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«LEGAL ASPECTS OF OFFSHORE OIL AND GAS OPERATIONS OLIVER L. STONE* The states' own title to the lands, minerals and other things underlying the ...»

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In my view, the United States, for domestic as well as international purposes, is fully competent to assert jurisdiction and control of the minerals within the submarine areas adjacent to its coasts and seaward of individual state-owned water bottoms. The extent to which such assertion may validly be made will be discussed later. The mineral resources encompassed by any such assertion would appear clearly to be leasable under the Outer Shelf Act. The international law question that presents itself is, how far to seaward can the United States, or any coastal nation, validly assert rights in the submarine minerals as against the other nations of the world? In seeking an answer to this intriguing question, we must consider one of four conventions which emerged from the 1958 Geneva Conference on the Law of the Sea.

IV

THE CONVENTION ON THE CONTINENTAL SHELF57

This Convention was approved by the United States Senate on May 26, 1960,8 and was ratified by the President on March 24,

54. U.S. Geological Survey News Release of June 1, 1965.

55. Id. Section 11 of the Outer Shelf Act authorizes the Secretary to issue authorizations to conduct "geological and geophysical explorations" in the outer shelf. 43 U.S.C.A. § 1340. These "permits" are, of course, not leases nor do they authorize the permittee to produce minerals.

56. U.S. Geological Survey News Release, May 26, 1967.

57. U.N. Doe. No. A/Conf. 13/L. 55 (1958).

58. 106 Cong. Rec. 11196 (1960).

OFFSHORE OIL AND GAS OPERATIONS

JULY 1968] 1961." 0 On June 10, 1964, when the requisite number of twentytwo nations had ratified it, the Convention came into force. 60 Article 1 defines the term "continental shelf" as follows:

For the purpose of these articles, the term "continental shelf" is used as referring (a) to the seabed and subsoil of the submarine areas adjacent to the coast but outside the area of the territorial sea, to a depth of 200 metres or, beyond that limit, to where the depth of the superjacent waters admits of the exploitation of the natural resources of the said areas; (b) to the seabed and subsoil of similar submarine areas adjacent to the coasts of islands.

Article 2 provides that: ( 1) The coastal nation exercises over the continental shelf "sovereign rights for the purpose of exploring it and exploiting its natural resources;" (2) The rights of the coastal nation are exclusive in the sense that if it does not explore the continental shelf or exploit its natural resources, no one may do so or make a claim to the shelf without its consent; (3) The rights of the coastal nation do not depend on occupation "effective or notional" or on any express proclamation; and (4) "Natural resources" consist of the minerals and other non-living resources of the seabed and subsoil, together with "living organisms belonging to the sedentary species, that is to say, organisms which at the harvestable stage, either are immobile on or under the seabed or are unable to move except in constant physical contact with the seabed or the subsoil.""' Article 3 provides that the rights of the coastal nation over the continental shelf do not affect the legal status of the superjacent waters as high seas, or that of the airspace above those waters.

A number of the articles of the Convention deal with the nature and conditions of the exercise of the rights conferred upon coastal nations. Thus, Article 5 (1) provides that in the course of exploration and exploitation, a coastal nation is not precluded from interfering with navigation, fishing or the conservation of the living resources of the sea if the work does not result in "unjustifiable interference." And, Articles 5 (3) and (6) provide that the coastal naState Dept. Bull. 609 (1961).

60. As of June 28, 1966, thirty-five nations had become parties to this Convention.

Dean, Geneva Convention on the Continental Shelf, 41 Tul. L. Rev. 419 (1967).

61. In acting on this Convention, the United States Senate understood that "under this definition, for example, clams, oysters, and abalone are included as 'natural resources,' whereas shrimp, lobsters, and finny fish are not." 106 Cong. Rec. 11191 (1960). Art. 5(1) U.N. Doc. No. A/Conf. 13/L. 55 (1958).

NATURAL RESOURCES JOURNAL [VOL. 8

tion may maintain necessary installations and devices on the continental shelf and establish safety zones around them for a distance of 500 meters, which safety zones must be respected by ships. No such installations or devices may be established, however, where interference may be caused in the use of recognized sea lanes essential to international navigation. Article 7 provides that nothing in the Convention shall prejudice the right of the coastal nation "to exploit the subsoil by means of tunneling irrespective of the depth of water above the subsoil." Article 6 provides criteria for fixing boundaries where the same continental shelf is adjacent to nations which are opposite or adjacent to each other."2 At the 1958 Geneva Conference, and within the International Law Commission (whose draft article defining the "continental shelf" was adopted in substance by the Convention in Article 1), there was considerable debate whether to adopt a definition of the shelf based on water depth alone or one based on capability of exploitation alone. Both criteria were ultimately included, as depth alone seemed too rigid, and exploitability alone too vague. The double criterion of water depth or exploitability incurred opposition from some of the delegates to the Convention because of its uncertainty. The exploitability criterion has given rise to considerable difference of opinion as to whether, assuming technical capability to exploit underwater areas, there is any limit (except perhaps some median line between nations) to a coastal nation's capability to assert sovereign rights under the definition. 4





62. For discussions of the applicability of these boundary criteria, see Shawcross, The Law of the Continental Shelf, Twentieth International Geographical Congress, London (1964), which includes a sketch indicating how the North Sea would be apportioned under Art. 6; Young, Offshore Claims and Problems in the North Sea, 59 A.J.I.L. 505 (1965) ; and Dean, Geneva Convention on the Continental Shelf, 41 Tul.

L. Rev. 427-431 (1967) ; Current Legal Developments-North Sea, 15 Int'l and Comp.

L.Q., 897 (1966) which also lists the treaties relating to delimitation of the North Sea;

and Morris, Oil and Gas Legal Problems on the North Sea Continental Shelf, presented at American Bar Association meeting August 8, 1967.

63. Whiteman, Conference on the Law of the Sea, Convention on the Continental Shelf, 52 A.J.I.L. 629 (Oct. 1958).

64. See, e.g., Law, Oil, and the Sea Today, by Jean Devaux-Charbonnel, World Petroleum, May 1965, 44; Id. (Oct. 1965), 52; Grunawalt, The Acquisition of the Resources of the Bottom of the Sea-a New Frontier of International Law, 34 Military Law Review 101-133 (1966) ; International Law Association (Helsinki Conf. 1966), Netherlands Branch Comm., "Report of the Deep Sea Mining Committee on Exploration and Exploitation on the Ocean Bed and in its Subsoil"; McDougal & Burke, Crisis in the Law of the Sea, 67 Yale L. J. 539, 541 n. 11 (1958) ; also collection of papers in M.T.S. Second Annual Report; also Dean, Geneva Convention on the Continental Shelf, 41 Tul. L. Rev. (1967).

OFFSHORE OIL AND GAS OPERATIONS

JULY 1968] The Geneva Conference designated the Forth Committee to consider the International Law Commission's draft articles on the continental shelf. The record of the proceedings of the Fourth Committee leaves no doubt that many of the delegates had concern regarding the uncertainty of the definition of the shelf because of the double criterion of water depth or exploitability.' While the matter is not free from doubt, I am left with the impression that most delegates felt that under the definition of the shelf as ultimately adopted, "adjacency" to the shore of the coastal nation was an overriding limitation on the rights of coastal nations, despite the exploitability test. 66 It is clear that the exploitability criterion makes ambulatory the limit to seaward of the sovereign rights recognized by the Convention.17 But it also seems-although not quite as clearly-that there is a geographical limit, despite technical capability (and the median line of Article 6) that circumscribes the extent to which a coastal nation can validly assert "exclusive sovereign rights" to explore the seabed and to exploit its natural resources. This circumscribing factor lies in the definition's use of the words "submarine areas adjacent to the coast." I take these words as a qualification of what follows in the definition. Otherwise, they are meaningless. Of course, the exFourth Comm. (Continental Shelf), Official Records, Vol. VI, U.N. A/Conf.

13/42.

66. Id. at 2-6, 8-12, 21, 24, 27, 33-35, 40, 42, 53 and 55. See also, Report of the International Law Commission (8th Sess.), U.N. Gen. Assembly, 11th Sess., Official Records, Supp. No. 9 (A/3159) 43 (1956). This Report is hereafter cited as "ILC Rep."

67. This assumes, as I do, that the exploitability test contemplates future exploitability and is not limited to that capability as it existed at the date of the Convention.

The debates in the Fourth Committee leave little doubt with me that the future was intended. However, inquiries concerning water depths in which exploitation was feasible at the time of the conference could possibly lead to a contention (which I believe unfounded) that that date, or the date the Convention went into force, controls. In this connection, when the Convention was before the United States Senate for its advice and consent, there was prepared by the Department of State, under date of March 2, 1960, "Answers to Questions of Senate Foreign Relations Committee Concerning the Law of the Sea Conventions (Executives J to N, Inclusive)." (Conventions on the Law of the Sea, Hearings before the Comm. on Foreign Relations, U.S. Sen., 86th Cong., 2d Sess., Jan. 20, 1960). Question 19 (Id. at 88) quoted the shelf definition from Article 1, and asked: "What are the practical or theoretical limitations on the exploitation of the

natural resources of the 'Continental Shelf' at great depth?" The answer (Id.) is:

"Answer. With respect to mineral resources, for practical purposes, the present limitation of operations normally is around 200 feet. Some holes have been drilled in exploring for petroleum in water about 1,500 feet deep. The depth at which operations can be carried on is continually increasing because of developing techniques. Serious discussion is now going on relative to the possibility of drilling, for research purposes, even from oceanic depths. It probably will be some time before oil and gas operations are practical on a substantial scale at depths even as great as 200 meters."

[VOL. 8

NATURAL RESOURCES JOURNAL

pression "submarine areas adjacent to the coast ' 6 8 is, itself, imprecise. And to that extent the definition in its entirety is vague.

That, however, does not mean that it confers limitless rights. What constitutes a "submarine area adjacent to the coast" must be resolved judicially or by agreement on an ad hoc basis with due regard to the circumstances. But, at any rate, the term surely imports "adjacency" though the exact extent thereof may be uncertain. If that is not so, what, if any, rights would be left to the landlocked countries to participate to the extent of their technological capability in the mineral wealth which might underlie the ocean depths far removed from all coasts?

Further indication exists that the Convention's definition of the shelf contemplated some limitation upon the coastal nations, in addition to the exploitability test. The International Law Commission, whose work was largely adopted at the 1958 Geneva Conference, submitted draft articles on the high seas as well as on the continental shelf. In its commentary dealing with freedom of the high seas, the ILC states: "Freedom of the high seas comprises, inter alia: (1) Freedom of navigation; (2) Freedom of fishing; (3) Freedom to lay submarine cables and pipelines; (4) Freedom to fly over the high seas." ' 9 The commentary then proceeds to say that its list of freedoms of the high seas "is not restrictive." It mentions the freedom to undertake scientific research as a freedom of the high seas,

and then recites:

The Commission has not made specific mention of the freedom to explore or exploit the subsoil of the high seas. It considered that apart from the case of the exploitation or exploration of the soil or subsoil of a continental shelf-a case dealt with separately in section III below-such exploitation had not yet assumed sufficient practical importance to justify special regulation.

68. The term "adjacent" is a relative one which does not have an arbitrary or definite meaning in law. But the authorities in the United States are uniform that, even in its broadest sense, the term connotes "nearness," even though in its strictest sense, it is not as confining as such words as "adjoining," "abutting," or "contiguous." It may also mean "appurtenant." Of course, the context in which used and the object sought to be accomplished are quite meaningful in determining the scope of the term. See Vol. 2, Words and Phrases.

Note that adjacency must be "to the coast." This seems to preclude step-by-step extension based upon the premise that the outer edge of the shelf, as it might from time to time be established by exploitability, thereupon becomes the base for measuring adjacency for the next round of out-steps.

69. ILC Rep. at 7, 24.

70. Id. at 24.

OFFSHORE OIL AND GAS OPERATIONS

JULY 1969] V

THE STATUS OF MINERALS ON AND UNDER

THE BEDS OF THE OCEANS

If there be an outer limit to the continental shelf as the Convention defines it, and as I believe there is, what are the rights, if any, to drill for oil and gas in ocean depths outside all continental and island shelves and terraces? Can anyone do so, or can no one? Are these sub-oceanic lands and the minerals therein res nullius, belonging to no one and thus capable of being appropriated by the first occupier, or are they res communis, common property of all and incapable of exclusive acquisition?



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