This is the second installment of a two-part series that was originally published by the International Law News, Volume 44, Number 2, 2015. © 2015 by the American Bar Association. View the first installment here.
Creating Conditions Above and Below Ground for Unconventional Oil and Gas Development through a Governance and Sustainability Framework
In the Southern Cone, regulatory frameworks, public policy initiatives, and opportunities for public-private partnerships are neither harmonized nor harmonious. South America shows different approaches to government regulation over hydrocarbons and ownership schemes over minerals, as well as their development and management, government-private sector relations and development, access to technology, regulations, implementation of industry sustainability standards, and different jurisdictions’ approaches to their own quality of governance and rule of law. Creating opportunities for leveraging, engaging, and innovation will require that the immediate future of unconventional oil and gas development in South America be characterized by development on three fronts:
1) a strategic approach to hemispheric policy development, diplomacy, and cooperation;
2) understanding the importance of social licensing processes and how that could affect the private-sector bottom line; and
3) the role of the legal profession in these developments.
Hemispheric Multi-Stakeholder Engagement
Strategic engagement and dialogue within the Americas among those who share the wealth of unconventional oil and gas resources will prove to be beneficial for the region and hemisphere at different levels. So-called energy diplomacy can have a direct impact on the establishment of solid dialogue and diplomatic relations that leverage good policy, regulatory frameworks, and industry best practices supporting energy independency and/or efficiency (depending on a country’s needs). When it comes to preventing and/ or mitigating the environmental, social, and governance (ESG) impacts of hydraulic fracking, one company’s best sustainability practices or even research initiatives trying to understand the true environmental impact of this activity are not enough. A multi-stakeholder approach, one that brings together governments, the oil and gas industry, research and academic institutions, industry associations, investors, shareholders, and even NGOs, can be the catalyst for leveraging best sustainability practices, investing in serious academic research that identifies the true impact (even the negatives) of hydraulic fracking, and providing standards for prevention, mitigation, and further technological and research development. This, in turn, will leverage international and regional standards that governments, the private sector, and even NGOs can agree upon to integrate as important for their own operations and activities. At the same time, it will serve to create the conditions for operating within a governance and rule-of-law framework.
Read More …