Why is the global economy constrained by the energy cost of energy?
Copyright 1997, Walter L. Youngquist -- Posted with permission
from GeoDestinies, by Walter Youngquist PhD &
Department of Geology, University of Oregon;
National Book Company, 1997; ISBN 0894202995
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Although minerals and energy minerals are fundamental to our existence, the facts of these resources and of industries which produce these materials are subject to many myths and much misinformation. This is unfortunate for it clouds the ability of individuals in a democracy to make intelligent choices. Some of the distortions are deliberately made by political interests who play upon the fears and hopes of the electorate, and then in the role of the defender of the public interest against the oil or mining companies seek to obtain votes by this device. Some statements are made from ignorance, and some are made by people who have their own political and social agendas which they wish to perpetrate upon the public. Some are made by people who are a bit over enthusiastic about a particular resource and do not carefully examine the hard facts, or may not be aware of them. Some statements are made by promoters wanting to raise money for a particular mineral development, whether that development has a sound basis or not.
It is important that facts be sorted out from fiction if democracy is to be the form of government which makes our laws and guides our international, national, and personal affairs. The tax structure which is a political matter has much to do with the success or failure of many mineral ventures. However, what is fact must be carefully presented and any doubts about a statement be fairly noted.
Also, it is important for correct public policy that the basic geologic, economic, and technical facts be known about a given resource, so that there are no illusions by government leaders or the citizenry in general as to how important that resource is now or may be in the future. There are numerous glowing statements in print about what can be expected from things ranging from oil shale to mining the moon. It is indeed nothing short of amazing what claims are made, and what people may believe. This also applies to solutions to resource-based problems such as population pressures, where colonizing space has been suggested. Some of these myths are discussed here.
In part, this chapter is a summary of statements made in other parts of this volume with respect to particular resources. However, for the sake of emphasis with regard to some of the misunderstandings concerning mineral resources, the facts are here brought together in one chapter for convenience of review.
Myth: There is no oil supply problem in the United States
During the two oil supply crises of 1973 and 1979, in the U.S. the average citizen frequently stated the belief that no "real" oil shortage existed, and that the shortages were caused by the oil companies withholding oil from the market. But when the individual is asked two basic questions: How much oil does the United States produce each day, and how much oil does the United States consume each day, there usually is no reply. People are "experts" on the oil situation with no knowledge of the facts. This serves no useful purpose.
The United States passed the point of oil self-sufficiency in 1970, and has been an importer of oil ever since then. In 1996, the United States produced about 6.4 million barrels of crude oil a day but imported more than 7 million barrels of crude oil plus 1.7 million barrels of refined oil products. The U.S. is now importing more oil than it produces.
The United States is the most thoroughly drilled area in the world and there is no possibility that this nation will ever again be self-sufficient in oil in the volumes and ways in which it is now being used. In what are reasonably prospective available oil areas in the United States, there are very few undrilled places left large enough for a major oil filed to be discovered onshore. Offshore there are some prospects, but offshore drilling has been banned in many areas.
A major oil field covers many square miles and almost all sizeable prospects have been drilled onshore U.S., except in a small comer of the Arctic National Wildlife Refuge, which has been under environmental limitations. Some prospective areas do exist in more distant offshore areas open to exploration but these are generally in increasingly deeper waters, and are difficult and expensive to drill. The amount of oil which would make the United States again self-sufficient in petroleum cannot be found and produced in what areas remain to be explored, either onshore or offshore. As one petroleum geologist put it, "Exxon has run out of real estate." This is true of all the major companies who have now had to mostly go abroad to obtain acreage prospects of worthwhile size.
Myth: Just drill deeper for more oil
The statement is sometimes made that deeper drilling would find more oil.
Oil occurs in sedimentary rocks which are a fairly thin part of the Earth's crust. In the long-time oil-producing State of Kansas, for example, granite or something else besides sedimentary rock exists everywhere at depths of 15,000 feet or less. All over the world, at some depth, non-petroliferous rocks are encountered below which there is no oil. Where there are great thicknesses of sedimentary rocks, 16,000 feet is, with a few exceptions, the limit of oil occurrence. Below that depth, because of the temperature of the Earth, only gas exists.
Myth: Oil companies have capped producing wells to keep up the price of oil
This is one of the oldest and most persistent myths about the oil industry. The idea is that oil companies will drill wells and then cap them, thus withholding production from the market until the price of oil goes up.
It is true that many wells are drilled and then capped. Almost all of them are capped because they are dry holes—that is, they are failures. Less than one in eleven exploration wells is successful. The law requires that failed wells be filled with cement at key points in the well to avoid groundwater contamination, and then capped. To the landowner who had great hopes for the well drilled on his property, the face-saving statement to the neighbors is that "they found oil but just capped the well." Only when the oil company drops the lease does reality arrive.
There are some wells which could produce oil which are temporarily capped. There are two common reasons for this. One is that there is no facility for transporting the oil from the well at the moment. Either a pipeline does not exist or it is too expensive to truck it out. Generally, if the well is a producer, other wells will be drilled in the area to establish the presence of enough recoverable oil to justify developing a transport system by which the oil can be brought out economically.
A second reason may be that occasionally it is true a well may be drilled, completed, and capped when the current price of oil is not high enough to pay for the expenses of producing the oil—the pumping costs and perhaps the problem of the disposal of the salt water which may be produced with the oil. However, capping a well and leaving it for a time is risky because sometimes the well cannot be restored to production.
Drilling a well is so costly that if the well is productive and capable of bringing a return on investment, the well will be produced. If a million dollars is involved in exploration, lease, and drilling costs—and one million is much less than many wells cost—then the cost of that money in lost interest which that money would otherwise bring, demands that the well be produced. No one can afford to tie up a million dollars, or many millions with no economic return. And it is not done.
Myth: Don't drill this prospective field. Only 90 days of U.S. oil supply there
One of the most misleading arguments used against drilling a particular area is the statement that it would only supply X number of days or months of U.S. oil demand. Yet to the average citizen this is one of the most "logical" reasons for not allowing drilling in a particular area. It is one of the most widely and most effectively used arguments against oil drilling. It appears frequently in numerous newspaper editorials and letters to the editor, and at public hearings.
With regard to the long-running debate about opening a portion of the Arctic National Wildlife Refuge in Alaska for oil exploration, in 1995, the president of a prestigious environmental organization said "...there may be at best only 90 days supply of oil for the U.S. There can be no justification to develop the arctic refuge."(27) Let us pursue this argument.
At the present time the U.S. uses about 18 million barrels of oil a day. A 100 million barrel oil field is regarded in the petroleum industry as a "giant." They have been discovered only infrequently. Yet if one of these giant oil fields was used to supply U.S. oil demand, it would last less than six days!
To put this in further perspective, at the present time only 15 oil fields in the United States have produced as much as a billion barrels of oil. This is done, of course, over a period of many years. But if the argument is applied that the oil field would only supply oil for a given length of time in the U.S., it should be noted that the oil from each of these 15 fields, if it could have theoretically been used alone at one time, would have only supplied the U.S., at its current rate of consumption of about 6.6 billion barrels a year, only about 57 days.
If the argument used by the president of the environmental organization was to be followed, there would be no oil drilling at all in the United States. These days, a ten million barrel oil field discovery is an important event in U.S. oil exploration. But that amount would last the U.S. less than 14 hours! The fact is, we are not discovering ten million barrel oil fields every 14 hours in the U.S. That is why our oil reserves are in decline. Prudhoe Bay, the largest oil field ever discovered in North America, would have lasted the U.S. less than two years if it alone had been used.
But it is not possible to produce all the oil out of Prudhoe Bay or in any other field in 90 days, or six months or two years. If one divides the number of producing oil wells in the U.S. into the total proven U.S. reserves, each well has a reserve of about 38,500 barrels. These 38,500 barrels of oil, if they could be immediately produced, would supply U.S. oil demand for about three minutes. On this basis, it might be argued that none of these wells should have been drilled, in which case the U.S. would have no oil production. But oil supplies are produced over many years from many wells which make up the total U.S. production.
Each well makes a contribution, and each discovery serves to stretch out domestic supplies a little longer. Individually most fields, with the notable exception of the huge Prudhoe Bay Field, and each well produces an insignificant amount of oil relative to total U.S. production. But taken together they add up to the 6.4 million barrels a day now being produced.
People who use this argument presumably drive to work in gasoline-powered cars. Where do they want that gasoline to come from? People demand and use oil. With few significant prospective areas now still open to drilling in the U.S., where is the oil supposed to be obtained? Those who would curtail exploration first need to reflect on what is causing the huge and increasing demand on mineral and energy resources, and address that cause and not the symptoms of the problem. The cause is the resource demands of growing numbers of people, and the desire to continue to maintain the largely petroleum-based standard of living enjoyed by citizens of the industrialized nations. Use no oil and there is no need to drill. Otherwise drilling is necessary—somewhere. And each well and field are a necessary part of the total supply picture.
Politics and Oil
In the United States, and in many other countries, gasoline is the commodity which most touches individual lives even day. It has been politically popular to proclaim that it is the right of even American to enjoy cheap gasoline, and if this does not occur the politicians blame someone—usually the oil companies. It is "they" versus "us". "They" are the oil companies. "Us" is the public, and the public elects the politicians. When considering the problems of gasoline supply, people should simply look in the mirror to see the major part of the problem. The United States uses more gasoline per person than any other nation in the world, except Venezuela. In the Los Angeles area more people drive more cars more commuting miles every day than anywhere else on Earth. To a lesser extent this occurs in many other cities in the United States including greater San Francisco, Houston, New York, Chicago, Denver, and Seattle.
Myth: Gasoline is high-priced
When gasoline in the United States crossed the one dollar per gallon retail price there was a general public resentment of the oil companies. Gasoline was "too high priced."
In the 1990s in the U.S. the basic cost of gasoline (before taxes) was less in terms of inflation adjusted dollars than anytime in the past 40 years. In fact, it was nearly as cheap as anytime in the history of the oil industry. It was also historically inexpensive in terms of how long the average wage earner had to work to buy a gallon of gasoline.
The cost of gasoline at the pump is the basic cost of exploring for, drilling, producing, refining, and marketing the gasoline together with the taxes which are placed on this commodity. Lesser costs are the cost of transporting and storing the gasoline enroute to the service station. Profit margins are spread all through this system, and are generally in line with average market returns on investment. The biggest single cost in the final price of gasoline at the service station is taxes. Gasoline is a favorite source of revenue for government. In 1993, for example, U.S. President Clinton signed a bill which increased the U.S. federal gasoline tax by 4.3 cents. This was not dedicated for the purpose of road building and maintenance, but went into the general U.S. Treasury, and was stated to be for the good cause of reducing the annual government deficit, which end result has since seemed rather elusive in practice. States and cities also impose gasoline taxes. In the United States, federal and state gasoline taxes on the average are in total equal to more than the basic cost of the gasoline at the refinery.
Based on constant 1967 dollars, exclusive of taxes, the retail price of gasoline in the U.S. in 1920 was 49 cents, in 1930 it was 39 cents, in 1950 it was 37 cents, in 1970 it was 30 cents, in 1974 it was 40 cents. The price in 1995 was 67.7 cents a gallon.(19) But this 1995 price is for a much improved quality of gasoline with additives for better engine performance, and also for reduction of air pollutants. The price is also for unleaded gasoline which was not available in 1974, and which costs more to produce than does leaded gasoline. This record of price stability is in marked contrast to the large increase in prices of virtually all other consumer items. The oil companies have done a remarkable job in supplying the world's largest consumer of gasoline, the U.S. citizen, with inexpensive high-quality gasoline without restrictions as to quantity.
However, because gasoline price touches so many people, the political posturing over gasoline prices in order to gain voter favor seems to be a continuing phenomenon. In the U.S. in the spring of 1996, gasoline prices rose about 10 to 15 cents per gallon. This was due to the fact it had been an exceptionally long, hard winter, and refineries had delayed their shift of refinery output emphasis from fuel oil to gasoline. There were also weather related problems in the North Sea and Mexico which interrupted oil shipments, and the world oil price rose from about $17 a barrel to $25. U.S. oil companies have no control over the price of world oil, from which now comes more than half the U.S. oil supply.
But both major U.S. political parties tried to make campaign advantage of the situation. The administration announced that the Justice Department would immediately look into the matter of a possible price conspiracy among the oil companies. The opposition in the Congress said it would try to repeal the 4.3 cent gasoline tax increase which the administration had pushed through in 1993. The media interviewed motorists at the filling stations who by and large were of the view that the oil companies were greedy, which view was widely echoed by cartoons, editorials, and radio and TV commentators.
Some of the media, however, had more informed observations. The syndicated columnist, Mike Royko, viewing oil prices both historically and currently, wrote some very direct comments about the 1996 oil price situation:
"What I didn't hear any reporter say was: 'Of course, in this country, we pay far less for gasoline than they do in Canada, Europe, or just about any other developed nation.'
"Nor did they point out that when you factor in inflation that the price of gas is less than it was 40 years ago.
"If the broadcast hysterics took note of these few simple facts, there wouldn't be any talk of a gas pump crisis...
"If CNN insists, every half hour, that helpless American motorists might suddenly be sputtering to a stop on the shoulder of the road, is the White House or Congress going to deny that we are suddenly fuel-starved? Is any self-respecting politician going to stand up and say: 'Hey, what's the fuss? You want to see high gas prices, go to Canada or Europe. What are you network magpies chirping about?'
"Of course not. When the nation's broadcast babblers, from whom the majority of Americans get their news, say we have a crisis, it's time for the political speech writers to crank out something, even if it is something stupid.
"That stupidity includes the instant-investigation into the vague possibility that the oil companies have somehow conspired to pick our pockets.
"All that the investigation will show is that if there was a conspiracy, they've somehow conspired to give us the world's cheapest fuel for our cars."(21)
In terms of oil, American's live in a "fuel's paradise." A British observer on the scene has written, "...by European standards petrol [gasoline] is almost given away in the United States..."(28)
It should be noted that in other countries, the retail cost of gasoline without tax is about the same as in the U.S. That gasoline costs more than five dollars a gallon in some nations is due chiefly to taxes, and to a lesser extent to retailer's profit, which commonly is higher than in the United States. Also, in some countries the gasoline distribution system is less efficient than in the U.S. and it costs more to transport the gasoline to the retail outlets.
Myth: "They" own the oil companies
To gain popular favor, many politicians, frequently joined by the media, assert that oil companies are vague and distant entities owned by "they" and it becomes "they" versus "you." The oil industry is a favorite whipping boy for politicians seeking to gain votes. Because the average citizen is not well informed on these matters, political rhetoric often reinforces prejudices against the oil industry rather than dealing in realities.
Who does own the oil companies? During the 1979 oil crisis I was invited to address a luncheon meeting of a State Employees Association in the State Capitol. The topic was the oil crisis. The oil industry was being widely blamed. I asked who among the State employees owned any oil company stock. Not a hand was raised. However, just prior to the meeting I had been in the office of the Public Employees Retirement System which administered the pension plan for all State employees. I had examined the holdings of the fund and discovered that the largest single industry holding in terms of dollar value, was oil company securities. The fact was that everyone in the room owned oil company stock. The conventional myth is that large oil companies are owned by some vague group distinct from the general public, the "they." The reality is that "they" are us.
And this is very broadly true. Insurance and investment companies place the funds of their clients in a variety of investments among which traditionally have been oil companies. Through life insurance, and other insurance policies, annuities, and mutual funds, the major oil companies as well as the mining companies are owned by the general public.
A recent study of ownership of stocks in the six largest oil companies in the United States disclosed the following: nearly 200 mutual insurance companies hold close to 16 million shares. Ninety-one colleges own these stocks, and about 1,000 charities and educational foundations in the United States are holders of these oil company securities. In direct ownership more than 2.3 million Americans hold stock in these six companies.
Many other Americans own interests in smaller oil companies. As to who produces U.S. oil, it should be noted that currently in the United States, excepting the North Slope Alaskan oil which is a very high cost operation and requires a very large investment, more than half of the oil produced in the U.S. is produced by small independent producers. It is the oil produced abroad in such high cost areas as the North Sea, where major oil producers are dominant. This is inevitable as expense of operations in these areas runs into billions of dollars, and are much beyond the financial and risk taking abilities of small independent oilmen. And, as noted, these larger companies are owned directly, and through pension plans, annuities, and insurance policies, by millions of citizens.
Myth: Some remote special group of people run oil companies
Here, also, people frequently believe that persons who are not part of the general public run the oil companies, just as they may believe that some distant remote group owns the oil companies.
People who run oil companies just as those who own the companies are again not "they" but us. Geologists, engineers, accountants, and business administration majors make the oil companies function. They are our sons, our daughters, our neighbors. I taught petroleum geology at a state university. From my experience, which is typical, I cite two examples of who runs oil companies. One student had worked as a meat-cutter in a butcher shop in his small Central Oregon hometown during his high school days to help out his family. He worked his way through college by various jobs and went on to graduate school and received a well-earned Ph.D. He worked his way up through the oil industry and is now vice president of a major U.S. oil company. He is based in London in charge of the company's North Sea operations. Another student worked as a clerk in his father's shoe store during both his high school and university days. After earning a graduate degree he held various positions in an oil company, and now represents one of the world's largest companies in examining oil prospects from Russia, to Norway, to Africa. Each of these men was the boy next door. The people who run the oil companies are us.
Myth: "Big oil" is bad
"Big oil" is a favorite expression frequently used in a derogatory manner by many in the media, and others who, for various reasons wish to turn the public against oil producers. The myth is that somehow "big oil" is bad.
It is true that worldwide oil production is becoming a bigger and bigger business. The reason is that the easy to find, shallow oil has been found. Now, more and more significant discoveries have to be searched for in remote "frontier" areas (arctic, or jungle) or must be sought after in deep water offshore areas which involve very expensive exploration programs. Costly leases must be negotiated with foreign governments, and if the area of interest is offshore, huge drilling platforms which may cost half a billion dollars or more must be built. Oil exploration is being conducted offshore Greenland and in the frequently violently stormy North Sea. These are expensive areas in which to operate. Oil exploration and development in the areas east of the Andes Mountains in Peru, Ecuador, and Colombia means building roads and hauling equipment through difficult terrain. Ultimately pipelines must be built over the mountains. Oil companies must be big to do these things and deliver gasoline to consumers. Individuals, or small companies with small amounts of money cannot do it.
Myth: oil companies own oil
In a number of countries, including Saudi Arabia, Venezuela, Kuwait, Iran, Iraq, Peru, and Mexico, oil was originally discovered and developed by foreign companies with the expertise which the country itself did not have. Subsequently, with the rising tide of nationalism following the colonial period, oil company properties—oil fields, pipelines, shipping facilities—were taken over by the respective governments, at times with little or no compensation.
Most of the oil in foreign countries is owned by the governments, not the oil companies. Oil companies simply hold leases (abroad commonly called concessions) to develop the oil deposits. The companies are allowed to search for and produce what commercial oil may be found. Sometimes the oil companies can sell it themselves and sometimes they have to market it through state-owned companies. In a sense they own the oil they produce, but they never really own the oil in the ground. They only lease the right to produce it. This is an important point, because it means that U.S. companies or any other companies operating in a foreign country do not own an assured safe resource base.
In the United States, the mineral rights which include oil and gas usually belong to the owner of the land. The owner can sell these rights to a resource development company, so, in effect there can be more than one owner of a piece of land. The surface can be owned by one individual and the subsurface can be owned by someone else. Oil companies can buy the mineral rights to oil and therefore own the oil. However, even in the United States, more often than not, the oil companies have to lease the mineral rights. Offshore oil belongs either to the adjacent state, or beyond the state limits, to the federal government. Oil companies, for the most pen' do not own much oil. Many own no oil. On the oil they do produce, they pay a royalty to the private owner, or royalties and taxes to the government. These costs range from 12.5 percent to as much as 90 percent of the value of the oil.
In other countries, the government generally owns all the mineral resources which may be leased out to developers. But governments change their minds about lease terms or cancel them with or without any compensation. Quite a few have done so—another severe hazard of the mineral resource business.
The existence of OPEC is obvious proof that oil companies do not own or control most of the world's oil.
Myth: Oil companies make big profits compared with other enterprises
The profits of oil companies are frequent targets of criticism by both the politicians and the media. Many people believe that mineral resource companies are excessively profitable relative to other enterprises.
As pointed out in Chapter 26, Mineral Economics, the amount of capital which has to be invested in the production of oil is very large and it takes a long time, in some cases, many years, before any return can be realized on the investment, if indeed there is a return at all. Many smaller oil companies go bankrupt from a series of dry holes. One such example was a firm which drilled in the geologically rather unpredictable deltaic sedimentary complex in the Denver-Julesburg Basin of Colorado. The first well was a small producer. Subsequently four wells were drilled around the first well. All four were dry holes. The small amount of oil coming from the first well was insufficient to repay the bank loan which had been used to finance the drilling of the other four wells. The company went out of business.
Oil exploration and production is a high risk venture. Companies that do survive, earn a relatively modest return on investment. On records kept since 1968, the average return on stockholder investment in 30 representative U.S. oil companies has been 12.5 percent. In 1994, it was only 9.2 percent.(7) For 30 representative manufacturing companies, the return has been 13.1 percent.(1) The average return for oil companies is less than the average return for manufacturing industry in general.
Relating this to the gallon of gasoline which we buy, an editorial review of this matter stated:
"No one needs to be reminded that gasoline prices have risen since the OPEC camel began flexing its muscles. But oil industry analyses show that oil companies aren't exaggerating when they say they make a profit of only about two cents on every gallon of gasoline sold. In fact, only Exxon reports making that much. Standard of California, Phillips Petroleum and Texaco report making no more than 1.5 cents a gallon. The big winners in the gasoline sweepstakes are the federal and state governments, which collect six times as much in taxes per gallon as the companies earn in profits and some of the most spectacular increases in gas pump prices are attributable to state tax boosts."(2)
Although this editorial was written in 1975, the economics of the oil industry remain about the same today. In spite of intervening inflation, two cents a gallon is regarded by the oil companies as a very good profit on a gallon of gasoline. Adjusted for inflation since 1975, the profit is barely one cent a gallon.
At the upper end of the list of profitable segments of the economy are the so-called "sin-stocks", the tobacco and liquor companies. It is ironic that companies which produce products that are harmful to the health and welfare of the country are much more profitable than is the oil industry which produces a basic necessity and makes life for much of the world much more pleasant than it would be without this important energy source.
If anyone still believes that the oil business is very highly profitable, it should be noted that in the developed nations it is a free economy and anyone is welcome to form an oil company and get into the business, or simply buy stock in oil companies. Almost all major companies are publicly held, with their securities listed on both national and international stock exchanges.
What has been said about oil companies in terms of huge capital costs, the risks of failed exploration efforts, and the long time from a discovery to when income is realized also applies to mining companies. Their economic returns are no better on the average than for oil companies, and in many cases are less. Mining company securities also may be bought on the stock exchanges of the world if one wishes to participate in this industry. Many other businesses show a better consistent and higher return.
Alternative Energy Sources
Alternative energy resources are those which could presumably replace the largest single conventional energy source which oil. Because of occasional oil crises and the increasing dependence of the United States and almost all other industrialized nations, as well as most Third World countries on foreign oil supplies, the urgency for developing and using alternative resources is growing.
Well-meaning but uninformed people make a great variety of statements as to what alternative sources might do for the country. Unfortunately poorly founded statements are frequently picked up by the media who repeat them without any research as to what the facts might be. This in turn misleads the public.
There are three considerations when evaluating the worth and validity of alternative energy sources. One is the ability of alternative sources to really replace oil in the quantities we are now using oil. A second concern is how using alternative energy sources might affect and change current lifestyles. What would it really involve to change to a "solar energy economy" as is the popular concept among alternative energy enthusiasts. The third consideration is the environmental impact of converting to alternative energy sources. These three factors with their myths and realities are briefly treated here.
Myth: Alternative energy sources can readily replace oil
This is the assumption made by many people who advocate alternative energy sources as an early easy solution to our dependence on imported oil, and the perceived negative environmental effects of burning oil.
The facts relative to this myth are mixed. Alternative energy sources can replace oil in its energy uses, but in some uses much less conveniently than in others. Fuel oil used under steam boilers can be replaced by nuclear fuel, or coal. But replacing gasoline, kerosene, and diesel fuel for use in vehicles, airplanes in particular, by an alternative energy source will be much more difficult.. At the present time, 97 percent of the world's approximately 600 million vehicles are powered by some form of oil. Going to another fuel source to meet this huge energy demand now met by the convenient, easily transported, very high grade energy source which is oil will not be easy.
The British scientist, Sir Crispin Tickell, states a very important fact, "...we have done remarkably little to reduce our dependence on a fuel which is a limited resource, and for which there is no comprehensive substitute in prospect."(28) It is very important to note that there is no apparent replacement for oil in the volumes and ways in which we now use it. The transition to a comparable energy source or sources will be difficult, and probably much less convenient than using oil. Even if it could be done it would markedly change the lifestyle of industrialized society as we know it today. This leads to the next and related myth.
Myth: Alternative energy sources can simply be plugged into our present economic system and lifestyle, and things will go on as usual
This also is a common assumption with regard to a transition to alternative energy sources, even to the major renewable energy source, solar. People do not appreciate the close relationship between the current energy sources, principally oil, and the control which energy forms have over the activities of their daily lives, and where and in what sorts of structures they live and work, and use for transportation.
Conversion to a solar energy economy would involve vast construction projects installing huge collecting systems. Houses and factories would have to be redesigned to much more energy efficient standards. In transport, an electric economy means electric cars, and the facilities to generate huge amounts of power beyond what is presently being used. And the electric car, as far as can be visualized with reasonably foreseeable technology, would not offer the degree of mobility which gasoline powered vehicles do. This would markedly alter both the work and recreational habits of people. It would markedly affect recreational related economies.
Other energy sources, beyond oil, similarly would involve a restructuring of daily routines. Our activities are very much controlled by the energy forms which we use. Our standard of living is largely a function of how much and in what form we can command energy supplies. Changing from the energy form which is oil to other energy sources can and will have to be done, but lifestyles will be altered, as may also be the standard of living.
Myth: Alternative energy sources are environmentally benign
Advocates of alternative energy sources, commonly believe that these energy supplies have very little impact on the environment. Sunlight as a source of energy would seem to be an ideal energy source with virtually no negative environmental consequences. Or, converting a relatively more polluting source of energy such as coal into a less polluting liquid fuel appears to be a good exchange.
Converting coal to some liquid fuel form which could be used in transportation is possible but to do so to the extent of replacing oil would involve the greatest mining endeavor the world has ever seen. It would require strip mining vast quantities of western land each year. If alternative energy considerations do not include coal, but rather are thought of in terms of solar energy, biomass, nuclear power, wind, hydropower, tidal, ocean thermal energy conversion (OTEC) or shale oil, they also have environmental impacts.
These have been discussed in more detail in Chapter 22, Mineral Development and the Environment, but some of the environmental problems are briefly summarized here. Solar energy collectors in numbers sufficient to be significant in our energy supplies would use very large amounts of land. Mining the materials used to make these collectors would have an impact. Because the collectors would not have an infinite life, there would be the continual problem of replacement, involving more mining operations.
The environmental impact of using biomass as a major source of energy would be huge, especially in terms of the degradation of the highly important mineral resource, soil. Nuclear energy from fission has the potential (and the reality, in the case of Cherynoble) of having a huge impact on the environment. Fusion nuclear power is relatively more safe but not entirely so. Wind power devices are unsightly, noisy, kill birds, and, like solar collectors, deteriorate and have to be replaced with more materials mined from the Earth. Tidal power, hydroelectric power, and OTEC have undesirable effects on aquatic environments. If oil shale is part of the energy alternative for the United States, the impact of developing that energy source on already scarce southwestern water resources would be large, and probably not sustainable.
In brief, as the saying goes, "there is no free lunch" in the use of any alternative energy source with respect to the environment. All make an impact. Eventually some or all of these sources will be used. The decisions to be made involve which sources have the least environmental effects and yet can meet the projected energy demands. With an ever-increasing world population requiring more and more energy, any energy source or combination of sources which will adequately meet this demand will inevitably have a large environmental impact, by the sheer size of the operations.
Myth: Biomass—plants—can be a major source of liquid fuels
This myth comes up frequently, and it has been rather thoroughly explored through various projects and proven to be a myth. A variety of plants including greasewood in the arid Southwest U.S., sugar cane, sugar beets, trees in general, seaweed, and seeds have been cited as important possible sources of liquid fuel for the future. In 1979, an article in a widely read U.S. magazine states: "Myriad forms of natural organic matter can provide heat or be converted into gas, oil, or alcohol. Wood holds the most immediate promise."(9)
In regard to wood as an alternative liquid fuel, a final report on a U.S. government-sponsored project on the conversion of wood to a liquid fuel stated as a conclusion: "Investigations to date have led the authors to be optimistic about the possibilities of oil from biomass. While difficulties in bringing the current facilities on-stream have somewhat limited information to date, it is felt that a vigorous activity in the future can eventually provide a new source of energy for the country in the form of oil from biomass."(6) A translation of this statement might be that "the project didn't turn out very well, but maybe in the future a lot of research could improve results." That may or may not be true. The project involved wood-to-oil conversion, and one conclusion was that "Information gained here should provide the means to be commercially competitive by approximately 1990."(6) The project was abandoned in 1981. No wood anywhere in the world is now being converted to liquid fuel.
There are several reasons why converting growing plants to oil will not be a significant substitute for oil obtained from wells. These have been touched upon in other chapters. Briefly they are:
In final view, the Energy Research Advisory Board of the U.S. Department of Energy stated in 1981 (U.S. population then was 258 million compared with 267 now), that the 258 million Americans used 40 percent more fossil energy than the total amount of solar energy captured each year by all U.S. plant mass. Current annually available biomass volume is no significant replacement for the large storehouse of organic energy accumulated over millions of years in the form of coal and petroleum.
In summary, biomass, at least considering the size of world population today which has to be supported by crops, cannot be diverted from food supplies in significant quantities to be important as a liquid fuel, and at best energy conversion efficiencies from biomass to oil are low. The environmental impact of using biomass for conversion to liquid fuel on a large scale would be severe and unacceptable. Biomass is not a potential source of significant quantities of liquid fuel.
Myth: There are billions of barrels of oil which can be readily recovered from oil shale in the U.S.
As the United States has the world's largest and richest deposits of oil shale, the optimistic statements which sometimes arise from that fact are among the more commonly heard in regard to the U.S. energy future. An enthusiastic article about oil shale in the prestigious Fortune magazine is titled: "Shale Oil is Braced for Big Role." It concludes, "Shale oil is not the whole answer to the energy problem but it's one of the few pieces that is already within the nation's grasp."(l9) The article was written in 1979. As of 1997 no oil from oil shale is being produced in the U.S.... or anywhere else.
The supposedly great prospects for the production of oil from oil shale in the United States has been one of the most widely promoted and heard energy myths for many years. Statements even made by government agencies can be quite misleading. These arise perhaps because it is good government policy to take as optimistic view as possible toward any national problem. The statements also are due to a less than careful examination of the facts, and perhaps a bit of promotion for the agency involved. The statement is made by a U.S. government organization that "...using demonstrated methods of extraction, recovery of about 80 billion barrels of oil from accessible high-grade deposits of the Green River Formation is possible at costs competitive with petroleum of comparable quality."(l2) This is a clear misstatement of the facts. At the time it was written (1981) there had been no demonstrated methods of oil recovery at costs competitive with oil of comparable quality, nor have there been any such methods demonstrated to this date. A variety of processes have been tried. All have failed. Unocal, Exxon, Occidental Petroleum, and other companies and the U.S. Bureau of Mines have made substantial efforts but with no commercial results.
A state government agency issued a pamphlet on oil shale stating, "The deposits are estimated to contain 562 billion barrels of recoverable oil. This is more than 64 percent of the world's total proven crude oil reserves."(29) The implication here is that the oil which could be "recoverable" could be produced at a net energy profit as if it were barrels of oil from a conventional well. The average citizen seeing this statement in a government publication is led to believe that the United States really has no oil supply problem when oil shales hold "recoverable oil" equal to "more than 64 percent of the world's total proven crude oil reserves." Presumably the United States could tap into this great oil reserve at any time. This is not true at all. All attempts to get this "oil" out of shale have failed economically. Furthermore, the "oil" (and, it is not oil as is crude oil, but this is not stated) may be recoverable but the net energy recovered may not equal the energy used to recover it. If oil is "recovered" but at a net energy loss, the operation is a failure. Also, the environmental impacts of developing shale oil, especially related to the available water supply (the headwaters of the already over used Colorado river), and the disposal of wastes, do not seem manageable, at least a the present time, and perhaps not all.
The clear implication of both of these government statements is that oil shale is a huge readily available source. Because of the enormous amount of "oil" which has been claimed that could be recovered, this gives a large sense of energy security which does not exist. For this reason it is a particularly dangerous myth.
Myth: Canada's oilsands with 1.7 trillion barrels of oil will be a major world oil supply
It appears to be true that in the Athabasca oilsands and nearby related heavy oil and bitumen deposits of northern Alberta there is more oil than in all of the Persian Gulf deposits put together.
The impressive figure of 1.7 trillion barrels of oil is deceiving. It is likely that only a relatively small amount of that total can be economically recovered. The oil is true crude oil but it cannot be recovered by conventional well drilling. Almost all of it is now recovered by strip mining. The overburden is removed and the oilsand is dug up and hauled to a processing plant. There the oil is removed by a water floatation process. The waste sand has to be disposed of.
Much of the oilsand is too deep to be reached by strip mining. Other methods are being tried to recover this deeper oil, but the economics are marginal. With the strip mining and refining process now in use, it takes the energy equivalent of two barrels of oil to produce one barrel. To expand the strip mining operation to the extent which could, for example, produce the 18 million barrels of oft used each day in the United States would involve the world's biggest mining operation, on a scale which is simply not possible in the foreseeable future, if ever. Canada will probably gradually increase the oil production from these deposits, but until the conventional oil of the world is largely depleted these Canadian deposits are likely to represent only a very small fraction of world production. The production will always be insignificant relative to potential demand. Oilsands are now and will be important to Canada as a long-term source of energy and income. But they will not be a source of oil as are the world's oil wells today.
Myth: Energy from any Source is readily used
Energy can be defined as the "capacity for doing work." (Webster's Collegiate Dictionary, Seventh Edition). Alternative energy sources are sometimes thought of as easily interchangeable. Energy is energy: there are no great problems in switching from one energy source to another. This is a myth.
An important fact, commonly ignored in discussing alternative energy sources, is that energy sources come in very different forms. Adapting these various forms to various end uses presents many problems. Electricity and gasoline can each do work, but these energy sources present very different problems when it comes to using them in particular applications. This is generally ignored by people who suggest on bumper stickers, for example, that "Solar Is The answer," or "Go Solar." Sounds simple. It isn't.
The conversion of the intermittently available very low-grade solar energy into an energy form which could be used to power the automobile as we use the automobile today is a complex process, and has not yet been satisfactorily solved. In many cases it is not possible to conveniently or easily substitute one energy source for another. Each has its own characteristics which may be useful in some circumstances and a decided problem in another situation. Coal can be used to produce electricity quite easily in a conventional coal-fired electric power plant. But using coal directly to power an airplane, or using the electricity produced by coal to power an airplane does not now, at least, seem possible, and may never be.
Energy from a variety of sources is not universally interchangeable in its applications. The transition from one energy source to another will in many cases be difficult, and may cause major adjustments in lifestyles.
Myth: We can conserve our way out of the energy supply problem
The movement to conserve our way out of the energy crises and supply problems has been vigorously promoted from time to time when energy shortages have occurred. In between such times, energy conservation seems to fade a bit as a general concern. But the widespread concept remains that conservation can solve the energy problem.
Energy and mineral conservation and recycling are useful goals, but conservation is only a temporary solution to the overall problem of continued growth of energy demand from an ever-increasing population. To accommodate more and more people, each person might use less and less resources, but at some point there is a minimum amount of the resource which has to be used. Reducing the amount beyond that point is not feasible. If one uses a vehicle for business, by a careful planning of the necessary travel route, one can reduce the need for fuel, but one cannot continue indefinitely to reduce the amount of fuel needed. Eventually there is simply not enough fuel to do the job. At some point the real problem must be addressed—the demand for the resource—and this demand comes from numbers of people, and lifestyle. There is no way to ultimately conserve out of the energy supply problem against an ever-increasing population. Demand can be reduced but if at the same time, an increase in population absorbs those savings there is no gain. Demands cannot be reduced to zero. Conservation and recycling can only buy time in which to stabilize population to a size which can exist on a renewable resource economy, which also has to be devised.
Myth: The political campaign promise—"we will achieve energy independence"
During the 1970s and early 1980s, because of the recent oil crises, a popular political campaign promise was that a presidential candidate and his party would achieve "energy independence" for the United States. Presumably this would be accomplished in four years or no more than eight as there is a two-term limit on the U.S. presidency. Citizens look for cures to their problems, and the candidate who can most convincingly promise them may be the winner.
Without making specific reference as to which politicians (some of them were elected) made such promises, it may be noted that, win or lose, soon after the campaigns have been over, the goal of energy independence seems to have been lost in the shuffle of everyday politics as usual.
It may be hoped that U.S. energy independence can eventually be achieved, but it will never be based on oil produced in the United States. Unless oil consumption is greatly reduced, the United States henceforth will be increasingly dependent on foreign supplies.
As part of the "energy independence" program came the headline statement from one presidential candidate, "We Will Find New Fuels". That promise was made in 1979. The candidate lost, and we have not made much progress on new fuels, now importing twice as much oil as then.
A promise made by a sitting U.S. president in the 1970s was an edict stating, "I am inaugurating a program to marshal both Government and private research with the goal of producing an unconventionally powered, virtually pollution-free automobile within 5 years." As the electric car was known then (and indeed electric cars existed before gasoline-powered cars) presumably the "unconventionally powered" car would have to be something else.
That promise is now more than two decades old and the promised new era automobile has not arrived. These statements are made primarily to gain public favor—and votes. But in the process the public is led down unrealistic paths. Politicians making such statements owe it to the people who give them public trust, to more carefully examine the facts, and not simply express cheerful hopes. Political posturing and optimism will not solve the energy supply problem. However, political decisions can encourage development of alternative energy supplies, and subsidize research toward that end. This should be done.
Energy independence for the United States is at present becoming less and less a near term possibility. The economy continues to be based very largely on petroleum, and oil imports continue to increase each year. Any political candidate who states that energy independence can be achieved for the United States in any presidential term of office (or even in two or three decades) is simply either not being honest or is totally ignorant of energy supply, and the prospects for viable alternatives.
A national move toward energy independence, which has to be expressed by the citizens through their elected representatives in the Congress, has not materialized. Energy independence for the U.S. will remain a myth if the present energy course is continued. It need not be a myth but the will to make the effort, and the reorganization of society which it would take to make energy independence a reality are nowhere in sight. Also, even if there were a consensus now, it would take many years to do the things necessary to achieve energy independence, and the capital expenditures necessary to do this would be huge. Any promise of energy independence for the U.S., at least within the next several decades, remains clearly a myth, hopeful vote-luring political statements notwithstanding.
Myth: "At current rate of consumption …"
This is commonly used as a comforting statement to assure the public that there is no looming shortage of a given resource. "At the current rate of consumption" a given resource will last for at least X number of years. Usually, this is quite a long time. There is no problem.
This very misleading myth is that the "current rate of consumption" does not represent the future. The rate of consumption of almost ail resources, particularly energy, is increasing every year. The increase in resource consumption is caused by three factors: population growth, a demand for an increase in per capita consumption of a resource to increase living standards, and a larger number of uses found for a given resource. Oil is the classic example which illustrates increased demand from all three causes. Present demand for oil is increasing at the rate of about two percent annually, which means demand will double in 35 years. "Current rate of consumption" has no realistic relationship to the future.
Demand does not grow arithmetically, but increases exponentially. That is, it goes up as a percentage each year over the previous year. Therefore, the statement that a depletable resource will last for X number of years "at current rate of consumption" has little relation to the reality of the actual life of the resource. A resource may have a life of 100 years at the "current rate of consumption." But, at the seemingly low rate of a five percent annual increase in demand, the resource will only last about 36 years. Because almost all resources are finite, and the population has no theoretical limit to growth, ultimately the population by its exponential growth of demand will overwhelm the available resource.
That we are living in a time of exponential growth is ably presented by Lapp in his classic book The Logarithmic Century.(18) That the general public does not appreciate the importance of the effect of exponential growth has been pointed out by Bartlett who has written a convincing discussion of the myth of "at current rate of consumption," and the large numbers which quickly result from a seemingly insignificant annual rate of increase in use of a resource.(3) In other writings and in numerous lectures, Bartlett has pointed out, by several striking examples, that this is one of the most dangerously misleading myths to which the public is continually exposed. He states, "The greatest shortcoming of the human race is our inability to understand the exponential function."
A recent example of such a misleading statement regarding oil supplies is that made by a ranking oil industry analyst on a popular Friday night Public Broadcasting System program.(30) The statement, regarding world oil reserves, was that current supplies are "...enough to last us for 40 years at current consumption rates." This statement is grossly misleading for two reasons: First, "current consumption rates" are transitory, and demand for oil will continue to increase. "Current consumption rates" have little relevance to the future. Second, if the statement was to be taken literally it would mean that for 40 years we would have the same amount of oil available as we have today, but in the 41st year there would be none. This also has no relation to reality.
The production of a finite resource is never a flat line. In broad form, smoothing out irregularities caused by political, economic, and technological events, the production is a bell-shaped curve. (Figure 8) It is estimated now that world oil production will continue to increase until about the year 2010 (see Ivanhoe, Chapter 28 and Figure 9), and then begin a permanent decline. There is little, if any, possibility that the amount of oil available worldwide 40 years hence will be the same as today. It will be less, and the critical point is when world oil production begins to decline, not when the last drop of oil is ever pumped from the ground.
One might peripherally observe that the statement made that the world has 40 years' oil supply at current rate of consumption was made in the context of being reassuring. However, 40 years hence is within the life expectancy of many, if not most people living in today's highly oil-dependent industrialized societies. However, the figure of 40 years is both illogical and irrelevant, and misleads the average citizen to thinking there is no problem for at least 40 years. The reality is that a permanent world oil crisis will occur when world oil production begins to decline early in the 21st century. Most of the present world's citizens will see that time.
Figure 8. Curves of
discoveries and production during a complete production cycle of
a finite resource.
(After Hubbert, 1956)
Myth: Mining the moon
It may seem to younger persons who were not part of the time of great enthusiasm for space exploration that to suggest mining the moon is ridiculous. But older persons recall the heady days of early lunar exploration when this idea was proposed. Mining the moon was one of the seriously suggested reasons widely discussed and advocated for lunar exploration. The minerals would be brought back to Earth for processing, or mineral processing stations could be set up on the moon and the refined product brought to Earth.
Small samples of moon rock have been brought back to Earth. Unfortunately, from the samples taken, the moon appears to be made up largely of a rock very similar to basalt here on Earth, of which there is a vast supply and which has no commercially useful mineral composition. The surface moon rocks do apparently have a slightly higher iron content than the average composition of the Earth, but going to the moon to mine iron does not seem to have attractive economics in either the near or foreseeable future. The energy cost of transportation would be astronomical.
Myth: Export the population problem to outer space
This also may seem like an idea too absurd to discuss. However, it is amazing what can be suggested even in high government circles. In those early space exploration times, some thought that the answer to the population problem was to export it from Earth. Hardin has identified the source of this myth stating: "In 1958, four years after the founding of NASA —the National Aeronautics and Space Administration—its congressional guardian, the Science and Astronautics Committee, supported the idea of space migration as an ultimate solution to the problem of a 'bursting population."' Hardin adds, ". . . when an agency is fighting for space that counts—space at the public trough—its administrators are in no hurry to correct statements that increase the size of their budget."(14)
Regardless of their logic or otherwise, ideas of populating space persist. In 1996, an article in a national magazine proposed that most industrial plants on Earth be replaced by those built on the moon and that the population pressures on Earth be solved by colonizing Mars. Some quotes from that article follow:
"The only way to keep the economy expanding infinitely is to expand our resource base infinitely. The universe is a big place. Human ingenuity is such that we will find innumerable ways to economically prosper in space"
"We will have escaped the trap of a closed, cyclical economy; the riches of the solar system will lie before us."
"The moon, with no ecosystem to damage, can become the seat of heavy industry. The earth, relieved of its population pressure and industrial burden as people migrate, can be allowed to regreen."(16)
Just to keep even with population growth, much less reduce the people pressure on this already overcrowded planet, approximately 250,000 people a day would have to be rocketed off to "somewhere" in outer space! The only merit might be that it would generate a lot of employment in a very large aerospace industry to produce the spaceships needed daily. The amount of energy needed to propel these vehicles was never calculated or how it was to be continually obtained.
Mining the moon and sending people off into space to solve the population problem were myths at one time advocated by people who wanted to promote their special interests in the space program. That these suggestions would come from U.S. Government agencies is almost incredible.
Similar suggestions made more recently stem from a recognition that we face increasing environmental problems and demands on limited resources.(16) With this there can be little disagreement, but continuing to escort people to space to solve the problem is not reasonable, to put it mildly. The support systems necessary to keep people alive in space already seen in our current very small space program are very expensive in terms of resources. To provide such for the 250,000 people a day launched into space just to keep the Earth's population stable is almost beyond comprehension, and this would have to be done indefinitely. Humans are adjusted to the environment on Earth, and space is a vast and very hostile environment unfit for human habitation. Space does not offer a viable alternative to the environment on Earth. The dream of colonizing space will remain just that. Any credibility given it only serves to momentarily divert attention from the reality of the closed resource system which is the Earth and with which we must deal.
Cohen has stated what we may hope will be the final word on the concept of exporting excess population to outer space:
"Let me dispense once and for all with extraterrestrial emigration. To achieve a reduction in the global population growth from say 1.6 percent to 1.5 percent would currently require departure of 0.001 x 5.7 billion = 5.7 million astronauts in the first year and increasing numbers in each later year. To export this number of people would bankrupt the remaining Earthlings and would still leave a population that doubled every 46 years. Demographically speaking space is not the place."(10)
A final fundamental fact related to moon mining and space travel in general is the cost. At present the cost of moving the space shuttle, satellites, and other payloads into orbit is about $10,000 a pound. In 1996, Lockheed Martin Corporation was awarded a billion dollar contract by the U.S. government to develop what is called the X-33 next generation of space shuttle. One of these is expected to be operational before 2010, and could bring the cost down to $1,000 a pound or perhaps slightly less for payload transport to space. However, this too, seems excessive for an extensive use, and reinforces a view which has been expressed regarding vehicles designed to access space that it is the "most effective device know to man for destroying dollar bills."
Let us hear no more about the absurdity of space colonization. These examples of myths emphasize the continual need to use reality in examining statements made, even by government officials, with regard to our energy and mineral resources, and population problem. These are basic to our very existence, and it is most important that plans for the future, by both government and the private sector, be firmly based on realities.
Myth: The omnipotence of science and technology—it can do anything
There continues to be a belief in some circles that technology and science can indeed solve all problems of human material existence indefinitely, as noted by the following and what might be regarded as the ultimate myth.
In 1995, a large volume appeared wherein a number of scientists and others expressed some moderately positive and reasonable views of the present human condition and the future. However, the introduction contained the following statements:
"Technology exists now to produce in virtually inexhaustible quantities just about all the products made by nature—foodstuffs, oil, even pearls, and diamonds— and make them cheaper in most cases than the cost of gathering them in the wild natural state."
"We have in our hands now—actually, in our libraries—the technology to feed clothe, and supply energy to an ever-growing population for the next seven billion years...Indeed, the last necessary additions to this body of technology—nuclear fission and space travel—occurred decades ago. Even if no new knowledge were ever invented after those advances, we would be able to go on increasing our population forever, while improving our standard of living and control over our environment."(25)
If it were not for the fact that this volume was published under the auspices of a presumably creditable national research institute, these statements would not merit comment. A few brief observations are made here.
The terms "virtually inexhaustible" cannot reasonably be applied to anything on this Earth except perhaps the ocean water, and rocks. Also, to support the concept that "we would be able to go on increasing our population forever" or at least for a minimum of "seven billion years" one might assume that some sort of calculations were made to back up the statement. No calculations were presented. The author of the "7 billion years" published statement is later reported to have said it was a misprint and should have been "7 million years" of population growth. University of Colorado physicist Albert Bartlett made the calculations, however, stating in regard to the reduction in number from 7 billion to 7 million, "it is too early to breathe easily." Using the 7 million figure and based on a 1% annual population growth rate (current annual rate is 1.7%), he determined that the population after 7 million years would be 2.3 x 1030409.7137 and added that "it is hard to imagine the meaning [of such a large number]...The number is something like 30 kilo-orders of magnitude larger than the number of atoms estimated to be in the known universe!"(5)
The editor of the book who wrote the fanciful introduction is not a scientist nor technologist. It is an observable fact that people other than scientists and technologists are frequently more confident of what these disciplines can do for the future than are the scientists and technologists themselves—the people who are aware of the basic facts of the availability of resources and what might be done with them, or to replace them.
Faith that science and technology can solve all resource supply problems is evidenced by the widely expressed public view that "you scientists will think of something." It ignores the fact that something cannot be made from nothing, and in order to have a resource one must have some material thing with which to work. This fact, however, is met with the thought that substitutions can be made. This is true, within the reality that eventually substitutions also become exhausted. Also, there are definite limits as to what substitutions can be made. There is, for example, no substitute for water. The age of alchemy is not here nor is it ever likely to arrive. Alchemy is the medieval chemical "science" which strived to turn base metals into gold. In general it is thought of as the ability to transform some common material into something more valuable. If this were possible one could make some wonderful substitutions—oil from granite. This is an absurdity. Yet there are shades of this concept expressed. In discussing copper as a resource, Simon states that there is no problem, "because copper can be made from other metals..."(24) This statement has no basis of fact, and it is highly unlikely that such will ever be possible. No scientific research suggests that this could be done on any commercial scale. Minute amounts of copper might be produced from other materials in a so-called "atom-smasher" at a huge cost of energy. The nature of matter is such that transmutation of elements is not a practicality.
However, Simon goes on, "Even the total weight of the earth is not a theoretical limit to the amount of copper that might be available to earthlings in the future. Only the total weight of the universe...would be a theoretical limit."(24)
In discussing energy, Simon states, "With respect to energy, it is particularly obvious that the Earth does not bound the quantity available to us. Our sun (and perhaps other suns) is the basic source of energy in the long run..."(23) Should an energy policy be based on the idea that we can draw on "other suns?" This astounding statement that we might be able to draw on "other suns" is by a professor in a reputable state university, and was published in the venerable magazine Science.
Simon also expresses faith in the ability of science and technology to supply the world with natural resources in unlimited amounts and in his book he has titled a chapter, Can the Supply of Natural Resources Really be Infinite ? Yes! He states,
"...we shall be compelled to reject the simple depletion theory. The revised theory will suggest that natural resource are not finite in any meaningful economic sense mind-boggling though this assertion may be. That is, there is no solid reason to believe that there will ever be a greater scarcity of these extractive resources in the long-run future than there is now. Rather, we can confidently expect copper and other minerals to get progressively less scarce."(24)
Bartlett has written a well-reasoned review of Simon's concept that there is no meaningful limit to resource availability.(4)
Science and technology do have limits imposed by the immutable laws of physics, chemistry, and mathematics. At the present time it seems clear that if current trends continue in growth of population, the demands of the human race will soon overwhelm the ability of science and technology to solve the problems of availability of resources, which are the basis for human existence.
Alan Overton of the American Mining Congress states: "the American people have forgotten one important fact: It takes stuff to make things." Pesticides, paint, medicines, and fertilizer cannot be made from solar energy.
In 1992, the U.S. National Academy of Sciences and the Royal Society of London together issued a statement warning that "if current predictions of population growth prove accurate and patterns of human activity on the planet remain unchanged, science and technology may not be able to prevent either irreversible degradation of the environment or continued poverty for much of the world." If present trends continue, ultimately scientists and technologists will not be able "to think of something."
Ryerson, commenting on the concept of a "technology fix" with respect to population growth, states:
"Some of the more outlandish claims of the 'technology fix' advocates—for example, that we could ship our excess people to other planets—have almost been forgotten (imagine sending aloft 90 million people per year). Yet, while extraterrestrial migration is no longer taken seriously by most people, many of the unsubstantiated claims of new technologies that will 'save the day' are still seen by many as a reason not to worry about population growth."(22)
It is important to understand that a "technology fix" is not the answer to unrestrained population growth. And future plans should not be based on unrealistic expectations.
Myth: Because past predictions of resource and population problems have proved incorrect, all future such predictions will not come true, therefore there is no need to be concerned.
This view stems in part from past predictions of disasters which did not materialize as scheduled. Notable were those by Malthus in 1798. The argument presented by those who apparently see no need now to relate population to resources is that if Malthus' predictions of two centuries ago proved so wrong, why should similar predictions be taken seriously today.
Reality: Malthus—then and now
Malthus' predictions were wrong because he did not foresee the coming industrial and scientific revolution. The Industrial Revolution provided much improved housing with adequate space heating, greatly improved sanitary facilities, and machines and the energy to run them. It provided the basis for supporting a much expanded population. Huge resources not known to Malthus were discovered and developed.
But with this much improved scene today, why should there be concern for the future?
The problem is that science and technology will not be able to continue to discover and develop the amount of new resources necessary to support a population growing at an exponential rate. And resources which might be thought of as something which could be depended on indefinitely such as soil and groundwater are being degraded. Population demands on resources are beginning to outpace the ability of science and technology to provide them. This is due to the fact that resources are not limitless. The availability of material resources to sustain the quality of life cannot keep pace with a continued exponential growth of population. Advanced exploration and production technologies have allowed geologists and engineers in a less than two hundred years to discover and develop the huge store of mineral and energy resources which accumulated slowly over billions of years. In a fraction of a second in terms of the length of human existence, Earth resources basic to civilization have been brought into production in volumes never before seen.
Soils, oil, high grade metal and coal deposits and now those of lower grade, groundwater, and other resources including dam sites, are being used up at an unparalleled rate. Since 1900, world population has increased nearly four times, but the world economy has expanded more than 20 times. Fossil fuel use has increased by a factor of 30 and industrial production has grown by a factor of 50, and four-fifths of these increases have occurred since 1950. Civilization exists now in a new reality which is far different from that of Malthus's time. Population grows but mineral and energy resources do not increase. By discovery and advanced recovery technology, the immediate supply can be made to increase, but in total, minerals and energy sources with the exception of sunlight, are depletable.
Since the beginning of the Industrial Revolution, the speed of human assault upon Earth's resources has greatly increased. More petroleum, coal, and metals have been used since 1950 than in all previous human history. In the United States the high grade, easily won, low cost deposits of iron ore (hematite), copper, and petroleum have been depleted. In some other regions of the world, high grade deposits still exist but are rapidly being developed and used. There are few major dam sites in the United States on which to build large reservoirs for additional hydroelectric power, and irrigation projects. Elsewhere more do exist but are now being developed, as, for example, the huge Yangtze River project. Dam sites are non-renewable and when the reservoirs completely silt up as has already happened at some localities, that resource is gone. All over the world, groundwater tables are dropping, in many areas precipitously, as in China, India, Australia, the Middle East and in parts of western United States. In Malthus' time none of these things had occurred.
For hundreds of thousands of years the human population had made only a minor impact on mineral and energy resources. With low living standards, and little or no medical services, the population grew very slowly, and sometimes was even briefly reversed by famines and plagues. But these hazards have been largely eliminated and population has soared. It took from the beginning of human existence to approximately the year 1850 to reach the first billion world population mark. It will take less than 10 years to increase the present five and three quarter billion by another billion.
What is different from the time of Malthus? The population in his time was small and the potential resources were large and undeveloped. Subsequently, the Industrial Revolution was rather rapidly able to produce enormous resource and material wealth in contrast to the past. It was the hare of energy and mineral development leaping ahead of the tortoise of population. In part, the population growth was tortoise in speed because of the lack of modern medicine, including vaccines and the knowledge of what caused plagues which would decimate populations. And, to a large extent, that hare of mineral and energy has kept ahead of population. This has been achieved by expanding the search, discovery and development of vital raw materials to a worldwide endeavor. That was not possible during Malthus' life.
But now with the present worldwide transportation network made possible chiefly by oil not available to Malthus, mineral and energy supplies can be searched for and produced on one area and transported great distances to another region. When one area experiences declining production, discoveries are made in other regions. Britain's metal deposits and coal resources were small but they supplied the basis for the start of the Industrial Revolution. But eventually the supply base moved to the rich undeveloped North American continent, and then oil was discovered. But now these North American metal and oil deposits have been largely developed and some are in decline. The oil development has gone more and more to the Middle East. Metal exploitation has moved to South America, New Guinea, Australia, and Africa. Worldwide, petroleum and metals are still in abundance. This tends to give a false expectation of a continual cornucopia of Earth resources, and an unjustified complacency especially in political circles toward the future.
However, we are running out of more world to explore and exploit. Only the ice-covered Antarctic continent remains untouched. In Malthus' time, the entire world's mineral and energy resources were virtually undeveloped, and the means to exploit them did not exist.
In Malthus' time, there was a small population and huge undeveloped world energy and mineral resources. The situation is now reversing. The difference is the present peaking or declining energy and mineral production in many parts of the world, and an already huge and continually expanding population. We live on a finite globe which now has been rather thoroughly explored. There are no more continents on which to continue to move as one region becomes depleted. The globe has been encircled. Malthus was simply ahead of his time.
Promotion of Myths
The media—newspapers, magazines, television, radio—report the news. But in the competitive haste to do so, sometimes they become accessory to spreading misinformation. The statements by uninformed people, politicians pursuing votes, unscrupulous promoters, or citizen groups trying to further a particular point of view may ignore realities. Too often these statements are picked up by the media and reported as fact.
Two such are cited. In a three-hour television special on energy (August 31, 1977), a CBS reporter stated in regard to how oil from shale might replace oil: "Most experts estimate that oil shale deposits like those near Rifle, Colorado, could provide more than 100-year oil supply." In another media report during the U.S. oil crisis of 1973, two young men in timber country announced that they planned to build plants using wood wastes which would be converted to gasoline and would "put the oil companies out of business." Subsequently in audiences at lectures I was giving, these two statements about alternative fuel supplies were brought up as genuine possibilities. Bartlett cites the CBS oil shale television program and convincingly points out that because the exponential factor of growth in use had been ignored, the resource could not possibly supply U.S. oil needs for 100 years.(3) Furthermore, at the time the CBS statement was made there was no evidence, just as there still is no evidence, that shale oil could replace conventional oil to any significant degree or that it could be produced at a net energy profit.
The statement was totally unrealistic, but with the 1973 oil crisis still fresh in mind, the program served to lull the public into a false sense of oil security. People like programs and statements which make them feel comfortable.
In the second situation, oil from wood wastes, very simple calculations would have shown that the volumes of wood waste available would not be even remotely sufficient to supply the raw material to provide any significant amount of gasoline in terms of U.S. consumption. The reporter on that story could have asked for some statistical data to back up the claims which he was about to print, and it would have made him a much better reporter for it.
It is perhaps too much to ask the media to thoroughly examine facts behind such statements. But there should be at least some minimal effort to do so because there is an unfortunate tendency for people not to critically read what is in the papers, or thoughtfully examine what television and radio brings them. Most do not have the background to make critical examinations. In the case of broad sweeping statements on things so vital as energy supplies, the media could at least quite quickly get a second opinion and present that also, which would give a useful balance to the reporting.
Degrees of Myths
It may be noted from the foregoing myths that there are degrees of such. Some may be regarded as marginal, and with some unforeseen technology (also to some degree a myth), the myth might become plausible. The myth of "562 billion barrels of recoverable oil" in oil shale might be regarded in this category, although at present it is definitely a myth. The myth that "We now have in our hands—actually in our libraries—the technology to feed, clothe, and supply energy to an ever-growing population for the next seven billion years"(25), and the myth that we could put our industrial facilities on the moon and that "human settlements on Mars could help to alleviate population and environmental problems"(16) plainly belong in the category of the absurd.
It is distressing to see that in many instances the general public cannot differentiate between what might be in the faint realm of possibility, from the absurd and utterly impossible. Sommers has commented on this stating in regard to our educational system that,
"...many students now graduate from college knowing little or nothing about math or science, thus creating a void into which 'flow negative and bizarre views.'...A consensus emerged at a conference of over 200 scientists, physicians, and humanists: Scientists must speak up against the popular manifestations of irrationalism."(26) Sommers adds, "Harvard Prof. Holton has noted that parascience and pseudo-science 'became a time bomb waiting to explode' when incorporated into political movements...A scandalously inadequate system of science education and diminished public regard for clear thinking and objective truth are just early casualties." (26)
If society is to survive, reason and clear recognition of reality must prevail, and plans made on that basis. Part of education should be directed toward that important end. The political leadership especially must be able to correctly differentiate between the possible and the absurd. This is particularly important when it comes to decisions relative to the foundations of civilization—the energy and mineral resources upon which everything else depends.
It has been said that "optimists have more fun in life, but pessimists may be right." Hardin has aptly noted, "If the reception of The Limits to Growth and The Global 2000 Report taught us nothing else it should have taught us that the Greeks were right. In the public relations game only optimism." Hardin quotes Teiresias in Euripides' The Phoenician Woman, "A man's a fool to use the prophet's trade. For if he happens to bring bitter news he's hated by the man for whom he works."(15) Hardin might have further noted that in political elections which are the quintessence of a public relations game, the same applies.
Regardless of the popularity of optimism over realism, the wisest route for humanity would be that plans and decisions be based on today's scientific and technological realities and reasonably visible resources, rather than on hopes for things which may never arrive. Optimism is vital in looking toward the future. One must be optimistic as a basis for making an effort. But optimism should be tempered with facts. The media and government leaders should try to learn the facts, and then have the courage to state them. Campaigns for public of office should not lead the citizenry into false hopes. As civilization proceeds, it will be much more convenient and less disruptive to be pleasantly surprised along the way than unpleasantly surprised. Myths must be replaced by reality on which intelligent decisions are made.
"Facts do not cease to
exist because they are
-- Aldous Huxley
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