The recent unpleasantness in Venezuela has spilled over into Cuba by reducing energy exports to the island nation.
While only new thinking can replace Venezuela’s energy exports, Cuba’s path forward is complicated by market and political forces that may not cooperate.
Former Chevron Corporation executive Silvia Garrigo shared insights on the future of environmental sustainability, renewable energy and what the death of Fidel Castro will mean for business in Cuba with students in FIU’s College of Business’ international business and strategy program.
“I don’t think Cuba is an attractive market for multinational businesses in the fossil fuel industry now,” said Garrigo, former manager of global policy and corporate responsibility at Chevron. “Exploring and producing oil in the Caribbean is not very attractive for a large multinational because the reserves are not big enough to justify a long-term, multi-billion dollar investment.”
About Cuba’s Geology
The Cuban geology and structural setting is complex and hosts a variety of non-fuel mineral resources in several terranes. Cuba hosts one of the largest mafic and ultramafic belts in the Caribbean region that are thought to be partially preserved fragments of oceanic crust (ophiolites). Other metallic mineral resources include copper and zinc in massive sulfides, copper in porphyry deposits, manganese oxide in strata-bound deposits, and tungsten vein deposits. Industrial mineral resources include volcanogenic bentonite, bauxite, feldspar, and zeolite minerals, as well as gypsum, kaolin, lime, high-grade limestone, marble, and sand.
Much of the exploration and development of these deposits, with the possible exception of nickel and cobalt resources, have remained underdeveloped since the mid-60’s. For example, Cuban copper production in 1959 was approximately 4% of world copper production, but no production has been reported since 2011. Part of the drop in production and development of mineral resources on the island can be attributed to the collapse of the U.S.S.R and repeated significant storms responsible for loss of life, property, and environmental damage (i.e. 1993, 1998, and 2004) and drought (1999). In addition, limited larger scale studies show fairly extensive unexplored areas (or a lack of accessible data) compared to adjacent areas in the Caribbean region. Therefore, significant potential for trade and investment lies currently untapped in the Cuban mineral sector.
Renewable Energy Working Group
Last month, the U.S. Departments of State and Energy co-chaired the first U.S.-Cuba Renewable Energy and Energy Efficiency Working Group in Washington, D.C. Participants discussed regional developments related to clean energy, including renewable energy and energy efficiency, and exchanged ideas and information on how the U.S. and Cuba can move forward on this shared interest.
The Renewable Energy and Energy Efficiency Working Group participants also shared information about domestic and international energy policies and established a meeting framework for future collaboration. The working group was jointly proposed and agreed to at the U.S.-Cuba Economic Dialogue on September 12 in Washington, D.C.
“Participants discussed regional developments related to clean energy, including renewable energy and energy efficiency, and exchanged ideas and information on how the United States and Cuba can move forward on this shared interest,” the U.S. State Department said in a statement.