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Recovering lost knowledge about exhaustion of the Earth’s resources (such as Peak Oil)

Summary: One of the saddest aspects of the Internet is that it so often fails to make us smarter. In a mutant version of Gresham’s Law, loud amateurs too-often drown out the voices of experts. Here we an excerpt from a 1975 book that tells us more about Peak Oil than a typical dozen posts on most peak oil websites. It’s an example of expert knowledge effectively lost to society by the prolifferation of mental chass. At the end are links to more on this subject.

The short version, the key fact about mineral resources: there is an inverse relationship between quantity and quality of reserves. Low quality deposits are more common than high quality. That’s why peak oil means acceleration of the capital expenditure required to extract the marginal barrel of oil. From sticking a straw into the ground in Saudi Arabia to deep onshore well to deeps offshore to unconventional sources (e.g., heavy oil, bitumen/oil sands, pre-salt deposits under fantastic depths of water and rock), to vaguely oil (e.g., kerogen/oil shale, coal-to-oil).

Rising prices drives this evolution. New technology for extraction and efficiency can mitigate but not prevent these price increases. This is lost knowledge for the general public, as seen in articles like Tom Keene’s at BusinessWeek, with a likely winner for dumbest thing written about energy in 2011: “There is oil wherever people are putting holes in the ground.” Here we recover some of this knowledge.

Contents

  1. Today’s reading
  2. The truth about the Club of Rome’s Limits to Growth
  3. What about the famous Ehrlich – Simon bet?
  4. For more information

(1) Today’s Reading

Excerpt from Sir Ronald Prain’s classic Copper: the anatomy of an Industry, from chapter ten — the Future (pp 267 – 280). It’s about copper but applies to all minerals, in including oil, and well worth reading for anyone interested in learning more about our world. With peak oil looming ahead, it’s lost and esstential knowledge. Red emphasis added.

Meditating on the nature of time in the first of his Four Quartets, T. S. Eliot wrote:

“Time present and time past
Are both perhaps present in time future,
And time future contained in time past.”

If this be so, it should not be too difficult to give some preview of the next 25 years as they will affect the copper industry and certainly it is possible to outline some of the factors which will be of importance between now and the end of the century, for so many of them have their origins in the past.

However, whilst encouraged by Eliot, I am cautioned against trying to peer too far by his distinguished contemporary, the philosopher-poet Santayana who reminds us that:

“Our knowledge is a torch of smoky pine

That lights our pathway but one step ahead.”

… Future copper supply will obviously depend on the volume of the world’s physical resources of the metal and man’s ability to exploit these resources, both technically and economically.

It has become abundantly clear over the past few years that the march of material progress which began with the Industrial Revolution cannot continue at its present rate unless the world’s reserves of minerals, fuel and food are similarly expanded. Nor, incidentally, can the damaging changes to the landscape and the pollution of air and water, which have followed in the wake, be allowed to continue if the human race is not to destroy all natural beauty and ultimately poison itself.

In regard to minerals, few matters have generated more controversy than the various attempts which have been made to quantify the resources, both in the earth and beneath the sea, which will be available for exploitation by future generations. This is a field in which neither computers nor the best human brains — nor a combination of both — can be relied upon to come up with the right answer. One has only to consider some of the forecasts which have been made over the past 50 years or so to see how totally wrong such predictions can be. In 1931, for example, Professor C. K. Leith, of the University of Wisconsin, and later an adviser to the United States Government in the Second World War, wrote that “the best and most available of the world’s minerals … are being rapidly depleted, and yet more than 40 years later the world’s known resources are very much greater than they were then.

In 1952 the Materials Policy Commission of the United States President — popularly known as the Paley Commission, after its chairman — produced a very pessimistic report in which it foresaw the end of certain metal supplies within a generation.

More recently a great deal of world attention has been attracted to a report by that group of international scientists, savants and industrialists known as the Club of Rome, which throws much gloom on the prospects of the world being able to continue its present growth rate because of the exhaustibility of resources. In the case of copper the report indicates that on the basis of known reserves and current usage, supplies of new material will dry up in 36 years and will last 21 years at the present rate of growth; even if reserves were five times as great as they are now known to be, supplies would run out in 50 years.

The above paragraph does not accurately represent the conclusions of the Club of Rome; see section 2 below for details.

This, and so many other prophesies of doom about the exhaustion of mineral resources, appear to be based on the mistaken assumption that ore reserves are somehow fixed by geology. These “fixed” tonnages are calculated, then divided by current demand, suitably adjusted by a growth factor, and the answer is expressed as so many years to Doomsday.

But tonnages of ore reserves of copper and other metals are not fixed in this way. They are not static. … Ore reserves are dynamic, and their quantum depends on a number of factors which are themselves subject to constant change. These factors include the intensity of exploration and the discovery rate of new orebodies; the effect of price, which at certain levels can increase reserves dramatically; the price/cost relationship; and future technology.

… The second factor mentioned among those which determine future ore reserves is price and the price/cost relationship. As already indicated, higher costs and higher prices seem inevitable over the years to come and the relationship between these two increases will have an enormous influence on future reserves, as resources for growth are a function more of economic than geological factors in teh period which we are discussing.

The higher the price at any given cost, or at any given technology, the more “mineral resources” will become “economic ore”. It has been said that if the copper price should double and provided that costs remain relatively stable, the copper reserves of the world might increase five-fold.

… And now to technology, the third of the 3 keys which can unlock the doors to the world’s treasure chest of mineral resources.

To state categorically that suitable technology will be available to meet every stage of future market development would be as foolhardy as joining the prophets of doom and declaring that mankind will not survive the next 50 or 100 years because in that time the world’s resources will be exhausted. Just because technology has been found to surmount the obstacles of the past does not necessarily mean that it will continue to do so. However, the chances seem to be set fair … it is frequently observed that the sum of human knowledge is doubling every 10 years and that 90% of all the scientists who have ever lived are alive today. So even if the world is indeed facing its biggest problem of resources since civilization began, it is far better equipped than ever it was to find a solution.

In the world of copper, new technology will certainly be needed if the expected demands of developing society are to be met. … We may have to accept that the advances in technology required to bring this about will not be spectacular. They will not be achieved “at a stroke”; rather will these solutions be the product of the combined efforts of many people working in many different fields. The big “break-through” when it comes will be the sum of whatever human knowledge is available at that time and the ingenuity of those who apply it. And when it comes it may not be immediately recognized; its effects are far more likely to be gradual than dramatic.

… The ultimate constraint in the future production of copper is, strictly speaking, outside the control of the industry, but it is a matter which is of vital concern to us all the availability and cost of future supplies of energy.

… Copper’s requirement of future energy supplies will have to be bigger than it is today if expected demand is to be met – and if, as I believe, its high rate of production will depend on the mining of ever-increasing tonnages of ore of ever-decreasing grade.

Here again, there is an element of “exponential growth”, for not only will more energy be needed because greater tonnages have to be mined, but proportionately more energy will be required in some of the metallurgical processes. For example, low grades of ore may contain copper in more minute particles than higher grade ores, and the grinding process to liberate these particles demands more and more energy per ton of ore as the grade decreases, and of course even more in terms of per ton of metal. (The alternative, if energy is scarce or too costly, is of course to sacrifice some recovery by maintaining a coarse grind.) Moreover, these crushing and grinding processes are of necessity performed in the same locality as the mining operations. In aluminium production, electric power is mainly required at the refining stage and the alumina can usually be transported to wherever power is chap and readily available. By contrast, the major power requirement in copper production is for grinding the ore and thus the power must be brought to the mine. The whole question of power utilization in every phase of copper production is under constant examination for even if availability could be assured, the cost element is certain to increase.

These and other constraints tend to suggest that the Club of Rome might be right after all in concluding that there must be limits to the growth of mineral supplies. In the case of copper, they could well be right – but not for the reasons which they advanced in their report. In my view, if there are to be limits to growth they will be imposed not by a disappearance of physical resources, but because it may become uneconomic to develop these resources, and because there could be an ultimate constraint in the form of availability, cost and input of energy.

… To sum up the question of future resources, I do not think that the world is in any danger for many years ahead of running out of copper reserves. The technology of production will change and the price will change, but in terms of availability there should be no limit to growth in the foreseeable future.

The three chief factors which will guarantee the availability of copper are, as I have mentioned, continued and intensified exploration with new scientific aids; new technology; and the maintenance of economic incentives to convert mineral resources into economic ore.

… We have come a long way since man mined and smelted copper under the shadow of the towering hills of Timna. Many times he has stood at the crossroads and wondered what the future held for him and his endeavours. The way ahead has never been crystal-clear. The brightest day must fade to twilight; in twilight all things lose their colour but not their shape, and within the general shape of the present world-wide industry,w hich has been build up piece by piece over six thousand years, the future will evolve with new colour, new brilliance and new rewards.

Prain continues to discuss other important factures, such as environmental impacts and geopolitics.

About the author:

Sir Ronald Lindsay Prain (1907-1991) was known in the popular press as ‘Mr Copper’. Prain joined the board of Anglo Metal in 1936, and in 1937 joined the boards of the Rhodesian Selection Trust (RST) and Roan Antelope, which had been acquired by American Metal. These companies led the development of the African copper mining industry. (source)

(2) About the Club of Rome report, published in 1972 as Limits to Growth

The Club of Rome report has been widely misrepresented — by both supporters and opponents. Both ignore their complex and technical analysis, preferring a cartoon version. The 1972 Club reportdescribes their forecasts as rough first cuts, with the goal of showing the finite nature of mineral resources. Rather than giving specific dates when resources will be exhausted, they describe the effects of depleting resources. From Chapter 2 – The Limits to Exponential Growth (red emphasis added):

“… The earth’s crust contains vast amounts of these raw materials which man has learned to mine and transform into useful things. However vast those amounts may be, they are not infinite. Now that we have seen how suddenly an exponentially growing quantity approaches a fixed upper limit, the following statement should not come as a surprise: Given present resource consumption rates and the projected increase in these rates, the great majority of the currently important nonrenewable resources will be extremely costly 100 years from now.

The above statement remains true regardless of the most optimistic assumptions about undiscovered reserves, technological advances, substitution,k or recycling, as long as the demand for resources continues to grow exponentially. The prices of those resources with the shortest static reserve indices have already begun to increase {e.g, mercury and lead}.”

Although their overall messages are opposites — one says there are hard limits, the other says no — the both give the same specific prediction: rising prices.

(3) What about the famous Ehrlich – Simon bet?

The famous 1980 bet is often described as proving the effectively unlimited extent of cheap resources. It does no such thing, reflecting only smart timing by Simon — and typical foolishness by Ehrlich. For details see “Luck or skill? An examination of the Ehrlich-Simon bet“, Katherine A. Kiel et al, Ecological Economics, May 2010 — Abstract:

In 1980, Paul Ehrlich and Julian Simon placed a famous bet on whether the prices of a bundle of natural resources would rise or fall over the ensuing decade. Simon won the bet as the real price of the bundle fell significantly, and the result of this bet has been taken as proof that technological progress is likely to overcome that of any Neo-Malthusian concerns about natural resource scarcity. Contrary to the popular perception, however, an examination of the price history of the identical bundle of goods from 1900 to 2008 shows that Ehrlich and not Simon would have won a majority of the bets over the past century and would have done so by a wide margin.

(4) For more information about other energy myths

  1. An urban legend to comfort America: our massive reserves of unconventional oil, 29 August 2008
  2. An urban legend to comfort America: crash programs will solve Peak Oil, 5 September 2008
  3. An urban legend to comfort America: demand for oil creates new supply, 8 September 2008
  4. An urban legend to comfort America: oil is oil, even if it is not oil, 10 September 2008
  5. An urban legend to comfort America: alternative energy will save us, 16 September 2008
Editorial Notes: Fabius Maximus is a very interesting site. We've re-posted and linked to a number of articles from them over the years. We first came across it through its short incisive commentaries about peak oil. Oilprice.com just re-posted one of their earlier pieces: What Aren't we Being Told About Peak Oil. Fabius Maximus is hard-to-categorize. The articles are written by a group of retired officers from the U.S. military. (see About the authors). The politics are, as they say, not what you would expect. I find myself agreeing with much of what they are saying. One point of difference -- they are skeptical about anthropogenic global warming. -BA

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