Sunken Treasure
“It is a far, far better thing to have a firm anchor in nonsense than to put out on the troubled seas of thought.” – John Kenneth Galbraith
The hit television series Bering Sea Gold chronicles a ragtag group of amateur miners as they seek life-changing fortune off the coast of Nome, Alaska. While locals undoubtedly roll their eyes at the requisite hype that comes with pseudo-reality television, the show does an entertaining job of capturing the group of scrappy entrepreneurs, trying to strike it rich despite the perils of underwater mining. Most operators profiled in the series use relatively primitive dredges pieced together from off-the-shelf materials available at most local hardware stores. Out at sea, those who stay on board keep a close eye on the weather, tending to key operating equipment, while in the near-freezing water below, divers sweep up paydirt through suction hoses for hours at a time.
The show’s producers tend to focus on the value of the gold recovered, but it is clear across the show’s 15 seasons that most miners don’t make much in the way of profit. Costly prospecting, high fuel and labor expenses, unreliable equipment, and disappointing gold weighs plague the upstart industrialists – most of the miners are losing money. The only seemingly profitable miner on the show is Shawn “Mr. Gold” Pomrenke who uses modified barges equipped with large excavators to scoop up substantially more material off the ocean floor than the dredging fleet he competes with. He also has a knack for locating rich pockets of gold, putting his vessels in ideal locations to extract the valuable bounty. In the mining business, grade and volume are king.
The show’s popularity is testimony to the time-honored thrill of a good treasure hunt and the mystery of the ocean, the last great undeveloped frontier on this planet. Although we have virtually saturated terra firma, vast swaths of the ocean floor remain untouched, inaccessible in large part due to the pressure that mounts as one sinks below the surface. The cast members of Bering Sea Gold are limited to depths of about 20 feet – much beyond that, and it becomes extremely difficult to operate.
And so, like Mr. Gold returning to the coast of Alaska aboard his sturdy vessel, the Christine Rose, we return to the question of whether there exist sufficient supplies of nickel, copper, cobalt, and other metals needed to facilitate the so-called green energy transition at scale. In a piece we published last week titled Mission Impossible, we made the case that the sheer tonnage of purified metals required to electrify our transportation sector and install battery-powered storage to solve for the intermittency of wind and solar was being ignored by our do-gooder overlords. We concluded the piece as follows: “We simply cannot electrify our transportation sector and back up our electricity grid to any meaningful extent using batteries, and therefore we won’t.”
The piece certainly triggered an interesting discussion, and many subscribers emailed us wondering if we had overlooked the possibility of deep-sea mining. Reports of massive deposits of green metals on the ocean floor abound in otherwise serious news periodicals, and surely a breakthrough or two in that area would expose us as techno-pessimists who lack the imagination necessary to solve the daunting challenges that stand before humanity.
In our real-world experience in the commodity sector, deep-sea mining belongs in what we only half-jokingly call the Grift Bin™, alongside other perpetual money sinks like graphene, nanotubes, metal-organic frameworks (MOFs), and all purported new battery architectures developed at startup companies. The money saved by simply saying no to all “investment opportunity” pitches we’ve heard in these areas has been substantial. Deep-sea mining would be a massive cash incinerator, not a panacea. Let’s dig in.