U.S. developed the UNCLOS royalty scheme under the Nixon administration with the full backing of the oil and gas industry
These arguments have proven a successful rallying point for UNCLOS opponents and a potential political millstone for senators who might otherwise be inclined to support the convention. The arguments have retained force despite the fact that the United States itself originally conceived the royalty plan under the Nixon Administration, with the full support of U.S. industry—support that has remained consistent across nearly four decades. Royalties were proposed as a modest concession in return for agreement on the U.S.-sponsored extended continental shelf regime.138 Indeed, most of the oil and gas that may be recovered would be in the first six years and thus would not ever be subject to royalty payments. The “UN-style bureaucracy” argument has also endured despite the fact that opponents have presented no evidence that the ISA is either inefficient, overstaffed, or corrupt at any time throughout the nearly 19 years since its founding in 1994.
Related argument(s) where this quote is used.
Opponents of UNCLOS often point to the royalty payments required under Article 82 of the convention as a reason to reject ratifcation. However, on closer examination many of the criticisms of the revenue sharing agreeements do not hold up. The actual amount the U.S. would have to pay pales in comparison to the revenues that would be generated, a significant reason why industry represenatives have consistently been in favor of UNCLOS. Additionally, the concern that royalty payments would go towards anti-U.S. states and non-state actors could be mitigated if the U.S.Related Quotes:
Parent Arguments:Supporting Arguments:Counter Argument:
- Royalties U.S. has to pay on mineral and hydrocarbon worth it given the extraordinary benefits U.S. would gain
- Revenue sharing arrangement of UNCLOS is insignificant compared to value of resources and was negotiated with support of oil and gas industry
- U.S. foreign aid could be used to offset any required transfers to states, eliminating any tax burden
- Modest revenue sharing system in UNCLOS will not pose any burden on extracting industries and is in U.S. best interests
- ... and 8 more quote(s)