Ecological Economics

# Natural resource quality

 Topics:

## Energy and natural resource availability

A natural resource is something that exists in nature which can be used by humans at current economic, technological, social, cultural, and institutional conditions. Natural resources are highly concentrated collections of energy and materials relative to other sources that we do not use. If you walked out your back door with a shovel and starting digging a hole, after a few meters you would hit bedrock—the Earth’s crust. If you chipped off a chunk of that rock, you would find tiny amounts of economically useful elements such as copper, lead, and phosphorous. In fact, you would find minute amounts of nearly all the 92 naturally occurring elements. But you couldn’t set up a viable copper mine in your backyard, or in the vast majority of other locations on the Earth, because the concentrations of copper in those locations are too dilute. The overwhelming majority of copper is produced in a small handful of mines located in the southwestern United States, Canada, Zambia, and a few other locations where copper is highly concentrated.

Table 1

Biogeochemical cycles produce natural resources by organizing materials and energy into forms that are easily accessible. Nonrenewable resources such as copper are scattered randomly and thinly in the Earth’s crust and ocean. The average concentration of an element in the crust is called its crustal abundance. For most elements you would find only a few grams per metric ton of crust. In some areas, however, biogeochemical cycles concentrate metals, minerals and fuels several times greater than their crustal abundance. Rocks that contain high concentrations of metals and minerals metals are called ores. A kilogram of copper ore has 10 to 100 times more copper than the average rock (see Table 1). Mines are located where these unusually high concentrations exist.

Table 2

Renewable natural resources also are characterized by a high degree of organization. Fish are found everywhere throughout the oceans, but fishing vessels do not randomly trawl the open ocean. The open ocean is a "biotic desert" because low rates of net primary production do not support a rich food chain. Oceanic circulation, wind patterns, and river runoff concentrate nutrients near coasts and in zones of upwelling. The average net primary production of upwelling zones is 225 grams of carbon per square meter per year; the open ocean averages just 57 grams per square meter per year (see Table 2). Coastal regions thus support a rich food chain where the concentration of fish can be 66,000 times greater than that in the open ocean. The vast majority of fish caught each year are taken from a small handful of coastal zone fisheries.

This higher degree of order or organization distinguishes natural resources from all other forms of energy and materials on the planet. Most of the world’s agricultural output comes from regions where biogeochemical cycles have produced soil that is far richer in nutrients, water, and other biologically important attributes compared to most of soil on the planet. Most of the world’s timber is harvested from forest ecosystems that produce large, dense accumulations of stored carbon (wood), and most of the world’s drinking water comes from lakes and reservoirs where the planet’s morphology stores large quantities of fresh water before it returns to the sea.

## Best first principle

Figure 1

Resource quality is important because of the pattern in which humans use natural resources. The best first principle states that humans use the highest quality sources of natural resources first. Given a choice, humans will grow crops on fertile (high quality) soil before infertile (low quality) soil. Humans use deposits of copper that are 5 percent pure metal rather than 1 percent pure metal, and deposits of oil that are 1,000 feet deep rather than 10,000 feet deep. Humans harvest timber from forests that are close to a sawmill before forests that are a long distance from the mills. Humans catch fish from large, highly concentrated schools in coastal waters before they harvest smaller, more random collections of fish in the open ocean. As the high quality sources are depleted, lower quality sources must be used. High quality sources require less effort to obtain than low quality resources, so depletion makes it harder and harder to obtain resources.

Figure 2

Differences in resource quality affect the economy via opportunity costs. Opportunity cost is equal to the goods and services that cannot be produced because energy is used elsewhere to produce an alternative good or service. For example, energy used to harvest timber or mine copper cannot be used to heat your home. High quality resources have a lower opportunity cost than lower quality resources. Using ores that are 1 percent copper leaves the economic system with more energy to produce other goods or services compared to using 0.1 percent ores (see Figure 1). Similarly, harvesting fish from productive upwelling zones rather than the open ocean leaves more energy left over to produce other goods and services.

Figure 3

The United States Geological Survey (USGS) characterized all the geologic provinces in the world according to their petroleum volumes (Klett, et al, 1997). Each geologic province is a spatial entity with common geologic attributes. World-wide, 406 geologic provinces were identified that contain some known petroleum volume. The geologic provinces were then ranked by total known petroleum volume in millions of barrels of oil equivalent (MMBOE) within the province. Exclusive of the U. S., the 76 largest geologic provinces in terms of petroleum volume contain 95% of the world’s total known petroleum volumes. The 10 largest provinces alone-just 2.5 percent of the total-contain more than half the of planet’s petroleum (see Figure 2).

Figure 4

The distribution of oil in the United States shows the same distribution pattern where large fields that account for less than one percent of all fields contain more than 40 percent of all the oil illustrates (Nehring, 1981). The pattern of utilization of this oil illustrates the connections among resource quality, the best first principle, and opportunity costs. The average field discovered around the turn of the century contained 20 to 40 million barrels of oil, and the largest contained several billion barrels (see Figure 3). But as the use of oil increased, the big, high quality deposits of oil were discovered and depleted. Today, the average field discovered contains less than 1 million barrels. The decline in quality of oil resources greatly increased the work required to find and extract oil. The cost to discover a barrel of oil in the early part of the century was less than $1.00 per barrel—today it is more than$15.00 per barrel (see Figure 4).

Figure 5

Many fisheries exhibit a similar pattern of development. High quality accumulations of fish are concentrated in upwelling zones near the coast. These populations are targeted first for development, and often are over-exploited. As the density of fish declines due to over-fishing, fishers must exert more effort to catch the same quantity of fish. A prime example of this is George’s Bank, a shallow upwelling region off the coast of Massachusetts that once supported one of the most fertile fishing grounds in the United States. Too many fishing vessels catching too many fish for too many years severely reduced the abundance of important species such as cod and flounder. As a result, fishing vessels have to stay out at sea longer and travel farther distances to catch the same amount of fish. The average trip length per fishing vessel increased from 9 to 13 days over the past several decades; some vessels must travel as far away as the Carolinas to find fish. The decline in quality of the fishery has caused the energy cost of one ton of fish to skyrocket (see Figure 5).