US should ratify Law of the Sea treaty, Senate panel told

July 9, 2012
It's becoming increasingly urgent for the US to join the Law of the Sea treaty, witnesses from the American Petroleum Institute and other business organizations told the US Senate Foreign Relations Committee on June 28.

It's becoming increasingly urgent for the US to join the Law of the Sea treaty, witnesses from the American Petroleum Institute and other business organizations told the US Senate Foreign Relations Committee on June 28. "This treaty would give us an opportunity to develop more of our own Outer Continental Shelf, particularly in the Arctic where an estimated 25% of the world's remaining energy resources lie," API Pres. Jack N. Gerard said.

He explained that Canada, Russia, Norway, and other countries that already are active in the Arctic sit on the council of the International Seabed Authority, which the treaty established. "Some have already filed claims," Gerard said. "We are sitting on the sidelines and could wake up 30 years from now with less than what we deserve because we didn't come on board now."

US Chamber of Commerce Pres. Thomas J. Donohue noted, "This treaty promotes our sovereignty by codifying our rights, but it's not perfect. It will change, and we'd better be sitting at the table. The bottom line is simple: The benefits would accrue to this country if we are part of this, and we'd better move on this treaty."

National Association of Manufacturers Pres. Jay Timmons said US Senate ratification of the treaty would help US manufacturers by opening up more resources for development, and by providing access to new rare earth deposits to produce rare earth minerals used to make a wide range of goods including petroleum refining catalysts.

"If we don't ratify the treaty and businesses don't start mining more rare earths from the seabed floor, China could start to use all the rare earths it mines for its own industries," Timmons warned, adding, "That would be devastating."

Ready to respond

Committee leaders noted that this was the third hearing the committee has held on ratifying the treaty since 2003. Chairman John F. Kerry (D-Mass.) pledged to provide prompt and comprehensive responses to critics' questions this time to improve its chances. "The administration did not ask us to bring this up," he said. "Mr. Donohue did because it's so important." Donohue said that the US Chamber also would be ready to provide legal opinions in response to senators' questions.

Ranking Minority Member Richard G. Lugar (R-Ind.) said the treaty already forms the basis of global maritime law regardless of whether the US is a party. "International decisions related to resource exploitation, navigation rights, and other matters will be made in the context of the convention whether we join or not," he observed. "We will not even be able to participate in the treaty's amendment process, which is far more likely to impose new requirements on our Navy and ocean industries if the US is absent."

Critics have warned that ratifying the treaty might compromise US sovereignty, indirectly impose climate-change requirements under protocols that the US has not accepted, and cost the federal government mineral development royalties. Supporters responded that the treaty actually promotes sovereignty, does not add climate-change regulations because of its provision barring this unless a country has formally ratified such a protocol, and potentially would generate greater revenue and other economic benefits than any mineral royalty share it would require.

Gerard said the US would benefit since the treaty would extend the nation's control of the continental shelf from 200 to 600 miles. "Certainty is the key," he maintained. "Our industry goes through every kind of calculation because billions of dollars can be involved in projects over long periods. Unless we are certain which country controls an area, our companies won't go there."

Timmons said, "The world has changed from 40 years ago. Companies are global and don't want to make major investments without the certainty about risks that this treaty provides."

Donahue noted, "Even though we have a great Navy, it's smarter and cheaper to be on the inside. If we don't lay a claim on these extended areas, there are a lot of countries, particularly in the Arctic, that will."

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About the Author

Nick Snow

NICK SNOW covered oil and gas in Washington for more than 30 years. He worked in several capacities for The Oil Daily and was founding editor of Petroleum Finance Week before joining OGJ as its Washington correspondent in September 2005 and becoming its full-time Washington editor in October 2007. He retired from OGJ in January 2020.