International legal regulation of energy relations: historical aspect

T he first regulation of the energy relations fulfilled on the basis of agreements on trade, because trade between different countries consigns to the remote part of its roots. Participants of trade relations were representatives. Since early times trade treaties were signed. They affirmed “the right of the public” (jus gentium). The aim of these treaties was fixing of the certain guarantees interfering discrimination and violation of the rights and interests of the states.

Questions of trade by energy carriers remained outside of international legal regulation during a long time despite of, for example, trade of coal or firewood, construction of mills always existed in the foreseeable past. Accessibility of these resources did excessive such regulation at the interstate level during an era of manufactory production (later – to widespread using of steam-engines).

In the ancient time and in the middle ages questions of energy were regulated only in relation to military science. For example, the emperor Theodosius I has forbidden training of “barbarians” in construction of sailing ships by his special edict. Chinese and Arabs protected a gunpowder production secret carefully. The history of finding and losses of secret of “the Greek Fire” contained several centuries.

The Law of the Kingdom of the Netherlands about a ban of export of windmills (February, 1752) is an example of legislative regulation of international trade by propulsion engines for peaceful purpose. As the historian Carrel Davies notes: “since that time nobody had the right to help foreigners to buy, build or transport separate parts of the Dutch windmills and also to export the tools intended for their construction” [11].

The agreements connected with energy cooperation contained in agreements on economic cooperation during long time. These agreements were an integral part economic. Thereby, history of the international cooperation in the energy sphere can be deduced only having paid attention to economic cooperation of the states, because even branches of the energy and economic law are in very close interrelation being interpenetrating. Except this many researchers have the opinion that the international energy law was segregated as branch from the international economic law.

The period of Modern time is characterized by the fact that trade agreements were not only local around participants and regulated questions, but they were unstable at the same time. Fixing of exemptions and privileges were happened therewith constant negotiation of treaties for equation of the appropriate rights of their participants.

Creation of the first international economic organizations belongs to the period which was over by World War I. Many researchers recognizethe international organizationasauniversal formofallianceofthestatesfor united conducting economic activity [7]. This form of cooperation has allowed combining respect of sovereignty of the states with restriction of their insulation in certain spheres. For example, the governments of two or more contracting parties had to work according the regulation of some questions of economic activity.

So, the first international organizations which have united the leading states for the organization of economic activity were: The Geodetic Union (1864), the General Cable Corporation (nowadays – the International Union of Telecommunication) (1865), the World Meteorological Organization (1871), the World Postal Union (1874), Metrological Committee and Bureau (1875).

Therefore bilateral or regional regulation of cooperation didn’t concede to multilateral cooperation bytheir meaning inthesphere ofeconomyandresources.

In the beginning of the 20th century the world war and world economic crisis rejected process of international legal regulation of trade far back. The national states have returned to practice of restrictive tariffs. The working of most favored nation treatment has been suspended;the economic communications created in decades (including energy carriers in the sphere of trade) have been broken. Fight for control over the territories rich with fuel and energy resources accrued.

At the end of the 19th century D. I. Mendeleyev wrote: “Nowadays even the majority of wars are defined by the industrial relations of the countries obviously or not, especially if outturn of feedstock in the occupied territory is joined to their numbers” [13].

There was a strengthening of state regulation of energy branches during this period. This tendency was the general for all developed states in result of the following reasons:

• –    these branches are strategic, the national economic and defensive capacity, and also a state of environment depends from them;

• –    branches of fuel and energy complex are entirely capital-intensive. Recoupment of investment takes many years in them. It demands the state participation, financial and economic support;

  – thereby of branch specifics of the energy companies hold a monopoly position, but stable functioning of all industries, transport, agriculture, defensive capacity of the state depends on a condition of their work [5]. Therefore questions of the international regulation of trade in energy resources and electrical supplies (they are considered services in a number of the states) didn’t consider at the international conferences convoked under the aegis of League of Nations.

Development of world economy was followed by strengthening of energy consumption during the period after World War II that demanded implication into economic circulation new volumes of natural energy resources in spite of increase of efficiency of using of energy resources. Increase of gauge of reproduction processes in energy branches of the certain states has brought to growth of international trade in energy resources, formation inter-country, regional and world markets (on oil) in the conditions of unevenness of accommodation of the main producers and consumers of energy resources in the middle of the 20th century.

In particular, as Ali Dakher-at-Tufayli (Egypt) notes that at the XIX-XX century’s oil capital investment began to play the main role in restriction of economic independence of developing countries: those from them where oil was extracted got to economic dependence from big customers of oil monopolies [1].

In the Middle East oil monopolies (“Seven Sisters”: “EXXON”, “Galf”, “Teksako”, “Mobile”, “Chevron”, “British Petroleum”, “Royal Dutch Shell” and the French state energy company – Federal Energy Regulatory Commission) have extended the domination to oil of Iran (1901), Bahrain (1920), Iraq and Kuwait (1932 – 1938) and also to oil of Saudi Arabia (1933) and Qatar (1938). The Dutch firms have received on super favorable conditions concessions on the islands of West Indies, the English-Swedish firm “Nobel – Fuel Oil” – in Azerbaijan, the American firms and “Shell” at the direct armed intervention – in Latin America and in other regions.

As possibilities of military annexation of territories richwith energy resources(use ofsuch opportunities was limited to danger of emergence of new world war with using of weapons of mass destruction) of the developed states were reduced notably during the post-war period. Requirements for energy carriers have considerably increased. The problem of legal regulation of interaction in the energy markets and organizational registration of such interaction has aggravated.

So, the Final act which has founded the General agreement on tariffs and trade has been signed on October 30, 1947. I.I. Dyumulen noted that the Final act established GATT as the temporary agreement, “governingtrade relations fortheperiodbeforeentry into force of the Charter of MTO, and it contained the Protocol on temporary application of the General agreement on tariffs and trade” [4].

Thetext of GATT has come into force since January 1, 1948. This document became the first multilateral interstate agreement inthe history of internationaltrade. Its importance for international trade can be compared to importance of the Charter of the UN in the sphere of the international relations [2].

The second half of the 20th century was marked by growth of regional economic corporations and expansion of bilateral regulation of the international economic relationsby thestates.“Thepowercomponent” of such regulation was looked through rather accurately. For example, researchers directly connect formation of cooperation of socialist member countries of CMEA with the developed countries of the West with realization of large energy projects, construction of facilities of power, investment into fuel and energy complex of the third countries, creation of the joint marketing organizations and association of interconnection in Europe (construction of the high-voltage power lines “the East – the West”, pipeline system and etc) in the 60th years of the 20th century [14].

The European Economic Community has inspired many states for establishment of the Customs unions and free trade zones during this period. Even the USA has signedtheNorthAmericanFreeTradeAgreement(NAFTA). Making with initiative of creation of NAFTA, the USA has expressed willingnessto refuse a role ofthe assertor ofthe multilateral regulation of internationaltrade which is basis of GATT and to follow the example of Europe, to become the supporter of regional preferential agreements.

Creation NAFTA indicated that in case “GATT isn ’t reconsidered i.e. if “the Uruguayan round” isn ’t successfully completed, the organization of world trade will depend onthe bilateral relations and onthe relations based on balance of forces between the European block, the North American block and Japan (and, perhaps, in the future China)” more and more.

However it is necessary to recognize that was a lack of the majority of regional economic unions was lack of specialized agreements on questions of power cooperation of the states – participants.

The second half ofthe 20th century was marked by formation of the global markets of energy resources and investment. In general formation of the world oil market has ended. Increase of the competition in the world markets restrained artificially using existence of two antagonistic military-political unions during long time. However importance of interstate regulation increased constantly in energy sphere during all post-war time.

These processes have begun in the developed countries of the West earlier than in the countries of CMEA orthe states ofthe Asian-Pacific region. The reason was sharpness of energy problem. Political unions of the export states of hydrocarbon raw materials became reaction to consolidation of the states consumers of energy resources. There were two centers of global power policy: the Organization of Petroleum Exporting Countries (OPEC) formed in 1960, the Intermountain Power Agency (IPA) created in 1974.

Creation of the IPA became natural result of activity of the European international energy bodies created during the period of realization of the plan of Marshall. It was the plan of the economic and political assist of the USA to post-war Europe. The USSR and its allies have refused to participate for political reasons in this plan. Some organizations have been created earlier (for example, the European organization of the coal industry – London, 1944). The Organization for European Economic Cooperation (OEEC) has been created for realization oftheplan.Necessity fortransformation ofthe former organization to new structures arose in process of implementation of the plan of post-war restoration of Europe and strengthening of economic integration of the leading countries of Europe and also the USA and Canada. The European Economic Community (EEC) and the European Free Trade Association (EFTA) became the new structures [12].

In the structure of the Organization for Economic Cooperation and Development (OECD) created in 1960 more than 20 bodies work, including: International Energy Agency, Environmental Directorate, Nuclear Energy Agency. The International Power Agency (IPA) created during oil crisis of 1973 – 1975 years occupies autonomous situation in this system since 1974 year.

Its task consists in assistance the countries in economy ofenergyand developmentofsubstitutes of oil. Besides, its members have made the decision on mutual redistribution of the oil resources in case of interruptions in supply with oil. Only 26 of 30 member countries of OECD enter in the IPA. In particular, “France has refused to participate in the body created at the initiative of the USA for the political reasons. France was afraid that it would strengthenthe confrontation which had observed in the relations between industrialized countries and the export countries of oil. The agency has turned into the permanent organization; however it plays a modest role being limited to collection of information about market condition of energy carriers” [9].

The European Atomic Energy Community created in 1957(EAEC– EURATOM) works incooperation with IPA. One of its main aims is assistance to member states in an assessment of a share of nuclear energy in the general energy production on a long-term outlook.

The IPA participates in development of legal acts of uniform standards of performance of work on construction and operation of the A-plant, improvement of security systems and environmental control together with IAEA.

Besides, researchers note such regional international energy organizations as the European Coal and Steel Community – ECSC (Paris, 1951) and the above-mentioned community EURATOM (Rome, 1957). The EURATOM has been founded simultaneously with the European Economic Community.

Work ofthe European states on creation of unified system of energy security needs to be estimated in unity with extensive and diverse activity of “energy” bodies of the Economic Commission for Europe (ECE) which is specialized division of Economic and Social Council (EKOSOS) of the UN. ECE was created in the period of the beginning of realization of the plan of Marshall at the end of 1946. The headquarters of the ECE is in Geneva.

The structure of the UN (ECE, UNCTAD), and also IAEA often became in bipolar Europe the binding bridge between the West and the East at the solution of questions of power cooperation during this period [8].

The second World energy conference was held under the auspices of the UN in Moscow on August 20th -23rd in 1968 year. It was the period of overcoming of consequences of “theBerlincrisis” of 1961and restoration of the contacts between the European countries represented different social and political systems.

At this conference it was noted that rapid growth of demand for energy of all types in Europe didn ’t stabilize with completion of restoration of economy that contacts electricity consumption and natural gas for domestic needs, transportation of energy on long distances, transformations of one types of energy into others. It has led to increasing in a share of import of oil and gas among other energy carriers. Also, the conjunction of energy consumption per head with level of life and level of technological development has been noted. For example, consumption of energy on per head was almost identical in 1955 – 1965 years in Denmark and in the USSR.

Full merging of systems of transfer of the electric power of neighboring countries has already been provided in a number of regions of Western Europe by the beginning of the 60th years of the 20th century. The countries of continental part of Europe have united in the Union for the Coordination of the Production and Transport of Electric Power (UCPTE). Besides, the Franco-Iberian Union for Coordination of Production and Transport of Electricity (UFIPTE); association NORDEL which includes the Scandinavian countries; Austro – Italian – Y ugoslavian association (SYUDEL) have been formed. The integrated electric energy system of Eastern Europe with control center in Prague has been formed in 1962 year. State regulation and the state participation have allowed realizing these amplitudinous projects in a short time.

Expansion of gas export from the Asian regions of the USSR, joint development of oil and gas fields on the shelf of the Northern and Norwegian seas, expansion of supply of gas on underwater pipelines from the North Africa, creation of overland pipeline system from the USSR to countries of Western Europe as tendencies of development of energy cooperation in Europe have been noted by the II World energy conference [10].

Such projects as construction of system of the oil pipelines “Friendship”, Urengoy – Riga and Urengoy – Pomara – Uzhhorod gas pipelines were realized in 70 – the 80th years of the 20th century.

The control of fuel and energy resources and means of their transportation began to play an important role in definition of geopolitical positions of this or that country or group of the countries during the considered period. The question consisted in methods of implementation of such type of control. The energy crisis became an important signal for world economy in the early seventies of the XX century. Dependence of the leading powers from the Middle Eastern oil has generated many solutions of this problem up to direct military intervention. In our opinion such intervention is absolutely illegal.

Huge popularity was received by idea of sovereignty of the independent state over natural riches in the conditions of crash of colonial system and growth of national consciousness of the people of the countries of “the third world”. Iraq was nationalized the oil industry in 1952 year. Then some other the states has followed its example.

The governments of five states – exporters of oil have founded the Organization of the Petroleum Exporting Countries (OPEC) in Baghdad in the 1960 year. It was done for strengthening of the positions – exporters of oil on the world market. The headquarters of this Organization has been in Vienna since 1965 year. Nowadays besides the countries – founders – Iran, Iraq, Kuwait, Libya, Saudi Arabia and Venezuela the Organization includes Algeria, Ecuador, Gabon, Indonesia, Nigeria, Qatar and the United Arab Emirates controlled up to 90% of world extraction of crude oil by the beginning of the 70th years of the 20th century.

Representative international conference which main attention was concentrated on energy, raw, financial and economic global problems was held under the auspices of the UN atthe beginning of 1976 year. The permanent commissions have been formed on its result. However these commissions couldn’t be transformed to permanent bodies for a formulation and discussion of problems of consumers and producers of energy carriers through the spacious and complex dialogue between the rich and poor states which is carried out under the auspices of the UN.

After that problems of the international energy cooperation began to be formulated and be discussed in the context of global problems of environment [12]. So, for example, adoption of the United Nations Framework Convention on Climate Change and the decision on creation of the Commission on Sustainable Development (CSD) became important results of the famous United Nations Conference on Environment and Development which was held in Rio de Janeiro in 1992 year. It has been noted that greenhouse gases are the main reason of climate change inthe Convention. First of all they are products of combustion of oil, coal and gas. It has been solved to develop the international energy dialogue for transition to purer energy, alternative types of fuel within the solution of an environmental problem of climate change.

The integration processes, obtaining a global scope, have significant influence on development of the world energy market [9; P.2]. Nowadays economic situation and development of energy is one of the most “difficult dilemmas of persistent development” [14]. On the one hand, the energy gets into all spheres of life of society. It is a necessary condition of persistent social and economic development of each state. Existence and accessibility of energy resources, ensuring their effective usingandfail-safedeliveriesinthe modernworldbecome the main factors of world progress, decrease in poverty, increase of welfare, cultural and cleric development of the population. Persistent energy supply is one of the most important conditions of the international stability. On the other hand, development of energy leads to negative influence on surrounding environment. The modern energy generally is based on using of fossil fuel which amount to about 90% in structure of world consumption of primary energy. The present tendencies of development of the relations in this sphere with a support on production, transportation and combustion of hydrocarbon fuel: oil and gas don’t answer to modern calls and tasks facing the international community. As a resultit mustcausereasonableanxietyfordestinypresent and future generations. Uncontrollable production and consumption of raw resources becomes global. It considerably strengthens pressure on the resource potential of the planet and creates threat to persistent development of mankind. It is necessary to prepare that raw resources will run out. So it is necessary to retrench. For this purpose it is necessary to fight against big consumption in the developed countries, against inefficient using of resources in developing countries.

Recently the UN takes more and more attention to problems of global dialogue between consumers and producers of energy carriers in spite of the fact that according to the Charter of the UN global power problems don’t enter in its competence directly. However, according with common aims of the UN some aspects of these problems began to step in the agenda of a number of the forums held under aegis or within the UN in the mid-seventies years of the 20th century.

The UN is the universal international organization where power questions are discussed. Group of Eight is very interesting interstate institute. The Russian Federation is the largest country – exporter of energy carriers. The Russian Federation enters into the institute with the import countries of energy carriers. Also there is an annual specialized International Energy Conference (IEC) which began to be called the International Energy Forum (IEF) after 2000 year.

The whole world has collided with the energy calls dictated by the globalization process accelerated by growth of economies and the population in certain regions,exhaustionandextremely lopsided dispensation of resources on the planet, excessive adverse charge of environment at the beginning of the 21st century. Nowadays world requirements for fuel and energy resources are huge and continue to increase straight. As the chairman ofthe International Prize Award Committee of the “Global energy”, the Nobel Prize laureate, the academician of the Russian Academy of Sciences Zhores Alferov has noticed that before mankind isn’t more important problem than energy today. Maintenance of our civilization depends on its decision [10; P.4].

The foreign energy policy of the states was created as the independent functional direction in the last decades the 20th century [3; P.58]. Its construction is directly connected with such factors as the external economic interests and geopolitics of the state.

It is known that many states of the world being the main consumers of energy resources are constrained to import them. Thereby their national energy security depends on position in the world energy markets. Nowadays the competition notably intensifies in connection with high economic profitability of branch in these markets. The interstate cooperation in the energy sphere becomes more active for avoidance the destructive and chaotic competition and also to ensure energy security of the certain states, regions and the world in the whole. Importance of the international energy cooperation can’t be overestimated in the light of today’s situation.

The energy policy of the states often consists in development and realization of the international campaigns directed at foreign policy providing of interests of energy security of the states and the external economic interests of the national companies of an energy profile.

These interests are realized by the manufacturing states via establishment of such priorities of foreign energy policy as maintenance of high prices of the exported energy resources and providing outlets.

Opposition using sharp amplification in the prices and threat of violation of system of energy supply from external sources is priority for the states consumers.

Interests of the transit states consist in receiving the maximum profit for accordance transit services in conveyance of energy resources through their territory.

According with these aims development of conceptual provisions and debugging of mechanisms of realization of energy diplomacy of many states has been going for several decades. It often happens within the international organizations of an energy profile of global and regional gauge.

It is possible to allot the following complexes of relationship within energy cooperation between: the consuming states; the resource-reproducing states; these groups ofthestateswithinthe internationalenergy organizations; the states-producers and consumers; the states-importers and exporters and also with the transit states.

Traditional organizational forms and received kinds of political and legal documents are used in the international practice as mechanisms of realization of the purposes in process of relationship. So, the intergovernmental commissions on economic and technical-scientific cooperation are widespread in qua of working bodies on a bilateral basis. The specialized committees or the constant working groups on cooperation in fuel and energy complex are created within them.

The councils or the constant working groups on energy are created in a multilateral format within the organizations of regional economic cooperation. For example, Intergovernmental Council for Oil and Gas is created in the department of economic cooperation of the states of the CIS.

The traditional forms of negotiation mechanisms, including diplomatic conferences, are widespread in practice of energy cooperation. The traditional documents of political character are used: declarations, memorandums, statements, communiqué and also international contracts and their versions for fixation of the agreements reached during negotiations [6; P.437].

Despite of questions of ensuring energy cooperation periodically rise within the regional organizations,they still haven’t received proper dispatch. The regional cooperation can create prerequisites for the conclusion of multilateral agreements in energy sphere. Regional integration of the states can make for wider cooperation of the states in the sphere of energy. Particularities of international legal regulation of cooperation are defined by specifics of energy branch in thissphere. Theproblem of improvement of international legal regulation ofthe energy relations is received special relevance as at the universal, as regional level.