Skip to comments.Oil Industry Says Joining 'Law of the Sea' Treaty Could Add to US Reserves
Posted on 03/29/2005 5:38:09 AM PST by lentulusgracchus
A U.N. treaty governing the oceans could clear the way for U.S. oil companies to tap deep oil and gas reserves offshore, which supporters say would bolster America's energy security.
But that access might be blocked, because conservatives opposed to the multinational treaty are fighting hard to keep a strong Senate majority from ratifying the pact.
When Secretary of State Condoleeza Rice called in January for prompt ratification of the treaty, she gave American oil companies their best hope yet to tap oil and gas reserves lying under thousands of feet of seawater.
In 2003, about 62 percent of the Gulf's oil production came from wells drilled in depths greater than 1,000 feet, according to the Minerals Management Service, up from 12 percent in 1993.
But oil executives say they won't venture into unchartered legal territory until the United States joins the U.N. convention ..... Knowing who owns the land and who will collect royalties are prerequisites ....
According to the convention, oil companies would be required to pay up to 7 percent in royalties to a newly created body called the International Seabed Authority.
Since its beginnings in the 1970s, the Law of the Sea convention has had a tumultuous relationship with the United States. President Reagan rejected it in 1982 over concerns regarding deep seabed mining. The Clinton administration renegotiated some of its mining provisions, but the convention came into force in 1994 without U.S. ratification.
Under the leadership of Sen. Richard Lugar, R-Ind., a fervent advocate, the Senate Committee on Foreign Relations unanimously approved its ratification last year, but it failed to move to the Senate floor for a vote after Sen. James Inhofe, R-Okla., called for more hearings to review sovereignty and security issues.
(Excerpt) Read more at rigzone.com ...
They have no idea or concern whether the 7% royalty is just a sucker's offer. Their economic models are so front-loaded by assumptions about the cost of money, any outyear surprises don't even show up in their risked analyses of net present value.
We won't be able to do that as we might disturb a sleeping fish. Forget it!
We won't be able to do that as we might disturb a sleeping fishy. Forget it!
Good, don't do it. The trade of isn't worth it.
That is perhaps one of the dumbest statements I have read in a long time.
What's stopping us from doing it now?
Whether it's a politician who is trying to be all things to all people, or a self-centered business who will deal with the devil for profits, or a mental deficient trying to promote "one world", dumb is dumb.
"But oil executives say they won't venture into unchartered legal territory until the United States joins the U.N. convention"
Rhetoric from those who would sell their own children, mothers and fathers to make a buck.
Like off the coast of Florida? or California? What have they been smoking?
It doesn't take a mental giant to foresee that, if this treaty becomes generally accepted international law (which it won't if the United States Navy says it isn't), the U.N. commissariat will then go on to claim title to the water column as well, and the power to police traffic on the ocean's surface. That will put them in the turnstile business and put them in a position to play water-empire (in the Mesopotamian sense) with all of humanity.
The U.S. should resist the encroachments and pretensions of would-be despotisms everywhere, including the one in the U.N. Building.
Too bad for the oil executives. Let the Russians and the French deal with it or let the sandmaggots drill it themselves.
We got ANWR to deal with and that's entirely in out own back yard.
Oil executives don't know what political risk factors to dial into their estimates of net present value -- waaaaaaahhh!
They can't estimate the risk of getting crossways with a U.N. agency that might get vindictive and decide to try to screw them somewhere else -- waaaaaaahhhh!!!
They want Mommy to tell them it's alright before they do anything -- waaaaaahhh!!
Businessmen and taking a real risk that they might have to answer for with their jobs -- what can I tell you?
We're talking about the Gulf of Mexico and offshore New England and Alaska. That's on the table right now.
The Gulf of Mexico acreage is mostly what they're talking about.
What we have here, as Strother Martin once said, is a bad case of RiNO's putting money over country.
Don't we take that oil anyway?
Concurring bump. Rhetoric now can mean trouble later.
Try that Law of the Seas Treaty (LOST) link our amigo posted above.
According to the traditional Law of the Sea, nobody controls the open ocean. Who gave the UN power over it? You don't own what you can't control or protect.
Does the UN have a navy that can enforce these laws? Are pirates about to defy the US navy and attack our oil rigs? I don't think so.
And by the way, who are these anonymous spokesmen for the "oil industry"? Does anyone still trust the media to accurately report the news using so-called anonymous sources who may not even exist?
We need to tell the UN to shove it.
A couple of them are named in the story, if you'll follow the link. Since I was posting an excerpt and didn't know about the 300-word limit, I had to bob it pretty sharply. The original story on RigZone is considerably more detailed.
I don't think there is a real consensus of the industry........what you are looking at is more a consensus in the suite, and a lot of what these guys are saying probably reflects things that were told them by their investment bankers and assorted financial analysts, centering on the quantification of the political risk.
FA's absolutely hate political risk.
You can bet Dick Cheney has had a lot to say about this issue.
Agreed. This has big backers in both parties. There is a lot of money to be made, and the 3rd world "gimme" tyrants and communists are quite enthusiastic at the prospect of tapping into our hard work and effort.
LOST should stay lost.
Our Sovereignty came at a very high price, we are still bleeding and dying to maintain it, a few wish to trade that sacrifice for a pat on the back from the UN?
Those few that do may not understand what it may cost them to proceed or to continue to support a truly underhanded shady UN lotto scam.
If the UN wants to win the lotto, let em buy a ticket like everyone else. In the meantime, the UN needs to get out of the US and the US needs to get out of the UN.
Now that you mention it.. they likely just made up oil executives supporting it.
It is ridiculous that this unelected body is making power grabs at the acquiescence[and urging] of the EU and at the expense of the US.
It is more disgusting that there are folks here who think its a great good thing.
The oil industry can go to hell. I think they are doing just fine right now. We don't need to sacfrifice our national sovreignty so that Exxon Mobil's stock can go up another 3 points.
Anonymous oil executives say all crude will be used up by June 6, 1982.
You mean the citizens of Florida are going to allow drilling? Or California? They only support drilling if it isn't in their backyard or in Alaska.
IMHO this qualifies as The Good Idea of the Week.
The people who need to hear about this right now are our senators. Lugar's all for it, and he has lots of push. Jim Inhofe of Oklahoma, a state where people are rumored to know something about oil and gas, is blocking it.
I'm afraid Texas's senators would be inclined to go along with anything Bush wants, just because he wants it -- and because his people totally control the Texas GOP.
Anent which, an obscure column in a recent number of the wretchedly liberal-turning Houston Chronicle (the editor is driving the paper to the left, and admitted it at a dinner in which he was quoted in his own paper) informs us that, after her strong rebuff by El Paso-area businessmen in her fund-raising campaign to test the waters concerning a run for the governorship of Texas against Bush protege' Rick Perry (whom Bush and Karl Rove are said to privately despise as "not the sharpest knife in the drawer"), U.S. Senator Kay Bailey Hutchison has suddenly turned up with a pair of important new Senate committee assignments overseeing NASA and other matters of interest to Texans.
IOW, there will be no Kay Bailey Hutchison challenge for the Texas governorship this year. Perry is to be protected, and all the Bushbots and bag-bearing businessmen are lined up to defend him. The El Paso millionaires basically and publicly told a very shocked Kay, they have too much money and time invested in Perry, and they want their money's worth!
So she's being paid off to go away, basically, after getting the rebuff. That's the way I read it.
She would be a very tough vote to get, in such an environment, against anything that Bush has put the word out that he wants. Hutchison's junior colleague is even more supine. I'd cite a recent example, but he isn't worth the memory expenditure.
This treaty should never be approved, any time, for any reason. International territorial conventions and long accepted laws of the sea have worked fine.
Besides, until we reign in our judiciary and get some more conservatives in the Senate, there is no international treaty that congress should approve; inlcuding extensions to NAFTA that Bush is going to propose. They should all be DOA.
While any generalizations about the industry's posture re the LOST can be sliced and diced until essentially rebutted, it doesn't seem probable that they would view the LOST as a firewall against unilateral contract adjustments and other extortion by this or that towelhead, Armani suit cum Gulfstream vel non. Consider the recent,most excellent adventures of certain US majors in certain of the "stans". In such lawless places, after the exporation and development work has been done and the project stands ready to be put on stream, the old contract is shredded and a new deal presented to the oil company. In such circumstances the writ of the UN is worth what it is always worth, nothing. Thus, IMHO, the administration is pushing LOST as a makeweight argument for the industry in negotiating with its lenders, OPIC and such.
It would be interesting to know which of the GOM operators who are self-financing from operating cash flows are on the LOST bandwagon, if any.
If the mainspring that is pushing this new cry for LOST is financing of some of the projects, it might be more worthwhile for USG to do the financing themselves, to shut the businessmen up about LOST.