Resource Scarcity and the Human Effort Index

The level of effort required by humans to harvest resources in their raw form and process them into finished goods determines our material standard of living. If the raw resource is easily accessible and rich, then it requires little of our time to acquire it. If the resource is rare and difficult to obtain, then it requires a lot more effort on our part to obtain useful amounts of it. In other words, resource depletion is directly related to accessibility. 

Take copper, for instance. Being a critical ingredient in electrical components, it is a vital commodity without which an advanced human society cannot exist. Fortunately, copper is relatively abundant. 

In ancient times, humans built fires under rocks containing high percentages of copper and the melting ore simply flowed onto the ground. But those few rich outcroppings of natural resources were quickly subject to overexploitation, and after that humans had to expend more and more effort to work increasingly poor ore bodies.

Then came the discovery of oil and the development of technology and processing, which allowed humans to access ore bodies virtually anywhere in the world and with much lower contents of ore. Why? Because oil became very easy to produce, and it contained an incredible amount of energy which we found very easy to apply in thousands of ways. This ease of accessibility began paving the path for resource depletion. 

Oil is a non-renewable mineral as well, and is available in many different forms in reserves requiring many different levels of effort to exploit. In the glory days of the resource, the richest fields of West Texas and the Middle East required only one barrel of oil energy input to yield 100 barrels of output. The EROI, or Energy Return On (Energy) Investment, was 100:1. In the period of the 1930s to the 1950’s real energy costs were falling and supply seemed limitless.

But now in the early 21st century, the easiest and richest of these natural resources have undergone exploitation and any future sources will require increasing effort to extract. The energy required to produce oil from oil sands or tight oil (fracking) reserves is vastly more than the large conventional fields of Texas and Saudi Arabia. In these new, unconventional reserves, one barrel of oil worth of energy will only yield between 4 and 5 barrels of oil for an EROI of 4 or 5:1.

For a reserve with an EROI of 100:1, the net amount of oil produced by 1 barrel of input is 99 barrels output. For a reserve with an EROI of 5:1, the net output per barrel input is 4 barrels, so theo net EROI is 4:1 In 1950, only 1% of energy from oil was used to discover and produce more oil. In the decades to come, over 20% of the energy we produce will have to be used to produce the energy we consume. This is the impact of oil depletion, and we will see the same outcome in the overexploitation of any natural resources. 

Resource Depletion: Long Term Impact

What are the implications for humanity of resource scarcity and the declining productivity of the basic resources bodies upon which our societies are built?

Consider the graph below which illustrates the richness of copper ore grade mines in Canada from the late 1800s to present day. This provides us with a clear picture of resource depletion and its impact over time.

Clearly, the average ore grade is much lower now and clearly, much more effort (and energy) is required to extract copper than was the case 100 years ago. In the late 1800s, copper ore mined in Canada had close to a 4% content of copper. In 2010, the average content was close to 0.5% or less than 15% of what it once was. Going forward, the yields are likely to decline gradually.

Looking at Canadian oil reserves, we see a similar long term profile of resource scarcity. As the richer and more accessible reserves were exploited and exhausted, average yield (EROI) has fallen. Canadian conventional oil fields were much smaller and not as rich as those in the Middle East and therefore have “played out” much more rapidly.

Resource Scarcity And The Alberta Oil Sands

The development of the oil sands in Alberta will see large amounts of oil being produced over the next century, but the oil output will require a much higher energy input. The EROI for the oil sands is in the area of 5:1, which dictates a much higher human effort and higher environmental cost. Oil scarcity due to the overexploitation of natural resources comes at a high price, both economically and environmentally.

Moving forward, the proportion of oil produced from conventional reserves with higher EROIs will decline as those fields play out, and the proportion from the oil sands with its lower EROI will increase. In short, we are moving into the era of more expensive energy. In this way, oil depletion will drive up the costs of energy more quickly than most would like to think.

Below is a graph showing the ratio of energy out per unit of energy in for Canadian oil and gas. Although the fields were small and output declined quickly, the EROI hit a very respectable 70:1 in the early 1970s. As output from the much lower EROI oil sands comes to dominate, the overall EROI is dropping continuously, indicating the long term impact of oil scarcity.

The primary energy used to mine copper in Canada is oil/gas and below is the combined productivity index for Canadian copper.

Inverting Resource Productivity Index to illustrate the human effort involved, we have the chart below.

Natural resource scarcity drives both human effort and long term costs. Human effort was greatly reduced when the ore body was rich and when the energy supply was cheap and plentiful. As both resources have become more scarce, we can see moving forward that real output of most resources, illustrated by copper as the end product, has required increasing human effort. Technology may flatten this curve slightly, but technology to date is fully represented in these charts. The bottom line is that real costs have gone up due to resource scarcity, and they will continue to do so.

Other resources will have different curves but they are all heavily modulated by energy. Very few show a declining Human Effort Index. As effort and costs continue to rise, the impact of resource scarcity will become more keenly felt.

In the 150 years from the early 1800s to the late 1900s, which saw western society’s massive expansion of population, consumption and expectations, energy was continually getting cheaper and more abundant. New resource bases were regularly being discovered and the overexploitation of natural resources was commonGoing forward, the physical reality of declining resource bases means our methods of development and production will be changing- as must our expectations.