The problem the world faces is that many of the resources that are truly threatened are the renewable ones, not, as so often assumed, the non-renewables.
Many of the earth’s renewable resources are being insanely over-exploited, and humanity seems incapable of agreeing on rules for their protection. Fish, large mammals, fresh water, timber, clean air – the list is endless.
In contrast, many non-renewable reserves have become so plentiful that their prices are presently at historic lows.
The question is: how has it come about that our non-renewable reserves are seemingly inexhaustible?
The case of oil
Fears that the world would soon run out of oil have been around for many years. During the first decade of this century, the so-called “Peak Oil” hypothesis pushed the view that the world had reached the height of oil production capability. The reserve and production statistics tell a very different story.
Back in 1980 the proven reserves were about 700 billion barrels and production was running at about 23 billion barrels per year, so there were about 30 years of oil left. By 2010, therefore, most of the 1980 oil would have been exhausted – yet by 2010, the proven reserves had grown to around 1600 billion barrels, the consumption had increased to 30 billion barrels per annum, and over 50 years of oil were left.
Another way of looking at this is to see how long it took to deplete the Proven Reserve in any one year. The 1980 oil reserve was consumed by 2007 – it lasted only 27 years; the 1985 oil lasted until 2014, 29 years; the 1990 oil will probably last until 2022, 32 years. Even though the rate of consumption is increasing, the reserve at any one time is lasting longer.
Our instinct tells us that the world’s resources are finite. Yet the example shows us that the reserves of oil have grown for the past 35 years even though the rate of exploitation has increased. Have our instincts let us down?
The paradox beyond oil
The example of oil is not unique. Many other materials are being exploited without fear of exhaustion of the reserves. For instance, over 50 years, the production of copper rose six-fold while the reserve/production ratio grew from 40 to nearly 80 years before dropping back to 50 years.
The case of copper is particularly remarkable because copper is extensively recycled, so a six-fold increase in what is mined is all the more significant. Moreover, consider the significance of a reserve/production ratio of 80 years. It implies that, if you were to discover a new deposit of copper, it might mean a wait of as long as 80 years before it was worth producing the copper you had discovered. Geological exploration is not cheap. No-one likes to spend money on exploration which will only start to yield revenue after many decades.
The production volumes and the reserve/production ratio of most non-renewable resources show patterns similar to that of copper. Production has increased inexorably, but the reserve has grown. Lead, mercury and asbestos are counter-examples. Health concerns have reduced the demand for the resource to low levels, and the reserve/production ratio has become very large.
Resolving the paradox
There are a number of factors underlying this paradox. The first is consideration of what constitutes a “reserve”. Our planet has many resources but they only become reserves when someone can find a way of making use of the resource material.
For instance, the crust of the Earth comprises about 8% aluminium. The lithosphere therefore contains about 70 million billion tons of aluminium. But the main reserves of aluminium are in the ore bauxite, with about 8 billion tons of aluminium, or of the order of one ten-millionth of the resource. So the reserve is a truly minute fraction of the resource, and this is true of many of the non-renewable resources. In contrast, our abuse of many renewable resources involves a significant fraction of the natural reserve.