A Comparative Legal Approach for the Risks of Offshore Methane Hydrates: Existing Laws and Conventions
138 Pages Posted: 16 Jul 2014 Last revised: 29 Oct 2015
Date Written: July 14, 2014
The study provides a review of the existing laws and conventions that might be applied to the development of offshore methane hydrates. Offshore methane hydrates are an exciting emerging new energy resource; one with great potential to provide vast energy supplies but also one with substantially novel risks and hazards to the environment, marine flora and fauna, and to adjacent human communities. Some of those new risks include cataclysmic levels of greenhouse gas emissions, subsea landslides, and tsunamis. As such, it is important to take survey of the existing laws and conventions that could be applied to such risks, examine them for their ability to efficiently govern those risks, and to take account of where risks from offshore methane hydrates are insufficiently addressed by current laws and conventions. This study undertakes that task; to compare and contrast existing rules against recommended legal policies and to offer potential solutions to existing shortfalls.
The first section of the study provides an introduction and review of the potential impacts from the development of offshore methane hydrates. It will discuss the potential economic and public welfare improvements to be gained from development of the offshore methane hydrates. It will also provide an exposition of the risks posed by that same development.
The second section of the study will demonstrate the application of law and economics theory to the choice of risk governance mechanisms. Within the rules of civil liability, a rule of strict liability is found to better fit the facts and circumstances of offshore methane hydrates and would thus be more robust in the efficient governance of their risks compared against a rule of negligence. Arguments for the application of both public and private regulations will be provided. The resultant risk governance strategy is a mechanism of complementary implementation of strict liability, public regulations, and private regulations.
The third section provides a review of major international laws and conventions with nexus to the development of offshore methane hydrates as well as the federal laws of the United States and the legal instruments of the European Union. Because so many laws or conventions might have some minimal application to the governance of offshore methane hydrates, only those with the greatest a priori expected nexus are reviewed. For each law or convention, two levels of analysis are provided, an examination of the nexus and potential applicability of the law and then an examination of the law’s risk governance mechanisms. Thus, each law is examined for both applicability and for alignment with the recommended three-prong risk governance strategy.
Conclusions are provided on the state of the existing laws and convention to address the potential risks and harms from the development of offshore methane hydrates. Potential improvements to the existing laws and conventions and efficient means to that end are discussed.
Finally, a perspective is taken of the whole study, are the world’s laws and conventions ready for the development of offshore methane hydrates? No, not quite yet, but they could readily be amended and extended to better provide for the efficient protection of the environment, of marine biota, and of the impacted human communities.
Keywords: law and economics, tort law, civil liability, regulations, private regulations, methane hydrates, gas hydrates, energy law, accident law, Shavell, Posner, Faure, offshore, energy, natural gas, negligence, strict liability
JEL Classification: K00, K13, K2, K32, K33, N7, O13, O32, O33, Q20, Q28, Q32, Q38, Q42
Suggested Citation: Suggested Citation