' that if Repsol is pressured into abandoning 
drilling, India's ONGC Videsh or Malaysia's Petronas will step forward.
    Curiously, this peculiar corporate trio was granted extensive oil-
rights last year by Hugo Chavez to develop a block with 235 billion 
barrels of reserves in Venezuela's oil-rich Orinoco belt. Reserves in 
that one Venezuelan block alone are believed to be 50 times greater 
than the best estimates in all of Cuba's territorial waters. Some geo-
political foul play can surely be deduced from the particularity and 
timing of this arrangement.
    Despite the fact that Repsol still faces exploratory hurdles (and 
gargantuan production costs if oil is ever found), the United States is 
erring on the side of caution and licensing specialty oil spill 
mitigation firms to respond quickly in the case of an accident. This is 
also not a new phenomenon. The U.S. has been licensing such firms since 
at least 2001. Moreover, current U.S. law provides all of the necessary 
flexibility to do so.
    While such precautions are necessary, efforts should also be made 
to prevent the Cuban regime from engaging in offshore exploration 
altogether. The anti-American nature of the Cuban regime will simply 
not provide the necessary safeguards regardless of the level of U.S. 
engagement on this issue. Thus, there is currently legislation filed 
with this goal in mind, including H.R. 2047, the Caribbean Coral Reef 
Protection Act, which targets U.S. visas and loans to the Cuban 
regime's foreign business partners, and H.R. 373, which amends the 
Outer Continental Shelf Lands Act to deny U.S. leases to foreign 
companies that engage in oil exploration with countries under U.S. 
sanctions, such as Iran and Cuba. Precaution might bring us temporary 
peace of mind, but prevention would better serve our long-term national 
interests.
    Mr. Chairman, this concludes my testimony. Again, I truly 
appreciate the invitation and the opportunity to speak before you and 
the committee. I will be pleased to respond to any questions.
                                 ______
                                 
    Mr. Lamborn. All right. Thank you.
    Mr. Pinon, you may begin.

 STATEMENT OF JORGE R. PINON, VISITING RESEARCH FELLOW, LATIN 
    AMERICAN AND CARIBBEAN CENTER, CUBAN RESEARCH INSTITUTE

    Mr. Pinon. Thank you, Mr. Chairman and Members of the 
Committee.
    The 1982 Third United Nations Convention on the Law of the 
Sea defines the rights and responsibilities of nations in their 
use of the world's oceans, establishing guidelines for 
businesses, the environment and the management of their marine 
natural resources.
    The United States has signed maritime boundary agreements 
with most of its neighbors--Russia [Alaska], Canada [ex Arctic 
Ocean], Cuba and Mexico--delineating an economic exclusive zone 
under which each state has sovereign rights on the exploration 
and exploitation of its water, seabed and subsurface marine 
resources.
    As the United States, Mexico, Cuba and the Bahamas embark 
in developing their respective deepwater hydrocarbon resources 
within their EEZs and after the catastrophic experience of the 
Ixtoc and Macondo well blowouts, the establishment of a working 
relation between all four countries and marine environmental 
protection would assist in the contingency planning and 
cooperation necessary to an early and truly effective response 
to an accidental oil spill.
    The United States has already in place agreements of 
cooperation with Mexico and Canada that set protocols to follow 
in case of an oil spill which would pose a threat to their 
shared marine environment. A similar bilateral agreement is 
urgently needed with Cuba and the Bahamas.
    The Bahamas, Cuba and the United States are signatories of 
multilateral agreements that commit the parties to prepare for 
and cooperate on potential oil spills. As was mentioned here, 
this includes the International Convention on Oil Pollution 
Preparedness Response and Cooperation, which was adopted in 
1990 under the auspices of the International Maritime 
Organization. Under the Convention, parties are required to 
establish measures for dealing with pollution incidents either 
nationally or in cooperation with other countries.
    To respond effectively to an oil-related marine accident, 
all four countries would also require immediate access to each 
other's oil services and equipment resources that can provide 
the needed instant technology and know-how that will be needed 
to prevent, limit and hold the damage of their shared marine 
environment.
    We are very naive to think that in the case of Cuba a 
handful of licenses would prevent and contain a deepwater oil 
exploratory well blowout. A general license to export and 
supply equipment, personnel and services to international oil 
companies operating in Cuba in the case of an emergency is 
urgently needed.
    Deepwater Horizon response resources needed to assist in 
containment and cleanup efforts were unprecedented: over 48,000 
responders, more than 5,050 vessels, over 10 billion feet of 
containment boom, two million gallons of dispersant and also 
two ultra deepwater semi-submersibles that were needed to drill 
relief wells to permanently seal the reservoir.
    Over the last few months we have seen a number of 
congressional concerns questioning the experience in deepwater 
drilling of the international oil companies, the standards and 
regulations under which they will operate, the technology and 
quality of the drilling equipment and the lack of a 
multilateral disaster preparedness and coordination agreement 
in the event of an oil spill.
    Most noticeable, Mr. Chairman, throughout this debate, it 
has been singularly focused on Spain's publicly held oil 
company, Repsol, while ignoring all other exploratory oil 
drilling activities in Cuba, Mexico and the Bahamas by a number 
of state-owned national oil companies, such as Malaysia's 
Petronas, Russia's Gazprom and Mexico's Pemex, among others.
    Mexico, Cuba and the Bahamas are in the process of 
implementing the most up-to-date drilling regulations and 
standards, but do they have the resources, capabilities, 
assets, personnel and experience to enforce them? Can these 
countries' regulatory agencies appropriately police the 
operators?
    The United States not only needs to reach out and share 
lessons learned and best practices with all companies operating 
in the region for the benefit and protection of our common 
economic and environmental interests but most importantly with 
the regulatory agencies such as Mexico's Comision Nacional de 
Hidrocarburos, Cuba's Oficina de Regulacion Ambiental y 
Seguridad Nuclear and the Bahamas' Ministry on the Environment.
    Having said this, the recent unprecedented international 
role played by the Department of the Interior's Bureau of 
Safety and Environmental Enforcement appears to me, Mr. 
Chairman, to be outside of its constitutional mandate to take 
charge of the nation's internal affairs and therefore merits 
further review and consideration as it establishes precedents 
which are not in the best interests of the United States' 
national security and could impact negatively in your efforts 
of hydrocarbon development in the Perdido Fault of Mexico and 
in the Chukchi Sea.
    The economic and environmental consequences from an 
accidental oil spill for all 19 million Florida residents 
demands proactive joint planning by Cuba, Mexico and the 
Bahamas and the United States. In order to prevent such a 
disaster, this planning should be done in the spirit of 
cooperation and not confrontation.
    The editorial position of Florida's three largest 
newspapers, Mr. Chairman, underscores this view. The St. 
Petersburg Times, and I quote, ``Florida lawmakers' hope of 
thwarting Cuba's offshore drilling ambitions by isolating it 
from oil companies that do business in the United States is 
shortsighted political posturing that won't work.''
    The Fort Lauderdale Sun Sentinel, ``Cuba's oil drilling 
ought to be put above the diplomatic and political fray.''
    And The Orlando Sentinel, ``Politics instead of wise policy 
continues to undermine the U.S. approach to oil drilling in 
Cuban waters.''
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Pinon follows:]

    Statement of Jorge R. Pinon, Visiting Research Fellow, Florida 
  International University Latin American and Caribbean Center, Cuban 
                           Research Institute

    Thank you Mr. Chairman and members of the committee, for the 
privilege and honor to be here today testifying and sharing with you 
what I consider to be an issue of national security.
    My name is Jorge Pinon, I am a Visiting Research Fellow with 
Florida International University, Latin American and Caribbean Center's 
Cuban Research Institute. I am also the former president of Amoco Oil 
de Mexico and president of Amoco Oil Latin America.
    The 1982 Third United Nations Convention on the Law of the Sea 
(UNCLOS III) defines the rights and responsibilities of nations in 
their use of the world's oceans, establishing guidelines for 
businesses, the environment, and the management of the marine natural 
resources.
    The United States has signed maritime boundary agreements with most 
of its neighbors; Russia (Alaska), Canada (ex Arctic Ocean), Cuba, and 
Mexico; delineating an economic exclusive zone--EEZ--over which each 
state has sovereign rights on the exploration and exploitation of its 
water, seabed, and subsurface marine resources.
    As The United States, Mexico, Cuba and The Bahamas embark in 
developing their respective deepwater hydrocarbon resources within 
their EEZs, and after the catastrophic experience of the Ixtoc and 
Macundo wells blowouts, the establishment of working relations between 
all four countries in marine environmental protection would assist in 
the contingency planning and cooperation necessary to an early and 
truly effective response to an accidental oil spill.
    The United States have already in place agreements of cooperation 
with Mexico and Canada which set protocols to follow in case of an oil 
spill which would pose a threat to their shared marine environment. A 
similar bilateral agreement is urgently needed with Cuba and The 
Bahamas.
    Cuba, The Bahamas and the United States are signatories of 
multilateral agreements that commit the parties to prepare for and 
cooperate on potential oil spills. This includes the International 
Convention on Oil Pollution Preparedness, Response, and Cooperation 
(OPRC), which was adopted in 1990 under the auspices of the 
International Maritime Organization (IMO). Under the convention, 
parties are required to establish measures for dealing with pollution 
incidents, either nationally or in cooperation with other countries.
    To respond effectively to an oil-related marine accident, all four 
countries would also require immediate access to each others' oil 
services and equipment resources that can provide the near-instant 
technology and know-how that will be needed to prevent, limit, and halt 
damage to their shared marine environment.
    We are very naive to think that in the case of Cuba, a handful of 
individual export licenses could prevent and contain a deepwater oil 
exploratory well blowout. A general license to export and supply 
equipment, personnel and services to international oil companies 
operating in Cuba in the case of an emergency is urgently needed.
    The Deepwater Horizon response resources needed to assist in 
containment and cleanup efforts were unprecedented; over 48,000 
responders, more than 5,050 vessels including skimmers, tugs, barges, 
tankers, and recovery vessels; hundreds of aircrafts, remotely operated 
vehicles, and multiple mobile offshore drilling units and support 
equipment, 2.93 million feet of containment boom, 8.35 million feet of 
sorbent boom and nearly 2 million gallons of dispersant. Also, 2 ultra-
deepwater semi-submersibles were needed to drill relief wells to 
permanently seal the reservoir.
    Over the last few months, we have seen a number of congressional 
concerns questioning the experience in deepwater drilling of the 
international oil companies, the standards and regulations under which 
they will operate, the technology and quality of the drilling 
equipment, and the lack of a multi-lateral disaster preparedness and 
coordination agreement in the event of an oil spill.
    Most noticeable throughout this debate has been the singularly 
focus on Spain's publicly held oil company Repsol, while ignoring all 
other exploratory oil drilling activities in Cuba, Mexico and The 
Bahamas by a number of state-owned national oil companies such as; 
Malaysia's Petronas, Russia's Gazprom, India's ONGC, Angola's Sonangol, 
and Mexico's Pemex among others.
    Mexico, Cuba and The Bahamas are in the process of implementing the 
most up to date drilling regulations and standards; but do they have 
the resources, capabilities, assets, personnel, and experience to 
enforce them? Can these countries' regulatory agencies appropriately 
police the operators?
    The United States not only needs to reach out and shared lessons 
learned and best practices with all companies operating in the region 
for the benefit and protection of our common economic and environmental 
interests; but most importantly with the regulatory agencies such as 
Mexico's Comision Nacional de Hidrocarburos, Cuba's Oficina de 
Regulacion Ambiental y Seguridad Nuclear, and The Bahamas Ministry of 
the Environment.
    Having said this, the recent unprecedented international role 
played by the Department of Interior's Bureau of Safety and 
Environmental Enforcement appears to be outside of its constitutional 
mandate to ``take charge of the Nation's internal affairs'' and 
therefore, merits further review and consideration as it establishes 
precedents which are not in the best interest of the United States 
national security; and could impact negatively in our efforts of 
hydrocarbon development in the Perdido Fault (Mexico) and in the 
Chukchi Sea (Russia).
    The economic and environmental consequences from an accidental oil 
spill for all 19 million Florida residents, demands proactive joint 
planning by Mexico, Cuba, The Bahamas and the United States in order to 
prevent such a disaster. This planning should be done in a spirit of 
cooperation, and not confrontation.
    The editorial position of Florida's three largest newspapers Mr. 
Chairman underscores this view:
        The St Petersburg Times; ``Florida lawmakers' hopes of 
        thwarting Cuba's offshore drilling ambitions by isolating it 
        from oil companies that do business in the United States is 
        shortsighted political posturing that won't work.'' (February 
        7, 2011)

        The Fort Lauderdale Sun Sentinel; ``Cuba's oil drilling ought 
        to be put above the diplomatic and political fray.'' (October 
        23, 2011)

        And the Orlando Sentinel; ``Politics instead of wise policy 
        continues to undermine the U.S. approach to oil drilling in 
        Cuba's waters.'' (October 19, 2011)
    Thank you Mr. Chairman.
    Jorge R. Pinon began his thirty year career in the energy sector 
when he joined Shell Oil Company. He was president and CEO of 
Transworld Oil USA prior to joining Amoco Corporation in 1991 as 
president of Amoco Corporate Development Company Latin America. In this 
position Mr. Pinon represented the business development and joint 
venture efforts in the region between Amoco Corporation and state oil 
companies.
    In 1994 he was transferred to the downstream oil sector to serve as 
president of Amoco Oil de Mexico and president of Amoco Oil Latin 
America, based in Mexico City. After the 1999 merger between Amoco and 
BP, Mr. Pinon was transferred to Madrid, Spain, to manage BP Europe's 
western Mediterranean petroleum supply and logistics operations. He 
retired from BP in 2003.
    In 1997, when vice-president and member of the board of directors 
of the American Chamber of Commerce of Mexico--AMCHAM--Mr. Pinon 
received the ``Yiacatecutli'' award for distinguished service in the 
promotion of U.S.-Mexico business relations.
    Mr. Pinon is today an international energy consultant, as well as a 
visiting research fellow with Florida International University's Latin 
American and Caribbean Center--Cuban Research Institute. With 
international experience in emerging markets and a network of senior 
energy contacts in Latin America, he is an independent analyst of 
regional energy issues, as well as the politics of oil and natural gas 
in Latin America.
    He is also recognized as an expert on Cuba's energy sector, as well 
as on the island's future economic transition challenges and 
opportunities. He is an advisor and a member of the Cuba task forces at 
The Brookings Institution and The Council of the Americas, and a member 
of the board of directors of the Association for the Study of the Cuban 
Economy--ASCE--; and a co-author of Cuba's Energy Future: Strategic 
Approaches to Cooperation (Brookings, 2010), a monograph addressing the 
major challenges facing Cuba's access to energy resources that are 
environmentally sustainable and sufficient to meet the nation's 
revitalization and development goals.
    Mr. Pinon holds a degree in Economics and a certificate in Latin 
American Studies from the University of Florida.

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    Mr. Lamborn. All right. Thank you.
    Mr. Whittle?

         STATEMENT OF DANIEL WHITTLE, SENIOR ATTORNEY/
       CUBA PROGRAM DIRECTOR, ENVIRONMENTAL DEFENSE FUND

    Mr. Whittle. Thank you, Mr. Chairman and Members of the 
Committee. It is an honor to be here today.
    The Environmental Defense Fund has been working for years 
to rebuild fisheries and conserve coastal ecosystems in the 
Gulf of Mexico and along the Atlantic coast. We started working 
in Cuba in the year 2000 because the health of marine life, 
coral reefs and fisheries in the U.S. depends in part upon how 
well these resources are managed in Cuba.
    The BP disaster was a wakeup call and a costly reminder 
that deepwater drilling is inherently risky. Lessons from the 
massive spill are still being learned, and it falls to 
Congress, the Administration and industry to adopt reforms to 
ensure that nothing like it ever happens again in U.S. waters. 
Congress, the Administration and industry must also take steps 
now to ensure that nothing like it happens again in Mexican, 
Cuban or Bahamian waters.
    Following the Ixtoc spill in 1979, Mexico and the United 
States entered into an agreement called MEXUS to ensure close 
coordination and cooperation on planning and responding to 
future transboundary spills. As Vice Admiral Salerno indicated 
this morning, we also have similar agreements in place with 
Canada and Russia.
    Just months after the Deepwater Horizon blowout, the 
Administration initiated a new round of talks with all levels 
of Mexican Government designed to strengthen MEXUS. U.S. and 
Mexico are also talking and meeting on the need for common 
environmental and safety standards, which were not part of the 
original agreement 31 years ago. The Administration does not 
have a MEXUS-like agreement with Cuba, and discussions, as we 
know, between the two governments are extremely limited because 
of U.S. law and policy.
    A major spill in Cuban waters would have devastating 
environmental and economic impacts in both Cuba and the United 
States. In the U.S., marine life, coastal communities and 
livelihoods from Florida to North Carolina would be at risk. 
Florida's multibillion dollar a year tourism and fishing 
industries, especially in the Keys and along the state's East 
Coast, would take a direct and costly hit. With the prospect of 
oil drilling in Cuba as early as December, the Administration 
should act now to minimize the possibility of oil spills in 
Cuba altogether and to ensure that our national interests are 
fully protected.
    Dialogue and cooperation between the U.S. and Cuba on 
environmental protection and safety standards is not without 
precedent. Since 1963, the National Hurricane Center in Miami 
has worked directly with its Cuban counterparts to track and 
monitor tropical storms and hurricanes. The U.S. has provided 
training to Cuban forecasters, and in turn Cuba has allowed the 
U.S. Air Force C-130 hurricane hunters into its airspace. This 
cooperation has saved lives and property.
    In its report earlier this year, which was already quoted, 
the President's Oil Spill Commission called upon the U.S. 
Government to engage with both Cuba and Mexico to agree upon a 
common set of standards. The Administration has done this with 
Mexico, Canada and Russia but has not yet initiated such 
negotiations with Cuba.
    In September, I led a nine-member delegation to Havana with 
William Riley, the former EPA Administrator and Co-Chair of the 
Commission, and Richard Sears, the Commission's chief 
scientist. Our delegation also included the International 
Association of Drilling Contractors president, Lee Hunt. Though 
Cuban environmental agencies have developed a strong set of 
regulations, best practices and standards, our visit confirmed 
that more needs to be done to ensure that Cuba is adequately 
prepared to regulate and oversee offshore oil exploration.
    In my written testimony, I outline some of the constructive 
steps that the Department of the Interior and Coast Guard have 
taken to date on this issue. Negotiations with Repsol are good, 
but they are no substitute for direct negotiations with Cuban 
government agencies. As a result, I believe the U.S. remains 
unprepared to minimize the environmental and economic damage 
that could occur from a spill in Cuban waters.
    My testimony also outlines a number of specific actions the 
Administration can take now. I believe the Administration 
should preauthorize companies through a general license to 
assist in preventing and responding to major oil spills in 
Cuban waters. Most importantly, the Administration should 
initiate a dialogue with Cuba, much like we have with Mexico 
and Canada, to ensure that future drilling is conducted safely. 
Also, dialogue is the best way to enhance transparency. It is 
in fact the only way in this case to have transparency. Third, 
the Administration should develop a joint contingency plan with 
Cuba.
    Ultimately our countries should work together much more 
broadly on environmental cooperation to protect the many shared 
resources, migratory fish populations, coral reefs, wetland 
systems, et cetera, that we share with our neighboring country. 
Thank you very much.
    [The prepared statement of Mr. Whittle follows:]

            Statement of Daniel J. Whittle, Senior Attorney 
         and Cuba Program Director, Environmental Defense Fund

    Thank you Mr. Chairman and members of the subcommittee, it is an 
honor to join you in a discussion of the potential environmental 
implications of new offshore energy development and what measures can 
to be taken to protect marine ecosystems, coastal communities, and 
livelihoods against future oil spills in ocean waters we share with 
Cuba, Mexico and the Bahamas.
    My name is Daniel Whittle and I work for the Oceans Program at 
Environmental Defense Fund (EDF) where I am the director of the Cuba 
Program. EDF is a national environmental organization that searches for 
solutions that maximize economic incentives for solving environmental 
problems.
    EDF has been working in the Gulf of Mexico for 35 years to protect 
and restore coastal ecosystems and to rebuild troubled multi-billion 
dollar fisheries. EDF is working now to address the economic and 
environmental devastation of the BP oil disaster and to ensure that 
Congress sends money where it is needed most: projects to repair Gulf 
Coast communities, wildlife and the environment, including the 
restoration of the delta of the Mississippi River. We support passage 
of The Resources and Ecosystems Sustainability, Tourist Opportunity, 
and Revived Economies of the Gulf States Act of 2011 (RESTORE Act) that 
would to ensure that 80 percent of the Clean Water Act (CWA) penalties 
to be paid by BP and other responsible parties will be used to restore 
the communities, economies and ecosystems of the Gulf region directly.
    For the past 11 years, under a specific license from the US 
Department of Treasury, EDF has worked with marine biologists and other 
scientists in Cuba to protect coral reefs and other important ocean and 
coastal ecosystems, and to identify strategies for restoring declining 
fish populations. Cuba's coral reefs remain of high quality and are 
vital habitats for many fish species of importance to the United 
States. The particular emphasis of our Cuba Program has been on waters 
of the Atlantic Ocean, the Caribbean Sea and the Gulf of Mexico that 
the United States shares with and Cuba. Therefore, over the last 
several years we have closely monitored Cuba's plans to develop 
offshore oil and gas resources in the Gulf of Mexico; since 2009 we 
have been particularly focused on promoting bi-lateral and/or multi-
lateral dialogue and cooperation to ensure that any oil exploration and 
production that does take place, proceeds in an environmentally sound 
and safe manner.
    Finally, my colleagues and I are also closely following Cuba's 
progress in implementing country-wide energy efficiency programs and in 
its investment into renewable energy, including wind, solar, biomass, 
and clean ocean energy.

Current US Policy on Cuba Impedes Cooperation on Environmental 
        Protection
    Current US policy on Cuba permits EDF and other scientific, 
academic, and conservation organizations to conduct on-the-ground 
research and conservation projects with Cuban partners and 
institutions. Scientific and professional exchange is generally 
limited, however, to non-governmental groups and academic institutions. 
Most private companies are prohibited from doing business in Cuba 
because of the embargo. There is a narrow exception for some private 
entities, such as oil services companies, but they must first apply for 
specific approval from the US Treasury and Commerce Departments to 
provide services and export equipment to Cuba. This process is 
complicated and time-consuming and apparently few companies in the oil 
services sector have asked for or received specific licenses so far. In 
the event of an oil spill in Cuban waters, this licensing process would 
cost precious time.
    US government agencies such as the Coast Guard, the Department of 
Interior, the National Oceanic and Atmospheric Administration (NOAA), 
and the Environmental Protection Agency (EPA) are extremely limited in 
their ability to communicate or coordinate with their Cuban government 
counterparts on environmental protection or natural resources 
management. This compromises each country's ability to ensure that 
shared waters and natural resources are properly managed and adequately 
protected.
    This lack of dialogue, cooperation, and joint planning between 
government agencies leaves the United States especially vulnerable to 
future oil spills in Cuban waters. Florida and other states along the 
east coast as far as North Carolina would be threatened by a major oil 
spill in Cuba. Therefore, as outlined below, the Administration should 
take immediate steps to initiate negotiations with the Cuban government 
to ensure that sufficient environmental and safety safeguards are in 
place before drilling begins later this year. In addition, the 
Administration should pre-approve categories of private companies to 
send personnel and equipment to Cuba in the event of an oil spill that 
threatens US waters.

Shared Ecosystems and Shared Resources
    Because of the prevailing currents and Cuba's close proximity to 
the United States, Mexico and the Bahamas, marine and terrestrial 
ecosystems in all countries are tightly linked. For example, Cuba 
provides important spawning grounds for snappers, groupers and other 
reef fishes that are crucial to commercial and recreational fisheries 
along the southeast United States and in the Gulf of Mexico. Cuba, the 
Bahamas, and the United States also share a recently discovered 
deepwater coral ecosystem that covers more than 25,000 square miles and 
extends as far north as North Carolina. Cuba provides essential 
habitats that sustain an amazing array of birds and the area around 
Havana is a major launching point for most of the familiar songbirds 
that nest along the east coast of the United States.
    The health of the Gulf of Mexico ecosystem is inordinately 
important to the ecological systems of the Gulf and the people who 
depend upon it for their livelihoods and culture, but also to the 
ecosystems and fishing communities of the broader western Atlantic. The 
coastal wetlands and beaches of the Gulf provide essential habitats for 
the vast preponderance of economically important species harvested in 
the Gulf, one of America's great fishing grounds. The coral reefs, 
eelgrass beds and mangrove swamps of the southern and eastern Gulf are 
key habitats for a wide array of marine organisms, and are especially 
vulnerable to oil pollution.
    The northern Gulf also functions as a key spawning and nursery 
ground for many highly migratory species from tunas to billfishes to 
sharks. In fact, whale sharks from a large portion of the North 
Atlantic congregate in the Gulf to feed. A large population of sperm 
whales lives in the northern Gulf, feeding on abundant mid-water biota. 
In addition, the Gulf plays a key role for passage of larvae from up-
current spawning grounds in the western Caribbean to and through the 
Florida Straits into the broader Atlantic beyond.
    Oil pollution in the Gulf threatens a wide array of essential 
habitats and important fishery species, and many protected species.

Offshore Oil and Gas Development Demands Region-wide Planning and 
        Cooperation
    As evidenced by the BP oil disaster in 2010 and the Ixtoc spill in 
the Bay of Campeche, Mexico in 1979, deepwater drilling in the Gulf of 
Mexico is inherently risky and can result in severe and long lasting 
impacts to marine life, coastal ecosystems, and communities. These 
disasters underscore that oil spills do not observe political 
boundaries and that cross-border cooperation on spill prevention and 
response is in the best interests of each country.
    In 1980--prompted by the Ixtoc spill--Mexico and the United States 
entered into an agreement (known as the MEXUS agreement) for planning 
and responding to future spills that might threaten the waters of both 
countries. MEXUS includes a number of mandatory provisions designed to 
ensure the two countries have the readiness and capacity to prepare for 
and respond to trans-boundary oil spills. Among other things, the 
agreement provides for rapid incident notification, a joint response 
team, on-site coordinators, communication protocols, and expedited 
customs and immigration procedures to ensure that equipment and 
personnel can be deployed efficiently and in a timely manner.
    In its report earlier this year, President Obama's National 
Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling 
recommended that cooperation be extended to include Cuba as well.
        ``It is in our country's national interest to negotiate now 
        with these near neighbors [Cuba and Mexico] to agree on a 
        common, rigorous set of standards, a system for regulatory 
        oversight, and the same operator adherence to the effective 
        safety culture called for in this report, along with protocols 
        to cooperate on containment and response strategies and 
        preparedness in case of a spill.''
    In his testimony before the Senate Energy Committee on October 18, 
2011, Michael Bromwich, the Director of the Department of Interior's 
Bureau of Safety and Environmental Enforcement, indicated that United 
States-Mexico cooperation ``has increased substantially in the 
aftermath of Deepwater Horizon and after the creation of the National 
Hydrocarbons Commission (CNH), the Mexican agency responsible for 
regulating offshore drilling safety on Mexico's continental shelf.'' To 
their credit, Director Bromwich and Department of Interior Secretary 
Ken Salazar have held a series of meetings with Mexican officials to 
discuss the need for common safety and environmental standards for 
future offshore oil and gas development in the Gulf of Mexico.
    In contrast, the US government's engagement with Cuba on this issue 
has been, for the most part, limited to the exchange of information 
after Cuban officials raised concerns that Cuban waters were threatened 
by the BP blowout. At that time, the two governments (through the US 
State Department and the Cuban Ministry of Foreign Affairs) opened up 
limited lines of communication, and US officials shared information and 
data with Cuba on the movement and transport of the oil, potential 
environmental impacts, and on response efforts being carried out in US 
waters. The US government also sought and received permission from Cuba 
to send a NOAA research vessel into Cuban waters to test for oil.
    In the absence of meaningful government-to-government dialogue, the 
Administration has taken some positive steps to enable private 
companies and non-governmental organizations to interact with Cuban 
agencies directly on this issue. For example, in the wake of BP, the US 
Treasury Department authorized the International Association of 
Drilling Contractors (IADC) to meet with Cuban energy officials to 
discuss safety and environmental issues associated with offshore oil 
and gas production in Cuban waters. The Treasury and Commerce 
Departments have also signaled that they are prepared to issue more 
specific licenses to private companies in the US with the capacity to 
respond to, contain, and clean up oil spills. At least one US company, 
Clean Caribbean and Americas, already has Treasury and Commerce 
approvals to provide oil spill response services in Cuba.
    The Department of Interior has also reportedly had productive 
discussions with the Spanish company Repsol over its future drilling in 
Cuban waters and has apparently secured the company's pledge to adhere 
to US environmental and safety standards.
    These positive steps, however, fall far short of those needed and 
pale in comparison to those the Administration taken to strengthen and 
expand cooperation with Mexico. As a result, the United States remains 
unprepared to effectively assist in the prevention, containment, or 
clean-up of a major oil spill in Cuban waters.

EDF Fact Finding Delegation to Cuba in September 2011
    In September 2011, EDF organized and led a fact finding delegation 
to Cuba on the government's plans to develop oil and gas resources in 
the Gulf of Mexico. Our delegation of nine experts included William 
Reilly, former Administrator of the US Environmental Protection Agency 
and the co-chair of the President's National Commission on the BP 
Deepwater Horizon Oil Spill and Offshore Drilling, Richard Sears, chief 
scientist of the commission, and Lee Hunt, President of the 
International Association of Drilling Contractors, who partnered with 
EDF in planning and carrying out the delegation's activities in Cuba.
    Our delegation met with a wide-range of Cuban officials and experts 
involved in the operation and regulation of offshore oil and gas 
exploration and development. Our goal was to get a better understanding 
of Cuba's plans for offshore drilling, their approach to regulation and 
oversight of offshore operations, and of their readiness and capacity 
to conduct offshore activities in a safe and environmentally sound 
manner. We also came prepared to make suggestions to Cuban officials on 
how lessons learned from the BP oil spill should be incorporated into 
their laws, regulations, oversight, and response planning.
    The Cuban government made clear its determination to begin 
exploratory activities this year. Cuban energy officials indicated to 
us that, in partnership with Repsol and other foreign oil companies, 
they expect to drill up to six exploratory wells between 2011 and 2013. 
In such a short period of time, it was not possible for us to conduct a 
comprehensive assessment of Cuba's oil drilling plans or of the 
strength of its regulatory framework and capacity, and many questions 
remain. Nonetheless, we had frank and open discussions and Cuban 
officials acknowledged the challenges associated with building an 
offshore oil and gas industry from scratch. They repeated their pledge 
to follow the highest international environmental and safety standards 
and expressed a strong willingness to cooperate with the United States 
and other countries in the region on all aspects of environmental 
protection and safety matters.
    After all, adopting all possible measures to minimize the 
likelihood of an oil spill is very much in the interest of Cuba, not 
just the United States, because of the importance of its coastal-
oriented economy.

The Administration Should Take Specific Actions Now to Negotiate with 
        Cuba and Other Countries in the Region
    First and foremost, the Administration should take steps now to 
ensure that US-based companies are pre-authorized to assist in 
preventing and containing major oil spills in Cuban waters. 
Specifically, the US Department of Treasury should adopt a new general 
license that provides authority to any qualified oil services company 
in the United States to send personnel to Cuba in response to a request 
from Cuba, Repsol or any other oil company conducting operations in 
Cuban waters; likewise, the US Department of Commerce should pre-
approve the export of vessels, equipment, and supplies needed for 
containment and response. This would allow Repsol and other foreign oil 
companies to contract with US oil service companies in advance of 
drilling. This is particularly important because of the proximity to 
Cuba of US firms with the requisite deep water drilling and advanced 
response, technical, and planning capabilities, in contrast to the 
distance between Cuba and other countries, such as the UK, Norway or 
Brazil, with state-of-the-art deep water oil development experience.
    Second, it is in our national interest to negotiate now with Cuba, 
Mexico and the Bahamas to ensure that any future drilling in waters of 
the Gulf of Mexico, Atlantic, or Caribbean is conducted according to 
the highest possible environmental and safety standards. In addition, 
the Administration should develop a joint contingency plan with Cuba 
that ensures the full participation of key US government agencies in 
oil spill response, including the US Coast Guard, the Department of 
Interior, NOAA and others. The MEXUS agreement discussed above can 
serve as a potential model for a US-Cuba agreement or for a region-wide 
agreement that includes the United States, Cuba, Mexico and the 
Bahamas. We urge action on this score as soon as possible.
    But the MEXUS agreement, with its emphasis on oil spill response, 
should only be a first step. A comprehensive solution requires that 
negotiations between the countries go beyond spill response and include 
how the countries can work together on prevention and on improving 
baseline scientific knowledge of shared waters and resources. 
Ultimately, our two countries must collaborate on protecting resources, 
such as coral reefs and coastal wetland systems that ecologically we 
share, and on advancing deep water oil and gas production and spill-
prevention technologies that advance our common interests in the Gulf 
of Mexico, Atlantic, and northern Caribbean ecosystems.
    In conclusion, because of our shared interests in protection of 
Gulf of Mexico resources, the importance of coastal resources to the 
health of our citizens and visitors, and physical processes that can 
disperse spilled oil far and wide, we urge the United States to engage 
Cuba, as it has Mexico, to strengthen standards and areas of 
cooperation that will minimize the likelihood of significant damage 
from any deep water oil and gas operations.
    As Cuba progresses toward extraction of oil and gas from deep water 
sites, EDF looks forward to a continuing dialogue with members of 
Congress as to how the marine environment of the Gulf, Atlantic and 
Caribbean may be best protected in that process.
    Thank you.
                                 ______
                                 
    Mr. Lamborn. All right. Thank you.
    Ms. Antrim, you may begin.

 STATEMENT OF CAITLYN ANTRIM, EXECUTIVE DIRECTOR, RULE OF LAW 
                    COMMITTEE FOR THE OCEANS

    Ms. Antrim. Good morning, Mr. Chairman and Members of the 
Committee. Thank you for the opportunity to testify before you 
today.
    I serve as the Executive Director of the Rule of Law 
Committee for the Oceans, a bipartisan group of experts and 
educators in international ocean law. Over my career I have 
worked as an ocean engineer, mineral economist, industry 
analyst, Federal official and diplomat, all with a focus on the 
development of minerals of the ocean floor. I would like to 
draw from that experience today to expand on our offshore 
energy base for development by American industry.
    As U.S. industry moves further seaward in search of 
exploitable energy resources, we approach the limits of the 
exclusive economic zone. Wide recognition of the exclusive 
economic zone has assured the stable legal environment 
essential for billion dollar investments in offshore oil.
    Now a warming Arctic and advances in technology are drawing 
attention to areas of the Continental Shelf outside the EEZ. 
The seabed north of Alaska is the most promising of these 
areas. Recent studies indicate that due to its unique geology 
the continental margin north of Alaska may extend 600 nautical 
miles or more from shore. There are reports of natural gas 
releases from the seabed at nearly that distance.
    The Alaskan Arctic isn't the only region with energy 
resources beyond the EEZ. The continental margins off of South 
Carolina and south of Alaska extend beyond the EEZ as well, and 
there are also large areas of the seabed around some U.S. 
Pacific Ocean island territories that may be claimed as our 
extended Continental Shelf as well.
    Lack of clarity of the legal status of the continental 
margin beyond the Continental Shelf was of serious concern to 
U.S. policymakers throughout the 1970s. In 1970, the Nixon 
Administration proposed a new intermediate region between the 
shelf and the abyssal plains in which the coastal state would 
manage exploitation and share royalties with the international 
community.
    Over the course of the Law of the Sea negotiations, U.S. 
diplomats quietly negotiated the extension of U.S. sovereignty 
over seabed resources from the edge of the Continental Shelf to 
the full extent of a new 200-mile EEZ, securing vast areas of 
the seabed with potential for energy and hard mineral 
resources. But as U.S. companies look to the sea floor beyond 
the EEZ, investors must consider the international perspective 
of conducting operations beyond the uncontested region of the 
economic zone.
    The Law of the Sea negotiations designed a process by which 
a coastal state may submit the boundary of an extended 
Continental Shelf to an international body of experts for 
confirmation of conformity with the criteria of the Convention. 
With such confirmation, coastal state jurisdiction over 
resources of that region would be recognized by all parties of 
the Convention. This part of the Convention has been accepted 
by every U.S. President since Gerald Ford, Republican and 
Democrat alike.
    If the U.S. remains outside of the Convention, we will 
still lay claim to a full continental margin off our shores, 
explaining that it is a right inherent in our national 
sovereignty, but other nations are not forced to agree with us. 
Such disagreement could be a serious matter for multinational 
companies that seek foreign investment, conduct business in 
foreign nations and sell in foreign markets.
    In 1981, the Reagan Administration review of the draft 
Convention found that it would be possible for the United 
States to exploit mineral resources of the seabed outside of a 
convention, but only if all other significant producers of 
minerals remained outside the Convention as well. As the only 
major nonparty nation with significant energy resources beyond 
the EEZ, our firms must be concerned about possible foreign 
discrimination or even legal action in response to exploitation 
of these resources without international recognition and 
without sharing royalties as provided in the Convention.
    International recognition and clear title of recovered 
resources are essential to any energy firm that invests, 
operates or markets beyond our shores. The provisions of the 
Law of the Sea Convention related to the extended shelf and 
sharing of royalties within it were negotiated with the advice, 
participation and approval of American industry and continue to 
be supported by individual energy companies and by the American 
Petroleum Institute.
    I agree with them that the Convention's provisions on the 
extended Continental Shelf are in the economic interest of the 
United States. I hope the consideration of U.S. policies for 
this new region, including the establishment of agreed maritime 
boundaries with Canada in the Beaufort Sea and with Mexico and 
Cuba in the eastern gap of the Gulf of Mexico, will be designed 
to conform with possible U.S. accession to the Law of the Sea 
Convention and will utilize the Convention's requirements for 
international sharing of information related to the impact of 
seabed development on the marine environment for our own 
benefit if and when the U.S. Senate gives its advice and 
consent.
    That concludes my statement. Thank you again for the 
opportunity to appear before you today.
    [The prepared statement of Ms. Antrim follows:]

           Statement of Caitlyn Antrim, Executive Director, 
                  Rule of Law Committee for the Oceans

    National authority over resources of the sea floor beyond the 
territorial sea rests on a combination of domestic and international 
law and regulation. This is particularly true with regard to the 
offshore oil and gas industry. Multinational corporations that develop 
resources beyond the territorial sea are funded by domestic and foreign 
investors and sell their products in international markets. The 
offshore oil and gas industry has been one of the strongest supporters 
of the development of international law regarding coastal state 
authority over the continental shelf, and of US accession to the 1982 
Convention on the Law of the Sea, and it presents a pragmatic view of 
offshore oil and gas development as a domestic industry operating in an 
international environment.
    The United States needs to address international legal aspects of 
continental shelf development in all of its coastal waters. In the 
Arctic, the US has yet to establish an agreed maritime boundary with 
Canada in the Beaufort Sea or an outer boundary to the continental 
shelf beyond the 200 mile Exclusive Economic Zone. In the Gulf of 
Mexico, there is an unresolved area of the continental shelf beyond the 
EEZ that is bordered by the United States, Mexico and Cuba, and the 
maritime boundary with Cuba in the Florida Strait that was negotiated 
in 1977 has not been submitted to the Senate for advice and consent. It 
remains a functional boundary that is provisionally applied but not a 
durable, legally recognized agreement. Development of hydrocarbon 
resources of the ocean floor in the region of the state of Florida, 
Cuba and the Bahamas is guided by principles of international law, the 
domestic laws and regulations of the coastal states and the Cartagena 
Convention and its protocols. The areas around the Pacific Ocean Island 
Territories are largely unexplored so far but may have mineral 
resources for future development.
    The majority of U.S. offshore oil and gas resources are found in 
the Exclusive Economic Zone (EEZ). The 1982 United Nations Convention 
on the Law of the Sea (LOS) defines the EEZ for states parties to the 
Convention. Although the U.S. is not yet a party to it, the 
Convention's definition of the EEZ has been applied by the United 
States as proclaimed in the 1983 statement of ocean policy by President 
Ronald Reagan:
        Third, I am proclaiming today an Exclusive Economic Zone in 
        which the United States will exercise sovereign rights in 
        living and nonliving resources within 200 nautical miles of its 
        coast. This will provide United States jurisdiction for mineral 
        resources out to 200 nautical miles that are not on the 
        continental shelf. Recently discovered deposits there could be 
        an important future source of strategic minerals.
    The Law of the Sea Convention details the internationally 
negotiated statement of rights, authorities and obligations of states 
within its Exclusive Economic Zone. For its parties, the Convention 
also provides a mechanism through which parties may secure 
international recognition of claims to the continental margin beyond 
the EEZ, an area referred to as the ``extended continental shelf.'' The 
US, as a non-party, does not have access to this mechanism for 
obtaining international recognition of rights beyond the EEZ. Without 
international recognition of US authority in the extended shelf, the 
oil and gas industry sees domestic development beyond the EEZ as adding 
increased significant political risk to their international financing 
and trade relationships.

Initial Steps in Creating the Exclusive Economic Zone
    Prior to the end of World War II, international law recognized only 
two ocean zones: the territorial sea that was generally, but not 
always, limited to a breadth of 3 nautical miles, and the high seas, 
which encompassed all waters seaward of the territorial sea. In the 
territorial sea, the coastal state had sovereign rights subject only to 
the right of foreign ships to pass through the under the conditions of 
``innocent passage.'' On the high seas, ships were under the authority 
of the flag state, subject to foreign authority in only a few specified 
cases, such as suspicion of piracy and transport of slaves.
    Advances of technology and the improvement of the economics for 
offshore development of living and mineral resources in the post-WWII 
period led to expanding claims of jurisdiction by coastal states over 
widening areas of what had previously been the high seas. In 1945, 
President Truman proclaimed US authority over the resources of the 
continental shelf contiguous to the lands of the United States 
(approximated by the 200 meter isobath). The proclamation was limited 
to seabed resources and their development and did not extend 
sovereignty to other activities beyond the territorial sea.
    Regardless of US intent, the Truman Proclamation opened the way for 
other nations to extend claims over the high seas and its resources. In 
1958, Iceland extended its claim to a fisheries zone to 12 nautical 
miles (nm), out from a previous limit of 4 nm. This displaced British 
fishing fleets from fisheries they had been utilizing and initiated the 
first so-called ``Cod War'' with a confrontation between the Icelandic 
coast guard and the Royal Navy. A subsequent extension of Iceland's 
fishing zone to 50 nm in 1972 resulted in a renewed maritime 
confrontation and a third confrontation came with an extension of the 
zone to 200nm in 1977.
    In the 1960s, Chile, Peru and Ecuador extended their territorial 
sea to 200 nm, a claim that included all of the sovereign rights 
associated with the territorial sea once limited to 3 nm. American flag 
tuna boats were regularly impounded by Chile for fishing within the 200 
mile zone. US officials protested these actions, but the seizures 
continued. US flag boats were released on payment of fines and, with 
the encouragement of the US government, returned to continue to 
challenge the extensive Chilean claim.

Seeking the Certainty of International Law for the Seabed and its 
        Resources
    The sudden collapse of the centuries-old regime of a narrow 
territorial sea and a vast expanse of ocean subject to high seas 
freedoms led to an effort to define a new legal order for the seas that 
could establish clear agreement on the limits of coastal state 
authority over the seas and its resources and stem the enclosure of 
ocean space by coastal nations.
    This effort to accommodate changes of practice into a new legal 
order was undertaken in the 1950s by the International Law Commission. 
This culminated in the 1958 Law of the Sea Conference in Geneva and the 
adoption of a set of conventions that addressed four issues: the 
Territorial Sea and Contiguous Zone, Fisheries, the Continental Shelf, 
and the High Seas. While the four conventions laid out important 
principles regarding activities within each of the four issue-areas, it 
failed to clearly specify the geographic limits to the regions. In 
particular, the territorial sea convention failed to reach agreement on 
the breadth of the territorial sea, the fisheries convention failed to 
recognize exclusive coastal state authority over fisheries beyond the 
territorial sea and the continental shelf convention produced a vague 
and self-contradictory definition of the extend of the continental 
shelf. The first article of the Geneva Convention on the Continental 
Shelf has this definition:
        For the purpose of these articles, the term ``continental 
        shelf'' is used as referring (a) to the seabed and subsoil of 
        the submarine areas adjacent to the coast but outside the area 
        of the territorial sea, to a depth of 200 metres or, beyond 
        that limit, to where the depth of the superjacent waters admits 
        of the exploitation of the natural resources of the said areas; 
        (b) to the seabed and subsoil of similar submarine areas 
        adjacent to the coasts of islands.
    By rejecting the more expansive phrase ``continental margin'' in 
order to retain the more limited reference to the ``continental shelf'' 
and replacing ``contiguous,'' which had been part of the Truman 
Proclamation, with ``adjacent,'' which added a vague criteria for 
nearness, the definition introduced a qualitative limit on the seaward 
extent of the legal continental shelf. In establishing a depth limit of 
at least 200 meters but going as far as exploitation could be 
conducted, the outer limit was left open to debate and disagreement. 
The result was a definition that was sufficient for the near term, but 
in need of revisions in order to resolve legal and political 
impediments to development in the longer term.
    A second attempt to define the outer limit of the territorial sea 
was attempted at a second conference in 1960, but it was unsuccessful. 
Clarifying the outer limit of the continental shelf would have to wait 
for a more significant effort to update and clarify the law of the sea.
The Third Conference on the Law of the Sea
    A decade after the completion of the four Geneva Conventions of 
1958, preparations began on a new effort to define national rights, 
responsibilities and limits at sea. Instead of seeking separate 
agreements on different issues, it was decided to seek a comprehensive 
agreement in which all essential national security interests would be 
met, while creating a package deal in which nations could seek to 
maximize their economic, environmental and scientific interests as a 
whole with tradeoffs between issues in order to facilitate the creation 
of an overall agreement attractive to all states.
    The determination of the breadth of a coastal state resource zone 
and the jurisdiction a state would have within the zone became a major 
focus of negotiators at the Third UN Conference on the Law of the Sea 
in both the preparatory discussions and the formal negotiations that 
began in 1973. While the initial focus of coastal state claims to 
resources in the area beyond the territorial sea had been on living 
resources, the zone came to include management of resources of the 
seabed within the zone regardless of whether the seabed was part of the 
geological shelf or part of the deep ocean floor.

Recognizing the Continental Shelf beyond the EEZ
    In 1970, during the preparations for the Third UN Conference on the 
Law of the Sea, the United States introduced a draft convention that 
incorporated a three-part system for management of mineral resources of 
the seabed. It included a continental shelf extending to the 200 meter 
isobath where minerals were under the exclusive jurisdiction of the 
coastal state, the deep seabed beyond the continental margin and beyond 
the jurisdiction of the coastal state where minerals would be managed 
by an international authority and an intermediate area, described as a 
trusteeship, in which minerals would be managed by the coastal state 
for the mutual benefit of the coastal state and the international 
community. As the EEZ was hammered out during the negotiations, the 
seabed within 200 miles from shore was incorporated into the EEZ. The 
negotiation of the provisions for the continental shelf beyond the EEZ 
took on aspects of the original US proposal for the seabed trusteeship 
zone.
    Under the LOS Convention, coastal state may have jurisdiction over 
the continental margin beyond the EEZ if it meets the geologic criteria 
specified in Article 76 of the Convention that establishes conditions 
and limits to the extent of coastal state jurisdiction. Just as 
originally proposed by the United States, excessive or frivolous claims 
are blocked by requiring that continental shelf claims that extend 
beyond the EEZ be reviewed by an international panel of experts. Under 
the LOS Convention, the Commission on the Limits of the Continental 
Shelf serves this role. The Commission is empowered to review claims 
submitted to it and make recommendations as to whether the claims are 
in compliance with Article 76 or to recommend how the submissions might 
be brought into compliance. If claims are found to be in compliance, 
they are to be recognized by all of the parties to the Convention. The 
Commission does not resolve disputes between adjacent or opposing 
states as to how overlapping claims are to be decided, but it may 
review a joint proposal for recognition of an outer limit to the 
extended shelf by two or more states, leaving the division of the areas 
for later resolution among the states that made the joint submission.
    Under the definition used by the Convention, the US continental 
shelf would extend beyond the EEZ in two parts of the Gulf of Mexico, 
off of the US coast along the Atlantic Ocean and around some of the 
Pacific Island territories and, most significantly, in the Arctic Ocean 
north of Alaska. If the US were party to the LOS Convention, the 
Convention's definition of the continental shelf would allow 
international recognition of US claims in the Arctic Ocean that may 
extend as far as 600 miles from shore. While potential claims in the 
Gulf of Mexico are much more limited, they are adjacent to regions of 
proven economic potential.
    Following the model of the 1970 US Draft Convention, the LOS 
Convention provides for sharing of revenues from oil and gas production 
in the extended continental shelf. Negotiations in which 
representatives of US oil companies played a central role produced a 
royalty system that provided for no royalties for the first five years 
of production, rising one percent per year from year six to 7% in year 
12 and remaining at 7% thereafter.

Industry and the Extended Continental Shelf in the Law of the Sea 
        Convention
    With regard to the continental shelf, the Law of the Sea Convention 
represents significant benefits for industry over the preceding Geneva 
Conventions. There benefits are:
          establishment of a clear definition of the 
        outer extent of the continental shelf, providing essential 
        certainty for investment;
          incorporation of the seabed beyond the 
        continental margin when within the EEZ, an area excluded by the 
        1958 definition;
          inclusion of the continental margin far 
        beyond the old limits of depth and adjacency;

International Recognition of Claims to the Extended Continental Shelf
    For countries whose continental shelf will be developed by private 
industry, the most important feature of the LOS Convention's regime for 
the continental shelf is the clear recognition of the authority of the 
coastal state to license exploration and production, to make licenses 
exclusive to the developer and to grant clear title to the recovered 
products. Oil industry representatives on the US delegation to the LOS 
negotiations made clear that benefits of the Convention's continental 
shelf provisions greatly outweighed those of its predecessor, the 1958 
Geneva Convention on the Continental Shelf.

Revenue Sharing in the Extended Shelf
    The revenue sharing provisions for the extended continental shelf 
are consistent with the US proposal in 1970. The coastal state is 
authorized to collect royalties on behalf of both itself and the 
international community. Production is exempt from royalties during the 
first five years of production, allowing early recovery of investment 
during the most productive years of a well, rising over a seven year 
period to a maximum of only 7%, ensuring that coastal states will also 
be able to share in the revenues of production from the continental 
shelf.

Industry Statement of the Convention's Provisions on the Extended Shelf
    Writing at the conclusion of the LOS negotiations in 1982, John 
Norton Garrett, who represented the Gulf Oil Exploration and Production 
Company on the US delegation to the LOS Conference, said:
        In conclusion, I believe that the international petroleum 
        industry can live with a law of the sea treaty incorporating 
        those provisions of the Draft Convention that specifically 
        apply to margin delimitation and revenue sharing seaward of the 
        200 mile Exclusive Economic Zone as well as navigation and 
        pollution control.

Marine Environmental Pollution, Regional Agreements and Dispute 
        Resolution

Responding to Pollution from Continental Shelf Development in the LOS 
        Convention
    The Law of the Sea Convention was negotiated just as marine 
environmental issues were gaining attention in the international 
community. As such, they provide a framework for action but identify 
few specific activities. The provisions related to pollution from 
seabed activities, listed in Article 208 of the Convention, all fall 
into good-faith responsibilities of states parties that are not subject 
to binding dispute settlement:

                              Article 208

   Pollution from seabed activities subject to national jurisdiction

        1.  Coastal States shall adopt laws and regulations to prevent, 
        reduce and control pollution of the marine environment arising 
        from or in connection with seabed activities subject to their 
        jurisdiction and from artificial islands, installations and 
        structures under their jurisdiction, pursuant to articles 60 
        and 80.
        2.  States shall take other measures as may be necessary to 
        prevent, reduce and control such pollution.
        3.  Such laws, regulations and measures shall be no less 
        effective than international rules, standards and recommended 
        practices and procedures.
        4.  States shall endeavour to harmonize their policies in this 
        connection at the appropriate regional level.
        5.  States, acting especially through competent international 
        organizations or diplomatic conference, shall establish global 
        and regional rules, standards and recommended practices and 
        procedures to prevent, reduce and control pollution of the 
        marine environment referred to in paragraph l. Such rules, 
        standards and recommended practices and procedures shall be re-
        examined from time to time as necessary.
    As a non-party that shares interests in preventing or reducing 
marine environmental pollution from seabed activities, the United 
States seeks strong environmental protection rules for seabed mineral 
development and works through the International Maritime Organization, 
the Arctic Council and other international bodies to ensure effective 
regulation for activities in the US EEZ and in the EEZs of other 
nations. Unfortunately, having not yet joined the Convention, US 
diplomats start from behind in assuring foreign states of commitment to 
the Convention's principles and face difficulty in leading the 
development of provisions for marine environmental protection.
    The fifth paragraph of article 208 could provide the US with 
leverage to engage other nations in multilateral discussions of rules, 
standards and practices for continental shelf development. In the 
Caribbean Sea, the United States already works through the Cartagena 
Convention and its protocols to provide a regional approach to marine 
environmental protection in the Caribbean.

Regional Maritime Governance
    The Cartagena ``Convention for the Protection and Development of 
the Marine Environment in the Wider Caribbean Region'' is the umbrella 
agreement addressing the marine environment in the region of the 
Caribbean Sea. The Convention was adopted in conjunction with its 
protocol on oil spills in 1983.
    The oil spill protocol recognizes the responsibility of states 
parties to take preventative and remedial actions to avoid and respond 
to oil spills, to share information, to require their nationals to 
report oil spill incidents, notify other parties of spills, establish 
operational measures, create subregional arrangements, and establish 
institutional arrangements.
    A protocol to the Cartagena Convention addressing land-based 
sources of pollution came into force in 2010 and the United States, 
Cuba and the Bahamas are all parties to the agreement.

Resolving International Disputes
    Dispute settlement processes always pose an issue of effectiveness 
versus freedom of action. The Cartagena Convention provides an arbitral 
process that parties may use if they agree to do so, but it is clearly 
not mandatory, though the commitment to resolve disputes peacefully is 
mandated.
    In the LOS Convention, marine environmental disputes related to the 
continental shelf may be referred to mandatory dispute settlement, but 
only as allowed by Article 297, Paragraph 1(c), which limits mandatory 
settlement to cases ``when it is alleged that a coastal State has acted 
in contravention of specified international rules and standards for the 
protection and preservation of the marine environment which are 
applicable to the coastal State and which have been established by this 
Convention or through a competent international organization or 
diplomatic conference in accordance with this Convention.'' As such, a 
party to the Convention could only be bound to mandatory settlement 
when has agreed to ``specified international rules'' and may, as part 
of another agreement, establish dispute resolution procedures that 
supersede those of the LOS Convention, although the default arbitration 
processes of the convention may be agreeable to parties to the 
Convention.

Conclusions
    The UN Convention on the Law of the Sea provides the international 
legal framework for a strong US offshore industry to operate in the US 
extended continental shelf and for protection of US interests in the 
marine environment. The provisions of the Convention related to the EEZ 
have largely been accepted as customary international law unaffected by 
US non-party status other than lack of access to the dispute resolution 
provisions of the Convention. With regard to the continental shelf 
beyond the EEZ, however, the United States lacks access to the 
Commission on the Limits of the Continental Shelf for international 
recognition of claims beyond the EEZ and cannot expect recognition of 
claims to an extended shelf by other states as long as the US rejects 
the revenue sharing provisions of article 82 of the Convention and 
other provisions that form the package deal agreed to by all parties in 
return for coastal state authority over mineral resources of the 
continental shelf beyond the EEZ.
    Provisions of the Convention related to marine environmental 
pollution from activities on the continental shelf are relevant to the 
United States both as a developer of the continental shelf and as a 
neighbor of countries that develop their own shelves. If the US becomes 
a party to the Convention, it will have greater leverage to negotiate 
rules, standards and practices to protect its marine environment from 
activities in foreign EEZs. However, consideration must be given to the 
advantages and disadvantages of mandatory dispute settlement both under 
the Convention and under regional agreements and ensure that future 
agreements, treaties and conferences reflect US interests in the 
balance of mandatory settlement and national autonomy of action. 
Dispute resolution provisions of conventions and protocols can be 
negotiated to incorporate their own dispute settlement provisions that 
provide for negotiation of differences with binding arbitration as an 
option subject to mutual agreement of the parties, which would resolve 
any lingering US concerns over the LOS Convention's dispute settlement 
provisions.
                                 ______
                                 
    Mr. Lamborn. All right. I want to thank each of the 
witnesses for their testimony. Members of the Committee may 
have additional questions for the record, and I would ask that 
you respond to those in writing.
    We will now begin questioning. Members are limited to five 
minutes for their questions, but we may have additional rounds. 
And I now recognize myself for five minutes.
    First of all, a general statement. I would like to thank 
you for being here and for the varying and diverse opinions 
that were expressed. Cuba's interest in pursuing offshore oil 
and gas development certainly is a dangerous prospect to which 
we have almost no clear understanding of their plans, 
commitment or capability.
    As we hear more about Cuba, we see a multitude of U.S. 
agencies working to help Cuba's drilling to go forward: the 
Bureau of Safety and Environmental Enforcement or BSEE, the 
State Department, the U.S. Coast Guard, NOAA, the Commerce 
Department and the Office of Foreign Assets Control through the 
Treasury Department. As Chairman of this Subcommittee, I would 
just like to say I wish there was equal effort to help our own 
oil and gas resources to be produced in the Outer Continental 
Shelf here in the United States.
    OK. First question. Mr. Claver-Carone, you mentioned that 
the Cuban Government has pushed offshore drilling for the past 
20 years. Have you noticed an increase in engagement by this 
particular Administration on this issue at such a level as we 
have seen recently?
    For instance, we know, as was stated in earlier testimony 
on this panel, Mr. Riley, the Chairman of President Obama's 
hand-picked Oil Spill Commission, recently went down there to 
meet with Cuban officials.
    Mr. Claver-Carone. Well, I think that they have been at it 
for 20 years. Since 2001, frankly, there has been a licensing 
process in regards to oil spill mitigation firms in order to 
have some type of safety mechanism in place as there has been 
now.
    In regards to this particular Administration, my biggest 
fear, we have seen that sanctions have worked as a deterrent 
for the last 20 years in keeping this offshore exploration from 
taking place. If the Administration would have taken a harder 
stance from day one toward Repsol--there was an opportunity 
earlier this year when actually Secretary Salazar was in Spain 
and he met with Repsol. Repsol came out of that meeting 
thinking that they had a green light as opposed to saying hey, 
don't go there.
    I believe, as we have seen in the last 20 years, if the 
Administration would have taken a stronger stance, would have 
strongly tried to dissuade the Spaniards from proceeding that 
we really wouldn't have been seeing this right now. Absolutely.
    Mr. Lamborn. All right. Thank you for that answer.
    Mr Whittle, as you mentioned, you were part of a recent 
group that traveled to Cuba to speak with Cuban officials.
    In the past, the Environmental Defense Fund has called 
offshore drilling in the U.S. a tragic sacrifice. However, 
after traveling to Cuba you seem to have a more optimistic view 
of drilling in Cuba waters. You were quoted as saying of Cuban 
officials that ``they are taking the lessons of the BP spill 
very seriously.''
    Do you see any inconsistency in the more pessimistic view 
that your group has expressed about U.S. offshore drilling 
versus what seems to be a more optimistic view of Cubans 
drilling offshore?
    Mr. Whittle. Thank you, Mr. Chairman. Let me clarify our 
position on offshore drilling. We have consistently opposed 
offshore drilling off the coast of New Jersey, Virginia, North 
Carolina and California. We have not opposed offshore drilling 
in the western or central Gulf, and in fact after the BP 
disaster we have worked to improve standards and have had some 
measure of success.
    In Cuba, we do not oppose or support offshore drilling. In 
fact, we have grave concerns with the drilling in the area that 
it is. It is in sensitive marine environments, and a spill 
could risk Cuban marine life and ecosystems and those in the 
U.S.
    As far as my state of North Carolina, the way we look at it 
is Cuba is determined to drill. I believe that it will begin 
drilling this year or early next year. The rig is on its way. I 
cannot comment on whether sanctions would work or not. We are 
extremely concerned that if drilling begins anytime soon that 
the U.S. simply isn't prepared to protect our environment.
    Mr. Lamborn. And that is what you meant when you said you 
came back and you thought that they needed to do more? I mean, 
you weren't satisfied with the status of where they stood in 
their oversight capabilities?
    Mr. Whittle. Right. We were there for about five days, and 
we had maybe two and a half to three days of intense meetings 
with engineers, scientists, officials, et cetera, and so we got 
a first glimpse at what steps are being taken in terms of 
training, regulation, et cetera. A fair amount has been done. 
There are a couple gaps.
    One thing we pointed out, Cuba doesn't have an oil spill 
prevention fund like we do in the United States. So if there is 
a spill, how do you pay for the cleanup? It was extremely 
important in responding to BP. Liability questions, capability, 
independence.
    Cuba is just now beginning to develop an offshore industry 
and, frankly, they don't have the history of regulating. We 
found out the hard way that even in the U.S. we did not have 
the accountability we thought we had beforehand. So many 
questions that can only be answered through continued 
conversations like this.
    Mr. Lamborn. OK. Thank you. I would now like to recognize 
the Ranking Member.
    Mr. Holt. Thank you, Mr. Chairman. I would like to continue 
that line of questioning, Mr. Whittle.
    We appreciate the efforts of groups like the Environmental 
Defense Fund to reach out to Cuba, and I think you have 
experience with let me call it the Riley delegation in the 
bilateral discussions. You have said a little bit about this, 
but I would like to give you more time to elaborate.
    Both on inspection to prevent spills and on response in the 
case of a spill, what more can we do and what more might we 
wish we could do to be assured that things would be handled 
well?
    I was struck by what I thought was a lack of alarm from the 
government witnesses a few minutes ago, and I would like to be 
assured. I would like to think that everything is fine. I 
wonder from your visits to Cuba whether you are comfortable 
with their safety standards and, if not, what you would wish 
that we as the United States could do about that.
    Mr. Whittle. Thank you. I have been following Cuban 
environmental law and policy for about a decade and have been 
impressed how strong their basic framework, laws and policies 
are. In fact, many of them have been based upon U.S. 
environmental law and some are in fact a bit stronger.
    In terms of ensuring that inspections are comprehensively 
done and response is well done, I think the model is the 
relationship we have with Mexico. In fact, as Director Bromwich 
testified, following the BP spill, despite the fact that we had 
an agreement in place, he indicated that we have taken many 
steps to strengthen the agreement and understanding. So we have 
greater confidence that inspections in Mexican waters will be 
done adequately because of that agreement and that ongoing 
dialogue.
    In other words, there is much more transparency of what is 
going on in Mexico than in Cuba to U.S. Government agencies 
with the expertise.
    In terms of responsiveness, the Cubans do not have the 
capacity to respond to a major oil spill. They are relying upon 
Repsol and other foreign countries to contract out. I am 
encouraged that Treasury and Commerce have begun issuing 
licenses. I think bureaucratically that it is a slow process, 
and in the event of an emergency even best-case scenario it 
would take several days to get everything lined up, and because 
of the Florida currents that could be too late.
    Mr. Holt. If the drilling is going to begin in a matter of 
months I believe, should we pursue the national hurricane 
agreement, a bilateral agreement, as a model for getting in 
place environmental cooperation? Does the hurricane agreement, 
with which I am not familiar with, provide exemptions to the 
embargo or is it just exchange of information? And I would like 
any of the witnesses who are prepared to talk about this to 
take that on. Is this a model that we should use for 
environmental protection?
    Mr. Claver-Carone. If I may address that, Congressman? You 
know, first of all, in regards to the observation that Cuba's 
environmental laws are very impressive and things of the sort, 
I would like to remind everyone Cuba is a totalitarian state. 
You know, basically rulemaking in Cuba is based on a dictator 
and his whim. So everything might look very pretty on paper. 
You know, actually Cubans have constitutional rights, but at 
the end of the day that doesn't exist.
    In regards to the hurricane agreement, I actually think 
that is the case in point of the dangers of this. While it 
might be very pretty in theory and on paper, the reality of the 
hurricane agreement in practice, pursuant to Hurricane Michelle 
in 2001 and Hurricane Dennis in 2008, has been the high 
politicalization of this agreement by the Castro regime.
    The United States has even offered aid for hurricane relief 
to Cuba and the Castro regime. It hasn't saved lives; it has 
actually cost lives. Cuba has refused to accept that aid unless 
the United States eases sanctions. So we see how the Cuban 
Government is almost masterful at manipulating the agreement.
    Mr. Holt. In the short time remaining, do other witnesses 
have any comments on this matter? Thank you.
    Mr. Whittle. I think in fact the hurricane cooperation does 
show that there are certain issues--narcotics, migration, 
hurricanes and I believe the environment--in which the two 
countries can have a dialogue independent of the more 
controversial issues that separate us.
    Mr. Claver-Carone. May I answer that?
    Mr. Holt. Well, I think my time is expired.
    Mr. Claver-Carone. It will take two seconds.
    Mr. Holt. Unless I get more time. Thank you.
    Mr. Lamborn. OK. We will have a second round, and we could 
certainly pursue that at that time.
    The gentleman from Florida?
    Mr. Rivera. Thank you, Mr. Chairman. My questions are to 
start off for Mr. Pinon. I know you have spoken extensively on 
this and have given the perception when you do speak that you 
try to be a neutral observer or analyst on this matter, and I 
appreciate that, but I need to ask you. You have often traveled 
to Cuba and met with officials from the Cuban Interest Section 
here in Washington regarding this matter. In your discussions 
and your travels with Cuban officials, do you ever discuss with 
them how to best approach the American Government in terms of 
easing sanctions?
    Mr. Pinon. No, sir, I have not.
    Mr. Rivera. And when I talk about easing sanctions, I am 
including in there sanctions regarding the energy sector and 
oil exploration. Do you ever discuss those issues?
    Mr. Pinon. No, sir, I have not.
    Mr. Rivera. And the reason I ask is much of your testimony 
today and previously and other remarks that you have made has 
been couched around the issue of the Deepwater Horizon accident 
and couched on issues related to preparing for a disaster.
    But even previous to the Deepwater Horizon, in comments and 
testimony that you have given, and I will point to one in 
particular back in 2009, April 2009, testimony that you gave 
before the House Oversight and Government Reform Subcommittee, 
you spoke about the importance of Cuba achieving energy 
independence. You spoke about the importance of allowing U.S. 
companies to contribute in developing Cuba's hydrocarbon 
reserves as well as renewable energy such as solar, wind, 
sugarcane, ethanol. So even much before----
    Mr. Pinon. Yes.
    Mr. Rivera.--the Deepwater Horizon crisis you had been 
advocating----
    Mr. Pinon. Yes.
    Mr. Rivera.--for increased engagement----
    Mr. Pinon. Yes.
    Mr. Rivera.--between U.S. companies in Cuba's energy 
sector.
    Mr. Pinon. Yes.
    Mr. Rivera. And in fact, you have advocated for the fact 
that U.S. companies should be allowed increased access to those 
energy sectors.
    Mr. Pinon. Yes.
    Mr. Rivera. So, Mr. Chairman, with your permission and with 
unanimous consent, I would like to ask that that testimony from 
April 29, 2009, by Mr. Pinon be entered into the record for 
this hearing as well.
    Mr. Lamborn. If there are no objections, so ordered.
    [The testimony of Mr. Pinon submitted for the record by Mr. 
Rivera follows:]

                   Oral Testimony of Mr. Jorge Pinon

 Energy Fellow, Center for Hemispheric Policy, The University of Miami

                               Before the

                 House Oversight and Government Reform

         Subcommittee on National Security and Foreign Affairs

 Hearing on ``National Security Implications of U.S. Policy toward Cuba

                             April 29, 2009

    Thank you, Mr. Chairman.
    Nearly two years ago, under the auspices of the Brookings 
Institution, I was invited to be part of a group of 19 distinguished 
academics, opinion leaders and international diplomats committed to 
(ph) seeking a strong and effective U.S. policy toward Cuba. Under the 
leadership of Ambassador Palos Pasquale (ph) and Ambassador Vicki 
Huddleston, a team of well-known experts in the field of U.S.--Cuba 
relations carried out a series of simulation exercises and discussions 
that have served to enhance our understanding of the complex political 
realities of Cuba and the United States.
    By testing the responses of several strategic actors and 
stakeholders a variety of scenarios, we have identified potential 
catalysts and constraints to political change on the island The end 
result of our effort was a road map report entitled, ``Cuba: A New 
Policy of Critical And Constructive Engagement,'' which I believe the 
committee has a copy of.
    Two-fourths Cuba's petroleum (inaudible) currently relies on 
important, and Venezuela is the single source of this import under 
heavily subsidized (inaudible) returns. This petroleum dependency, 
valued at over $3 billion in 2008, could be used by Venezuela as a tool 
to influence a Cuban government in maintaining a political antagonistic 
and belligerent position toward the United States.
    Cuba has learned from past experiences and is very much aware of 
the political and economic risk and consequences of depending on a 
single source of imported oil. The collapse of the Soviet Union in 1991 
and a 2003 Venezuelan oil strike taught Cuba very expensive lessons.
    Raul Castro understands the risks. His recent visits to major oil 
exporters, such as Brazil, Russia, Angola and Algeria, underscore his 
concerns.
    A relationship with Brazil would provide a bonus to Cuba's current 
dependency, while others could (inaudible) a corrupt and unsavory 
business practices. Only when Cuba diversifies suppliers and develop 
its own resources, estimated by the U.S. to be at 5.5 billion barrels 
of oil and 9.8 trillion cubic feet of natural gas, would have the 
economic independence needed in order to consider the political and 
economic evolution.
    Although Cuban authorities have invited the United States oil 
companies to participate in developing their offshore oil and natural 
gas resources, U.S. law does not allow it. Today, international oll 
companies such as Staines-Wetzell (ph), (inaudible), and Brazil's 
Petrobras are active in exploration activities in Cuba's Gulf Mexico 
waters.
    American oil (ph) and oil and equipment service companies have the 
capital, technology and operational know-how to explore, produce and 
refine in a safe and responsible manner Cuba's potential oil and 
natural gas reserves, with the remaining (inaudible) line, because our 
almost (inaudible) five (inaudible), international (ph), political and 
economic embargo.
    The president can end this impasse by licensing American companies 
to participate in developing Cuba's offshore oil and natural gas. In 
the opinion of legal experts consulted, Mr. Chairman, no legislation 
prevents the president from authorizing U.S. oil companies from 
developing Cuba's oil and natural gas reserves.
    A Cuban government influenced by its energy benefactors, would most 
likely result in a continuation of the current political and economic 
model. If Cuba's future leaders are (inaudible) to fill the power 
vacuum left by the departure of the old cadre, they could become 
(inaudible) of illicit business activities, drug cartels, and the 
United States could face a mass illegal immigration by hundreds of 
thousands of Cubans.
    The Brookings Report proposes, Mr. Chairman, as part of a full (ph) 
strategy, a policy that supports the allegiance (ph) of the Cuban state 
where the Cuban people (inaudible) in the political and economic future 
of their country to Democratic rules. And to achieve this goal, Mr. 
Chairman, Cuba must achieve energy independence.
    In conclusion, Mr. Chairman, if U.S. companies were allowed to 
contribute in developing Cuba's hydrocarbon reserves, well as renewable 
energy such as solar, wind, and sugar cane ethanol, it would reduce the 
influence of autocratic and corrupt government on the island's road 
toward selfdetermination. Most importantly, it would provide the United 
States and other Democratic countries with a better chance of working 
with Cuba's future leaders to carrying out reforms that will lead to a 
more open and representative society.
    Thank you, Mr. Chairman.
                                 ______
                                 
    Mr. Rivera. Thank you very much. So I would think that in 
terms of your testimony today being couched around the 
Deepwater Horizon accident, that is really not the impetus for 
your advocacy in terms of engagement for the energy sector in 
Cuba. You have been for several years now advocating for that 
increased engagement.
    Mr. Pinon. Yes.
    Mr. Rivera. Would that be accurate?
    Mr. Pinon. That is correct. That is correct.
    Mr. Rivera. I believe to do so, as I discussed earlier, all 
those energy sectors that you mentioned in terms of increased 
engagement, whether it be hydrocarbon, solar, wind or 
sugarcane, ethanol, you would agree all those energy sectors in 
Cuba are not controlled by any private entities but are 
controlled by the Castro dictatorship?
    Mr. Pinon. That is correct.
    Mr. Rivera. So, if we were to engage or to follow your line 
of reasoning and to allow more engagement by U.S. companies 
with the Cuban energy sector, the financial windfall would fall 
to the Cuban Government as well?
    Mr. Pinon. Yes, but there is an issue of--may I?
    Mr. Rivera. Sure.
    Mr. Pinon. Yes. The testimony that you are referring to was 
testimony based on the Brookings reports of which I was a 
member, along with Pepe Hernandez from the Cuban National 
American Foundation and a group of another 19 people, including 
Ambassador Pascual and others. So my testimony that I gave to 
the House in 2009 was based on the new policy of critical and 
constructive engagement with Cuba out of the Brookings reports, 
of which I was a member.
    I would encourage the Members to read this report because 
what it encourages us to do is that for the economic and 
political transition of Cuba what we argued here was that we 
needed not a weak Cuba where a power vacuum would be left but a 
strong Cuba. We also studied in this report that the monetary 
impact, the monetization of any of Cuba's resources, will take 
anywhere between five to 10 years.
    Mr. Rivera. I have run out of time. I have run out of time, 
but I will just state the fact that any----
    Mr. Pinon. The answer is yes.
    Mr. Rivera. I understand that.
    Mr. Pinon. Yes.
    Mr. Rivera. The fact that any report that would argue to 
make the Castro dictatorship stronger is flawed on its face.
    Mr. Pinon. Fine.
    Mr. Rivera. Thank you, Mr. Chairman.
    Mr. Lamborn. OK. Thank you. Mr. Duncan of South Carolina?
    Mr. Duncan. Thank you, Mr. Chairman. I apologize. Having a 
markup in another committee sort of took my focus away from 
this hearing, and I hate that I missed Mr. Bromwich when he was 
here because we have had a lot of conversations this year on 
this Committee about the safety and the de facto moratorium, 
the actual moratorium and drilling in the Gulf of Mexico. The 
fact is that we are drilling off the coast of Brazil and 
supporting that. Our President is saying we will be your first 
and best customer.
    And I think about Deepwater Horizon. It was 50 miles off 
the coast of Louisiana, and we had a terrible accident there 
that impacted the environment. We had a hearing last week about 
the true impacts of that horrific event to the shrimpers and 
the oystermen and also the welders and pipefitters and other 
things and the money that might be available or not.
    And so I reflect back on my experience under MMS, under the 
Outer Continental Shelf Five Year Planning Subcommittee, which 
I was on for about 18 months in the waning years of the last 
Administration. I remember when we were talking about a five-
year plan of where we were going to allow offshore drilling and 
lease sales.
    I think about the very limited area that we were able to 
even talk about on that committee was western Gulf of Mexico, 
no eastern GOM at all, a very small grid square in the Alaskan 
Sea, nothing on the Outer Continental Shelf on the Atlantic 
side and nothing around Florida. Yet here we are having a 
conversation today with these panelists about Cuba harvesting 
resources off their coast and allowing foreign companies to 
come in and help them, assist them with that.
    But the question I have is, OK, we are not allowing lease 
sales for American companies that would be under American laws 
and American regulations. The safety that we learned from 
Deepwater Horizon, those mechanisms would be put in place, are 
being put in place in the Western GOM and anywhere the United 
States allows deepwater drilling off our Outer Continental 
Shelf. Yet we have Cuba 90 miles off the coast of Florida. If 
you come north to the drilling waters where they are going to 
purport to be drilling, it is very, very close to, according to 
the environmentalists, the very fragile waters around the coast 
of Florida.
    And so my question would be, and it will be in panel two 
because I won't have enough time to ask this question and get 
an answer and delve into it, but we will in a minute, is what 
kind of safety mechanisms are in place? What sort of power does 
the United States have toward a foreign government, especially 
one that we have no diplomatic ties with at all?
    How can we ensure that the Chinese companies that are doing 
the drilling off the coast of Florida and off the coast of Cuba 
are going to implement the safety requirements that our own 
drillers and our own producers have to put in place in order to 
get back to work?
    The slow walking of the permits by this Administration of 
American companies that want to produce American resources, the 
slow walking of those permits to make sure, to ensure to 
Americans that we won't have another Deepwater Horizon, we have 
no certainty that the Cuban companies and the Cuban drilling 
efforts are putting in place those safety requirements that we 
won't have a Deepwater Horizon type accident off the coast of 
Cuba that will impact the waters of Florida, the Keys and even 
the Gulf Coast states.
    And so those are the kind of questions that I want to see 
answered. That is what I am interested in, and I appreciate you 
giving me the time. I look forward to the second round of 
questioning.
    Mr. Lamborn. Did you want one of the witnesses to respond 
to what you just commented on?
    Mr. Pinon. If I could?
    Mr. Lamborn. OK. The gentleman has yielded back, so we are 
going to start our second round of questions.
    Mr. Whittle, let me follow through on one other thing that 
had to do with the trip we were talking about that you and 
others took to Cuba recently. Were you able to talk to or about 
the plight of environmental activists when you met with Cuban 
officials, some of whom have been oppressed and mistreated?
    Mr. Whittle. No, sir, we did not talk about that during 
this particular trip.
    Mr. Lamborn. OK. Mr. Carone, you note that the Cuban 
Government in the past expropriated U.S. oil assets from Esso 
in Texas. Do you think there is any possibility that that could 
happen with their relationship with Repsol's assets?
    Mr. Claver-Carone. Perhaps, and we are seeing that actually 
it has happened now with a bunch of companies in other sectors 
in Cuba in other industries that have actually been long-term 
trade partners of the regime. You know, it is kind of always 
whimsical with them and when it meets their interest.
    In the case of Repsol, Petronas, and India's ONGC, I think 
there is a peculiar situation there because those companies, 
there is a Chavez angle. The Chavez angle is that those 
companies have been given rights, extensive rights last year, 
to drill in an area in the Orinoco belt which has over 235 
billion barrels of oil. That is over 50 times what can be 
expected in all of Cuba's offshore waters.
    Therefore, there is a lot of geopolitical profiling taking 
place there, and Chavez to a degree is protecting them and sort 
of pushing them in that realm in order to be in this situation, 
in order to be able to extract and push and have the fear 
factor like we saw in 2006 with the Chinese, to basically push 
the United States to unilaterally ease sanctions, which is 
something that they use with all of these issues. We have seen 
it.
    You know, when we talk about these cooperation agreements 
in regards to narcotics, yes, we cooperate with the Cuban 
regime in narcotics. Yet we still have open indictments for 
senior officials of the Cuban regime for narcotrafficking here 
in the United States.
    I mentioned the environmental. This is a long trend of 
using these issues to try to unilaterally extract political 
concessions from the United States, which is very worrisome.
    Mr. Lamborn. OK. Thank you. I would now like to recognize 
the Ranking Member.
    Mr. Holt. Thanks. Ms. Antrim, a number of commercial 
organizations--the American Petroleum Institute, the 
International Association of Drilling Contractors, the National 
Ocean Industries Association and others have called for 
ratifying the Law of the Sea. It appears that industry is wary 
of making investments in waters--well, in many places around 
the world but also around the U.S. Do you think that 
ratification of the Law of the Sea would benefit these 
extraction industries? They seem to think so.
    Ms. Antrim. Thank you for the question. Yes, I do agree 
with that. When we were looking at this during the Reagan 
Administration and preparing to go back to the final 
negotiating session we had delegations go to major industries 
to talk about the importance of obtaining international 
recognition of mining rights, of title to secured minerals. We 
were mainly looking at deep seabed minerals, but oil and gas of 
the extended shelf fall into the same category.
    Mr. Holt. Now would ratification or full participation in 
the Law of the Sea treaty allow resolution of the kinds of 
liability questions that were raised earlier about damage from 
oil spills?
    Ms. Antrim. It provides a channel to do that, but the Law 
of the Sea Convention is very much a framework convention. Some 
of that work would be pursued through regional organizations 
such as the Cartagena Convention process, but as we develop 
more guidelines and regulations through the International 
Maritime Organization those become the minimum standards that 
all nations are expected to apply to their activities. If we 
reach those through a multilateral process, they become 
something that we can actually use dispute resolution to 
enforce. So, yes, it does strengthen our hand with regard to 
protecting ourselves from activities in foreign zones.
    Mr. Holt. Thanks. I would like to go back to pursue a 
question I asked a few minutes ago that I am still not clear 
on. I was asking about the hurricane agreement and whether that 
would serve as a model.
    We have heard that Cuba might not be well prepared to deal 
with a major oil spill. We have heard from our own Coast Guard 
that they/we are dependent on commercial organizations, 
commercial entities coming in to assist with the cleanup. I 
will sort of repeat the question I asked before. Could the 
hurricane agreement serve as a kind of model?
    Under that are there permitted general licenses? Are there 
permitted exemptions of the embargo? I am concerned about what 
is going to happen to the Gulf waters, to the environment, to 
the U.S. Gulf Coast if there is a major oil spill relatively 
close to the United States that the Cubans for whatever reason, 
whatever their internal politics, are unable to deal with and 
we are still confronted with an embargo.
    I am not here trying to say this--let us assume the embargo 
remains in place. Is there a way to deal with the environmental 
problem that looms? Yes? Yes, please.
    Mr. Whittle. I am happy to take that one on. The Executive 
Branch has Presidential prerogative with current laws in place 
to engage with the Cubans both through the licensing authority 
and through diplomatic discussions.
    The hurricane example is a good model for U.S. Government 
dialogue and cooperation, not so much for licensing and sending 
personnel. We have sent hurricane hunters in Cuban airspace. We 
have trained Cubans. There is a pretty active exchange of 
nongovernmental experts on hurricanes that the Center on 
International Policy conducts, bringing officials from 
Galveston, from Louisiana and elsewhere to Cuba to look at how 
Cuba prepares, so there is some dialogue and discussion.
    But there is authority. The model that the hurricane 
example provides is just that. There are issues in our national 
interest that can be conducted independent of these more 
controversial issues, and I would just like to say that having 
a dialogue and some limited cooperation in oil and gas will not 
facilitate keeping the oil and gas production. I am convinced 
they are moving in that direction now and that they will begin 
drilling independent of whether we make that step or not.
    Mr. Holt. Thank you. I guess the time has expired.
    Mr. Lamborn. OK. Thank you. The gentleman from Florida?
    Mr. Rivera. Thank you, Mr. Chairman.
    For Mr. Whittle, a couple questions. Can you tell me a 
little bit about Cuba's environmental record nonenergy sector?
    Mr. Whittle. Yes, sir. Since the mid 1990s, Cuba has at 
least on paper made the environment a policy priority. They 
established a cabinet level ministry for the environment, and 
they ushered in a new suite of environmental laws, everything 
from a NEPA law, environmental impact statements, to a Coastal 
Zone Management Act to protect the area law, et cetera.
    Cuba has a mixed record on the environment. They have a 
number of environmental problems and challenges from water 
pollution to air pollution, extensive soil erosion associated 
with intensive agriculture. They have also done a good job in 
certain areas in protecting natural areas. They have a system 
of national parks and refuges where they intend to protect up 
to 25 percent of the Cuban insular shelf and up to 20 percent, 
I believe, of Cuban territory. They have done a good job of 
protecting coral reefs, mangrove forests, sea grasses and other 
fish habitat.
    They have some problems in managing fisheries, commercial 
fisheries now, so it is a mixed bag like it is everywhere else, 
but I have seen good progress in conserving coastal areas and 
natural areas in the last 10 years as a direct result of the 
laws implemented since 1995.
    Mr. Rivera. Well, let me ask Mr. Claver-Carone. Mr. Whittle 
says it is a mixed record, some problems. Would you agree with 
that? What would be your assessment of Cuba's environmental 
record?
    Mr. Claver-Carone. Cuba's environmental record 
historically, particularly under this regime, has actually been 
quite disastrous. I mean, we have seen from 1969 when they 
grazed pretty much all of Cuba's land in order to plant 
sugarcane throughout. I mean, if there were environmental 
crimes against humanity, that would be definitely on the top of 
the list because Cuba has pretty much lost--it used to be able 
to feed itself. Cuba has not been able to do so since then. So 
definitely I don't think Cuba's environmental record is one to 
be admired.
    On this particular issue I think there is one big concern 
that I think no one has really talked about in regards to the 
general licenses and the hurricane cooperation. We have general 
licenses for government officials, and that is how it is really 
used in regards to the hurricane. I mean, NOAA officials go 
there, et cetera, the general licenses for the Coast Guard to 
be able to do the same and for other government officials in 
regards and Interior to be able to do the same in that regard.
    I really urge caution. I think since 2001 the Treasury 
Department has been licensing specific disaster oil mitigation 
relief efforts to the island and different specialty companies, 
but I urge great caution in regards to a general license for 
commercial basically response. That would create a scenario in 
which there would be no control whatsoever.
    And I think that the Coast Guard can tell you and I know 
Mr. Pinon painted one scenario in his testimony in which he had 
all the vessels that went down in regards to the Deepwater 
Horizon. That would be the Coast Guard's security nightmare. To 
have 5,000 vessels pretty much going down to Cuba uncontrolled, 
unlicensed, et cetera, would be a security nightmare for the 
Coast Guard. That would be the largest maritime traffic since 
the Morielle, and we saw how the Cuban Government used that 
against us when that was supposed to be just about migration 
and they used that against us.
    So I really urge caution, and I am sure the Coast Guard 
speaks for itself in that regard, but general licensing would 
be probably one of the most dangerous things we can do for a 
mass commercial response and for individual response to this 
drilling.
    Mr. Rivera. Let me ask you in the minute that I have left 
also for Mr. Claver-Carone. With respect to the comments made 
earlier as to energy independence on behalf of the Castro 
dictatorship or strengthening the dictatorship's energy sector, 
what type of impact would that have on potential democratic 
reforms or changing the nature of the regime?
    Mr. Claver-Carone. It would be devastating. I mean, energy 
has always been the Achilles heel of the regime. Therefore, we 
have seen this. We saw the Soviet subsidies through 1991. Then 
their new godfather, and that was pretty much as the Chairman's 
question before had gone to, their new godfather is Chavez. So 
why is Repsol and Petronas and these companies protected? 
Because Chavez is their godfather. He is protecting them, and 
he is protecting them with these subsidies. That wouldn't be 
the case for American companies of course.
    So that essentially is what has maintained the economic 
livelihood of this regime. Now, even if they discovered some 
offshore, which, like I said, they have been at it 20 years. In 
2004, Repsol said nothing there. Petrobras said not worth it. 
Sherritt has said I am out of here. You know, would it be 
sufficient to maintain that regime? Maybe, maybe not.
    But the one beneficiary immediately would be Chavez. That 
would be less than the 100,000 barrels a day that he has to 
send to the regime, and that is something that Chavez is also 
looking forward to, and a strong Chavez is a strong Castro, and 
a strong Castro is a strong Chavez.
    Mr. Rivera. Thank you, Mr. Chairman.
    Mr. Lamborn. OK. The last person asking questions is 
Representative Duncan of South Carolina.
    Mr. Duncan. Thank you. I would just follow back up with 
some of the comments I made earlier.
    Mr. Whittle, does your group, the Environmental Defense 
Fund, do you all advocate drilling off the coast of Cuba?
    Mr. Whittle. No, sir. As I explained maybe before you 
showed up, domestically we oppose oil and gas drilling offshore 
of sensitive areas off North Carolina, Virginia, New Jersey and 
California. We do not oppose offshore drilling in the Gulf of 
Mexico, particularly in the western and central Gulf. We do 
think offshore is here to stay. We are strong advocates of an 
alternative energy future, but we recognize the place of 
offshore.
    In terms of Cuba, we don't take a position on their 
drilling. We recognize that they will drill, so our posture has 
been if and when Cuba drills it is imperative that steps be 
taken, that we protect our environmental and economic 
interests.
    Mr. Duncan. OK. Mr. Pinon, you were going to comment on 
something I had said earlier. I will give you the opportunity 
now if you have a question or a comment.
    Mr. Pinon. Yes. I think your comment was about 
environmental regulations. One of the things, I am not an 
academic. I am retired after 32 years in the oil industry. I 
was president of Amoco Oil-Latin America.
    I can tell you that I have been to countries in which the 
environmental regulations, when you and I would pull them off 
the shelf, they are probably the best in the world and you and 
I will be surprised. They are meaningless unless the regulators 
have the resources, the expertise to enforce those regulations.
    I am the first to admit that in the case of the Bahamas and 
Cuba and even maybe Mexico the regulations on the shelf might 
be fantastic. In fact, they might very well just copy the U.S. 
regulations. But as far as the enforcement is concerned, it is 
certainly lacking.
    Mr. Duncan. All right, sir. You are saying that it is 
safer? The practices they put in place are safer than what 
Americans are doing now in the Western Gulf?
    Mr. Pinon. No. What I am trying to say is that even though 
Cuba might have the regulations in place, the Government of 
Cuba itself, the regulatory agencies, don't have the set of 
skills and/or experience to enforce them.
    In this case, you do have something to protect you, and 
that is Repsol. Repsol just drilled about a year ago the 
prospect Buckskin, which was about 180 miles south of Houston. 
It was a record-setter at a 32,000 feet depth. So here is a 
company that has a U.S. interest. Here is a company that is 
very well versed in know-how, in experience, following U.S. 
regulations, and they are the first ones that are going to 
drill in Cuba.
    The second company, by the way, as soon as the excavator 09 
finishes with Repsol, which will be sometime in April, it is 
going over to Petronas. No one in the first panel I assure you 
even has the telephone number of Petronas. They wouldn't even 
know who Petronas is. So it is sad that all of the emphasis has 
been put on Repsol. If we are really concerned about safety, we 
should have been engaging Petronas and Gazprom, who are taking 
over the excavator 09.
    You are right, Representative Rivera. As soon as that rig 
leaves Trinidad and Tobago, a lot of things can happen before 
she gets to Cuba. When that rig leaves the hands of Repsol in 
April and goes over to Petronas, we won't even have a telephone 
number to call and talk to. That to me is really totally 
unacceptable.
    Mr. Rivera. Mr. Claver-Carone, the resources that are being 
harvested, where are they going to be refined? Is Cuba building 
refineries?
    Mr. Claver-Carone. And that is the million dollar question. 
I mean, they have talked about like the regime does a lot of 
propaganda that Chavez and the Chinese are building this huge 
facility for refining in Cuba, but that will take years and 
years. Even the Venezuelans refine their oil here in the United 
States. The Mexicans refine their oil here in the United 
States.
    What will they do with it? I think that part of their big 
strategic bet here is that with all this that we are hearing 
eventually they are going to start garnering support from 
different lobbies here in the United States that are going to 
push to lift sanctions, and therefore whatever we find in Cuba 
we will be able to refine here in the United States and then 
repatriate it back to Cuba. You know, that is one bet.
    Another bet is maybe with the expansion of the Panama Canal 
with tankers being able to go by will they be able to send it 
to China? It is still very expensive. So that is one of the 
huge impediments and has been one of the deterrents that for 
the last 20 years has prevented Cuba from doing.
    In regards to Petronas coming after, I guarantee you that 
if Repsol once again, as they did in 2004, comes out with a 
commercially unviable find that Petronas will not be following 
up in any way whatsoever.
    Mr. Duncan. My hope is that our refining capacity, which we 
have capacity now, will be filled up with the Keystone XL 
Pipeline and oil coming from Canada, a friendly country who we 
will have economic relations with. My fear is that the Cuban 
oil will go to Venezuela or Valero's Refinery in Aruba, which 
is all part of the Venezuelan regime. So that is an interesting 
concept. Thank you. I yield back.
    Mr. Lamborn. All right. That concludes our questioning. 
This has been a good hearing.
    As I said earlier, Members may have additional questions 
for the record, and I would ask that you respond to those in 
writing. Thank you for being here.
    If there is no further business, without objection the 
Committee stands adjourned.
    [Whereupon, at 11:57 a.m., the Subcommittee was adjourned.]

    [Additional material submitted for the record follows:]

                        Council of the Americas

NORTH AMERICAN OFFSHORE ENERGY: MEXICO AND CANADA BOUNDARY TREATIES AND 
                    NEW DRILLING BY CUBA AND BAHAMAS

    The Council of the Americas (``Council'') appreciates the 
opportunity to provide a statement for the record concerning North 
American offshore energy, particularly deepwater drilling in the Gulf 
of Mexico. The Council is a business organization representing some 190 
member companies invested in and doing business throughout the Western 
Hemisphere. Since our founding in 1965, the Council has been dedicated 
to the promotion of open markets, social and economic development, 
democracy, and the rule of law, and we are widely recognized for our 
policy and commercial leadership throughout the Americas.
    The Council is deeply engaged in hemispheric energy issues as well 
as U.S.-Cuban relations through member working groups. The Energy 
Action Group brings together the public and private sectors to develop 
strategic energy policies for the Americas. The Energy Action Group 
hosts forums in cities across the Americas and publishes working papers 
and recommendations on key energy topics. The Cuba Working Group 
includes corporate leaders from the worlds of banking, financial 
services, energy, telecommunications, hospitality, pharmaceuticals, and 
law. This effort has produced a series of papers on regulations and 
laws affecting U.S. business activity under the U.S. embargo and in 
Cuba.

Background
    Spanish oil company Repsol is preparing to drill in the deep waters 
of the Cuban portion of the Gulf of Mexico. While much attention has 
been focused on Repsol and the arrival of its Chinese-constructed rig, 
the Scarabeo 9, in Cuban waters at the end of 2011, more than a handful 
of other oil companies are also engaged in exploratory activities off 
the Cuban, Jamaican, and Bahamian coasts. Mexico, as well, has its 
sights set on extracting deepwater oil in its stretch of the Gulf.
    The Deepwater Horizon blowout in the U.S. Gulf of Mexico in 2010 
was a terrible tragedy but also a wake-up call for companies and 
countries about the risks inherent in deepwater drilling and the need 
for a well-coordinated emergency response plan, with public and private 
actors ready to deploy at a moment's notice.

The Council Applauds Private Sector Action and US-Mexico and US-Canada 
        Cooperation
    Since the Deepwater Horizon explosion, the U.S. government has 
overhauled its offshore oil and gas regulations. In February 2011, 
several oil companies launched a quick-response system in case of 
another spill in the U.S. Gulf. At the international level, the United 
States is working with Mexico to develop shared safety and 
environmental standards for the Gulf. Outside of the Gulf, the United 
States and Canada are collaborating bilaterally and as part of the 
Arctic Council (members also include Denmark, Finland, Iceland, Norway, 
Russia, and Sweden) on oil spill prevention and response in the Arctic.
    While U.S.-Cuban communication on Gulf drilling issues has thus far 
been limited to updates on the Deepwater Horizon spill, U.S.-Repsol 
engagement has been more active. Repsol has pledged to comply with U.S. 
regulatory requirements and industry standards in the Cuban area of the 
Gulf of Mexico and has shared its drilling and oil spill response plans 
with the United States as well as promised to allow U.S. agencies to 
inspect the Scarabeo 9.

Safety First
    Repsol's transparency is to be commended, but it is no substitution 
for direct U.S.-Cuban interaction on Gulf safety issues at the 
technical level. An oil spill in the Cuban Gulf puts at risk the waters 
and coast of the Eastern half of the United States from Florida to as 
far north as North Carolina. Such a spill would require more than a 
good working relationship between Repsol and the U.S. government. 
Complete cooperation and open communication between the U.S. and Cuban 
governments is essential for effective response management.
    For its part, the United States has issued licenses that exempt 
U.S. companies from the embargo and allow them to assist in the case of 
a possible spill off the coast of Cuba. In addition to the licensing, 
the United States has facilitated contact between some U.S. companies 
and NGOs and Cuban officials on drilling safety and environmental 
topics.
    These measures are constructive, but the Council is concerned that 
the licensing application process is too complicated and that too few 
companies have applied for or received licenses. Communication between 
U.S. companies and NGOs and Cuban officials is extremely important but 
no substitute for direct government-to-government contact. The Council 
urges the United States to grant relevant oil and oil service companies 
an embargo waiver that would allow them to provide equipment and share 
safety and prevention best practices now in order to avoid the need to 
provide emergency assistance in response to a spill in Cuban waters 
later. The Council further urges the United States to enter into direct 
discussions with Cuba at a technical level, as well as with Jamaica and 
the Bahamas, to ensure that safety and environmental standards for 
drilling in shared waters are at the highest level, and that 
communication and cooperation procedures are in place in case of a 
spill.

Bottom Line: The United States Must Do Everything Possible to Protect 
        Its Waters and Coasts
    Legitimate concerns about strengthening the Cuban regime in ways 
that allow it to continue its level of political repression cannot be 
overlooked but should nonetheless be considered as part of a larger 
picture. With only 90 miles between the tip of Florida and the north 
coast of Cuba, our aquatic ecosystems are inextricably linked. What 
damages marine life and fouls beaches in Cuban waters, if not promptly 
contained, will damage marine life and foul beaches in U.S. waters as 
well. To the extent drilling occurs off Cuba's coast, the United States 
must do everything within reason to protect its people and its 
environment. We can do this by working with Cuba (as well as Jamaica 
and the Bahamas) at a technical level to ensure drilling safety, 
prevention, sound practices, and, in the unfortunate event of an oil 
spill, quickly mobilize all necessary resources to contain it.
    For further information, please contact:
Council of the Americas
1615 L Street NW, Suite 250
Washington, DC 20036
202.659.8989
www.as-coa.org

                                 
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