Towards an International Law for the Conservation of Offshore

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8 Νοε 2013 (πριν από 3 χρόνια και 11 μήνες)

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Towards an International Law for the Conservation of Offshore
Hydrocarbon Resources within the Continental Shelf?


David M. Ong




Introduction


The evolution of the modern international law of the sea has been particularly
sensitive to, and influenced by
, developments in scientific knowledge and
technology. An obvious example of this is in the great strides made in offshore
drilling and mining techniques that stimulated the development of the legal
regime for exploration and exploitation of continental sh
elf resources, as well as
latterly, the deep sea bed mining regime. A more recent influencing trend in the
development of the law of the sea is the scientific progress made in assessing
the growing threat posed by human activities on the marine environment
. This
has had the consequential effect of the evolution of marine environmental law,
which in turn has as its main concern
-

the application of sustainable
development to human activities within the maritime sphere.


This paper examines how far it is pos
sible to argue for the application of the
principle of conservation within the international legal framework governing the
exploration and exploitation of offshore hydrocarbon resources found within the
continental shelves of coastal States. In doing so, i
t will not chart the general
trend towards increasing environmental regulation of the oil and gas industry,
1

but instead focus on how far this general trend, in conjunction with other different
but related legal, policy and economic trends can be combined
to argue in favour





Reader in International and Environmental Law, Uni
versity of Essex Law School, Wivenhoe
Park, Colchester, Essex CO4 3SQ, UK. E
-
mail: daveo@essex.ac.uk.

1

For a comprehensive study of this general trend, see:
Zhiguo Gao (ed.),
Environmental
Regulation of Oil and Gas
, London: Kluwer Law International (1998)

of the conservation of hydrocarbon resources within the continental shelves of
coastal States.



The Application of the Conservation Principle within the Continental Shelf
Regime?


The legal difficulties that the thesis posited in this p
aper needs to overcome
cannot be too greatly overstated. Although the conservation principle is now well
-
accepted and arguably applicable in almost all aspects of the international law of
natural resources and wildlife protection, it is implicitly confined

in its scope of
protection to the conservation of
living

rather than
non
-
living

natural resources.
Nowhere is this distinction more evident that within the international legal regime
of the continental shelf. In so far as the governing treaty law on conti
nental shelf
resources is concerned,
2

there appears to be very little legal authority for even
the semblance of a suggestion that coastal States should implement a principle
of conservation in respect of the exploitation of their offshore hydrocarbon
resou
rces.


Moving back one step to a higher level of generality, it is also clear that
the principle of permanent sovereignty over natural resources,
3

which in turn
derives from the underlying concept of territorial sovereignty under international
law,
4

provi
des a very strong impetus for the notion of complete coastal State
autonomy over its exploitation of the natural resources within the continental
shelf.
5

Article 77.1 of the 1982 Convention enshrines this notion when providing



2

The governing legal regime for the continental shelf would generally be contained within Part VI
(Continental Shelf) of the 1982 UN Law of the Sea Convention, although there are aspects of Part
V (EEZ), Part XI (Area) and Part XII (Protection and Preser
vation of the Marine Environment) that
are relevant to this paper’s thesis.

3


4


5

As provided in Part VI of the 1982 UN LOS Convention, (Arts. 76

85).

that: ‘(T)he coastal State ex
ercises over the continental shelf sovereign rights for
the purpose of exploring it and exploiting its natural resources.’ The ‘natural
resources’ referred to in this Part (VI) consist of the mineral and other non
-
living
resources of the sea
-
bed and subsoi
l together with living organisms belonging to
sedentary species, ...’
6


The difficulties arising from the exclusive nature of these sovereign rights
are exacerbated by the fact that the coastal state is not explicitly obligated to
conserve and manage the r
esources concerned, at least under the continental
shelf regime. Part VI of the 1982 Convention does not contain any explicit
provision to conserve the continental shelf resources, whether living or non
-
living.
The lack of explicit conservation and managem
ent requirements in the
continental shelf regime is most obvious in relation to sedentary species, which
are explicitly provided for under the continental shelf regime by Article 77.4 of the
LOS Convention, and just as explicitly excluded from the EEZ regi
me by Article
68; thereby ensuring that even these living resources are not subject to the
conservation management and optimum utilization principles under the EEZ
regime. Indeed the situation with sedentary species deserves special treatment
in this respe
ct because it can give rise to implausible legal scenarios, whereby
sedentary species living on the continental shelf beyond 200
-
nautical miles (nm)
are subject to the coastal State’s sovereign rights and jurisdiction and therefore
apparently exempt from c
onservation, whereas members of the same species
present in the same sea
-
bed area but lying beyond the 200
-
nm limit will arguably
be subject to the high seas conservation regime under Section 2 of Part VII of the
1982 Law of the Sea Convention?


By contras
t, the sovereign rights accorded to coastal states under the
exclusive economic zone (EEZ) regime
7

entail corresponding general duties of
conservation and management for
both

living and non
-
living resources in the



6

Article 77.4,
ibid.

7

Governed by Part V of the LOS Convention (Articles. 55

75),
supra

note 1.

superjacent waters, seabed and subsoil of
the 200
-
nautical
-
mile zone.
8

However,
Article 56.3 provides that the sovereign rights with respect to the seabed and
subsoil shall be exercised in accordance with the continental shelf regime in Part
VI of the 1982 Convention. Moreover, subsequent Articles

within Part V imply
that these conservation and management requirements are limited to living
resources only. For example, Article 61.2 reiterates the obligation to conserve
and manage the living resources of the EEZ but implicitly excludes non
-
living
res
ources from this requirement. Article 62 further promotes the objective of
optimum utilization but again limits this only to living resources.


One possible argument that can be brought to bear upon the apparent
dichotomy between the lack of a conservation

requirement for the both
living
and
non
-
living

natural resources in the sea
-
bed and subsoil, as opposed to the
living

resources in the water column above, is the doctrine of parallelism.
9

Parallelism
traces the development of the continental shelf and EE
Z regimes as two
separate but co
-
existing and evolving legal regimes.
10

Parallelism in this context
can utilised to argue for the extension of the conservation principle from the EEZ
regime into the continental shelf regime, but even if this extension is ac
cepted, it
is arguably limited only to the conservation of the living natural resources of the
continental shelf,
i.e.,

sedentary species.


Thus, there is a distinct lack of adequate legal authorities for the proposition
that some form of the conservation
principle is applicable to the exploitation of
continental shelf resources generally, and hydrocarbon resources in particular.
Instead the legal regime that is in place arguably provides incentives to coastal
States to exploit their mineral resources (and
indeed even their sedentary
species) without any intrinsic regard for the rational and efficient principles of
sustainability and conservation. For example, under Article 82.1 of the UN



8

Art
icle 56.1(a) of the LOS Convention,
ibid.


9

Ref. to writings of Oda and Kwiatkowska in this respect.

10


Convention on the Law of the Sea, the coastal State is obliged to make

payments or contributions in kind in respect of the exploitation of the non
-
living
resources of the continental shelf beyond the 200
-
nautical mile (nm) limit. This
revenue
-
sharing requirement in respect of such non
-
living resources found
beyond the 200
-
na
utical mile (nm) limit effectively promotes their early
exploitation whether or not this proves beneficial to the national economy
concerned, or indeed the global economy as a whole. This much is arguably
evident from the fact that Article 82.2 then provid
es that the payments and
contributions shall be made annually with respect to all production at a site after
the first five (5) years of production at that site. For the sixth (6
th
) year, the rate of
payment or contribution shall be 1% of the value or volu
me of production at the
site. This rate shall increase by 1% for each subsequent year until the twelfth
(12
th
) year (by which time it will amount to 7% of the value or volume of
production) and shall remain at 7%. ‘Production’ does not include resources us
ed
in connection with exploitation.


Certain writers contend, however, that the duty to conserve, or at least
efficiently manage, the mineral resources of the continental shelf was an implicit
element in the evolution of the continental shelf regime under

general
international law, even if not explicitly provided for in subsequent multilateral
conventions on the law of the sea. For example, Townsend
-
Gault argues that
resource conservation (albeit on a unilateral basis) lay at the heart of the
continental s
helf doctrine under international law: “Jurisdiction was extended . . .
for the purposes of [petroleum] exploitation in a controlled and properly managed
manner.”
11

Support for this view can be garnered from the original Truman
Proclamation itself, which ju
stified the United States’ claim of ‘jurisdiction and
control’ over the natural resources of the seabed and subsoil of the continental



11

Ian Townsend
-
Gault,
Regional Maritime Cooperation Post
-
UNCLOS/UNCED: Do Boundaries
Matter Any More? in

I
NTERNATIONAL
B
OUNDARIES AND
E
NVIRONMENTAL
S
E
CURITY
:

F
RAMEWORKS
FOR
R
EGIONAL
C
OOPERATION
3,

6

(Gerald Blake et al. eds., 1997).

shelf,
inter alia,

in order to effect their ‘conservation and prudent utilization when
and as development is undertaken.’
12



The Principle of Conservation as an Aspect of the Sustainable Use of
Natural Resources?


It is also possible to discern the beginnings of a sea change in the attitudes
towards the generally accepted principle of permanent sovereignty over natural
resou
rces and its arguably less imperative application in the form of sovereign
rights over natural resources within a State’s continental shelf. Xue, for example,
notes that this principle is now balanced with environmental concerns, indicating
‘a shift in emp
hasis from an absolute right to use and dispose, to a relative duty
to protect.’
13

More specifically, in respect of the non
-
living resources of the
continental shelf, it may be seriously questioned how far the present legal lacuna
that obtains in respect of

the conservation of such resources and accordingly, the
disincentive to conserve these resources, can be held to fulfil one of the main
tenets of the sustainable development concept that must now arguably underlie
all anthropocentric activities, namely, t
he principle of sustainable utilization of
natural resources.


An attempt at the enumeration of the various dimensions of the concept of
‘sustainable development’ can be found in the final report of the ILA’s Committee
on Sustainable Development, which in
cludes within this objective or goal, the



12

Truman Proclamation on the Continental Shelf, 28 September, 1945. The text of the Truman
Proclamation can be found in 10
Federal Register

12303 (1945) and 59 US
Statutes a
t Large
884
.

For a short history of the genesis of the Proclamation and its immediate aftermath, see
Lawrence Juda,
International Law and Ocean Use Management: The evolution of ocean
governance
, London: Routledge (1996) at 93
-
98. See also, Juda,
Ocean Spac
e Rights:
Developing US Policy
, New York: Praeger (1975)

13

Hanqin Xue,
Transboundary Damage in International Law
, Cambridge: Cambridge University
Press (2003) at 135.

‘sustainable use of natural resources’.
14

Elaborating on the inclusion of the
principle of ‘sustainable use’ within the international law in the filed of sustainable
development, Schriver suggests that it has result
ed in the emergence of a duty to
ensure sustainable use of natural resources and this requires States,
inter alia,

‘...to make prudent use of the natural wealth and resources within their
jurisdiction.’
15

This reflects paragraph 1 of the ILA’s New Delhi Dec
laration of
Principles of International Law Relating to Sustainable Development’, which
specifies the duty of States to ensure sustainable use of natural resources.
16



Among other prominent legal commentators on this issue, Sands also
considers that the le
gal elements of the concept of sustainable development,
inter alia
, comprise of both 1) the preservation of natural resources for the benefit
of future generations (the principle of intergenerational equity) and 2) the
exploitation of natural resources in
a manner which is ‘sustainable’, ‘prudent’,
‘rational’, ‘wise’, or ‘appropriate’ (the principle of sustainable use).
17

As for the
concept of ‘sustainable development’ within the international law of the sea, Pinto
suggests that the word ‘development’ in thi
s context refers to the use or
exploitation of a natural resource, while ‘sustainable’ conveys the idea of
supporting, so that the overall term ‘sustainable development’ connotes
‘...development that is conservative, and is conducive to (the) continued via
bility
of a resource.’
18

In other words, sustainable development implies ‘...



14


15

Nico Schrijver, ‘Searching for the Contours of International Law on the Field of Sus
tainable
Development’ , in
Reflections on Emerging International Law, Essays in Memory of the Late
Subrata Roy Chowdhury
, International Law Association, Calcutta Centre (India), Calcutta: Law
Research Institute and Bangalore: National Law School of India
University (2004) 179
-
199, at
188.

16

ILA Resolution 3/2002. Accessible at
http://www.ila
-
hq.org
. Also in Schrijver
ibid.,

194
-
199.

17

Philippe Sands,
Principles of International Environmental Law
, 2
nd

ed., Cambridge: Ca
mbridge
University Press (2003) at 253.

18

Christopher W. Pinto, ‘The United Nations Convention on the Law of the Sea: Sustainable
Development and Institutional Implications’, in Peter Bautista Payoyo (ed.)
Ocean Governance:
Sustainable Development of the
Seas
, Tokyo: United Nations University Press (1994) 3
-
27, at 3.

management of a resource for the purpose of maintaining a balance between
conservation of the resource and its optimal utilization.’
19


It must however be noted here that the use o
f these different and
interchangeable terms and their lack of definition suggest uncertainty in both the
legal status and the application of this principle of ‘sustainable use.’
20

This
uncertainty is especially true in respect of the application of this pri
nciple to the
exploitation of non
-
living, as opposed to living, natural resources. Certainly, the
overall continental shelf regime itself, as laid out in Part VI of the 1982
Convention, does not provide for either the ‘sustainable use’, or even the
conserv
ation, of the exploitable non
-
living resources found within the continental
shelf. Moreover, it should be noted that even the applicable environmental
protection provisions for continental shelf activities are to be found in Part XII
(Protection and Preser
vation of the Marine Environment), rather than in Part VI
governing the Continental Shelf.


The ‘sustainable use’ principle has furthermore usually been applied only to
living, and therefore traditionally regarded as renewable, resources. On the other
hand
, it is significant to point out here that calls for the conservation of such
resources are usually at their most shrill precisely at the point in which they have
been over
-
exploited to the extent that they are about to lose their renewable
status. Thus, i
f the conservation of so
-
called renewable natural resources is
regarded as imperative, especially when such resources are threatened with
catastrophic depletion or even extinction; then by the same token the
conservation principle should be applied to non
-
renewable mineral resources,



19

Ibid.,

at 22.

20

Such uncertainty of course echoes similar concerns raised about its ‘parent’ principle, namely,
‘’sustainable development.’ For a constructive critical analysis of the legal
status and application
of ‘sustainable development’, see Vaughan Lowe, ‘Sustainable Development and Unsustainable
Arguments’, in Alan Boyle and David Freestone (eds.)
International Law and Sustainable
Development: Past Achievements and Future Challenges
, O
xford: Oxford University Press (1999)
19
-
37.

with offshore hydrocarbon resources being particularly subject to this principle,
as an example
par excellence

of the latter type of non
-
renewable natural
resource.


Within this context, Sands notes that the term ‘conservation’

is often defined
by reference to the terms mentioned above and includes elements that are
similar to that of the ‘sustainable development’ concept.
21

He notes further that
the Legal Experts Group of the World Commission on Environment and
Development defin
ed ‘conservation’ in terms which recall the principle of
sustainable development as follows:


‘(the) management of human use of natural resource or the environment in such
a manner that it may yield the greatest sustainable benefit to present generations
w
hile maintaining its potential to meet the needs and aspirations of future
generations. It embraces preservation, maintenance, sustainable utilisation,
restoration and enhancement of a natural resource or the environment.’
22


Here it is significant to note
that Part XI of the 1982 Convention devoted to
the deep sea
-
bed ‘Area’ beyond the limits of national jurisdiction applies the
conservation principle to activities in the Area. Initially, as part of the general
requirement under Article 145 to protection th
e marine environment in the Area,
the deep sea
-
bed Authority shall adopt appropriate rules, regulations and
procedures for,
inter alia
, the protection and
conservation

of the natural
resources of the Area...’
23

Then, all activities within the Area must be c
arried out
with a view to ensuring ‘orderly, safe and rational management of the resources
of the Area, including the efficient conduct of activities in the Area and, in



21

Ibid.,

at 260.

22

1986 WCED Legal Principles, para (i), as cited in Sands,
ibid.

23

Article 145(b) of the 1982 Law of the Sea Convention, emphasis added. The term ‘resources’ in
this context is defined in Articl
e 133(a) as meaning all solid, liquid, or gaseous mineral resources
in situ

in the Area at or beneath the sea
-
bed, including polymetallic nodules.

accordance with sound principles of
conservation
, the avoidance of unnecessary
waste’
24


This notion of conservation as a way of promoting efficiency is echoed in
the debate over the conservation of energy use. As Roberts notes, energy
conservation does not mean using less energy but using energy more efficiently:
‘In this sense, conservatio
n is less a question of morals or ethics than of sound
business practices:...’
25

It is therefore at least arguable that similar notions of
rational and efficient management should be imputed to the non
-
living resources
exploitation within the continental sh
elf. As Sands concludes, ‘(T)he significance
of these terms is that each recognises limits placed by international law on the
rate of use or manner of exploitation of natural resources, ...’
26

Onuosa goes
further, arguing that the sustainable development im
petus as a whole means
‘...developing petroleum in a manner that minimizes the depletion rate of
reserves and maximizes the life of petroleum resources, without harming the
environment, both for the interest of present and future generations.’
27

he
accepts

however that ‘(T)his demands a conservative exploitation of petroleum
resources, which is a difficulty to most countries, who are very often more
interested in maximizing the revenue of petroleum exploitation, rather than
conserving the petroleum resourc
e.’
28





24

Article 150(b)
ibid.,
emphasis added.

25

Paul Roberts,
The End of Oil: The Decline of the Petroleum Economy
and the Rise of a New
Energy Order
, London: Bloomsbury (2004) at 215.

26

Sands (2003)
ibid.
, at 261.

27

Stanley Nwabuishi Onuosa, ‘Sustainable Development of Petroleum Resources: The Rumpus
and Resolution’, in Zhiguo Gao (ed.),
Environmental Regulation of Oi
l and Gas
, London: Kluwer
Law International (1998) 433
-
450
at 436.

28

Ibid.,

citing T. W. Walde, Investment Policies in the International Petroleum Industry


Responses to the Current Crisis’, in N. Beredjick and T. Walde (eds.)
Petroleum Investment
Policie
s in Developing Countries
, London: Graham & Trotman (1988) 7
-
28.

Moreover, recourse may also be had to the
Gabcikovo
-
Nagymaros Project

case in this respect where the ICJ noted the increasingly influential role of
environmental protection as well as several important environmental principles
within the conduct of i
nternational relations between States.
29

Specifically, the
Court in that case highlighted the need to examine a bilateral treaty between
Hungary and the then Czechoslovakia (but contested by Slovakia Republic)
establishing a series of dams and other fresh w
ater infrastructure and
management projects on the Danube river in light of the development of
international environmental law and more significantly to impute the application of
generally accepted environmental principles into the implementation process o
f
this treaty.
30

Within this context, the Court held that the preventive and polluter
pays principles, as well as the objective of sustainable development, could
reasonably be imputed to the bilateral treaty provisions applicable to both States.
On this bas
is, a similar imputation of such principles can be submitted here in
respect of continental shelf exploitation activities; in particular, the conservation
principle as an aspect of the wider objective or goal of the sustainable
development.


Thus, it is ce
rtainly arguable that in order to achieve the goal of
‘sustainable development’, we need to be looking at ways and means to
conserve the utilization of the non
-
renewable or expendable hydrocarbon energy
sources. Writings on the economics of ‘sustainable de
velopment’ appear to
accord with this view. For example, Herman Daly has postulated three now well
-
known conditions for sustainability with regard to the supply and consumption of
resources, as follows:

1. The consumption rate of renewable resources is no
t higher than its recovery
rate;

2. The consumption rate of non
-
renewable resources is not higher than the rate
of increase in renewable resource supply ;




29

Gabcikovo
-
Nagymaros Project (Hungary/Slovakia)
ICJ Rep

(1997) 1.

30

Ibid., at 184
-
186, paras. 52
-
56; 196, paras. 112
-
113; 200
-
201, para.140.

3. The emission of pollutants is within the absorption capacity of the
environment.
31


The second cond
ition of Daly’s sustainability thesis is especially pertinent
to the argument for conservation of offshore hydrocarbon resources that is being
made here. Gao, for example, relies on Daly’s thesis to hold the view that despite
their non
-
renewable nature, it

is possible to develop hydrocarbon resources in a
quasi
-
sustainable manner by limiting their rate of depletion to the rate of creation
of renewable substitutes.’
32

As Kaya points out, however, these evidently sound
conditions for sustainability have been c
onspicuous in their lack of application,
citing examples such as deforestation, increased CO
2

atmospheric
concentration, and most significantly for our purposes here, the depletion of fossil
fuels.
33



The Climate Change Regime: Requiring Conservation to Ef
fect a Smooth
Changeover to Renewable, Non
-
Carbon based Energy Sources?


A further impetus for the conservation of hydrocarbon resources generally is the
growing acceptance, by even the most ardent non
-
believers,
34

that the era of



31

Herman E. Daly, ‘Toward some operational princi
ples of sustainable development’
Ecological
Economics
, Vol. 2, Issue 1 (April, 1990) 1
-
6.

32

Zhiguo Gao, ‘Environmental Regulation of Oil and Gas in the Twentieth Century and Beyond:
An Introduction and Overview’, in
Zhiguo Gao (ed.),
Environmental Regulati
on of Oil and Gas
,
London: Kluwer Law International (1998) 3
-
55, at 53.

33

Yoichi Kaya, ‘Environment, economy, energy and sustainable development’, in Yoichi Kaya
and Keiichi Yokobori (eds.)
Environment, Energy, and Economy: Strategies for Sustainability
,
T
okyo: United Nations University Press (1997) 52
-
56, at 53.

34

Odell represents one of the more eloquent ‘refuseniks’ in this respect and even his argument is
a subtle one, accepting that oil resources will eventually run
-
out but expressing the belief that
n
atural gas will take over from oil
per se

as the energy source of choice in the twenty
-
first century
and that even coal might stage a comeback. See: Peter R. Odell,
Why Carbon Fuels Will
Dominate the 21
st

Century’s Global Energy Economy
, Brentwood, Essex:
Multi
-
Science (2004)

carbon
-
based energy source
s is about to end. As Fridleifsson puts it, in simple
terms, ‘(I)n all the scenarios, the peak of the fossil fuel era has passed.’
35

Moreover, ‘(i)t is clear that no single energy source is going to take over from
polluting fossil fuels.’
36

As the much respe
cted
Economist

newspaper journal
observed in an editorial leader entitled ‘The end of the Oil Age’ more than one
and a half years ago now already, ‘(F)inally, advances in technology are
beginning to offer a way for economies, especially those of the develo
ped world,
to diversify their supplies of energy and reduce their demand for petroleum, thus
loosening the grip of oil and the countries that produce it.’
37

Moreover it notes
that ‘(H)ydrogen fuel cells and other ways of storing and distributing energy are
no longer a distant dream but a foreseeable reality.’
38


With the passing of the carbon
-
based energy era, a transition period
towards the ultimate changeover to other types of renewable energy sources
(sometimes called the hydrogen era) beckons. The argumen
t for conservation of
offshore hydrocarbon resources in order to engender a smooth transition from
the carbon to hydrogen era is also particularly applicable within the context of the
need to curb greenhouse gas emissions under the international climate ch
ange
regime.
39

Although switching from oil to natural gas will assist both in terms of
reducing the overall adverse environmental impact of fossil fuel reliance, as well



35

Ingvar B. Fridleifsson, Energy Requirements for the New Millennium’, in Hans van Ginkel,
Brendan Barrett, Julius Court and Jerry Velasquez (eds.),
Human Development and the
Environment: Challenges for the United Nations in the New Mi
llennium
, Tokyo, Japan: United
Nations University Press (2002) 220
-
233, at 227.

36

Ibid.,

at 231.

37

The Economist
(UK) newspaper journal
,
25
-
31 October 2003, Vol. 369, No. 8347, editorial
leader at 11.

38

Ibid.

39

The global climate change regime consists of
the Framework Convention on Climate Change
1992 and the Kyoto protocol on …., 1997. The former Convention now has 178? State Parties
and entered into force on: …., whereas the latter Protocol required 55 State parties contributing
55% of the total global g
reenhouse emissions to enter into force, which it did on 16 February,
2005. For the text of both these instruments and more information, see: http://www.unfccc.org/

as lowering carbon dioxide emissions to avert climate change,
40

this will
ultimately pro
ve to be a mere staging post before the full transition to carbon
-
free
energy sources. As
The Economist

leader again noted, ‘(S)uch changes will not
occur overnight. It will take a decade or two before either (hydrogen) fuel cells or
bioethanol make a sign
ificant dent in the oil economy. Still, they represent the
first serious challenges to petrol in a century. If hydrogen were made from
renewable energy (or if carbon dioxide generated by making it from fossil fuels
were sequestered underground), then the c
ars and power plants of the future
would release no local pollution or greenhouse gases.’
41

What this means in legal
and policy terms is that countries should be encouraged to first, forsake coal and
oil in favour of natural gas as their main energy source
for power generation,
especially in industry and homes; and second, make full use of this transition
period as a bridge to effect a complete changeover to the use of carbon
-
free
energy sources.
42

In doing so they will also be implementing far
-
reaching polic
ies
in aid of their responsibilities for the mitigation and reduction of greenhouse gas
emissions under the climate change regime.
43



The Conservation Principle from the Perspective of International
Development Law


A further, and just as significant, per
spective to bring to bear upon the issue of
conservation of hydrocarbon resources is that of international development law.
This argues,
inter alia,

the need for orderly and just progress in the socio
-
economic development process of a State being particula
rly directed in this
context, to developing, and less
-
developed, countries. For example, in the



40

Nebojsa Nakicenovic, ‘Decarbonization as a long
-
term energy strategy’ in Yoichi Kaya and
Keiichi Yokobori (eds.) (1997)
op. cit.,
271
-
80, at 271. See also Odell (2004)
op. cit.

41

The Economist,
25
-
31 October, 2003, editorial leader at 11.

42

Nakicenovic, (1997)
op. cit.

43

Ref to main obligations under the Framework Convention and Kyoto Protoco
l.

Preamble to the United Nations Declaration on the Right to Development (1986),
the concept of ‘development’ was elucidated as follows:


‘Development is a compr
ehensive economic, social cultural and political process,
which aims at the constant improvement and well
-
being of the entire population
and of all individuals on the basis of their active, free and meaningful participation
in development and in the fair d
istribution of benefits resulting therefrom.’
44



What should also be noted is how the international development ‘paradigm’,
previously based on exclusively economic yardsticks, is now viewed in terms of
its wider social impact, thus requiring the adoption
of an integrated approach to
the implementation of all three so
-
called ‘generations’ of human rights, namely
civil and political, economic social and cultural, and most recently, the right to
development and a healthy environment.
45
. Of late, the environmen
tal
sustainability of such socio
-
economic development, which we have charted
above, is of course playing an ever greater role and the conservation principle as
an aspect of this particular policy and legal impetus clearly resonates within
international dev
elopment law. Hossain, for example, notes that ‘(T)here is
increasing recognition that sustainable development must be ‘human
-
focused’, or
centered around the realisation of human rights


indeed, we speak today of
‘sustainable human development’.’
46

The IL
A’s Committee on Sustainable
Development ...


It is further possible to argue that conservation has an independent
influence upon a State’s progress in its socio
-
economic development pathway.




44


45

Kamal Hossain, ‘Human Rights and Development’, in
Reflections on Emerging International
Law, Essays in Memory of the Late Subrata Roy Chowdhury
, International Law Association,
Calcutta Centre (India), Calcutta: Law Research Institute and Bangalore
: National Law School of
India University (2004) 44
-
52, at 47, citing
inter alia,

the UN Declaration on the Right to
Development (1986)

46

Ibid.

Noe and Pring for example note the emerging concept of ‘sustaina
ble energy
development’,
in order
to suggest that ‘(N)o energy development project should
be promoted, let alone approved, merely because its proponents assert that it is
“necessary

for energy security” without analysing how it meets or does not meet
the
requirements of sustainable development.’
47


This separate perspective for the application of the conservation principle
from that of a purely environmental basis
also
has its roots in the growing
recognition that the development of an oil and gas industry
represents a real
challenge to any State’s entire economic, political, social and hence also legal,
landscape. This overarching, multi
-
faceted impact upon almost every aspect of
Statehood is clearly more pronounced within developing, and less
-
developed,
co
untries simply because their governing institutions are invariably less well
entrenched and hence less immune to the multiplicity of threats that the
development of an oil industry inflicts upon such States. The reality of the
situation however is that
any

country in the world would struggle when suddenly
finding itself sitting atop an oil and/or gas bonanza, whether it be a less
-
developed, developing, newly
-
industrializing, or even highly
-
developed, post
-
industrialised State. For example, Birdsall and Subr
amanian note the fact that up
to 34 less
-
developed States around the world now have significant hydrocarbon
resources that constitute at least 30% of their total export revenues, before going
on to highlight the difficulties involved for oil
-
rich countries

due to the so
-
called
‘resource curse’.
48






47

Susan Y Noe and George (Rock) Pring ‘The ‘Fear factor’: Why We Should Not Allow Energy
Security Rhethoric to
Trump Sustainable Development’, in

Barry Barton, Catherine Redgwell,
Anita Rønne and Donald N. Zillman (eds.)
Energy Security: Managing Risk in a Dynamic Legal
and Regulatory Environment
, Oxford: Oxford University Press (2004) 431
-
456, at 431
-
2, citing L.
Price and M. D. Levine, ‘Production and Consumption of Energy’, in J. C. Dernbach (ed.),
Stumbling Toward Sustainability

(2002)

48

Nancy Birdsall and Arvind Subramanian, ‘Saving Iraq From Its Oil’,
Foreign Affairs,

Vol.83,
No.4 (July/August, 2004) 77
-
89, es
pecially at 80
-
82.

More generally, Bretschger and Egli note that economies with abundant
natural resources do not necessarily grow faster than those with few natural
resources,
49

citing a long
-
term study (1971
-
1989) which shows that
economies
for which natural resources exports constitute a large portion of their initial GDP
share tend to have low economic growth rate subsequently and, moreover, that
this negative relationship holds even after controlling for other important factors
t
hat explain such growth rates.
50

They also report, albeit more critically, on
another empirical economic study supporting the notion that an economy’s over
-
reliance on primary sector production (usually involving non
-
renewable resource
extraction) tends to
inhibit economic growth by discouraging investments in
human capital or research and development.
51

Auty confirms this perception in a
more focussed study on eight oil
-
exporting developing countries, concluding that
‘(W)ith few exceptions, resource
-
based in
dustrialization made a disappointing
contribution to the oil
-
exporting countries’ economic growth, structural change,
and geographical decentralization.’
52



Birdsall and Subramanian suggest that such disappointing outcomes of oil
and gas booms result from
the role natural resources play in impeding the
development of a society’s economic and political institutions and values critical
to open market economies and political freedom, such as civil liberties, the rule of
law, property rights protection and poli
tical participation.
53

Of the countries that
they diagnose as having successfully weathered the so
-
called ‘oil curse’, they



49

Lucas Bretschger and Hannes Egli, ‘Sustainable Growth in Open Economies’, in Günther G.
Shulze and Heinrich W. Ursprung (eds),
International Environmental Economics: A Survey of the
Issues
, Oxford: Oxford University Press (2001) 183
-
20
8, at 202
-
3.

50

J. Sachs and A. M. Warner,
Natural Resource Abundance and Economic Growth
, NBER
Working Paper No.5398.

51

T. Gylfason, T. T. Herbertsson and G. Zoega
, A Mixed Blessing: Natural Resources and
Economic Growth
, Centre of Economic Policy Researc
h, Discussion Paper No. 1668.

52

R. M. Auty, ‘Resource
-
Based Industrialization: Sowing the Oil in Eight developing Countries,
Oxford: Clarendon Press (1990) at 251.

53

Birdsall and Subramanian (2004)
op. cit.

cite Norway as being particularly effective in doing so. This is because of its
strong democratic traditions and associated political

institutions that foster
openness and accountability, which resulted in the creation of special oil funds
with constitutional or other restricted use of the revenues.
54

Here it should also
be added that it is precisely such transparency in the Norwegian go
vernment that
has not only ensured the general success of its ring
-
fenced oil fund, but also
resulted in the concommitant conservationist approach towards the exploitation
of Norway’s vast offshore hydrocarbon reserves to provide an orderly stream of
reven
ues into its hypothecated oil fund.
55

Onuosa lists other examples of similar
oil funds and supports a previous suggestion by Gao that a permanent global
fund be established for the express purpose of investment in the research and
development of renewable r
esources.
56


An example of this approach can be seen in the recent Norwegian
government’s decision in late 2003 not to open the ecologically sensitive Lofoten
Islands to oil exploration until 2005,
57

although this decision was arguably made
strictly for envi
ronmental protection, rather than resource conservation purposes.
Nevertheless, this is evidence of how the obligation under international
development law for the fullest possible public participation in the decision
-
making process on the utilization of a
country’s natural resources invariably
translates into the application of the conservation principle for the exploitation of
these resources.






54

Ibid.,

at 83.

55


56

Onuosa (998) op. cit., at 44
5, citing Z. Gao,
International Petroleum Contracts: Current Trends
and New Directions
, London: Graham & Trotman (1994) at 234
-
273.

57

See ‘Norway’s decision to put nature before oil is a turning point in history of oil development in
sensitive areas’ WWF I
nternational, Press Release, 15 December, 2003. Accessed at:
http://www.panda.org.

Continuing Difficulties with the Application of the Conservation Principle to
Hydrocarbon Resources in the Cont
inental Shelf


The main challenge that an argument for the application of the conservation
principle to the exploitation of continental shelf resources faces is that which is
faced by all potentially ‘regime
-
changing’ theses of this nature. Is there suffi
cient
legal
, as opposed to environmental, economic and international development
policy arguments in favour of its recognition and implementation? In this respect,
the hard legal evidence is admittedly thin on the ground. What is becoming
clearer however
is that there are multiple international law, policy, and economic
perspectives that are all moving towards a similar focal point, namely, that of
conservation. At this juncture it is also important to note that while an increasing
emphasis on conservation

can certainly be discerned, this trend arguably
represents no more than the extension of the conservation principle that currently
applies to renewable natural resources (such as fisheries and timber), to non
-
renewable natural resources generally, and hyd
rocarbon resources in particular.


The precise scope and detail of the conservation impetus is arguably still
left to the discretion of individual States to deliberate upon. In this regard, the
relationship between the conservation principle and the well
-
k
nown and accepted
principle of common but differentiated responsibilities will need to be properly
spelt out, especially in respect of developing countries’ obligations. In this
context, it should be recalled that all developing countries are currently ex
empt
from formal legal requirements to abide by the greenhouse gas emissions
reduction commitments of the international climate change regime.



Conclusions


This paper has developed arguments for the application of the
conservation principle to hydrocarbo
n resources in the continental shelf
from a number of international legal, policy and economic perspectives,
namely, the international law of the sea, the economics of non
-
renewable
natural resource extraction, international environmental law and policy,
p
articularly in respect of the climate change regime, and last but not least,
international development law. As noted above, while the conservation
principle can certainly be discerned, both its international legal status and
precise implementation within S
tates are still to be determined. The next
few years will undoubtedly be significant for the evolution of this principle
as it makes its own transition from ‘soft’ to ‘hard’ international law.




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