Ocean Energy and Minerals Security: A New Strategic Cooperation Policy for US-Portugal Relations

Ocean energy and rare earth minerals security has the potential to become a valuable strategic cooperation policy area between Portugal and the United States. At the minimum, it is a logical consequence of the major transatlantic geopolitical elements that unite both countries.

First, Portugal and the US are long-time, close, and reliable allies, and have a history of a trustworthy relationship. Both are founding members of NATO.

Second, Portugal is the European maritime frontier of United States, with the Azores archipelago—a distance of four thousand kilometres between US and Portuguese shores—as the main point of contact. During World War II and the Cold War, the Lajes military base in the archipelago played an important logistical role for US operations in Europe.

Third, the US has the largest ocean territory in the world, with an Exclusive Economic Zone (EEZ) of nearly eleven and a half million square kilometres. However, Portugal—which has the 110th-smallest land area on the planet—has the 20th largest ocean territory in the world, comprising an EEZ of nearly two million square kilometres. This maritime territory will probably increase twofold if the UN extension of the Portuguese continental platform proposal is approved—an area equivalent to the size of the Indian subcontinent.

When considering these geopolitical elements and the current energy and rare earth minerals challenges of the North Atlantic, Portugal and the US will arguably gain a lot in building a new cooperation framework for ocean energy and minerals security in the following four strategic areas: Liquefied natural gas (LNG) trade; ocean renewable energy; methane hydrates; and deep-sea mining.

LNG: an alternative route for Europe’s gas security

LNG trade defines this new line of cooperation. A 2015 study published by the Energy Security Program of the Luso-American Foundation for Development (FLAD) stated that by accounting for the annual additional production of gas in the US and in certain African countries, Europe may be able to mitigate its dependence on Russian gas imports and thereby adopt a maritime-based supply system, instead of relying on land-based pipeline networks.

According to FLAD’s analysis, Portugal and Spain have the capacity to substitute almost 30 percent of European energy imports from Russia, which comprises about 44 percent of the gas that flows through the Ukraine network—the most problematic chokepoint of Europe’s Russian gas dependence. This is possible because Portugal and Spain LNG reception capacity is under-utilized. A recent report, “Surging Liquefied Natural Gas Trade,” published by the Atlantic Council, stressed this fact—stating that European policy officials should launch initiatives that connect underused terminals of Portugal and Spain to the markets of central and eastern Europe via pipeline.

In Portugal, the Sines LNG terminal can become an important maritime re-export hub of US natural gas. Even if it is not connected by a pipeline network to the markets of central and eastern Europe, its deep-water port can work as a storage and gas re-export hub, by maritime connection, with the US being one of its main suppliers. This would reinforce the role of the North Atlantic as a secure energy corridor for Europe. Indeed, the first shipment of US LNG to Europe was made through the Sines terminal in May of 2016.    

Ocean energy: technology and innovation

Ocean-based renewable energies, particularly floating offshore wind and wave energy, stand as a second area where the US and Portugal can enhance energy cooperation. Floating offshore wind and wave energy are two frontier renewable sources that have immense potential for producing secure and sustainable electricity.

In Portugal, floating offshore wind has the potential for supplying 25 percent of the total consumed electricity, enough to substitute a coal power plant. Furthermore, EDP, the main Portuguese utility, is a pioneer in the development of this new technology, as demonstrated by the Windfloat concept. In a recent report, US-based National Renewables Energy Laboratory has mentioned Windfloat as one of the most promising technologies of this kind.

This is by and large the most efficient in its category and is moving to a pre-commercial phase in 2017, as seen by a floating offshore wind farm at Viana do Castelo in Portugal—composed of three 8 Megawatt turbines.

Wave energy is a more experimental technology—due to its harsh operation environment. Still, taking into account its great potential, it is worth investing in its development. Portugal and the US have several projects going forward in this area and would gain a lot of in combining resources for generating higher-scale initiatives.

Methane hydrates: the next energy frontier

The exploration and production of subsea methane hydrates is a third avenue that can lead to further energy cooperation. Commonly known as “burning ice”, this method uses frozen geological formations containing encapsulated natural gas. According to US Geological Survey estimates, gas hydrates are between 10 to 100 times as plentiful as US shale gas reserves worldwide—making it an abundant source of a clean-burning fossil fuel. Potential sources of methane hydrates were identified both on the US Atlantic Coast, and in Portuguese platforms.

However, there is a great deal of research and development that needs to occur before this method can be considered economically viable. Despite this, the state-owned Japanese energy firm JOGMEC is moving to produce pre-commercial gas from a methane hydrate formation in the Sea of Japan—capable of supplying ten years of national consumption.

It would not be an exaggeration to state that methane hydrates are seen as a future source today as shale gas was fifteen years ago.

Deep-sea mining: a future strategic challenge

A final area of strategic cooperation is more long-term: deep-sea mining of rare earth metals. These are minerals of high strategic value because they are critical for a series of industrial appliances in many sectors: renewable energies, information and communication technologies, and electrical mobility, for example.

Presently, 90 percent of the world’s supply of these mineral resources is concentrated in onshore mining in China. More than 50 percent of the current world’s supply of lithium is in Bolivia. Since developed economies are migrating to an electrified, renewable-based, and information-driven energy system, the result of further adoption of deep-sea mining will be the creation of new and potentially dangerous geopolitical dependencies if new sources of rare earth metals are not developed.

Recent research into the Portuguese oceanic platform identified that its deep sea is equivalent in size to Europe with the most quantities of rare-earth metals available. There is an immense potential in the Azores hydrothermal vents, in the Madeira abyss, and in the Portuguese continental margin. Nautilus Minerals, a Canadian firm, plans to start exploration into the Azores area in 2017.

The advantage of deep sea mining in the Atlantic is that it is geopolitically less risky, and economically and environmentally friendlier.

To conclude, a strategic cooperation between Portugal and the US in Ocean energy and minerals security is not only possible, but also serves as a pragmatic and necessary policy that will have a significant contribution for securing transatlantic prosperity.

Ruben Eiras is director of the Energy Security Program at the Luso-American Foundation for Development in Portugal. 

Image: From left: Then-European Commission President Jose Manuel Barroso shakes hands with US President Barack Obama as then-Prime Minister Jose Socrates for Portugal looks on the exchange during the second day of the NATO Summit in Lisbon November 20, 2010. (Reuters/Yves Herman)