Every generation consumes the available reserves of minerals

Every so often, you see a breathless warning from a tree hugging environmentalist warning of the impending doom caused by the world running out of this or that mineral / energy resource caused by our insatiable appetite for natural resources.

Here is an example of how we are going to run out of coal  in the near future:

Although peak coal gets less attention than peak oil, the issue is gaining attention. The world consumes 6 billion tons of coal per year (2010 data),with coal consumption trending upward. The largest user of coal, China, faces the imminent depletion of national coal reserves at current use rates, raising disturbing political, social, and environmental issues about neighboring Mongolian coal reserves.

This is nothing new. Check out this article from the Vancouver Sun, 1973 (click for larger version):

Yep, back in 1973 Canada didn’t have the oil reserves to solve America’s energy crises. Fast forward to today, Canada is a major oil exporter and is the number one source of ‘dangerous foreign oil’ in the United States. By far.

  • Canada is one of the world’s five largest energy producers and is the principal source of U.S. energy imports.
  • Canada’s unconventional oil sands are a significant contributor to the recent and expected growth in the world’s liquid fuel supply and comprise the vast majority of the country’s proven oil reserves, which rank third globally.
  • Canada is the world’s third-largest producer of dry natural gas and the source of most U.S. natural gas imports.
  • Canada is a net exporter of electricity to the United States, and most of its power needs are met by hydroelectricity.

So, why are the Tree Huggers so consistently wrong. According to my favorite economics writer, Timmy, it is really simple:

When you see an environmentalist complaining that we’re going to run out of a mineral in a generation he’ll actually be correct. That’s also the number Madsen uses for copper, 40-60 years or so. For every generation runs out of mineral reserves, this has been true since we started mining. For what everyone is talking about is “reserves”. These are the known knowns. These are the ore, we know where it is, we know we can extract it at current prices, with current techniques, and make a profit doing so. Further, we have also tested and proven all of this to the satisfaction of the stock market listing rules where mining companies go to get traded.

You’ll not be surprised to learn that drilling and sampling and sending odd hairy geologists over the hill with little hammers is expensive. So we only do this with the stuff we’re likely to dig up in the next few decades. Thus, reserves of ore are, at any one time, good for only a few decades of use. Because they are a both legal and economic concept and as such we only define as reserves what we’re likely to use in the next few decades. Or rather, only bother to do enough work to declare as reserves what we’re likely to use in the next few decades. Thus every generation does indeed use up the available reserves of minerals.

“Sending odd hairy geologists over the hill with little hammers is expensive.” 

Too funny and too true…