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Government investigates resource shortages

The British government is making a review of current, ongoing global shortages of vital raw materials.

This will go beyond the notion of peak oil to look at the supply of a series of key natural resources, following rises in commodity prices, food riots and accusations that various countries - particularly China and Japan – are beginning to stockpile important minerals in an attempt to protect their businesses from global competition.

A report in the UK Guardian newspaper, Government review to examine threat of world resources shortage, states that the country’s Department for Food, Environment and Rural Affairs is leading the initiative. The ministry believes that, “every sector of the British economy was directly or indirectly vulnerable to future shortages.”

The government is taking the initiative following widespread reporting on the pending collapse of various natural resources, including a December report by the World Business Council for Sustainable Development that 49 strategically important resources may become harder to obtain. This, EU starts screening raw materials ‘critical list,’ states:

An expert group set up by the European Commission has begun screening a list of forty-nine "potentially critical" raw materials whose availability to industry could come under threat as global competition for natural resources intensifies, EurActiv has learned.

A preliminary list of twenty raw materials considered to be potentially critical for the EU economy, published by the Commission a year ago, has been expanded to include nineteen new substances.

A first batch of raw materials – cobalt, lithium and rare earths – was examined by the expert group during its first meeting in November, with the objective of testing the Commission's proposed methodology on the raw materials' "criticality", EurActiv has learned.

According to this report, the EU is particularly concerned about “rare earths, collections of metals and elements found in a wide range of gadgets and consumer goods, including batteries used in electric cars.” The problem here is that 95 per cent of rare earths come from China, which is currently putting export quotas in place.

Rare earths include neodymium, used to make lightweight and powerful magnets used in hybrid cars and wind turbine generators, touted as ways to mitigate peak oil. The item continues:

Chinese media reported in September that Beijing would start applying quotas on exports of rare earths and other exotic metals of which it is the only major supplier, citing environmental reasons.

The United States and European Union filed a complaint with the World Trade Organisation on 23 June, accusing Beijing of unfairly favouring its steel, chemicals and other industries by restricting access to nine types of key raw materials.

Clearly, the Western nations are attempting to force China into providing raw materials – rather than finished goods. According to the Guardian:

Elsewhere, the US, the EU and Mexico have announced that they want to bring a World Trade Organisation case against Chinese restrictions on exports of nine key raw materials, including coke, bauxite, magnesium and fluorspar, all important for producing steel, aluminium and other chemicals.

China has been a member of the World Trade Organization since December 2001, and has been the subject of previous complaints from the West.

In the hands of the World Trade Organization, the matter will be presented as being of free trade rather than resource collapse. Anti-globalization protesters may well say that it’s about the perceived right of Western nations to continue to burn through finite resources at an unsustainable levels, no matter where in the world they may be located and who owns them. Although correct up to a point, this arguably to confuses China’s protectionism with conservation; the Chinese government clearly intends to utilize these resources itself. It wants the manufacturing jobs to be within its own borders.

Underneath all this is geopolitical positioning over declining resources – hydrocarbons are front and centre, but the issue is far wider. As the Guardian reports:

The international affairs thinktank Chatham House, which is carrying out its own review into the resource crunch, has also compiled a list of deals signed by Chinese state-owned companies for special access to oil and gas reserves and the purchase of stakes in oil and coal producers covering South America, Australia, Russia and the Middle East.

Peak oil writers have long written about the prospect of resource wars, from the US involvement in Iraq and Afghanistan to less obvious suspects such as water wars. (Although water is renewable, drinkable water in underground aquifers can be depleted in the same fashion as oil.)

According to a March report in the UK’s Independent newspaper, tensions are rising between India and Pakistan over water. The item, India is stealing water of life, says Pakistan, suggests farmers on the Indian side of the Chenab are “reducing one of the subcontinent's most important rivers to little more than a trickle” before it reaches Pakistan. It continues:

A group of more than 20 different UN bodies warned earlier this month that the world may be perilously close to its first water war. "Water is linked to the crises of climate change, energy and food supplies and prices, and troubled financial markets," said the report. "Unless their links with water are addressed and water crises around the world are resolved, these other crises may intensify and local water crises may worsen, converging into a global water crisis and leading to political insecurity and conflict at various levels."

At first sight, this may seem like just another in a series of cross border issues between these two nations, dating back to the very formation of Pakistan (and, in fairness, India’s last minute reneging on a deal to cede Kashmir – which was to have been the ‘k’ in Pakistan). But disputes like this are likely to escalate when oil becomes depleted. It states that farmers in the area must pump water from wells:

When Mohammed Babar and other villagers close to the town of Wazirabad sunk a well several years ago, they discovered water just 50ft beneath the surface; now the water table lies at around 100ft down. "To irrigate our crops it used to cost about 200 rupees (£2.71) worth of diesel," said Mr Babar, standing amid fields lush with rice and winter wheat. "Now it costs 250 or 300."

(The Baglihar hydroelectric dam on the river Chenab, which flows from Indian-controlled Kashmir into Pakistan, is pictured above. Clearly, this is more than a dispute between farmers either side of the border.)

When the price of oil rises, as demand outsrips supply, agriculture will likewise become more expensive. This will make staple foods cost more throughout the world, possibly sparking food riots, and increasing the level of tension over resources such as water.

It’s wrong to look at depletion of any one resource in the absence of others, because they all play together – at the most basic, a rise in the price of oil will push demand for natural gas, for instance. In addition, many writers are independently plotting declines of resources that fit a similar timeline, coming together over the coming decade or so. For instance, an April 2010 Foreign Policy article, Peak phosphorus, stated that demand for this mineral – which is subject to the Hubbert bell curve model of decline – is already outstripping production enough to raise prices. Phosphate fertilizer prices rose 350 per cent between 2003 and 2008, they claim. If this is not addressed we could face “a Malthusian trap of widespread famine on a scale that we have not yet experienced.”

This British review of global resource shortages could be presented as an economic, free-trade issue, but, on closer examination, it becomes difficult to avoid the prospect of people going hungry, and possibly also facing aggressive military intervention. It is a humanitarian crisis.

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