LOVE 201 Natural Resources Module

Signs that we are facing a global mineral resource crisis

• Consumption of mineral resources is growing at an ever-increasing rate, in excess of population growth
• Consumption is far greater in more developed countries (MDCs) than in the lesser developed countries (LDCs): e.g., MDCs with 16% of global population use 70% of world aluminum, copper, and nickel, 58% of oil, 48% of natural gas, and 37% of coal.
• As standard of living increases in LDCs they will create even greater demands on world resources. Can MDCs maintain their standard of living, while LDCs improve theirs, in a sustainable manner?
• Although we need more mineral resources to meet demand, we are becoming increasingly aware that their production and use are polluting the planet. Moreover, local effects often have global impacts.
• If global population increases as rapidly as expected, the pressure to find and produce minerals will be enormous, as will the potential pollution related to their extraction and use.
• What limits are there on supplies of nonrenewable resources or on the amount of pollution that the planet can tolerate?

Historical Perspectives

• See Kesler Figs. 1-1, 1-2 for trends in production with time in this century, and changes in reserve outlooks for selected commodities.
• Several decades ago it was apparent to some that known resources for many commodities (oil, aluminum, coal, etc.) were nearing depletion and that mineral-dependent technologies could be reaching their limits (cf. Meadows et al., 1973, Limits to Growth; World Resources Institute).
• Increases in oil prices, associated with global shortages in 1973, led to price inflation for other commodities, intensive exploration, and dramatic increases in reserves for most minerals. Availability of raw materials increased production capacity, but declining demands resulted in plummeting prices and contributed to an unrealistically complacent view of mineral resource availability.
• In the future, it will be necessary to either increase mineral production within the constraints of what the environment (and we) can tolerate, or develop alternative technologies that are not so dependent on present patterns of minerals utilization.

Terminology & Concepts

• Reserves - material that has been identified geologically and that presently can be extracted at a profit.
• Reserve base - includes reserves as well as already discovered material of lower grade that could be extractable in the future.
• Resources - include the reserve base plus any undiscovered deposits, regardless of economic or engineering factors; aversion of a mineral supply crisis will entail converting resources to reserves.
• Costs of extraction, including environmental costs, determine the profitability of extraction and the cut-off point between reserves and reserve base. These costs are not solely influenced by market forces, particularly in MDCs where environmental costs are determined by regulations and public opinion.

Factors Controlling Mineral Availability

Geologic factors

• Mineral deposits
  • concentrations of elements or minerals by geologic processes; key points:
  • most are nonrenewable in that they form by processes much slower than the rate of utilization
  • they have place value in that we can only exploit them where they formed; erratic global distribution adds an important geographic and political dimension to resource issues
  
  
• Ore deposits
  • economically profitable concentrations; the following types can be distinguished:
  • essential resources - soil and water; these are not only critical to our survival but also most prone to abuse by environmental contamination
  • energy resources - crude oil, natural gas, coal, oil shale, tar sand, nuclear fuels, geothermal
  • metal resources - structural, industrial, and ornamental metals
  • industrial mineral resources - sand, gravel, salt, potash, phosphate, timber, etc.
  
  

Engineering factors

• Technical constraints - concern what is technologically feasible (e.g., depths of drilling, physical properties of rocks, etc.).
• Economic constraints - concern cost/benefit questions; increasingly weighted by environmental concerns (costs of handling wastes and cleanup in addition to production costs). Is the cost too great?

Environmental factors (local and global)

• Pollution associated with mineral extraction and processing - wastes from resource extraction (>2 Gt/yr) exceed all other wastes generated in the US economic cycle
• Wastes associated with mineral consumption - more dispersed (air, water, soil) and insidious

Economic factors

• Supply side - engineering and environmental costs related to extraction and processing
• Demand side - commodity prices, taxes, land tenure, other legal costs

Minerals & Global Economic Patterns

• Standard progression of economic development - shift in exports from dominantly raw materials (LDCs) to more manufactured products (MDCs)
• Increasing import reliance - associated vulnerabilities
• Policies concerning strategic minerals (esp. defense needs)
• Global mineral trade promotes market transparency
• Introduction of modern materials, synthetics - technology fixes to import reliance

Global Mineral Reserves & Resources

• Geological estimates - assessment based on what can be observed and quantified (e.g., basin analysis of petroleum reservoirs)
  
• Statistical estimates - assume that resource characteristics can be extrapolated from partial information and models; do not address where resources are, only their estimated size
  • Lasky relation - for some commodities, a logarithmic increase in the volume of ore with arithmetic decrease in grade (implies an exponential increase in reserves with linear decrease in ore grade); one cannot infer the existence of "infinite supplies at infinitesimally low concentrations" because of technological and economic constraints
  • correlation between amount of exploration (# drill holes, etc.) and amounts of ore or oil discovered, but this cannot be extrapolated to arrive at unrealistically large reserve estimates (e.g., most oil is in a few huge fields that were easily discovered, whereas the majority of wells encounter little or no oil)
  
  
• Combined methods used to estimate gross in-place amounts/value of undiscovered deposits - e.g., Hubbert peak-production curves for oil (mineral production will increase smoothly, reach a peak, then decline at roughly the rate it increased)

Adequacy of World Reserves

• Public opinion and values affect market action and demand for products (e.g., nuclear power)
• Stockpiles of strategic minerals - effects on exploration, market prices, long-term stability
• Recycling - problems with economic of scale, types of materials

World Reserves & the Future

• Dividing reserve figures by present consumption rates (ignoring increased demand in the future) provides an optimistic view of the duration that these reserves can meet market demands; apparently many commodities will approach depletion in a short time (Kesler Fig. 13-5)
• Significance of these estimates depends on how long it takes to find reserves and too put them into production. However, one must keep in mind that even though geologic estimates and models may suggest the existence of mineral deposits, we do not actually know where they will be found or even if they exist at all. Once mineral deposits are discovered, significant lag times may preceed on-line production.
• Conversion of reserve base to reserves also may be problematic in face of economic or environmental constraints.
  • development of many deposits has been stopped for environmental or other reasons; if they remain in the ground they are of little use in accounting for reserves
  • any decision not to develop a deposit necessarily requires that another be put into production if demand is to be met; what will be the basis for such decisions?

LAST MODIFIED: 10/1/97
BY: Bill Leeman