July 29, 2010
Vol 1, Issue 8

Energy Troubles in the Caribbean 


This issue of NotiEn will look at some energy issues in the Caribbean.  When one thinks about energy, Cuba is the country that has garnered the most attention.  The Caribbean nation has for decades been the center of geopolitical struggles, with countries like the former Soviet Union and Venezuela gaining favor with the regime in Havana by supplying oil and other types of energy.  But Cuba has been aware that the country sits on untapped supplies of oil, and its long-term plans are to become more self-sufficient in energy.  The island consumes about 150,000 barrels of oil per day.   


The collapse of the former Soviet Union in the late 1980s and early 1990s left Cuba without one of its most reliable suppliers of oil.  Until the 1980s, Cuba was receiving the majority of its oil from the USSR, although some supplies came in from Mexico and Venezuela through the Pacto San Josť.  In the past several years, Venezuela has stepped in to fill some of the void left by the loss of the ex-USSR.  Caracas provides around 100,000 barrels per day of petroleum and its derivatives to Cuba. These are paid for mainly with Cuban medical services, teachers, coaches, and consultants in diverse fields.   


The Cuban government does not want to tie itself entirely to Venezuelan oil and has entered into agreements with other suppliers, including Brazil, Algeria, Russia, and Angola.  Cuba has also been moving forward with plans to increase its own supplies and is looking for technology from Brazil, Russia, and even the US to develop deepwater deposits in the Santa Cruz 100 oil field in the Gulf of Mexico.  Foreign investment in the oil sector, which quadrupled between 1991 and 2000, continues to expand greatly.


Energy issues are also a concern in other parts of the region, with the focus in the Dominican Republic centering on a lack of reliable electricity.  Blackouts have become a way of life in the country, with the current electrical grid producing less than half the country's demand. Several plants were out of service for lack of fuel, while others functioned at a fraction of capacity.


In neighboring Haiti, the poorest country in the hemisphere, energy problems are even greater.  A 2004 report produced by Haitian government, the UN, and the World Bank recommended "converting" 30,000 urban households and 1,000 businesses to gas or kerosene, as well as promoting "alternative" energy sources. But there is no mention of subsidizing other fuels. That means, as long as charcoal is cheaper, and as long as its sale is allowed, it will probably remain both an income-earner and the fuel for Haiti's majority.  The extensive use of wood for fuel has resulted in massive deforestation in the Caribbean nation, resulting in significant environmental problems, such as erosion.   


Some countries in the region, such as Trinidad and Tobago, are selling rather than buying fuel.  That country recently signed a memorandum of understanding with Chile to expand cooperation in the area of energy, which includes increasing sales of natural gas.  Chile turned to Trinidad and Tobago after Argentina reduced exports in 2006. 

Carlos Navarro - Editor