The oceans are dead, long live the ocean
Is the economic model that sustained the shipping industry dying? and if so, is a new one based around the ocean economy emerging in its place? And yes, it is ocean in the singular, not plural (More on that later).
A new wave of deep-water fish farm development is underway with designs getting ever larger (the size of international football pitches) and automated (did you know there is technology to identify and track individual salmon by taking images of their unique facial spots).
Offshore renewable energy production systems are also getting bigger by design, with offshore wind turbines, over 220m high, some are even floating, and they have blades that dwarf airplane wings. There are wave energy buoys under development that will be the size of a small coaster.
And then there is deep sea mining. Consortia are being formed to apply for exploration licences in the Pacific and other areas ahead of potential extraction of rare earth metals, cobalt and possible energy. Such a task requires collaboration of a number of industries and it is therefore not surprising to see dredging companies, companies with experience in deep-water oil and gas, and shipping companies involved as suppliers and developers of services, technologies and supply chains.
As society looks to the oceans to meet its demands for food, energy and transport, things are getting ever bigger, automated and intricate, yet the various industries that need to be engaged in this development discussion are only just waking up to the potential being offered.
Similarly, the policy makers, looking to the expectations of the oceans under both the societal demands and those underscored for sustainable development by the UN, are only now bringing their collective minds together.
At the beginning of May I moderated the two day Opening Oceans Conference in Copenhagen. It was a first of a kind event in so far as it was not so much targeting companies with finished products and case study examples, but looking at bringing together the shipping, maritime technology, renewable energy, ocean mariculture and aquaculture, deep-water oil and gas and mining sectors to look at new synergies that will create opportunities, but do so in the knowledge that the UN sustainability goals, and society, implies high expectations.
In full disclosure, the event was created for Nor-Shipping, the Norwegian Trade Fair. Nor-Shipping, and therefore the Norwegian business sector, had already begin this journey to broaden its remit to include the technology and demands in the greater commercial ocean space.
This is no surprise. Norwegian technology has a strong focus on clean-tech and innovation (an example is the NCE Maritime cleantech), the country’s economy is heavily focused on oil and gas, shipping, maritime and technology.
The Norwegian government, perhaps recognising the benefit of this, has become particularly ocean focused. Prime minister Erna Solberg went to Davos this year to take part in an Ocean related press conference where she and others announced plans to create a high level “Friends of Ocean Action”. Norway will host a high level ocean policy event in 2019.
While it may be difficult to see how this policy and governance activity is going to trickle down to the commercial actors that are pushing to create sustainable ocean economies, it does show the escalating governmental awareness to create strong ocean policies that will connect growth in regional waters, EEZs and international waters that remain unregulated.
Another Norwegian example of the recognition to link shipping, oil and gas and the maritime technology industries with the expanding ocean economies is the move by Sturla Henriksen former head of the Norwegian Shipowners Association to a newly created role representing the ocean economy at the UN Global Compact, the industry-based initiative that targets businesses striving to meet the UN sustainable development goals.
The United Nations is the forum where much of the governance debate is happening, and there are a range of agencies governing various aspects of the seas, from the IMO, FAO, UNFCC, UNESCO, and UNCLOS (from which the International Seabed Authority was formed). Add to this the various regional or national regulatory or policy bodies and one can understand why there are comments about a fragmented policy landscape around which the shipping and ocean economy can grow.
The UN now has a special envoy for the Ocean, with Peter Thomson the highly respected Fijian diplomat taking the post. He briefly explained to me just before we started the second day at Opening Oceans that the title has the “Ocean” in the singular as the UN recognises there is only one ocean between any two coastal points such as Copenhagen and Fiji. One hopes the regulatory/governance/policy landscape will reflect that soon.
From a shipping industry perspective, the emergence of new industries (look at the OECD Ocean Economy 2030 report to see the potential) is happening when many shipping observers predict huge structural change.
These new economies are maturing in an age of digital solutions and a focus on data, two of the disruptive aspects that are transforming shipping.
Shipping, as the economic oil behind global trade, faces geo-political upheaval, economic upheaval, and technological change. It’s been called a perfect storm, shipping 4.0 or the fourth industrial revolution by some. As someone who has been active in the maritime space for 30 years, I would call it simple evolution and change, and happening quickly, very quickly.
Yes, there will always be the demand for cargo to be shipped from one port to another, but spatial planning will impact routes, cargo owners and financial majors will demand more transparency (on things like fuel efficiency and environmental risk management – and at opening Oceans I talked on the stage to those that pointed to examples where this is happening). Ports will be impacted too, with changing demands as ocean economies need new logistics services and the risk of rising sea levels threatens infrastructure.
Different shipping sectors will be impacted differently and will see opportunity. Can offshore vessel operators see new opportunities here? Survey vessels, seismic vessels and research vessel demands will change as society seeks to understand what lies beneath the waves (An oft quoted statistic was how such a small percentage of the oceans have been studied, how little we understand the anthropocentric impacts on the ocean, although the strong link between climate change and the health of the oceans is becoming a recognised part of the debate).
The OECD report (published in 2016) points to the ocean industries offering a further 9 million jobs. This, by its own admission is a conservative estimate, but given this is similar to the population of Sweden, and certainly more than Norway or Denmark, shows the potential. But this also raises questions about human rights, skills, equality, training and safety.
When we started developing the Opening Oceans Conference in late 2017 there were many people who were surprised by the nature of the event. They perhaps wanted a “normal” event that did not seek to ask questions but merely gave companies a platform to shine in one industry silo or another.
OOC was and is about breaking down those silos, looking at these changes from an industry perspective (other significant events look at these developments through a policy/governance or a scientific prism) and asking questions about collaborative needs and opportunities that have not been asked before.