Nonrenewable Natural Resources—The Enablers
Our modern industrialized existence is enabled almost exclusively by enormous and ever-increasing quantities of nonrenewable natural resources (NNRs)1—the finite and non-replenishing fossil fuels, metals, and nonmetallic minerals that serve as:
• the raw material inputs to our industrialized economies;
• the building blocks that comprise our industrialized infrastructure and support systems; and
• the primary energy sources that power our industrialized societies.
NNR Roles
NNRs play three essential roles in enabling our industrial lifestyle paradigm.
• NNRs enable renewable natural resources (RNRs)—air, water, soil, forests, and other naturally occurring biota—to be used in ways and at levels that are necessary to support the extraordinary population levels and material living standards associated with industrialized human societies. Examples include water storage/distribution systems, food production/distribution systems, and energy generation/distribution systems, which would support only a negligible fraction of today’s global human population in the absence of NNRs.
• NNRs enable the production and provisioning of infrastructure, goods, and energy that are inconceivable through the exclusive utilization of RNRs. Examples include cars, airplanes, computers, skyscrapers, highway systems, gasoline stations, communication networks, electric power grids, and nuclear power plants.
• NNRs enable the creation of enormous real wealth surpluses, which are necessary to support the thriving middle-class population segments that differentiate industrialized societies from pre-industrial, RNR-based, agrarian, and hunter-gatherer societies.
Within the context of our industrial lifestyle paradigm, human prosperity2—defined by economic output and material living standards—is enabled by NNRs.
NNRs → Human Prosperity
(Economic Output and Material Living Standards)
Examples of the critical role played by NNRs in enabling human prosperity:
• NNRs comprise approximately 95 percent of the raw material inputs to the United States economy each year.3 • During 2006, America used over 7.1 billion tons of newly mined NNRs, which equated to nearly 48,000 pounds per U.S. citizen.4
The tightly-linked causal relationship between NNR utilization and economic output (GDP) is clearly demonstrated by America’s experience since the inception of its industrial revolution.
NNR Supplies
Despite recycling, reuse, conservation, substitution, efficiency improvements, productivity enhancements, and technical innovation, global NNR production (newly mined extraction) has increased extraordinarily during our modern industrial era.
As the following data demonstrate, annual global NNR production levels associated with the most critical NNRs have increased enormously in just the past generation (thirty years).
Moreover, we believe without question that annual global NNR production levels will continue to increase as required for the indefinite future.
We have yet to understand that while there will always be plenty of NNRs in the ground (we will never “run out” of any NNR), and over the near term there will likely be more NNRs of nearly every type supplied each year, in an increasing number of cases there are not enough economically viable NNRs to completely address our global requirements—i.e., to increase global prosperity at a rate that we consider “acceptable.”9
Global NNR scarcity is becoming increasingly prevalent.
NNR Scarcity: Shifting Global Demand/Supply Dynamics
Humanity’s incessant quest for universal “Western style” prosperity through global industrialization caused fundamental shifts in global NNR demand/supply dynamics during the latter decades of the twentieth century.
• On the “demand side,” approximately one billion people occupied industrialized and industrializing nations during the mid/late twentieth century.10 By the year 2000, as a consequence of the industrialization initiatives launched by China, India, Brazil, and other emerging nations in Asia, Africa, and Latin America, that number had increased to over five billion.
As a result, global NNR requirements increased nearly instantaneously and extraordinarily during the early years of the new millennium. More important, early twenty-first century NNR utilization levels within the newly industrializing nations represented only tiny fractions of their longer-term requirements.
• On the “supply side,” owing to persistent and increasing exploitation11 since the beginning of our industrial revolution, the quality associated with the vast majority of NNRs has been decreasing—i.e., global NNR discoveries and deposits are generally fewer in number, smaller in size, less accessible, and of lower grade and purity.12 Increasingly, the cost advantages derived from new NNR exploration, extraction, and processing technologies are failing to offset the cost disadvantages attributable to exploiting Earth’s lower-quality NNR deposits. The result is diminishing returns on NNR-related investments—that is, each incremental dollar invested in NNR exploitation yields smaller quantities of economically viable NNRs.13
Global NNR supplies, which had generally remained sufficiently “low cost” during the mid/late twentieth century to enable relatively low price levels, became increasingly “high cost” during the early years of the twenty-first century.
Owing to rapidly increasing global NNR demand during this period, we were forced to exploit lower quality NNRs. Unfortunately, human ingenuity—i.e., technology, resourcefulness, innovation, efficiency improvements, and productivity enhancements—could not constrain the escalating costs associated with exploiting these lower quality NNRs.
Epidemic Global NNR Scarcity
By the year 2008, immediately prior to the Great Recession, costs (and prices) associated with most NNRs had increased to levels that were unprecedented during our modern industrial age. Global NNR scarcity had become epidemic.14 In fact, sixty-three of the eighty-nine NNRs that enable our modern industrialized existence—including aluminum, chromium, coal, copper, gypsum, iron/steel, magnesium, manganese, molybdenum, natural gas, oil, phosphate rock, potash, rare-earth minerals, titanium, tungsten, uranium, vanadium, and zinc—were scarce globally in 2008.15
Fueled by incessant central government fiscal stimulus (unrepayable debt) and central bank monetary stimulus (money printing and interest-rate suppression) since the Great Recession, the industrialized and industrializing nations of the world have attempted to recover economically and restore prerecession prosperity.
Despite this historically unprecedented economic “pump priming,” however, repeated postrecession recovery attempts have failed, as global NNR demand was throttled in each case by increasing and/or inordinately high NNR prices. Global NNR scarcity and economic malaise have persisted through 2014.16
And while it remains unclear at this time whether our current episode of global NNR scarcity will prove to be temporary or permanent, it is clear that our early twenty-first–century experience with NNR scarcity is a precursor of things to come.
What Happened?
During our modern industrial era but increasingly over the past several decades, continuously decreasing NNR quality has prevailed over human ingenuity.17 That is, significant cost increases associated with NNRs of continuously decreasing quality have overwhelmed human technology, resourcefulness, innovation, efficiency improvements, and productivity enhancements.
Our enormous and ever-increasing global NNR requirements within the context of lower quality/higher cost (less affordable) global NNR supplies have brought about increasingly prevalent NNR scarcity, which has caused faltering global prosperity.
Increasing NNR Scarcity → Faltering Prosperity
In less than half a century, global humanity has experienced a transition from robustly increasing prosperity to anemically increasing prosperity.18 We are “rolling over” from our old normal of “continuously more and more” to our new normal of “continuously less and less".
Humanity’s fate was sealed during the eighteenth century with the advent of industrialism; the NNR genie had been released from the bottle and could not be put back. We remained oblivious to our fate throughout the nineteenth and twentieth centuries by misconstruing our windfall of temporary NNR abundance as permanent NNR sufficiency.
What Happens Next?
The probability that we will discover and extract sufficient high quality/low cost NNRs to reverse our faltering global prosperity trajectory is infinitesimal—given that we have failed to do so during the past fifty years despite unparalleled human ingenuity during that time, and given that our global NNR requirements remain enormous and are still increasing in almost all cases.
While temporary upticks in national and global prosperity growth rates are certainly possible during the near term, a return to persistently robust global economic growth and rapidly improving material living standards is nearly impossible.21
The episode of epidemic global NNR scarcity that we are experiencing during the twenty-first century is Nature’s wake-up call to the fact that our industrial lifestyle paradigm—the way of life that we in the industrialized West consider “normal”—is anything but normal. Our NNR–enabled industrialized existence is a onetime anomaly that is coming to an end.
(...)
(conclusions and footnotes)
