The World in 2050: Four Forces Shaping Civilization's Northern Future (8 page)

CHAPTER 3

Iron, Oil, and Wind

All I wanna do is to thank you
Even though I don’t know who you are
You let me change lanes
While I was driving in my car

—Lyrics from “Whoever You Are” by Geggy Tah (1996)

I
nose my compact SUV out of traffic and into the Mobil gas station at Cahuenga Pass, just off the 101 Freeway in Los Angeles. Perched high above me atop the Santa Monica Mountains are the enormous white letters of the Hollywood sign. The nine letters gleam out proudly over a booming young megacity that barely existed a century ago.

I find an open pump and hop out of the car. I swipe a credit card and tap in my ZIP code. I choose a fuel grade, lift the pump handle from its cradle, and jam it into the tank’s orifice. I squeeze the pump’s handgrip and feel its metal grow cold as fuel churns from another tank in the ground beneath me to the one in my car. It is a simple, mindless act I have repeated countless times since I was seventeen years old. I give no more thought to the process than I do to washing my hands or drinking a glass of orange juice. But I really should be more appreciative. In L.A. the elixir of life isn’t Botox: It’s gasoline.

The average man must labor for ten hours a day, for two solid months, to perform as much physical work as one gallon of crude oil. No wonder we’ve abandoned horses and carriages in favor of oil-powered vehicles. This raw material, from which all gasolines, diesels, and jet fuels are refined, is miraculous stuff. It fuels 99% of all motorized vehicles today. And oil is so much more than just a transport fuel—it is an essential ingredient of nearly everything we make. Our plastics, lubricants, cosmetics, pharmaceuticals, and millions of other products all derive somehow from oil. Our food is grown with oil. So besides what I was pumping into my gas tank, I was sitting in oil while driving and was drinking oil as I sipped coffee from my cup.

Since the Industrial Revolution oil, coal, natural gas, and metals have improved nearly every aspect of human life. Before then, a meager existence was the norm no matter what country one lived in. It is naïve to romanticize the eighteenth century as simpler, happier times—the lives of those farmers and townspeople were a constant struggle. Without fossil fuels and metals our lives would be very different. Indeed, today’s urbanization megatrend and gigantic cities would not even exist.

The modern city survives upon constant resupply from the outer natural world, from faraway fields, forests, mines, streams, and wells. We scour the planet for hydrocarbons and deliver them to power plants to zap electricity over miles of metal wire. We take water from flowing rivers with distant headwaters of snow and ice. Plants and animals are grown someplace else, killed, and delivered for us to eat. Wind, rivers, and tides flush out our filth. Without this constant flow of nature pouring into our cities, we would all have to disperse, or die.

This reliance of cities upon the outside natural world is a profound relationship to which their occupants give little if any thought. Unlike a hardscrabble Uzbek farmer, modern urbanites worry little about securing water and food, and instead focus on securing jobs and wealth. But a lack of awareness doesn’t make this dependency any less profound. Swedish cities, for example, import at least twenty-two tons of fossil fuel, water, and minerals per person annually.
⁹¹
In a single year Portugal’s growing city of Lisbon gobbles some 11,200,000 tons of material (things like food, gas, and cement) but excretes just 2,297,000 million tons (things like sewage, air pollution, and trash).
⁹²
That’s twenty tons coming in and only four going out for every one of Lisbon’s 560,000 residents. The difference—nearly nine million tons—stays in Lisbon, mostly in the form of added buildings and landfills. So not only do cities
feed
on their outside natural resource base, they
retain
and
grow
from it.
⁹³

Clearly then, our global rush to urbanize does not mean giving the natural world a break. As we saw in the previous chapter, when people move to modern cities, consumption goes up, not down. And cities import all sorts of materials besides food, water, and consumer goods. Roads, buildings, and power plants require serious tonnage of steel, chemicals, wood, water, and hydrocarbons. Even in rural areas, the departing farmers are being replaced by tractors and petrochemicals.
⁹⁴

As described in the last two chapters, the developing world will experience extraordinary urban and economic growth over the next forty years. What does this portend for our third global force, demand for natural resources? Do we face oil wars and crazy steel prices? Stump forests and dried-up water wells? Are we about to run out of the raw materials our cities and mechanized farmlands so desperately need?

Are We Running Out of Resources?

The debate over natural resources, and whether we are running out of them, is a contentious and surprisingly ancient debate. Even Aristotle wrote about it. In 1798 Thomas Malthus’ first edition of
An Essay on the Principle of Population
argued that the exponential growth of human population, set against the arithmetic growth in the area of arable land, must ultimately lead us to outstrip our food supply, thus inevitably dragging us toward a brutal world of famines and violence.
⁹⁵
Among Malthus’ more odious ideas was that social programs are pointless because they enable poor people to have more babies, thus making the problem worse.

Not surprisingly, Malthus’ ideas angered many people in his day and since. John Stuart Mill, Karl Marx, Friedrich Engels, and Vladimir Ilyich Lenin were among his vocal critics, mostly retorting that social inequity, not resource scarcity, is the root cause of human suffering. More than two centuries after the publication of this slim book the battle rages on, pitching modern-day “neo-Malthusians” like Stanford’s Paul Ehrlich against opponents like the late Julian Simon at the University of Illinois.
⁹⁶
The debate has now expanded well beyond food production to include all manner of natural resources.
⁹⁷

To enter this debate it is simplest to start off with finite, nonrenewable raw commodities that are essential to modern human enterprise, like metals and fossil hydrocarbons (we will take up water, food, and renewable hydrocarbons later). Are we running out?

Let us tabulate estimates of known geological deposits that we have already discovered and know to be of sufficiently high grade that they could be profitably developed tomorrow if necessary. These quantities are called
proved reserves,
or simply
reserves
. It is then a simple calculation to divide the world’s total reserves by their current rate of depletion (i.e., their annual production rate) to see how many years are left until the remaining reserves run out. This simple measure is called the “R/P” (reserve-to-production) ratio or the “life-index” of a resource. On the following page are some examples of global proved reserves (both in total and per capita) and R/P ratios for twenty-two of the Earth’s especially useful nonrenewable resources.

Two observations leap from these data. The first is that the absolute abundance of a reserve is not always a good predictor of when it might be depleted. The current world reserve of oil—despite being the second-largest at nearly two hundred billion metric tons (about twenty-four metric tons for every man, woman, and child alive on Earth)—is scheduled to run out in just 42 years at current production rates, whereas the supply of magnesium would appear to last for 4,481 more years, despite having only 1/75th the abundance of oil. Platinum would appear to have 150 years left despite being more than two million times scarcer (just 100 grams for every man, woman, and child).

The second observation is that there is an enormous range in R/P ratios, with some reserves projected to be exhausted as soon as eight years from now and others not for hundreds or even thousands of years. The known proved reserves of magnesium, for example, appear sufficient to carry us to the year 6491 at today’s rate of consumption. Interestingly, commodity prices do not necessarily reflect this. For example, one can buy silver and lead much more cheaply than platinum, despite their having shorter index lifetimes.

Proved World Reserves of Some Important Natural Resources

(
Sources: PB 2008
; British Geological Survey 2005)
⁹⁸

Why is this? Can the markets be wrong? Before you rush off to hoard lead ingots, note that there are serious flaws with the use of this simple “fixed-stock” approach to project future resource scarcity. An obvious one is that not all “nonrenewable” resources are irreparably destroyed when used, meaning they can be recycled. This is particularly true for metals. Lead and aluminum are highly recycled today, for example. A second flaw is that the size of proved reserves is not truly fixed but tends to rise over time as new deposits are found, extraction technologies improve, and commodity prices go up. The latter can make a low-grade deposit become economically viable, thus adding it to the list of proved reserves despite no new geological discoveries whatsoever. And to an economist, a big problem with the R/P ratio is its implicit assumption that the cost of production for all those tons is equal around the world, when we know that is not the case.

In principle there is sufficient aluminum, iron, zinc, and copper within the Earth’s crust to last humanity for millions of years, if we had the energy and technology and desire to extract such dilute materials and didn’t object to mining away vast portions of the planet from beneath our feet. Mineral “depletion,” at least in the strictly physical sense, is thus meaningless.
^99
,
100
The better question, therefore, is not “will we run out of aluminum?” but “to what lengths will we go to get it?”

The above flaws—ignoring recycling, and the tendency for proved reserves to increase over time with advancing prices, technology, and new discoveries—make R/P life-index calculations, like the ones tabled on the previous page, overly pessimistic. However, two other factors tend to make them overly rosy. The first is that governments or companies holding a resource sometimes find it in their best interest to be optimistic when assessing the size of their proved reserves. This is particularly true for oil and is a serious concern with Saudi Arabia, currently the world’s largest oil producer.
¹⁰¹
The second problem with life-index calculations is that they imply today’s rate of consumption will remain fixed into the future. As we saw in the previous chapter, enormous growth in the global economy and population is projected for developing countries. Resource consumption is expected to rise right along with them, thus making life-index projections too short. In light of these weaknesses, R/P life-index values are best used for illustrating the present-day situation, rather than for making projections into the future.

A more sophisticated approach is to link resource consumption to GDP or some other economic indicator, thus allowing it to rise with projected economic growth. Model studies that add this extra step all indicate serious depletion of in-ground reserves of certain key metals, notably silver, gold, indium, tin, lead, zinc, and possibly copper, by the year 2050.
¹⁰²
Pressure is also rising on some other exotic metals (besides indium) needed by the electronics and energy industries, notably gallium and germanium for electronics; tellurium for solar power; thorium for next-generation nuclear reactors; molybdenum and cobalt for catalysts; and niobium, tantalum, and tungsten for making hardened synthetic materials. Clearly, we are transitioning toward a world where some industrial metals will become either geologically rare and increasingly recycled, or abandoned altogether in favor of cheaper, man-made substitutes.
¹⁰³
So while physical mineral depletion won’t happen soon—and we will see it coming if it does—perhaps you might stash away a little silver and zinc after all. They could well bring you a tidy payback in forty years’ time.