Back in 1980, the great libertarian economist, Julian Simon, and the prepetually wrong Malthusian biologist, Paul Ehrlich, entered into a little wager regarding population growth and resource scarcity. They decided on using the inflation-adjusted prices of five metals to decide the bet. Simon allowed Erlich to pick the five metals. If the 1990 prices were higher, Erlich would win. If they were lower, Simon would win. With the help of a fellow perpetually wrong Malthusian, John P. Holdren, Ehrlich selected chromium (Cr), copper (Cu), Nickel (Ni), tin (Sn) and tungsten (W). Julian Simon won the bet. However, a couple of years ago, economist Paul Kedroski suggested that had the time period of the bet extended to 2010, Ehrlich would have been the winner every year since 1991…
Given its 30th anniversary, and with commodities in the news – especially oil – I thought it was an apropos time (and TED an appropriate venue) to revisit the bet’s context, outcome, controversies and implications.
Without getting into it too deeply, here are some things worth knowing. Given the above graph of the five commodities’ prices in inflation-adjusted terms, it will surprise no-one that the bet’s payoff was highly dependent on its start date. Simon famously offered to bet comers on any timeline longer than a year, and on any commodity, but the bet itself was over a decade, from 1980-1990. If you started the bet any year during the 1980s Simon won eight of the ten decadal start years. During the 1990s things changed, however, with Simon the decadal winners in four start years and Ehrlich winning six – 60% of the time. And if we extend the bet into the current decade, taking Simon at his word that he was happy to bet on any period from a year on up (we don’t have enough data to do a full 21st century decade), then Ehrlich won every start-year bet in the 2000s. He looks like he’ll be a perfect Simon/Ehrlich ten-for-ten.
In light of the fact that the world population clock recently crossed the 7 billion mark, I thought I’d see if there was a more accurate measure of the increasing scarcity (or lack thereof) of these metals over time.
Rather than “cherry-picking” particular decades, I took a look at the full historical price record (available from the USGS). The inflation adjusted prices of Chromium (Cr), Copper (Cu), Nickel (Ni), Tin (Sn) and Tungsten (W) exhibit no statistically meaningful inflation-adjusted price trend over the last 110 years…
Cu, Ni and W have slightly negative slopes; while Cr and Sn have slightly positive slopes… Only chromium’s (R^2 = 0.3187) and copper’s (R^2 = 0.1719) trend lines approach statistical significance.
While the inflation adjusted price of these metals is a good measure of affordability, it is not a complete measure. The price is only relevant if it is measured against the financial resources available. Relative to world real per capita GDP all five metals have become more affordable since 1969…
The GDP slope is positive and highly statistically significant (R^2 = 0.98). The GDP slope (81.354) is almost three times larger than the largest positive metal slope (Ni, 32.506).
More importantly, from a scarcity perspective, the production output of all five metals has been rising over time. Four are rising exponentially …
While the ratio of price to output has been declining exponentially…
If these metals were becoming more scarce, the price would be rising faster than the supply.
The USGS estimates that the current prover reserves of all five metals are sufficient to meet demand for the next 20 to 59 years. For “fun” I estimated the crustal mass of all five metals and estimated how long it would take to literally run out at the current production rate…
Debunking the Population Bomb Dud
The human popupation hit the seven billion mark last fall…
Published online 19 October 2011 | Nature 478, 300 (2011) | doi:10.1038/478300a
News
Seven billion and counting
A look behind this month’s global population landmark reveals a world in transition.
Jeff Tollefson
What’s in a number? This month, the world’s attention turns to a big one: 7 billion, the latest milestone in humanity’s remarkable and worrying rise in population.
[…]
On one level, a figure of 7 billion is incredible for the sheer momentum it represents: a full doubling of the planet’s population since 1967, with current growth adding 200,000 people each day, and a nation larger than the size of France each year. But although the 6-billion mark was reached about 13 years ago according to revised figures, it will take nearly 14 years to hit 8 billion (see ‘Snapshots of growth’). The comparison shows that population growth is decelerating; it is likely to level off at about 10 billion before the end of the century.
Between now and then, the fastest growth will be in Africa, where fertility levels remain higher than anywhere else in the world. Population levels among industrialized countries, by contrast, will remain relatively constant. Although Asia will remain the most populous continent, decreasing fertility rates there will add to the overall ‘greying’ of the planet.
The Nature article included the following graphic, indicating that the word population will most likely level off at ~10 billion ca. 2070…
Is that a problem? I don’t think so. The human race handled the rise from 3.5 to 7 billion rather well. The global per capita food supply has steadily increased since 1960…
Per capita real GDP has risen at the same rate as the population…
Per capita food supply has also risen with the population…
And… Amazingly… Per capita food supply and per capita GDP are highly correlated…
The percentage of the world’s population suffering from undernourishment has steadily declined over the last 40 years, despite a rising population…
Very few nations have failed to reach the MDG 1 target of reducing the percentage of their population suffering from undernourishment by 50%…
The world isn’t running out of water either. The UN FAO Aquastat data base showed that in the year 2000, the world’s total renewable water resource was 53,730 x 10^9 m3/yr. The total withdrawal was estimated to be 2,871 x 10^9 m3/yr. That’s a 5% utilization rate.
The far from perect human condition doesn’t negate the fact that clear progress has been made over the last half-century to reduce hunger, despite a growing population.
Almost all of the population growth over the next 60 years will be in Africa and Asia – the two largest land masses on Earth.
Assuming that the populations of Asia and Africa reach 5 billion and 3.6 billion respectively, their population densities will be 114 and 119 people per km^2. The population densities of the rest of the world will remain about the same or decline. Asia’s density is currently 95 per km^2. The greatest stress will be on Africa, which is currently underutilizing its resources more than any other continent.
Africa has plenty of potentially arable land, plenty of water and plenty of resources. Africa just lacks the economic and political infrastructure to realize its own potential.
Current and potential arable land use in Africa. Out of the total land area in Africa, only a fraction is used for arable land. Using soil, land cover and climatic characteristics a FAO study has estimated the potential land area for rainfed crops, excluding built up areas and forests – neither of which would be available for agriculture. According to the study, the potential – if realised – would mean an increase ranging from 150 – 700% percent per region, with a total potential for the whole of Africa in 300 million hectares. Note that the actual arable land in 2003 is higher than the potential in a few countries, like Egypt, due to irrigation…
The “world” isn’t running out of anything. Global proven oil reserves have doubled since 1980.
Most other commercial mineral resources have seen its proven reserves grow at least as fast as consumption has grown.
The world has plenty of food, water, space, mineral resources and the Earth’s environment is generally cleaner now than it was 35 years ago. Crop yields have continued to maintain an increasing upward trend for 40 years… And there is every reason to believe that crop yields will continue to improve (unless we really are on the verge of returning to Little Ice Age climate conditions).
But it will get worse in the future!!!
The “bear” is always just out of sight in the woods. For centuries, Malthusians have trotted out one invisible bogeyman after another (Malthusians pre-date Malthus by at least a few thousand years). The disaster is just over the horizon, just around the corner or lurking in the woods.
The Earth is finite; but humans have barely tapped its resources… We will still barely be tapping the Earth’s resources when we hit the 10 billion mark about 90 years down the road… And the Malthusians will still be warning us about the bear in the woods.
The only thing the world has a genuine shortage of is honest and competent people in gov’t. Almost all of our problems are due to political interference with market forces.
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djl
January 25, 2012 7:12 am
To adjust what
williamholder says:
January 25, 2012 at 4:00 am
When viewed as a percentage of a whole this is a very effective presentation. In terms of absolute numbers however it is deceiving. There are certainly “many” more “wealthy” people than there were a century ago – there are certainly “many” more people “with” ready access to clean water than there were a century ago – there are “many” more overweight people than there were a century ago – there are “many” more people “with” adequate health care than there were a century ago – there are more “people living longer” than there were a century ago – in fact there are many “pleasant” human circumstances that in absolute terms have increased significantly over the last century
I can confidently predict that these numbers will increase over the next century. It will get “better” in the future.
Changes in ” “.
Plus compairing todays health care to a century ago is almost meaningless.
Jeff in Calgary
January 25, 2012 7:14 am
afizifist says:
January 25, 2012 at 5:14 am
“Sorry if i’m a bit heavy on this but this is supposed to be a climate blog …”
Umm…? No! Read the title banner again
“Commentary on puzzling things in life, nature, science, weather, climate chagne, technology, and recent news by Anthony Watts”
I started ready this blog because of a Windows XP post that helped me fix a problem with my computer.
Tony Hansen says:
January 25, 2012 at 4:20 am
‘…The only thing the world has a genuine shortage of is honest and competent people in gov’t.’
Is that Malthusian?
BTW, thanks for your work David.
It would only be Malthusian if I thought Ron White was correct… 😉
Don K
January 25, 2012 7:17 am
Overall, an excellent article. But there are some problems. First problem is that technology has “rerouted” a certain amount of metal consumption into alternate materials. e.g. How much chrome plate do you see on a modern car? If we still used materials in the fashion and amounts that we did three decades ago, the consumption and price of metals would probably be higher
Second, modern civilization requires large amounts of energy. AFAICS, there are only four energy sources capable of supplying the rougly 3×10^15 btu per day that 10 billion folks will need to live in reasonable comfort — nuclear fission, nuclear fusion, fossil hydrocarbons (but they may be running short by the end of this century), and possibly solar. It’s not clear how to build out the energy infrastructure and how much the energy will cost.
Third. Water. It’s heavy and expensive to move. It may well be true that only 5% of water resources are currently utilized. But vast amounts of water in the North American lake belt or the Amazon basin, aren’t much help to the guy trying to raise tomatoes in Bakersfield or Cairo. A lot of agriculture is currently dependent on mining diminishing amounts of fossil water in arid or semi-arid regions. That’s almost certainly not sustainable.
Jakehig
January 25, 2012 7:18 am
On the water resource issue, there’s a major pilot project underway in the Middle East to capture water from the exhaust of power plants. If it flies it will augment the available supplies in those arid regions and provide a strong incentive to use gas instead of flaring it.
polistra says:
January 25, 2012 at 4:28 am
Middleton’s final sentence is dangerously wrong.
Commodity prices have gone wild in the last decade or two, but NOT because of population. Prices have gone wild because governments did EXACTLY WHAT MIDDLETON RECOMMENDS. They deregulated speculators.
WE DO NOT NEED MORE DEREGULATION.
What we need now is a return to the government rules that held from 1936 to 1990, a return to FDR’s rules. During that period speculators were a minor part of the system, so real supply and demand determined most prices.
The commodity price spikes in the 1970’s to early 1980’s were worse than the 2007-2008 spikes.
Periodic supply-demand imbalances will always lead to episodic price spikes and crashes, irrespective of regulation. Price controls actually exacerbate the problem…
In the election year of 1980 interest rates peaked at 21%, the highest since the Civil War. The so-called energy crisis still persisted. Unemployment and poverty rates were high. Ronald Reagan took the oath of office during the greatest economic crisis since the Great Depression. Was this the final crisis of capitalism that leftists, beginning with Karl Marx, had long predicted?
Ronald Reagan didn’t think so. He came to Washington with the most ambitious program since the New Deal and a serene confidence that its adoption would turn the country around. He advanced a program of across-the-board tax cuts, deregulation and inflation-fighting, even at the cost of considerable economic pain.
Immediately after delivering his inaugural address in 1981 Reagan performed his first official act as President: He signed an executive order eliminating price controls on gasoline that had been in place for a decade. Yes, price controls. Incredible as it may now seem, some of Reagan’s predecessors, Richard Nixon among them, had believed price controls could curb inflation. Critics of Reagan’s action, like Senator Howard Metzenbaum (D-Ohio), warned that without government-imposed limits gas prices would rise to $2 a gallon. Instead, they fell dramatically; and have remained low. With a stroke of his pen Reagan had ended the energy crisis. LINK
I don’t see a graph of square miles per capita (or people per square mile for that matter) in each continent and region over time, and price of land per square mile over time.
I’m reminded of a relative’s letter back in the 1830s, saying someone had offered them $60K for their 10K acres, but couldn’t bring themselves to accept so much; it just wouldn’t be ethical. It’s now a nice refinery, chemical feed-stock plant, shipping docks… And others who paid $0.75 to $1.50 for their annual property taxes on their square mile of land, so property taxes might be a separate indicator.
Closely (but not rigidly) tied to that, and to development of computing, are the massively increasing violations of privacy with idiot-meters (electricity and water), “interactive” cable TV “services” which track viewing, surveillance cameras along streets (some cities have 2 sets — one allegedly for monitoring traffic flow and the other for “crime prevention”), in businesses (yes, you are our valued customer, so we will begin by insulting you), searches at transportation nexuses, transaction kkkards…
What’s the price of that potable water per gallon?
“Speculators” serve as insurance. They even out prices, and reduce risks by taking the costs of them on themselves.
“1) global financial system collapse – possible but is it likely?” Already happened. We’re just waiting for the distortions to wash through and out of the economic system.
CPI is under-representing effects of inflation even when food and energy are included, and the definition changes have diverted it from the implicit claptrap def, er, uh, implicit GDP deflator and the WPI/PPI. These 3 used to be tightly twined until the changes of the early 1990s. Since then, they show extreme parting of ways. http://www.kermitrose.com/jgoMoney.html
has graphs, links to shadowstats, the Fed, Oregon State and other price indices and money supply.
DirkH
January 25, 2012 7:32 am
“Per capita food supply has also risen with the population…”
Yikes! We’re getting ever fatter! We’re doomed…
(Sorry. Had to find SOMETHING dystopian.)
adolfogiurfa
January 25, 2012 7:32 am
The later you adjust your economy (and this goes for Europe too) the harder the “shock” that will be needed to do it, and the harder and longer the times you will have to live; and if, as all the posts published here in WUWT forecast, we have entered a cycle where climate conditions will not be precisely “ideal”, in special for the northern hemisphere, then time is due for such adjustments. An alternative way out for this situation would be to open your frontiers, and those of Europe, to immigration, which would mean more working people, more buyers, more production, more market.
Steve from Rockwood
January 25, 2012 7:36 am
ZZZ says:
January 25, 2012 at 3:38 am
…use how much of a given raw material — copper, petroleum, etc. — one ounce of gold buys as your metric for whether the true price of raw materials has been increasing or decreasing over the last 20 years. It suspect it would make a big change in the shape of your graphs!
——————————————————————–
Year Ni Au Au/Ni
1980 3.00 850 283
1990 8.50 400 47
2000 2.50 275 110
2010 9.00 1100 122
Looks like the ratio of gold to nickel was twice as much in 1980 as in 2010. You’re right ZZZ. It makes a big difference.
David says:
January 25, 2012 at 5:06 am
Prices of commodities have been going up of late for reasons other than scarcity. The main one is the debasement of currencies by central banks (US and EU have been on the printing press with their monetary expansion policies). In the long run, inflation should catch up so that the inflation adjusted prices of commodities will be brought lower. In the mean time, the higher recent prices mean little, and definitly do not indicate scarcity.
Yep. Oil is trading at a 40-50:1 multiple realtive to natural gas in the USA; but only at a 12:1 multiple over natural gas in Europe and 6:1 multiple over LNG in Japan. The Oil:Gas multiple shot up when QE1 kicked in. Crude oil is a global commodity priced in USD. Natural gas is not a global commodity. QE1 caused the price of oil to rise by about 50% relative to the price of natural gas. QE1 devalued the USD.
The collapse in US natural gas prices relative to other industrialized nations was primarily caused by the surge in shale gas production. However, the price has remained depressed because natural gas is not very fungible.
Tim Clark says:
January 25, 2012 at 5:23 am
Sorry about this, these little typos detract from the excellent article:…………..-.
The USGS estimates that the current prover (n)
The far from per(f)ect human
I noticed those typos after I submitted the post… Argh! I hate typos and spelling & grammar errors. As a guest poster, I can’t edit my posts after I submit them for review.
Marc77
January 25, 2012 8:01 am
Asking if we should lower our consumption is equivalent to asking if our grandparent should have used less wood and coal. I think not.
jrwakefield says:
January 25, 2012 at 5:56 am
Sorry, but this article is grossly flawed. It is entirely geological. Our dependancy on resources is not just what’s in the ground, but how fast it can be extracted. The prime example in this article is the claim of oil reserves doubling. That’s irrelevant. What’s important in oil production is the rate of production vs the demand. That was not taken into account in this article.
It was not taken into account because the world can’t consume more petroleum than it produces. Even the oil in SPR’s was “consumed” when it was purchased to fill the SPR’s.
In 2009 the average daily consumption of oil was 84,077,000 barrels. While the average daily production of crude oil was only 79,948,000 barrels. While that might appear to be a 5% deficit; it is not. The difference is made up by non-petroleum additives, refinery gains, etc. The United States produces more than 3 million barrels of “oil” per day more than its crude oil production. When you add in natural gas liquids and other liquefied petroleum products produced in natural gas plants, out total daily oil production is ~9.5 million barrels per day.
Chris B says:
January 25, 2012 at 7:01 am
“Almost all of our problems are due to political interference with market forces.”
Not that i’m in favour of more government, but hasn’t the increase in government closely followed, or led (causal/correlation issues notwithstanding), the growth in GDP, kcals per capita, volume of metals and oil extracted, etc.?
The author hasn’t shown his political statement to be true. Moreover, he contradicts himself with this statement: “Africa just lacks the economic and political infrastructure to realize its own potential.”
The increase in “rule of law” governance helps to enable growth. Western capitalist democracies are all “rule of law” governments (even the Obama administration is somewhat restrained by “rule of law”).
Most undeveloped and developing nations tend to have governments that are less restrained by “rule of law.”
Mike M
January 25, 2012 8:35 am
Chris B says: … Moreover, he contradicts himself with this statement: “Africa just lacks the economic and political infrastructure to realize its own potential.”
No, just slightly redundant if he means free market capitalism as ‘economic infrastructure’. When you create wealth others will envy it. Politics determines whether they can just take it away from you, (socialism, no one produces enough for themselves=misery), or they also create wealth and everyone is rich, (capitalism, everyone produces more than enough for themselves=surplus). William Bradford discovered this a long time ago. http://i2.photobucket.com/albums/y48/mikeishere/Capitalism-Socialism-b.gif
Leonard Weinstein says:
January 25, 2012 at 6:05 am
Dave,
I don’t want to be a pessimist, but a some factors of the near future are troubling. The main one is that the temperature trend seems to be heading down, at least for a while. The warming trend along with increasing CO2 occurring over the last century allowed more crops than was otherwise possible. The cooling may lower crop output enough to cause problems. The possibility of Earth’s magnetic field reversing, which seems to be tending toward, could greatly impact power transmission, crops, and communication for a long while. The aquafers like the big one under Texas are being depleted to dangerous levels. All the while more population in parts of the world require more food and other resources. These problems can be handled by technology, but governments seem to have their heads on backward, and may not allow needed progress. The metal issue is not a problem, but other factors may be
Dr. Weinstein,
The way I view groundwater is similar to the way I view mineral resources in general… Every oil & gas field and every mine eventually becomes depleted; yet our production of almost all mineral resources and our proved reserves of those resources have steadily increased. Groundwater aquifers, unlike oil, gas and most other mineral resources, are continuously recharged at rates relevant to human consumption. In the oil & gas business, reservoir management is essential. It’s the way we maximize our profits. The key is to manage reservoirs so that the maximum volume of reserves can be recovered economically. There’s no reason that groundwater aquifers can’t be better managed.
I agree with you on the cooling. I’m fairly certain that Earth’s climate will hit the end of the current warm phase of the millennial-scale cycle by the end of this century. If the cool down mimics the Little Ice Age, mankind could be in for some rough times; particularly if we eviscerate our economy “tilting at windmills” of global warming.
rum
January 25, 2012 8:55 am
as the ‘story’ goes: wasn’t manbearpig a student of either erlich or holdren and present when the meeting took place. and further stories…didnt they ask some students to come up with what metals they would use for the bet and algore was part of that?? fairy tale or truth? anyone know?
Rob Crawford
January 25, 2012 8:59 am
Don K:
“First problem is that technology has “rerouted” a certain amount of metal consumption into alternate materials. e.g. How much chrome plate do you see on a modern car? If we still used materials in the fashion and amounts that we did three decades ago, the consumption and price of metals would probably be higher”
That’s entirely Simon’s point.
MarkW
January 25, 2012 9:19 am
Greylar says:
January 25, 2012 at 6:29 am
—
Everytime someone builds a multi-story building, they are making more land.
MarkW
January 25, 2012 9:22 am
Chris B says:
January 25, 2012 at 7:01 am
—
Multiple studies have shown that size of growth and size of govt are inversely proportional.
The US’s economy was growing much, much faster, decades ago, when govt was much, much smaller.
adolfogiurfa
January 25, 2012 9:33 am
@David Middlelton: Groundwater aquifers, unlike oil, gas and most other mineral resources, are continuously recharged at rates relevant to human consumption
That´s correct, though, as for the recent findings in Brazil and Norway, oil is the same….and methane (natural gas) is continuously produced as pesky humans and other carbon based creatures keep on defecating.
ckb
Editor
January 25, 2012 9:34 am
“The Earth is finite”
Of course, this is true, but if you are trying to imply that the Earth’s resources available to humans are finite as well, it’s only true in the technical sense. The Earth’s resources are essentially (or practically) infinite because we can not destroy matter. Apart from radioactive stuff changing and the tiny amount of stuff we fling into space, all the stuff we “use up” is still here. We just change its form – it does not go away . It can, given the right circumstances, all be reclaimed. (Especially when we talk aboiut metals or water. The earlier post about supply increasing as the grade goes down is excellent. When we talk about stuff like oil, “reclaiming” is a bit tricky… 🙂 … but all the pieces are still here!)
Today’s landfill is the Future’s Mother Lode.
I never thought much of Malthus.
DesertYote
January 25, 2012 9:36 am
“Africa has plenty of potentially arable land, plenty of water and plenty of resources. Africa just lacks the economic and political infrastructure to realize its own potential.”
###
Because its overrun with Marxists. The last thing Marxist want is for anyone to actually get out of poverty,
Jeremy
January 25, 2012 10:09 am
thingadonta says:
January 25, 2012 at 3:22 am
Incidentally, you can’t actually ‘run out’ of any metals, since they are formed in the virtually limitless earth’s crust (as opposed to fossil fuels which are formed organically, and near the top).
I will grant you that on the grand scheme of things, humanity worrying about running out of metals is akin to a single colony of ants worrying about running out of rocks and dirt from the top of mount Everest. However… yes you can actually exhaust the metal supply of a planet. Mind you, it would take a race of far greater technological capability than our own, but it can be done. Metals are not formed in earths crust, they’re formed in supernovas, and ONLY there. They manifest in our crust because of internal heat and pressure inside the Earth.
/sorry, its the internet, so someone somewhere hates your generalizations.
To adjust what
williamholder says:
January 25, 2012 at 4:00 am
When viewed as a percentage of a whole this is a very effective presentation. In terms of absolute numbers however it is deceiving. There are certainly “many” more “wealthy” people than there were a century ago – there are certainly “many” more people “with” ready access to clean water than there were a century ago – there are “many” more overweight people than there were a century ago – there are “many” more people “with” adequate health care than there were a century ago – there are more “people living longer” than there were a century ago – in fact there are many “pleasant” human circumstances that in absolute terms have increased significantly over the last century
I can confidently predict that these numbers will increase over the next century. It will get “better” in the future.
Changes in ” “.
Plus compairing todays health care to a century ago is almost meaningless.
afizifist says:
January 25, 2012 at 5:14 am
“Sorry if i’m a bit heavy on this but this is supposed to be a climate blog …”
Umm…? No! Read the title banner again
“Commentary on puzzling things in life, nature, science, weather, climate chagne, technology, and recent news by Anthony Watts”
I started ready this blog because of a Windows XP post that helped me fix a problem with my computer.
It would only be Malthusian if I thought Ron White was correct… 😉
Overall, an excellent article. But there are some problems. First problem is that technology has “rerouted” a certain amount of metal consumption into alternate materials. e.g. How much chrome plate do you see on a modern car? If we still used materials in the fashion and amounts that we did three decades ago, the consumption and price of metals would probably be higher
Second, modern civilization requires large amounts of energy. AFAICS, there are only four energy sources capable of supplying the rougly 3×10^15 btu per day that 10 billion folks will need to live in reasonable comfort — nuclear fission, nuclear fusion, fossil hydrocarbons (but they may be running short by the end of this century), and possibly solar. It’s not clear how to build out the energy infrastructure and how much the energy will cost.
Third. Water. It’s heavy and expensive to move. It may well be true that only 5% of water resources are currently utilized. But vast amounts of water in the North American lake belt or the Amazon basin, aren’t much help to the guy trying to raise tomatoes in Bakersfield or Cairo. A lot of agriculture is currently dependent on mining diminishing amounts of fossil water in arid or semi-arid regions. That’s almost certainly not sustainable.
On the water resource issue, there’s a major pilot project underway in the Middle East to capture water from the exhaust of power plants. If it flies it will augment the available supplies in those arid regions and provide a strong incentive to use gas instead of flaring it.
The commodity price spikes in the 1970’s to early 1980’s were worse than the 2007-2008 spikes.
Periodic supply-demand imbalances will always lead to episodic price spikes and crashes, irrespective of regulation. Price controls actually exacerbate the problem…
I don’t see a graph of square miles per capita (or people per square mile for that matter) in each continent and region over time, and price of land per square mile over time.
I’m reminded of a relative’s letter back in the 1830s, saying someone had offered them $60K for their 10K acres, but couldn’t bring themselves to accept so much; it just wouldn’t be ethical. It’s now a nice refinery, chemical feed-stock plant, shipping docks… And others who paid $0.75 to $1.50 for their annual property taxes on their square mile of land, so property taxes might be a separate indicator.
Closely (but not rigidly) tied to that, and to development of computing, are the massively increasing violations of privacy with idiot-meters (electricity and water), “interactive” cable TV “services” which track viewing, surveillance cameras along streets (some cities have 2 sets — one allegedly for monitoring traffic flow and the other for “crime prevention”), in businesses (yes, you are our valued customer, so we will begin by insulting you), searches at transportation nexuses, transaction kkkards…
What’s the price of that potable water per gallon?
“Speculators” serve as insurance. They even out prices, and reduce risks by taking the costs of them on themselves.
“1) global financial system collapse – possible but is it likely?” Already happened. We’re just waiting for the distortions to wash through and out of the economic system.
CPI is under-representing effects of inflation even when food and energy are included, and the definition changes have diverted it from the implicit claptrap def, er, uh, implicit GDP deflator and the WPI/PPI. These 3 used to be tightly twined until the changes of the early 1990s. Since then, they show extreme parting of ways.
http://www.kermitrose.com/jgoMoney.html
has graphs, links to shadowstats, the Fed, Oregon State and other price indices and money supply.
“Per capita food supply has also risen with the population…”
Yikes! We’re getting ever fatter! We’re doomed…
(Sorry. Had to find SOMETHING dystopian.)
The later you adjust your economy (and this goes for Europe too) the harder the “shock” that will be needed to do it, and the harder and longer the times you will have to live; and if, as all the posts published here in WUWT forecast, we have entered a cycle where climate conditions will not be precisely “ideal”, in special for the northern hemisphere, then time is due for such adjustments. An alternative way out for this situation would be to open your frontiers, and those of Europe, to immigration, which would mean more working people, more buyers, more production, more market.
ZZZ says:
January 25, 2012 at 3:38 am
…use how much of a given raw material — copper, petroleum, etc. — one ounce of gold buys as your metric for whether the true price of raw materials has been increasing or decreasing over the last 20 years. It suspect it would make a big change in the shape of your graphs!
——————————————————————–
Year Ni Au Au/Ni
1980 3.00 850 283
1990 8.50 400 47
2000 2.50 275 110
2010 9.00 1100 122
Looks like the ratio of gold to nickel was twice as much in 1980 as in 2010. You’re right ZZZ. It makes a big difference.
Yep. Oil is trading at a 40-50:1 multiple realtive to natural gas in the USA; but only at a 12:1 multiple over natural gas in Europe and 6:1 multiple over LNG in Japan.
The Oil:Gas multiple shot up when QE1 kicked in. Crude oil is a global commodity priced in USD. Natural gas is not a global commodity. QE1 caused the price of oil to rise by about 50% relative to the price of natural gas. QE1 devalued the USD.
The collapse in US natural gas prices relative to other industrialized nations was primarily caused by the surge in shale gas production. However, the price has remained depressed because natural gas is not very fungible.
I noticed those typos after I submitted the post… Argh! I hate typos and spelling & grammar errors. As a guest poster, I can’t edit my posts after I submit them for review.
Asking if we should lower our consumption is equivalent to asking if our grandparent should have used less wood and coal. I think not.
It was not taken into account because the world can’t consume more petroleum than it produces. Even the oil in SPR’s was “consumed” when it was purchased to fill the SPR’s.
In 2009 the average daily consumption of oil was 84,077,000 barrels. While the average daily production of crude oil was only 79,948,000 barrels. While that might appear to be a 5% deficit; it is not. The difference is made up by non-petroleum additives, refinery gains, etc. The United States produces more than 3 million barrels of “oil” per day more than its crude oil production. When you add in natural gas liquids and other liquefied petroleum products produced in natural gas plants, out total daily oil production is ~9.5 million barrels per day.
The increase in “rule of law” governance helps to enable growth. Western capitalist democracies are all “rule of law” governments (even the Obama administration is somewhat restrained by “rule of law”).
Most undeveloped and developing nations tend to have governments that are less restrained by “rule of law.”
No, just slightly redundant if he means free market capitalism as ‘economic infrastructure’. When you create wealth others will envy it. Politics determines whether they can just take it away from you, (socialism, no one produces enough for themselves=misery), or they also create wealth and everyone is rich, (capitalism, everyone produces more than enough for themselves=surplus). William Bradford discovered this a long time ago.
http://i2.photobucket.com/albums/y48/mikeishere/Capitalism-Socialism-b.gif
Dr. Weinstein,
The way I view groundwater is similar to the way I view mineral resources in general… Every oil & gas field and every mine eventually becomes depleted; yet our production of almost all mineral resources and our proved reserves of those resources have steadily increased. Groundwater aquifers, unlike oil, gas and most other mineral resources, are continuously recharged at rates relevant to human consumption. In the oil & gas business, reservoir management is essential. It’s the way we maximize our profits. The key is to manage reservoirs so that the maximum volume of reserves can be recovered economically. There’s no reason that groundwater aquifers can’t be better managed.
I agree with you on the cooling. I’m fairly certain that Earth’s climate will hit the end of the current warm phase of the millennial-scale cycle by the end of this century. If the cool down mimics the Little Ice Age, mankind could be in for some rough times; particularly if we eviscerate our economy “tilting at windmills” of global warming.
as the ‘story’ goes: wasn’t manbearpig a student of either erlich or holdren and present when the meeting took place. and further stories…didnt they ask some students to come up with what metals they would use for the bet and algore was part of that?? fairy tale or truth? anyone know?
Don K:
“First problem is that technology has “rerouted” a certain amount of metal consumption into alternate materials. e.g. How much chrome plate do you see on a modern car? If we still used materials in the fashion and amounts that we did three decades ago, the consumption and price of metals would probably be higher”
That’s entirely Simon’s point.
Greylar says:
January 25, 2012 at 6:29 am
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Everytime someone builds a multi-story building, they are making more land.
Chris B says:
January 25, 2012 at 7:01 am
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Multiple studies have shown that size of growth and size of govt are inversely proportional.
The US’s economy was growing much, much faster, decades ago, when govt was much, much smaller.
@David Middlelton: Groundwater aquifers, unlike oil, gas and most other mineral resources, are continuously recharged at rates relevant to human consumption
That´s correct, though, as for the recent findings in Brazil and Norway, oil is the same….and methane (natural gas) is continuously produced as pesky humans and other carbon based creatures keep on defecating.
“The Earth is finite”
Of course, this is true, but if you are trying to imply that the Earth’s resources available to humans are finite as well, it’s only true in the technical sense. The Earth’s resources are essentially (or practically) infinite because we can not destroy matter. Apart from radioactive stuff changing and the tiny amount of stuff we fling into space, all the stuff we “use up” is still here. We just change its form – it does not go away . It can, given the right circumstances, all be reclaimed. (Especially when we talk aboiut metals or water. The earlier post about supply increasing as the grade goes down is excellent. When we talk about stuff like oil, “reclaiming” is a bit tricky… 🙂 … but all the pieces are still here!)
Today’s landfill is the Future’s Mother Lode.
I never thought much of Malthus.
“Africa has plenty of potentially arable land, plenty of water and plenty of resources. Africa just lacks the economic and political infrastructure to realize its own potential.”
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Because its overrun with Marxists. The last thing Marxist want is for anyone to actually get out of poverty,
I will grant you that on the grand scheme of things, humanity worrying about running out of metals is akin to a single colony of ants worrying about running out of rocks and dirt from the top of mount Everest. However… yes you can actually exhaust the metal supply of a planet. Mind you, it would take a race of far greater technological capability than our own, but it can be done. Metals are not formed in earths crust, they’re formed in supernovas, and ONLY there. They manifest in our crust because of internal heat and pressure inside the Earth.
/sorry, its the internet, so someone somewhere hates your generalizations.