Are We Running out of Resources?

Are We Running out of Resources?
April 1, 1999



At current rates of production, according to the U.S. Geological Survey, known reserve bases of gold will last 31 years; mercury, 80 years; tin, 60 years; zinc, 55 years; petroleum, 44 years; copper, 56 years; lead, 41 years; and natural gas, 65 years. The World Bank calculates that between 1970 and 1996 the average real price of all metals and minerals fell by more than 50 percent. Lower prices mean that resources are becoming more abundant, not scarcer.

This good news for humanity was bad news for Paul Ehrlich. In 1980, so confident was Ehrlich of his predictions of imminent depletion that he made a bet with University of Maryland economist Julian Simon that the prices of natural resources would rise over the next ten years. Ehrlich himself chose a basket of five metals--chrome, copper, nickel, tin, and tungsten--with a total price of $1,000. If the real price of the metals were higher than $1,000 in 1990 than in 1980, Simon would pay Ehrlich the difference. If the price fell, Ehrlich would pay Simon.

Ten years later, Ehrlich, without comment, sent Simon a check for $576. The real prices of these metals had fallen by more than 50 percent in just ten years.

But will we run out of tin in 60 years or copper in 56 years? No. "We do not fear that we are running out of the supply of milk because the grocery store holds only a three-days' supply," notes Cato Institute economist Stephen Moore. "Similarly, we should not expect to run out of copper simply because copper mining companies calculate that they have only a certain number of years of reserves. When they use up those reserves, they will have a renewed incentive to local new sources of supply."

The whole depletion debate misses a key insight. People use resources as a means to an end, not as an end in themselves. People don't want oil, they want to cool and heat their homes; they don't want copper telephone lines, they want to communicate quickly and easily with friends, family, and businesses; they don't want paper, they want a convenient and cheap way to store written information. If oil, copper, and paper become scarce, humanity will turn to other sources of energy, other methods of communication, and other ways to store information. Viewed in this light, running out of oil (or copper, or paper) starts to look a lot less frightening.

Ronald Bailey is an independent writer living in Dogwood Valley, Virginia. He is editing Earth Report 2000: The True State of the Planet Revisited, forthcoming from McGraw-Hill in Spring 2000.

Excerpted from "Running Out of Evidence," an article in the November/December 1998 issue of Philanthropy, published by The Philanthropy Roundtable, 1150 17th Street NW #503, Washington, DC 20036; phone 202/822-8333, fax 202/822-8325, e-mail mail@philanthropyroundtable.org; http://www.philanthropyroundtable.org.