Published 18 November 2022
As an engine of the world's economy, offshore oil and gas operations are already common with significant investment and exploration and production activities. However, the petroleum industry has historically been identified with significant environmental risks since its first operation in the mid-19th century. According to World Economic Forum's 2022 Global Risks Report, environmental risks are the most pressing issues facing the modern world. This has raised a contentious question that "Can economic growth be environmentally sustainable?". This debate is also reflected in the legal interaction between the development of offshore oil and gas activities to foster economic growth and the establishment of marine protected areas (MPAs) for ocean conservation.
The research aims to 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.