Article from: OGEL 2 (2004), in Editorial
There are two special themes in OGEL 2 (2004).
First, OGEL publishes an extensive special feature on renewable energy edited by Dr. Alexandra Wawryk, Lecturer at the Law School of the University of Adelaide in Australia. Dr. Wawryk recently obtained the prestigious Willoughby Prize for an excellent article on environmental standards in the international oil and gas industry in the IBA's Journal of Energy & Natural Resources Law (2002, Vol 20, No 4). This special OGEL feature shows Dr Wawryk's great dedication and ability to deliver on the related issue of renewable energy.
This section on renewable energy has been prompted by the forthcoming Bonn Conference (www.renewables2004.de) and my own involvement, as adviser and co-author of the primarily IUCN-sponsored input paper on international arrangements.
Renewable energy is a current policy priority in many countries, in particular in the EU. It is related to climate change policies (see the special OGEL feature edited by Christian Egenhofer in OGEL 1 (2004)), but also to the massive and ever-increasing dependence of the world's major economies (US, EU, Japan, China and India) on oil and gas supplies from the politically-as-ever volatile and explosive Middle East. We do not know if oil and gas resources are on their way to depletion or not (the OGEL context chapter continues the discussion), but we certainly know that getting most of the oil from the Middle East is a high-risk factor, both for the security of supply and the impact of the oil price on the global economy.
Promoting renewable energy (conventional: hydropower; new: in particular wind- and sun-based) seems the easy way out, as the success of building up renewable energy to the target of 20 per cent of total demand promises both less CO-2 emissions and negative climate effects, increasingly reduced dependence on petroleum and in particular imports from the Middle East, but also a host of additional advantages - technological progress, environmental quality, creation of new jobs and less dependence on critical, and vulnerable, energy infrastructure facilities.
Such promises, however, may not be so easy to fulfil: Gavin Longmuir (OGEL 1 (2004)) suggests that the net energy balance (or 'energy multiplier effect') of renewables is much less than petroleum: some figures suggests that each unit of energy invested may only produce two units of energy produced (under favourable circumstances) while oil and gas may have an 'energy amplification' effect of 20 times and more. But there should currently be no doubt that under the impact of high oil prices, high demand, an inflexible supply-demand relationship, governments will continue to encourage the development of renewable (and quite likely also nuclear) energy: in fact they have at present little choice of doing anything else apart from promoting renewable energy together with greater energy efficiency.
Renewable energy raises many questions: the need for tax and other incentives to stimulate both supply and demand; stability of investment conditions (I have just completed work on the first Energy Charter Treaty arbitration which centred on incentives and stability of contract for an environment-friendly and energy-efficient co-generation plan in Eastern Europe); competition and non-discriminatory free trade -which can be obstructed by the use of renewable energy incentive schemes open only to national or regional operators. Renewable energy is therefore something that is likely to keep us occupied - next to watching the seemingly uncontrollable events of the oil markets - for quite a while.
Corporate and 'Governmental' Governance
OGEL 2 (2004) also provides an extensive section on governance issues. We have the recent report on internal Shell corporate governance problems, but also several studies on the transparency of oil income in developing/transition economies prepared with much help from the Soros Foundation. This section thus deals both with problems of corporate and of 'governmental' governance. While there is a risk that corporate governance rules go far and it becomes a self-propelled business of its own, adding unnecessary transaction costs, there seems to be little doubt that increased transparency can only add benefits to both large public companies and governments controlling large petroleum revenues, with risks - or even high probabilities - that such mineral rent gets 'captured' by those in temporary control of the state.
The OGEL dispute management section has grown substantially over the last year. We will soon launch a new service, modelled on the successful OGEL format, methods and operating routines, on transnational dispute management. Check our emerging website: transnational-dispute-management.com, for information. This new 'TDM' service will include previous, current and future content from the OGEL section on 'disputes', but it is intended to develop a separate identity over time, with a special associate editors' team and focus on the management of transnational disputes be they commercial, inter-state or state-investor in the global economy.
We will as in OGEL provide a legal, a commercial and a specific dispute management perspective contributing expertise from various disciplines (law, business, economics, international relations, psychology) and on various types of managing disputes - negotiation, arbitration/litigation and mediation. As in OGEL, the focus will be on providing practically relevant, but intellectually enlightening, commentary rather than mere 'facts' - insight and analysis of recent developments and current practice. We have not developed yet a concise strategy on the interrelationship between OGEL and TDM, but we are working towards OGEL subscribers having access to TDM at a substantially preferential discount.
Editor in Chief
Thomas W Wälde
Professor & Jean-Monnet Chair
and Principal, Thomas Wälde & Associates