Watching Government: A far offshore E&P framework

May 2, 2005
While Congress considers ways for coastal US states to extend their offshore authority from 3 to 200 miles,

While Congress considers ways for coastal US states to extend their offshore authority from 3 to 200 miles, Paul L. Kelly believes the oil and gas industry has unfinished business farther out.

With exploration and production moving farther from shore, it’s increasingly urgent for the US to ratify the international Law of the Sea treaty, the senior vice-president of Rowan Cos. Inc. said during a break at the National Ocean Industries Association annual meeting in Washington, DC.

Senate ratification is essential because it would establish an E&P framework for the industry beyond the 200-mile limit, according to Kelly. It’s also more than 10 years overdue, he added.

“From its beginning in 1970, when the Seabed Committee set out to prepare the Third United Nations Conference on the Law of the Sea, the process of negotiating the Law of the Sea Convention was painstaking,” Kelly said in remarks a few days later at the Global Offshore Drilling 2005 Conference in Houston.

Although consensus was reached on most of the convention’s major issues by 1982, its deep-sea mining section remained controversial. “But after a cooling off period, reasonable, practical and realistic solutions were found in an implementation agreement signed by all [countries] that participated in the negotiations, including the United States, in 1994,” Kelly said.

What US could gain

The Law of the Sea Convention also established the Continental Shelf Commission, through which countries may establish universally binding outer limits for their continental shelves. The US could gain more than 291,383 sq miles for mineral exploration and development by registering claims to extend the outer limits of its continental shelf where appropriate, according to Kelly.

There’s only one problem. The Senate still hasn’t ratified the treaty.

From 1994 until 2002, the treaty languished in the Foreign Relations Committee because its chairman, Jesse A. Helms (R-NC), refused even to hold hearings about it. His successor, Richard G. Lugar (R-Ind.), held two in October 2003, and the committee voted 19-0 to recommend full Senate approval of the treaty in February 2004. But Majority Leader Bill Frist ofTennessee hasn’t scheduled time to debate and vote on it.

Kelly concedes that other issues are more pressing politically. He’s also concerned that the US is missing a significant long-term opportunity that other countries are pursuing. Two US presidents, Bill Clinton and George W. Bush, endorsed it. The US Commission on Ocean Policy, which Bush established, recommends approval.

Questions raised

“We ran an intense, interagency process to be sure that it delivers what this country needs,” James L. Connaughton, chairman of the President’s Council on Environmental Quality, said during the NOIA meeting.

Environmental and sovereignty issues continue to be expressed, he indicated. “In the post-9/11 environment, there have been other questions raised about security and intelligence gathering,” Connaughton said.