1. Business

Congressional panel weighs impact of Cuban offshore oil drilling

MIAMI — Against the backdrop of the sparkling Atlantic Ocean, a House subcommittee convened a field hearing in Sunny Isles Beach on Monday to discuss U.S. readiness if an offshore oil spill in Cuba or the Bahamas reached American waters or drifted ashore.

The hearing of the Coast Guard and Maritime Transportation Subcommittee came as the Scarabeo 9, an oil rig leased by the Spanish company Repsol, embarks on oil exploration in deep Cuban waters about 70 miles south of the Florida Keys, and the Bahamas contemplates offshore drilling of its own, perhaps by mid 2013.

During the hearing, Florida Republican Rep. John Mica, chairman of the House Committee on Transportation and Infrastructure, questioned whether the Scarabeo 9 was safe enough to be certified to drill if it were in U.S. waters.

Repsol allowed U.S. officials to board and review the rig when it was off the coast of Trinidad and Tobago earlier this month. They found it to "generally comply with existing international and U.S. standards.''

But Lars Herbst, the Gulf of Mexico regional director of the Interior Department's Bureau of Safety and Environmental Enforcement, said "the level of inspection we did was not thorough enough'' to allow such a rig to drill in U.S. waters.

During the review, some welding and wiring problems were brought to Repsol's attention and the Spanish company promised to remedy them, Herbst said. The procedure in the United States would be a re-inspection before drilling could begin, he said. In this case, Herbst said, the United States has no alternative but to take Repsol at its word.

The temporary hearing room at the Doubletree by Hilton Ocean Point had an ocean view. "We're not used to seeing breakers like this on the Potomac,'' noted Rep. Billy Long, R-Mo.

That was precisely why Mica said it was important to hold the hearing in a location that demonstrated why the beach and water are "such an important treasure to Florida tourism.''

In her testimony, Florida Lt. Gov. Jennifer Carroll noted that "the Deepwater Horizon incident in 2010 has shown that a spill that poses even a potential of impacting Florida's water or land causes a huge negative impact on the economy.''

Even though Florida beaches escaped the brunt of the Deepwater Horizon spill, she said, the Panhandle is still recovering from the impact of canceled trips and the "perception'' that Florida's shoreline wasn't safe.

"Florida had more third-party claims than any other state as a result of the Deepwater Horizon incident despite the less-than-expected oil which reached its shores,'' she said.

Carroll said Florida was concerned about who would foot the bill for such third-party claims if a foreign source were responsible for a spill. She urged the federal government to develop a plan to address how U.S. citizens would be compensated for damages.

In written testimony, Rear Admiral William Baumgartner, commander of the Seventh Coast Guard District, said that "holding parties responsible for damages to U.S. interests arising from extraterritorial activities involves complex legal questions.''

Because of such challenges, he said, the Coast Guard will have to direct and fund most or all of its response and mitigation efforts using the Oil Spill Liability Trust Fund. The fund, though, has a cap of $1 billion per incident.

Debbie Payton, chief of the emergency response division for the National Oceanic and Atmospheric Administration, noted that the fast-moving currents surrounding Florida could carry oil 70 to 80 nautical miles in a 24 hours. A good portion of oil spilled in Cuba or the Bahamas would likely remain offshore because it would have to cross very strong currents to reach the shoreline.

But, she said, some scenarios show oil reaching the Florida coast — most likely 10 to 20 days after a spill.