activity is light. The same purpose could be 
achieved by limiting development projects to 
certain parts of the water column. 
Recommendation: 
To encourage innovative uses of the ocean other 
than petroleum and hard mineral development, 
State governments should initiate experimental 
programs for leasing submarine areas (“‘seastead- 
ing”) within U.S. territorial waters, contingent on 
useful development of the property. Such pro- 
grams should be a part of a plan for the orderly, 
rational development of offshore regions. 
Although the panel recommends seasteading 
only within territorial waters, such a concept will 
have increasing merit in waters farther offshore as 
ocean activities expand in new uses of the sea. Just 
as in the territorial waters, seasteading will be a 
means of providing investment protection to inno- 
vative users from multiple use conflicts. Therefore, 
the Government should consider the advantages of 
special leasing arrangements beyond territorial 
waters. 
IV. JOINT VENTURES 
Joint ventures probably will allow many ocean 
ventures not otherwise possible considering invest- 
ment size and high risk involved. Companies must 
be alert to such opportunities as: 
—Collaboration in research and development of 
ship design and shipbuilding methods, as practiced 
in competitive countries, may be fruitful. 
—Consortia for ocean mineral exploration and 
development may prove necessary in certain cases 
to attract sufficient risk capital. 
—Joint ventures in expensive deep ocean research 
may shorten the period necessary to collect 
essential data in many fields. 
—Insurance pools covering offshore equipment and 
structures may allow improved coverage for 
marine operations. 
V. INSURANCE 
From large petroleum companies to small sup- 
ply and diving businesses, offshore operators have 
had difficulty obtaining adequate insurance cover- 
age. Many aspects of the problem are being solved 
by underwriters, but several remain, impeding 
progress. Two unsolved areas are discussed below. 
A. Offshore Installations 
At one time, U.S. insurance companies insured 
such offshore items as rigs, platforms, pipelines 
and small submersibles. However, business became 
so unprofitable to the few companies in the field 
that U.S. underwriters vacated the market and left 
Lloyds of London as the sole insurer. Now the 
gross annual premiums on offshore installations 
have climbed to an estimated $80 million and U.S. 
companies are showing signs of renewed interest. 
For instance, several participate in reinsurance 
through Lloyds, while at least one U.S. company 
recently has written a direct policy in this area. 
In 1968, several underwriters attempted to 
form a syndicate to cover this phase of offshore 
industry but the proposal had not been effected at 
the time of writing this report due to considera- 
tions of profitability and possible anti-trust implica- 
tions. The panel encourages the efforts of the 
insurance companies to pool their resources to 
undertake the high offshore risks. In time, various 
factors will improve the insurability of offshore 
installations, including: 
—Improved actuarial statistics. 
—A lower rate of damage and loss due to improved 
technology. 
—A broader insurance base resulting from acceler- 
ating offshore investments. 
Until the insurance companies find the business 
more profitable, it appears that the companies 
operating offshore will continue to pay high 
premiums or in some cases resort to local pooling 
or self insurance arrangements. 
B. Personal Injury to Workers Offshore 
The panel finds the insurance cost for personal 
injury in the offshore areas extremely high and for 
some small companies prohibitive. A major reason 
for this is that by law many offshore workers may 
choose between compensation and litigation when 
seeking recovery for injury; thus the underwriters 
have no sound basis to evaluate premium ratings. 
V-17 
