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3 – Marine Resources – Opportunities and Risks

WOR 3 In Short

> WOR 3 explores comprehensively the issues surrounding marine resources. The report sets out the current resource situation and presents in detail the markets for crude oil, natural gas and metal-bearing ores. In that setting, it goes on to examine the demand for resource extraction from the marine realm. The offshore gas and oil industry is long established and is reaching ever greater depths in the sea in its quest for new and major deposits - for instance in the Gulf of Mexico and off the coast of Brazil. In contrast to oil and gas production, the future marine mining of metals and minerals is only just emerging. Today, the technology for large-scale, regular extraction is still not available.
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Marine Resources – Opportunities and Risks

Humankind’s hunger for resources is insatiable. We need oil to power the world’s one billion motor vehicles. We use around 20 million tonnes of refined copper annually to produce items such as electric cables and electric drives, and we utilize exotic metals such as neodymium in a wide range of industrial applications. Global consumption of energy has doubled since the early 1970s and, according to the International Energy Agency (IEA) in Paris, is likely to increase by more than one-third by 2035 due to world population growth and development in the major emerging economies of China and India. In consequence, the seas are attracting growing interest as a resource reservoir. The deep oceans host large oil and gas fields and ore deposits. Extracting this mineral wealth is a very appealing prospect.

Although gas and coal will be available in sufficient quantities well beyond the end of this century, oil is likely to be the first fossil resource to become scarce. Oil is currently the world’s most important fossil fuel, with a good one-third of production now taking place offshore. The offshore oil industry is well-established. In the early days, drilling took place solely in shallow coastal waters, but today, the oil industry has conquered the deep. With new geophysical methods of exploration, scientists can now search for oil and gas fields in the seabed and underlying geological strata up to a depth of 12 kilometres below the ocean floor. With these sophisticated methods, many large new deposits have been discovered in recent years, and known deposits have been resurveyed. During the period from 2007 to 2012, 481 major discoveries were made at water depths greater than 1500 metres, accounting for more than 50 per cent of all major offshore oil discoveries. Deepwater production is therefore likely to become increasingly significant. It is interesting that the offshore discoveries are, as a rule, 10 times larger than those discovered onshore. As the explosion at the Deepwater Horizon oil rig shows, ultra-deepwater oil production is an ultrahazardous activity. Wells can only be accessed using special submersible vehicles, so incidents are almost impos-sible to control. Many causal factors led to the disaster: engineers on board misinterpreted readings from the well, and safety valves which should have closed off the well failed to activate. On the rig itself, the division of responsibilities was unclear. This was doubly problematical because operatives from several different subcontractors were working on board at the same time. Human errors thus went undetected.
In response to the disaster in the Gulf of Mexico, the offshore oil industry has developed special technology, known as capping stacks, for subsea incident response. Capping stacks can be deployed to stop the flow of oil from a gushing deep-water well. They are now on emergency standby at bases in the major oil-producing regions, including the Gulf of Mexico and the coast of Brazil. New regulations have also been introduced for onboard management of oil rigs in the Gulf of Mexico. One person with ultimate work authority on a rig must now be informed about every single step taken by subcontractors. But these measures are unlikely to go far enough to avoid incidents and damage running into many billions of Euros in future. The tragedy is that the injured parties – such as fishermen and tourism businesses – often face lengthy delays in obtaining compensation because the oil companies and government become locked in legal disputes over the issue of liability. If an oil spill affects neighbouring countries as well, the lawsuits become even more complicated. This situation could be avoided if a straightforward liability regime were es-tablished, similar to that which exists for tanker operations. Here, an international convention has been adopted, which places strict liability for damage on the owner of a ship. The owner must therefore cover the costs of the damage. If these costs exceed the amount provided under the owner’s insurance, an international fund comes into operation and disburses compensation swiftly without excessive red tape. A similar scheme would make sense for the offshore oil industry as well, but has been rejected by the oil multinationals. In the case of tanker operations, the oil-importing nations pay into the fund and then claim their contributions back from their national oil-processing industry. >
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