Limits to growth

Physical Scientists Are So Darned Cute When They Finally Understand Economics

Geologists analyze the myth of mineral resource exhaustion.

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CopperPipesScanrailDreamstime
Scanrail/Dreamstime

Remember Peak Oil? What about Peak Everything? The Limits to Growth myth of impending mineral resource exhaustion was running once again rampant just a decade ago. The world didn't run out of any critical minerals or metals. Why not? Because as rising demand boosted the prices for minerals like tin, copper, zinc, and iron ore, geologists and entrepreneurs went in search of new sources while manufacturers and consumers economized on the amounts required to make their products.

The current issue of Geochemical Perspectives is devoted to considering "Future Global Mineral Resources." The good news is that the group of geologists who put together the study have stumbled upon economics and now understand a bit about how demand and supply works. From the abstract:

Some scientists and journalists, and many members of the general public, have been led to believe that the world is rapidly running out of the metals on which our modern society is based. Advocates of the peak metal concept have predicted for many decades that increasing consumption will soon lead to exhaustion of mineral resources. Yet, despite ever-increasing production and consumption, supplies of minerals have continued to meet the needs of industry and society, and lifetimes of reserves remain similar to what they were 30-40 years ago. …

Over the last 150 years, improved technologies, economies of scale and increased efficiency have combined to reduce costs hence allowing lower-grade ore to be mined economically. The net result is that the long-term inflation-adjusted price of most metals has decreased more or less in parallel with increasing production, a second apparent paradox that frequently is not well understood.

The press material released by the University of Geneva to accompany the study notes:

To define reserves is a costly exercise that requires investment in exploration, drilling, analyses and numerical and economic evaluations. Mining companies explore and delineate reserves sufficient for a few decades of profitable operation. Delineation of larger reserves would be a costly and unproductive investment, and does not fit the economic logic of the modern market.

The result is that the estimated life of most mineral commodities is between 20 to 40 years, and has remained relatively constant over decades. Use of these values to predict the amount available leads to the frequently announced risks of impending shortages. But this type of calculation is obviously wrong, because it does not take into account the amount of metal in lower quality deposits that are not included in reserves and the huge amount of metal in deposits that have not yet been discovered.

Hmmm. Who else has made that point? In my chapter "The Depletion Myth" in my 1993 book Eco-Scam: The False Prophets of Ecological Apocalyse I wrote:

Impending scarcity provokes people to search for substitutes and to improve technologies used to exploit natural resources. For example, copper reserves are not only expanded through new ore discoveries, but also through technology. Improvements in refining allow humanity to exploit copper ores now that are eight times less rich than those mined in 1900. … A deposit of copper is just a bunch of rocks without the know-how to mine, mill, refine, shape, ship, and market it.

Similarly in my 2015 book, The End of Doom I report:

Why does the horizon of mineral reserves never seem to go out further than a few decades? Basically because miners and technologists do not find it worthwhile to find new sources and develop new production techniques until markets signal that they are needed. How this process evolves is encapsulated by the USGS report which notes that in 1970 known world copper reserves stood at "about 280 million metric tons of copper. Since then, about 400 million metric tons of copper have been produced worldwide, but world copper reserves in 2011 were estimated to be 690 million metric tons of copper, more than double those in 1970, despite the depletion by mining of more than the original estimated reserves."

Having now taken on lessons from economics, the researchers writing in Geochemical Perspectives conclude:

We demonstrate that global resources of copper, and probably of most other metals, are much larger than most currently available estimates, especially if increasing efficiencies and higher prices allow lower-grade ores to be mined. These observations indicate that supplies of important mineral commodities will remain adequate for the foreseeable future.

The good news is that humanity is nowhere near peak everything; the bad news is that we are also nowhere near peak doom.

For more on physical scientists' fruitful encounters with economics, see my 2012 column where I report their astonishing discovery that property rights can save fisheries from depletion.

NEXT: White House Chief of Staff Reince Priebus speaks out in favor of banning flag-burning

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  1. I bet this article will garner hundreds of comments. Nothing gets yokels and cosmos butting heads like mineral resource exhaustion.

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      1. I’m making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life.

        This is what I do..,.,.,., http://www.careerstoday100.com

        1. I know this isn’t true because unlike most geologists, I already understand economics.

  2. Some scientists and journalists, and many members of the general public, have been led to believe that the world is rapidly running out of the metals on which our modern society is based.

    I blame the popularity of StarCraft.

  3. Copper piping is already seeing substitutions with plastic such as PEX taking its place. We bought a dishwasher recently, and I think the only metal was in the pump and the frame.

    1. Not if plumbers and pipefitters unions and plumbing contractors have any say.

      While PEX may be allowed by the national code, there are still a lot of areas where the unions and contractors have managed to keep it from being allowed.

      I used PEX to replace corroded old black iron pipe in a house.
      I found it to be superior to copper in every way but one. You have to be darn careful you don’t pinch it.

  4. The real weird thing about mineral exhaustion is it acts as though atom “wear out” after use. There’s essentially the same amount of copper on this planet now as there was 100 years ago and will be in 100 years.

    1. Nuh-uh. Space probes use a lot of copper.

      1. Not to mention gold.

      2. Hence the “essentially”. The amount of copper leaving the planet in space probes is trivially small.

        1. And it is raining down on us daily in meteorites. What we really need is a mile-wide copper asteroid to land and replenish our supply. The price of copper would plummet, probably to zero.

  5. But wait! we have been running out of oil for decades! And decades! And decades!
    Why else would the feds give them a depletion allowance?

    1. The depletion allowance is analagous to depreciation of assets in every other line of business.

  6. Insert parable of boiling frog here.

  7. I saw this and was mostly flabbergasted that anyone would even admit that scarcity is variable and depends on price, and even more flabbergasted that any magazine would dare publish. It made me wonder, a little, if it was only published because Trump’s win provided cover; would it have been stalled and rejected if Hillary had won?

    Such is the state of science reporting, that its reputation has sunk so low.

  8. RE: Physical Scientists Are So Darned Cute When They Finally Understand Economics
    Geologists analyze the myth of mineral resource exhaustion.

    But..but..but if you don’t have mineral resource exhaustion, then you’re wasting a crisis.
    That should never happen.

    1. You act as if there is a crisis scarcity.

      1. There isn’t a crisis scarcity?

        1. Are we reaching peak crisis?

          1. That’s the best one liner on this page.

      2. Just because we have plenty of crises is no excuse to waste them.

  9. Even more, we don’t destroy metals by mining and using them.

    They’re recoverable (with super-rare exceptions that don’t matter), just somewhat more expensive.

    (Don’t recycle! That way our descendants can mine our landfills!)

  10. Various concepts become very popular in some groups, not because they are correct, but because they support a world outlook preferred by that group. Sadly, the world view frequently supported is that people must be minutely controlled for their own good, and for the good of all.

  11. Does this mean that peak derp is not going to happen?

    1. We are headed for the derpularity.

  12. Ron spikes the ball and does the Ickey Shuffle!

  13. Hmmm. Who else has made that point?

    Jean Baptiste Say? The Late Spanish Scholastics? Carl Menger? Murray Rothbard? Ludwig von Mises? Eugen von Bohm-Bawerk? Friedrich Hayek?

  14. OK, now I’m worried.

  15. My what a faggy self-serving article. One wonders why the author can’t make a point without blowing a lot of senseless nonsensical mixed-up gibberish around about these guys and those guys who he imagines to himself are so stupid and out of touch compared to him. I’m not buying the book. This is bullshit.

  16. My what a faggy self-serving article. One wonders why the author can’t make a point without blowing a lot of senseless nonsensical mixed-up gibberish around about these guys and those guys who he imagines to himself are so stupid and out of touch compared to him. I’m not buying the book. This is bullshit.

  17. A shorter version of this article: Paul Ehrlich is the wrongest man in the galaxy.

    If the End of Doom is anything like The Rational Optimist, I might go buy it.

    Oh btw, latest tidal gauge data from NOAA is very interesting. Hard to find any acceleration in any of the data sets.

  18. The true danger, of course, is that when the Peak Stuff True Believers gain power, they will regulate away all the technological solutions and self-fulfill the prophesy.

  19. In dealing with physical scientists, indeed anyone not leftist-innumerate, start with the idea of feedback mechanisms.

    Remember that engineering comes before preferences and moral decisions.

    The thermostat at home measures temperature, and when appropriate, starts the furnace.
    In the economy, the free market is the thermostat, price is measured, and when appropriate resources are allocated.
    That immediately orients anyone able to understand STEM topics to rational decision making.

    Now if only we could provide remedial intellectual support to those in need.

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