The Legal Status of Oil and Gas Exploitation in the Arctic: The Case of Norway

70 Pages Posted: 2 Aug 2015 Last revised: 19 May 2016

See all articles by Beate Sjåfjell

Beate Sjåfjell

University of Oslo - Faculty of Law

Anita Margrethe Halvorssen

University of Denver

Date Written: January 29, 2016

Abstract

The rates of warming in the Arctic are double the average increase on the rest of the planet. The Arctic is especially vulnerable and climate change is already affecting this region. The melting of polar ice and land ice due to climate change, especially in Greenland, also exacerbates climate change amounting to a positive feedback loop. Oil and gas exploitation in the Arctic has additional environmental impacts affecting the marine environment and the atmosphere in the form of pollution in the oceans and a haze in the air space in the lower atmosphere affecting Arctic populations. The Arctic also has an indigenous population of 400,000, many of whom depend on the land and marine resources to uphold their subsistence livelihoods. The environmental and social impacts for these indigenous groups should be integrated into any energy development project in the Arctic.

According to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC), fossil fuel production will not be able to continue as it is now if we are to stay below the two-degree Celsius increase in temperature relative to pre-industrial levels. A fundamental shift from fossil fuels to renewables is necessary, with the majority of known fossil fuel reserves needing to remain in the ground.

With this backdrop, the article’s main question is whether new and large-scale oil and gas exploitation in the Arctic is lawful under international law and domestic law. The article focuses especially on the case of Norway as one of the Arctic states. Starting on the level of international law, the article argues that oil and gas exploitation in the Arctic on a large scale, although not expressly prohibited, would defeat the object and purpose of the UN Framework Convention on Climate Change (UNFCCC), general legal principles relating to climate change, UN Convention on the Law of the Sea (UNCLOS), the Biodiversity Convention and international human rights agreements and declarations, including the UN Declaration on the Rights of Indigenous Peoples. It also breaches the spirit of the EU Treaties’ goal of sustainable development. On the national level, Norway’s constitutional provision on environmental rights was amended in May 2014. With this amended provision the people of Norway on their own behalf and for future generations have a stronger possibility of enforcing their right to a liveable environment. At a minimum, a right to a liveable environment includes safe-guarding critical environmental processes that regulate the stability of the life-support systems on Earth. The planetary boundaries framework defines nine parameters of the earth system to indicate a safe operating space for humanity, including climate. The June 2015 victories in the Dutch Urgenda case and the U.S. Our Children’s Trust case are inspiring indications of an emerging international trend of using the courts as the guardians of this aspect of the very basis of our existence.

Assessing the question of new and large-scale oil and gas exploitation in the Arctic in light of Norway’s international law obligations, its EU law obligations (through the EEA agreement) and notably the enhanced provision of its Constitution, leads to the conclusion that exploiting oil and gas on a large scale in the Arctic is unlawful. This is based on the knowledge that the majority of known fossil fuel reserves need to remain in the ground if we are to have any chance of staying below the two-degree limit. Logical and obvious consequences are that we must refrain from exploiting fossil fuels with the most polluting exploitation methods and in the most vulnerable areas, where exploitation will have the worst environmental and human rights impacts and in areas where exploitation contributes most to climate change. Continuing with the Norwegian fossil fuel industry on a large scale will make it impossible for Norway to fulfil its obligation to ensure a liveable environment. Not exploiting oil and gas in the Arctic is an obvious first place to draw the line (along with unconventional methods of exploitation, such as the tar sands in Canada). Norway therefore, as a matter of law, cannot lawfully award any additional licenses for fossil fuel exploitation in the area of the Arctic where it has jurisdiction. Norway is also obligated to prevent Statoil, where Norway is the majority shareholder, from applying for or using licenses in other areas of the Arctic.

On a general note, the authors argue that rather than allowing a new fossil fuel boom, the nations surrounding the Arctic must be incentivised to move to renewable energy through more effective legal regulation of environmental protection and the promotion of human rights. The authors briefly discuss the limitations of the Arctic Council’s role in achieving an environmentally, socially and economically sustainable development of the Arctic, with the implications this has for the responsibility of the Arctic states. The article concludes with a forward-looking perspective on the potential that lies in achieving the transition towards sustainable low-carbon societies.

Keywords: Oil, gas, energy, public international law, EU law, EEA law, Constitutional law, Norwegian law, 23rd licensing round, Arctic, climate, ice-edge, environment, human rights, Sami rights, indigenous peoples, UN Framework Convention on Climate Change, Urgenda case, Our Children's Trust case, Alta case

Suggested Citation

Sjåfjell, Beate and Halvorssen, Anita Margrethe, The Legal Status of Oil and Gas Exploitation in the Arctic: The Case of Norway (January 29, 2016). University of Oslo Faculty of Law Research Paper No. 2015/17; OGEL 2 (2016), Special Issue, Tina Hunter (ed.); University of Oslo Faculty of Law Research Paper No. 2015/17; Nordic & European Company Law Working Paper No. 15-09. Available at SSRN: https://ssrn.com/abstract=2636542

Beate Sjåfjell (Contact Author)

University of Oslo - Faculty of Law ( email )

PO Box 6706 St Olavsplass
Oslo, 0130
Norway

HOME PAGE: http://www.jus.uio.no/ifp/english/people/aca/beatesj/

Anita Margrethe Halvorssen

University of Denver ( email )

2255 E. Evans Avenue
Denver, CO 80208
United States

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