The Alien Torts Statute and the Search for Energy in Difficult Political Environments

I. INTRODUCTION II. THE OPERATING ENVIRONMENT III. THE LAW IV. THE CASES A. The Doe v. Unocal Corp. Case B. The Presbyterian Church of Sudan v. Talisman Energy, Inc. Case 1. The Facts 2. The Law V. CONSPIRACY UNDER THE ATS 302 VI. AIDING AND ABETTING UNDER THE ATS VII. CAUSATION VIII. CONCLUSIONS IX. PRACTICAL PROPOSALS I. INTRODUCTION The need to satisfy the world's ever growing thirst for energy drives both American and foreign energy companies further than ever before to accept risks that would not have been considered acceptable previously. Initially, the risks were primarily technological in nature. Energy companies drilled deeper and deeper onshore at greater risk and cost to unlock reservoirs of petroleum and natural gas previously considered technologically unfeasible or uneconomic. Thereafter, the industry took its exploratory efforts offshore into shallow, and then deeper, waters. Now, the Gulf of Mexico and other mature offshore energy basins are populated by standing and floating platforms, both manned and unmanned, all fully automated, producing thousands of barrels of oil and millions of cubic feet of natural gas each day to meet the world's demand. The energy industry's willingness to accept risk has not been limited to technological issues, however. As energy reserves become depleted, the difficulty in finding new reserves of energy has increased. Energy explorers have had to expand the scope of their search to places far from the safe political confines of the Gulf of Mexico. This expansion has taken explorers from the North Sea to Eastern Europe, from the tundra of Western Asia to the warm seas of Southeast Asia, from the East Indies to the West Indies, from Patagonia to Mexico, and from Libya to South Africa. This exploration has borne fruit. Millions of barrels of oil and trillions of cubic feet of natural gas have been discovered in basins great and small around the world as a result. Accompanying these discoveries, however, are safety issues for assigned personnel, security issues for onsite assets, political risk for investments, and hazards resulting from working with or for governments deemed by world opinion to be violating international law. While not exclusively so, most modern concession contracts between host governments and energy companies are referred to as Production Sharing Contracts. These agreements take many forms. Fundamentally, however, they authorize the energy concessionaire to explore for and produce oil and gas within a specified geographical contract area. Upon discovery and production of energy resources within the contract area, the host government becomes entitled to receive a portion of the net production after allowing the concessionaire to recover from the sale of produced hydrocarbons some or all of its costs of exploration, production, and operation. The contract often provides that in return for receiving a share of the production, the host government agrees to provide certain services to assist the concessionaire in the operation and maintenance of the contract area. These services include the provision of road and pipeline rights-of-way, water for operations, and, most importantly, security for operations in and around the contract area. This latter obligation on the part of the host government is, to a greater and greater extent, becoming the source of serious risk to the international energy industry. II. THE OPERATING ENVIRONMENT Geology is blind to politics and world strife. While inexplicable and utterly illogical, it has long been believed in the international energy industry that the larger the energy reserve discovered, the larger the political and safety risk to be encountered. Such was the situation in two recent cases discussed hereafter. In Presbyterian Church of Sudan v. Talisman Energy Inc., a Canadian corporation was striving to produce discovered oil pursuant to a production sharing contract whose contract area was located in Darfur. …

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