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The Oceans and Natural

Resources
Oil, Natural Gas and Minerals

Outline of Today’s Lecture
• Oil
• It’s in the ocean
• It’s transported by
sea

• Natural Gas
• It’s in the ocean
• It’s transported by
sea

• Minerals
• They’re in the
oceans….
• But not yet
economically viable

• Putting People Back
In: Why Does This
Matter to You?

Why Oil and Natural Gas?
• Most of the world’s new discoveries are
in the ocean; eg:
• The Arctic
• Gulf of Guinea
• East coast of Africa

05/04/16

D. Nincic Cal Maritime

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Oil and Natural Gas: Some
Questions
• Who needs it?
• Where is it? (Place)
• How do I get it? (Place and Space)

May 4, 2016

D. Nincic Cal Maritime

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Quick Note • OECD refers to the Organization for Economic Cooperation and Development • Shorthand for “rich countries” • Currently 34 nations 05/04/16 D. Nincic Cal Maritime 5 .

Nincic Cal Maritime 6 .OECD Countries Australia Austria Belgium Canada Chile Czech Republic Denmark Estonia Finland France Germany Greece Hungary Iceland Ireland Israel Italy Japan Korea Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Slovak Republic Slovenia Spain Sweden Switzerland Turkey United Kingdom United States 05/04/16 D.

Nincic Cal Maritime 7 .World Energy Demand 05/04/16 D.

Nincic Cal Maritime 8 .05/04/16 D.

Nincic Cal Maritime 9 .Oil Consumption 05/04/16 D.

Canada 10. Nigeria 9. 4. 2.Top 10 Oil Exporters 1. Iraq 7. Saudi Arabia Russia Iran United Arab Emirates Norway 6. 5. Nincic Cal Maritime Source: CIA World Factbook 10 . 3.United States • 05/04/16 D. Kuwait 8.

Nincic Cal Maritime 11 . United States China Japan India Germany 6.Top 10 Oil Importers 1. 2. Singapore 10. France 9. 4. 3. South Korea 8.Italy Source: CIA World Factbook 05/04/16 D. 5. Netherlands 7.

Main Oil Suppliers to the United States: 2013 05/04/16 D. Nincic Cal Maritime 12 .

Oil Transportation and Chokepoints 05/04/16 D. Nincic Cal Maritime 13 .

Nincic Cal Maritime 14 .NATURAL GAS 05/04/16 D.

Nincic Cal Maritime 15 . 2016 D.Natural Gas • Consumption expected to increase 70% from 2001 to 2025 • Industrialized nations will rely on imports for 30% of their needs by 2025 • Much of the increment in international trade is expected to be in the form of LNG May 4.

Global Natural Gas Production Note: • Dominance of Middle East • Asia • Africa May 4. 2016 D. Nincic Cal Maritime 16 .

Russia May 4.The Arctic Sea • Believed to contain one quarter of the world’s oil and natural gas reserves (mostly gas) • Conflicts between Canada. 2016 D. Denmark. the US. Nincic Cal Maritime 17 . Norway.

9%/year) • Increase 1.8%/year in developed world May 4. Nincic Cal Maritime 18 .Increased global demand • Developing world: Demand will double from 2001 to 2025 (2. 2016 D.

Transporting Natural Gas • Becomes liquid when cooled to -162°C (-259°F) and shrinks to less than 1/600th of original volume • Transported by special tankers • Returned to gaseous state at terminals and fed into pipelines • Cannot burn or explode in liquid state May 4. Nincic Cal Maritime 19 . 2016 D.

May 4.000 to 138.000 ft long Capacity of 125.000 cubic meters of fuel.LNG Tanker • • Can be up to 1. Nincic Cal Maritime 20 . 2016 D.

Nincic Cal Maritime 21 .Fleet Expansion • Worldwide fleet expanding 30% • Current global fleet: 151 vessels • 55 ships under construction • 2-8 LNG tankers could arrive and depart along Baja and California coasts each week May 4. 2016 D.

7% • • • • Brunei: 4.6% Marshall I*: 4.coltoncompany.4% each • * US reflags Source: Maritime Business Strategies.S*: 5.com May 4.2% Liberia: 9.9% Panama: 10. Bahamas.I.7% Bermuda: 7. LLC www.0% Algeria.4% N.LNG Fleet by Flag • • • • • • Japan: 15.8% Malaysia: 10.6% Singapore: 4. UK: 3. 2016 D. Nincic Cal Maritime 22 .

Nincic Cal Maritime 23 . 2016 • Plans to adapt existing yards for LNG construction: • India • China • Poland D.LNG Shipyards • Currently only 8 actively building LNG carriers: • Japan (3) • Korea (3) • Europe (2) May 4.

Nincic Cal Maritime 24 .US LNG Terminals May 4. 2016 D.

LA May 4. GA Lake Charles. 2016 D. MD Elba Island. Nincic Cal Maritime 25 .Current Terminals • • • • Boston. MA Cove Point.

2016 D.Oil and Natural Gas: Putting it all in context • One-quarter to one-third of oil and gas reserves are offshore – mostly on the continental shelf • Some significant reserves are in areas of contested EEZs • Oil and natural gas issues are increasingly maritime issues  Much of the transport is through chokepoints with significant security concerns May 4. Nincic Cal Maritime 26 .

Nincic Cal Maritime 27 .OCEAN MINERALS 05/04/16 D.

without light • As late as 1817 some scientists believed the seabed was covered with ice • This changed with the Challenger expedition .Historical views of the deep seabed • Life could not exist under great pressures.

Challenger: 1872-1876 • Goals • Determine the chemical composition of seawater • Ascertain the physical and chemical deposits on the sea bottom • Examine the distribution of organic life .

hundreds of sea-floor sediment samples • 50 volumes of expedition reports .000 of which were previously undiscovered).441 water samples. • 1. one chemist: 13.000 species of plants and animals (4.The Voyage • 69.000 miles • Four naturalists.

8km) picked up some corals with “black crust” • Pure oxide of manganese • Seabed samples repeated around the world • Significant find south of Australia at a depth of 5km .525 fathoms (~2. 20°14’W: • A dredge to 1.The discovery of minerals in the deep seabed • 18 February 1873 at 25°45’N.

non-magnetic is also important to shipbuilding and aerospace • 1957: Scripps and UC Berkeley focus on the study of deep sea manganese nodules • 1965: The mineral resources of the sea concludes it would be economically feasible to mine the nodules .More recently • Manganese is essential to iron and steel production.

Important point • A great deal of the manganese deposits are found in the deep seas • Beyond the territorial limits of any nation • 1968 UN General Assembly establishes the Committee on the Peaceful Uses of the Seabed and the Ocean Floor Beyond the Limits of National Jurisdiction • Deep seas established as the common heritage of mankind .

beyond the limits of national jurisdiction…as well as the resources of the sea are the common heritage of mankind. and the subsoil thereof. to be reserved for peaceful purposes.Minerals and UNCLOS III: The 1970 Declaration of Principles • “The seabed and ocean floor. except in accordance with an international regime to be established” . not subject to national appropriation and not to be explored or exploited.

US objections • The detailed procedures for production authorization from the International Seabed Authority • The complex financial rules of contracts • The decision-making process in the Council of the Seabed Authority • Mandatory transfer of technology .

1994 renegotiation • Production limitations on mining were removed • Annual fee mining companies had to pay – even for exploration – was removed • US given a seat on the Seabed Council • Technology transfer provisions removed or made acceptable to the US • Still not enough for some US Senators – the treaty still has not been ratified by the United States .

Where we stand now • Only just beginning to be commercially viable (eg: Nautilus Minerals) • Exploration continues – especially in deep sea “chimneys” (first discovered in 1977) • Galapagos chimneys: Copper deposits worth an estimated $2 billion .

What minerals are we talking about? • • • • • • • Nickel Copper Wolfram Coal Iron Lead Zinc • • • • • • • Sulphides Gold Diamonds Silver Manganese Chromium Titanium .

Environmental concerns about deep seabed exploration • Loss of biodiversity • Unintended pollution/ecological consequences • Loss of potentially economically valuable knowledge • Microbes  hazardous waste removal .

zoarcid fish. Anenome. clams. scaleworms. crabs. no plants are found here. mussels. alvinella worms. limpets. to create simple sugars. tube worms . They are chemosynthetic. squat lobsters. • Microbes form the base of the food chain.Deep Sea Vent Creatures • Tubeworms. using energy from hydrogen sulfide in the vent fluid. and oxygen and carbon dioxide from the seawater. • Given the absence of sunlight. and octopus.

foraging briefly in the desert sun at temperatures up to 55°C (131°F).The Pompeii Worm • The most heat-tolerant animal on Earth • Can survive an environment as hot as 80°C (176°F) • Formerly. the Sahara desert ant was believed to be the most heat-hardy creature. .

Nincic Cal Maritime 42 .Conclusion • Oil and natural gas are ocean issues • Found in the oceans (nearly all “new” discoveries are at sea) • Transported by sea • Mineral extraction from the seabed will be an increasingly important issue for the future • Tying it all together: Note security and environmental concerns 05/04/16 D.