Introductory Remarks by Lakshman Guruswamy

Article excerpt

Writers spanning two centuries, from Herbert Spenser in the 18th century (1) to Leslie White in the 20th century, (2) have asserted that the ability to harness energy is the basis of both social progress and development disparities among societies. Harnessing energy refers to the ability of humans to convert or transform exogenous energy (meaning energy outside themselves) to perform jobs for us. A primary reason for the greater economic progress of some countries over others lies in their access to cheap energy. (3) Over the past two centuries efficiencies in the way in which coal, gas, and oil were converted into useful energy (by combustion processes or producing electricity) has accounted for the economic growth of western civilization. (4)

Juxtaposed to the importance of energy, international energy governance (IEG) only functions in a random and truncated fashion, and has not been conceptualized in any comprehensive manner. Strikingly, the energy cycle of hydrocarbons or fossil fuels (5) outlined below, on which the world relies for over 80% of its energy, demonstrates the disjointed patchwork of energy governance.

MINING AND PRODUCTION

IEG can empower or encourage mining and production through financial or other incentives for mining and extraction of fossil fuels, or restricting such mining and production, or resolving practical difficulties as was the case with the Agreement on the Resolution of Practical Problems with Respect to Deep Seabed Mining Areas, concluded at New York on August 14, 1987. (6) Similarly, the International Labour Organization has enacted a number of treaties governing the safety of mines for extraction, including oil, gas, and other minerals, (7) or prohibiting child labor. (8) OPEC lays down quotas restricting production of oil. (9) The United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol attempt to control emissions of CO2 that could result in restrictions on the mining and production of fossil fuels. The OECD Agreement on an International Program (IEP) of 1974, as amended, was initially dedicated to respond to physical disruptions in the supply of oil, as well as to serve as an information source on statistics about the international oil market and other energy sectors.

TRANSPORT, DISTRIBUTION, AND STORAGE

Fossil fuels need to be transported, stored, and distributed. Billions of gallons of oil are transported across the globe by ship, causing oil pollution of the oceans because of operational reasons or tanker accidents. Vessel pollution is regulated by a number of international instruments (10) that indirectly act as instruments of energy governance. Pipelines also transport or convey oil both nationally and internationally, and browsers carry petroleum both nationally and internationally by road and rail. The Energy Charter Treaty (ECT) of 1994, and the Protocol on Energy Efficiency and Related Environmental Aspects (PEEREA) of 1998 were signed by 52 countries that include Russia, the EU, and eastern and western Europe. The ECT seeks to ensure reliable cross-border energy transit flows through pipelines, grids, and other means of transportation, and the resolution of disputes between participating countries.

There are health and safety ramifications to these activities, and they are governed internationally as well as nationally by a variety of treaties and national laws. (11)

TRADE AND COMMERCE

A number of international treaties deal with trade and commerce in energy. The most important is the World Trade Organization, which deals with the global rules of free trade between nations. WTO agreements--negotiated, signed, and ratified by a large majority of the world's trading nations--provide the legal ground rules for international commerce, including fossil fuels. The WTO also has a compulsory system of dispute resolution. Other regional treaties include the ECT, which aims to protect foreign investments; promote nondiscriminatory conditions for trade in energy materials, products, and energy-related equipment based on WTO rules; and provisions the promotion of energy efficiency. …