Washington (Platts)--16Jul2012/540 pm EDT/2140 GMT

A treaty that could unlock massive Arctic oil and natural gas resources lacks the votes to pass the US Senate, after two key Republicans announced Monday they will oppose the treaty.

Republican senators Rob Portman and Kelly Ayotte, of Ohio and New Hampshire, respectively, said they would vote against the Law of the Sea treaty over concerns that the accord would place unacceptable limits on US sovereignty.

"After careful consideration, we have concluded that, on balance, this treaty is not in the national interest of the United States," the senators wrote in a joint statement. "We simply are not persuaded that decisions by the International Seabed Authority and international tribunals empowered by this treaty will be more favorable to US interests" than the status quo.

That brings to 34 the number of Senators who have announced opposition to the treaty, meaning its backers do not have the 67 votes needed to ratify the measure.

The treaty covers a range of maritime topics, but key for energy developers, countries that ratify the treaty could extend their jurisdictional boundaries beyond the long-accepted 200-mile offshore limit by showing the UN geologic evidence that their continental shelves extend beyond that point. The US has sent scientific research ships to the Arctic for the last several summers to gather that type of evidence, in anticipation that the US will someday ratify the treaty.

The US oil and gas industry has long supported the treaty, saying it would provide greater legal certainty for offshore energy exploration, and that it would also protect vital oil shipping lanes.

Top officials at the American Petroleum Institute have repeatedly called on Congress to ratify the treaty.

Senate Foreign Relations Committee Chairman John Kerry, Democrat-Massachusetts, has held three hearings on the treaty this year, and had said he plans to vote on the measure sometime after the November elections.

The Obama administration also has voiced its strong support for the treaty. Secretary of State Hillary Clinton has said the treaty would allow the US to lay claim to a swath of the Arctic that is 403,000 square miles.

Other Republicans, including Senator David Vitter, Republican-Louisiana, say the treaty would allow the UN to dictate how the US conducts military operations as well as energy development in the world's oceans.

Another treaty detractor, Senator James Inhofe, Republican-Oklahoma, has highlighted a provision of the treaty that would require the US to give the United Nations-chartered International Seabed Authority up to 7% of revenues from oil and gas production in the new territory. The ISA would redistribute that money to other poor and land-locked countries that signed the treaty.

Clinton, Kerry and others have said the treaty would provide the legal certainty that US companies need to mine the world's oceans for so-called rare earth metals, which are used in wind turbines, advanced batteries and other energy applications.

Treaty backers say the US needs to ratify the treaty this year, because more than 40 countries have already submitted petitions to extend their offshore resource rights, and UN-sponsored panels are currently drafting rules governing deep-seabed mining.

--Keith Chu, keith_chu@platts.com --Edited by Valarie Jackson, valarie_jackson@platts.com

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