Another look at non-renewable resource exhaustion

Abstract

This paper challenges the widely held hypothesis, considered in some circles as accepted scientific consensus, that modern industrial society is rapidly exhausting non-renewable resources. We argue that this paradigm is amiss and use copper availability as an example to demonstrate the problems with this consensus. In the 80 years for which reasonably reliable estimates of copper reserves and reserve life are available, there is no evidence of resource exhaustion. In addition, an analysis of the economics of resource exploration indicates that mining companies will treat exploration as an inventory control problem and trade off using limited capital resources between expanding inventories of reserves and generating current revenue through production. In the case of the copper industry, it is argued that there is little incentive for major copper producers to explore for more resources. Non-producers, exploration companies do have an incentive for expanding reserves, but this does not change the conclusion that new copper resources are effectively not worth looking for. We also conjecture that, except for in rare and temporary circumstances, this conclusion is applicable to many non-renewable resources. Ultimately, this implies that aggregate reserve-life calculations for all types of non-renewable resources are inherently flawed.