Matthew Draper discussed water supply risks to the energy production value chain at a panel discussion on the arbitration of international energy disputes hosted by the International Chamber of Commerce's Young Arbitrators Forum (ICC YAF) in Houston on October 6, 2014.
Mr. Draper's presentation focused on the energy industry's dependency on water, particularly in parts of the world where hydrocarbons are abundant but water is scarce. The extraction of shale resources such as natural gas and tight oil, for example, often requires large quantities of freshwater. Mr. Draper argued that the fracking industry is particularly vulnerable to water supply risks as it expands from shale plays in the United States and Canada to water-stressed areas like the Arabian Peninsula, Northern China, Mexico, North Africa, and Pakistan. He also highlighted water supply risks to other forms of energy production, including oil extraction and hydroelectricity. As a result, Mr. Draper stated that participants should expect to see an increasing number of international disputes in the energy industry that are caused or exacerbated by water supply problems. Many of these disputes will be resolved through international arbitration.
More information about the ICC YAF event is available here. It preceded the Second Annual ICC Houston Conference on International Arbitration: Energy, Ethics and the Effective Management of Arbitration on October 6 and 7.
Photo:User eflon on Flickr. Licensed under Creative Commons Attribution 2.0 via Wikimedia Commons.