I have finished my previous post with a quote from Aristotle. It highlights the importance of contemplation (seriously thinking about where our actions lead). It is especially important in our age: our civilization is at an inflection point. As I have sketched out the last time things are about to change and not for the better. I have started with drawing a map of our resource problem placed in semi sci-fi context. My aim was to push out the boundaries of conventional wisdom and to make the unimaginable imaginable (if you haven’t read it so far, please read it now).
Now, that the map has been laid out let’s zoom into the middle section: the past ten to the next ten years. Understanding this part is key to understanding what is really going on in the real world of goods and services and how the near future — your future — might look like.
For how long this life is sustainable?
One of the most frequent question I hear in the media (regarding our future) is “How do we became sustainable?”. Unfortunately the topic is shrouded with an exceptional amount of magical thinking backed by political ideology and willful blindness on the very nature of sustainability. A prime example of this is an ad I’ve seen recently on how to be sustainable: a bearded man put his clothes into a supposedly energy efficient washing machine while other actors in the spot used many other supposedly energy efficient machines and lived a clean, no-stress and certainly very comfortable life. Sustainably.
What does this has to do with sustainability…? The word itself has many definitions — if you use your favorite search engine you might get something like this:
“the ability to be maintained at a certain rate or level”
or:
“avoidance of the depletion of natural resources in order to maintain an ecological balance”
This all sounds nice, but what I miss the most from these (and many other) definitions is the timescale. What level of consumption AND for how long. What common wisdom tends to “forget” way too often is that we are talking about finite mineral resources on a finite planet. With this willful ignorance on finiteness (thinking that human creativity will solve every impediment) it’s all to easy to think that using renewable energy together with highly efficient smart AI driven battery electric devices is the obvious answer to our sustainability. I beg to differ. Quoting Ursula K. Le Guin:
“There are no right answers to wrong questions”
Put in a different way: if renewable energy (plus AI) is the solution, then what was the question…? My guess is that our wise leaders asked the following: “How do we maintain our comfortable life combined with eternal growth in the face of our pollution problem (global warming)?” My take on the question though is rather different, far outside the common wisdom presented in the mainstream media: “We have an energy problem and — as an inevitable side effect — we have polluted damaged and heated up the entire planet. How do we get back to living within our means?”
Energy is everything
Take a look around the room you are in: look at the desk, the chair, the lamp. What were the materials used? Wood? Metal? Plastics? Do you know how these materials are manufactured? How did these pieces of furniture got there? By truck? Now think about the last time you visited your hairdresser. Bring up the memory of the electric shave, the hair dryer, the temperature of the saloon, the flow of warm water over you hair…
All of manufacturing and transportation processes as well as all of the services take energy. Wood need to be sawed, metal need to smelted with high heat, goods and raw materials need to be transported by trucks, trains, ships. Hairdressers and other services use a lot of electricity. Now try to mention a good or service which does not involve the use of energy… Social media? Banking? Video streaming? Bitcoin…? Take sources of energy (electricity, diesel fuel, natural gas, coal etc.) away and industrial civilization grinds to an immediate halt.
Open the chart above. Can you see renewable energy sources with a naked eye? More than 85% of our energy today is still provided by fossil fuels. Electricity generation is just one quarter of the total energy consumption. And of that quarter only a fraction is produced by renewables. Now take a look at the devices providing us with renewable energy. Wind turbines and solar panels. Huge dams and tidal power. They are built using immense amounts of steel, concrete, copper, nickel, cobalt and rare earth metals. Mining and processing these minerals require energy, almost exclusively from fossil fuels (oil, coal, natural gas). Think about the consequences of this “renewable” energy shift… In fact it is an extraordinary building project, where you build out a completely new infrastructure and at the end of its lifetime — 20–30 years from now — you start again, perhaps by recycling some the old materials. Think about the amount of mining needed… On top of everything else mined and produced today. How much more are we talking about? A lot.
Mineral depletion on a finite planet
What you see on the chart above is our expectation’s departure from reality. Big time. As a prime illustration I would like to draw your attention to the first element on the chart: copper. It is a widely used material from semiconductor (microchip) manufacturing to high voltage wires and huge electric transformers. None of the above products (not to mention renewable building projects) would work without it due to it’s superior electric conductivity. Noticed the slight downward trend from 2023? That is mineral depletion in real time. With another word: trouble.
This how a mineral resource gets depleted: first the highest quality, easiest to access (closest to or at the surface) material is used. This had usually happened before the industrial age (with a pick-axe and a basket). Then people had to dig deeper and travel greater distances to fetch lower and lower quality ores. You can easily track this process by looking at ore grades over time. Now, I want you to guess the amount of copper in typical copper ores today. What’s your result? 50%? 20%? 5%? Take a look a the chart below:
The correct answer is: below 3%. Yes, that means when you load your mega dump truck carrying 100 tons of ore, process it, smelt it you’ve got 3 tons of copper. The rest — 97 tons of rock, now mixed with dangerous chemicals used in processing — has to be dumped in the environment. See the downward trend in ore grade? That is a sign of things to come. When deciding about the next mining project in Chile (the world’s top producer) the mining company has to commit itself to process ore grades of 0.3% ten years in advance (this is how long opening an ramping up production takes). Yes, that means 300 kilograms of copper and 99 700 kilograms of waste. All of which have to be moved uphill from the deepest open pit mines, in the middle of the driest desert on Earth (Atacama) using immense amount of drilled and pumped water. Not a per book definition of sustainability.
Unless we start discovering a new Australia every 20 years or start mining copper meteors (if they exist at all) we are in trouble... Elon, did you find copper on Mars?
Recycling
What about recycling you might ask. Two things. First, you can only recycle what you already have. Expanding the electricity network, building electric cars (using much more copper than traditional ones) will come on as extra above our daily consumption of the red metal.
Second, recycling takes a lot of effort and energy. Take a smartphone for example: it contains circa 15% copper — better than any ore on Earth! But how do you get it out? It has been built into microchips in ceramic housings, layered on PCB-s, added as thin few mm long wires etc. — all requiring different approaches (plus a lot of labor) to get them used again. If you would have to rely on recycling your typical phone would cost ten times as much. Plus, there is a lot of waste in every recycling process and some of your material will inevitably end up in the landfill (actually quite a lot). If you have the time I encourage you to do an internet research on this topic.
Back to energy — the master resource
This all takes us back to the question of energy. Maintaining current production levels of copper (or any other mineral) will require an exponentially increasing amount of energy — not to mention pursuing our goal towards renewables… Remember, we want to do this starting today — yet we still get 85% of our energy from fossil fuels, another mineral resource.
The bad news is, that the same depletion process takes place — believe it or not — with oil as well, the ‘master resource’ of our civilization. Oil is used to mine coal (as well as other minerals) and 90% of natural gas comes as ‘associated gas’ i.e. together with oil. Now you understand what’s all the fuss about oil.
Back in 2005 something has changed on the market of raw materials. Prices went haywire in almost every category. Most notably crude oil. Conventional (easy to drill) oil extraction has topped out, but world population and economic activity did not. The ensuing supply-demand gap sent oil prices steadily upwards — and as we have seen — other raw material prices with it. Then came the great financial crisis ending the rally and with the following quantitative easing (QE) programs (i.e. money printing for big banks) stabilized prices on a high level. This made shale oil look like a great business (in fact shale companies continued to run on negative cash flows requiring ever greater investments from banks stuffed with freshly printed dollars). Oil extraction boomed again in the US and Canada, as well as in the recently “liberated” Iraq. The rest of the world? Every country has lost or struggled to maintain production due to depletion… (Don’t let the number world oil (liquids) production fool you — it’s not all oil but a lot of LNG as well. If you are interested in the true story look for C+C, crude plus condensate numbers.)
2014 to ‘16 marked a major crash in oil price partially due to overproduction from shale and partially because previously high prices were also artificially made affordable by QE for companies buying large amounts of oil (QE was discontinued during this period).
Fast forward to 2020: COVID-19 came and the ensuing lock-downs forced people to stay home and burn less oil products. Conventional wisdom holds that once we are back to normal, oil consumption will return to pre-pandemic levels. There are two major problems with this expectation. (Or should I say: magical thinking?)
One: oil wells around the world continue their long way down their depletion curve. Plus — due to the sudden fall in demand — the most unproductive wells (old and costly to operate traditional as well as a number of shale wells) had to be closed. Permanently.
Two: oil companies gave up on finding new sites to drill. There are three reasons to this:
1) Looking for oil costs a lot of money — in fact an exponential amount of money. Following the oil price shock of 2014–16 companies slashed the expenses spent on exploration.
2) There are not many places left to look. Geologists have described the oil creation process a long time ago and thus give us a clear hint where oil could be found on our planet. These places are well known to oil exploration companies who go to these locations on purpose to find more oil.
3) They didn’t find enough anyway — and this says it all. Since the early 80-s (yes, for more than 40 years) we could not find enough to replace what we have used up in a given year… In fact we use up 3x every year compared to what we find. Using a rather blunt example: we have (used to have) a huge stash of booze and we continue to drink 3 bottles a day — even though we only have money for 1 bottle per day.
Decline in global oil production is thus only a question of time — and unfortunately has nothing to do with green activist groups.
Summing it up
As I have demonstrated here we are facing a serious sustainability crisis. One part due to the pollution it causes (especially CO2). But most pressingly we will soon have a ‘peak everything’ problem — no matter what we do. It means that — as it looks like today — we will have neither the materials nor the energy to complete the transition to renewable energy. Remember all this renewable build out activity has to come on top of everything else. Expect no democratic leader to say: “I will close this car manufacturing plant, and send everyone home, so that the solar panel factory has more raw materials and energy.” Even if this would happen rare earth metals, nickel, copper lithium and many more would still be a bottleneck: the entire electricity industry would be fighting tooth and nail for these metals.
Depletion will not be a sudden event though. There will be crises for sure, especially from the second half of this decade, but the depletion of raw materials will take place on a long timescale over 20–30–50 years (notice the slope in the case of copper above). This means that we have to prepare for a world of less and less material and energy output for decades to come. Renewable transition will go on, albeit much-much slower than expected (as long and as far as we can allocate the necessary resources). On a positive note pollution will most certainly start to decrease as we will have less and less oil (and consequently less coal and gas) to burn year-over-year. The production of real goods and services will most certainly fall slowly but steadily. No new energy efficient washing machine — sorry you have to wait 6 months for that. New car? Sorry, 12 months is the lead time. This is something very hard to imagine until it really happens, and an extraordinary amount of magical thinking will be applied to hide the problem — of that you can be sure.
One great example for this is the recent Net Zero craze around the world. Don’t get me wrong this is exactly what we should have been doing… since 1970. Back then, it was still possible: we still had most of our now depleting resources, world population was less than half (consuming much less than today). But now Net Zero is nothing more than a thin green veil over the ugly face of dwindling resources.
First it will be oil to start its long descent (we might have passed that point in November, 2018 already). Then because of the increased energy demand on mining different minerals will be on short supply soon (also due to their own depletion). If you are interested in the details and have the time take a look at this. This study was performed by the Finnish Geological Survey — similar ones were done by almost all major governments, but they were classified for geo-political reasons. Understandably — arguably no one is willing show how much he/she has when he/she has to negotiate (or fight) for more.
Now that you have a firm understanding on resource depletion… First, digest this information. This is though, I know. But think about the possibilities it brings with it…! You like repairing old radios? Or know how to use a scythe? Make bread? Or beer? These hobbies will gain a new meaning — in fact they could make you a respected member of your society. Think of what will be lost, mourn it, then move on — the end of industrial civilization will be slow, you might not see the very end of it even if you are young, but in many ways it will also be liberating and can give a new meaning to your life.
In part two I will explore these options and try to guess which material / technology can stay with us in the coming centuries and millennia.
Until then,
B
