Ugo Bardi's Report to the Club of Rome
Extracted:
How the Quest for Mineral Wealth is Plundering the Planet

 

argaiv1902

Prepared by Michael Marien

 

March 2014

 

extracted
Extracted: How the Quest for Mineral Wealth Is Plundering the Planet. Ugo Bardi (Dept of Earth Sciences, University of Florence, Italy). Foreword by Jorgen Randers. A Report to the Club of Rome. White River Junction VT: Chelsea Green Publishing, April 2014, 299p, $24.95pb. (First published in Germany, 2013.)

 

Since the much-publicized The Limits to Growth in 1972, the 34 reports to the Club of Rome have promoted a "holistic approach" with a concern for the future of humanity and the root causes of the world's "systemic crisis" which has yet to be widely appreciated, especially by economists. (Unfortunately, the Club's peer-reviewed reports are not summarized or even listed in each new report, and the reports are issued by a variety of publishers.)   Most of these reports focus on growing population and pollution, and imminent scarcity of resources. This report makes no mention of population, and focuses solely and extensively on mineral resources. As described by Bardi, "the pages ahead offer a sweeping look at the history of mining, along with a systemic and scientific look at the current state of mineral depletion and its effects on the economy and ecosystem."

The conclusion is that "we are bumping up against limits on a number of these critical resources—some sooner than others—and that the methods the global mining industry uses to forecast remaining supplies may be entirely inadequate when it comes to determining how many of those supplies can be extracted without unbearable cost—financially, environmentally, and in terms of energy." (p.xviii)

This is essentially the same message as that from Michael T. Klare of Hampshire College in The Race for What's Left: The Global Scramble for the World's Last Resources (Metropolitan Books/Henry Holt, March 2012, 306p; GFB Book of the Month, May 2012), who warns of "the end of 'easy' everything" as the world faces "an unprecedented crisis" of resource depletion that encompasses shortages of oil, coal, uranium, copper, lithium, water, and arable land.

The two books are not identical, and should be seen as complementary. Klare's book is more readable for a more general audience, although backed up with 55 pages of footnotes, while Bardi's report is aimed more at scholars and has smaller print. Klare has a broader view of resources (with chapters on Arctic resources now becoming available as the ice melts and on global "land grabs"), while Bardi has a longer view of the history of mining and mineral empires.

Both books deal with offshore oil and gas (especially Klare), tar sands, shale gas, and rare earths. Bardi's report includes 2-4 page sidebar "Glimpses" by various experts on the age of oil, soil fertility and soil loss, consequences of fracking, the end of cheap uranium, gold and silver, copper as "the near-peak workhorse," platinum group metals, lithium as a potential fuel for electric vehicles, nickel and zinc, the Hubbert Model of peak oil, phosphorus depletion and misuse, peak coal, tar sands oil, recycling, and electronic waste and rare earths. This "sidebar style" is similar to that used in Jorgen Rander's interesting single scenario report to the Club of Rome, 2052, also published by Chelsea Green (GFB Book of the Month, July 2012).

Other topics considered by Bardi include minerals as "Gaia's gift," origins of the mining industry, the birth of modern mining, the possibility of a general decline in mining as it becomes more and more expensive, mining and wars, mineral extraction and energy, mining the oceans and the solar system, modeling depletion and overexploitation, the dark side of mining (pollution, debris, greenhouse gases), and fracking for non-conventional gas (its abundance may be substantially overstated and the US experience may not be easily replicated elsewhere).

 

SUBSTITUTION, RE-USE, EFFICIENCY, AND INNOVATION

Many economists will glibly dismiss the arguments for imminent depletion, and assume that technology will come to the rescue. For example, Princeton economist Angus Deaton (former president of the American Economics Association in 2009) is "cautiously optimistic" in asserting that "the forces for progress and for collective action against imminent danger are...strong, and I would put my money on their winning out." (In 100 Years: Leading Economists Predict the Future; MIT Press, Dec 2013, p.48). More specifically, Harvard economist Edward L. Glaeser pooh-poohs that "While there is a perpetual market for articles trumpeting doomsday scenarios, conservation, innovation, and substitution all tend to work against dire outcomes. The natural forces of supply and demand mean that as demand outstrips supply, prices will rise, and in response, consumers will restrict their purchases of the commodity... Humanity's track record in responding to shortages with innovation has been impressive and is likely to remain so." (In 100 Years,p.75).

Bardi directly addresses this position in Chapter 7, "The Red Queen's Race," where everyone in Lewis Carroll's imaginary kingdom had to run as fast as they possibly could just to stay in place:


The Substitution Option is valid within physically reasonable limits, but "not so easy as some economists would lead us to believe." For example, we can substitute copper with more common aluminum, which is almost as conductive, but requires four times the energy needed to produce the same amount of copper. Hopes of replacing fossil fuels with biofuels are based on a "gross misunderstanding" of agricultural needs. Substitution is a good strategy if we invest serious resources in developing substitutes, but not everything can be substituted.

The Recycling/Reuse Option would allow us to go on forever if we could recycle 100% of our waste. But efforts to do so remain limited, and there has never been an effort to manage waste so as to make it easy to recover useful materials; the goal has been to simply make it disappear from view. "While some form of recycling is generally common now, it is also often minimal and inefficient."  Many minerals that have entered the world's economy in the past few centuries are now in landfills or dispersed in the ecosystem.   Minerals from waste sent up in smoke are gone forever for reuse purposes, and take on a new role as air, water, and land pollution. Where there is waste recycling, the recycled material is normally of lower quality than that from pristine mineral sources; there are many examples of such "downcycling" (e.g. in steel, glass, plastic, and paper). Recycling may have a significant effect in fighting depletion, but only if we change industrial production to a "circular economy."

The Efficiency Option is valuable, but requires investment. The "degrowth" movement theorizes that living in a simpler society means being happier, but the movement has been embraced by only a tiny minority in most countries, and politicians everywhere remain locked to the view that growth is the only way to solve all problems. Meanwhile, "degrowth is rapidly ceasing to be a choice...(and) is becoming a forced condition" in many countries. But forced degrowth is quite different from intentional degrowth. Another problem is the "Jevons paradox," where saving money through energy efficiency leads to spending on other resources and thus no net decrease.

A plausible case is made by Bardi for the limits of substitution, recycling, and efficiency, and for overall plundering of the planet. Will economists ever consider this scientist's rebuttal to their simplistic assumptions? It is doubtful that they will even know about it. The Club of Rome would thus be well-advised to re-consider their 40-year-old outreach strategy in the Age of Infoglut.

On the other hand, what Bardi does not consider is technological innovation--neither "technology" or "innovation" is in his subject index--that continues planetary plundering at the same or reduced costs. Fracking is a prominent example.

 

THE FRACKING FACTOR: AN INCONVENIENT TRUTH?

Personally, I must strongly emphasize my wish that horizontal fracking for gas and oil would go away. It prolongs use of gas and especially oil, while deflecting attention and resources away from the necessary long-term transition to non-polluting sources of energy.

It also creates problems with air and water pollution, usage of large quantities of water and sand, damage to local roads, low-level earthquakes, and deflated values of nearby properties. Only the public health problems of pollution are now beginning to be addressed, which does not mean that the pollution problem will be largely or even partly mitigated anytime soon.

That said, fracking is here—another "inconvenient truth," to use Al Gore's book title that was applied to climate change. The question is for how long. At the moment it is a "disruptive technology" that is extremely controversial, with benefits readily apparent and widely touted by oil and gas interests, and various costs more difficult to calculate and aggregate. This imbalance in assessing benefits and costs is aggravated by the gas industry's massive television advertising campaign, repeatedly claiming that fracking is safe when in fact it is potentially safe only under optimal best practices, as well as regulation and enforcement. And safety is only one of several concerns about prolonging the age of fossil fuels.

In addition to the question of benefits vs. fully-considered costs, and seldom-made comparisons with other energy investments that also create jobs, there is a huge question of shale reserves.

Bardi asserts that the abundance of nonconventional resources "may have been substantially overestimated," national reserves in the US "are being rapidly consumed," the decline in gas production in the US is already starting, "a similar trend is observed for the production of shale oil in the US," and "the new age of fossil fuels will most likely turn out to be a short-lived bump on the path toward unavoidable decline." (pp. 197-202) But is this wishful "peakist" thinking?

A starkly opposite view is presented in the May-June 2014 issue of Foreign Affairs, considered by many to be the leading American journal on global issues. The headline for the cover feature is "Big Fracking Deal: Shale and the Future of Energy." The lead article by Edward L. Morse (Global Head of Commodities Research at Citi), "Welcome to the Revolution" (pp. 3-7), enthuses about "a paradigm shift" in thinking about hydrocarbons, "large and accelerating" efficiency gains in the shale sector (at about 25% per year), steadily dropping costs of finding and producing oil and gas in shale and tight rock formations that "will drop even more in the years to come," a plausible 30% increase in US natural gas production before 2020, US oil production likely to rise to 12 million barrels per day or more in a few years (and be sustained there for a long time) and resources "far in excess of total global conventional proven oil reserves." The bottom line is "the availability of plentiful energy at ever-lower cost and with ever-great efficiency, enabling major advances in global economic growth." (p.4)  Morse assures us that potential environmental risks can be mitigated and "are in fact being addressed in the industry's evolving set of best practices." He concludes that "the shale revolution is only just getting started." Is this even more wishful thinking?

A follow-on article by Robert A. Hefner III (founder and CEO of the GHK Companies) argues that the shale revolution could have happened only in America, which has the unique ingredients and entrepreneur-friendly system needed to fully develop shale resources. "Since the shale boom began over a decade ago, companies have drilled about 150,000 horizontal wells in the US" at a cost of about $1 trillion, while the rest of the world has drilled only hundreds of horizontal wells. Thus, it is "highly unlikely that other countries will ever catch up to the US," even though China and Europe sit on vast shale resources. Cheap and abundant natural gas will add to America's geopolitical capital (shale oil and gas reserves have already boosted US GDP by as much as 1%), an economic advantage that could last to 2050 or beyond unless blocked by anti-fracking activists.

A concluding article by Fred Krupp, president of the Environmental Defense Fund, does not dispute these lusty forecasts, and even adds that "China has the world's largest recoverable shale gas reserves, over 1,000 trillion cubic feet, more than the US and Canada combined." But he points to growing US concern over the environmental costs of unconventional oil and gas production, especially by releasing methane, and hopes that new rules adopted by Colorado in February 2014 will be "a bellwether for other states seeking to minimize the air pollution produced by the oil and gas industry." And he weakly concludes with a reminder that slowing the rate of climate change in the next 20 years is critical—a concern ignored by the first two articles.

A serious in-depth debate is needed between these two opposing forecasts. "Big Fracking Deal" or "Big Bubble"? Is Bardi far too pessimistic, or are Morse and Hefner much too optimistic? Or is the more truthful outlook somewhere in the muddled middle?

In any event, even if Bardi is largely wrong on the outlook for shale gas and oil reserves, his broader argument that "we are bumping up against limits on a number of these critical resources—some sooner than others" remains as another inconvenient truth that seems irrefutable. Ignoring this argument or casually dismissing it as many do is not a counter-argument. Shale exuberance, especially in the US, thus serves to blind us to the imminent problems of cost and availability of other critical resources.

 

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