Oil & Gas Industry Leaders Warn of Problems with L.O.S.T.

As with an earlier letter sent on June 14^th to Sen. Kerry by senior retired U.S. military leaders, the latest correspondence makes clear that LOST proponents’ claims that the treaty enjoys unanimous support among influential communities – notably, the Navy and the private sector’s oil and gas industry – are significantly overstated.

The business leaders’ letter states in part: “Gaining access to the resources in and under the world’s oceans is critically important to our country, but the costs and risks associated with doing so pursuant to LOST are simply too high.”

The signers expressed concern about six different aspects of the treaty and its repercussions.  These include the possibility of being obliged, pursuant to LOST:

• to give up proprietary data and technology in order to engage in the exploitation of the resources of the deep ocean sea beds
• to confront a global Environmental Protection Agency that is sure to be far more aggressive in fulfilling its mandate of protecting the marine environment than even our own EPA
• to contend with mandatory dispute resolution mechanisms that will be stacked against this country and used by its adversaries to hamstring us
• to participate in discredited socialist wealth redistribution schemes at the dictates of foreign, unelected and unaccountable bureaucrats and jurists

The oil and gas industry leaders who signed this letter are: Raul Brito, President, Brito Oil Company; Steve Dillard, Vice President, Pickrell Drilling Company; Mike Dixon, Owner, Dixon Oil and Gas, Inc.; Hon. Dennis Hedke, Owner, Hedke Saenger Geoscience Ltd.; Bill Johnson, Partner, McCoy Petroleum Corporation; A. Scott Ritchie III, President, Ritchie Exploration, Inc.; and Scott Stewart, Owner, Bird Dog Oil LLC.

Frank J. Gaffney, Jr. of the Coalition to Preserve American Sovereignty, said:

June 27, 2012

Hon. John Kerry

Chairman, Senate Foreign Relations Committee

444 Dirksen Senate Office Building

Washington, DC 20510-0802

Dear Chairman Kerry:

We are writing as individuals with long experience in oil and gas exploration and production. We have deep concerns about the United Nations Law of the Sea Treaty (LOST).  We request that you ensure such concerns are given at least equal prominence as, and made a part of the record along with, the views of those who will be testifying before the Senate Foreign Relations Committee on June 28^th.

Gaining access to the resources in and under the world’s oceans is critically important to our country, but the costs and risks associated with doing so pursuant to LOST are simply too high.  Our concerns include:

• Under the terms of the Law of the Sea Treaty, at least some of the permits for deep seabed resource exploration and production will entail sharing of proprietary data and technology.  American companies will almost certainly be reluctant to provide such sensitive items to their competitors – either directly or, through international bureaucrats, indirectly.[i] As a result, companies that think LOST may be good for their business interests today may find themselves effectively precluded in the future from tapping the immense natural wealth of the world’s sea beds.
• From its preamble onwards, LOST obligates its parties to facilitate the redistribution of wealth from the developed, maritime nations to the developing and land-locked ones.  In this sense, it is of a piece with – and a backdoor means of achieving – the sort of socialist “sustainability” accord that was wisely recently rejected at the “Rio+20” conference on sustainable development.[ii]
• Former Secretary of State Warren Christopher once described LOST as “the strongest, comprehensive environmental treaty now in existence or likely to emerge for quite some time.” [iii]  That is the case not only because of its myriad obligations with respect to protecting the marine environment, but also due to the treaty’s mandatory dispute resolution mechanisms that will surely be used to enforce such commitments.  Activist organizations (e.g., the Natural Resources Defense Council, Sierra Club, etc.) will be very effective at exploiting the new “hooks” to block exploration and production.

One purpose to which LOST’s tribunal and arbitration panels could readily be put is to impose a form of “cap-and-trade” arrangement on carbon emissions.  At a minimum, the treaty can help advance the campaigns environmental activists have been waging for years[iv] against the sources of such emissions: the mining and use of coal and now their next target, fracking and the recovery of immense quantities of natural gas that it makes possible.  As we now know, the “bridge fuel” role for natural gas set out in the 2001 energy manifesto of the NRDC (which was endorsed by the Sierra Club) has now morphed into a “Beyond Natural Gas” campaign.

• The Law of the Sea Tribunal established the precedent in a December 2001 ruling in the “Mixed Oxide Fuel (MOX) Plant” case of extending its jurisdiction to alleged pollution emanating from a state party’s interior waters and air columns.[v]  The pretext is that such pollution ultimately migrates to the world’s oceans and, therefore, must be regulated.
• Through this device, it is predictable that, if the United States were to ratify this accord, we would be afflicted with business-hostile interference and regulations that would make the record of our domestic Environmental Protection Agency seem tame by comparison.  Unaccountable foreign bureaucrats and jurists will surely prove even more intractable than was the EPA when, to cite but one recent example, Shell Oil sought permission to explore off the coast of Alaska.  Some federal judges in this country can be expected happily to enforce any rulings engineered by such well-funded international activists.  The LOST treaty would become a useful framework for those who have advocated a global EPA under the UN Environmental Program sponsored by Maurice Strong.
• Finally, LOST will provide potentially vast revenue streams to the International Seabed Authority to fund its operations and to “redistribute” to favored nations.  The United Nations system has proven to be extremely hostile to our interests, even when we are picking up over twenty percent of its costs.  It is frightening to contemplate what a supranational organization dominated by countries that do not like us will do if it becomes self-supporting through LOST-facilitated taxes, fees, and revenue-sharing.

All these concerns are powerfully reinforced by a remarkably candid warning issued sixteen years ago by one of the Law of the Sea Treaty’s U.S. negotiators, Prof. Bernard H. Oxman.  The Senate should regard the following admonition from his 1996 article in the European Journal of International Law[vi] as evidence that – whatever one makes of the provisions and implications of LOST today – they will mutate in the future in ways that contribute to the further “development of international law,” a euphemism for greatly expanding the treaty’s jurisdiction and impact:

Those who wish to realize fully the contributions of the Convention to the rule of law will need to exercise restraint and wisdom in at least the immediate future lest they complicate the ratification process in one or more states.  Politically, this suggests caution regarding the organization, composition and budgets of the new institutions established by the Convention.  Legally, this suggests restraint in speculating on the meaning of the Convention or on possible differences between the Convention and customary law….

I do not dissent from the view that the development of international law benefits from more cases and decisions by the [Law of the Sea Tribunal].  My point is simply that, because of its compromissory clauses, a globally ratified Convention promises many more cases in the future, and that it would be unfortunate if one or two cases during this delicate interim period, when so many governments are considering ratification, had the effect of prejudicing that promise.  (Emphasis added.)