Editorial OGEL Special Issue on "Offshore Energy Investments and Activities"
Article from: OGEL 5 (2022), in Editorial
I. Introduction to the Special Issue
(Updated 10/03/2023) Over the last decades, the energy world has been increasingly going offshore. Ocean spaces cover more than 70% of the globe and have vast resources to provide energy solutions for humankind. Both "old" and "new" technology and energy forms and carriers are found.
O ffshore oil and gas operations have been up and running for many decades with significant investment, exploration and production activities taking place in the Gulf of Mexico, the North Sea, the Middle East, Brazil, Western Africa, and elsewhere. More than a quarter of the world's oil and gas supply is produced offshore. Integrated natural gas projects, exploration and production, liquefaction, liquefied natural gas transportation and regasification are often done fully offshore. Increasing attention is focusing on offshore hydrocarbon decommissioning, its electrification, and even calls for its phase-out.
The energy transition has put offshore energy on the table with paramount importance. Offshore production of renewable energy, including wind and solar energy is taking place in territorial waters and exclusive economic zones of coastal states, as well as in areas beyond national jurisdiction. Renewable energy developments offshore are expected to increase.
At the same time, increased controversy over permitting onshore energy infrastructure such as pipelines and power-lines has sharpened the focus on offshore sources of energy. Developers often hope that if hydrocarbon and electrical energy can be produced offshore, it will be easier to transport or export to markets in need. The same trend can be said to start to take place regarding novel energy forms, such as hydrogen.
Energy demand is still increasing, albeit slower than anticipated before COVID and the Russian invasion of Ukraine, including hydrocarbons use which some expect to peak in 2030 and then start its decline. Nonetheless, offshore energy expansion is expected. Such an expansion and "press for space", create pressure in ocean spaces, lead to tensions between sea-space users and the need for regulatory planning, coordination and coherence.
The contributions to this Special Issue on "Offshore Energy Investments and Activities" illustrate well the complexities of regulating offshore energy activities from a truly global perspective, including contributions from all continents: Africa, the Americas, Asia, Australia and Europe.
II. Featured Articles
2.1 Offshore Renewable Trends: Offshore Wind as the Current Frontier
This Special Issue has featured offshore wind regulation, globally and nationally, with prominence. Offshore wind activity is no longer a North Sea phenomenon. Projects become global, bigger, more complex, and their consequences too. Offshore wind activity affects nature, other sea-users and trigger questions related to the adequate regime to award rights and duties to developers, investors and states.
In Regulatory and Policy Frameworks for Offshore Wind Projects: Spatial and Temporal Considerations in Light of Fisheries Sustainability amid Climate Change,  Arif and Herrera Anchustegui explore the interplay between offshore wind projects (OWPs) and fisheries within a climate change context. The authors remark that there is scant literature reviewing the interaction and regulatory framework that applies or ought to apply to these two uses of the sea. They attempt to fill the gap by critically examining the relationship between OWPs, fisheries and climate change to then identify the key challenges arising from their interaction and co-existence. These issues not only slow down the deployment of offshore wind projects but also put in perspective the consequences of such projects. Advancing the state of the art, the contribution puts forward broad regulatory suggestions based on science-policy interfaces and marine planning concerning the spatial and temporal factors of OWPs to achieve the peaceful and sustainable co-existence of two essential resources - offshore wind and fisheries.
Closely connected to this, Taylor and Taylor, discuss the role of Planning for Offshore Wind Energy: The Case for Marine Spatial Planning in Australia.  As argued by the authors, the recent passage of the Offshore Electricity Infrastructure Act 2021 represents the first federal regulatory framework for renewable energy development, including offshore wind, in Australia. Offshore wind is an additional and important use of offshore ocean space creating potential spatial issues among and between ocean users and management of environmental impacts. Planning for offshore wind requires coordination to accommodate offshore wind and ensures that any spatial conflicts are mitigated and minimised. Regulation of marine environmental risks for offshore wind development in Australia is governed by the proponent's environmental management plan, relevant OEIA provisions, and the Environmental Protection and Biodiversity Conservation Act 1999 triggered by proposals within Commonwealth marine areas from 3 up to 200 nautical miles from the coastline. Yet, the EPBCA is increasingly under pressure to demonstrate environmental protection which includes and represents conservation outcomes. This article analyses the current gaps within the environmental assessment framework for offshore wind in Australia and argues for the adoption of a Marine Spatial Planning (MSP) framework to increase ecological protection and an ecosystem-based approach. It provides a comparative analysis to demonstrate best practice principles from the MSP experience of The Netherlands as a mature wind energy jurisdiction and presents assessment procedures to ensure the effective spatial planning of Australia's offshore wind sector.
Further, Mizutani and Tanida, discuss how Japan, a technology giant but fresh jurisdiction to offshore wind energy, incorporates this renewable energy form in its energy mix as an alternative to promote energy security and promote novel local industry. As the authors put forward in The Wind of Change: The Development of the Legal Framework for Japan's Offshore Wind Energy, Japan has historically been a net-energy importer with a heavy reliance on foreign natural gas and crude oil for its primary energy resources, yet in recent years, the increasing concern for climate change and a call for a carbon neutral society have shifted the domestic energy policy to seek alternative energy sources, most notably offshore wind energy. In this article, the authors analyze the underlying factors of the development of offshore wind energy in Japan, and further consider the emerging themes from the recent legal reforms. The authors highlight that the two key policy drivers for the development of offshore wind energy in Japan are the need to reduce reliance on foreign energy and the commitment to carbon neutrality. In other words, Japan views offshore wind energy to meet both energy security and carbon neutrality objectives. Further, the authors note from the analysis of the recent legal reforms that the emerging theme in Japan's offshore wind energy is the need for a mechanism to incentivize proponents, while also adjusting existing interests with relevant stakeholders in offshore areas.
Offshore renewable energy trends are also spreading in the global south. In Brazilian Policies and Regulations in the Offshore Energy Generation Chain: Implications for Short and Mid-term Investments, Barboza Mariano et alia show that the Brazilian offshore energy industry is in a phase of full development, with the federal government investing in the deployment of new legal frameworks and regulations aiming to promote competition among investors and enhance transparency while reducing political and regulatory risks. The goal is to create an inviting business environment for entrepreneurs and to make investing more attractive, thereby facilitating an energy matrix more diversified and less carbon-intensive.
2.2 Hydrocarbons are not out of the Picture Either
The pivotal role of hydrocarbons in meeting the world's energy demand is beyond doubt. Offshore oil and gas operations, like wind projects, are global. Development and large investments are taking place in established jurisdictions but also new frontiers, which are now replacing mature areas.
In Relative Status of Guyana-Suriname and US Gulf of Mexico Offshore Oil and Gas Growth Prospects, Smith showcases the fascinating and rapid development of the deep-water Guyana-Suriname basin, commencing with an initial discovery in 2015. Since that first discovery, following a string of 45 dry holes, there has now been a string of now 32 discoveries by 2022. Production is now at 360,000 bbl./day with another 250,000 bbl./day coming onstream in 2023. It is estimated that by 2027, the area will produce 1.2 million barrels per day by 2027. At this pace, analysts are predicting that production from Guyana, will exceed US Gulf of Mexico production sometime between 2030-2035. Uncertainty about the tipping point vis a vis the US Gulf is not a result of estimating new developments in Guyana, but rather, from accurately estimating decline rates for the US Gulf of Mexico, a mature basin containing significant reserves, but plagued by higher costs and dysfunctional government regulation. Beyond production results, Guyana is also beginning to reap the economic rewards associated with the new production. The government will also finance power plant enhancements as well as the new onshore natural gas liquids (NGL) extraction unit. Finally, Smith highlights reserves discoveries in areas directly to the south of Guyana's Stabroek block, with associated opportunities and risks for both countries.
In Africa, discussions concerning the need for a more sustainable and environmentally friendly upstream hydrocarbons sector keep taking place. As illustrated by Suleman and Zaato in Achieving Sustainability in Ghana's Upstream Oil and Gas Sector: The Role of the National Oil Company, the oil and gas sector is at a crossroads, contributing to sustainable development but also increasing inequality, climate change and environmental damage. Some of its operations may deliver wealth but these benefits come at a substantial cost to sustainability efforts. Amid this debate, what role should national oil companies such as the Ghana National Petroleum Corporation (GNPC) play to achieve sustainability and local content development? And, are NOCs well equipped to play these crucial roles? Using empirical data, interviews with GNPC officials, corporations, policymakers, activists, community leaders and practitioners, the authors examined GNPCs sustainability and local content efforts and pathways based on three main scenarios: Sustainable Development Scenario (SDS), Netzero 2050 Scenario (Netzero2050) and the Rapid Transition Scenario. They find that GNPC is on course to be a standalone and world-class oil company and to meet all the Sustainable Development Goals except SDGs 4, 10, and 16 which demand improved education and institutions and reduced inequality. The study discovered that even though GNPC sustainability efforts are commendable there is no roadmap policy from GNPC to accelerate sustainability in their operations and core mandates. From the scenario analysis there is the need for GNPC to consider transformational and innovative pathways of transitioning to an Integrated Energy Company and remain locally and globally relevant to meet the dynamic energy needs of the Ghanaian economy.
The management of the hydrocarbon operations' impact in the marine environment is a still pending issue, as the piece by Do, puts forward. Offshore energy expansion on the one hand and its marine impact on the other beg the question whether the development of offshore oil and gas activities to foster economic growth and the establishment of marine protected areas (MPAs) for ocean conservation. In Interactions Between Offshore Oil and Gas Activities and Marine Protected Areas, the author examine how States and relevant international organizations can legally designate MPAs against environmental impacts of offshore oil and gas activities, and whether international law provides any regulatory guidance and procedure to harmonize the coexistence between offshore extractive industries and MPAs. The paper will begin with an overview of offshore oil and gas activities under international law in relation to environmental protection. Subsequently, inconsistent regulations and policies on the interplay between MPAs and offshore oil and gas development in States' coasts will be identified and analyzed. It will be followed by a legal consideration of an alternative "third way" of coexistence between MPAs and offshore hydrocarbon activities. The Coase Theorem will be re-appraised with a view that legal rules are only justified by reference to a -cost-benefit analysis. The paper concludes on how the consistency element found in the Coase Theorem translates into a more coherent MPA concept. Court cases in multiple jurisdictions are largely employed to provide real world examples for this paper's analysis.
2.3 Offshore Investment Trends
Technological development and demand for energy are promoting investment in offshore energy activities. Some of these are technology-focused, such as the discussions related to wind and oil and gas extractions, while others are more general and conceptual around investment options and modalities. In "Energy Auctions: An Alternative for Energy Investment in Cuba" Delgado Triana et alia discuss how the use of competitive energy auctions (and which modalities) may be utilized to increase energy production and offers to this island. Their contribution is, in a way, part of a bigger trend in Latin America in which, as the authors say, energy investments, with special emphasis on renewable energies have been developed through auctions or tenders. These have presented diverse typologies and schemes, but also have many points in common, with the main objective being to obtain power or energy. The countries involved in these practices have developed their legislation, based on existing legislation, from which new regulations have been created specifically to regulate them. In Cuba, there are not enough experiences of energy investments under the auction scheme, nor does it have specific legislation to carry them out, however, it has a novel legal framework as a basis for the creation of a legal norm to regulate this issue. This paper determines that the most feasible typology for Cuba is the closed envelope auction, which should evolve in the future into a hybrid or combinatorial auction. The analysis of the energy auction schemes developed in the countries studied is the basis for the one proposed for the Cuban scenario, and it is necessary to study it from a business approach, with a political vision of state development that integrates all social actors. The Cuban legal framework on energy does not contemplate energy auctions in a specific regulation, and it is advisable to legislate on the matter through a Decree issued by the Council of Ministers; in turn, the Ministry of Energy and Mines can issue lower-level regulatory provisions within the framework of its competence.
The energy transition is impacting the way that companies invest and organize themselves for offshore operations. Companies re-evaluate their investment portfolio, move further offshore and think of new commercial and technological. This is the case discussed by Ukponu and Nwanko related to the Nigerian experience in "A 'Peculiar Energy Transition' in Nigeria: International Oil Companies, Onshore and Shallow Offshore Divestitures, and Deep Offshore Investments". As discussed by the authors, as far back as the early 2010s, the Nigerian oil and gas industry has been incrementally witnessing divestitures of both onshore and shallow water investments by International Oil Companies (IOCs) in favour of attaining new or focusing on their deep water assets. While divestments of onshore assets and investments in offshore fields are generally current trends in international energy business, the case of Nigeria is notable for peculiar reasons, prompting the authors to term it a 'peculiar energy transition'. The peculiarity of this energy transition is partly underscored by the fact that IOCs are micro-focusing on deep water assets to the exclusion of shallow water assets, albeit that shallow water assets are also offshore assets. This article explores the context and consequence of this 'peculiar energy transition'. It also interrogates the extent to which the 'peculiar energy transition' integrates local content, climate change, environmental protection, energy-food-water nexus, host community rights and other International Environmental Law considerations and translates to socio-economic prosperity for Nigeria.
In Lessons Learned from the Energy Activities in the Gulf of Mexico Region as a Guide for Accelerating and Financing Energy Activities in the Atlantic Region during the Energy Addition, Pollet discusses the interaction between energy transition and investment in natural gas offshore. As discussed in the paper, we are entering the energy addition that brings together the Golden Age of New Energy and the Heyday of Natural Gas. In this paper, the author explores how the offshore energy industry and the US Atlantic region would benefit from the offshore energy industry, stakeholders and regulators working together in establishing a stable employment base, fabrication yards and other infrastructure needed for a high level of design, construction, installation as well as vessel utilization in compliance with Jones Act requirements.
Lastly, our Special Issue on Offshore Energy Investments and Activities ends with a contribution by Roeben on WTO Law on Subsidies and Local Content Rules in the Renewable Energy Sector. As the author discusses, the WTO legal framework on subsidies and local content requirements applies to renewable energy projects executed by Member States globally. This article analyses the constrains that WTO law places on the support Member States can provide through local content requirements in subsidy regimes used for renewable energy projects. Considering the growth of offshore renewable energy globally and the widespread use of local content requirements, it is crucial to determine whether the WTO rules will affect offshore renewable energy growth globally. The article analyses disputes involving various forms of renewable energy between Member States. Only one dispute analysed, the recently resolved dispute between the UK and the EU, directly relates to offshore renewable energy. Through analysis of disputes involving other types of renewable energy, an inference may be made regarding the application of the WTO legal regime to offshore renewable energy developments.
 See more on this potential, inter alia: Herrera Anchustegui I and Radovich VS, 'Wind Energy on the High Seas: Regulatory Challenges for a Science Fiction Future' (2022) 15 Energies 9157; Keivanpour S, Ramudhin A and Ait Kadi D, 'The sustainable worldwide offshore wind energy potential: A systematic review' (2017) 9 Journal of Renewable and Sustainable Energy 065902; Kark S and others, 'Emerging conservation challenges and prospects in an era of offshore hydrocarbon exploration and exploitation' (2015) 29 Conservation Biology 1573.
 International Energy Agency, Offshore Energy Outlook 2018, p. 9.
 International Energy Agency, World Energy Outlook 2022, p. 236.
 A.A. Arif; I. Herrera Anchustegui "Regulatory and Policy Frameworks for Offshore Wind Projects: Spatial and Temporal Considerations in Light of Fisheries Sustainability amid Climate Change", OGEL 5 (2022).
 A.A. Arif; I. Herrera Anchustegui "Regulatory and Policy Frameworks for Offshore Wind Projects: Spatial and Temporal Considerations in Light of Fisheries Sustainability amid Climate Change", OGEL 5 (2022).
 M. Taylor; R.G. Taylor "Planning for Offshore Wind Energy: The Case for Marine Spatial Planning in Australia" OGEL 5 (2022).
 K. Mizutani; H. Tanida "The Wind of Change: The Development of the Legal Framework for Japan's Offshore Wind Energy" OGEL 5 (2022).
 J. Barboza Mariano; M. Hernández; A. Szklo; T. Santos; B.S.L. Cunha "Brazilian Policies and Regulations in the Offshore Energy Generation Chain: Implications for Short and Mid-term Investments" OGEL 5 (2022).
 E.N. Smith "Relative Status of Guyana-Suriname and US Gulf of Mexico Offshore Oil and Gas Growth Prospects" OGEL 5 (2022).
 S. Suleman; J.J. Zaato; "Achieving Sustainability in Ghana's Upstream Oil and Gas Sector: The Role of the National Oil Company" OGEL 5 (2022).
 C.V. Do "Interactions Between Offshore Oil and Gas Activities and Marine Protected Areas" OGEL 5 (2022).
 Y. Delgado Triana; J.G. Luis Cordova; J.F. Milian Gómez; E.Y. Fariñas Wong; B. Lorenzo Yera; A. Sánchez Fernández (2022) "Energy Auctions: An Alternative for Energy Investment in Cuba"(OGEL, ISSN 1875-418X) December 2022.
 M.U. Ukponu; O.K. Nwankwo (2022) "A 'Peculiar Energy Transition' in Nigeria: International Oil Companies, Onshore and Shallow Offshore Divestitures, and Deep Offshore Investments" (OGEL, ISSN 1875-418X) December 2022, www.ogel.org
 B.B. Pollett; "Lessons Learned from the Energy Activities in the Gulf of Mexico Region as a Guide for Accelerating and Financing Energy Activities in the Atlantic Region during the Energy Transition" OGEL 5 (2022).
 V. Roeben; "WTO Law on Subsidies and Local Content Rules in the Renewable Energy Sector" OGEL 5 (2022).