International Energy Governance Research Articles

The Energy Charter Treaty at a critical juncture: of knowns, unknowns, and lasting significance

Abstract This article envisions the future of international investment law and arbitration amidst the need to accelerate the shift towards renewable energy. Recognizing the risks of predicting the unknown, the article charts the delicate balance between forecasting a future legal framework and respecting past complexities. Focusing on the Energy Charter Treaty (ECT), the article analyses ‘known-knowns’ rooted in positive law and ‘known-unknowns’ in the ECT’s future. The article examines the ECT’s design and scope in the first part, showing its pivotal role in organizing the renewable energy market through fair and equitable treatment and expropriation provisions. Against this backdrop, the article explores potential continuation, modernization, or abandonment scenarios and argues for a nuanced and anticipatory approach to the Treaty’s evolving dynamics. It underscores the variety of pending cases, the potential resurgence of State contracts, and the shift to contract-based arbitration influenced by ECT decisions. Given the impasse over the ECT’s modernization and the paradoxical nature of the ongoing energy transition, the ECT will continue to shape international investment law and international energy governance for the foreseeable future.

Marine renewable energy technologies on the high seas: challenges and opportunities to strengthen international environmental and renewable energy governance

Marine areas beyond national jurisdiction (ABNJ) offer an extensive area of about half of the Earth’s surface with an unparalleled potential for the use of marine renewable energy (MRE) technologies to provide energy security and competitiveness to States and in the fight against climate change. However, the expansion of MRE technologies into ABNJ as well as the environmental impacts associated with their development can entail risks and threats to security and biodiversity. This paper focuses on highlighting key regulatory and governing challenges associated with the deployment of MRE technologies in ABNJ as well as an initial exploration of regulatory alternatives and forms of governance that could provide an effective way to enhance the sustainable and secure development of the MRE industry in ABNJ.

Canada, the EU and energy security: a historical perspective

ABSTRACT Canada’s energy relations with the EC/EU have historically been driven by hopes for complementary trade and like-minded international positions, especially once international energy governance took on urgency in the 1970s. Since the early 2000s these two objectives have become less compatible as they pit transatlantic energy trade against the global climate change agenda. Not only does Ottawa have to reconcile hydrocarbon energy production and pledges to net zero carbon emissions, but it also has to balance short and long-term time horizons as the world embarks on its decarbonizing journey. Current Canadian plans for LNG and hydrogen facilities in the eastern part of the country illustrate the difficulty of navigating between immediate responses to a crisis – providing LNG to Europe to make up for deliveries from Russia – and longer-term plans to become an exporter of cleaner energy such as hydrogen to foster the next energy transition and help address climate change. Leaning on historical institutionalism and constructivism, the following analysis will show that Canada’s present and future energy relations with the EU are best understood as the outcome of decades of transatlantic energy diplomacy, institutionalized understandings of energy security and global frameworks which link energy and climate matters.

The regulatory framework of the hydrogen market in Mexico: A look at energy governance

The global context suggests need to move towards decarbonization as part of international climate change commitments promoting clean energy and social welfare actions. The hydrogen market is a global trend because it responds to energy needs and to be feasible requires effective regulatory and policy frameworks. Mexico has a presence in the hydrogen market, but it is still limited and presents challenges in energy governance. The objective of this study was to analyze the importance of the legality and legitimacy of the current conditions of the hydrogen market in Mexico. A systematic search of the literature was conducted through scientific platforms and various federal laws and policies associated with the hydrogen market were reviewed. The main findings suggest that Mexican regulations present commercial, ecological, human, economic, and technological challenges, that may run counter to international agreements and challenge energy governance by discouraging the hydrogen market and curbing expected decarbonization.

THE BRI AND ITS IMPLICATIONS FOR CHINA’S ENERGY SECURITY: THE FOUR AS MODEL PERSPECTIVE

The ‘Belt and Road Initiative’ (BRI) proposal provides an opportunity to address the challenges of energy security. This paper aims to explore the relationship between China’s energy policies and the BRI, especially in energy security, by highlighting the energy status in China and its top energy priorities. In this study, the analytical framework presented is based on the model of “four As.” The results indicated that BRI can improve China’s energy security in all four areas of availability, accessibility, affordability, and acceptability. By deepening energy cooperation with BRI countries, the import transportation channels of energy in China can be further diversified, its room for maneuver in the international energy market will increase, along with its voice in international energy negotiations and global energy governance. The initiative will enable member states to collaborate on energy supply and security issues broadly and strategically. In addition, it can improve energy development efficiency and speed up the circulation of investment funds. Further, BRI can increase energy technology exchanges and cooperation with major energy-consuming countries such as Japan and Singapore. Contrary to merely geopolitical analysis, China’s BRI Energy Sustainable Project should be observed in a broader context in terms of sustainable development and economic objectives. Under the framework of the BRI strategy, the future development path of China’s energy security strategy may open the way for pluralistic economic cooperation in the field of energy.

From a liberal to a strategic actor: the evolution of the EU’s approach to international energy governance

ABSTRACT Most scholars have described the European Union (EU) as a liberal actor in its approach to international climate and energy governance. This paper argues that the EU has shifted to a strategic approach, including the use of legislation and the adoption of negotiating positions that promote a political agenda. This is illustrated through an analysis of the EU’s evolving stance on multilateral energy governance and its handling of the Nord Stream 2 project. The EU began to shift towards a strategic stance already in the 2000s, in the context of the Energy Charter Treaty negotiations and the growing securitization of European energy debates. Following the polycrisis of the mid-2010s, the EU adopted a full-fledged strategic stance on external energy policy. Geopolitical crises and great power competition, together with intra-EU divisions and an increased focus on the climate agenda, have catalyzed the EU’s shift to a strategic approach.

A place in the Sun? IRENA\u2019s position in the global energy governance landscape

The International Renewable Energy Agency (IRENA), created in 2009, is the only intergovernmental organization dedicated to renewable energy. Drawing on several new datasets, this article explores IRENA in the context of three other major international energy organizations: the International Atomic Energy Agency, the International Energy Agency and the Organization of Petroleum Exporting Countries. Through this analysis, several empirical approaches to comparing international energy organizations are tried out. Direct comparison between IRENA other international energy organizations is found to be problematic as each organization is different and comparisons inevitably encounter apples and oranges type issues. The study finds that IRENA’s niche in international renewable energy governance is not yet fully carved out, but that the organization’s mandate and institutional structure, as well as recent international developments, indicate that it may grow rapidly in importance.

IRENA as a glocal actor: pathways towards energy governmentality

For decades renewable energy has remained a “blind spot” within the sphere of international energy governance. The existing institutional network is highly fragmented, resulting in a myriad of international organizations, which all claim to deal with energy issues, yet do not focus on renewables on a global scale. Since 2009, IRENA, the International Renewable Energy Agency, seeks to fill up this vacuum, thereby creating a new (and maybe more Southern-led) political arena for governing renewable energy issues. This article focuses on IRENA’s role as a changemaker in the sphere of global energy governance by investigating IRENA’s governance practices and contributions to knowledge production.

The new International Energy Charter: Instrumental or incremental progress in governance?

The International Energy Charter, signed by 64 states in May 2015, is analysed here against the structure of the existing formal institutions of international energy governance as outlined in the literature. In terms of actors, the Charter has a Europe/Eurasia centred nucleus of signatory states accompanied by the United States, China and some further ‘regional ambassador countries’ in Africa, Asia and Latin America. However, references to non-state actors are scant. In terms of the dimensions of energy policy, the Charter is relatively comprehensive, pertaining to all main sources of energy, addressing the modernisation of infrastructure and technology; stressing non-discriminatory ownership and taxation of resources, likewise facilitation of energy trade and investment; while remaining a non-binding political framework retaining sovereignty over resources; and omitting climate change issues from its references to market-based measures in environmental protection. The Charter remains instrumental to protect the market interests of large energy consumers and represents at best incremental progress vis-à-vis linking the interests of producers, transit states and consumer states. However, it offers few building blocks for a more precise roadmap or eventual Treaty.

International Energy Governance: Weaknesses of Multilateralism

The article attempts to highlight major institutional causes for weaknesses of multilateralism in energy relations between States. In particular, the view defended here focuses on the concept of logic of appropriateness, which helps to conceptualize the level of acceptance of norms and practices. Four various angles of institutions of energy relations are then analyzed: political vs economic angles and rational vs value angles. On these grounds, the case study about the Energy Charter process is then analyzed. In conclusion, the article argues that the Energy Charter process is an explicit attempt to create an international governance, although the issues of acceptance (conflict of appropriateness) is an important barrier to the multilateralism in energy.

The Architecture of International Energy Governance

The study of international energy governance is in its youth. This fact may seem somewhat paradoxical. Many international energy institutions, such as the International Atomic Energy Agency (IAEA) and the Organization of Petroleum Exporting Countries (OPEC), have existed for fifty years or more. Energy has long been a major driver of global crises and national politics. The memory of the Arab oil embargo of 1973-1974 casts a long shadow over global energy debates, and American politics, to take but one example, continually return to the question of the appropriate balance between environmental protection and natural resource extraction. Yet despite energy's centrality to global and national politics, international energy governance--as distinct from national energy policies and international energy politics--has resisted the multilateral governance trend of the past several decades. There is no global World Energy Organization (the International Energy Agency (IEA) is an OECD agency and as such is not open for accession to most nations), and many of the major multilateral legal institutions such as the World Trade Organization (WTO) deal with energy only incidentally. Perhaps for this reason, it is only with surging demand for energy and the problems such demand creates for traditional areas of international cooperation, including trade and climate change, that energy governance has itself become an object of study again. In my remarks, I want to address three questions: Why is international energy governance so fragmented? Why is that fragmentation a problem? And what do we do about it? WHY IS INTERNATIONAL ENERGY GOVERNANCE SO FRAGMENTED? An alphabet soup of international agreements and organizations deals in some way or another with international energy: the WTO, the United Nations Framework Convention on Climate Change (UNFCCC), the Energy Charter Treaty (ECT), OPEC, the Gas Exporting Countries Forum (GECF), the IAEA, the International Energy Program (IEP) Agreement and IEA, and the International Renewable Energy Agency (IRENA), to name but a few. This list includes only intergovernmental organizations and neglects regional institutions such as the European Union or the North America Free Trade Agreement that influence international energy cooperation. The fragmentation in energy governance arises in large part because of path dependence. At no time did negotiators ever sit down and think about what an ideal international energy institution would look like. Instead, institutions were created to deal with issues and crises as they arose. Energy institutions thus tend to have mandates and powers shaped, not by considerations of desirable energy governance, but by historically contingent governance problems. The development of institutions dealing with oil illustrates the role of contingency. In the early 20th century, the most important governmental institution dealing with oil was the Texas Railroad Commission, which was able to influence global oil prices by regulating production levels in Texas. (1) In part to combat the influence on prices of U.S. authorities and multinational oil companies (the so-called Seven Sisters), oil-exporting states formed OPEC with the goal of renegotiating concession agreements with the multinational oil companies. (2) OPEC was wildly successful in this goal, and by the 1970s OPEC (and in particular Saudi Arabia) had emerged as the key swing producer of oil, capable of influencing global prices. Arab members of OPEC deployed this ability during the Arab oil embargo of 1973-1974. That crisis prompted oil-consuming nations to sign the IEP Agreement, which created the IEA and aimed to coordinate emergency response measures in the event of an oil price shock. As the development of oil institutions illustrates, the fragmentation of international energy governance is a result of the fact that many energy institutions have been created to respond to specific contingent governance problems, rather than long-term governance challenges. …

International Energy Governance: The Role of the Energy Charter

DIFFERENCE OF ENERGY FROM OTHER GOODS Energy is different from manufactured commodities with which the WTO is used to dealing. In case of hydrocarbons we deal with finite non-renewable resources vital for our life that are distributed highly unevenly throughout the world. These resources are under sovereign control of a relatively small number of resource-owning countries. It is true that due to new discoveries in the Arctic and Brazil, and the development of new technologies for energy exploration and development, more countries are now involved in exploitation and extraction of energy. However, unequal distribution of hydrocarbons prevails, making international regulation of energy particularly challenging. The distinctive features of energy lead to the question of whether energy trade can be effectively regulated by a general international legal framework or whether a specialized framework is needed. WTO DESIGN AND ENERGY TRADE The WTO rules that govern international trade are fully applicable to trade in energy and energy products. But some might argue that these rules were not specifically designed to tackle energy issues. The traditional focus of GATT has been market access of domestic manufactured products abroad rather than access to foreign supplies. The multilateral trade rules have therefore been designed to address mainly import barriers related to market access rather than export barriers. But import restrictions are not particularly problematic in the energy sector--on the contrary, states have been more concerned with securing access to energy supplies at affordable prices. In energy, trade restrictions are more pertinent to export barriers. WTO rules do not adequately address the issues of export restrictions and investment protection, commonly regarded as the most crucial challenges in oil and gas. Manufactured products could normally be produced without limitation in many countries, due account being made to the theory of comparative advantage. Such goods do not encounter natural endowment constraints as energy resources do. Hydrocarbons are finite resources that are unequally distributed around the world. Resource-owning countries want to exploit their natural wealth for the benefit of their populations and national economies. When exporting, these countries strive to derive maximum rent for depletion of finite resources. Social policy objectives play an important role in shaping their energy policies. These domestic policy considerations have aroused controversies in the WTO (for instance, the energy dual pricing has been perceived (unconvincingly) by some WTO members to be inconsistent with WTO rules). In addition, when energy resources are exported, producing countries want to be sure they receive maximum rent from development and exploration of energy resources. Export taxes are a common means of revenue generation for these countries. The WTO rules do not address to the full extent the issues of export restrictions, and export duties remain largely unbound. Also, WTO rules do not address issues of ownership of natural resources or access to energy supply. However, it is not enough to address traditional cross-border export/import barriers in order to liberalize energy trade. The most significant challenges related to dealing with energy trade stem from the fact that a significant part of international energy trade takes place through fixed infrastructure, built specifically for the purpose of carrying hydrocarbons or electricity. CHALLENGES FOR EXISTING MULTILATERAL FRAMEWORK: FIXED INFRASTRUCTURE AND TRANSIT The energy sector is highly capital-intensive--significant costs are needed to find, produce, and transport energy. Trade in electricity and gas has mainly been regional due to the particular transportation characteristics of these products. Transportation of natural gas, for example, takes place mainly through pipelines, although the share of LNG trade has been increasing steadily. …

An Introduction: Confronting Complexity

In March 2012, a record number of international lawyers assembled in Washington, DC for the 106th Annual Meeting of the American Society of Law. We had the privilege of co-chairing the Meeting and chose as our theme, Confronting Complexity. We felt that this theme reflected well the current challenges and opportunities presented by rapidly evolving technologies, increasing global interconnectedness, rising population, and deepening understanding of science and the environment. New international actors; changes in social, economic, and political dynamics; a multipolar power structure; and novel security threats only add to the complexity we face. Amid this confusion, international law can be a source of order and clarity. It can provide frameworks to resolve disputes peacefully, regulate relations between different actors, and clarify rights and obligations. It can foster technological development and facilitate exchanges of knowledge and goods. It is no surprise that managing global financial crises, protecting global commons, responding to conflicts spilling across borders, and guaranteeing public health and safety have all been added to international law's purview. In our crowded, connected world, civil uprisings, financial collapses, natural and human-caused disasters are no longer domestic crises: they are global crises. While international law has at times been quite creative in response to these problems, whether it is fully up to the task remains an open question. law can actually exacerbate complexity with conflicting or unclear rules, uncertain enforcement, and overlapping and competing jurisdiction. law must demonstrate the flexibility to embrace new issues, to look beyond the state, and to integrate new players (who may not follow its rules). Transparency, accountability, and participation must be guaranteed in new private regulatory regimes, shorn from state control. instruments and processes of international law must provide means for scientific evidence to be sifted, understood, and translated into law. And yet, even as it adapts, international law must also remain a force for stability and predictability. As we looked at various issues that seemed to be defining the moment in international law, whether the Arab Spring, the global financial crisis, disasters, or drone warfare, we kept coming back to this theme of complexity. These issues seemed staggeringly complex, not just for the range of laws and regimes they implicate, but for the masses of information that need to be processed to figure out how to deal with them. More and more, it seemed that the real challenge was understanding how to grasp and manage this increasing complexity. questions we wanted to address at the Annual Meeting were not only how international law might help do this, but also whether international law is always the best tool to do so. We sought to explore when and how international law can best be mobilized and when and how it might either partner with or even cede the field to others. These questions were prominent in the panels, roundtables, and talks scheduled for the Annual Meeting. We sought to tackle the problem of complexity in a number of different ways. First, some sessions featured particularly complex problems, for example, roundtables or panels on International Humanitarian Law and New Technology, Cybersecurity, What Makes a State, International Energy Governance, An Emerging Law of Migration, Financial Crisis in the Eurozone, The Emergence of a Human Right to Water and Sanitation, The Emerging System of Arbitration, Chevron/ Ecuador Dispute: A Paradigm of Complexity, and Transitional Justice and the Arab Spring. Second, other sessions focused on attempts to manage or cut through the complexity, including panels on Indicators in Law, Fact-Finding in Interstate Disputes, Courts, Commissions, and the Complexity of Claims Against States, and Global Environmental Protection and Transnational Conservation Contracts. …

Modernizing the Energy Charter Process? The Energy Charter Conference Road Map and the Russian Draft Convention on Energy Security

On 24 November 2010, the Energy Charter Conference adopted a Map for the Modernisation of the Energy Charter Process (Road Map) as a strategic document to respond to the important changes in global energy relations since the 1990’s and ensure the relevance and authority of the Energy Charter Treaty (ECT) in current circumstances and for the future. The Road Map expressly recognises the contribution of the Conceptual Approach to the New Legal Framework for Energy Cooperation presented in April 2009 by the President of the Russian Federation (Russia) Dmitry Medvedev, subsequently embodied in a Draft Convention on Energy Security (Draft Convention) issued in September 2010. It also makes specific reference to energy security as one of the goals of multilateral energy cooperation, a longstanding Russian concern in the Energy Charter context. How does the Road Map respond to Russia’s concerns as set out in the Draft Convention? Is Russia, having officially stated its intention on 20 August 2009 not to become a Contracting Party to the ECT as it stands, and instead proposed the Draft Convention, back in the Energy Charter process? This article assesses future developments in international energy governance in light of the Road Map and Draft Convention. It concludes that, while the Draft Convention stands in potential contradiction to the multilateral spirit of the ECT, the Road Map helps integrating Russian concerns into the Energy Charter process.