Solution to the Energy Crisis in Cuba - Case Study Example

For many years, Cuba has been blighted by a rather intractable energy crisis that did not only affect the island country’s economy but also brought in excessive drain to its food production and availability. Following the collapse of the Soviet Union in 1989 and the US Boycott and Restriction, the country had gone through a major shortfall on its energy supply, which at the time was postulated to be at 70%. The national government has proposed several solutions to the energy crisis of the region; some of these proposed solutions have already been carried out like the “Energy Revolution”, which is a fundamental move to a dispensed and circulated grid system, energy productivity, sustainable and renewable energy among others. But as the need for a more stable energy supply arises, other solutions are expected to be purported. Hence, this paper shall present several proposed solutions to battle against the energy crisis in Cuba. As previously offered, these solutions will be specified as follows: (1) nuclear energy; (2) fossil fuels; (3) facility improvements; (4) renewable energy; and (5) installation of energy efficient bulbs. A Proposed Solution to the Energy Crisis in Cuba Introduction The existing economic, political, and social developments in Cuba signify that energy consumption will considerably increase in the days ahead (Alhajji & Maris, 2003). The countrys transition into becoming a market economy would pick up the pace of this tendency. As the country takes in a new route towards becoming globally competitive, this development indicates that there is a dire need to provide a stable and sustainable energy supply, which is crucial for the new batches of investors to progress and proliferate. The closeness of Cuba to the United States and the prospect of substantial natural deposits within the Cuban basins will have a concrete and tangible influence on the political, economic and social milieus, not just in Cuba, but in the entirety of the country. Discovery of marketable oil deposits in various Cuban basins would impact both the economy of Cuba and the energy policy and the energy security of the United States (Alhajji & Maris, 2003). Granting that the connection between Cuba and the United States gets better sooner or later, detection of profitable oil deposits could significantly impact the energy trade models between these nations and could influence the oil commerce between the United States and other nations, particularly those in the Middle-eastern region, in so far as oil production is concerned. Following the downfall of the Soviet Union in 1991, which eventually inspired the US Boycott and Restriction to follow, the Cuban government has appreciated the importance of domestically producing the countrys energy supply (Park, 2010). Cuba boarded on many sustainable and non-renewable schemes to produce electricity and implemented several conservation and efficiency actions. The political turmoil that took place in Venezuela, the chief oil energy supplier for Cuba, jeopardizes the movement of low-priced oil to the country. The short term goal is energy independence, which would have an absolute advantage in the manufacturing, transportation, and tourism sectors (Alhajji & Maris, 2003). In due course, Cuba desires to become an oil distributor, which would produce profits to restore Cubas depreciating infrastructures and to improve its ties with other nations, particularly those in the Caribbean. This paper delivers a short but concise proposed solution to Cubas energy crisis and sketches out future prospects and challenges. This paper will cover the following sections: (1) program description; (2) objective of the project; (3) expected results; (4) activities that need to be carried out to achieve the desired outcome; (5) budget and resources needed to implement the proposed solution; (6) implementation schedule and project timeline. Program Description Owing to the fact that most of Cubas energy sources had been afforded from imported oil, the deficiencies impacted almost every aspect of the country: economy, food production and availability, public utilities, transportation, etc. Rotating power brownouts have persisted for a number of years. The insufficient supply of electricity, for instance, has resulted into inconveniences even at the smallest level: without electricity, fridges would absolutely not function; thus, ruining food, which would result into financial burden. Therefore, it is indeed important to come up with efficient solutions to develop a stable energy production domestically. Thus, the following solutions are advocated: Nuclear Energy With its relationship to the United States getting stronger, Cuba is at the cutting edge of developing its own nuclear power plant supported by the United States. Going back to history, back in the 1970s, Cuba attempted to erect its first two nuclear power reactors (Park, 2010); nevertheless, this plan was suspended until today due to the lack of financial support from the then Soviet Union, the countrys former ally. Considering the heavy reliance of Cuba to oil imports for its energy supply, the building of nuclear power plants will reduce its dependence on oil for energy production. For its global progress, Cuba should seek to revolutionize its obsolete and worsening energy division. To achieve this, Cuba needs to become a focus for investment by developing nuclear energy resources (Benjamin-Alvarado, 2000). Fossil Fuels Cuba’s richly endowed geography suggests of a better way of resolving energy crisis: by exploiting its basins for drilling operations. According to Park (2010), Cuba has two basins and has been confirmed to contain considerable amount of economic reserves of crude oil: these basins are the Florida-Bahamian Plate and the Caribbean Plate. Given these natural resources, the national government should resume its endorsed “Production Sharing Agreement” – an arrangement that attracts foreign oil companies. Considering the shaky economic status in Cuba today, exploration of fossil fuels and crude oil reserves through the Production Sharing Agreement will be an effective way for Cuba to set up its gradual transition to become a market economy. As a matter of fact, due to the Production Sharing Agreement, Canadian oil companies have indulged in investing in oil drilling activities in Cuban basins; and as a result, in 2004, an estimated 73,500 barrels of crude oil were produced daily (Pińon Cervera, 2005). Facility Improvements One of the most indicative reasons for the failure of the Cuban government to successfully launch its nuclear power plants was due to the United States and the world scientific community’s opposition to this plan (Alhajji & Maris, 2003). An apprehension was referred to the substandard construction, structural flaws, and lack of proper quality control procedures, inadequate training, and the inexperience of Cuban workforces, which formed the possibility for future failures and disasters, mainly because the designs of these nuclear power plants are not intended for tropical regions (Alhajji & Maris, 2003). For Cuba to finally implement the aforementioned solutions, it should improve its facilities and infrastructures. By doing so, much interest the country can be obtained from the United States. Renewable Energy Cuba is located in a tropical region; hence, it is highly efficient for the country to take advantage of its renewable resources. For instance, since Cuba is a tropical country, solar energy is abundant. Cuba’s geographical setting presents huge edge for utilizing solar radiation that is greater than 5 kWh/m2/day all through the year - a condition similar to that of Southern Arizona (Park, 2010). Other forms of renewable energy like wind, hydro power plants, geothermal, and biofuel are also abundant in the area. Also, biomass displays a promising solution to the energy crisis experienced by the country. There had been a lot of effort to produce electricity out of sugar cane residues. In line with this, Cuba should also invest on a sugar cane processing center that will help expedite the production of sugar cane residues. It has been postulated that if this would plan would become a reality, 10% of the energy supply of Cuba will be covered by the sugar industries through its production of biomass (Park, 2010). Installation of Energy Efficient Bulbs The attempt to control global warming and excessive energy consumption, many countries around the world have encouraged the employment of energy efficient light bulbs that cuts the amount of electricity needed for lighting. Cuba should likewise take advantage of this opportunity. It is not enough to look for solutions on how to produce sufficient and sustainable energy, but it is also imperative for Cuba to make of its energy effectively and ecologically. Objective of the Project The objective of this project is to aid in the battle against energy crisis in Cuba by proposing solutions that are derived from energy resources already available in the country but are left unexploited. Each of these proposed solutions does not guarantee to completely resolve the energy crisis, but the collective results that can be obtained from them have the highest potential to not only get rid of Cuba’s energy crisis, but also will make Cuba self-sufficient for oil and other petroleum products, and even become an oil exporter. Expected Results and Activities It is rather difficult to project which path these proposed solutions would lead Cuba’s energy sector, but with the collective potential that each suggested solution contribute in general presents a great promise of energy sufficiency. In contextualizing the approach to end the energy crisis in the region, it is very important to consider the relationship between the vast natural resources available within the region, and economic development, the energy security as of the moment, and the environmental policy in post-revolutionary Cuba (Economist Intelligent Unit, 1997). It cannot be denied that Cuba is rich in natural resources: basins, terrains, renewable resources like wind, water and solar energy due its geographical location, and others. Given these pre-existing conditions, we can see that Cuba is not deficient of energy source, but is lacking contemporary ways on how to exploit and take full advantage of its natural resources. If all these proposed solutions are successfully carried out, it can be expected that (1) Cuba will be self-sufficient when it comes to oil; (2) it can adequately provide the complete energy needs of the country; and most interestingly (3) it will become an oil exporter, if and only if, its basins are to undergo a nationally-funded oil drilling operation or to implement the Production Sharing Agreement. Several indicators can be observed as these solutions take effect: reduced oil imports, lowering electricity cost, lowering transportation cost, a gradual drop in the prices of prime commodities, and overall economic progression that would be manifested by the influx of new commercial investments. Budget For so many years, the International Atomic Energy Agency has been the main funder of Cuba’s energy development plans. As a matter of fact, the IAEA has been constant in support for the implementation of the nuclear power plants in the country. In 1997, the organization has approved $680,000 for the nuclear technical assistance (Benjamin-Alvarado, 2000). The huge support by the IAEA from 1962-1996 amounting to an estimated $12 million (IAEA, 1997) is a good reason that the organization would be much willing to support these proposed solutions; although, the budget would not solely come from organization. In order to maximize the funding, apart from the budget allocation from the government, funds can be obtained from foreign developers and oil drillers such that under an agreement, infrastructures can be developed in the country but with Cuba having equal share of the overall production the energy produced by all of these proposed solutions. This is highly feasible in that deep ocean oil fields of Cuba has previously, and even until today, been explored by Canadian companies under the Production Sharing Agreement. Project Timeline for 2014 January Endorsed to the Congress for approval February to March Staff Recruitment May to July Activities start: exploration of the basins, agricultural and renewable resources; feasibility studies. August to September Opening of the projects for public bidding October to November Survey of the geographical locations; final phase of scientific research for renewable resources December Start of the implementation and construction of the proposed plans References Park, H. (2010). Cubas response to energy crisis [PDF Document]. Retrieved from http://udel.edu/~hunpark/papers/Cuba_s%20Response%20to%20Energy%20Crisis.pdf Alhajji, A., & Maris, T.L. The future of Cuba’s energy sector. [PDF Document]. Retrieved from: City University of New York Website: http://web.gc.cuny.edu/dept/bildn/publications/documents/AhajjiandMaris8.pdf Read More