I might comment on what I have learned about the probable future for this industry.

I think it is going to be big and important business.

The best estimates I have are that by 1985 there will be four to six operations, with capital investments of as much as $150 million to $300 million each, and gross annual total sales of as much as $1.5 billion. A reasonable estimate of total profits is in the hundreds of millions of dollars.

I think that there is no question this business will be important. I think that there is no question that the United States needs to be in it, and I am very glad that there are companies that are going ahead.

Why the rush in passing this bill? It is said that we need minerals quickly.

As I pointed out, passing this bill is not likely to get us one pound of mineral one day sooner, so that is not a valid reason. How about the climate for safe investment? Mr. Dubs and I agree, for instance, that the best approach is for the Law of the Sea Conference to reach an agreement. Property rights will be well assured if there is general agreement.

Mr. Dubs said yesterday, and also Mr. Greenwald, and I agree, that you need reciprocity. The second best way to get property rights would be a multilateral treaty, where, if you cannot get agreement with everybody, you get agreement with those you can, and go ahead in 1976 or 1977.

The method in this bill is the third and the least effective, way to seek assured property rights. Such unilateral assertion of rights may very well be contested. This would require, as a previous witness stated, under certain conditions the Navy, and I wonder if the Navy really is a very useful tool in the long run under these conditions. Property rights can be better assured by successful outcome of the Law of the Sea Conference, or a multilateral treaty, and if they fail, then this method may be necessary.

This action, right now, would damage the chances of getting more secure property rights by a Law of the Sea agreement, or by multilateral treaty.

What countries would resent would be our going ahead and doing it on our own, setting up something, saying, "you do it our way,' rather than getting an agreement on what we will do together.

Another argument is that we might lose our technological lead if we do not pass a bill like this.

I see no indication of that. Our technological lead is being advanced, and will continue to be advanced, wheter or not the bill is passed.

There is one argument that carries considerable superficial appeal, and that is that we need to protect the secrecy of the locations of the desired mining sites. Of course, that is true.

If a company is afraid that its mining site would be disclosed by developing its technology there, there are similar places where they can develop their technology. They do not need to develop their technology on the site they expect to mine.

I suspect Mr. Hughes is not doing that. I suspect he is developing his technology in another place.

Now, the real reason for rushing this bill through has not really been admitted, but probably it is that our good friends in the mining industry are human. They would like to get the best sites now, before anybody else has a shot at them. In other words grab them now, while the grabbing is good.

That is perfectly understandable, but it would be resented. I think that when the Oklahoma Territory was opened up to colonization by staking out claims, that they all started at the same time, rather than somebody getting their claims in first.

This is what this bill would amount to, and this is, of course, a very valid reason if you want to make the most money, get your claims on the best sites, before anybody else gets a chance.

That is a reason which certainly would boomerang in international affairs.

Now, from what I have said, you can see that this is not a bill which is really needed by many companies.

Hughes certainly does not need it. He is out there doing his own thing.

Kennecott does not need it. They have their financing in sight, and are going ahead.

International Nickel has not been down here to urge this bill. They do not need it now.

The only one who seems to have much need is Tenneco-Deep Sea Ventures. They are my friends, but I do not think legislation in the interest of one company at this time is the best way to further the whole of U.S. interests.

Now, let us go on to the effect on the Law of the Sea Conference and the U.S. bargaining position.

I think the bargaining position is this, that the deep seabed hard minerals are inportant bargaining chips for the United States. The United States has the technology to move ahead and exploit these nodules, with little consideration to the interest of developing countries. The developing countries are interested in having at least a part in deep seabed hard mineral development over a period of time.

Therefore, if we are willing to make some concessions at this point I think it is very likely that getting concessions on freedom of navigation for our submarines and airplanes, and for our commercial vessels, for our distant fishing fleets off the coast of South America, for pollution control, and all the rest, will be very much better, and have a much better chance.

Now, what concessions are necessary and possible in this area? This more or less answers Mr. Sharood's questions. Certainly, not an enterprise whereby the developing countries would determine to produce nothing, or only on their own terms.

This, of course, is not in the bargaining range, but it is in the bargaining range to have some joint ventures between the International Seabed Resources Authority and commercial companies.

I have talked to company officials. They say that they are used to operating joint ventures, and under the right terms they would not object to this method to supplement licenses.

It is a customary way of doing business. In joint ventures, the developing countries as part of The International Seabed Resources

Authority would see the books. They could be on the ships, and they could be at the refineries. They could then be sure that they are getting a fair deal on the licenses. I think that some compromise at this point is possible, and would be acceptable, rather than holding out for a 100-percent license system.

I think bringing the developing countries in on the action here is a very important way to get concessions elsewhere in the very vital, largest interests of the United States. The largest interest of the United States is in commerce, outside of defense.

Our tankers could be harassed very seriously off foreign coasts, unless we can assure freedom of transit through the area that will be the economic zone off other coasts.

We are the largest maritime country in the world both in defense and commercial shipping.

We have a very large interest in the long run protection of the ocean environment. In these and other areas I think that deep seabed mining is a very important bargaining chip.

Now, I think perhaps I should close by saying that I think what action one takes, what position one holds, depends a good deal on the kind of world one assumes we are in.

It seems to me that going ahead and taking possession of the most important and valuable sites assumes that we are in the kind of world of 150 years ago, when Africa was divided up by the nations with the power and the ruthlessness. It assumes that we are willing to commit our military might to defend these mining interests, and go to war, if necessary, with whoever interferes.

This is not the kind of world that makes sense now. With the dispersion of weapons and the growing interdependence of countries, the present world is better served where, as far as possible, nations cooperate, where decency is the rule of national behavior as it is in individual behavior, where suppliers are more likely to make supplies available to those whom they consider their friends rather than to those whom they consider their enemies.

In other words, a lot of the world's problems are going to have to be solved together, such as the environment, food supplies, and many many other things we have very much in our favor.

There is no particular advantage in alienating other countries unnecessarily. And it seems to me that is what the passage of this bill would do.

I rather think the United States has an overriding interest in the long run in survival, in peace in the world rather than atomic

war.

These atomic weapons, the way things are going, will be in the hands of very irresponsible nations in the not too distant future. It seems to me that it is in the interest of the United States to move for the control of these weapons by an effective international authority.

In 100 years we might be in the position that Israel is in now. A century from now, the same thing could happen to us.

I think that to bring these weapons under control is in our interest, and I think effective international authority for development of the deep seabed, which is now possible, I think, sir, could be a very important step in that direction.

This is the kind of world I think we have. It is a time for statesmanship, for looking way down the road, sir, for protecting our interests, of course, but also doing it in a way to protect them best. Thank you very much.

Mr. DOWNING. Thank you very much for an interesting and valuable statement.

We have two other witnesses so we would like to keep the questions short.

Mr. Levering, you mentioned that the mining companies did not appear to have too much interest. But, as a matter of fact, the American Mining Congress testified on behalf of the bill and supposedly they represent most of the mining interests in the United States.

But you mentioned failure of International Nickel to appear in support of the bill.

Is that not a Canadian corporation?

Mr. LEVERING. There is a very strong American subsidiary, and their ocean mining operation is based in Seattle, so there is no reason they would not appear.

You and I know how these American Mining Congress things go. I have gotten acquainted with a whole lot of them, sir, and you can do lots of things in the name of a Congress where most of its 202 members do not give a hoot, as you well know. And if one or two do, the others are not likely to stand in the way.

And I reiterate from close personal knowledge this is not a united industry at all.

Mr. DOWNING. There is nobody on this committee, I think, that would not agree that we would prefer this seabed development to take place by the means of an international agreement.

That is the way it should be done, but it does not look like we are going to reach an international agreement within the foreseeable future, within the time limits that are necessary for us to get together to mine these minerals.

How do you view the Caracas Convention?

Do you think that is going to resolve anything?

Mr. LEVERING. I am rather intimately involved in this sort of thing, sir.

At Caracas, nations have stated extreme positions. Compromise, as you know, where vital interests are involved, takes place only at the last moment possible, so that the compromises will be hammered out at Vienna in the summer of 1975.

Mr. DOWNING. You think the Vienna Conference will resolve these issues?

Mr. LEVERING. I think there is an excellent chance that it will, not because many nations will want it to, but because there is no alternative.

Developing nations, if they do not agree at Vienna, know that developed countries are going out in the deep ocean and they are going to lose their chance at a very valuable resource.

I think, for that reason, having achieved their main purpose, which is economic zones off their coast, agreement is entirely possible on the other things.

Mr. DOWNING. You cannot give this committee any definite assurance that a final resolution will be had even in 1975, can you? Mr. LEVERING. No one can give you that assurance, and I certainly would not have that assurance.

However, I do know, and of this I have ample knowledge, that a multilateral treaty with some other developed countries and a number of developing countries also should be possible quickly if the Law of the Sea Conference fails.

That second alternative almost certainly is available.

Mr. DOWNING. Thank you.

Mr. Anderson?

Mr. ANDERSON. No questions.
Mr. DOWNING. Counsel?
Mr. HEYWARD. No questions.
Mr. DOWNING. Mr. Sharood?

Mr. SHAROOD. Just one question.

Mr. Levering, I have one problem with your thesis, and that is that on the one hand you are very optimistic in terms of what the small nations are going to see as in their best interest in the Law of the Sea Conference.

But, on the other hand, you are raising the specter of nuclear proliferation. You refer to them as irresponsible small nations.

Are we to assume, on the one hand, in the seabed regime, they are going to be guided by enlightened self-interest and, yet, on the other hand, you caution us that if we do not adopt an international approach, we have the specter of irresponsible small nations armed. with atomic weapons confronting us.

Now, it seems to me you are trying to have your cake and eat it, too, in terms of the structure of your argument.

Mr. LEVERING. I have been a student of these matters for a long time.

I think if you have 148 entities with complete sovereign powers, acting anarchically, by definition a great many of them would be irresponsible.

However, from time to time, they agree to limit their irresponsibility for some interest they see.

I think there is a real chance they will limit their irresponsibility in the ocean matter, and I think there is a real chance they will limit their irresponsibility through effective control of armaments.

I certainly hope so. If not, the future of mankind is very gloomy, indeed.

Among us Mountaineers, we say there is a lot of the devil in lots of people. There is a considerable amount of the Lord in many of them. We have to hunt pretty hard to find it sometimes, but we think that is true in human behavior generally.

The irresponsibility is brought under control sometimes by better motives and judgments of interest.

Mr. SHAROOD. Thank you, Mr. Chairman.

Mr. DOWNING. Thank you very much, Mr. Levering, for your testimony.

I am sure the committee will give it its most earnest consideration. Dr. Oswald A. Roels, chairman, biological oceanography, LamontDoherty Geological Observatory, Palisades, N.Y., has submitted a statement he would like to be included in the record.

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