Bermuda in danger of being left behind on deep sea drilling, warns Hutchings
Local seabed prospecting company Oceans Projects Limited (OPL) is urging Government to ‘move it or lose it' when it comes to taking advantage of future deep sea mining ventures.
The “90 percent Bermudian-owned” OPL — of which former Premier David Saul is a primary stakeholder — wants Government to start gearing up for a global boom in deep sea mining by showing international mining contractors that Bermuda, and the Island's surrounding mineral deposits, are open for business.
While seabed mining is currently permitted within 200 miles of Bermuda's shores — the Island's Exclusive Economic Zone (EEZ) — OPL president Nick Hutchings said yesterday the door should be opened for seabed mining beyond the Bermuda platform.
“The discussion is no longer if we are going to mine the deep seabed, but how to do it responsibly,” Mr Hutchings said yesterday. “There is not only opportunity for Bermuda's economy within our EEZ, but outside as well, especially given the range of resources known to be in the region.”
The allure of vast, untapped mineral deposits beneath the waves has countries around the world drafting regulatory frameworks to oversee the burgeoning industry, said Mr Hutchings. And if the Government does not act now, he opined, Bermuda, already “well behind” the curve, risks losing out on significant investments.
“This is a lot closer than you would imagine. Within the next decade — I would think probably within the next half decade — we'll see people mining at those [deep sea] ocean depths. And of course once the first mines open and are proven to work [financially and environmentally] then there'll be great interest. I think what we want to do is position ourselves to be ready for when that happens, because at that point there will be some very serious investor interest in deep sea minerals, including those we have in our EEZ.”
After recently receiving an unopposed second reading in the House of Lords, Mr Hutchings highlighted a bill, soon set to pass through Parliament, seeking to amend seabed mining legislation.
The Deep Sea Mining Bill 2014 would give the British Government the ability to award exploratory licences for companies incorporated on their shores. Bermuda, said Mr Hutchings, should be doing the same.
Beyond the potential for creating new jobs and diversifying Bermuda's economic base, Mr Hutchings said a company given an exploratory licence by the Bermuda Government, as opposed to another Government, would allow a model to be established that will be beneficial for all.
But with deep sea mining comes the concern that mankind is heading towards another tragedy of the commons, already exemplified by depleted fish stocks around the globe. Under international law, minerals contained outside a country's EEZ represent “the common heritage of mankind.”
If Bermuda's mineral deposits represent the common heritage of all Bermudians, how much is each person entitled to, and how is it shared?
“Fascinating questions,” admitted Mr Hutchings, adding that he would like to hear what the more financially savvy analysts would have to say.
But if all Bermudians are to benefit, he said, all Bermuda has to do is pick a good model.
Mr Hutchings pointed to Norway's sovereign wealth fund which has taken surplus profits from oil revenue and created a sovereign account worth over $700 billion at last check.
“Norway realised quite early that they had relatively small oil reserves, maybe 30 or 40 years worth. So clearly, that's a very finite resource. If you get cranked up, create a whole industry, everything's fine until the oil runs out. Then what happens? You have a boom-to-bust [scenario.] What Norway did was, they created a sovereign account in which they took some of the oil revenues and put it into the sovereign account. They kept doing that, staying very disciplined about it, and that account is now the largest sovereign account in the world.
“Imagine you have a fast car and you are at Daytona. The race is starting, the purse is [worth] billions [of dollars]. Where do you want to be? If we are not careful we going to find ourselves locked in the garage.”