CNMI delegate proposes to allocate 50% of seabed lease revenues to host territory
By Jayvee Vallejera
Northern Marianas Del. Kimberlyn King-Hinds is pushing for a 50-50 revenue split for seabed mining leases, with half of the funds going to the federal government and half going to the host territory.
King-Hind’s proposed Pacific Minerals Economic Security Act, or PACMESA, would also require lessees to post a $100,000 bond upon lease award, plus a supplemental bond before production begins, to ensure companies can meet their environmental and lease obligations.
The proposal covers Guam, the Northern Mariana Islands and American Samoa.
The bill, H.R. 10318, also expands the notification and consultation requirements for territorial governments and bars the Interior Secretary from exempting a lessee from paying royalties for leases covered by PACMESA.
Driven by rising demand for critical ocean minerals for use in batteries, electronics and defense technologies, the Trump administration has ramped up efforts to seize control of the Pacific seafloor in competition with China.
The Marine Mineral Administration last month issued the proposed lease notice as part of the process leading to the auction of deep-sea mining leases for 69 million acres of seafloor off the coast of the Northern Mariana Islands and Guam.
In July, the federal agency initiated the leasing process for 31 million acres of American Samoa’s seafloor. Contracts are expected to be awarded in November.
The U.S. Geological Survey estimates that 31 billion tons of critical minerals are deposited within 1,000 miles of Pago Pago Harbor in American Samoa.
King-Hinds said PACMESA would strengthen economic benefits environmental
protections and local consultation requirements for U.S. Pacific territories located near potential seabed mining activities.
“Critical minerals are at the center of America’s economic competitiveness and national security,” said King-Hinds. “While I do not support or oppose seabed mining, we must recognize the nation’s strategic imperative to develop secure
critical mineral supply chains.”
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PACMESA is a crucial insurance policy for the Pacific territories that could be directly affected by seabed mining, she said.
“This bill addresses some of the most serious gaps in existing law and regulation governing hard mineral development on the Outer Continental Shelf,” King-Hinds said.
She said the measure would establish unprecedented levels of local revenue sharing for natural resource development.
It would also require meaningful financial assurance to ensure companies can meet their environmental and lease obligations and provide greater notification and consultation for adjacent Pacific territorial governments, she added.
King-Hinds proposed that lease revenues be divided equally, with 50 percent going to the U.S. Treasury and 50 percent to the U.S. territory located within 200 nautical miles of the center of the lease tract.
If the center of a lease tract is located within 200 nautical miles of two territories, each territory's share would be calculated inversely proportional to its distance from the lease.
There would be a 10 percent minimum share of the territorial allocation for the U.S. territory located within 200 nautical miles of the lease.
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The revenue going to the U.S. territory would be used for coastal restoration, infrastructure development, including energy infrastructure, environmental mitigation, fiscal stabilization, or debt reduction.
The bill also requires the secretary of the Department of the Interior to conduct a study examining methods to mitigate the environmental impacts of seabed mining and the potential costs of those mitigation measures.
The study would be done in consultation with the Northern Marianas College, the University of Guam and American Samoa Community College to give local students a chance to gain experience and expertise in this emerging field, King- Hinds said.
This study would be done a year after PACMESA becomes law, and to be submitted to the Committee on Natural Resources of the U.S. House of Representatives and the U.S. Senate’s Committee on Energy and Natural Resources.
In expanding the notification requirements for territorial governors, federal agencies, including the Department of the Interior, will be required to notify adjacent territorial governors when an application for a prospecting, testing, delineation, or production permit triggers a Coastal Zone Management Act consistency review.
It will also set a notification and comment period for territorial governors when an environmental assessment is required for such permit applications.
