The meaning and scope of energy law

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The role of the law can be understood by considering the definition of 'energy law'. Energy law has been described as 'the allocation of rights and duties concerning the exploitation of all energy resources between individuals, between individuals and the government, between governments and between States'.91 The reference to 'energy resources' should not be seen as limited to the primary sources of energy, but should extend to secondary and substitute sources of energy. The most important secondary source of energy is electricity. The major substitute energy resource is energy conservation. This energy resource is indirect in the sense that it does not directly produce energy, and in fact is in one sense the antithesis of a resource in that it curtails the production of energy. In

90 See Chapter 6 for a discussion of this issue.

91 Adrian J Bradbrook, 'Energy Law as an Academic Discipline' (1996) 14 JERL 193, at 194.

another sense, however, it is as much an energy resource as any of the primary energy resources insofar as it is capable of satisfying society's demand for energy. For example, if society's demand for electricity can be reduced by a given amount due to the use of energy conservation techniques, this means that the amount of primary energy used is correspondingly reduced. Energy saved is as effective as energy generated in satisfying society's demands, and in this sense energy conservation is equivalent to the use of primary energy resources.92

The definition of energy law coined above refers to the 'exploitation' of energy resources. The methods of turning energy resources into productive and profitable use differ greatly between the various sources, and the involvement of the law must be separately considered in respect of each resource. For example, the exploitation of wind energy raises issues such as: How can access to the wind be legally safeguarded for owners of wind generators?93 What environmental safeguards exist to protect against visual pollution caused by wind generators in environmentally sensitive locations?94 To what extent should planning laws be modified so as to permit the construction of wind generators in urban and suburban districts?95 And what remedies exist to protect neighbouring landowners from possible damage caused by flying rotor blades, collapsing towers or microclimate modification?96

The 'allocation of rights and duties' must next be considered. This expression is designed to consider the balance of legal rights and duties that must be established between the interested parties in respect of each energy resource. Again, the appropriate balance will differ fundamentally according to the nature of the resource. In the case of non-renewable energy resources, there is the initial fundamental issue of ownership rights in the resource.97 Are or should the resources be vested in public ownership or should they be subject to private ownership? In the case of renewable energy systems, the notion of public ownership of the resource makes no sense. One cannot, for example, 'own' the sun, the wind, the tides or the waves. The issue in these cases is rather one of access to the resource. In the case of solar and wind energy access issues involve a balancing of the rights of a solar or wind user to erect and operate their devices as efficiently as possible;

92 A unit of energy saved as a result of energy conservation techniques is sometimes referred to as a 'negawatt' (a negative watt).

93 See Adrian J Bradbrook, 'The Access of Wind to Wind Generators' [1984] AMPLA Yearbook 433.

94 See H Wilkinson, 'Wind Farms' (1994) 134 New LJ 314; Adrian Bradbrook, 'Liability in Nuisance for the Operation of Wind Generators' (1984) 1EPLJ128.

95 See D Newman, 'Empowering the Wind: Overcoming Obstacles to Wind Energy Development in the United States' (2003) 3 SustainableDevelopmentL & Policy 5; LCoit, WindEnergy: Legallssues andlnstitutionalBarriers (1979), at 9ff; J Riley, R Odland and H Barker, Standards, at 91.

96 See Adrian Bradbrook, 'The Liability of the User of a Wind Generator in Tort for Personal Injuries' (1985) 15 Melbourne UL Rev 249; L Bass and P Weis, 'Safety Standards Development for Small Wind Energy Conversion Systems' (1981) 3 Solar Law Reporter 453; K Knox, 'Strategies and Warnings for Wind Generator Buyers' (1982) 24 Wind Power Digest 54.

97 See Michael Crommelin, 'The US Rule of Capture: Its Place in Australia' [1986] AMPLA Yearbook 264; R Pierce, 'Coordinated Reservoirs Development - An Alternative to the Rule of Capture for the Ownership and Development of Oil and Gas' (1983) 4 JERL 1; Adrian Bradbrook, 'The Relevance of the Cujus Est Solum Doctrine to the Surface Landowner's Claims to Natural Resources Located Above and Beneath the Land' (1988) 11 Adelaide L Rev 462. The issues also arises in relation to geothermal resources: see Adrian Bradbrook, 'The Ownership of Geothermal Resources' [1987] AMPLA Yearbook 353; Sato and Crocker, 'Property Rights to Geothermal Resources', 247.

in other words, to avoid all possible physical barriers to the flow of wind and access to sunlight, with the rights of neighbouring landowners to develop their land as they consider fit.98 In the same way as the law has to find a compromise between the state and a petroleum company in the case of the development of oil and gas resources, so the law has to achieve a balance in the case of solar and wind energy between neighbours. While the balance in the petroleum context is usually achieved by the introduction of legislation controlling petroleum exploration and production, in the case of solar and wind energy the balance is usually achieved by the use of the local planning laws. In the case of energy conservation, the roles of the individual and the State are effectively reversed. As it is in the national interest to conserve energy to the maximum extent practicable, the individuals or companies who engage in energy conservation techniques are helping the State as much as themselves, not simply financially, but in relation to other matters such as energy security or the avoidance of pollution. Thus, it is appropriate to think in terms of the individual or company having legal 'rights' and the State having legal 'duties' towards them.

The preceding discussion explains why the definition of energy law referred to above refers to the allocation of rights and duties concerning the exploitation of energy resources 'between individuals' and 'between individuals and the government'. We must now consider the role of energy law in allocating rights and duties 'between governments' and 'between States'.

The allocation of rights and duties between governments arises for consideration in federal jurisdictions such as Australia and raises issues of constitutional law. In Australia the Constitution reserves residual rights to the States and gives only enumerated powers to the Commonwealth government. Energy issues fall within the residual powers of the States and thus primary responsibility for energy laws lies at State level. To date, the existing laws affecting renewable energy resources and energy efficiency (apart from taxation issues), including the electricity industry, are purely at State level. However, with the newly established national electricity grid and a national market for electricity and other energy products, together with the increasing interconnection of the State grids, it is possible that the Commonwealth government will be able to attract jurisdiction to itself over the industry pursuant to the trade and commerce power (s 51(i)) and the corporations power (s 51(xx)) of the Constitution.99

Finally, rights and duties in the energy sector must be allocated by law between States. This, of course, raises a consideration of the application of the principles of international law in the context of energy. This area has evolved and continues to evolve very rapidly and represents the real cutting edge of energy law at the

98 In relation to solar energy, see M M Eisenstadt, 'Access to Solar Energy: The Problem and its Current Status' (1982) 22 Natural Resources J 21; J Gergacz, 'Legal Aspects of Solar Energy: Easements for Sunlight and Individual Solar Energy Use' (1980) 18 American Business L J 414; Adrian Bradbrook, 'The Development of an Easement of Solar Access' (1982) 5 UNSWLJ 229. In relation to wind energy, see R Taubenfeld and H Taubenfeld, 'Wind Energy: Legal Issues and Legal Barriers' (1977) 31 Southwestern L J1053; Adrian Brad-brook, 'The Access of Wind to Wind Generators' [1984] AMPLA Yearbook 433.

99 Adrian Bradbrook and Alexandra Wawryk, 'Constitutional Implications of the Restructuring of the Australian Electricity Industry (1996) 3 Australasian Natural Resources L & Policy 239.

present time. Until comparatively recently, energy was seen to be very much a national issue and one that required little, if any, international legal intervention. In recent years, however, world concern for the environment, together with the removal of trade barriers, has led to a realisation that international law has a significant role to play in this domain. The role of international law in promoting the use of renewable energy resources and energy efficiency is discussed in detail in the next chapter.

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