AALL 2017 Recap: Global Energy Law: Perspectives from North America and Africa

By Susan Gualtier

Energy Law Program.jpgOn Sunday, July 16, I attended the Global Energy Law program curated by Yemisi Dina and featuring guest speaker Emeka Duruigbo.  Professor Duruigbo is an internationally recognized Energy Law, Business Law, and Economic Law scholar and has taught at the Thurgood Marshall School of Law at Texas Southern University since 2006.  He has made a number of media appearances and was featured in the documentary film, Crude Impact, which explores our global dependency on fossil fuel energy and examines the future implications of “peak oil.”  He is licensed to practice law in Nigeria and California.

Professor Duruigbo began the program with a few statistics, followed by an overview of the geology of petroleum drilling and of the petroleum industry for those of us unfamiliar with the processes.  Energy use evolves over time, with oil and gas dominating modern energy use.  Texas is considered the energy capital of the world, encompassing not only oil and gas, but also wind and solar energy.  Professor Duruigbo predicts that by 2040, oil, gas, and coal will still make up approximately 80% of the world’s energy demands, with gas usage growing the most over the next several decades.  The use of nuclear energy and renewables will also grow, while the use of wood, dung, and other biomass will decline slightly.

Crude oil and natural gas occur naturally in rock formations and can be drilled either horizontally or vertically.   The oil and gas industry consists of upstream, downstream, and midstream components. The largest and most lucrative oil and gas companies are engaged in upstream activities, which include exploration, field development, and production operations (referred to as “E&P.”)  E&P companies in turn hire midstream companies – those engaged in the transportation, processing, storage, and distribution of fuels – to drill their wells and to maintain and service them afterward. Downstream companies are those engaged in manufacturing, wholesale, and marketing.  The industry also includes companies providing supporting services to the upstream, midstream, and downstream operations.

Moving on to the legal portion of the presentation, Professor Duruigbo focused primarily on the human rights and environmental issues arising from the oil and gas industry.  Problems in the U.S. appear to be largely environmental.  The U.S. currently accounts for about 18% of the world’s energy consumption, despite making up only 4.5% of the world’s population.  One of the primary concerns in the U.S. oil and gas industry right now is that of fracking, which is a process for making shale more permeable to allow for drilling, and which may damage water, cause earthquakes, or have other environmental implications. Horizontal drilling is also at issue, as it allows for drilling underneath residential areas without the necessity of drilling a well nearby.  The U.S. oil and gas industry is governed by federal and state statutes, agency regulations, common law (which dominates areas such as trespass, strict liability, nuisance, and negligence), international law, and soft law.

In Nigeria, by contrast, the industry is not well-regulated.  Nigeria is the most populous country in Africa and is one of the largest oil and gas producers; however, despite its rich natural resources and successful oil and gas industry, poverty levels have not improved much over time. Natural disasters, gas flares, and human rights abuses are common, and there is little redress for the victims through the Nigerian court system.  This has led victims to seek alternative venues in the U.S., Canada, and Europe.  It has also exposed U.S. and Canadian companies to lawsuits arising out of their alleged role in human rights abuses abroad.  Professor Duruigbo believes that Nigeria and other developing countries need to better embrace a “culture of legality,” in which the law matters and there are consequences for disobedience.  He also believes that in countries that suffer from government corruption, it may be better for natural resources to be owned by private companies, as they are in the U.S.

Professor Duruigbo finished the presentation by stressing the need for international cooperation on environmental and human rights issues, as well as the need to develop alternative energy policies and sustainable development models.  Overall, this program was a helpful introduction to the oil and gas industry and the current legal issues surrounding it.

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