Offshore Sea Resource Development:
A Spur to Onshore Land Speculation

Will Lissner

[A paper presented at the 13th International Conference on Land Value
Taxation and Free Trade. Douglas, Isle of Man. September 1973]

Until recently the oceans, the connected mass of waters which comprise 71 per cent of the earth's surface, have been a relatively free good. The nations have disputed sovereignty over the waters contiguous to their coasts, and jurisdiction is claimed three, twenty-five, fifty, one hundred and even two hundred miles offshore, while empires have asserted for a time hegemony over vast sections of them. But the ordinary citizen could make a living by fishing or transporting people and goods over the ocean without interference from the government or exploitation by it.

This situation is changing rapidly. Heedless and unlimited exploitation by ruthless corporations, conflict between national interests and other pressures, has brought about, in many countries, regulation and licensing. A way of life that was hard but so free that it attracted men and women of noble character and adventurous bent is passing. It will be gone soon for technology is sounding its doom.

Technological advance is often a clear response to pressing needs. It is so in this case. No doubt part of the energy crisis in the United States and certain other countries has been manufactured by monopolists, such as the oil producers and the utilities interests. But it is a fact that economic boom, wasteful use, a tax system that fails to allocate resource lands according to their most efficient use and other factors have led to depletion of the richer sources of the energy resources of the United States.

This has put a premium on the development of new energy sources. But this is not the only shortage with which the country has to contend. There is a shortage of food in relation to the demand backed by purchasing power, and hence food prices have risen. This comes at a time when nations in the Soviet bloc, and nations in the Communist Chinese orbit, suffered crop disasters from unfavorable growing weather. This also came at a time when recovery and boom in a number of countries made it possible for people to improve their diets. The world, however, and particularly the United States, has more than a fuel and a food shortage. There is also a water shortage. In the United States it is produced by technology: the use of water in industry, in improving the amenities of life by air conditioning, by the spread of water systems making its use attractive to and available to more people, and other developments. In other countries it is produced by climatic factors and in all countries environmental changes, such as urbanization, road-building and forest exploitation, play an important role.

In the face of the fuel, food and water shortages, the advanced industrial nations are turning to the oceans. Many nations are engaged in oceanic exploitation; this paper will be limited to efforts by the United States, and not in better known areas such as offshore oil exploration and exploitation but in an area that is less well known: development of offshore solar power combined with desalinization plants and mariculture tanks. This is an area of tremendous promise, but much of the promise may not be realized unless we act quickly to prevent land speculation from running up costs.

Those who will enrich themselves from the solar sea power concept are not its discoverers. We owe it to the French physicist, Jacques D'Arsonval, who reported it to the scientific community in 1881. It is based on the fact that more than 70 per cent of solar radiation falls upon the oceans[1]. In the tropics the sun's heat keeps the ocean's surface temperature at 25 degrees centigrade. The warm water from the tropics moves toward the North and South Poles, and is a major factor in melting the ice. Cold water at the poles slides into ocean depths and moves toward the equator. In the tropics this cold water in the depths, moving beneath the warm water at the surface, provides a heat sink from 25 to 5 degrees centigrade at a depth of only 1,000 metres. This is an infinite phenomenon since both the warm water at the surface and the cold water at the 1 ,000-meter depth are replenished by solar radiation[2]. Hilbert Anderson and James Anderson of York, Pennsylvania, proposed in 1964 that this ocean thermal gradient be used to operate a power plant submerged to a depth of 100 to 200 feet. They and others proposed a design in which the 25 degree hot water would flow through a heat exchanger in no greater amount than a hydroelectric plant with the same output, causing another fluid, the working fluid, to boil. The vapor of the low boiling point fluid would expand through a turbine to generate electricity and then be condensed back to a liquid for re-use in a condenser cooled by the cold ocean water. Ammonia, freon or propane have been used in recent heat exchanger experiments, but the model with which George Claude successfully produced electricity in Cuba in 1929 used only sea water[3].

Efforts to make the thermal gradient power plant more efficient are not limited to improvement of the working fluid. Anderson and Anderson also proposed that the power plant produce fresh water by removing dissolved gases from the warm water flow, vaporizing it in a vacuum evaporator and condensing the vapor by the cold water flow. They estimate that a 100 million watt plant could produce 60 million gallons of fresh water daily.

Experiments are also going on to combine with the production of power the production of hydrogen and oxygen through the electrolysis of water. It may be cheaper to transmit power to shore through a hydrogen pipeline than through cables.

Still another development is based on the knowledge that natural upwellings of cold water from ocean depths are sites extraordinarily rich in marine life, such as unicellular algae. One such, off Peru, accounts for almost one-fifth of the world's fish harvest. Experiments in the Virgin Islands have demonstrated that when such water is fed into tanks, shellfish such as clams, oysters and scallops can be cultivated, at a rate faster than in nature. Cull shellfish can be used as feed for lobsters, shrimp and other crustaceans, which, experiments show, grow at a much accelerated rate in these tanks. This food production at an onshore site contiguous to the offshore plant is called mariculture. It is estimated that the annual yield of shellfish alone would be $50,000 an acre ($125,000 a hectare).[4]

Such a development, it is estimated, would be economically viable in Florida, where the Gulf Stream hugs the coast from Jacksonville south to the Florida Keys. A team at the University of Massachusetts is preparing designs for a submerged plant to produce power from the Gulf Stream. The first site proposed for testing the concept is about 25 kilometers from Miami. But already Jacksonville is estimating the effects of such onshore and offshore ocean development in terms of employment, investment, tax revenues, population increase and land values. Anderson and Anderson have estimated that the Gulf Stream's thermal gradients could generate 182 billion kilowatts, which is 75 times the expected US demand in 1980.

William D. Metz, reviewing the experimentation now in progress in Science, the weekly journal of the American Association for the Advancement of Science, remarks sagely that "solar power from the sea may well turn out to be a source of clean energy that has been overlooked for too long. "[5] But it must be pointed out that even if the federal government of the United States of America asserts its sovereignty over the ocean sites, combined development will require the use of contiguous onshore sites. This is appreciated not only in Jacksonville but along the shore southward. Jacksonville residents are pointing to the rise in land values in central Florida to astronomical levels -- on the order of from $1,500 to $55,000 an acre and higher -- as a significant precedent[6]. Of course, transmission technology should limit the possibilities of development in the early stages. Even so, the possibilities are enormous. If Florida employed land value taxation, the gains in value of the contiguous onshore sites could be recaptured for the benefit of all Florida residents. In the absence of this, the franchise fees exacted by the federal government for the use of the offshore sites could be used to recapture a substantial amount of the profit for the benefit of all United States residents. The onshore sites would generate not merely economic rent but monopoly rent; if the annual franchise fee were high enough, it would serve to moderate the rise in onshore land values, for the monopoly exaction would be shared by the offshore and onshore sites and the onshore site owners could only claim what was left after the federal treasury received its due.

But the federal government has not yet shown that it appreciates, in this situation, the advantage to all except speculative land owners of the total appropriation of the rent generated by power, water, chemical and mariculture development. Those who do appreciate this should seek to make their studies available to the policymaking bodies in the federal and the relevant state governments. Since such thermal gradients are available in many other countries, students of the taxation of land values and the social appropriation of rent would be well advised to consider studies of the application of their positions with respect to franchise fees and land value taxes applied to the exploitation of this ocean resource.


  1. William D. Metz, "Ocean Temperature Gradients; Solar Power from the Sea," Science, Washington, D.C., Vol. 180 (June 22, 1973), p. 1266 ff.
  2. Ibid.., p. 1266.
  3. Ibid.
  4. Oswald Roels of Columbia University's Lamont-Doherty Geological Observatory, quoted by Metz, op. cit.
  5. Op. cit., p. 1267.
  6. Personal communications from Jacksonville residents.