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Treaties on Transit of Energy via Pipelines and Countermeasures. By Danae Azaria [Oxford: Oxford University Press, 2015. 285 + xlix pp. Hardback £70. ISBN 9780198717423.]

Published online by Cambridge University Press:  14 March 2016

Anatole Boute*
Affiliation:
The Chinese University of Hong Kong

Abstract

Type
Book Reviews
Copyright
Copyright © Cambridge Law Journal and Contributors 2016 

The interruption of gas supply from Russia to Ukraine in 2006, 2009, and more recently in the context of the Ukrainian conflict has highlighted the crucial importance of transit for energy security and the exposure of the EU to transit risks. To minimise these risks, the EU has adopted and implemented domestic reforms of its energy market aiming at reinforcing the solidarity between the EU member states in situations of external energy crisis. The objective is to increase intra-EU infrastructure links and cooperation to facilitate the compensation of external energy deficits with internal energy supply. Moreover, the EU increasingly promotes the diversification of energy routes (e.g. from the Caspian region) and energy resources (e.g. renewable energy and liquefied natural gas) to manage the risks of external energy dependency. Nevertheless, these measures will not fully neutralise the risk of energy transit for the EU. Taking into account the large share of Russian energy in the EU fuel mix and the high cost of energy self-sufficiency, the EU will in the foreseeable future remain dependent on energy supply from Russia and transit via Ukraine. The EU therefore has a strategic interest in the development of a functioning international regime for the regulation of energy transit and the resolution of transit disputes. More generally, most energy-importing states around the world are dependent on the transit of energy resources through pipeline infrastructure. Despite the increasing importance of local renewable energy sources and liquefied natural gas for world energy markets, the cross-border transportation of energy via pipelines will remain an essential component of global energy supply. In this context, it is of essential importance for both energy-importing and producing countries to understand their rights and obligations in relation to the transit-related risks of interruption of energy supply. The topic of transit is not new in the energy and international law literature. In particular, scholars have devoted attention to the regulation of transit under the General Agreement on Trade and Tariffs (GATT) and the Energy Charter Treaty (ECT). However, given the complexity of the legal issues at stake and the multiplicity of applicable legal regimes (customary international law, GATT, ECT, regional energy law, intergovernmental pipeline agreements), much remains to be said about this crucial aspect of international energy law.

Treaties on Transit of Energy via Pipelines and Countermeasures makes a unique contribution to the international law literature by providing an in-depth and impressively researched analysis of energy transit under general international law. The focus of the study is relatively narrow but goes into a great level of detail based on a careful discussion of multilateral transit regimes (GATT and ECT) and pipeline agreements (e.g. the Trans-Adriatic, Nabucco, South Stream, China-Central Asia, Baku-Tbilisi-Ceyhan, West African Gas pipeline agreements), as well as international case law and public international and energy law literature.

Azaria analyses the regulation of energy transit via pipelines (i.e. not via rail and road infrastructure or waterways), focusing in particular on the right of exporting, transit, and importing countries to suspend energy flows as countermeasure to the violation of international law obligations. The book under review does not cover customary rules concerning energy transit (i.e. the controversial question of freedom of transit under customary international law) and the construction of new transit capacity. Instead, the analysis looks at the more specific issue of enforcement of international law in relation to the strategic question of cross-border energy supply. The Ukrainian crisis highlights the relevance of a legal study on the rights and obligations of states in relation to the interruption of energy flows. Understanding the relationship between treaties on transit (e.g. GATT, ECT, and bespoke pipeline agreements) and the regulation of countermeasures under general international law is important to limit the deterioration of geopolitical tensions in this sensitive field.

Under certain circumstances, the interruption of energy flows by transit and exporting states can be justified in case of violation of international law obligations. However, the scope for such measures will depend on the formulation of the applicable pipeline and transit treaties and the nature of the obligations at stake. Certain pipeline agreements (e.g. the Trans-Adriatic Pipeline agreement) specifically prohibit the suspension of performance of the obligation not to interrupt energy flows in response to prior treaty breaches. Moreover, according to the International Law Commission (ILC) draft articles on the responsibility of states for internationally wrongful acts, countermeasures must exclusively target the responsible state, which significantly limits the possibility for states to interrupt energy transit. The suspension of energy supply by exporting countries (e.g. Russia) as a response to breaches by transit states (e.g. Ukraine) will not be compatible with international law if it affects importing countries (e.g. the EU). This stems from the indivisible, interdependent, and in some cases erga omnes nature of transit obligations. However, this does not prevent states from introducing countermeasures relating to treaty obligations that are bilateralisable. For instance, the ECT prohibits the interruption of transit flows but does not explicitly exclude countermeasures with other ECT obligations (i.e. obligations that are not owed to other ECT Contracting Parties). In any event, the effect of countermeasures must be proportional to the injury suffered by prior breach. Moreover, countermeasures must respect human rights. The latter requirement can be very important in the energy sector, taking into account the severe impact on society and human life that the interruption of energy supply can have on states that are fully dependent on one external source of energy.

Despite the social and economic impact of interruptions of cross-border energy supply, international law arguments have not played a central role in the resolution of the transit disputes that have affected Europe's energy supply. States have focused on political ways of restoring energy flows and have refrained from launching compensation claims following the cessation of supply interruptions. Azaria does not engage with the possible reasons underlying the limited use of international law arguments in the geopolitically sensitive energy sector.

The limited practical relevance of international law so far does not reduce its potential to address future energy transit disputes. Treaties on Transit of Energy via Pipelines and Countermeasures highlights signs of “genuine multilaterisation” and “increasing treatification” in the field of energy transit. Pipeline agreements are concluded all over the world and increasingly by non-EU actors such as China that developed a massive pipeline infrastructure to secure the supply of natural gas and oil from Central Asia. The challenges that the EU faced and is still facing in the field of energy transit are therefore of broader relevance. In this context, Treaties on Transit of Energy via Pipelines and Countermeasures must be welcomed as a much-needed analysis of the complex case of the interruption of energy supply and its consequences under international law. Although at times difficult to follow given the level of detail, the precision of the study, and technical language, the book under review will prove to be most valuable scholarship for lawyers specialising in the field of energy and public international relations.