The Energy Charter Treaty, a case study of ‘business as usual’ in the energy sector

(EurActiv, 24 Jun 2019) A closer look at the Energy Charter Treaty provides a case study of who really holds power in our increasingly interconnected world, writes Timothy Knickerbocker.

Timothy Knickerbocker holds a Ph.D. in cultural anthropology from UC San Diego. He was an associate professor at Central College, Iowa before moving to Paris in 2010 where he has taught economics, religion, and sustainable development at St. John’s University, the Catholic Institute and Hollins University.

On 7 June, EURACTIV ran a news article which gives a glimpse into the failings of the Energy Charter treaty. This is more than an internal squabble in another international bureaucratic organisation. It provides a good opportunity to take a closer look at the ECT in relation to global energy concerns, for three important reasons:

  • It shows how international commitment to sustainable development can be sidelined and how current beneficiaries of oil and gas extraction activities in host countries have a vested interest in maximising profits from fossil-fuel based economic engines.
  • It reminds how individual and corporate interests, represented (or initiated) by specialised law firms, have used the treaty’s provisions to make huge profits on the back of signatory states of the treaty.
  • It brings into high relief the growing legal, economic, and ethical battles over energy resources between states (e.g. Spain and Italy), corporations (e.g. Gazprom), multilateral organisations (e.g. the EU), and society at large.

At its core, the ECT was designed to encourage economic cooperation between the former Soviet Union, Central and Eastern Europe and the EU. This purpose has been eclipsed by quite different geopolitical realities, and energy company operations, that have since emerged. Two important structural changes occurred as a result.

First, in 2015, the ECT Secretary General, Dr Urban Rusnák, launched the International Energy Charter (IEC). The IEC is a political declaration, which aims to expand the scope of the ECT to global energy systems. This internationalisation of the ECT does not reflect all of the international community’s will when it comes to energy. There have been efforts and rhetoric to pay attention to the UN Sustainable Development Goals and the Paris Climate Agreement.

The second structural change is that the European Commission kick-started negotiations to “modernise” the ECT on 14 May. The EU’s executive arm recommended that the ECT provides stronger provisions for sustainable development, including climate change and the energy transition that are in line with EU agreements and positions.

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EurActiv, 24 Jun 2019: The Energy Charter Treaty, a case study of ‘business as usual’ in the energy sector