U.S. economic growth from 1976 to 1986 : prospects, problems, and patterns

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U.S. economic growth from 1976 to 1986 : prospects, problems, and patterns
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Table of Contents
    Front Cover
        Page i
        Page ii
    Letters of transmittal
        Page iii
        Page iv
        Page v
        Page vi
    Table of Contents
        Page vii
        Page viii
    Resources available and growth
        Page 1
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    Mineral raw materials and the national welfare
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    Resource substitution
        Page 82
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    Resource and energy substitution
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    Natural resources policy, 1976-86
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Full Text






94thCnrs
th ongess JOINT COXMITEE PRINT '-:
2dSession C









Volum D%..ucs. n Eeg












STUDIES

PREPARED FOR THE USE OF THE

JOINT ECONOMIC COMMITTEE

CONGRESS OF THE UNITED STATES













NOVEMBER 16, 1976







Printed for the use of the Joint Economic Committee


U.S. GOVERNMENT PRINTING OFFICB 78-653 WASHINGTON : 1976


For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 Price $1.70

























JOINT ECONOMIC COMMITTEE
(Created pursuant to sec. 5(a) of Public Law 304, 79th Cong.)
HUBERT H. HUMPHREY, Minnesota, Chairman RICHARD BOLLING, Missouri, Vice Chairman
SENATE HOUSE OF REPRESENTATIVES
JOHN SPARKMAN, Alabama HENRY S. REUSS, Wisconsin
WILLIAM PROXMIRE, Wisconsin WILLIAM S. MOORHEAD, Pennsylvania
ABRAHAM RIBICOFF, Connecticut LEE H. HAMILTON, Indiana
LLOYD M. BENTSEN, JR., Texas GILLIS W. LONG, Louisiana
EDWARD M. KENNEDY, Massachusetts OTIS G. PIKE, New York
JACOB K. JAVITS, New York CLARENCE J. BROWN, Ohio
CHARLES H. PERCY, Illinois GARRY BROWN, Michigan
ROBERT TAFT, JR., Ohio MARGARET M. HECKLER, Massachusetts
WILLIAM V. ROTH, Ja., Delaware JOHN H. ROUSSELOT, California

JOHN R. STARK, Executive Director
RICHARD F. KAUFMAN, GenerGal Counsel

ECONOMISTS

WILLIAM R. BUECHNER ROBERT D. HAMRIN PHILIP MCMARTIN
G. THOMAS CATOR SARAH JACKSON RALPH L. SCHLOSSTIN
WILLIAM A. Cox JOHN R. KARLIK COURTENAY M. SLATM
Lucy A. FALCONN L. DOUGLAS Las GnoaRG R. TrtLa

MINORITY

CHARLES H. BRADFORD GEORGE D. KauMuAAR, Jr. M. CATHuaN MILLEa
MARK R. POLICNSKI
(H)











LETTERS OF TRANSMITTAL

NOVE MER 12, 1976.
To the Members of the Joint Economic Committee:
Transmitted herewith is the fourth volume of the Joint Economic Committee study series entitled "U.S. Economic Growth From 1976 to 1986: Prospects, Problems, and Patterns." This series of over 40 studies forms an important part of the Joint Economic Committee's 30th anniversary study series, which was undertaken to provide insight to the Members of Congress and to the public at large on the important subject of full employment and economic growth. The Employment Act of 1946, which established the Joint Economic Committee, requires that the Committee make reports and recommendations to the Congress on the subject of maximizing employment, production and purchasing power.
This volume comprises five studies on the relationship of resources and energy to future economic growth. Four of the papers focus on the issues of resource and energy scarcity and also substitution. The other is on the Federal Government's role in the resource and energy sectors of our economy. These studies have been done by Dr. John McHale, Dr. Preston Cloud, Prof. William Vogely, Profs. Lee Schipper and Thomas Long, and Prof. Allen Kneese. The Committee is indebted to these authors for their fine contributions which we hope Will serve to stimulate interest and discussion among economists, policymakers and the general public, and thereby to improvement in public policy formulation.
The views expressed are those of the authors and do not necessarily represent the views of the Committee Members or Committee staff.
Sincerely,
HuBERT H. HUmrrPHEY,
Chairman, Joint Economic Committee.

NOVE MBR 8,1976.
Hon. HuDmT.H. Hu-brmr y,
Chairman, Joint Econom i Committee, U.S. Congress, Washington, D.C.
DIAR MR. CHAIRMAN: Transmitted herewith are five studies entitled "Resource Availability and Growth" by Dr. John MdHale, "Mineral Raw Materials and the National Welfare" by Dr. Preston Cloud, "Resource Substitution" by Prof. William Vogley, "Resources and- Energy Substitution" by Profs. Thomas Long and Lee Schipper, and "Natural Resources Policy, 1976-86" by Prof. Allen Kneese. These five studies comprise volume 4 of the Joint Economic Committee's study series "U.S. Economic Growth From 1976 to 1986: Prospects, Problems, and Patterns." This series forms a substantial part of the Joint Economic Committee's 30th anniversary study series.
(III)





IV

Taken together, these five papers present an excellent synopsis of
current thinking on the questions of resource and energy scarcity and substitution possibilities. What is made quite clear is that there is still 1 wide divergence of opinion on these issues and how economic growth will be affected by the availability of resources and energy in the future.
Professor Mellale concludes that in overall terms, there are no foreseeable absolute scarcities which might constrain economic growth in the- next 10 years. Thoug()h the U.S. industrial materials outlook is goOd. the main problems are likely to come from economic availability rather than physical shortage. Various factors discussed in the papers suggest that as higher living standards are met for more people, material demands peak out below maximal satiation, and satisfaction is sought through less material means. The paper emphasizes that many of these changes towards alternative growth patterns cannot be taken care of by conventional market forces but will require a restructuring of incentives and regulatory practices to reward the kinds of new public and private initiatives which will be required.
After examining the various types of resources, Dr. Cloud concludes that only a few geochemically abundant substances are both so far from the energy barrier and so widely distributed that there is little danger that they will cease, to be available. For many others, however, recurrent shortages and for some economic depletion can be predicted within the first half of the 21st century. Based on this, he argues that we need to generate a less materials-consuming set of demands while striving to satisfy genuine needs. He gives 10 suggestions for minimizing or avoiding shortages of mineral supplies. He stresses that the only kind of growth that is both beneficial and capable of being sustained by national and world resources is growth in enhancement of the human condition. Two suggestions are offered for attaining this: (1) Establish a program of sabbatical, educational and advanced training leaves for all members of the working force and (2) establish an array of new urban grant universities. iProfessor Vogely's analysis led to three basic conclusions. The first that within the time frame of 1975 to 1985, and with only slightly diminished certainty within the time frame 1975 to 2025, the physical characteristics of materials availability will not cause any increase in the real cost of materials to the world economy. Thus, physical constraints, on production of materials are not a threat to continued economic growth. The second conclusion is that the process of material substitution is extremely complex, and the traditional economic theoremn that it is a function of relative prices is inappropriate to understand the process. Finally, there are serious emerging iinstitutional. problems surrounding the production and use of materials and these issues should be subject to intensive research and evaluation to develop proper governmental policies.
Professors Lo6ng and Schipper derived 10 principle conclusions, among which were the following. The crucial issues regarding resource scarcities concern the rates and prices at which rsurces will be available and the political constraints to using them in ever increasingr amounts. They also assert that we need to incres the flexibility of the economic system to respond to sudden resource supply




V

disruptions through broadening our understanding of and technical potential for resource substitution. On a macroeconomic level, the authors assert that the substitution of productive factors should be viewed in a unified framework that permits exploration of the interdependencies of capital, labor, and material and energy resources, rather than solely within a value added formulation that focusses on the tradeoffs, between capital and labor. Finally, they convey data which supports the conclusion that international comparisons of energy requirements in industrial production show that many opportunities exist for energy conservation in the U.S. through the introduction of more advanced technologies. .Professor Kneese's, basic thesis Is that our natural resources policy is a matter for deep concern. He feels that it is inconsistent, often outdated,, and grossly over dependent on direct regulation vis-a-vis modifications in our defective system of economic incentives. What results from the marketing imperfections and defective public policy is an excessively rapid rate of resource extraction, too much discharge of residual materials to the environment, and an over dependence on foreign sources of supply of some natural resources. He stresses that a coherent policy program is needed, one which recognizes the interrelated nature of, the economic sources of, and economic remedies for, our resource problems.
The Committee is deeply grateful to these authors for their insighitful papers. Dr. McHale is with the Center for Integrative Studies, SUNY at Binghamton, Dr. Cloud is with the U.S. Geological Survey and the Department of Geological Sciences, University of California at Santa Barbara, Professor Vogely is in the Mineral Economics Department at Pennsylvania State University, Prof. Thomas Long is with the Resource Analysis Group at the University of Chicago while Professor Schipper is with the Energy and Resources Program, University of California at Berkeley, and Prof. Allen Kneese, is on the economics faculty at the University of New Mexico.
Dr. Robert D. Hamrin of the Committee staff is responsible for the planning and compilation of this study series with suggestions from other members of the staff. The administrative assistance of Beverly Mitchell of the Committee staff is also appreciated.
The views expressed are those of the authors and do not necessarily represent the views of the Members of the Committee or the Committee staff.
Sincerely,
JOHN R. STARK,
Executive Director,
Joint Economic Committee.




















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CONTENTS

Page
Letters of transmittal ------------------------------------------------ III

RESOURCES AVAILABLE AND GROWTH
By John McHale
Summary ------------------------ t" ---------------------------------- 1
Introduction --------------------- ----------------------------------- 4
1. The context of change --------------------------------------------- 6
2. Resource use and technological change ------------------------------ 8
S. The energy outlook ------------------------------------------------ 16
4. The materials outlook --------------------------------------------- 32
Concluding remarks -------------------------------------------------- 48

MINERAL RAW MATERIALS AND THE NATIONAL WELFARE
By Preston Cloud
Summary ----------------------------------------------------------- 51
Introduction -------------------------------------------------------- 55
Entropy, economics, and mineral production --------------------------- 58
Mineral deposits, reserves, resources, total stock ----------------------- 61
Extractive products, economic growth, market signals ------------------ 63
Potential mineral resources ------------------------------------------- 65
Shortages anticipated and their effects --------------------------------- 72
Avoidance of shortages ----------------------------------------------- 74
Economic versus physical availability ---------------------------------- 77
Restricting economic norms, values, and habits ------------------------ 78
References cited ------------------------------------------------------ 80

RESOURCE SUBSTITUTION
By William A. Vogely
Summary ----------------------------------------------------------- 82
Part I. Resource adequacy -------------------------------------------- &3
Part 11. The process of substitution among materials ------------------- 86
Part 111. Institutional problems -------------------------------------- 90

RESOURCE AND ENERGY SUBSTITUTION
By Thomas Veach Long II and Lee Schipper
Summary ----------------------------------------------------------- 94
A. Material-material and energy-energy substitutions ------------------ 98
B. Substitution of materials and energy ------------------------------- 101
C. The substitutability of energy and employment in the industrial sector- 103 D. Substitution or complementarity of capital and natural resources ------ 105 E. The tradeoff between energy and time ------------------------------ 108
F. Beyond substitution in production-the consumer's role -------------- 110
G. Energy and gross national product -------------------------------- 11-9.
H. Consumer choice and market penetration ---------------------------- 115
Conclusion ---------------------------------------------------------- 120
Bibliography --------------------------------------------------------- 191
(VU)






viii

NATURAL RESOURCES POLICY, 1976-8
By Allen V. Kneese rg
S u m m ry ---- --- ---- --- ---- --- --- ---- --- ---- --- ---- --ag12
Snrummary ------------------------------------------------------ 122
The market system and its limits: The connection between resource use and environmental problems --------------------------------------- 125
Environmental policy----------------------------------------------- 130
Energy policy---------------- ------- ------------------------------ 131
Additional issues for public policy in the energy area -------------------- 14 6
Non-fuel minerals-------------------------------------------------- 150
MN-acro-economic issues -------------------------------------------- 154
Recommended resource policies and Employment Act goals-------------- 156
Institutional issues----------------------------------------------- 158













RESOURCE AVAILABILITY AND GROWTH

By JOHN MdHALE*


SUMMARY
The central question in the U.S. resources and growth debate is not whether we can sustain traditional growth in view of apparent resource depletion and scarcity-but how growth directions themselves are changing in society and "where emerging patterns of resource supply and use now qualify the conventional depletion and scarcity
argumnts.1. The Cluillenge of Change

(a) In general terms:
Overall resource availability will continue to expand with regard to reserves expansion, recovery, substitution and efficiencies
of use.
Growth demands will shift through changes in social attitudes
and values--probably with less emphasis on wider consumer product ranges: more on human systems and services needs. With a stabilising population, growth may be less dependent upon increased resource demands but more on human resource
development.
.Greater requirement for more rapid social and organisational
innovation to cope with new socio-economic, challenges of increased complexity and interdependency, both domestic and
international.
U.S. society appears to be moving from a short range, autonomous and "means" outlook towards a longer range, interdependent, "ends" orientation-thus may not only be receptive to different growth patterns but more willing to accept longer-term costs
and benefits of alternative growth policies.
(b) Resource use and technological change:
The leading edge in industrial growth and development has
shifted to electronics, telecommunications, computers and new material ranges and processes. These tend to be less labor intensive, use less energy and other resources per unit output and have lower
environmental impacts.
This coincides with the post-industrial shift hypothesis where
industrial productivity is maintained with less manpower, decreasing energy and materials inputs whilst labor force and eco*Director, Center for Integrative Studies, School of Advanced Technology, State University of 'New York, Binghamton, N.Y.






2

nomic emphasis moves towards a services oriented economy. This implies changes in growth areas, institutions and resource needs which are essentially different from traditional directions and require new configurations of public and private enterprise with
shifts in capital, tax and R. & D. investment.
A new dimension of resource range emerges with information
as resource which has profound systemic implications for the
structure of the economy and society.
2. The Energy Outlook
In next decade terms, the most critical element will be the degree of external dependence for oil and natural gas. Domestic reserve estimates range between 10-20 years at current consumption rates. Coal's potential is greater with a very much longer time horizon. Nuclear power is unlikely to add significantly within the decade and requires a "second look" in view of potential long term hazards. Alternative energy sources need higher priority by investment and development to augment supplies:
Constraints on growth are cost and time dependent rather than
being based on actual scarcity. Exploration and exploitation of new fields could improve the supply picture in five to ten years: Given time and increased R&D, higher recovery rates of submarginal oil could add considerably to domestic reserves. Both will require increased energy pricing and changes in taxing structures to provide the necessary capital-but higher pricing should contain tax revenue components earmarked for direct investment
in R. & D. and low energy growth areas.
Estimates of demand and supply are policy contingent. Consumption can be reduced significantly, (i) through increased industrial efficiencies and encouragement of higher energy intensivity-of-use. (ii) by more rigorous energy accounting and efficiency incentives. (iii) by disincentives towards over-stimulation of consumer demands, e.g. by taxing advertising, automobiles power/size/energy consumption etc. and diverting revenues into R. & D. (iv) by better conservation techniques in construction and transportation uses, and more "systemic" design of residential uses.
In overall terms, it is estimated that the U.S. energy budget
could be reduced signiflcantly-without appreciable effects on living standards and economic growth. This would require consumption restraints as above with more comprehensive review of producer/consumer practices and a rigorous overhaul of direct and
indirect Federal subsidy programs in the energy area.
The role of the market. There is no "free" energy market in the
classical sense. Given its hybrid private/public structure the market per se is particularly unwieldy in its ability to provide swift and equitable "across-the-board" adjustment to strains and shortages in supplies. The private sector is necessarily too short-range nnd proprietary interest oriented to give anticipatory guidance on longer-term energy policy. No sy~ stem of incentives or re-






3

strarnts, applied piecemeal, is likely to aid the market's capacities in these respects--n the absence of a more coherent and comprehensive federal energy policy. The development of such a policy should include wider consumer interests and contain specific elements for monitoring, on a more continuous basis, the effects
past and present of legislative action.

3. The Materials Outlook
In overall terms, there are no foreseeable absolute scarcities which might constrain growth in the next ten years. World and domestic reserves are ample, in most cases, and the supply picture does not indicate any severe price constraints other than those which may emerge in market collusion or commodity price adjustments arising from political factors in the world economy:
As with energy, one of the key policy needs is more adequate
and reliable information on reserves, supply and materials usage.
Where some reserve margins, expressed in years of supply seem
slender, rates of economic recovery, growing intensivity-of-use, substitution and recycling capacities extend them considerably.
The "in-use reservell pool is also a neglected factorin estimation.
Increased prices may increase manufacturing costs but in most
cases, raw materials now constitute a relatively small fraction of
such costs.
Growth in the capacity to "do more with less" is quite marked
in U.S. materials use per function. This coincides again, with the post-industrial shift and paces the comparative decline in energy
and materials components in GNP growth.
Though the U.S. industrial materials outlook is good. the main problems are likely -to come therefore from economic availability rather than physical shortage. Healthier directions for U.S. materials policy-in terms of reducing social, economic and environmental costs-should be sought in policies which emphasize:
Alternative process paths should be sought which optimize materials use and indicate specific reductions in energy and environmental costs.
Increased R&D in material use technologies and substitutions
at each stage in the materials cycle--with more rigorous energy
input accounting.
The role of the market. Again not a free market, but differing
from energy in the wider raw materials, processes and products.
It is also a complex and hybrid structure in which government intervenes to a considerable degree via taxing, regulatory and subsidy procedures. In critical areas of supply it is unlikely that the commercial market alone could be relied upon to provide sufficiently swift adjustments to strains and scarcities. More systematic sets of materials policies will probably require more lateral integration of various industrial sectors and a closer working relationship between government and consumer interests.






4

4. Towards a Regenerative Resource System
In terms of more adequate energy and materials' policy we need to move, in the next decade, towards a system which operates on a metabolic model. This would be one which treats the overall flows of energy and materials in society so as to account for all agri-industrial and other uses and devise ways to optimise at larger systems' levels, linking up wastes and byproduct effluents so that they feed back regeneratively into the system-instead of being discarded at great socio-economic and environmental costs.
Many of the policies for organizing such a system are under consideration:
Policy components for approaching such a system are already
extant in the many hearings which have examined the structure of the energy and materials industries and are also present, for example, in the 1973 National Commission Materials Policy report and other documents. In general, they would comprise a set of incentives for the re-use of materials, for wastes utilisation and
by-product rationalisation to encourage optimal resource use.
One specific measure may be to set up annual or biennial
"growth" reviews which, paralleling various Presidential reports, would give overall energy, materials, socio-economic and environmentalbalance sheets for continuous growth direction appraisalas well as evaluating the impact of ongoing policies.
5. Concluding Remark
These counter the prevailing view that growth in advanced societies is predicated on continuation of high energy and material demands and consumption-leading inevitably to resource scarcity and high environmental deterioration:
Various factors are advanced to suggest that as higher living
standards are met for more people, material demands peak out below maximal satiation and satisfaction is sought through less
material means.
Overall, the kinds of social and value changes ongoing within
U.S. society, accompanied bv various technological and resourceuse shifts, suggest not only that growth directions will change but that growth requirements in the next decade and beyond could be satisfied with less per capita resource use, lower environmental
impacts and expanded productivity.
It is emphasised that many of these changes towards alternative growth patterns cannot be taken care of by conventional market forces but will require a restructuring of incentives and regulatory practices to reward the kinds of new public and private initiatives which will be required.
INTRODUCTION
The assessment of resources available in relation to growth in the next decade, and beyond, calls into question many of our orthodox assumptions both with regard to resources themselves and the kinds of growth which they may subtend.







Our sets of working loremises, and assumptions pre-select the kinds of problems addressed, the data which is available and the end conclusions reached. A central aspect of the resources and growth discussion is, therefore, conceptual. Resource scarcity or abundance is dependent upon the state of our knowledge, and the perception of our needs. Only a short time ago, nuclear energy was a laboratory phenomenon, aluminum a scarce metallic curiosity and many of today's materials were regarded as waste impurities in other ores. As may be expected in a period of rapid change, our conceptual frames of reference have often not kept pace with the changes themselves. This is particularly important when we discuss U.S. economic growth using the relatively short term horizon of the next ten years.. Several points should be borne in mind:
The time scale of a decade, past or present, may be inadequate,,
given the kinds of changes which have perturbed that economyand will continue to perturb it in the more, distant future. Manyof our present crises stem from habitual resort to short term.
perspectives on what are essentially long term problems.
Decisions made for practicality and expediency in the, next yearor in five to ten years can commit us to large scale energy an,4 materials usage patterns whose full consequences may not be felt for another ten or twenty years. Our current dependence on oil as major fuel is an example of this kind. Urgent decisions required in relation to nuclear energy generation have already exposed problems of radioactive waste accumulations whose disposal and storan problems extend over several generations.
Federal and Lical governments are already actively encouraging technology assessment. The need for similar assessments in the long term planning of resource uses is now urgent and should deal with the whole spectrum of consequences economic, social,
political and environmental, both locally and internationally.
Resources assessment does not fit easily into the conventional
economic frame. With specific regard to energy and. materials assessment, economic valuation and pricing are not reliable guides as the market is not "free" in the classical sense but subject to constraints and distortions through subsidies, taxes, and other
regulatory practices.
The growth debate itself cannot be confined to considerations
of physical resource availability, even when these take account of market mechanisms and fiscal structures. The debate extends to questions of shifting values and attitudes, changes in life styles, social expectations and environmental concerns that indicate alterna.tive patteims of growth which may or may not be met within
our present institutional frameworks.
The shock waves of recent upheavals in energy and materials
supply, environmental pollution, urban problenis, inflation and unemployment, which give rise to the need for this kind of decade assessment, are not singomlar and isolated physical crises per se.
They are evidence, rather of an institutional crisis. Their dis-.
continuous impacts derive from particular sets of institutional' arrangements, of piecemeal modes of economic, industrial and






6

fiscal operation. which have been encouraged as expedient in the short range. It is only when their dysfunctional effects become apparent in the longer term that they emerge at crisis levelsand are then displaced into separate compartments such as the
"energy crisis,. the. "urban crisis" and so. forth.
Serious consideration of the prospects, problems and patterns of U.S. economic growth cannot be limited therefore, even in this chapter, to the more immediate aspects of resource scarcity or abundance, pricing mechanisms, market constraints and regulatory procedures. These questions need to be subsumed within a brief review of some of thee ranges affecting long term growth.
1. THE CONTEXT OF CHANGE
The key dimensions to be considered here are the changes in energy and materials usage, the technologies through. which these are effected, their environmental consequenses and the perception of socioeconomic needs, demands and requirements which vary according to growth and change in population.
The latter third of the twentieth century has been particularly characterised as the period of abrupt change and discontinuity With the past... .
Change itself has changed. Where previously discrete, relatively separated in time and limited in the numbers of people affected, today's changes are increasingly interlinked in multiple feedback relationships. Within living memory, series of sicentific, technological, social and economic changes have impacted one upon the other. It is unlikely that the pace, frequency range and scale of such changes will alter significantly in the next decade. Just as in the past, it is highly likely tat many abrupt changes will occur unanticipated.
Increased frequency and narrowing intervals between scientific discoveries, technological development and large scale use have become particularly apparent in many sectors of resource use in the past decade. Where it used to take ve or ten years for a product to move from research to production and widespread distribution this process is now often dramatically shortened.
Many consumer products have also moved into more rapid obsolescence cycles and degrees of expendability, e.g. from buildings and cars to refrigerators, Kleenex, clothes and food packaging. Where this may be defensible in terms of innovation and economic prosperity it may be acutely dysfunctional in environmental impact and socially efficient resource usage unless accompanied by more long term anticipatory planning.
growthh in human numbers and concentration on the world level will continue. In the U.S. case, however, demographic figures show that population is relatively stabilised. Population increase in the coming decade will not draw down significantly on resource use. However, attitudinal changes within the population could change resource availability ad consumption patterns in important ways, e.g. through continued environmental concern, increase in consumerism and changes in quality of life perception.




7

Population pressures and rising demands for equity in the lesser developed countries could still impact considerably on the world flow of resources critical to the U.S. as more OPEC type resource coalitions and market blocks emerge in the changing international economic order. As standards of living improve in other countries we may assume greater competition for physical resource access and control. The effect of this may be offset in the U.S. by virtue of the size of its own resource base, by stabilisation of population and by saturation and increased efficiency in resource usage.
The increases in scale, complexity and interdependency of human support systems and services is an important resource change factor. In terms of technological systems scale, the Wright brothers, in 1903, could introduce a new technology, the aeroplane, at a level where it could be designed, built and tested by two men. A comparable technological development in the past decade could be the Appollo project requiring approximately 300,000 people, thousands of parts, subassembly operations and well over one million times the cost.
The scale of many of our globally operative technological systems in production, distribution, transportation and communications now require and are dependent upon the resource range of the entire earth for the metals and minerals fom which they are built and the energies which they need to run. Many single industrial products draw similarly on a range of globally distributed resources for their manufacture. No single nation is, therefore, now wholly self-sufficient in industrial resources.
Large economies of scale in technological undertakings have, in many cases, gone beyond the capacity of individual nations to build, maintain and develop further, e.g. the Anglo-French Concorde. Similarly, at the local level, many of the socio-physical maintenance services in society such as health, housing, transportation, energ supply begin to go beyond the point of "economical" provision and control by private enterprise and increasingly require government support and intervention.
It is not surprising that the most swiftly growing and powerful sectors of the world economy are no longer national undertakings but multinational corporate entities. These organisations are unprecedent-, ed in size, in their globally interlocked operations and their autonomy from national control. More important decisions regarding resources availability and usage are probably made in such organisations than in national governments.
The local growth and complexity of our technological support systems also has been accompanied by critically interactive relationships. Relative minor malfunctions, such as an electrical "brownout", a transportation strike or a material shortage can cascade swiftly through a whole industry, a city or affect international trade relations.
Our investment in large scale systems is further complicated by its effect on innovation and change. We already find ourselves committed to out-moded systems in production, transportation and other areas where necessary changes may be hampered by the inertia of the system and the relatively enormous costs of change.





8

The new magnitudes of these systemic ramifications and interdependencies from the local to the global level are but imperfectly understood and urgently require more research, anticipatory assessment and long range planning.
Summary Note.-Some salient implications of such, changes for future growth patterns may be noted as follows:
The pace of technological change, with regard to resource recovcry, reserves expansion, substitutions and efficiencies of use and re-use, will increase with more visible pressures of pricing, competition and interdependence. Longer range coordinate federal policies of incentives and controls will be required to aid beneficial changes and conserve resource options. Whilst technical innovation advances there is an accompanying requirement for more rapid social and organisational innovations to cope with the new economic challenges of increased complexity and interdependency
both domestic and international.
Shifts in growth demands may be expected through changes in
social attitudes, standards and values. These appear to place less emphasis on wider consumer product ranges but more on improvements in the quality of socio-physical maintenance systems e.
housing, health and environmental services, transportation an~d social services. Meeting such changed demands will shift the ba-lance of public and private provision of goods and services-and will require different managerial, regulatory and administrative
systems.
The overall orientation of U.S. society ma~y move more rapidly
from being short range, autonomous and meansn" oriented towards a longer range,interdependent, "ends" oriented outlook.
This has implications for growth policies which go beyond our immediate questions of available resources to support conventional growth patterns as the society may not only opt for different kinds of grrowth but be more willing* to assume the longer range
costs and benefits of alternative growth options.

2. RESOURCE USE AND TECHNOLOGICAL CHAN-GE
The relative abundance or scarcity of resources is crucially related to technological development. We may distinguish, for present purposes, three major phases of this development with their different sets of typical resource use patterns, environmental impacts and related socio-economic changes. (See figure 1.)





9


FIUia 1

PHASES OF TECHNOLOGICAL DEVELOPMENT

I. Expanson of human range in the Electromagnetic Spectrum




TIId









Threshokld
7Tt






Approximtate i1 50 1900 19 50 1970 2000
Time Scable I


Tre-nustrial Phases of Industrial





Period Development:
FIRST SECOND THIRD
Ib














Steel Light metals Composites
Railroads Plastics Industrial microbiology
Petroleum Electronics Bionics
Automobile Nuclar fission Mariculture.
Electrical generation Computers Biochemical industries
Etc. Airlines Nuclear fusion
Aerospace Etc.
Etc.

S Locally balanced. High visible impact due to fossil fuel use. Great increase Impact decreases as new r3nges E but often intensive in materialst extraction and resource dep|ltive practices. of technology tend to be role due to agricultural High waste to production ratios. tivaly non-resource depletive,
3 practices. d-affor- using less energy and materials.
o estation for fuels Trend towards micro rin;aE etc. I turisation; more efficient regereative practices, high waste
rouse and high recycle rates.
CC
W3


















Source: McHale, John and Magda Cordell MeHale, Human Requirements, Supply Levels and Outer Bounds : A Framework for Thinking About the Planetary Bargain. A Policy Paper prepared for the Aspen Institute for Humanistic Studies, Program in International Affairs, 1975.

The first phase encompases the heavy industry developments incident on the later stages of the Industrial Revolution. These were typically steelmaking, railroads, automobiles, centralised electric generation, etc., and were based on the fossil fuels:coal, oil and natural gas. This type of industrial practice is highly resource depletive, with rela78-653--76------2






10

tively low efficiency of performance per input of energy and materials and has gross environmental impacts through its effluents and other by-products. As developed historically in terms of large centralised facilities to exploit economies of scale, this area of industrial development is heavily invested in large plant, established market patterns and tends to be less flexible in its capacity to adapt and change.
The second phase of industrial development emerges most clearly after World War II, accompanying the development of computers, large scale air transport and the emerging set of new electromagnetic spectrum industries, i.e. electronics, tele-communications and nuclear energy eneration. The materials base expands more in the direction of the light metals-aluminum, titanium, magnesium, etc., and their alloys-the rare earths and plastics. The materials supply base becomes not only more expanded but more complex with a much wider variety of basic elements being used. This phase typically uses less energy and less material by weight per function or product with successive micro-miniaturisation of components. It tends, by comparison with heavy industry, to be more economical in energy use and to have a much lower impact on the environment.
The third phase appears to move towards the increased fusion of biological and technological capabilities, e.g. biomics, industrial microbiology applications in the more efficient use of microbial populations to produce energy, food and process materials. There is increased attention to the genetic tailoring of food stocks and modes of "organic" technical growth using renewable resource stocks like forest and agricultural by-products. Its materials base tends towards new ranges of metallic and non-metallic composites and other hybrid materials coupled with more sophisticated electronic and electro-chemical processing. The energy directions move towards less centralised non-fossil fuel alternatives such as those associated with solar power, fuel cells, hydrogen and other synthetic fuel sources with the longer term possibility of nuclear fusion techniques for larger scale power generation.
In practice, the three phases overlap considerably with different rates of growth.
The overall profile of materials entering into volume production over time gives another dimension to these
giesaoterteepbases of devlpeta industrial usage expands towards fuller use of the whole table of elements. (See figure 2.)
These developmental phases have been linked to structural changes in society from industrial to post-industrial forms. This does not mean that the society is less technologically or industrially based, but that there is a shift in the economic wealth generatng sectors in terms of manpower, investment and productivity.
The United States, to some extent is the first post-industrial nation in which the majority of the labor force is not engaged in either agriculture and extractive industries, or manufacturing, or a combination of both, but essentially in services-that is trade, finance, real estate, education, research, administration and government .... It is a change equally in the character of the societies themselves.,
I The Management of Information and Technology: paper prepared for 11th meeting of the Panel (n Science and Technology, Committee on Science and Astronautics, U.S. 11Iwoei' of Representatives, 1970, Moderator's Remarks, Daniel Bell, p. 14.











FIGURE 2


....... ENTRY OF SELECTIVE METALS INTO
1880-1900 Copper Manganese VOLUME PRODUCT-CONSUMPTION U.S.
_I Lead Tin Zinc
D 9 [Chromium
1901-192 Nickel

Aluminum
1921-1930 luminum
SMolybdenum

1931-1940 Cadmium Nagnesium
_Tungsten

1941-1950 1 eryllium Cobalt Hafnium Selenium Silicon Titanium

1951-1960 Bismuth Columbium Germanium Tantalum Tellurium Vanadium Zirconium

1961-973 Gallium Platinum Group Yetals 1961-.9 Rare Earth inerals-Metals

PERIOD QUANTITY (TONS) PERIOD QUANTITY (TONS)

A. 1880-1900:. E. 1941-1950:
Copper 100,000 Silicon 500,000
Lead 100,000 Titanium 250,000
Manganese 100,000 CuoLa It 2,500
Zinc 100,000 1,er ilium 1,000
Tin :10,000 .Selenium 250

B. 1901-1920: Hafnium 2
Chromium 10,000 F. 951 -1960:
Nickel 5,000 Zirconium 30,000
Vanadi ,n 1,300
C. 1921-1930: Bismuth 750
Aluminum 100,000 Columbium 500
Molybdenum 500 Tantalum 250
D. 1 1Tellurium .100
D. 1931-1940: Germanium 0
Cadmium 3,000
Magnesium 1,000 G. 1961-1973:
Tungsten 1,000 Rare Earth Minerals 10,000
Platinum Group Metals 50
Gallium 5



Source: Center for Integrative Sttudies.

As with agriculture, the extractive and production sectors become less labor intensive whilst maintaining and increasing productivity
and, in some cases, less energy and materials intensive. The transition, however, is not merely a change in the economic and industrial base towards a service economy but implies as massive an institutional shift as that from an agriculturally based to an industrially based society.
In the Fig. 3 describing these waves of development, we have extended the "third generation" schematic line, back historically as many of these "alternative technology" paths have quite ancient pre-industrial origins (e.g. bee keeping, silkworm cultivation, etc.). These alternate tracks have been accorded little recent attention due to the emphasis on "machine" industries. We might also introduce in this
third generation development many other ranges of emerging "soft" technologies modeled on natural processes, e.g., behavioral technologies, various "mixes" of man/machine systems, etc.






12

FIGURE 3

PHASES OF INDUSTRIAL GROWTH




FIRST PHASE ..... ..
Sleet
Ptoleum SECOND PHAS9
Automobile Light metals
Electricalgeneraton Plostics THIRD PHASE /
etc. Electronics Composires
Nuc. fiti';on Inust. microhiology
Computers Bionics'
Airlines Mariculture e
Aerospace fiochem. indust.
etc. Nuc. fusion
etc. >II
PR E Industrial
INbUSTRIAL flcvolution INDUSTRIA. 1950-1970 POST-INDUSTRIAL
Source : Center for Integrative Studies.
We may note one single distinction between the old and new forms. The new patterns of industrial development tend to be relatively nonresource depletive, with lower environmental impact, compared with the older highly resource depletive and environmentally impactive forms.
This shift is still difficult to assess in resource and economic growth terms. Many service sectors are still energy and materials intensive, and have a different tax and subsidy relationship to the economy than the heavy industrial base. Some require high technology inputs with high capital costs where such technologies also change with greater frequency, e.g., in medical equipment computers and the diffusion of electronic systems.
Many of our anxieties and crises regarding possible energy and material shortages, changes in employment investment and fiscal structures, however, may result from a failure to understand these fundamental changes and to continue to regard the society as essentially industrial and production oriented in terms of economic wealth generation.
Summary Note.-The implications for future growth with regard to the outlined shifts in industrial technology are:
The leading edge in industrial growth, productivity and wealth
generation is no longer held by the older heavy industries but already shifted over into the "second phase" developments in electronics, telecommunication, computers and new material
ranges. To retain its initiative in this phase, the U.S. will have
to invest more in capital and R. & D. intensivity in these areas.






13

Third generation technological developments noted suggest pssible growth breakthroughs in advanced applications and fusions of biological, agri-industry and materials design components which may constitute as large a market base as electronics, plastics and computers.
The third challenge obviously lies in devising new institutional
mixes of public and private enterprise to meet increased human services demands which have been typically low technology, labor intensive areas but represent growth markets both for new technical applications and entrepreneurial functions. These would depend less on physical resource demands but draw more on human resource development and managerial expertise.

Inom~aion as Resource
Information treated as basic resource has certain unusual proper-ties:
(i) All other resources are ultimately dependent upon information and organised knowledge for their recognition, evaluation
and utiisation.
(ii) As resource, information is not reduced or lessened by
wider use distribution or sharing, like other resources-it tends
rather to gain in the promes.
Where other resource bases such as raw materials and energy are, by comparison, potentially depletive, information and knowledge are inexhaustible. "
***A preindustrial society is essentially one based upon raw materials, as a game against nature, and in which there is diminishing Teturn. An industrial society is organised primarily around energy and the use of energy for the productivity of goods. A post-industrial. society Is organised around inf ormation and utilization of Information .. as a way of guiding the society.'
The properties of this new dimension of the resource range have profound implications for the structure of our economies and our societies.
The range of such implications extends beyond our present discussion with its emphasis on physical resources. It may be worth noting, however, some areas in which the fusion of information and communications technologies imparts upon resource evaluation questions:
Broadening the resources range as more data accrues on given
materials or substitutive practices and on increasing energy and
resource usage efficiencies and manufacturing processes.
Increasi-ngthe reserves base through earth satellite monitoring,
aerial and land survey technics whose basis ties in new information and communications technologies.
Computer modelling and control of resource utilisation in industry and agriculture can lead to greater economy in energy
2 Ibid., Daniel Bell, The Management of information and Knowledge, p. 14.






14

and materials use, with enhanced capacities to monitor and predict economic and environmental impacts.
In more general terms, changes in the information environment have already had considerable unanticipated impacts on both the polity and the structure of the economy. From the Pentagon papers to the Watergate affair, debate now reverberates through rights to consumer and other information, questions on proprietary ownership of vital resource data, and political contributions disclosure. The structure of the business economy itself has tightened up as new information and communications systems change the flow and immediacy of impact of market data. Industrial organisation and productivity has been strongly influenced by automate procedures, new instrumentation, new products and processes. The overall systemic effect of these changes has not yet been adequately assessed in comprehensive policy terms to gauge their specific points of advantage for future growth directions. t
We have already drawn attention, for example, to the emergence of the new electromagnetic spect7trum industries-electronics, telecommunications,. computers, automated central process equipment, etc. These are prime growth sectors in the economy but with comparatively little drawdown on extractive resources and increasing energy efficiency. As one analyst notes here:
]Insofar as it is free from depletion upon use, .the. spectrum has characteristics of a sustained yield (flow) resource of a-unique sort, perhaps most similar to solar or water power. ... In the spectrum, if equipment is maintained intact, then the same flow of information is possible, indefinitely, with no depletion of the resource itself."
The wider impacts of the changing information environment on specific sectors of society will have their effects on work and organisational modes, on individual productivity, life and political p articipation. Some of these are considered in the accompanying chart of their centralisation and decentralisation tendencies. (see figure 4.)
Th r Irvisible Reegource: use and Regulation of the Radio Spectrum, Harvey L. Levin, Johns Hopkins Press, 1971, p. 28.










TIM INFORMATION rXV1 ,0*% X*_"XT1.
CENTRAL ISING A", "'ECENTRALISIXG FACTORS


I(Jif"ilatlon Indust(y trant;- C61versmea of tn"armatic-ln Systcml networks Jcv ,;op %yhc,.h
ir nature arc hifiYY d fformed, in part, into centrally commvnicatioms lcchnolc;:c, ;;,,a. t:y thot
2 administered Public utility. dcos tcr-4cricios towirds o-,:, tcr fifsod and complex *.,a central:
ly -,:anjroI;cd,10
--cantr.:ilitatiom in 4 42 r n 7-,- : ; l.
ia.Q.;,torminal u4Q, of (trol lys.,
of sColo ano oporattom links, 1ovw.r,j tCrns ard oi ',cr in:cr,)c0Ya mod-.&
0 favor recr,ssaty centralized doW.
0 F) cn c! in strucro cocouti-,f: of oc.
orimisrit of ccriain ,spocts ol new of c,-i--.,n, .,, ccss and nviliceal u-,.-q
technologies. e.
T V,

;0 Of rn 0 C
Scale of investment cquircd by
new 10chnologirs rclmms !Jrp J,
Centralizud r! I rr %',:,I
T, c,,,! *', iafttmvjcas"
111C t L J fu r.c I, o
"c'):o sm;al will 1 -0 1 on C C-,U!,; ( r-"oWth of
:- '-c %,:,_."1os
Surl
$0 C-.l I It 1 14 0 L ccljcm planning. a: Upt -,,s Se of cco.
funding, PL, z nasini. partic- Vol 0., zc- :r r7lVda a ll at.
ularly in the will ter Of P ,:5or")l c1ni d.*
prota4blyjcrijln rooru c-ntralized
Scale of investment for certain
U types of rc-carch will rcquira its ity to I-3r-c CO,'.Mvm;.
c.,! :-s a -,r,3 factor of
C) location in cuntra:ized facilities. to
w r sp N type of cxpc


Ti ,j tor rather than looser organ. Two cral but contrLdicto ry lrc,, ri rntzr 0,
isitonal structure via usa of tech. I S- s 0,
_j nologies used for unacific purpose lencnccs: in! Qu will Tvfo-v,,)y com-unicaCon W:11
of Greatcr social control. 4b:4
of na*,% maj Qp ,iop r, UT.) S --fatly s:1,u4:c'1, o
CPiMio "a J S "I' o c s a n'd s, u
I-) par: ve, ) jh* or political IV "0 -c; -(l 01 to
s1ruci",e mofc contr4l:zcd "Y f.. 0 C', to C, 'Jse
The wi, pvlatcd consen- t C, lo,- 1
0 of "Mari:r ccu )Omic structure. 11
$Us a! a lorm of social con,:01. "s PJ a
",ty sys"cm of


Inmaso iwstratificj*, Qrl ,fld con.,
fiict Loni-teen information"hav"" of =icns
< and "have nots" rray lead to
s:rontor centralized Political con. V* tllll. o' now ):v ', s zy in. of .1cI or
r_ I Ccitraliscd control ol rr ,Ji ac.
,col. to dampen conflicts.
> co :--n;.A by struc. v-ccs fri all Tj ocLzl cn In sc
E ture S ely, C -;ur- ty lri:li, C.ji
1-;Q4 QIJI' 1111 ccinscnlu$.


0
COUNTCREALANCING Policies in*"rfatiorfal intcrw"seok ro ,, :'orlal balarict: of ,,,:,,Iy A sv, :- s Te-d to be 'leaky,
rroaifor central dolta storarc con. (1, ro! P:xirlf) f,;r n. a( I ir,( it tvf CCrt,3'-n PUfFORCES irol with corollary trends towards I -,!- ,! :hs- ,ic: ,v f(,. 1''"
more social turvoill,;nce, c,,c. qu;rx.j )no i)f
Li 1"c bie i in tl i
Monopolistic structure of tivsi.icis
trends lov4ards cemral control Soc;41 Pressures for both Icndcri. Cfcccritml zad autonomous sys.
lod(,.,d A vadows industrial com. cies, cqual;zo.out towards mcciian terns rrlatl c: rrows, .4s zcchno:coy
ccitaloos smaitcr, chcapc. Instrumentation.






16

The possibilities of growth diversification through the "spectrum" industries and the ways on which new developments in the information environment can be tailored to meet social demands are very great. Realizing these possibilities both for domestic growth markets and for retaining favorable U.S. position in the world economy will require more specific attention to this sector by policy makers in business and government-and accompanying changes in attitudes to growth objectives.
There is great demand for attention to critical problems in environment, health and auxiliary services, mass transportation, education and urbanisation which are all critically interrelated. The allocation of attention and resources to meet such demands could create a diversity of new product and market opportunities on the same scale as federal attention to national security needs and aerospace have in the past decade or so. The balance of market growth may not, however, be so much in new single products but in new services and systems to meet interrelated demand clusters.

3. Tn ENERGY OuTLoox
The separation of energy supply considerations from materials is for convenience only. In principle all materials are energy in temporally stable forms. We can then, to a certain extent, define the materials supply available to us in terms of the energy at our disposal for its extraction and processing.
For present purposes we will concentrate on the U.S. energy position in the next decade with obvious regard for the longer term implications of supply and demand.
The basic data on energy production, consumption and end uses varies considerably according to source and bias. The immediate and foreseeable critical elements are:
(i) The acute dependence which has been developed on certain
preferred sources of energy. In this regard, the crisis as it originally emerged was not so much an energy crisis but an oil supply one. Though it has since broadened to include natural gas, it is still not a crisis in terms of actual world shortage but in terms of price, external availability and declining domestic supplies. It is a crisis which also occurs within a relative abundance of other (loiestic energyT reserves. It is estimated that we have well over 500 years in coal reserves at current rates of use, and though domestic oil exploration had declined in recent years there are still considerable field (and oil shale) reserves of varying estimates
of magnitude.







In tennis of U.S. growth in the next decade, one of the ii-lost,
critical elements will be the degree of dependence on foreign sources for oil and natural gas. The bill for foreign oil has risen from $3.7 billion in 19 71 to an expected $35 billion in 1976. How far this will rise by 1985 critically depends on the kinds of energy policies which the U.S. adopts in the very near future, both for short term solutions and larger term shifts to alternative full
sources and use patterns.
(ii) The level of energy consumption which is unique to the
U.S. in terms of its population size. The U.S., with 215 million people, uses more energy in total than the combined use of four major industrial countries, United Kingdom, Japan, USSR, and the West Germany, totalling 500 million people. This may be defensible in terms of the comparable amount of energy which the
U.S. produces but it still requires questioning.
(iii) The ways in which energy is used-at what rates, for
which purposes and at what degree of efficiency.
Ewrgy8ourceg -are divisible into "capital" and "income" types which are roughly equivalent to non-renewable fuel deposits, which can be used up. and renewable energy flows which are part of the recurrent and rei negative processes in the environment. The accompanying table of energy systems illustrates these various sources with their advantages and disadvantages. (See figure 5.):







Fioum 5




E V' q Y Con, e, 6ors PC -to
y

Difficulty Of frol- ols tistriodic
'If. 'e tlect"C 6vo 9 pw'rises' 900. qegjjC,,,,al h jq ell all COFI wqooo. geographic disproportion
e, 'Ci "o %lejm t jal PO*(!f con't!fl-urll (lnCLj% & hjI.C jf w inhCFeot tic.
K Cooling food.
V E E E t; C y I l'- preserving food.
I I ),Id orm,- labor. d it j,,-j(ol, letmen. 'elf v,)rn(,r3t,nq systems
t Lat fle volumes of best energy cooking food,
I% & ii-ot'ol extraction vegetation. hir!ct -.,: ici,-ri May bor siled d in direct metabolic
rortcf0bal energy 119011 1 'IS etc (0111 C Ld I-Coribilill In v jttot recta Maloof) cycle. procelitcs.
act Q a pfoces'-s. lostiff heating,

'd '4 't-. a o' Direct rrfr, ;y itansler, may be lsespni!y not capable of economic space cooling,
Heal e'ect' Ca! emv' y ""cdcb; 0, e!rctlo- applhcaliin on wide Scale Of large
L- V'[ ll"j the" 31 !C0c!'0"X P1t;C-l c,,1,cA chrIni a y Out on 3 reljl vely v6urne (Jnqc
on& 01 etc %mail scale, pumping water, of
listies,

'403! a'd e:-Cl-icol erref y Throj9h May be t 1 ,,!d, transport ted and Fieceii waste hejt gases, to 01. motive power,
S. C 0 U C V.J( IOUt C71osfTl i i, Of cCso SV Ji and CO 1!100'-d -(n saw and in 1,,veov, effect biogoidichemocif
C!c. lisr e- vcl,,-es lighting.
communications.
Independent of geoqp3phy. Inlet.
I .Iq 3-3 eff I'IC3; entgy V.f'd-el thrcfv h Lor -yestment in ihi;eld nq and indutt,.3f
IS o'-'We *( 211CIMS 1. tOMt1jtIJT'QCI Allis imal upkeep, by'p'oouct Jsles 1 cnel, emilrit.dospoui of rdo- .0.0- l1ral-g.
I t clecito M-C'3r-oicj' tys:crrl may be used as other tt.rls. active walls is a preterit key problem. conversion 3nd
Ormong of rn3W,
c I 'e ak, etc.
I U xich-'aL May be Owed, controlled, and Used in explosilet tic Primarily
--141 :Vc' -' 'netjfs s"ch as P;!'alft' Heil y e!dcd through Chifeel-C31 MCOOMS, used as It, ii, zc(s in other 1 )Odl p1,cphj!cs, cil. tic. elsergy Proctsscs etc. destiuctivit efaill4iry use. lo"oo"
I I -- I I j W
!a V' rid Flescfurce rraderick A. Praeger, Inc., New York, 1966, p. G8. C' Lno-y-, Z n io


ENERGY SOURCES

CAPITAL INCOME isolor radiation)

fos" fjo S atomic energy e3rth'S energy indirect dilrect

Cc 11 1 fu ion heat kinetic energy of rotat;om water wind photaffivrithes;s
L I I t I I
iNJIter 11--bines infind generators vegetation

Irnp u1se orcacti on

CONVERSION INTO HEAT DIFIECT CONVERSION INTO POWER

heat e rigines
If
eir breathing eng1riel: external C74 istion engines atomic fission? fvcl 'Cells MAD thermionicogeneration solor'celfs
I ---l. I I atomic fus;orl
fec1procating rotary raln jftl atmospheric engine$ fcciprocatinglitearn engines rotary

spark iqn;%torl romprCiSign ignition gas turbines steam turbine$
I "
TMP'V;s.& reaction






19
(i) Fos8il fuels coal, natural gas, oil (including shale and oil
sands.) These have been built up over a 500 million years of geological time and are "non renewable" other than on that time
scale.
(ii) Nuclear fuels: those elements yielding energy through nuclear fission and fusion processes. Though relatively finite in terms of their earth crust sources, when we include their extension to the ocean elements and the development of "breeder" and fusion technologies they are almost "infinite" energy sources. Though in potential use since the early 1940's nuclear energy is developing
more recently at a faster rate.
Income energy sources are those which are recurrent and regenerative processes in the environmental system:
(i) Solar energy: this is mainly used indirectly, for example,
through photosynthesis in the food energy cycle-using plants and animals as converters. We also tap into this cycle by extracting fuels from wood and other vegetation sources, by using microbial action in biological fuel cells, etc., and so on. Most recently we have begun to develop the use of solar energy more directly through collecting and converting devices for heating and cooling purposes, photo-electrical andf photo-chemical cells.4
For most current uses, and in terms of projected technological developments for the next decade we are almost entirely dependent on capital energies derived from the non-renewable fossil fuels-coal, natural gas and oil (possibly augmented by shale and oil sands).
Given this dependence, however, the most immediate question is whether we will have access to enough fuel in the next ten or twenty years without undue economic distortion, environmental and other pacts.
In terms of overall potential supply, both domestic and foreign, the answer is a qualified yes. The main qualifications are those of domestic reserves available and the balance of -internal and external supply. Both of these are a function of the rates of use, types of consumption, interchangability of fuels, and the relative economic and socio-environmental costs which may be entailed.
The reserves and supply question is extremely tangled. Data available varies according to source, and the major sources are from the energy industry and, therefore, hardly unbiased.
Reserves., themselves, are classified as recoverable and submarginal. A recoverable reserve is that which can be extracted profitably in terms of investment and production of usable fuel at current costs of recovery and processing. This is the kind of reserve figure which is given in terms of "reserve-to-annual-production ratio" or how many years our reserves will last if present rates of production and consumption are maintained.
4The energy the earth receives annually from solar radiation is about 35,000 timeR the nresent yearly energy consumption. If it were possible to transform one ten thousandths of the sun's radiation directly into power the world's energy production would 1-s inereaised bv 250 percent. World Patterns of Energ, Consumption, E. Willard Miller, The Journal of Geography, vol. LVIII, No. 6, September 1959, p. 227.









Estimates of reserves fluctuate, therefore, according to demand and pricing structures. This is particularly important in relation to submarginal, or known undeveloped deposits, which are not used as they are unprofitable to extract with present technology, costs and prices. . as the economy of scale reduces costs, and as new technology reduces
costs, submarginal deposits tend progressively to be developed and are transformed into reserves. As an oilfield, it flows easily at first, then less easily, then the cost of getting it out exceeds the price it will bring. The inventory of recoverable oil has been exhausted. The reserves are gone. Yet 70 percent or so of the original oil in place m the field still remains there as a submarginal resources
Fowler's intensive analysis of the same question from a wide variety of sources gives roughly the same answers. Noting that it is estimated that half of the U.S. coal and oil is still to be discovered, he also points out that:
The actual recovery efficiency-for oil-in-place-has risen from about 26 percent in 1955 to a present 31 percent. It is projected to rise to 36 or 37 percent by 1985. Thus 2 barrels of oil remain underground for each barrel removed, 186 billion barrels for the 93 billion barrels produced to date.6
On "total estimated resources", and using 1973 consumption growing at 4.5 percent per year, Fowler suggests that these would last 17.5 years.
FIGURE 6

Reserves
U.S.
United States years
World production as percent supply
Energy resources (millions) World (millions) of world (plectd)

Coal:
Bituminous and lignite.. 2 982L..................................................
Anthracite ------------ 174t (1973, preliminary) .... 805,787.9t (Jan. 1, 1974) -.. .. 49. 2 512
Helium ------------------- 26.04ms (1973, estimate)..- 4,355.2ms (Jan. 1 1975)_.... 99.4 132
Natural gas -------------- 1,358,400m. (1975, esti- 60,731,800m3 (bec. 31, 20.4 11
mate/preliminary), 1974)
Crude petroleum ---------- 2,853.9t (1974, estimate)..-- 99,532.4t (Jan. 1, 1975).... 4.9 12
Shale oil ------------------ 53.9t (1975, estimate) ...... 983 880t (1973)--------------9.3 1,080
Thorium ------------------ 0.0119t (1973, preliminary)_ 0.843t (1973) -------------- 4.7 663
Uranium -------------- .0186t (1974, estimate)-.... 0.967t (January 1974) ----- 25.04 13

Note: The above figures are approximate and may be qualified in many ways. U.S. years oil supply forecast is based on 1973 production: Coal years supply excludes anthracite.
Data: Various sources; mainly Bureau of Mines, mineral facts and problems, 1975.

For a more graphic picture than is usually presented we may refer to Fisher's "same scale" diagram. (See figure 7.) Though using 1970 consumption data, this gives a succinct overview of the recoverable, submarginal and undiscovered reserve estimates.

5 Fisher, John C., Energy Crisis in Perspective, published by John Wiley and Sons, New York. 1974, p. 29.
Fowler, John M., Energy and the Environment, published by McGraw Hill Co., 1975, p. 277.









FIGuR 7




ENERGY RESOURCES



2411 Undiscovered ~:Undiscovered
Recoverable 13 22 Recoverable 130 270
Submarginal 400 r
Natural gas Submarginal 170 3200



Crude oil



1(nown g Undiscovered


Recoverale





$*rrcinat 80








United States reservesard resources of natural gas, crude olT, and coal, in UnitS of C 10" Btu.






Coal 100 J Cwzil 1.3
Oil 6A5~ oil 3.0
Gas Gas 2.2

Cumulative consumpn 1970 Consumplon
throu-1h 1970
Consumption of fossil fuels in the United Stattes, cumulative through 1970 and for the yea r 1970, in units of C ;- 10' Btu.




Source: Energy Crises in Perspective, by John C. Fisher, John Wiley & Sons, New York, 1974.





22

Overall the domestic position seems to be-about 10-15 years of easily recoverable oil supply, natural gas on a similar basis but probably with a shorter supply horizon due to increased use, and enough coal for several centuries.
The domestic reserve could be expanded (hence "years of supply") if submarginal oil and gas are added plus offshore and Alaskan fields in development. To these we may add Bureau of -Mines estimates of virtually untapped "heavy" oil deposits, potentially doubling the domestic proven oil reserves. Again, this additional reserve has been considered uneconomic to exploit in terms of costs but rises in the price of petroleum and new extraction techniques may bring it into the more easily recoverable category.
One would stress, however, that all such estimates of "years of supply" are usually based on continuing patterns of consumption in terms of current technologies, use efficiencies and costs. Each of these factors is a policy contingent variable-consumption can be reduced, technologies and efficiencies improves more rapidly and costs rationalized according with appropriate incentive policies-and "years of domestic supply" extended to a more secure margin.
In terms of shortage vs. growth for the next ten years, again the constraints are cost dependent rather than being based on actual scarcity. Obviously it would be unwise to deplete even known domestic reserve supplies too rapidly but more effort might be made to encourage: (a) submarginal exploration of present fields, (b) stock piling o oil fuel as an economic hedge similar to the strategic reserves.
If we include the estimates of external reserves then, in addition to the reserves of the OPEC bloc, the rate of exportation and exploitation of new oil and gas sources around the world threatens no real scarcity for some time. (See figure 8.)
FIGURE 8
*FFS"O FE OIL tWM*ATIW AND LEAS AIf*AS-VIORtM















Source: Center for Integrative Studies, compiled from various Issues of Ocean Industry, 1969-1974, plIus additlonal sources.






23

The oil lease mapping alone of the South China seas looks like a multinational subdivision! There is, still a possibility,' therefore, that the real crisis of the next decade or so could be a. return to oil "surplus" with a lowering of prices-thus encouraging more profligate use, with gross environmental impacts, of a resource that is potentially more valuable as a source for petrochemicals, medicinals, plastics, and even food, than as a material to be wantonly'burnt up. The opportunities for energy conservation and of more diverse growth in oil, gas and coal derived products might thereby be lost.
The so-called energy crunch of recent years, therefore, is basically a price problem arising from the encouraged dependence on cheap foreign oil to augment local supply. This dependence 7 running to about one sixth of overall energy supply, was relatively well known before the OPEC upward pricing began in the late 1960's but little action was taken other than setting- oil import quotas and other measures to protect higher cost domestic production against low priced foreign costs. Middle East oil wellhead costs range as low as 20 or 30 cents a barrel which is more than triple the cost for U.S. oil. Historically, therefore, it was more profitable to buy foreign than to invest more in domestic exploration and recovery. Part of the case for cheap energy was also made by the energy industry itself in encouraging high oil dependence and electrical consumption through its various
marktingpractices. The industry alone however cannot be expected to cut demands for its products. It could, however, be encouraged to rationalize its internal policies, where at present one sector may be operating at very high standards of efficiency in energy economy but another may be encouraging higher consumption through demand stimulation for its products.
The present situation is, therefore, not one of absolute scarcity-but of increased costs. of imported energy and of domestic production. This begs the question of real costs as the ratio or profitability to production and processin ig costs is probably higher than it might be, in an industry relatively well insulated from so-called free market practice.
Natural gas has many similar critical domestic supply features to oil. One of the main problems appears to realistic estimation of reserves as, until. very recently, the only; annual national estimate was that provided'by the American Gas Association itself.8
The use of natural gas has increased greatly as a versatile "clean" fuel of high heat value, free of many of the pollutants associated with other fossil fuels and delivered by pipeline from source almost directly to consumer. Federal law price regulation certainly contributed to its increased use but recent deregulatiion. has not as yet had time to effect larger exploration and recovery rates to augment domestic supply shortages.
7 Deednevaries, I.e., up to 33 percent before the onset of the Mid East embargo and continuing to about 40 percent of today's U.S. consumption.
8 s problem of acute dependence on proprietary AGA data Is closely questioned In the Jan. 1976, Hearings on Natural Gas Supplies of the Subcommittee on Oversight and Investigations of the Committee on Interstate and Foreign Commerce, House of Representatives 94th Congress, Serial No. 94-88, pp. 14-29.





24

The gas transmission and distributing utilities have therefore committed resources to synthetic gas manufacture from naptha, no doubt to be augmented later by coal gasification.
Large gas supplies are believed to exist on U.S. pub lands and
offshore and in Canadian fields and these issues are being vigorously pursued to offset increasing dependence on imports of liquefied gas.
.As the world reserve and supply level problems are much the same in terms of known reserves andsupply estimation except that in many nonuser producing countries large amounts are vented and flared off in the course of associated oil production.
Given the increased importance of gas, however, overseas sources, both associated and nonassociated with oil fields, are now being more intensively pursued and many supplies may be forthcoming in the next few years outside the OPEC bloc. Though prices will be high they may be less dependent, therefore, on political factors. The overall situation for the next decade is, therefore, one not of absolute scarcity but of economic availability.
As domestic gas shortages have occurred, users have, in many cases, switched back to oil and electricity hence exacerbating the overall energy situation. As price deregulation may not ease this for some time in terms of new on-line gas supplies, many of the recommendations made for oil would apply to the gas situation. Conservation policies are more limited than for oil, however, as the efficiency of use is relatively high and the use sectors are less elastic in this regard.
Energy use and consumption. At present the comparative use of various energy sources used in the U.S. is approximately: See figures
9 and 10.
FIGURE 9
1975 U.S. energy source8-used Percent
Coal -------------------------------------------------------18. 5
Natural gas (dry) --------------------------------------------28.2
Petroleum --------------------------------------------------- 46.3
Hydroelectric -------------------------------------------------4. 5
Nuclear ----------------------------------------------------- 2.5
'Anthracite, bituminous and lignite.
2 Includes hydroelectric power produced
3 Nuclear power production.
Source: Federal Energy Administration, Energy Information report to Congress, Quarterly Report-First Quarter 1976 (National Energy Information Center, Washington, D.C., 1976), p. 104, Table 7-11 and Federal Energy Administration Monthly Energy Review, July 1978 (National Energy Information Center, Washington, D.C., 1976), pp. 41, 70, 46. Various sources cited.






25

FIGURE 10.-1975 U.S. energy consumption by sector Percent Fndustrial ------------------------------ 25. 8
Production of electricity' ------------------------------------------- 28. 5
Transportation---------------------------------------------------- 25. 7
Residential and commercial----------------------------------------- 20. 1
'Electric utilities.
Source: Federal Energy Administration, Energy Information report to Congress, Quarterly Report-First Quarter 1976 (National Energy Information Center, Washington, D.C.. 1976), p. 104, Table 7-11 and, Federal Energy Administration, Monthly Energy Review, July 1976 (National Energy Information Center, Washington, D.C., 1976), pp. 2, 41, 70, 46. Various sources cited.
Given this comparison of energy source usage with consumption what are the prospective implications for economic growth in the next decade? The first problem may be the relationship between energy growth rates, need and demand. .
The problem of "sustainable" energy growth seems weakest in assuming aggregate past demands as the basis for linear projection, e.g., at the rate of 4.8 percent of energy growth of 1974, for example, our energy consumption would double in 15 years. Needs are not the same as demands. Much of the apparent demand is artifically stimulated, sustained by inefficiency in use systems and end products and has a high11 waste factor. Our actual energy needs are thus overstated.
Could we sustain traditional econt~omic growth with less energy consumrption? This may be answered in several ways..
(i) Energy cosumption and GNP. Here again, our standard
assumption has been that energy use paced GNP growth. Whilst this may be true for developing societies and those in the heavy industry phase, it need not be so' in the LU.S. where economic development has shifted into post-industrial forms of growth which are less energy and material intensive in terms of performance
per unit input of resources.
.the changing- composition of the GNP. Demand forces have (already) moved our economy towards more service output relative to a more goods output. This has, on the whole, resulted in a shift to a less energy intensive sector, especially where comparison is made between energy use over decades.9
Other aspects of this post industrial shift have already been noted with reference to:
"Resource Use and Technology Changre", where the table 'of
metals entering into volume production and the charts of technological development phases show the decline from central importance of the older heavy industrial processes requiring large
extensive resource and energy inputs.
9 Mineral Resources and thze Environment, National Academy of Sciences, 1975, pp. 276-277.










78-653-76-3





26

The emergence of "information as resource" which follows the
above discussion and emphasises the chang ing profile of materials and energT intensivity which characterises the newer set of spectrum industries.
It should be underlined, again, perhaps that this is accomplished with less direct manpower and resource investment. By contrast, the newer industries comprising the post industrial core are more capital and knowledge intensive. In effect, therefore, they may offer opportunities for greater economic and social growth with less resource and environmental constraints than the older industrial forms. The shifts of manpower and social investments into human service systems also presages different growth directions for the society as is evidenced in the changing composition of the GNP noted above.
Recent projections of long range U.S. GNP relative to energy growth, appear to buttress these indications, "show only a tiny shortfall in gross national product by 2,000 even if the energy growth rate is cut from 3.4 percent per year., the U.S. average since 1950, to 1.7 percent." 10
This rather startling conclusion is supported, for example, by the comparison of energy per dollar GNP in production compared with energy per capita.
FIGURE 11

ENERGY CONSUMED PER CAPITA-AIL LION BTU'S (U.S.) $
; a .*
~~ ~-- .300
GNP PER CAPITA

ENERGY USED t,-R CAPNTA
200

ENERGY UZEO PEIR $ GNP t!1 BTU's)
100

=0
T;00 1 10 I9000 19J) b'10 1970
Source: Center for Integrative Studies.
Industry absorbs in total about 40 percent of all energy consumed including proportions of transportation and electrical energies as well as those used directly in production. As another study underlines, the shift to higher efficiency in energy use has particularly occurred in the large energy using areas of the industrial base-in primary metals, chemicals, stone, clay, glass, food and paper.
"I Jorgenson, John G., Energy Use by Industry, The Conference Board Record, May, 1i74, p. ;2.






27 FIGURE 12.-Gross energy purchased per 1967 dollar of value added, 1947-80. 200 Summary Averages
Thousands of BTUs per 1967 Dollar





Six High Energy Using Grosups. 100 90


70

Go All Ma nu fact uring _. 50 40



aa
3D


Other Manufacturing~



20 .Ratio Scale




1947 1954 1958 1962 1967 1971 1975 1980
Source: John G. M-yers, Energy 1780 by Ind~ustry. The Conference Board Record, 'May, 1974.






28
Significant savings in energy have been realised by the manufacturing sector. For example, energy use per unit of product declined at a 1.6 percent rate from 1954 to 1967. This was achieved in a period of stable or declining relative prices of energy.'
It is important also that the decline in energy use in the manufacturing industries examples was not governed by deliberate policies of energy conservation but by technological innovation and internal efficiency.12
The above analysis derives from an intensive study of six groups of industries accounting for nearly four-fifths of energy use in manufacturing. It is further supported by the 1975 report of the National Academy of Science which notes:
. the important point is that even bcforc the days of recent changes in the price and/or availability of energy raw materials, the forces of economic change were apparently working to lower the rates with which the U.S. economy used many raw materials and energy . the increased use of total energy per unit of GNP (in the years 1969-72) . was also a period of intense business activity to expand consumption of energy-using appliances, it was a period of large investment in air-conditioned structures-both commercial and residential."
In policy terms, this may suggest that though higher pricing might affect individual energy demand, it is a declining factor in cost of product manufacture. Passing higher fuel costs down to the individual consumer level might seem to place energy costs on a more realistic basis and reduce demand, but this would have to be accompanied by more rigorous energy accounting and regulation throughout the entire use spectrum to affect real savings. It would also require appropriate incentives towards higher use efficiencies and disincentives to offset artificial demand expansion in appliance diversification, energy intensive teminperative control of new construction and overpowered automobiles. Disincentives to over stimulation of energy consumption by advertising expenditures in such areas might be effected by taxing such expenditures-the revenue to be earmarked for energy conservation development.
(ii) Growth in per capita energy use in transportation, in products, for residential and commercial space heating and cooling, etc., illustrates specific areas of increased energy usage where considerable economics might be effected.
Transportation accounts for around 25 percent of the overall energy used in the U.S. Of this percentage over half is gasoline used in automobiles which are singularly wasteful in their fuel use with an overall end efficiency of about 5 percent. The problem here is not only wasteful fuel use with high environmental impact, but high built-in obsolescence rate in automobiles, with over stimulated demand for more production and marginally "new" models. Energy conservation by reducing auto speeds is a palliative measure only.More might be accomplished (i) by extensive restructuring of the auto industry towards smaller, longer life cars, higher fuel efficiency and more exploration in synthetic fuels, (ii) by providing more choices in mass transit
Myers, John C., Energy Use by Industry, The Conference Board Record, May, 1974, p. 82.
Wi rhro delIbIIwrato :tntlon h)iu boen given tn this. the World Enery Conference. 1974. reported that some U.S. Industries have cut total energy use by 40% between 1972 and 1974 thronih a combination of Increased efficiency and conservation in use. SThbid. Ifineral Resources and the Environment, National Academy of Sciences, 1975, pp. 276-277.








systems, e.g. railroads, local buses and other services which have been allowed to run down as they are no longer economically profitable. In some cases, transportation emphasis has moved to freight haulage where profitability is higher and direct and indirect subsidy incentives greater.
Residential and commercial space heating and cooling is another high energy area taking around 20 percent of our energy budget and absorbing one third of generated electrical power. Low insulation standards cause an estimated 30 percent inefficiency in all home heating and cooling systems. In addition to this there is the low efficiencies of appliances-with no design for their systemic interrelationship which might offload energy uses from one part of the system to another. Major appliances are also geared to swift obsolescence and over-stimulation of demand-with complete replacement of whole units rather than adequate maintenance and repair.
Electrical generation and use patterns afford similar examples of areas of high energy use at relatively low rates of efficiency with large amounts of waste energy. Given that most generating plants are operating at present mechanical limits, their distribution and use systems are still lower in efficiency. The Nation's electrical energy distribution system is a patchwork of quasi-independent utilities operating in a monopolistic mode with more or less captive consumers.
In aZl of these three major sectors of energy use, the prevailing market practices per se are unlikely to reduce consumption. Many of them are operating in the opposite direction-to over-stimulate demand. Some large consumers, for example, are outside of the commercial market system, e.g. the Federal Government itself and its various department programs consume large amounts of energy directly and indirectly.
The potential for energy conservtion0 without cutting back on economic growth, is very large.
International comparisons support the contention that the 1975 U.S. energy budget can be trimmed over time by more than one-half. For example, Sweden, West Germany. and Switzerland, with about the same level of per capital GNP as the United States, use only 60 percent as much energy per capita as does the United States. West Germany uses seven eighths as much fuel per capita as the U.S. for industrial production, one-half as much for space heating, and only one-quarter as much for transportation. None of these countries has begun to approach its full potential for energy thrift. The contention that the U.S. energy budget can be gradually cut by more than one-half without altering the nation's standard of living is almost certainly conservative."
In reviewing overall energy need projections, in terms of the U.S. average of a 3.4 percent increase per year, several authorities appear to agree with the above statement of possible reductions in the energy budget without serious affects on standards of living and growth. Whilst the Federal Eneray office has suggested that a 3 percent level could be achieved by 1980, the 1974 Energy Policy Project of the Ford Foundation claims that reduction to an average rate of 1.7 percent is feasible before that time, which concurs with the Data Resources, Inc. projections of the same year.
14 Sant. Roger, Assstaint Administrator of the Federal Energy Administration, Private Communication: Lee Schipper. "Energy Conservation : Its Nature, Hidden Benefits and Hidden Barriers," Energy and Resources Group, University of California at Berkeley, 1975.






30

This would tend to suggest that the U.S. might be able to pursue adequate growth goals in the next decade and beyond by a mixture of policies-from conservation to real cost pricing through more rigorous energy accounting to the use of some alternate sourceswhich could cut energy consumption by close to 2 percent, at least, if not halving the growth rate to 1.7 percent.
The technical prospects for energy conservation are high. The actual prospects, in social and political terms, may be somewhat lower unless clearly defined priorities are placed on specific areas where conservation measures may yield the best returns. In policy term, a much more thorough and corn prehen ive review of the industries and consumer practices involved may be necessary to weed out inefficiencies, reduce levels of waste and high product obsolescence, and to encourage innovation and alternative eergy sources exploration. This should be accompanied by a hard look at the direct and indirect federal subsidy programs, many of which may be found to militate against higher energy and materials conservation by subsidising obsolete and uneconomical practices.
Our discussion so far has been somewhat skewed towards oil and natural gas, what are the prospects for coal and nuclear power generation in the next ten years.
Coal has been somewhat displaced as a prime fuel partially through cheaper oil and gas and, more recently, due to its severe environmental problems as conventionally used and mined. The U.S. has one-third of the world's coal reserves, and if new technologies for improving the efficient conversion of coal to synthetic gas and oil are developed and its capacity for polluting reduced, then this could be a major renewed industry. For example, coal converts to oil; "with a yield of two or more barrels per ton, the two trillion tons of recoverable coal in the U.S. is equivalent to more than four trillion barrels of oil-ten times the total known worldwide oil supply.7)15
Even if coal could be the basis for a new synthetic fuels industry, however, there are considerable environmental problems, (a) of access, whose history is visible in strip mining around the country, (b) of byproduct pollutants in coal processing. These are certainly soluble with available technology but would require more social and economic pressures to resolve.
Nuclear power faces some of the same problems-and other hazards of longer term radioactive by-products disposal-though it could potentially supply a large part of U.S. energy needs. It is presently limited to electrical power generation and provides about 9 percent of our electricity but it could provide much more and be more varied in its applications. The pros and cons in the nuclear debate have been dealt with exhaustively in the daily press and scientific literature. In the long range, via the development of fusion rather than fission reactors, it is probably one of the most compact and relatively inexhaustible energy sources available.
In summarising the nuclear debate, Alvin Weinberg one of the key authorities in the area, emphasizes not only the technological and environmental aspects but the social costs of nuclear options.
Vs 11, George R., Electrical Power Research Institute, The Sciences, December, 1973, p. 10.





1

We nuclear people have made a Faustian bargain with society. On the one hand, we offer .. in the catalytic burner .. an inexhaustible source of energy . but the price that we demand of society for the magical energy source is both a vigilance and a longevity of our social institutions that we are quite unaccustomed to . .. to be sure we shall steadily improve the technology of nuclear energy; but short of developing a truly successful thermonuclear reactor, we shall never be totally free of concern over reactor safety transport of radioactive materials, and waste disposal."
In a later statement this year, Weinberg calls for a more extensive review of nuclear energy options and advocates a phased policy of its use which would include among other things, the clustering of nuclear parks in isolated areas with the development of a dedicated "nuclear cadre" to ensure the necessary levels of vigilance. But this is a longer term view than that with which we are presently concerned.'17
It seems unlikely that nuclear generated power will add significantly to our ener qy budget for the decade under consideration-though, obviously, decisions will have to be made in that 'Period with regard to speeding or retarding its wider use. Whilst the breeder reactor program has hi'g h priority in the U.S. energy research program, other countries already have plans for commercial reactors of this type to be on line by 1986. The economic ramifications of this are difficult to assess but likely to impact in the 1990's. By then, unless the United States has decreased its energy growth rate and rationalized its energy policies ,it could face some difficulties in competitive pricing for energy intensive products, but this may be obviated by equivalent decline in fossil fuel prices.
Alternative sources of energy are unlikely to be developed on a large scale in the given time period of the next decade. Almost all are longer term prospects-but it is crucially important that many of them ~be given high research and development. priorities within the next five to ten years. The obvious candidates are solar energy, fuel cells of various types, wind and tidal. energies, fuels from organic and industrial wastes, geothermal' source development and the possibilities of hydrogen and hydrogen-based fuels.
Even where none'of these alternatives might make major contributions to overall energy. supply in the short range, i.e. Within the decade, they are extremely important areas for resource allocation for research and development, both in the sense of unanticipated break through and in the specific ways in which they may off load fossil-fuel consumption and encourage locally. autonomous non-polluting systems-particularly in the cases of solar conversion for residential pur .poses and community/industrial uses, for wastes derived fuels.
Of course a perfectly functioning free market would presumably anticipate scarcity versus demand by the "price-rationing", of comThe Role of the Energy Market
The question "can the market be relied upon to provide the necessary adjustment to potential scarcities" begs, in turn, several questions about the market as such.
11 Social Insttutions and Nuclear Energy, Alvin Weinberg, science, July 7, 1972, pp. 33-34.
17Weinberg, Alvin, Is Nuclear Energy Acceptable, Purdue University Dept. of Nuclear Engineering Distinguished Lecture, April 20, 1976, (mnimeo).






32

modities over time, and by forcing competitive substitution, where resource scarcities appear.
In energy-from extraction and processing through various end uses and products-we cannot refer to a free market in the classical sense. It is an elaborate hybrid market system in which relatively monopolistic corporate control, ranging through all aspects of energy production, distribution and end use), operates within a structured environment involving considerable governmental intervention. Some of the latter is advantageous to the industry in the form of preference tax incentives, indirect subsidies and quotas; some is restrictive as to pricing, public land use and lateral integration. This produces a system in which the consumer components have little or no direct participation in the balance of market forces. The domestic structure is further compounded by international cartelisation of the energy industry on one side and by nationalised governmental structures with political uncertainties on the other.
Given its hybrid, extremely complex and unbalanced character, the domestic market system is particularly unwieldy in its ability to provide swift adjustment to strains or shortages in energy supplies and in its capacity to give longer range anticipatory guidance on energy policy directions. The experience of the past few years particularly seems to confirm this observation. Pivotal policy roles cannot be left to the market per se.
No system of additional incentives or restraints applied piecemeal seem likely to aid the market's capacities in this respect-in the absence of a more coherent comprehensive and social energy policy. This may not, and perhaps should not, be done entirely by government but by virtue of governmental intervention in the market and by its representation, ideally, of all interested parties, it should be the prime initiating, guiding and regulating agency.
The development of comprehensive energy policy requires a much more coordinate, and open, review and control process in whic industry, government and consumer interests participate on a more continuous basis-to anticipate supply strains, regulate critical areas of consumption and oversee resource allocation for longer range research and development of conventional and alternative energy sources and

The necessary short term adjustments can only come from deliberate policies designed to decrease oil and natural gas consumption through conservation and greater elflciency in their use whilst longer term adjustments to a more diversified fuel economy are sought through the development of alternative sources technologies and growth patterns. It has been indicated in various areas of previous discussions such policies need, in no way, constrain the economy but by encouragement of innovation and enterprise can provide opportunities for more diversity and selectivity in its future growth.

4. Tim MATERIALS OUTLOOK-.
The assessment of non-fuel resources for the next decade is rather different from that of energy supplies. The array of energy sources is more limited than that of metals and minerals and the range of options,






33

alternatives and substitutions in the latter is much wider. An additional difference is that energy is much more dispersed in use. We "consume~ energy in utilising it whilst we do not dplete or consume materials. Materials are extracted, assembled or dis-assembled for various purposes but they are not used up or lost in the process. Some may become too dispersed after use for economic recovery and re-use but, by and large, materials use can be considered as more cyclical than energy. The distinction may be seen more clearly in the case of the fossil fuels and other combustion use materials where the degree of disassociation is too high to refer to "renewal" in less than geological time. On the other hand, where such resources are used in non-com.bustion ways, such as petrochemicals, they can be disassociated and recombined in many different re-usable. forms.
The use of terms like depletion and consumption in materials usage is reflective of an older economic calculus based on "one-way"~ use criteria.
'When we refer to material resources, we are really discussing the ways in which the-physical elements are found in various combinations in the earth's crust, the oceans and the atmosphere. All of these dispositions are in various stages of cyclical change. Some of these changes occur at the level of geological time and are not so relevant to our short cycle needs; others, such as nitrogen, oxygen and phosphorus are in briefer periods of change in various environmental cycles: Industrial use is also cyclic al-prioducts can take from 3 to 25' years to be re-cycled.
Our net reserves, therefore, should include all materials in present use, those in junked form as well as in stockpiles and mineable reserves. The earth's crust, the oceans, the air are the gross reserves from which to draw materials and, ultimately, where we return them. Then there is the "organic" stock of renewable materials from forestry and agriculture as embracing the "common" set of air, water, soil, plants and animals. In term of an adequate conceptual frame, we need to view the whole of the environmental system and its complex series of regenerative interehange8 and combinations as a model for our material use systems. C
Industrial growth in the past century has been specifically characterised not only by the enormous increase in the amount of materials used but the expansion of the range of the material elements coming into use. (See figure 2 on p. 11).
Since 1900 a host of new substances, metals and minerals have come inLo common use. Germanium, thorium, vanadium, beryllium, tungsten, selenium, molybdenum, and titanium are a few examples of odd elements that only 100 years before were either unknown or recognised only as mineralogical curiosities. Today a great number of them are components of our industrial technology, and it is an unusual element indeed that does not have a scientific or industrial application.'"
Significantly, of course, many of the new entries on the industrial menu are not used in anything like the same quantities as the older staples like iron, but in relatively small amounts for alloying and other purposes and in comparatively fTractional amounts in electronics. The
I8 Frasche, D. F., Mineral Resources, Report to U.S. Committee on Natural Resources, National Academy of Sciences, National Research Council, 1962.








increasingly diverse menu means, however, that no nation is wholly self sufficient in the range of elements required for advanced technological processes. We may note, as a passing example here, the standard telephone handset which uses upwards of 27 different material elements drawn from over 20 countries around the world. The Availability of Materials
Recent price changes on the world market combined with political uncertainties and the emergence of the energy crisis has encouraged predictions of impending scarcities and possible exhaustion of material resources at the world level. Such predictions appear to have little basis in reality and suffer from specific weaknesses:
One of the key policy relevant key problems on this area and in that of energy resources, is the availability and reliability of inf orma tion.
Much information available in government files, but much is in the hands of private organisations . current resource estimates could be greatly improves if these two categories of information could be brought together in such a way, and in such timing, that a running inventory of resources could be maintained.
(i) Reserves' estimation is conventionally based on so-called
available proven reserves. If considered wholly in terms of current prices and technology and linearly projected "consumption", these can be shown to last theoreticaly, in some cases, for only thirty to a hundred years. But even proven reserves are steadily increasing through wider exploration, technological sophistication in extraction and changing demand; for example, "reserves"
of copper have risen by 3.5 times since 1935; of bauxite 7 times since 1950; metals and minerals available data suggest that in many cases these are ample for almost every material in th6 next
fifty to a hundred years. (See figure 13.)
FIGURE 13.-Proved world reserves of selected minerals. More Than 100 Years: Cobalt 15-25 Years:
Columbium Asbestos Copper
Potash Molybdenum Lead
Phosphorus 21-50 Years: Tnlu
Magmesium Manganese Zinc
51-100 Years: Bauxite Tungsten
Iron Ore Platinum Barite
Chromite Titanium 10-15 Years:
Nickel Antimony Mercury
Vanadium Sulfur Silver
Source: Special Report, Critical Imported Materials, Council on International Economic Policy, December, 1974.
The Table (Fig. 13) of proven world reserves expressed in terms of years of adequate supply should be read with caution. For many of the metals of the 10-25 years level, the rate of recycling, subVaron. Benlon, Enough of Everything for Everyone Forever, Finance and Development, Vol. 12, No. 3, September, 1975.






35

stitution capacities and growing intensity-of-use alters the picture considerably. Figures here are also proven reserves. The amount in undiscovered sources is still great and the crustal abundance is even greater-given the energy and environmental costs of extraction.
Reserve Quality. The expanding reserves concept has often been criticised as including those which cannot be economically exploited as the ore quality of the reserve may be much lower. This, in most cases, is a function of energy, price and .environmental considerations.
Copper may be a useful example here, where the economically mineable grade has gone from 3 percent to 0.3 percent since 1900. The energy cost of extraction has risen but not in due -proportion to the grade decline; prices have remained relatively steady; environmental costs have risen when measured in terms of overburden to be removed and rock crushed and milled. Each cost is reduced, however, by the increased use of recycled copper.
A viable approach may be assumed for most metals of this type, i.e. as ore grades decline, extraction processes tend to improve; if prices rise, substitutions are called into service; environmental costs can be reduced by better management and offset considerably by greater efficiency in primary and secondary materials usage.
Above ground reserves. Conventional reserves figures omit materials accumulated in use over the years. For interest, we have computed here the total cumulative production of selected materials between 1870-1973 which also gives this accumulation as a percentage of world reserve. (See figure 14.)
More conceptual emphasis is 'now being placed on this in-use pool of resources as recycling and substitution techniques improve and as the idea of materials-in-flow gains ground. This emphasis also includes the renewed interest in the recycling of municipal garbage and agricultural wastes, for fuel and materials re-use; reclamation of resources "stored" in auto and obsolete machinery dumps: progressive reprocessing of extractive tailings-and otherkinds of processes which extend to the architectural rehabilitation of older structures to purposes, rather than tearing down and building new.
An in-use pool represents a stock of any material which is theoretically, but seldom actually, totally available for reuse. The in-use pool of copper in the United States is presently a little over 50 million tons compared to 60 million tons of domestic primary production-since 1840-or about 75 million tons including imports. Thus, about two-thirds of all copper ever used in the U.S. Is still available for recycle one or more times in the past. The amount of copper in the domestic in-use pool represents annual consumption of 1.4 million tonS/year .201
20 Goeller. TT. E.. Senator Chemical Engineer, ORN-NSF Environmental Progrram, Oak Rie 'National Laboratory. Oak Ridge, Tennessee, An Optimistfc Ou~tlook for Mineral Rew~urces,, pnner preqe-nted at the rniverslty of Minnesota 'Forum on Scarcity and Growth: Tnvwaqrd a Natinnal Materials Policy, sponsored by the National Commission on Materials Policy, June, 1972.








36


FIGURE 14

METALS-MINERALS, CUMULATIVE PRODUCTION TOTALS: WORLD AND UNITED STATES
WORLD
f Production and reserves in million metric tons]

Cumulative
production as a
percent of
Period Production Reserves reserves

FERROUS
Iron ---------------------------------- 21870-1973 21,741.9 390,518.6 24.02
Steel------------ ff ------------------- 1870-1973 13,430.5
Chromium (chromite'-----------w---------1870-1974 118.9 1,692.5 21:
Cobalt 4------ -------------------------- 1905-74 .53 2.4 21.
Manganese'I------------ w------------------ 1870-1974 434.0 1, 814.0 23.9
Molybdenum'-------- ------------------- 1905-74 1.41 5.99 23.5
Nickel 4. . . . .------------------------- . . 1807-1974 12.6 45. 26 27. 8
Tungsten'6------------------------------ 1807-1974 1.8 1.78 101. 1
Vanadium$'----------------------------- 1939-74 .27 9.7 2.8
NONFERROUS
Aluminum7----------------------------... 1893-1973 152.3 3 1,059.9 14.4
Antimony4--------------------------..... 1925-74 2.24 4. 14 54. 1
Berylliu m'I------------------------------ 1935-74 .056 .380 14.7
Cadmium4-----------------------------... 1925-74 .37 .753 49.1
Copper,'------------------------------- 1887-1974 199.45 408 2 48.9
Magnesium',---------------- ------------ 1938-73 4.5 2, 358.2 .2
Lead, 1-------------------------- --------------- 1887-197 3 96.8 149.1 64.7
Tin4 ........ ......... ................... 1870-1973 12.9 10.14 127.2
Titanium ------------------------------------- 1925-74 52.0 340. 1 15.3
Zinc' I------------------------------------------ 1887-1974 153.5 135.1 113.6

1 Ore.
2 1946-1947 excluded.
3 As of 1969- 70.
4 Metal content.
SOre and concentrate.
6 Concentrate.
7 Primary metal.
I Concentrate; ilmenite and rutile combined,
Data: Various sources, compiled Center for Integrative Studies.








37

FIGURE 14-Continued

METALS-MINERALS, CUMULATIVE PRODUCTION TOTALS: WORLD AND UNITED STATES-Continued
UNITED STATES

Cumulative U.S. years of
production supplyas percent projected
Period Production Period of reserves demand '

FERROUS
Iron2 ........._...................... 1870-1973 5,334.2 1875-1973 147.03 38. 5
S-- --.- 1870-1973 4,608. 8 1929-73 ---------------------------Chromium (chromite)2 -------------- 1870-1961 1.9 1948-73-4 0
Cobalt 5 .............................. 1943-74 .021 1943-73 --------------4 0
Manganese2- ......................... 1880-1974 5.58 1880-1973-.............. -4 0
Molybdenum --......---1915-74 1.11 1915-73 370 61.4
Nickel -- -1870-1974 .259 1871-1973 3.4 62. 2
Tungsten7- ...................... 1900-74 .148 1940-73 137 26.2
Vanadium 7 -------------------------- 1911-74 .12 1955-73 115.4 8.6
NONFERROUS
Aluminum s---------------------1893-1973 58. 7 1918-73 91.9 2
Antimony 5 .......................... 1925-74 .056 1944-73 61.5 4. 01
Beryllium' ---------- --------- 1935-66 .01 1936-73 40.0 54.0
Cadmium5---_ .-------------------- 1925-74 .13 1929-73 79. 8 23. 3
Copper .--------------------- 1870-1974 60.4 1870-1973 74.0 37.4
Magnesium7 ----------------------1938-73 1.83 1948-73 14.9 6.97
Lead --1870-1973 32.4 1870-1973 86. 5 53. 5
Tin 5 --------------------------------- 1920-73 .543 1870-1973 10,627.9 1.0
Titanium s------------------------------1925-74 16.4 1940-73 57.1 37. 7
Zinc- ................................ 1870-1974 42.5 1870-1973 156.3 16.7

1 Based on Bureau of Mines low forecast projections, (Mineral Facts and Problems, 1975 Edition) of cumulative demand to year 2000 computed as average demand per year. 1973 is the base year for Bureau of Mines forecasts and for determination of years of supply.
2 Ore.
S No U.S. production since 1961.
4 Other U.S. resources--estimated quantities recoverable in the future on the basis of new technology and/or changes in price-were not considered.
5 Metal content
6 Ore and concentrate.
7 Concentrate.
I Primary metal.
# Concentrate; ilmenite and rutile combined,
Data: Various sources, compiled Center for Integrative Studies.






38

Large amounts of these above ground reserves are around us in various degrees of recoverability in present structures, in factory dumps, in stockpiles, mothballed ships, obsolete equipment and other forms.
(i) C(7anging Mateials Usage. Though attention has been
focused on the high growth in materials' use over the past fifty to a hundred years less has been given to changes in materials' use intensity. In advanced countries, increased economic growth in recent years has not been accompanied by concomitantly increased use of materials in many specific cases.
A broad measure is provided by the value of (U.S.) total resource output (minerals, lumber, agriculture) relative to gross product. This ratio was 0.36 in 1870 and declined to 0.21 in 1920. A further decline to 0.12 took place in the next 25 years: the rate of decline more than doubled. From 1920 to 1954 the share of minerals alone declined by 50 percent. In the decade, 1957-66, industrial production increased by 57 percent use of important minerals expanded by well under 20 percent (e.g. copper 18.6 percent; steel 16.4 percent; zinc 4.2 percent) while the use of alloy steels increased 49 percent; aluminum 77 percent; synthetic rubber 82.5 percent; and plastics 240 percent. As the precision of material production improves, as end use products are standardised, as materials strength is enhanced, less input is needed for a given output.2
Malenbaum, quoted above, has analysed intensity-of-use characteristics for a variety of resources. His projected data for the U.S. is given in Figure 15.
This growth in capacity to "do more with less" also corresponds in general terms to wi at we have characterised as the post-industrial shift in materials' usage technologies and paces the decline in energy intensity per GNP unit already discussed.
FIGURE 15
UNITED STATES:t INTENSITY OF USE (PER BILLION DOLLARS GOP)
Commodity 1951-55 1966-69 2000
1. Crude steel (1,000 metric tons) ---------------------------------- 157 136 85
2. Iron ore (1,000 tons) ------------------------------------------- 102 76 45
3. Refined copper (metric tons) ------------------------------------ 2, 240 1,920 1,400
4. Primary aluminum --------------------------------------------- 2,090 3,480 5,000
5. Zinc (metric tons) ---------------------------------------------- 1,480 1,230 900
6. Fluorspar (metric tons) ----------------------------------------- 890 1, 140 1, 300
7. Sulfur (metric tons) -------------------------------------------- 9,060 8,860 8,500
8. Total energy (1,000 metric tons coal equivalent) -------------------- 2, 160 2,070 1,875
1 Includes Puerto Rico and overseas islands.
Source: Malenbaum, Prof. Wilfred "Materials Requirements in the United States and Abroad In the Year 200," U.S$ Department of Commerce, March 1973, p. 33.

Coupled with the accumulation of stock of goods in service, of saturation of demand for many products and materials, and with stable or declining populations, it suggests that the draw down on material resources by the technologically advanced nations will decrease relatively over the next few decades. In the case of the U.S., the conventional picture of a disproportionate use of such resources is distorted by the fact that the U.S. is also a large exporter of both raw materials and manufactured products.
21 Malenbaum, Wilfred, Materials Requirements in the United States and Abroad in the Year 2000, National Teehnical Information Service, U.S. Department of Commerce PB219)675, March, 1973.






39

(iii) Recycling and Substitution Factors also affect estimates of
reserves. As the materials' recycling range is increased, more go
into multipurpose use cycles. (See figures 16 and 17.)
Recycling means gains in the economy of energy use and, importantly, reduction in social and environmental costs. In many cases, this could reduce the energy burden and processing costs for new raw materials.
Materials' substitution works in several ways to enhance the supply/ reserves situation. One is the simple substitution of one material for another, e.g., copper for conductivity is supplemented by other metals and non-metallics giving comparable performance. The range of possible substitutions of this type is very large. (See figure 18.)
The other kind of substitution is 'unctional, where a wholly different way of carrying out a specific function is developed e.g. nuts and bolts replaced by adhesives, communications substituted for physical transportation, microminiaturized electronics in place of bulky mechanical systems for various purposes, plastics and composite materials replacing metals.
The range of such possibilities is increasing rapidly as the molecular design of materials to specific function is enhanced and as new functional substitutions are made. Such replacement and displacement of traditional functions is accompanied by changes in demand in the materials range and, in many cases, by a marked decrease in economic, social and environmental costs.
FIGURE 16
RECOVERABLE MATERIAL RESOURCES CURRENTLY RECYCLED
150 5
Avaiable for recycling
4- Recycled
100 7_ ..Ct....


ou.ce-)-.-.- --1

0 ....................... .*.%-.-.8%

Precious Paper S eel Al Cu Pb Zn Ni Stainless "Texti-.s
5flCal$ stel

Data :Environmental Science & Technology, vol. 6, No. 8, August 1972, p. 702.







40

FIGURE 17

SECONDARY PRODUCTION ACCOUNTS FOR A MAJOR PORTION OF PAW MATERIAL SUPPLY


60%





40%





20%


COPPER &
ALUMINUM BRASS LEAD ZINC PAPER
SCRAP 30% SCRAP45% SCRAP 52%" SCRAP 20% STOCK 25%1

_ _ _ _ _L__ ,.. .0

Adapted from "The Economics of Recycling Waste Materials," hearings, Subcommittee on Fiscal Policy, Joint Economic Committee, 92d U.S. Congress, Nov. 8 and 9, 1971.








41


FiGuRE 18

EXAMPLE AGGREGAW, USES
SUBSTiTUIE
FERROUS AWINERALS NON'FERROUS MINTRALS,




:3 _21 ,
Ck RO I LTii
COAL T jI__ ~ ~ -3RHENIUM





o IUC'ONY -T
i! fNAU -.y IF, _U A


CA_ 0M-- I IN.
RS9JI Al _COPIFP.___ I_ L J LL

RVWOANIU~ ____
COLD


R-CC

___ __ .t21-.

_AD I U -SSCA.N9MUM K
SWITFA
L -. VT I [AN!~i Un
pi~ 4 L_1 I J__SLMS~fT U Ai_, V R-SK%[ET
N 0 7E, RILED I W BY US B?. C0OWW.0 1IY S PEC IAL I STS.

Source: World Mineral and Energy Resources: Some Facts and Assessments by J. N. Hartley with contributions from E. A. Eschbach and 0. J. Wick, Battelle, December 1974.


U.S. Material& Position

One key aspect of the critical nature of the potential demand for various materials is related to dependence on external supply. This is reflected in the accompanying table of net imports of selected commodities. (See figure 19.)
of th-e nineteen materials listed, some are only required to augment domestic production, others are more critical where -no sizeable deposits are available within the E.S. or where it is preferable to import rather than exploit domestic sources.







78-653-76--4







42


The critical import list may be reduced to nine metals in terms of current usage-chrome, aluminum, platinum, iron ore, nickel, natural rubber, manganese, zinc, and tin. Their critical aspects may be summarized as follows: 22
Chrome. None mined in the U.S. Use of recycled metal supplied
about 10 percent of 1973 demand, plus 20 percent from strategic
stockpile sales with 70 percent imported.
Al7umirnm. As metal and bauxite are only price critical. If external supplies become more costly, domestic aluminum-bearing clays could become competitive but it would take more R. and D.
investment on a true scale of up to twenty years for self sufficiency
at present use rates.
Platinum. None mined in the U.S. In major catalytic uses is
recoverable with only 1 to 2 percent loss, and higher price substitutes could be developed.
Iron Ore. Relatively self sufficient. Even where 30 percent is
imported, domestic production from existing reserves could be increased if this position became difficult in terms of competitive
pricing.
FIGURE 19

U.S. NET IMPORTS OF SELECTED COMMODITIES

Net imports
Net imports as percent
1973 1973
(millions) consumption t Major suppliers 1969-72 2

Alumina ----------------------- $209 35 Australia (50), Jamaica (22), and Surinam (18).
Bauxite ------------------------ 143 90 Jamaica (54), Surinam (23).
Chromium ----------------------- 63 70 U.S.S.R. (32), South Afca (30), and Turkey (18).
Platinum group metals 145 95 United Kingdom (39),3 U.S.S.R. (32), and South
Africa (12).
Iron ore ----------------------- 534 28 Canada (50), Venezuela (31).
Nickel ------------------------- 544 65 Canada (82), and Norway (8).
Natural rubber ----------------- 347 100 Malaysia (40), and Indonesia (39).
Manganese --------------------- 100 82 Gabon (35) and Braz 1(33)
Zinc --------------------------- 303 48 Canada (60) and Mexico (24).
Tin ---------------------------- 215 65 Malaysia (64) and Thailand (27).
Titanium ----------------------- 48 29 Japan (73), U.S.S.R. (19), and United Kingdom
(8).
Cobalt ------------------------- 54 95 Zaire (45), and Belgium-Luxembourg (29).4
Mercury ----------------------- 12 78 Canada (59) and Mexico (17).
Tungsten ----------------------- 27 41 Canada (61) and Peru (9).
Lead -------------------------- 27 17 Canada (29), Peru (21), Australia (21), and Mexico
Columbium --------------------- NA 63 Brazil... Canada (16,.
Vanadium ---------------------- NA 25 South Africa (55) and Chile (5).
Flourspar ---------------------- 52 83 Mexico (77) and Spain (12).
Copper ------------------------ 143 5 Canada(31), Peru (27), and Chile (22).
Phosphates (U.S. net exporter) -------------------------------I In quantity terms. Calculated by dividing net imports by total consumption. In some cases consumption includes withdrawals from (or additions to) Government and/or private stocks.
2 Figures in parentheses are in percent.
3 United Kingdom sources for raw materials are South Africa, Canada, and U.S.S.R.
4 Of Zaire origin.
Source: Special Report, Critical Imported Materials by the Council on International Economic Policy, December 1974.

Nic~el. Essentially price critical, i.e. if external prices doubled
U.S, import depen ence could be cut from 65 percent to around
20-30 percent.

":Bised on the Special Report: Critical Imported Materials, Council on InternationaJ Economic Policy, the White House, December 1974.






43

Natural Rubber. Use and supply closely related to the competitive pricing of synthetic rubber. U.S. completely dependent on imports for natural rubber but availability of substitutes is likely
to assure supply.
Manganese. U.S. wholly dependent on imports, but large world
reserves and diversity of potential suppliers render this position
more favorably.
Zinc. Import dependency for about one-half of supply. Domestic production could be expanded to reduce this in three to five
years, or less if necessary.
Tin. Import dependency for about two thirds of supply but secondary recovery and substitutions could be expanded. Stockpile
also held of about 2-year U.S. requirement.
In assessing the U.S. reserves of some 70 non-fuel and fuel resources (including uranium and petroleum), the National Commission on Materials Policy 1973 estimated "identified domestic sources" on a scale through huge, very large, large, moderate, small and insignificant. Excluding twelve of these, with insufficient data to estimate, only six were identified as small or insignificant in terms of potential domestic supplies, i.e. antimony, asbestos chromium, fluorine, mercury, mica.23
As will be noted from the above discussion, however, even where certain materials are wholly import dependent for the U.S., there is no critical world scarcity. The question is one of adequacy of supply, not merely one of self-sufficiency. Whilst noting that, "the U.S. is importing some materials that could be produced domestically because of price", the National Commission on Materials Policy 1973 underlined that certain items may be critically important where no U.S. source exists, In most cases, however, the diversity of external supplies seems to indicate no apparent shortages in the next ten years relative to possible embargoes or OPEC type cartelization. Increased price competition may increase manufacturing costs, but as raw materials constitute a relatively small fraction of such costs, this does not appear to be a critical growth factor for the U.S. other than where it may influence balance of payments or force the pace in domestic exploitation with other resultant energy and environmental costs.
Though the U.S. industrial materials outlook is good, the main problems are likely to come from economic availability rather than physical scarcity. The former depends on "market forces" not all of which may be of a wholly economic character, but rather effected by social and political changes both within and outside of the U.S. Instead of depending wholly on the invisible hand of such forces, however, healthier directions for U.S. growth should be sought in terms of policies which emphasize.More efficient use of materials by increasing their performance
per unit input, by recycling and waste reduction and by cutting rapid obsolescence in certain areas of product use. In effect, we need to design into products their disassembly and recycling phases, e.g., where plastics may be made bio-degradable or, as in military aircraft manufacture, where alloy composition may be
'National Commi ,*eon on Material8 Policy, Final Report, June 1973, pp. 4B-8, 9.






44

stamped on components to aid recovery on scrapping. Production and use and scrapping should be gauged in terms of the whole
materials use cycle.
Increased research and development in materials use technologies and substitutions at each stage in the industrial processincluding more comprehensive energy accounting in extraction,
production, manufacture, distribution and end use.
External policies and agreements for more equitable access to
the world resources pool-not only with regard to U.S. requirements, but in terms of equity of advantage and sharing for all
participants in the world economy.
The latter point is an important one for future growth policies. One of our major market areas, for example, is the EEC group of nationswhich U.S. aid policies helped reconstruct after World War II. The same advantages for mutual benefit should now be explored with the lesser developed nations. Their development and growth should not be viewed simply in aid terms but a mutually reciprocal basis. They are in dire need of many comodities of the advanced nations, such as the U.S., and more innovative trade linkages could be explored than are presently used. The return on investment might be much longer-term than the EEC case but the potential is much greater for both the U.S. and for the greater stabilization of world economy on which our future growth ultimately depends.

THE MARKET AND POLICY
The market structure in the materials area is more complex than that of energy as, (a) it deals in a vastly greater range of raw materials, processes and end uses, (b) it is, therefore, much more diversified in the number of businesses, degree of competitive practices and vertical integration. This very complexity of the myriad interdependencies and interlinkages of extractors, primary and secondary processors, by-product uses, etc. each acting with limited responsibility for their own sector, makes it difficult for the "market" to adjust to very rapid changes in supply positions. It is also a hybrid market structure in which government intervenes to a considerable degree via regulation, taxing and subsidy procedures.
In some of the more critical areas of materials supply it is unlikely that the commercial market alone could act with sufficient flexibility to safeguard the economy from potential scarcities due to higher pricing and tight supplies. Also, as we shall later discuss, the more systemmatic kinds of materials use policies which may be necessary to sustain prefered growth directions would require a much closer working relationship between the "market" and government.

Towards a Regenerative Resource System
In terms of a more adequate energy and materials' policy we need to move in the next ten years towards a regenerative resource system which emphasises the more efficient performance per resource unit used. This speaks to the needs of a more diversified conceptual frame for growth-as going beyond the fiscal economy towards the inclusion of social and env ironmental costs and growth advantage.






45

The idea of a regenerate resource system expands our immediate considerations of U.S. resource adequacy towards a more fundamental assessment of industry, agriculture, services and other human systems in terms of potentialy symbiotic and regenerative modes of usinc" energy and materials-as an external metabolic system. Just as weliave successively mapped the flows of vital elements in our internal body metabolism so we now need to begin to do the same for our external metabolism-which comprises all the ways in which we use energy and materials in the overall economy.
This approach should be extended to include not only industrial and agri-industrial uses, residuals and pollutants but also the overall flow of energy and materials in our domestic, urban and other sectors. It would be a physiological rather than merely a pathologial approach as at present-where we rush to identify economic and environmental malfunctions in one sector without much regard for its relationship to the larger system. Within such an approach, social and environmental factors mnay be found to be economically advantageous rather than the reverse. Currently piecemeal attention to pollution, "wastes" and "residuals" disposal is often costly because we have no systemic ways in which to extract valuable materials presently labelled as pollutants; we burn, bury, or void into rivers and lakes, large amounts of resources as industrial, urban or agricultural wastes-or we engender considerable expense in getting rid of a noxious residual in one industry whilst another industry may be producing the same substance as its primary product.
In effect, we need to review our energy and materials use systems in more organic, biological as well as in more economical and rational terms. At present, most parts of our agri-industry economy work in comparative autonomy. We have extractors, primary processors, secondary manufacturers, end-users and their sub systems-with the scrapping and reclamation sectors at still greater remove. Whilst each may operate relatively efficiently, the overall system efficiency is low. In many cases, the flow from raw material through end-use to scrapping and re-use could be optimised at much lower economic, social and environmental costs, and thereby allow for more diversified growth at less overall cost.
As may be seen in the accompanyin figure 20 of the average life cycles of products, many are in very short lifetime uses whose more systematic organisation via closer industrial collaboration could, (a) extend product lifetimes where applicable, (b) effect considerable energy and materials investment by broadening responsibility for Oresource conservation through the entire cycle from primary processing through end-use to re-use. In some isolated cases, now observable in aluminum cans, where the cycle from manufacture to recycle is brief and clearly identifiable, the materials system might be based more economically, organised on rental/lease to govern the whole cycle, thereby spreading- the responsibility for economy of use and conservation of resources.
More symbiotic relationships could be designed between primary processors and by product users by optimising alternative process paths to specific products thus providing more efficient by-product utilisation of wastes and residuals.







46

In larger terms, one may envisage the much tighter relationship as now possible in the overall market continuum with the capabilities inherent in new information and communications capabilities already described. (See figure 21.)
This figure suggests how various stages could be strengthened to increase feedback through subsystem in the continuum enabling adjustments to be made more swiftly to meet changing profiles of resource availability and market/consumer needs. This would contribute greatly towards stabilising the economy, allow for swifter identification of key growth points and enhance longer range forecasting and planning capabilities.

Policies for a Regenerative Resource ASystem

Some of the technical basis for devising such policies may be found in input/output techniques, energy accounting, materials flow studies and in areas of technology assessment.

FIGURE 20

AVERAGE LIFE CYCLES OF PRODUCTS
Shipbuilding and Marine Equipment
Rail Transpeortation Equipment
Contractors' Products _Foundry [
Ordnance & other Military Equipment [ Electrical Machinery and Equipment
Metal Working Equipment i
General Purpose Industrial Equ;pment FMninng. Ouarrying and Lumbering
Machinery and Industrial Tools [Air Conditioning and Ventilating Equipment
Agriculture Equipment
Construction and Related Equipment
Cantainers ,
Automotive :
Refrigeration Equipment [---Other Domestic and Commercial Equipment [
Oil and Gas Drilling Equipment 1
Appliances, Utensils and Cutler'y
Aircraft
Aircraft Engines' ..
Hand Tooli
Utensils and Galvanized Wire [1 ]
Washing Machines and Ironers r
I I
0 5 10 15 20 25 30


1. -1O years depending on the type, size, etc.
2. Classifications above are for steel based products.
3. Metals now average 42 years in building: weighted average-total refined metals recireulated every 22 years with variable loss.
Adapted from :
1. Mcllale, John, World Design Science Decade. 1964-1975. Document 4. The Ten Year Proram. Carbondale, Illinois. World Resources Inventory, Southern Illinois University, 116f5.
2. Survey and Ainalysis of the Supply and Availability of Obsolete Iron and Steel Scrap (Revised edition) Columbus, Ohio, Hatelle Memorial Institute, 1957,
3. Iron and Steel Consumption Problems, Washington, D.C., U.S. Department of Commerce, June 1967.






47

FIGumE 21
EMERGING MARKET CONTINUUM
flows of funds


GENERATORS TRANSFORMERS PRODUCERS REGULATORS CONSUMERS
Basic research Applied R&D Manufacturing, Standards. Anti.
... ... ... ervices, to". st. Regular an,
Distribution Setting ol priorities
SCIENTISTS BUSINESS BUSINESS GOVERNMENT BUSINESS
ENGINEERS EDUCATION GOVERNMENT EDUCATION
ARTISTS GOVERNMENT GOVERNMENT
ETC. IN DIVIDUAL
SOCIAL GROUPS
ETC.
I L . . . -.J L I I
flows of lawvs/authority I

II
I Varying degrees of
I interlinkage and
----------------- -..-.-... -. -. feedback
.... ...... .................................................................... ...........................
Source: "The Changing Information Environment: A Selective Topography," J. MeHale, Chapt. in "Information Technology: Some Critical Implications for Decision Makers, 1971-1990," The Conference Board, N.Y., 1971.
Specific policies to encourage approaches to such a system might
include:
(i) setting up a study group(s) to review the overall concept
and coordinate the various technical approaches to it already
underway.
(ii) assessment of the dis-incentives built into present energy
and materials use policies and the regulatory and tax structures governing the uses of new and "old" materials. Many of our current policies of tax incentives and depletion allowances directly encourage greater exploitation of new materials-and discourage
more economic recycling and re-use strategies.
(iii) possibilities of increased lateral integration of extractive,
primary processing and byproduct industries both in energy and materials. This may fly in the face of present anti-trust regulation but ways could be found, and incentives created, to encourage more rationalisation and collaborative arrangements to take advantage of scale and total process systems in various agriindustry groups without creating monopolistic practices.
(iv) initiation of annual or biennial "growth" reviews. Paralleling the various reports of the President, these should not deal only inm financial costs but be primarily concerned with physical energy and material flows and costs-(a) in maintaining domestic standards of living, (b) employment and productivity in the overall economy, and (c) coordinated estimates of social, environmental and economic impacts of changing growth patterns. with a running inventory of resource use, rates of intensity-of-use, consumption, status of alternative sources and substitutions.






48

N.B. Much of this kind of information is already produced in many different forms but requires more concerted efforts to present in more integrated fashion for both the decision-maker and
the general public.
This discussion of a more systematic and regenerative approach to resource use may be extended, in larger perspective, to speak of the regenerative society as a conceptual model for future growth. Our fixation on one-way use of physical resources and lack of coordinate responsibility for the hidden social and environmental costs and diseconomics also extends to human resources.
Many of our prevailing modes in education, work and organisational style tend to view people in single-use and discard fashion. The human life cycle could be more gainfully employed (or enjoyed) in a system which made more allowance for change, growth and regenerative renewal throughout life.

CONCLUDING REMARKS
It has been generally assumed in considering economic growth per se, in advanced societies such as the U.S., that this is predicated on the continuation of high material demands and consumption as approaching exponential levels-thus leading inevitably to resource scarcities and high environmental deterioration.
This viewpoint fails to take into account many of the technical and resource economy changes which we have discussed--the expandable nature of many reserves, increased energy aand materials intensity-ofuse, technical advances in substitution and recycling and the emergence of new industrial growth-points which are much less energy and materials intensive.
Although no strong sets of data or other evidence has been assembled, it may also be suggested. in terms of the U.S. particularly, that as living standards rise and more people achieve sufficiency levels of affluence, we could approach satiation or stabilisation of demand in many areas.
U.S. population growth has slowed and we may expect only about a 15 to 25 percent increase in the next 20 or 30 years. Many of the physical structures and facilities to serve such a population are already in place. Changes in the location of work place to residence, in leisure pursuits and entertainment will entail changes in the disposition of energy and materials usage. The new "sun belt" migration, for example, is also coupled to changes in life style which are more oriented to increased leisure and recreational pursuits.
Many of those coming to maturity in the next ten years already appear to have different attitudes and values than their parents. Some of these attitudes reverse older "conspicuous consumption" trends as evidence of achievement and turn towards less materially goals. styles and life satisfactions. As the work force composition changes from a production to services orientation there may further intensivity of resource use in production. Though energy and materials use is .till high in many service needs, they tend more to be people and organisati onally intensive sectors.






49

Demands may, of course, be artificially maintained and stimulated but, as advertising revenues indicate, this is an increasingly costly process. The growth tendency in more materially advanced societies, may not he towards more products and more things-but towards better quality, wider ranges of choice, and access to more services. The recent rise in U.S. consumerism is patently not a movement towards getting more goods to consume but a demand for better performance, longer life, safety and durability in those already available. It has also been accompanied by non-material demands for more balance and diversity of growth in environmental concerns and quality-of-life
issues.
One might hypothesise therefore, that in conditions of relative ffluence wholly material demands in terms of personal consumption peak out below maximal satiation, and then seek satisfaction through prgessively dematerialised and, eventually, symbolic means. (See

FIGURE 22








Maximal -- ---- -- -- -- -- -- -- -- -- -- --%% %
Sufficiency - - ------Satisfaction
levels






Minimal - - -- -- ..
Level




TRAJECTORY OF NEED SATISFACTION

As needs and aspirations rise ard are met on the ascendancy phaspthey tend to go beyond sufficiency/atisfaction levels to "conspicuous
material consumption -- then to descend towards more symbolic modes
of satisfaction which become lass material.
Source: Human Requirements, Supply Levels and Outer Bounds: A Framework for Thinking about the Planetary Bargain by John McHale and Magda Cordell McHale. A joint publication of the Center for Integrative Studies, State University of New York at Binghamton and the Aspen Institute for Humanistic Studies, Program in International Affairs, New Jersey, 1975.






50

There is an observable shift, then, where people begin to pursue styles of life and goals for personal growth, which move away from the energy-intensive, materially costly and conspicuous consumption phase of development, towards concerns with different ranges of life experience. The expansion of shared amenities and services becomes important, and even where the individual may not use them, he or she will tend to support to their collective availability as a draw-down on the public purse.
Overall these kinds of social and value changes within society, accompanied by the technological and resource-use shifts which we have discussed, suggest that the growth requirements of the next decade could probably be satisfied with less per capita energy and materials use, lower environmental impacts and an expansion of economic productivity in more diverse ways.
There is a strong policy need to explore and survey, in more continuous fashion, such changes in citizen attitudes and preferences in relation to growth goals. This should also be done in ways that present more vividly the range of costs, benefits and options which changing directions would entail.
Again, we should not assume that the changing nature of such demands will be automatically taken care of by conventional market forces. On the contrary, the market has lagged behind in responding to the economic provision of many services, to consumer issues like quality in products and environmental conservation. Even in its traditional function of providing diversity of choice we may observe this lag in many major products and services-in failing to meet the need for smaller, less resource hungry automobiles or better mass transit. for more diverse, flexible, and economic housing, and for ranges of consumer items where quality and durability has been sought.
Part of this problem may be found also in the lack of coordinate policy frameworks on such issues in government which now controls many of the incentives through which alternative growth policies may be pursued-tax structures, direct and indirect subsidies and other regulatory practices. Previous policies have often been constraining upon more innovative market directions through lack of knowledge of better social, economic, and technical options and have thus often rewarded vested inertia rather than new enterprise, whether public or private. It is to be hoped, therefore, that the current debate on U.S. economic growth will lead to greater clarification of these issues.
It seems clear from our present review that the continued growth of the United States during the next decade will be constrained more by its capacity for institutional and technological innovation rather than by any potential resource shortages. Directions for more selective and diversified growth are already implicit in many ongomg social and attitudinal changes. In terms of global requirements, the economic growth of the United States as a major force in the world economy is essential, not only for the health of that economy but to assist in meetilng the basic needs and growth expectations of the less fortunate both in the local and the larger world society.













MINERAL RAW MATERIALS AND THE -NATIONAL WELFARE
By Plu~sTox CLO-UD *


The ultimate dilemma (is) that all of our knowledge is in the past and all of our decisions are about the future. Ian H. Wilson, Michigan Business Review, July 1974, p. 15.
The state is more than a device for serving the immediate preferences of its citizens. Its purpose is to achieve collective objectives, and the collectivitythe nation-includes a constituency of generations not yet born. George F. Will, Newsweek, May 31,1976, p. 76.
SU3131ARY
All of the minerals that man can ever hope to produce and use are in the four-tenths of a percent of the mass of the earth that makes up its outer crust, and most of these are in the outer two to three kilometers. In practical terms only a minute fraction can be thought of a potential mineral resoutrce, because the energy required to get at it, concentrate it, and clean up after removing it, rises rapidly as grade decreases and depth in the crust increases. Reserves of a mieral (including, loosely speaking, those of a metal or other element found as a native element or contained in a mineral) include only those deposits that are known to exist as a result of physical prospecting, and which, in addition, can be extracted. and brought to the market at a profit. Reserves increase as ne 'w deposits are found and explored, or as advances in extractive technolog., new transportation systems, or price increases transform previously submarginal resources into reserves.
Mineral raw materials are the basis of industrial society. Although they represent only 5.6 percent of the $1.5 trillion _Un'ited States GNP for 1975, their increase in value as a result of various transformations represents about 40 percent of the GNP at the stage of finished products, and in some sense they underpin all the rest of the GNP. (See figure 1.). M Ainerals are the vitamins that keep -industrial giants healthy.
Scarcities of mineral resources arise where grade of ore declines to levels at which costs of energy and materials required f or mining, extraction, and environmental restoration begin to climb steeply. (See figure 2.). Below this grade it is possible to continue mining only those products that are. sufficiently prized for their inherent properties or exceptionally strategic nature, or for which new mining- or extractive technologies or economies of scale reduce the grade level at which energyT costs begin to climb steeply. Even now, however,
U.S. Geological Survey and Department of Geological Sciences, University of California, Santa Barbara, Calif. (Affiliation indicated for purposes of Identification only and not as an implication of endorsement of views by organizations mentioned.)






52

16 percent of the total U.S. energy budget goes for materials production. As that percentage grows, the cost of energy becomes increasingly critical, as does the prospect of deleterious environmental effects from energy production and use itself. A steep general climb in energy costs for materials production would have a sharp braking effect on the economy. Moreover, as energy restraints limit access to materials, so do material restraints limit access to energy. Industrial society must have adequate resources of both, and that will take much well-directed effort.
Only a few geochemically abundant substances are both so far from the energy barrier and so widely distributed that there is little danger they will cease to be available in a sane world. Iron, aluminum, magnesium, and the silicates are examples. The industrial society built on them alone would be austere indeed, however. For many others, recurrent shortages and for some, economic depletion can be predicted within the first half of the 21st century. Petroleum, natural gas, and helium (except in the atmosphere) will be gone except insofar as resources are withdrawn or stockpiled. Global shortages can also be expected for antimony, bismuth, copper, gold, and molybdenum. As for domestic supplies, additional shortages exist or can be expected with respect to sheet mica, commercial asbestos, fluorspar, tin, columbium, silver, strontium, the platinum group metals, mercury, and probably others. (See figures 3-9 and table 1.)
We need to generate a less materials-consuming set of demands while striving to satisfy genuine needs. If our primary goals as a nation are the achievement of a closer approach to equity, ample but not extravagant living conditions for all, a balanced population, preservation of a diversity of clean habitats and natural areas, and opportunity for self-fulfillment in constructive types of activity, extractive products can certainly be made available to attain such goals in the U.S. Achievement of these goals, however, is threatened by excessive consumption, waste, pollution, and continued population growth even in the affluent nations, let alone the deprived three-quarters of the world. A critical reexamination of both goals and means is thus needed. It is hazardous to rely on market signals alone in foreseeing and generating compensatory reactions to resource scarcity. Warnings can arise faster from other sources if we will but heed them-the energy crisis is a good example. Moreover, the now very large and increasing number of consumers, consuming more per-capita than ever before, results in shorter warning times between general perception of impending shortages and their emergence as real crises. Market signals need to be supplemented by strategic planning activities in which a variety of competent specialists interact to discern trends in resource use and misuse, the likely consequences of permitting such trends to continue, and the prospects and consequences of various kinds of ameliorative action.
Ten suggestions for minimizing or avoiding shortages of mineral supplies are as follows; including very rough guesstimates of cost and listed in the order of priority as I would rate it at this time:
1. Establish a strategic research anl planning co mission or
center for mineral resources to be staffed by geologists, extractive






53

chemists, mining engineers, materials scientists, ecologists, and economists with instructions to monitor mineral resources and materials and with authority to propose action at top executive and legislative levels. Costs; $5 million to provide facility, $3 to $5 million annually to operate.
2. Create legislation limiting the weight and horse power or number of cylinders of automotive vehicles to that required for the use to which put. No monetary cost. Much expected saving to user in reduced costs of intial investment and subsequent operation. Large conservation of fuels and metals with no reduction of basic individual freedoms. Reduction of adverse environmental impact.
3. Accelerate geologic mapping and related geological research,
including geochemical censuses to define metallogenic provinces and epochs. Cost for adequate increases about $12 million a year.
4. Convert space-heating and cooling system to solar energy
as far and as f ast as possible (creating many new jobs in the process). Cost in the billions of dollars over a 10 to 15 year interval, perhaps as much as $200 billion total, but with eventual large and permanent saving in costs of energy raw materials. Cost would be mainly to private user, perhaps with a federal subsidy to home owners.
5. Increase support for solar energy technology, fusion energy research, geothermnal energy exploration and research, and more efficient energy conversion and transport systems. Cost perhaps $40 million a year.
6. Rejuvenate and modernize research and training programs in mineral science, Mining, and extractive technology. Cost for an adequate program about $15 million a year-$3 million a year to 5 institutions.
7. Support studies related to nwtallo genesis and the theory
ore-finding. As little as $3 million a year could have a beneficial eff ect.
8. Support materials science research aimed at the more conserving use of or substitution for scarce raw materials. Expected costs about $10 million a year-$2 million a year to 5 institutions.
9. Intensify exploration of the continental shelves and slopes.
Cost for adequate increases perhaps $15 million a year.
10. Allow prices to ris8e to levels that encourage more conserving practices and more inteniive exploration. Prices might even be encouraged to rise, with beneficial side effects, by imposing stringent requirements on evironmental protection and cleanup, charging for depletion quotas on the scarcer commodities, and increasing taxes on raw materials generally so that they can be reduced elsewhere. There is no inconsistency in recommending conservation and intensified exploration in the same context. It will take all we can achieve of both to meet national requirements in the coming years without ruinous trade deficits. Moreover, some increase will be needed, even as -we strive toward a steady state, in order to enhance the material lives of the now deprived and provide for the roughly 1 million new U.S. births that will continue





54

to arrive yearly for some years to come. No direct costs other than to user, some savings in reduction of regulatory activities, potential increases to federal and state revenues.
Among other actions called for, I see it as of central importance to move away from traditional modes, including traditional emphasis on material growth, and to define new and more humanistic goals and better ways of arriving at them. Because traditional growth patterns lead to resource scarcity, any alternative pattern that reduces such pressures makes resource scarcity easier to cope with. Thus I stress that the only kind of growth that is both beneficial and capable of being sustained by national and world resources is growth in enhancement of the human conditions-EHC. This sums up what I hold, along with peace itself, should be the central goal of the Nation and the world.
EHC can be achieved by taking steps to put the means of livelihood in the hands of all people, by emphasizing nonmaterial ways of achieving a sense of personal value and standing in the community, by eliminating planned obsolescence and emphasizing the quality and value of working material stock rather than the rate of fiscal turnover as a measure of economic well-being, by deemphasizing the use of nonessential material consumption and waste as.prestige symbols, by bringing populations into balance with the carrying capacity of the nation and the planet for lives of high quality, by decentralizing industry and populations, by legislating incentives and disincentives that will promote these goals, and, finally, by getting the top people into the top jobs instead of letting them go to willing mediocrities or as political rewards. In the body of the report I discuss how an index of EHC (Khc) can be measured comparable to GNP and with more relevance to the quality of life.
Two suggestions directed toward the elimination of unemployment and the attainment of a high EHC index are as follows:
1. Establish a program of sabbatical educational and advanced
training leaves for all members of the working force. During one full year out of seven (on a rotational basis) everyone would go back to school or into special training or research programs to acquire new skills or to improve still-needed traditional skills.
This would account for 14 percent of the working force, a number substantially larger than that of the presently unemployed.
Among other effects discussed, such a plan might also reduce jobhopping and provide management with a more stable more interested, and regularly upgraded working force. The initial fiscal costs to management would be less thap the reduction from the 50 to the 40 hour work week, while the gain to society (and management) in the form of healthier, happier, better informed citizens
could be great.
2. Establish an array of new Urban Grant Universities
(UGU's), remote from present cities, as nuclei for a larger number of smaller, pleasanter, better dlsp sed cities, and more accessible educational opportunities. The _UGU's would be granted tracts at the edges or corners of scenic well watered, public lands for their foundation and partial support. By developing appro-





55

priate programs, combined with easy access to recreational lands, and by contractual aiTangements with industry, private foundations, and government, each UGU would seek to attract light industry, commerce, cultural activities, and, of course, people to the region. Thus UGU's could nucleate the growth of new and pleasanter cities while simultaneously reducing some of the pressures on existing urban complexes, achieving a healthier dispersal of populations, and providing experimental opportunities for new types of construction, urban services, and strategy in the use
and conservation of materials.
Politics must be transformed into statesmanship to make such things happen. But, if they could be made to happen, I believe they would provide strong impetus toward more humanistic and less materialsconsuming goals for the Nation, toward a better balance between man and nature, and therefore toward enhancement of the human condition.
INTRODUCTION
Omitting land and livestock, the basic ingredients of the economy are the same now as they were at the founding of the Republic-the four M's-mind, manual skills, money, and materials. Capital and labor became larger and materials smaller fractions of the GNP before commodity prices started rising again a decade or so ago, but nothing happens without materials. Under the influence of mind, manual skills, and money their multiplier effect on the economy is enormous. Non-energy raw materials move through the system driven by a sustained flow of energy to ever-higher forms and uses, until finally they end up either by being recycled or becoming a waste-disposal problem. nis is illustrated by Figure 1. In the U.S., for instance, during 1975, the initial valueof mineral and energy raw materials used was only 5.6 percent of the GNP (4.2 percent domestic). By the time the stage of finished products was reached, however, the combined value of materials plus inputs of energy plus manual and managerial skills accounted for some 40 percent of the GNP. And, in some sense they underpin all the rest of it. Everybody "consumes" raw materials in the form of transportation and communication, housing, work space, and daily operations. Thus, mineral and other raw materials exert a strong positive multiplier effect on the economy.










Agriculture



.** Machines *
** Products Uses GNP
os'Structures Services Forest -,~40 .
Products i>


o2.
MatIer s Deterioration
or Febricotion / Dbsolescence ... "
Structures | <
an nd Assembly RECYCLING
Functions E
o
U AST

Ref inedWAT Mineral
Processing Energy
Products 0 DISPOSAL
18% o ........ POLLUTION

A I
g e aI Beneficiation te nea
Puri f icctio raw
1% Re n lestone I
Re 5 6%
'.... ocmbin an i. Tn Exploration
Pools Actions m ,wi Extraction / u*
E n e rg y f lo w ** a fs s

FIGURE 1.-Flow of materials and energy in an industrial society (percentages
given are of 1975 GNP for the United States).

Multiplier effects, of course, can be either positive or negative. Thus an ample and continuing supply of new or recycled materials supports a solvent industrial economy, while diminishing supply, grade, or ease of access causes aches and pains. Scarcities n an economic sense arise as a result either of excessive demand or inadequate supply. And inadequate supply can arise either from approaching physical depletion or from a variety of factors that lead to excessive costs. Chief among the latter factors affecting mineral raw materials is decreasing grade of minetalliferous deposits, requiring higher energy inputs boti per ton of metal recovered and for management of growing volumes of waste and related needs for environmental restoration-all caused by the need to process increasing volumes of host rock for equivalent (quantities of materials sought.
The issue of mineral supply, however, involves many other complexities of geology, technology, economics, demography, and the sociopolitical conceptual environment within which these factors act and interact. A clear perception of it is difficult enough without the (Complaency fostered by simplistic statements about needs, rights, the )power of the free market, infinite anything, or the whole earth being mnade of minerals-which, of course, loosely speaking, it is.





57

The problem is to find, separate. and brina to bear on improved human welfare an optimal quantity and selec tion of those minerals and mineral products that can enbance it without imposing avoidable adverse effects on living systems or the physical environment. Interior Secretary T. S. Kleppe expressed it, weli on his nomination to that position when he remarked, "We must strike a delicate balance between resource use and resource protection, and keep in rmid that the economic penalty for an error in the direction of overprotection can always be corrected, while the damage from resource abuse may be irreparable." As they say in the Caterpillar tractor ads., "We must have, minerals . But we must also have an inhabitable environment." So the cost of minerals in both dollars and energy units is going to go up, and that cost must be internalized, which means it will be transmitted to the user. Higher dollar prices for energy and raw materials, in fact, are not a bad idea. That they have been so ridiculously low considering their enormous significance for industrial economies is in large part why they have been used so profliorately. One benefit of higher prices could be more efficient. more conservina uses of materials. Posterity would benefit from such practices.
All forecasters worth listening to agree that futurology is an inexact art and that the longer the interval forecast the more inexact it is likely to be. That is usually where agreement ends. Nevertheless, the conduct of human affairs requires, that we attempt to look into the future, if only to decide on a 'plan of action for the next election. I hold, in addition, that the very fact that we have some ability to foresee the consequences of our actions makes us answerable to posterity for them, and that the least we can do is to avoid thoughtless or premature foreclosure of options for the future-not only for the short term, but also for the intermediate and long range.
It may even be that one of the reasons "Predictions" often prove wrong is that they stimulate anticipatory reactions. Suppose one makes the entirely correct prediction that present trends cannot be sustained. If that prediction is followed by leveling off or reduction of population and per capita demands for materfals-consuming products and more conserving uses generally, a constructive result is achieved by reactions that may, in retrospect, make the prediction seem incorrect. 1t doesn't matter whose prediction was right as long as balance's are restored. As for substitution of materials or technologies,, invention of new resource-conserving materials, or development of new extractive or mining processes, they require recognition of opportunity that can benefit as much or more from geological perceptions of impending problems as from economic or technological signals, if only they can be heard.
My goal here is to articulate those characteristics and processes that either impose limitations on or afford opportunities for the advancement of mankind and the Nation insofar as mineral resources are concerned. Under mineral resources I include metals, a variety of nonmetalliferous resources, and mineral fuels such as coal., oil, gas, and uranium. I draw on many sources, in particular the works of the Bureau of Mines and the Geological Survey, and I have discussed the issues with many associates. But I have submitted this paper to no one for review or approval and I alone am responsible for all views and judgements expressed.
78-653-76 5





58

E.TRoPY, ECONOMICS, AND MINRALPU0DuGToN
Most economic assessments of mineral potential are too simplistic. There is a geological parallel to Borgstrom's passionate plea to "those economic analysts who . take refuge in an abstract verbal world far removed from the stark realities of our globe and its staggering needs." (See Borgstrom, 1969, p. 73.) A comparable set of analysts is all too prone to overlook or minimize geological variables and technological limitations in the stubborn faith that market forces will provide whatever warning, inducement, or corrective action may be needed to restore interruptions in the flow of minerals sought. Brooks and Andrews (1974), for instance, drawing attention to the obvious fact (leaving out the hydrosphere and probably Earth's fluid core) that "The entire planet is composed of minerals", conclude that "The. literal notion of running out of mineral supplies is ridiculous". Under a loose and impractical definition of "supplies" that, of course, is correct, and it serves to support the notion of economic omnipotence. But nobody ever suggested we'd run out of quartz or that metals couldn't be recycled, or even that some materials would not find substitutes. Goeller and Weinberg (1976) follow their ringing de of a cornucopian outlook with the concession that they see 'no insuperable technical bars to living a decent rather than a brutish life", provided of course, that we speak of "a stable population" (emphasis addd).
I agree, but would phrase my agreement with a different introductory emphasis, including the urgent need for very early stabilization and eventual reduction of population. Therein lies the crux of the matter. Neither U.S. nor world populations have stabilized, and although the U.S. may be headed in that direction, we cannot divorce our fate from that of the larger world. On the 200th anniversary of our independence, the real population of the U.S. (allowing for census oversights) was close to 222 million and that of the world about 4.23 billion. World population is currently increasing at a rate that yields a doubling time of about 35 years--or around 30 years in the poor three-quarters of the population. Given its age structure, ond assuming current birth rates continue and no further immigration takes place after the year 2000, U.S. population will stabilize at about 270 to 300 million between the years 2020 to 2045, depending on whose numbers you like.
Those are trends we have to deal with, either by altering them or by seeking to meet the demands for materials that the housing, feedine, transportation, and employment of these additional new citizens will create. Without dramatic economies and advances in reeling it will not be possible to meet those demands except by large infusions of new virgin raw materials.
By now all are familiar with the consequences of exponential growth -g-owth that increases by seemingly small but cormounding proportions, such that 1 percent annual growth gives a doubling time of about 70 years and 7 percent growth doubles the initial quantity in 10 years. As long as growth in consumption of materials continues, even 100 percent recr1cl nq meets only half the eed. for each doubling time! Given the aol of stabilization at present percapita levels of materials use., we would still have to increase production over the next 50 to 70 warsq just to meet internal demands. What dooc; this entail? Georgeseu-RPoeren (1971) and a few other economists under4and that the really basic limiting factor in resource








rouction, apart from a breakdown of society itself, is not likely to be mrrency so much as it is energy. That is a consequence of the secondlawof thermodynamics, not susceptible to repeal, which says that theentop of the universe always increases. In practical, oversimplified terms, this means that disorder always tends to increase, that order
cnbe retred or increased only by an investment of energy, and that avalble or "free" energy is converted by use into unavailable states.
The mining, extraction, and beneficiation of ores to produce metals represents an increase in order at a cost in available energy-about 16 percent of all energy used in the U.S. in 1975 for a domestic mineral production that fell 25 percent short of demand. Energy cost increases exponentially as the grade of ore decreases to somew grade at which there is an inflection in the rate of energy demand such
tht it ascends toward the vertical. This is clearly explained in papers byPage and Creasey (1975), Cook (1976), Hayes (1976), and
Skner (1976), including the problem of metals needed for energy Figure 2 illustrates the problem. It shows how, as the grade of ore decreases toward the left beyond certain critical values, energy costs climb abruptly and dramatically. This, in effect establishes- cutoff grades below which metals cannot be produced from those ores at toler'able prices and existing technology. Nor is it easy to foresee what tehnology might drastically reduce such energy demands. Energy
aotof course, include not only those of actually rdcn n ee
ficiating the ores, but those of transportation to the market and a suitale fraction of the energy costs of all plant equipment and facilities inolved in production, beneficiation, and transportation. The 16 percent of the U.LS, energy budget that presently goes for mineral production will increase substantially as we seek to reduce our dependence on foreign sources. As the price of energy goes up the hardcuirrency cost of non-energy mineral procurement will also increase with consequent braking effects on the economy.
This follows inexorably from the second law of thermodynamics anid the decreasing grades' of new primary ores. Economics enters the picture only: to the extent that the growing energy investment is reflected in rising prices that, in turn, will stimulate the geological search~ for higher grades of ore and the technological search for substitute materials and practices. A question to consider is why we must wait for economics to tell us what appropriate expertise can foresee now,, albeit dimly, when the lead times needed for the development anid introduction of uncertain new materials and technologies are so long as to introduce stresses the economy could do better without.
Even the hoary economic fallacy that decreasing grades of ore are invariably compensated for by increasing volume, the so-called arithmnetic -geometric, or grade-tonnage ratio, has now been laid to rest for the very ores (porphyry copper) that gave rise to this concept initially. A comprehensive study of grades and volumes by Singer and others (1975) shows that this is not true for copper ores in general, and that, in particular, "large-tonnage very low grade deposits in the porphyry class . are .. very rare."
The point is not that economics is not crucial. but that an economic philosophy rooted in the concept of ever increasing material growth as the basic or even sufficient ingredient has dominated U.S. affairs to the point of conceptual bankruptcy, whereas other aspects are





60
equally important and in some instances should be overriding. It is time to balance the decision-making process by introducing a mix of economic considerations and viewpoints and by paying comparable attention to other factors, including the long range values of economy in the use of most materials (an interesting example of a commodity in limited supply where conserving e is essentially valueless because of its by-product relation to another substance is the gas helium).

240

220
Ti in soils
200

o 180Ti in beach sands
(b180
rich in ilmenite
O 160 / ,,Ti in all rocks
Cl) xx

140 Al in anorthosite

S120
..--AI in clays L 100

o 80
Al in bauxite 60 (as A1203)
Lij
0Cu in sulfides
20 Fe in laterites
Fe in hematite
0
0 10 20 30 40 50 60 70 80
%" METAL CONTENT
FIGURE 2,-Energy costs of metal production (simplified from Page & Creasey, 1975).






61

MINERAL DErOSrrS, RESERVES, RESOURCES, TOTAL STOCK
If the whole earth is made of minerals, why isn't it all one big mineral deposit? Indeed that is implied by the suggestion, often made, that, as grade of ore decreases, we will turn to mining "common rock," Like many other reassuring, oversimplicities, there is not only an element of truth but also food for dangerous complacency in this one. Indeed, to the extent we obtain lead a'nd zinc from limestone and copper from sandstone, we mine "common rock" now. But the idea is misleading -to the non-geological public in the same sense that. the idea of an earth made up of minerals, while literally true, is misleading. The zinc-rich limestones and copper-bearing sandstones are, in fact, very unusual rocks. It is the uncommon features of a rock that make it mineable. It is the local concentration of elements'beyond, and usually far beyond, their normal abundance in -Earth's crust to comnmercially exploitable levels that we designate a mineral deposit. Even if the whole earth were accessible to us, which it is not, other factors would limit our exploitation of it-above all energy accounting, but also considerations of public health, safety, and environmental quality.
The nature and origin of mineral deposits 'is succinctly discussed in a very readable paper by Skinner and Barton (1973). Except for placers and residual aggregations produced by weathering at Earth's surface, practically all mineral deposits are formed by local concentration from mobile fluids of some sort., Many of these are warm, salty, aqueous solutions that move through rock, depositing minerals chemically just beyond points of temperature change or constriction, in response to boiling or fluid mixing, or because of -chemical reactions with particular adjacent rock types. Others are actual rock melts that produce chemical or gravitational segregation of particular minerals during crystallization. And still others are vapors, special kinds of open water bodies, fluids that were buried along with ancient sediments, ground water itself, or some mixture of these things.
As a consequence of reactions within these different solutions, melts, and vapors, or between them and the rocks through which they flow, different kinds of mineral deposits are formed, many of them having highly irregular shapes and being difficult to discover and exploit. And, of course, the metal elements, in which we are particularly interested, display a wide range of normal geochemical abundances in Earth's crust, depending on rock type.
Some metals are so abundant and so widespread that it is fair to expect that technological advances -and market pressures will assure a continuing supply sufficient to meet all-demands of a sane world for thousands of years. They include iron, aluminum, and magnesium. At an intermediate level of abundance, but not so universally available are manganese, chromium, and titanium, all with crustal abundances greater than 0.01 percent by weight. All of the foregoing elements are found as essential constituents of minerals. Together with the silicates and other rock-forming minerals, they make up 9 9.23 percent of Earth's crust and provide a fall-back position for Industrial technology and civilization.
All other metals, those with crustald abundance less than 0.01 percent by weight, are relatively scarce and commonly of restricted occurrence. They tend to. occur by atomic substitution in silicate minerals rather than as essential components of minerals and to form very irlrgular





62

and highly localized ore bodies. These are the ones where scarcities now threaten or can be expected to arise. Their increasing scarcity or practical exhaustion will force changes in technology or institutional structures. They should be the focus of strategic research and planning in terms of mineral exploration, extractive technology, and materials science and engineering. The difference between the abundant and scarce minerals is somewhat like the diff :erence between abundant and scarce game, fish, or trees. The abundant ones are easy to find and harvest, the scarce ones difficult and uncertain. "Luck" in finding and harvesting the difficult and the uncertain is reserved for those who have prepared themsebes properly for the job.
Reserves are mineral deposits that have been discovered, defined as to volume, and shown to be commercially exploitable under exising technology, transportation networks, and market values. They differ from resources, which include probable undiscovered mineral deposits, as well as those known to exist but of unknown, unproven, or submarginal economic feasibility. McKelvey (1973) has developed a classification of mineral deposits that is now standard in Interior Department reports and widely accepted elsewhere where such estimates are made. Cloud (1975) also has discussed reserves and resources in relation to another quantity, called total stock.
On the premise that man is unlikely to recover minerals from below the outer 10 to 40 kilometers that comprise Earth's outer crust, we can think of the entire quantity of an element within that crust as the total stock of the element. Resources and reserves are fractions of this total stock as defined above. It is easy to estimate total stock. We know the mass of Earth's crust within narrow limits and average crustal abundances of different metals and other chemical elements are reasonably well setablished from many analyses of different rock types. Multiply mass of the crust by percentage abundance and that's your total stock.
Similarly, reserves are easy to estimate. Just get the numbers from all mines in the nation or the world and add them up. Within the Interior Department, the Bureau of Mines publishes such figures regularly, along with thoughtful analyses of their implications, while the Geological Survey deals with the more complex and quantitatively much more uncertain problem of resources (as in its 1973 compendium on "United States Mineral Resources," and in reserve figures provided for the Bureau of Mines "Commodity Data Summaries 1976", used in the compilation of data for this paper).
Reserve figures, together with demographic data and a variety of economic indicators provide data for short range planning. They are, however, almost invariably conservative, owing to local tax laws and other factors that make it disadvantageous for a mining company to develop or reveal larger reserves than are needed to meet their own short-range projections. What we would like to get at are reasonably reliable fimires for potential resources that, could provide a basis for strategic intermediate and long ranae planning. This is more difficult, but it can be done within broad limits. For instance, Skinner and Barton (1973) estimate that most of the world's ore deposits are to be found in the upper 2 to 3 kilometers of Earth's crust. That substantially narrows the target.
In addition, the new general model of the earth comprised under the term plate tectonics gives us clues about the best places to look within






6

that outer 2 to 3 kilometers. Viewed in the context of 4.6 to 4.7 bbillion years of Earth history, a new theory of metallogenic provinces and epochs related to times and types of plate motions and events 'within plates is emerging. Such research could be one of our best sources of strategic planning information and it should be strongly encouraged and supported.
Meanwhile crustal abundances provide some clues for the estimation of potential resources (McKelvey, 1973 and earlier). Resources that may some day become reserves are orders of magnitude less than crustal abundances but have some relation to them. In the case of coppefor instance, I have estimated (Cloud, 1975), using abundance data and probabilities, that of the roughly 1O15 metric tons in Earth's crust, no more than 1 to 10 billion tons might, eventually be recovered. And Erickson (1973) and Skinner ('1976), who do not find it reassuring, have derived ultimate resource estimates for metals that far exceed those of individual commodity experts indicated elsewhere in this paper.
I like to illustrate- the distinction among total stock, reserves, and resources with the story of the economist, the geologist, and the engineer who found themselves wrecked on a desert island with only the clothes on their backs. When a can of beans from their wrecked vessel floated ashore the geologist and the engineer had an animated discussion over how they might get at the beans with no tools of any sort. The economist, however, proposed to solve the problem by assuming a can opener. Assuming a can opener, all of the cans of beans that had up to then floated ashore on their island and had been observed by them comprised a reserve. All the cans of beans that were aboard their ship and might float ashore on their island cnostituted a potential resource. And all cans of beans that happened to be floating about anywhere in the ocean or lying about on the ocean floor made up the total 8tock. It is easy to see that the potential resource can be only a tiny fraction of the total stock.

EXTRACTIVE~ PRODUCTS, ECONOMIC GROWTH, MARKET SIGNALS
Let me turn then to questions posed by the Chairman and staff of the Joint Economic Committee. The central questions so posed concern the adequacy of extractive products to sustain "needed economic growth" and the reliability of market signals in stimulating adjustments to resource scarcities.
cAny response to those questions depends on what one 'means by "needed economic growth." How can growth be considered as an end in itself rather than as one possible means toward specified goals? What are our goals? What do we need growth for? What do we mean by need? Is it the same as demand? How can we generate a less materials-consuming, set of demands while satisfying real needs? If we define our goals as a closer approach to equity, with ample but not extravagant living conditions for all, a balanced population, preservation of a diversity of clean habitats and natural areas, and opportunity for self -fuilfillment in constructive types of activity, extractive products can certainly be made available to attain such goals within the U.S., much of the rest of the Europeanized world, and a few other places.






64

Despite some progress toward those ends, however, continued growth of population, percapita consumption of materials, waste, and pollution threaten their attainment even here in the U.S. In the more densely populated three-quarters of the world, ample living and selffulfillment are probably unattainable for most, even at present population levels under existing political and social systems. Such goals, moreover, are certainly unattainable at projected population levels among that three-quarters of the world's people where some 40% of them are under 15 years old and current growth rates yield average population doubling times of about 30 years.
I am aware that the focus of the Joint Economic Committee is on the U.S. and that growth has until recently served a useful purpose here as our predecessors filled up a nearly empty continent and brought its resources to bear on the improvement of the human condition. But I hold that the U.S. cannot isolate itself from the rest of the world, if only because so large a proportion of our raw materials come from foreign sources. I also ask, now that the continent is full and demand approaches and in some areas exceeds supply, are the principles that worked so well during our westward expansion well suited for the decades ahead? Or do we need new mechanisms for assuring that the means of livelihood and self-fulfillmnent are made available to all?
Thus I claim that a critical examination of both goals and alternative means is called for before we can constructively discuss future economic growth. It is clear that some material growth will be needed to provide material essentials for those additional Americans who are bound to keep coming for the next 50 to 70 years even if we agree on zero population growth and reduced percapita material consumption as ways of working toward a harmonious, ample, and more equitable national existence. We must also somehow work toward these things without taking the challenge out of life, and there's the rub. As that, in fact. is the thrust of the last question raised by the Committee, I will defer further comment on this issue until then.
The second central question concerns the reliability of market signals for generating adjustments to resource scarcities. I would say that the recent (and recurring) "oil crisis" is a good example of the kind of failure of market signals that we can expect to see more of in the future. Hubbert (1969 and earlier) pointed out well before it happened that domestic petroleum production would peak in 1970 and that we should be developing alternate sources of energy. Yet, even after the Middle Eastern embargo, many saw the whole shortage as a plot on the part of the oil companies and some still do. One economic columnist and Nobel Laureate mocked the whole idea of limited oil supplies, writing to the effect that oil was so abundant that there were places where you had to hold your thumbs against the ground to keep it from gushing out. If that were the case, why are we importing more than 40 percent of our oil now, and why do we expect to import 50 percent of it by 1985 despite balance of payment problems?
Not only are market signals later in being sent than warnings that can arrive from other sources, but also increasing numbers of consmers. consuming laIrger quantities more voraciously, are likely to result min shorter warning times between general perception of impending shortages and their emergence as real crises. Market signals, to be sure, should be heeded, but the time has passed when it is an adequate procedure to rely upon them as the sole planning mecha-





65

nism. They need to be supplemented by special studies and strategic planning activities in which earth scientists, materials engineers, economists, and others interact. Their collective talents should be brought to bear in a balanced way in attempting to foresee trends, the likely consequences of permitting those trends to continue, and the prospects and consequences of various kinds of preventive or ameliorative action.
POTENTIAL MIN E L RESOURCES
A related question is, what are the best and most recent estimates as to ultimate supplies of the most critical fuel and non-fuel resources. As discussed under "Mineral deposits, reserves, resources, total stock," ultimate supply involves so many variables that we can make reasonably reliable estimates only for a few commodities that are either so abundant and widely distributed that potential resources approach that part of the total stock that occurs in say the outer one to three kilometers of the crust, or that occur in regular and predictable patterns. As noted earlier, only iron, aluminum, magnesium, the rock silicates, and few others are abundant enough to be considered in this light. Coal, oil, natural gas, and to some extent, the metals mentioned, occur in regular and predictable ways.

10' BBLS.
3000



0.




1000



00
p p

*r
1000"





0 1 ,,! , I i ,i
1940 1950 1960 1970 1980
FIGURE 3.-Recent estimates of ultimately recoverable global crude petroleum
(stars indicate estimates by M. K. Hubbert).
There is little disagreement about these commodities. Virtually all the information strategic planners need to have about coal is summarized in a, single slender book by Averitt (1975). The many estimates of ultimately recoverable oil and gas, despite much dispute,






66

agree within a remarkably narrow range. Figure 3 shows that fourteen different estimates of ultimate world petroleum production made during the lasQt quarter century range only from 1 to 2.5 billion barrels. It is estimated by Al. K. Hubbert (whose data are indicated by stars in Fig. 3 and now accepted by the geology departments of most or all petroleum companies) that world production will peak around 1990 and decline thereafter, as U.S. production has been declining since 1970. Coal has a lifetime measurable in hundreds of years at current rates of consumption, but would only last about 140 years if called upon as the sole source of energy at projected rates of increase. Natural gas will be depleted only a little later than or at about the same time as oil (and helium will be gone with gas). The only factor that could significantly affect these estimates would be, improvement in tertiary recovery methods (brought about by higher prices or technological breakthrough) that would allow a larger fraction to be removed from the ground than the slightly more than 30 percent of the oil now obtained by primary and Fecondlary recovery methods. .VA best this might double production, which (allowing for other factors) would increase crude petroleum lifetimes by somewhat more than one doubling time, or a bit over 28 years at currently projected rates of demand.
As for other commodities, estimates of potential resources are given in reports by the U.S. Bureau of Mines (1976a, 1976b) and the U.S. Geological Slurvey (1973, and in USBM, 1976a). Of interest because of its theoretical approach and large estimates is the brief paper by Erickson (in U.S.G.S., 1973) relating resource estimates to crustal abundance and tabulating U.S. and global estimates for 31 metals. A much briefer summary on "Mineral Resource Perspectives 1975" (U.S.G.S. Prof. Paper 940) tabulates domestic commodities in terms of probable availability beyond the year 2000. It finds domestic reserves of few metals to be adequate but suggests that identified subeconomic resources and estimated undiscovered resources can make up the difference for most. Commodities in insufficient domestic supply at any level beyond the year 2000 are tin, asbestos, chromium, antimony, mercury, and tantalum.
Data on reserves and estimated resources from the most recent U.S. Bureau of Mines preprints and reports (U.S.B.M. 1976a, 1976b) are summarized in terms of lifetimes under projected demands and adequacy to meet demands through the year 2000 in Figures 4-7 of this paper. In the lifetime estimates of Figutres 6-7 I give not only the projected lifetimes of established reserves, but also for hypothetical reserves 5 and 10 times as great and for Bureau of Mines resource estimates. Additional notation indicates where geological evidence shows or strongly implies potential resources to the right of scale.
Table 1, below, compares reserves and estimated potential resources cited in Bureau of Mines reports (1976a, 1976b) used in compiling Figures 6 and 7 with estimates by Erickson (1973) of ultimate resources and his reserve figures for 25 metals. This illustrates the range from conservative to optimistic resource estimates. My own judgment is that. the U.S.B.M. resource estimates used in Figures 6 and 7 are minimal, although they do suggest where some simply problems may
ri se lae nti etury or early in the 21st. Where Erickson 's resoulrce estimates suggest shortages, we can expect serious and persistenit problems.











TABLE 1.-UNITED STATES AND GLOBAL RESERVES COMPARED WITH 2 SETS OF INDEPENDENTLY ESTIMATED POTENTIAL RESOURCES OF 25 METALS

United States World
Reserves, metric tons X 100 Resources, metric tons X 105- Ratio, resources/reserves Reserves, metric tons X 100 Resources, metric tons X 100 Ratio, resources/reserves
USBM Erickson, USBM, Erickson, USBM Erickson, USBM, Erickson, USBM, Erickson, USBM, Erickson
Element 1979 1973 1976 1973 197g 1973 1976 1973 1976 1973 197e 1974

Aluminum ----- 9. 07 8. 1 45 203, 000 4. 96 24, 000 3, 480 1, 160 5, 720 3, 519, 000 1. 64 3, 000.- 0
Antimony ----- .091 .1I 093 1.1 1.02 11 4.14 3.6 5 .06 19 1.22 5.0
Beryllium ----- .025 .073 .073 3.1 2.92 50 .38 .016 1. 105 64 2.91 4, 000.
Bismuth----------- .012 .013 .016 .007 1.33 .5 .059 .081 .133 .12 2.25 1.5
Chromium -----None 1.8 5.17 189 387 1,693 696 4,383 3,260 2.59 47.0
Cobalt------------ None .025 .764 44----------1,760 2.45 2.14 4.28 763 1.75 360.0
Coppr-------81.6 77.8 372 122 4.61.6 408 200 1,860 2,120 4.56 10.0
Gold-------------- .0034 .002 .0068 .0086 2.0 4.1 .037 .011 .054 .15 1.46 14.0
Io------3, 600 1, 800 89, 900 118, 000 25 65 86, 900 87, 000 689, 000 2, 035, 000 7. 93 23. 0
Lead ------------- 53.5 31.8 108 31.8& 2.02 1.0 150 .54 299 550 1.99 1,000.0
Manganese ----None 1.0 66.77 2,450----------2,450 1,814 630 3,266 42,000 1.80 67.0
Mercury---------- --.016 .013-.028 .031 20 1.415-6.8 .17 .11 604 3.4 3.55 30.0
Molybdenum ---- 2. 96 2. 83 15. 92 2. 7 5. 38 1.0 5. 99 2. 0 28. 62 46. 6 4. 78 23. 0
Nickel------------ .181 .18 13.8 149 76.2 830 45.3 68 90.8 2,590 '2.00 38.0
Phosphorus------- 2, 268 931 6, 350 2, 940 2. 80 3. 0 16, 068 15, 000 76, 107 51, 000 4. 74 34. 0
Selenium ----- .035 .025 *.157 .14 4.49 6.0 .168 .695 628 2.5 3.74 36.0
Sle-------.043 .05 .162 .16 3.77 3.2 .17 .16 .642 2.75 3.78 18.0
Tantalum----- None .0015 .0015 5.6---------------- 4,000 .0676 .274 .261 97 3.86 354.0
Tellurium ----- .0082 .0077 .037 .0009 4.51 11 .039 .054 .148 .015 3.79 .3'
Thorium----------- .13 .54 .27 16.7 2.08 31 .71 1 1.83 288 2.58 288.0
Tin--------------- .043 Small .198 3.9 4.60 Small 10.1 5.8 37.6 68 3.72 12.0
Tungsten----- .108 .079 .435 2.9 4.03 37 1.78 1.2 5.17 51 2.90 42.0
Uranium ----- .242 .27 .395 5.4 1.63 20 .967 .83 1,691 93 1.75 112.0
Vanadium ----- .104 115 9.104 294 87. 5 2,560 9.707 10 56 5, 100 5.77 500.0
Zinc---- --. 27 31.6 45 198 1.67 6.3 135 81 245 3,400 1.81 42.0






68

FIGURE 4.-Reserves of 21 key U.S. mineral commodities compared with cumulative demand to year 2000 (data from U.S. Bureau of Mines).

U.S. MINERAL COMMODITIES (1975-2000)

52t Wer 1000 cu.r. at well heed
Natural gas ..L.
013 l4 10s 101 li units
$6,74 per barrel
Crude oil berres
$853 per ion (1973)
Cool short tons
$ 35 per million cu ft
H elIIu m --------go t
$1 28= Ie onia loft
Iron "0 ' short tons
S471 pertroyoz
Si Liver troy oz.
$ ~ 38 per Ib
Molybdenum Ilbs.
Molybdenum ............. ..... ... ...... .
t I I
lO O10 0 O IO112 units
90s per Ib
Mang anese short tons (no reserves in U.S.)
394 per ton
Chromium > short tons (o reserves in U. S.)
Nickel "short tons
SI50 pr Ion WO,
Tungsten l lbs.
$1; get lb
Cobtal* tl. (* *s., nu.s.
774 per lb
Copper ......... -- short tons
22 5 i per Ib
Lead short ons
Zinc short tons
33 9 per lb.
Aluminum t .00 0Rsor,*ns
$ 130-zoo per troy oz
GoldE I II troy oz.
i ....................... = -. .... __'tryo |,,
Platinum troy .
I
10 0 07 l0 109 units
-$ 20 per lb U308
Uranium Io tons
$3.22 per Ib
Tin ***--.long Ios
$ 1000 per 76 lb flosk
Mercury '76 lb. flsks
I |
105 104 Os 106 107 units

Shaded bars represent cumulative demand through 1999. Median lines show
largest, most recent reserve estimates. Prices in 1975 dollars. Scale is logarithmic, unit quantities and scales vary as indicated and all lines begin at zero
to left of diagram. See table 1 for more optimistic resource estimates.









FIGURE 5.-Reserves of 20 key global mineral commodities compared with cumulative demand to year 2000 (data from U.S. Bureau of Mines).

GLOBAL MINERAL COMMODITIES (1975-2000)

526 per 1000 c ft at well hed
Natural gas cu.f.
103 1014 00 6 IO117 units
8.53 per ton *19*73)
Coal s .I Ishort tons
St 46 per barrel
Crude oil .. barrels
$$5 per inition Cu. ft.
Helium-' cu. ft.
I I- I 1 1
109 010 011 012 I013 units
$384 per ton
Chromium.. F- \. /.\\short tons
Chromium
774 per lb
Copper short tons
22.54 per b.
Lead short tons
39# per 1lb.
Zinc 22----- short tons
Tin -" short tons
Platinum rto oz.
fl00 ask
Mercury 76 Ib flasks
I I I 1 l
10I 106 o 0 Is I09 units
$238 per lb.
Molybdenum Ibs.
Manganese $15.2 prn short tons
Iron short tons
$105 per ton WOs
Tungsten .b1 r lO s................... .
4.'/ l OZ.
Silver troy oz.
o 10 09 1010 .0" 1012 units
t$1.74 per lb.
Nickel short tons
$130-200 per troy o
Gold troy oz.
33-94 pjr lb.
Aluminum ,tons
$4 per lb.
Cobalt I bs.
I I I
SOs o0 1010 I01 units
$20 per lb. Ua0,
Uranium..... short tons
I I I
I0o4 IO5 106 Io? IO8 units

Shaded bars represent cumulative demand through 1999. Median lines show largest, most recent reserve estimates. Prices in 1975 dollars. Scale is logarithmic, unit quantities and scales vary as indicated and all lines begin at zero to left
of diagram. See table 1 for more optimistic resource estimates.







70

FIGURE 6.-Apparent lifetimes of reservers of 21 key U.S. mineral commodities
compared with lifetimes of hypothetical reserves 5 and 10 times as great and with potential resource estimates (data from U.S. Bureau of Mines).

LIFETIMES OF U. S. DOMESTIC MINERAL COMMODITIES
S 35 per million cu. ft. ...... .
Helium ,, m ermali cuf Helium (12)
e .53 per on (9) : mm mm Coal (19)
$674 erbbt ; (0EOGOY INDICATES POTENTIAL RESOURCES END WELL TO RIGHT)
a n seem Crule Petr leum (32)
Fuels na. ~Oo 61 .,
FUSS5st per tooo6 ft fwellshead
mlmmsmem ,a mm Natural Gas (87)
S 20per Ib U0s O
-I... I Ur'anium 235 (9)
S moaln Ii Iron (43) RESO EXTEND TO RIGHT)
_____________ INCTES.T ~.
904 per lb. :
Iron **** ****7 Mantanese (44) (LARGE LOW-oGRADE RESOURCES AVAILABLE)
$ 384 per ton : *
and Chromium (34)
$1.74 p lb.r I
'oa...... ...... T Nickel (28)
Fe-olloy $2.3 pert: I
mmnmsU II Molybdenum (17) metals $os5 pronWo I
aui-IIwwIaI Tungsten (17)
$ 4 per IIh.
.............!Cooalt (23)
77 per b.
Ieemm m alleallmUm d Copper (25)
Non- 22.5S per t.
mmInumeImmadamlalmlellllmlll I Il Lead (50)
Ferrous 39 perI
llnmmmml Imm Zinc (34)
Industrial s3.2z per Z.
:" Tin
Metals *p Tin
33.9 cpw ib.
top Aluminum (16) (GEOLOGY INDICATES POTENTIAL RESOURCES EXTEND FAR TO RISG9T I
S 130- 200 psi troy oz
I IIm'miuein Gold (22)
Precious $4.7,,pr roo.
l mPrecious p Silver (54)
metals $ss per troy Z
maml Plotinqm (19)
$1000 psr 51b. flsk :
I....i..e Iuum m Merlcury
1973 2000 2050 2100 2150 2200

Solid bars at left are for known reserves. Short-dash lines in middle are for 5x known reserves. Solid lines at right are for 10x known reserves. Circles indicate resources only, no or scant reserves. Solid triangles denote lifetimes implied by USBM resource estimates. Bracketed numbers at right are years for projected doubling of demand. Prices in 1975 dollars.







71

FIGuRE 7.-Apparent lifetimes of reserves of 20 key global mineral commodities compared with lifetimes of hypothetical reserves 5 and 10 times as great and with potential resource estimates (data from U.S. Bureau of Mines).

LIFETIMES OF GLOBAL MINERAL COMMODITIES

$8 53 per sho8l ton
............ . . .. . . c oa l
*muuummm um Cool
4 P(GEOLOGY INDtCATES POTENTIAL RESOIMCES EM WELL TO RIOT) nsmmum mmemnmesi Crude Petroleum (28)
Fuels 52 per 10o u ft
m- a**=m m~aa Natural Gas (16)
$ 20 per lb. U3.0e
inmamm Uranium 235 (8)
...5.. .....8 Iron (26 ) andog_ ,r a
Ma0s stoneswn'u .o-ae aso)e (GEOLOYsATE
AmIron (26) RESOURCES TINO TO RIGHT)
Iron mamm :Manganese (26)
S 4 (LARGE LOW-GRADE SESOUIM AVAILABLE)
$ 384 person _ _ _
and
and $74 per ab Chromium (34)
aon mas =Nickel (28)
Fe-alloy 2 38per lb
mmmen seio Molybdenum (17)
metals s$105 poer onwoTunsten (2)
amllamleelaises daamns nusem Tungston (27)
$4 per lb
$4ninw Lm uu ~ Cobolt (21)
mem Plrl m Copper (19)
Non- 22 S per Ib
.........m.m.. Lead (31)
Ferrous 39 per b
...m.& Zinc (31)
Industrial $3 22 per lb, yN_ T (
M..ts ..~.m..i. ..--U Tin (54)
Metals 33 9 Per 1b. (GEOLOGY INWCATES POTENTIAL
in1 m.a 'mm mmmm Aluminum (16) ESOURCE EXTE FAR TO RIHT)
S36- Jooer r Z
I Gold (30)
Precious $4...5. Silver (42)
$ 181 per tra oz.
metals ,6,,. =e.....u.mmm.m. Platinum (23)
$1000 per 761b. flask
...... m.mmm..m Mercury (24)
1973 2000 2050 2100 2150 2200

Solid bars at left are for known reesrves. Short-dash lines in middle are for 5x
known reesrves. Solid lines at right are for 10x known reesrves. Solid triangles denote lifetimes implied by USBM resource estimates. Bracketed numbers at
right are years for projected doubling of demand. Prices in 1975 dollars.

Skinner (1976) in a recent illuminating and very readable analysis of the ultimate limits of metal production, using the crustal abundance method, arrives at eventual resource estimates close to Erickson's, although he gets much smaller numbers for platinum, gold, and mercury and somewhat smaller numbers for several others. (He also shows why sea water and the deep ocean basins are of little interest for most metals, so that future metal production must come, above all, from continental types of rocks.) Thus the Erickson resource estimates given in Table 1 can be taken as outside limits.






72,

After, and probably w ell before these outside limits are exceeded, industrial society, regardless of how vast its energy sources, will be confronted with greochemical limits on the addition of new virgin metals that will require adapting its technology to one that can subsist on recycled materials plus rock silicates and the geoclinically abundant mietals-iron, aluminum, magnesium, titanium, manganese, and phosphorus.
On balance it seems that difficulty with global metal supply beyond the first third of the 21st century is to be expected only for antimony, bismuth, copper, gold, and molybdenum. Similar difficulty with U.'S. supply threatens for antimony, bismuth, tin, copper, gold, mercury, nickel, platinum, selenium, tantalum, thorium, lead, zinc, and perhaps others. It must be stressed, however, that we have no assurance that undiscovered potential resources will be discovered such as to limit shortages to the commodities named, or that they will be discovered inl the quantities estimated by Erickson and Skinner, as they have made quite clear.

SHORTAGES AwNCIPATED AND THEIR Emurcs
ForMo8t mineral commodities it is more likely that the next halfcentury will be marked by temporary shortages and dislocations than depletion in the sense that grade of ore will decline to levels where approach to the energy boundary (Fig. 2) and other cssof miningr( and extraction will exiclude them from the market. For some, however, depletion is in prospect. Domestic petroleum will be essentially go41ne by the end of this century, natural gas early in the 21st century, and helium will last thereafter only as long as stockpiles hold out or to the extent it may be extracted from the atmosphere. By mid-century crude petroleum and natural gas will be essentially exhausted worldwide, along with helium. Domestic sup plies of tin, commercial asbestos, columbium, fluorspar, sheet mica, high-grde phosphorus, strontium, bismuth, the platinum-group metals, mercury, even molybdenum, and perhaps chromium and nickel are either non-existent or so localized and limited that there is only faint prospect of new domestic addition by discovery. We will almost certainly continue to remain dependent or become dependent on imports for most of them. Domestic mercury will very likely be depleted. Although we now import most of our manganese and aluminum ores, however, large lowgrrade domestic resources of these elements exist and could be tapped at significantly increased costs.
Energy promises to dominate the future economic picture. As Figure 2 indicates, dramatic increases in energy required to obtain metals from ores of decreasing grade could severely limit the availability of some metals. As crude Petroleum and natural gas are depleted we will need to seek relief from other sources, more efficient uses, and better energy-conversion systems. Main elements of the energy picture are indicated in Figuire 8. This suffices to indicate that a number of options remain to be explored, and that, although we are having energ~y problems and probably will continue to have them in one way or another, We reed not panic or rush headlong into "'solutiovns" that





73

?nZ7/ be premature or unnecessai-y, suck as a massive proliferation of converter or breeder (fission) reactors. We have some decades of grace during which to seek more conserving ways to use and transform our energy, to explore and develop solar energy systems, and to continue research toward a practicable fusion reactor before we are forced to make decisions with such potentially far-reaching adverse consequences as the generation of vastly larger quantities than already exist of plutonium-239 or long-lived radioactive wastes. For more information on energy a good, readable, up-to-date summary is that of Ildren (1975), while a classic, though now somewhat dated summary is that of Hubbert (1969).
ENERGY
REOVERSiON
SO CTsJ.sl AND !
CONSERVATION
SPACEBATTERIES
[--ELEC RC177 :A ltTO !Et,.! .STR,,LI FUEL CELLS ANA COOL- HYROGES
1 MHD
INFOLEA-Ri IGEOTHERA!|OAiIIn~

FUSIONDIRECT
FS[NCOL CONVERSION pmTSN

RT--S BREEDERS TEMNCARHYDRO ELECTRIC,
-1 1 F[SO WIND, OCEAN CURRENTS,
GAS- LIUD A-OCEANIC THERMAL GRADIENT
COOLED MEA OLR
FIGU-R 8.-Main elements of the energy picture.
It deserves emphasis, however, that, although alternate energy sources of vast potential exist, there would be little useful energy without metals to build the machines and superstructure needed to capture it, convert it to useful forms, transport it, and apply it to the performance of work-including getting more energy to produce more metals. As energy restraints limit access to materials, so material restraints limit access to energy. It would be unfortunate if either were to dominate our thinking to the exclusion of concern for the other.
The Committee has asked what effect expected increases in cost will have on traditional ways of growth. Let us start with the causes of probable cost increases. NeW supplies of many mineral commodities will cost more primarily because decreasing grades of ore require moving larger volumes of material at greater energy costs per ton. (See figure 2.) This, in turn, increases the scope of adverse potential environmental impact and thus the costs of prevention of such impact or restoration after it, both in mining and energy production.




78-653--76----6





74

Now consider what is implied by "traditional ways of growth". Material growth has traditionally been considered in industrial societies as a basic good, a goal in itself. This probably has some relation to the fact that population growth was early seen not only as responsive to religious teachings but also as a means of icreasg the labor force. Then growth of production became a means of keeping the labor force employed and of enhancing national wealth and influence. Under such an ethic, where production to maintain employment exceeds the essential needs of the people plus foreign trade outlets demand must be created to absorb the overproduction. This has traditionally been achieved by increased levels of consumption, obsolescence, and waste, including enterprises such as arms races and even destructive ones nuch as war.
I believe that the time has come in the generally upward course of human and societal evolution when we should be trying to break away from traditional modes of growth. Those modes tend to shut out the deeper values of life. They are the central cause of environmental deterioration. And they violate the rights of our unborn and thus voteless descendants-in particular their right to have the planet passed on to them in the best possible condition and with a maximal variety and flexibility of vital options. Indeed I have the impression that the growing awareness of Earth's limitations is interacting with other concerns to generate outlooks toward growth for its own sake that are crying to be led to new norms in mans' relation to nature, including his use and abuse of natural resources. A recent Harris Poll, for instance showed 90 percent of respondents favoring reduction of consumption and waste. Here is a response so nearly unanimous as to constitute a public mandate for abandonment of tradition and the installation of a new ecologic ethic in which healthy balance take, precedence over growth
If we need the word growth to catalyze human reactions consider a new kind of growth. Instead of worrying about whether or not GNP continues to increase let us promote growth in en hancement of the human condition. I will call it EH.
I have more to say about EHC, but will reserve it for the final setion. Here I only want to emphasize that traditional ways of are neither relevant to the last quarter of the 20th century no sustainable in the old pattern. At the very least population must come into balance, and growth in material over-consumption and waste by the already affluent must give way to an increased flow of essential goods and products to the deprived. As I hope to make clear at the end, this does not require high levels of unemployment, stagnation of the means of production, or a return to agrarian society. It does, however, call for strategic research and planning involving all sectors of society.
AVOIDANCE OF SUORTAOES
Minerals-in particular metalsare the vitamins and enzymes that keep industrial giants healthy and productive. W hen they are not available in appropriate proportions, even giants fade, some to oblivion. In dealing with the question of how te avoid or minimize limitations in the avaflability of such essential elements, and to reduce their







75


onstrants on the economic health of the Nation, I will confine my rspo to specific possibilities for anticipating and avoiding shorta The geochemical basics of where and why shortages are bound
to arise incontradiction to conventional economic wisdom are briefly,
simply, and clearly analyzed by Skinner (1976).
Thep of the Mining and Minerals Policy Act of 1970 (P.L.
91-631) was a constructive step in dealing with the problem of future
sges, but still only a step. Interior is doing a good job of monitori and reporting, but we lack ,a clearly articulated National Minerals
Plicy that defines goals, means, and responsibilities and brings the
-rce and State Departments more .actively into the interplay
of forces. Foreign policy implications of our consumption and production. of minerals are apparent from Figure 9, yet how many of our
eies in countries listed on the right of this graph have mineral
-ttaches and how much consideration is given to mineral-resource
considerations apart from oil in evolving foreign policy ? I have elsewhere listed the kinds of questions that should be asked and suggested
some institutional arrangements that should be considered in formulating a comprehensive National Minerals Policy (Cloud, 1973), 1 and
others have ialso suggested responses to some of these questions (Cloud,
chairman, 1972). Still other recent responses are given in the final
reports by the Committee on Mineral Resources and the Environment
of the National Academy of Sciences, obtainable from those sources.

MINERAL PERCENTAGE IMPORTED M"JOR FOREIGN SOURCES
0% 2s% 50% 75% 10%
II..Iil i
COLUMBIUM 30 BRAZIL. THAILAND, NIGERIA
MICA (ut) 1001 INDIA, BRAZIL, MALAGASY
STRONTIUM 100 MEXICO, U.K., SPAIN
MANGANESE 9911 BRAZIL, GABON, AUSTRALIA, SOUTH AFRICA
COBALT 981I ZAIRE. SELGI UM.LUXEM0OURG, FINLAND, NORWAY, CAMICA
TANTALUM 95.. THAILAND, CANADA, AUSTRALIA. BRAZIL
CHROMIUM 91 1 SOUTH AFRICA, U.S.S.R.. TURKEY. fRHODESIA
AEOS 86 1 CANADA, SOUTH AFRICA
ALUMUM (ores & meta 85 JAMAICA, SURINAM, AUSTRALIA, DOMINICAN REPUBLIC
FLURINE 82 MEXICO, SPAIN. ITALY
BISMUTH 8o l PERU, JAPAN, MEXICO. U.K.
PLATINUM GROUP METALS 80 SOUTH AFRICA. U.K.- USSR.
TIN 75 MALAYSIA, THAILAND, BOLIVIA
MERCURY 73 CANADA, ALGERIA, MEXICO, SPAIN
NICKEL 71 CANADA, NORWAY
ZINC 64 II1 N ' | CANADA, MEXICO, AUSTRALIA. HONDURAS PERU
TELLURIUM 59 I PERU, CANADA
SELENIUM 58 CANADA, JAPAN, MEXICO
ANTIMONY 56 SOUTH AFRICA. P.R. CHINA, BOLIVIA, MEXICO
TUNGSTEN 54 I .CANAlE4 BOLIVIA, THAILAND. PERU
CADMIUM 50 MEXICO, CANADA. AUSTRALIA. BELGILM-LUXEMBOURG
POTASSIUM 49 1CANADA
GOLD 45 1 CANADA. SWITZERLAND. U K_ FRANCE
GYPSUM 39 CANADA, MEXICO, JAMAICA
VANADIUM 36 I SOUTH AFRICA. CHILE, U.SSR.
BARIUM 35 IRELAND. PERU. MEXICO
PTROLEUM (inc. Nat. Gas liq.) 35 I 'CANADA. VENEZUELA. NIGERIA, SAUDI ARABIA SILVER 30 CANADA, MEXICO, PERU
IRON 29 CANADA, VENEZUELA, JAPAN. COMMON MARKET IEECI
TITANIUM filmenite) 28, CANADA, AUSTRALIA
SALT ', CANADA. MEXICO, BAHAM^SCHILE
PUMICE GREECE, ITALY
CEMENT 4 CANADA, BAHAMAS, NORWAY, UJ.
LEAD 4 CANADA. PE1U AUISTRALIA, MEXICO
NATURAL GAS 4 CANADA
MAGNESIUM (nonmetallic) 3 GREECE, IRELAND. JAPAN
&

FIGURE 9.-Percentage of U.S. mineral requirements imported during 1975
(source: Morgan, 1976, figure 8).






76
Based on the foregoing I have distilled 10 explicit, high-priority suggestions for ameliorating, deferring, or avoiding shortages in mineral supplies, as listed below. They are given in the order of priority that I judge to be most relevant to societal needsat this time, and with very rough guesstimates of cost:
1. Establish a strategic research and planning commission or
center for mineral resources to be staffed by geologists, extractive chemists, mining engineers, materials scientists, ecologists, and economists with instructions to monitor mineral resources and materials and with authority to propose action at top executive and legislative levels. Costs: $5 million to provide facility, $3 to $5
million annually to operate.
2. Create legislatio-n limiting the weight and horsepower or
number of cylinders of automotive vehicles to that required for the use to which put. No monetary cost. Much expected saving to user in reduced costs of initial investment and subsequent operation. Large conservation of fuels and metals with no reduction of basic individual freedoms. Reduction of adverse environmental
impact.
3. Accelerate geologic mapping and related geological research,
including geochemical censuses to define metallogenic provinces
and epochs. Cost for adequate increases about $12 million a year.
4. Convert space-heating and cooling systems to solar energy
as far and as fast as possible (creating many new jobs in the process). Cost in the billions of dollars over a 10 to 15 year interval, perhaps as much as $200 billion total, but with eventual large and permanent saving in costs of energy raw materials.
Cost would be mainly to private user, perhaps with a federal
subsidy to home owners.
5. Increase support for solar energy technology, fusion energy
research, geothermal energy exploration and research, and more efficient energy conversion and transport systems. Cost perhaps
$40 million a year.
6. Rejuvenate and modernize research and training programs
in mineral science, mining, and extractive technology. Cost for an adequate program about $15 million a year-$3 million a year
to 5 institutions.
7. Support studies related to metallogenesis and the theory of
ore-$fding. As little as $3 million a year could have a beneficial
effect.
8. Support materials science research aimed at the more conservingq use of or substitution for scarce raw materials. Expected
costs about $10 million a year-$2 million a, year to 5 institutions.
9. Intensify exploration of continental shelves and slopes. Cost
for adequate increases perhaps $15 million a year.
10. A llow prices to rse to levels that encourage more conserving practices and more intensive exVploration. Prices might even be encouraged to rise, with beneficial side effects, by imposing stringent requirements on environmental protection and cleanup, charging for depletion quotas on the scarcer commodities, and increasing taxes on raw materials generally so that they can be
reduced elsewhere.






77

EcONOMIC VERSUS PHYSICAL AVAILABmrIY
It is hard to separate physical and economic availability. As economists are fond of pointing out, availability in the long run depends on what the market will bear. Even though the world's richest deposit of diamonds required the movement of 75 million tons of rock to get 3 tons of gems, diamonds continue to be available. We can and doubtless will obtain iron and aluminum from increasingly low grades of ore. But, as Figure 2 shows, there is usually an inflection point in the energy costs of metals recovery with decreasing grade beyond which it is not profitable to pursue lower grades unless and until new and much more efficient mining and extractive procedures can be devised. Skinner (1976) explains why even such developments are likely to be significant only in the case of 12 geochemically abundant elements that make up 99.23 percent of Earth's crust and why energy costs become a real barrier for the 76 elements that comprise the other
0.77 percent.
Non-metallic mineral resources are, on the whole, far less of a problem than metals. Some, such as sheet mica are likely to cause problems, but I would guess that demand for a good many of the scarcer nonmetalliferous products might eventually be met by advances in crystal chemistry or materials science.
On the larger issues, declining grades strongly suggest that marginal returns will diminish relative to real inputs of labor and capital. As Skinner (1976) clearly shows, it is a gross economic oversimplification to suppose that declining quality of itself will give rise to expansion of reserves. As mentioned earlier, this doesn't apply even in the classic case of copper, or for the other 75 geochemically scarce element.% beyond the energy barrier.
I don't believe either that current reserve figures ignore accessibility or other factors. On the contrary, they are characteristically conservative. However, I should say that I have used the most optimistic reserve estimates in preparing Figures 4-7, in order to make it clear that, under the best of circumstances. much research. exploration, and development will be needed to meet projected future "needs".
Finally, I would say that it is not only efficiency in terms of energy that counts in establishing accessibility, but that energy and materials are both crucial in broadening the Materia ls base. Improved exploration theory, discovery of new commercial resources. and imiprovements in extractive technology can have large and unpredictable effects; but decline of average arade is certain, and energy and efficiencies of scale are the central factors in compensating for that down to the energy barriers of Figure 2.
Another question asked concerns "the possibilities of price increases not leading to supply increases because there is no more." Leaving out nuances that will be explored by economists, T see this as essentially the some question dealt with above. Again. quoting a response economists like to give. there is always more somewhere Pt a pricealbeit perhaps a -price it would be uneconomic to prav. WVhen helium from natural gas is exhausted, there will still be helium in thp atmosphere. When copper-bearin( rock declines to concentrations of copper to the left of the energy inflection point of Figpire 2. there vill still






78

be copper-bearing rock at lower grades. Costs of recovery in energy and otherwise, however, will be so high that, for practical purposes, the resource will have been depleted. That is what geologists mean when they speak of depletion. Economists and some energy technologists to the contrary, nothing is infinite, except perhaps space and the human mind, and even they cannot transcend the laws of thermodynamics.

RESTRUCTURING EcoxoMIc NORMS, VALUES, AND ABITS
Finally we arrive at the question of actions called for. As I noted earlier, and as a few fore-thinking economists such as Nicholas Georgescu-Roegen. Kenneth Boulding, Emile Benoit, and H. E. Daly have stressed elsewhere, GNP has outlived its usefulness as an index of progress. It measures rate of fiscal turnover rather than value of the nation's material stock or the quality of life enjoyed by its citizens. Traditional growth patterns lead to resource scarcity. Thus any alternative that reduces conventional growth pressures makes resource scarcity more manageable.
In my view, the only kind of growth that is both beneficial and capable of being sustained by national and world resources is growth in enhancement of the human condition-EHC. EHC can be achieved by taking steps to put the means of livelihood in the hands of all people, by emphasizing non-material ways of achieving a sense of personal value and standing in the community, by eliminating planned obsolescence and emphasizing the quality and value of working material stock rather than rate of fiscal turnover as a measure of economic well-being, by deemphasizing the use of non-essential material consumption and waste as prestige symbols, by bringing populations into balance with the carrying capacity of the nation and the planet for lives of high quality, by protecting and restoring the environment, by continuing education, by decentralizing industry and populations, by legislating incentives and disincentives that will promote these foals, and finally, by getting the top people into the top jobs instead of letting them go to willing mediocrities or as political rewards.
Growth in ETTC is what I think, along with peace itself, should be our central goal. The usual complaint against such "impractical, fuzzy" goals is that they are not susceptible to numercial analysis. But I would argue that we can put numbers on EHC that are more deeply meaningful than those we compute for GNP. For instance, we could arrive at an index Kehe using measurements of the value of operating capital stock, area of protected public lands, number of advanced or specialized degrees granted, and other goods minus measurements of "bads" such as poverty, population growth beyond replacement levels, alcoholism. violent deaths and crimes of violence, unrecycled waste, man-days of respiratory discomfort and other measurements of pollution. By aggre~ntion of such factors, abbreviated to a fine alphabet soup. we could even make up an impressive equation. Then the value of Ke, for any given year, and whether it was a positive or a negative number, would sum up how well or how poorly societal affairs were being managed.








As for how to achieve the subsidiary goals of EHO, I have suggested some steps in the section on Avoidance of Shortages, above.
An urgent issue that remains to be discussed is how to put the means of livelihood into the hands of all people without excessive production, w aste, planned obsolescence, stimulation of prestige consumption, large military establishments, and other stimuli that we normally think of as creating jobs.
Through various social arrangements that now exist, the nation has aleady approached something that is very like a, guaranteed individual income. It seems logical to me to gro the rest of the way, coupled with incentives and disincentives that encourage people to seek and retain employment and that do not encourage multiplication of dependents, while, at the same time, not penalizing those that come. But where will the jobs be, particularly if more women are to have the option of making meaningful careers for themselves?
One step that would reduce unemployment without stimulating production, while simultaneously reducing problems of technological obsolescence would-be a program of sabbatical educational and advanced trainig leaves for all members of the workinq force. During one full year out of every seven everyone (on a rotating basis) would go back to school or into special training or research programs with industrial, governmental, founhdational, public service, or academic institutions to acquire new skills or to improve still-needed traditional skills.
This ivoud account for 14% of the working force, a number substantially greater than that of the now unemployed. It would also prepare people whose skills had obsolesced to undertake relevant new tasks and it would improve the outlook and performance of those who, had simply grown stale on the job. If employers were required to budget for such training programs and guarantee appropriate positions -without loss of seniority to returning employees, such a plan might also reduce job-hopping and provide management with a more stable, more interested, and regularly upgraded working force. Such a plan, it is true, might not be the most efficient use of the labor force, but if social welfare and joblessness is a concern, it -could be highly beneficial. Fiscal costs to management would be less than in the reduction from a 50 to a 40 hour work week, while the gain to society (and perhaps even to management) in the form of healthier, happier, better informed citizens could be great.
Urban decay is an important negative aspect of EHC, largely as a product of increasing immigration to city centers, paralleled by the flight to suburbia on the part of the affluent. From 54 percent in 195-0, the fraction of the U.S. population living, in cities of 50~,000 or more increased to 71 percent in 1970. It is expected to reach 85 percent by the year 2000, when current projections call for it to be concentrated mostlyv with in a few gigq~antic urban complexes. The main problems are already in the larger cities, and they appear to be worsening. If Ipeople are determined to live in cities it might be better all around if these cities were smaller, pleasanter. provided with better public transport, closer to recreation centers, and more widely dispersed. We might also consider emulating the steps some European countries have taken to






80

provide incentives for rural families to remain on the land or in country towns.
As for smaller and better dispersed cities, that goal might be combined with materials conservation, decentralization of commercial activity, and the sabbatical leave plan suggested by creating a new system of Urban Grant Universities. These UGU's would not be in existing cities, but would be at the edges or corners of large tracts of scenic, well-watered public lands. For each UGU, a substantial block of public land would be granted to the parent state for its foundation and partial support of the incipient IUGU. By developing appropriate programs, combined with easy access to recreational lands and other conveniences. as well as by contractual arrangements with industry, private foundations, and government, each UGU would seek to attract light industry, commerce, cultural institutions and activities, and, of course, people to the region, generating support funds by contracts and the leasing of UTGU lands. Thus UGU's could nucleate the growth of pleasant, modest-sized, economically viable new cities while simultaneously reducing the pressures on existing cities, achieving a healthier dispersal of populations, and providing experimental opportunities for new types of construction, urban services, and strategy in the use and conservation of materials.
Utopian? Far from the question of resource adequacy? Perhaps.
But isn't enhancement of the human condition what society and its use of resources is all about? Isn't conservation and dispersal of the means of production part of it? And don't most major advances in societal affairs begin with dreams? The problem is to make them happen. And that's where politics becomes statesmanship.

REFERENCES CITED
Averitt, Paul, 175, Coal resources of the United States, January 1, 1974, U.S.
Geol. Survey, Bull. 1412, 131 p.
Borgstrom, Georg, 1969, Too Many. Collier Books, N.Y., 368 p. Brooks, D. B. and Andrews, P. WV., 1974, Mineral resources economic growth, and world population: Science, v. 185, p. 13-19. Cloud, Preston, 1973, Materials-their nature and nurture: National Research Council, Earth Sciences Newsletter, No. 8, p. 2-7. Cloud, Preston, 1975, Mineral resources today and tomorrow: i W. W. Murdoch, editor, "Environment-Resources, Pollution and Society," Sinauer Assocs., Inc., Sunderland, Mass., p. 97-120.
Cloud, Preston, chairman, 1972, Elements of a National Materials Policy. NASNAE-NRC, National Materials Advisory Bd., NMAB-294, report of Ad Hoe Committee on National Materials Policy, 66 p. Cook. Earl, 1976, Limits to exploitation of nonrenewable resources: Science, v. 191, p. 677-682.
Erickson. R. L., 1973. Crustal abundances of elements, and mineral reserves and resources. U.S. Geol. Survey, Prof. Paper 820, p. 21-25. Georgescu-Roegn, Nicholas, 1971, The entropy law and the economic process.
ITH rvard Univ. Pres. 457 p.
Goeller, II. E. and Weinberg, A. M., 1976, The age of substitutability: Science,
v. 191, p. 683-689.
Ioldren. J. P., 1975. Energy resources: in W. W. Murdoch, editor, "Environment
--Resources, Pollution and Society," Sinauer Assocs., Inc., Sunderland, Mass., p. 121-145.
Iuhhert. M. K.. 1969. Energy resources: p. 157-242 in Preston Cloud, editor, Resources and Maan, W. II. Freeman and Co., S. F., 259 p.







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McKelvey, V. U., 1973, Mineral resource estimates and public policy: U.S. Geol.
Survey, Prof. Paper 820, p. 9-19.
Morgan, J. D., Jr., 1976, World distribution and flow of major mineral commodities: preprint for Workshop A of NAE-NAS Symposium on "Materials and the Development of 'Nations: The Role of Technology," Washington, D.C., 28
April, 1976, 18 p.
Page, N. J., and Creasey, 5. C., 1975, Ore grade, metal production, and energy:
Journ. Research U.S. Geol. Survey, v. 3, no. 1, p. 9-13.
Singer, D. A.; Cox, D. P.; und Drew, L. J., 1975, Grade and tonnage relationships among copper deposits. U.S. Geol. Survey Prof. Paper 907-A, 11 p.
Skinner, B. J., 1976, A second iron-age ahead?: Amnerican Scientist, v. 64, p. 258269.
Skinner, B. J., and Barton, P. B., Jr., 1973, Genesis of mineral deposits: Annual
Reviews Inc. (Palo Alto, Ca.), Ann. Rev. Earth and Planetary Sciences, v. 1,
p. 183-211.
U.S. Bureau of Mines, 1976a. Commodity data summaries 1976. Dept. Interior,
Bureau of Mines, 196 p.
U. S. Bureau of Mines,, 1976b, Mineral facts and problems (1975 ed.). Dept. of Interior, Bureau of Mines, Bull. 667 (in press at writing, chapter preprints available).
U.S. Geological Survey, 1973, United States Mineral Resources (D. A. Brobst and
W. P. Pratt, editors), Dept. of Interior, Geological Survey, Prof. Paper 820,
772 p.I
U.S.* Geological Survey, 1976, Mineral Resource Perspectives 1975. Dept. of Interior, Geol. Survey, Prof. Paper 940, 24 p.
Wang, K. P., 1975, The People's Republic of China-A -new industrial power with
a strong mineral base. Dept. of Interior, Bureau of Mines, 96 p.











RESOURCE SUBSTITUTION
By WXmuAx A. VOGLEY*


SUMMARY
This paper explores some fundamental concepts in the area of resource substitution. It is directed, in general, to the series of questions proposed by Senator Hubert H. Humphrey, chairman of the Joint Economic Committee, in calling for papers as part of a study series U.S. Economic Growth From 1976-1986: Prospects, Problem, and Patterns. It is restricted to the non-energy resources-those resources which are usually characterized as "materials".
Conclusion 1
Certainly within the time frame of 1975-1985, and with only slightly diminished certainty within the time frame 1975-2025, the physical characteristics of materials availability will not cause any increase in the real costs of materials to the world economy. Thus, physical constraints on production of materials are not a threat to continued economic growth.
Materials have become available to society at decreasing real costs over the past century. For the next decade, known deposits of materials produceable at current prices are more than sufficient to meet projected world demands. For many materials, the same is true through A.D. 2000. Beyond that date there is a degree of uncertainty introduced. To analyze periods beyond A.D. 2000 it is necessary to make estimates of ultimate recoverable resources-mineral deposits that, if found, could be produceable at current cost levels. Such estimates, along with demand projections, made by the author clearly indicate that through A.D. 2025, mineral material costs need not rise because of exhaustion of geologic deposits. When technological progress which led to the historical decline in real costs and possibilities of material substitutes are also considered, it is clear the above conclusion is justified.
Conchusion 2
The process of materials substitution is extremely complex, and the traditional economic theorem that it is a function of relative prices is inappropriate to understand the process. Much fundamental research needs to be done to further understanding of the substitution process.
Materials demand is derived from society's consumption of goods and services. Thus, materials needed are determined by the structure
*Pennsylvania, State University.
(82)





83

and size of final demands for goods and services, the state of technology to produce these goods and services, and the comparative attractiveness of a material over its alternative materials. Material prices are certainly part of this picture, but, in fact, have played a relatively minor role in determining patterns of material uses. Thus, to explain substitutions which have taken place, and to look ahead for evolving trends, a very complex set of factors must be examined. The current state of knowledge in this area is unsatisfactory. Much fundamental research is needed.
Conclhusin 3
There are serious emerging institutional problems surrounding the production and ue of materials and these issues should be subject to intensive research and evauaZtion to develop proper governmental policies. Specifically, economic stockpiles of selected materials should receive 8erwus Congressional consideration.
The successes of the oil cartel, the use of the embargo as a political weapon, the rise of nationalized mineral industries, the emergence of multi-national mineral firms, and the growing awareness of environmental and social costs of mineral developments have generated a host of institutional problems. These problems could result in a short fall of mineral supplies in both the short and long term, and thus cause mineral shortages to have an impact on the quality of life in the U.S.
These institutional issues are exceedingly complex and require intensive research and evaluation to be better understood. In one areaembargos-stockpiles are a clearly dominant policy choice. A well designed stockpile policy may also be partially effective in meeting the other economic issues raised. The others do not have a clearly dominant solution. These are the policy areas most in need of addressing by the Congress.

PART I. REsou-RcE ADEQUACY
The framework for this requested paper is the broad topic of "The Substitutability of Capital and Labor for Natural Resources in the Future". Capital, if it is to be defined meaningfully at all except in a monetary sense, is the stock of stored productive services in durable goods existing in a society. Clearly, this stock is a matter for societal decision vis-a-vis the proportion of the output of the society which will be devoted to consumptive uses versus that devoted to investment goods. Thus, capital is not a uniquely determined resource and the amount of capital available to society over time is dependent upon that society's decisions. Labor also is a dynamic, renewable factor of production and the amount of labor devoted by society is a function of the cultural, economic and physical characteristics of the population of that society. Resources are made available by devoting capital and labor to their production from a naturally occuring deposit. Production of goods and services can take place only with inputs of capital, labor and resources combined through a technology. The lack of any one of these factors will cause production to be either zero or extremely low. It is conceivable that labor can produce a product completely without the use of tools (capital), but the example is trivial.







The question comes down to the required input of capital and labor to produce the resources which are needed in the production functions for society. Thus, the question is whether or not the cost of available resources, in terms of the capital and labor required to make them available, will rise to such levels so as to severely dampen the quality of life for society.
The answer to that question within the 1975--85 period is an unequivocable "no". The answer to that question over, say a 50-year period, is still "no", but not without some uncertainty. The answer to that question for even much longer periods of time is still "no", but with increasing uncertainty as the time period lengthens.
Natural resources of an unreproducible nature, i.e., materials of non-agricultural origin, have been the subject of much concern recurrently through the history of industrialized societies. Exhaustion of these resources has been a recurrent theme of many writers, who point to growing demands and geologically limited availability. It is interesting, and reassuring, to note that the universal result of scientific examination of this question is that, historically, there has been no evidence that exhaustion of materials has served as a constraint upon mankind. There appears to be no evidence that the future will be radically different from the past.
For the next ten years, this is clearly the case. There are knoum deposits of all mineral materials needed to supply requirements, at current prices and at projected growth rates for world demand, for the next decade or more. For many materials, known deposits producible at today's prices are adequate to meet projected needs through the end of the century. Thus, in the time frame of 1975-1985, there is no reason from geological factors for materials cost to increase.
Looking beyond the planning horizon of known reserves, however, a degree of uncertainty is introduced. Reserves of any material are expensive to find, develop and hold. Investments in reserves must be balanced against using those investments to provide other goods demanded by society. With all other things equal, a society that found and held a 40-year reserve of materials would, in current consumption terms, be poorer than one that opted for a 15-year reserve. The reserves which actually exist are the result of decision-makers with investment funds who. following their own criteria, have decided it is worthwhile to search for and hold reserves. Where reserves are cheap and easy to find, they tend to be a much higher multiple of current production than in the case where they are expensive. For example, reserves of silicon are virtually infinite, since it is not hard to find sand. Reserve, on the other hand, of petroleum in the UIT.S. are relatively a small multiple of current production, because they are expensive to find. That. by the way, is not true in the Middle East where reserves are a very large multiple of current production. The critical point is that the status of reserves in no way implies that future prices will rise or fall. They measure, much more simply, the investment in future reserves as a deliberate calculus of present versus future value.
In order to consider resource availability beyond the time horizon of proved reserves. it is absolutely necessary to make estimates concerning future dicoveries of deposits which would be economically recoverable at today's prices, i.e., deposits as good as those called reserves. To make such estimates of ultimate recoverable resources 1111o1vs the 1geologoical science. There are several methods used by






85

geologists to estimate undiscovered resources, but these methods are subject to considerable debate and uncertainty.
Most of the surface of the earth has not been explored for mineral deposits. The bulk of existing reserves of most materials are located in the industrialized countries-U.S., Canada, Australia, and Russia. Because of transportation costs to market, exploration has been condlucted, intensively only in the relatively few areas of the world that are accessible to centers of industrial demand. There is no reason to believe, however, that the occurrence of minerals in the earth's crust is related to the distribution of industrial activity on the earth's crust. Thus, there is no reason to believe that the currently explored areas will be any less or any more productive of mineral deposits than the major areas, including under the oceans, which have not been explored. Even under the most conservative kinds of assumptions relating to findings in unexplored areas of the world, estimates of ultimate recoverable resources are high. I have made such estimates for a number of materials for an ongoing, study. The results of the study will be published sometime within the next several months. The attached table, which for some 16 mineral commodities compares reserves plus ultimate recoverable resources with demands for the entire world over the next 50 years, illustrates that, with a broad margin for error, such deposits can be discovered so as to prevent an increase -in real cost of mineral materials to society.
The real cost of availability of material resources to society has been declining over the past century. This decline is hidden by short-term price fluctuations in the case of some materials, and is strongly hidden by the current cartel pricing of energy in the world markets. There is little or no evidence which indicates this long-time trend of declining real cost is about to be sharply reversed. The geologic evidence strongly argues in the opposite direction.
TABLE I.-COMPARISON OF RESERVES, ESTIMATED ULTIMATE RECOVERABLE RESOURCES, AND CUMULATIVE
CONSUMPTION, WORLD, 1972-2025, BY SELECTED MINERALS [Short tons
Estimated Ratio by
ultimate Cumulative total to Reserve
Reserves, recoverable consumption, cumulative exhausted Commodity Scale 192 resources Total 1972-2025 consumption by 2000.
Aluminum------------ 100 3 1,776 1,779 5.4 379.4 Yes%
Copper-------------- 106 373 8,995 9,368 1,218.0 7.7 Yes.
Lea---------106 141 3,406 3,547 1,889.0 1.9 Yes.
Tin -----------------10V 11 821 832 78.0 10.6 Yes.
Zinc ----------106 238 13,042 13,280 1,060.0 12.5 Yes.
Chromium ------------ 10' 1 12 13 1. 0 13. 0 No.
cobalt--------------- 106 3 4,645 4,648 8. 0 606.0 No.
I ron----------------- 109 93 1,109 1,202 84.0 14.3 No.
Manganese ----------- 10' 1 77 78 .7 111.4 No.
Molybdenum ----------106 6 640 646 10.0 64.6 No.
Nickel--------------- 106 70 10,909 10,979 220.0 49.9 No.
Tungsten------------- 1& 2 685 687 4.0 171.8 No.
Vanadium ------------ 106 12 17,696 17,708 6.0 2,951.3 No.
Phosphorus -----------10' 8 80 88 38.0 2.3 Yes.
Potassium--------10' 101 480 581 7.0 83.0 No.
Sulfur--------10' 2 31 33 11.0 3.0 No.
Note: Estimates by author. Cumulative consumption estimate based upon high economic growth and high population growth for world. No recycling is assumed, so cumulative consumption overstates drain on reserves and estimated economic resources.
A second -factor, important in deciding whether or not materials cost can contribute substantially to decline in quality of life, is the








fact -that materials are an extremely small part of the toa economic value of goods produced. The total value of materials consumed in the U.S. economy in recent years (excluding energy) is below 50 billion dollars per year. With a total value of output of 1.5 trillion dollars, cost increases for this portion of the economy can be large without imposing significant strain on the quality of life and can be offset by advances in productivity in other phases of production.

Summary
Resources are an essential ingredient in the production of goods and services. The availability of resources is related to their mode of occurrence in the earth's crust, thus they do differ from capital and labor. Historically, resources have become available at decreasing real costs, and, from a geological point of view, there is no reason to expect real cost to rise over the next several decades.

PAuRrII. Tins PRocEss op Su-Bsnrru-rioN A31ONG MATERIALS
The demand for materials in a society is of a derived nature. Society's demands for ultimate consumption are either in the form of investment goods. or consumer goods-products and services which involve. in, their production the use of materials. These m~aterial~s perform physical functions which are necessary for the production of the product ultimately demanded. For example, the materials contained in an automobile are used because they provide strength, conducttivity. or beauty to the final product. In the same way, the materials involved in producing a haircut are used because they provide certain characteristics having to do with combing or cutting of the hair, and a comfortable seat while the process is taking place. It is the exception that a non-energy material is consumed as such in the final products of the economy
Since it iste properties of the material which are desired, not the material itself, the possibilities of substitution between materials is extremely wide. It is the thesis of this section that that process is complex, involving three major elements, within each of which there is great complexity. These elements are (1) the structure or composition of the final demands of the economy; (2) the state of the technologies used to produce those final demands; and (3) the comparative attractiveness of the competing materials, not only in terms of cost per unit, but also in terms of other factors such as stability in supply, ease of workability, and tradition.

Structure of Final Demands
The issue here is how the changes in structure of final demand might impact on material substitution, not on the demand for materials as a whole. The latter is a subject of great interest, and work is being done on it by those interested in the impact of economic growth on the total materials demands.
From the point of view of substitution, the role of structure of final demands has to do with the shi'fting of consumer preferences as the per capita size of national income grows. These shifts can be characterized in general as a shift from a goods, especially producer-








consumer-durable goods, toward a more service-oriented economy. It is not clear that the impact of such a shift is a decline in total materials requirements, but it is clear that the shift does lead to a different pattern of services demanded of materials. The consumer- durable goods economy places relatively large demands upon those materials which can be fabricated into "appliances" broadly defined. The service-oriented economy also generates major materials demands; for example, materials needed for transportation systems, opera houses, auditoriums, schools, universities, etc. These materials, however, may be of a different nature than the former case.
Therefore, different patterns of material input into world economies at different stages of -development can be observed. Differences in -the composition of material inputs can -arise solely because of changes in the composition of the final demands of these economies. Thus,-'even without direct substitution of one material for another, there will be differential patterns -in specific materials use arising from this factor.

User Technology
Of major importance in the substitution of one material for another is the factor of user technology. Although no quantitative data are available, it is clear in many, cases that this is the dominant engine of substitution.
What is involved here is the means by which the economy's final demand for goods will be met. The example of communications can serve to illustrate the point
IMan has always had the innate desire to communicate. The amount of this communication has always been limited by the technologies available, and the cost of communication. Initially, of course,- cornxnunicatiou was- entirely face-to-face and the limit of communication was by sight and sound. The materials involved in such communication could 'be considered as zero. With the development, of skills of writing, materials began to be devoted to communications. These materials initially were both mineral in origin, i.e., stone tablets; and from reproduceable sources, i.e., parchment. As the technology of communication developed, the demand for communication services increased. The communications industries today are maj or consumers of materials in the form of wood pulp for paper, metals for wire communication networks, and material components of radio and television transmitters and -receivers. The development of a user technology which made a service available, has led to major material demands.
The question here is -the substitution of materials in these demands. User technology development has significantly reduced material requirements for some means of communications. For example, the development of the solid-state electronic technology has tremendously reduced the material content of radio. receivers. The development of microfilm storage has reduced the material costs of the storage of printed information. The laboratory demonstrated technology of transmitting voices on laser beams holds a promise of greatly reducing the material content of telephone transmissions. The development of microwave technologies and commercial satellites, in turn, h as reduced the need for long-line cable materials.
The list could go on and on. The essential point is that the translation of the demands for goods and services by a society into demands





88

for materials is through technology. The nature of tis technology plays an extremely important role on the level and char acer of the requirements or demands for materials. To explain the rved change in patterns of demands for materials through time, an understanding of what happened in the area of technology is absolutely essential.
The significance of this observation is that one must go well beyond examining the situation with respect to any given rials to understand the process of substitution among materials, and to understand the impact of any perceived material shortages on the quality of life. Public policy must be based upon an understanding of the'complexity of materials issues, rather than a commodity-by- dity a hoe
approach. The objective is a healthy, dynamic, adaptive technological system, rather than a piece-meal set of specific commodity programs.

Economic Factors
Traditional text book economic analysis treats the demand for a raw material as ultimately being related to relative prices. The argument runs that, within a given technology, the firm will pick the least cost combination of raw materials for production. There will be tradeoffs between using more, say, of steel, and using less, say, aluminum in the manufacture of a refrigerator. Traditional economic theory argues that if the price of aluminum declines relative to the price of steel, then, to achieve the lowest cost combination, the producers will use more aluminum and less steel.
What happens in material substitution is much more cmplex than this simple model. Historically, other factors than unit price seem to have been of primary importance. While it is true that producers will attempt to achieve the lowest cost for their final product, it is not clear that this translates into a simple price-demand relationship for raw materials. The producer is seeking lowest cost for the total production function for the product concerned. Since raw materials are usually a relatively small portion of the total cost of the final product, noncost attributes of the raw material and its indirect effect on other costs may well outweigh any price differentials between the competing inputs. To use an example from outside of the materials field, but one which is well-known, consider the switch from coal to diesel oil to power American railroads. This substitution, which took place extremely rapidly in the 1940's, was not the result of differential price shifts between diesel oil and coal. It was the result of the total overall efficiency of the diesel engine versus the steam engine. Virtually no price differential (within reason) between the two competing fuels could have stopped the transformation.
Another more recent example was the belief in the early 1960's that aluminum would replace iron castings in automobile engine block-s. This was a widely held belief in the automobile industry in the early 1960's and some major projections concerning future aluminum demands were made based upon such a substitution. In fact, the substitution did not take place, due to a very complex set of circumstances which-to this day-are not thoroughly understood. One of the problems which surfaced in cars which did use aluminum cylinder heads was an adverse reaction to one-time overheating.





89

The essential point here is that substitutions between materials may arisefrom developments completely outside of the price behavior of materials.
A-nother factor which strengthens this conclusion is the fact that, although materials are often a very small portion of a final product's value, they are an essential ingredient of that product. A cut-off of the supply of materials to a producer will cause output to drop to zero. Thus, the producer, because of the major losses involved from a loss of output, may place great weight in his decision as to which raw material to use upon security of supply in face of many kinds of -difficulty. When a firm commits to a raw material in its production function, a decision not subject to rapid change, it will consider such things as the stability of the industry to provide supplies, the probability of political or economic cut-off of supplies, the ease of storage to maintain stockpiles, as well as the pure cost functions feeding into the accounting costs of the product.
Summary
The conjunction of the above factors is what makes the substitution process complex. The tendency is to consider such processes as continuous, but in fact they are highly discontinuous. Once, because of technological change or a shift in consumer preferences or from factors other than price, a substitution has taken place, it tends to be irreversible. Clearly, radio producers are not going to return to vacuum tube technology, with its consequent material demands, in place of solid-state transist-or which uses virtually no materials. Nor are we likely to return to -th.e use of coal to heat homes or power railroads. Yet, of course, substitutions do take place and many of them are in the direction of moving to more abundant materials and in the direction of materials savings in toto. It is correct that the process of 'Substitution through. the last century has contributed to the maintenance of a firm position of materials adequacy for the world as a whole.
There are counter-examples which ar e perhaps worth examining, at least as a caution. One of the substitutions in materials which has occurred over the past 50 years has been the relative decline in use of natural fibers and the growth of synthetic fibers. This was a change f rom, a renewable aoTicultural resource to a finite mineral-bas d resource. The reasons for the switch, include all three. of the factors mentioned above. The synthetic fibers provided increases in services; for example, permanent press clothes. They provided economies in manufacture by uniformity in fiber specification, and they provided stability in supply, because supplies were not a function of weather. Such a substitution cannot be explained primarily by the per pound price of nylon versus the per pound price of cotton, and it is an example of a change which shifts the. material base of the technology.
The conclusion stated concerning substitution rests upon these factors. It is a process which is very Poorly understood and one which is a prime target for major funaamental research effort.



78-653-79-7






90

PART Ill. JYSTTUO.NAL PIOBLEms
It is very important that society organize itself so that materials flow is without constraint and relatively certain. Although, as argued above, there are no greologric reasons for material shortages to impact on the quality of life, an interruption of material flows to the economy would be disastrous. The time for adjustment for change in raw material inputs to production functions is long, and the failure of a component in these production functions will stop production. This is equally true whether that failure is from- a lack of capital through a lock-out, a lack of labor through a strike, or a lack of material inputs through an embargo. Each of these political weapons stops production.
Each of these political weapons or the threat of them can be used to increase the share of productive income flowing to the owners of that factor. Capitalists can use lock-outs to hold down labor costs; labor
-unions can use strikes to increase, the share of income going to labor; and raw material producers can use embargoes and cartels to increase the share going to the raw material component of the production f unction.
The problem facing the U.S., and the world, over the next. ten years is one of institutions. The issue is -what can be done to reduce the potential damaging impact of raw material supply interruptions or price manipulations on the quality of life of the U.S.
Embargoe8
In the case of raw materials, which are relatively cheap to store, the least cost protection to society from either a political or economic embargo is the existence of stockpiles. Without going into the very difficult issues as to how big a stockpile, who should finance it and who should hold it, it is obvious that the stockpiling strategy is the leastcost one to employ in uncertain situations. This leads early to a recommendation that the question of economic stockpiles be placed highrl on the agenda for congressional consideration as an insurance that raw material interruptions from natural or man-made factors will not substantially interrupt economic activity. The following chart detail-s those minerals where the U.S. imports some significant proportion of current supplies. Each of these should be subject to analysis in the stockpile study.









91




IMPORTS SUPPLIED SIGNIFICANT PERCENTAGE OF

MINERALS AND METALS CONSUMPTION* IN 1975





MINERAL PERCENTAGE IMPORTED MAJOR FOREIGN SOURCES
0% 25s 50% 75% t 00.
I I I I I

COLUMBIUM 100 AZL THALAND .NI GERIA
MICA (sIheet) 1 0 i1o AZL MALAGASY
STRONTIUM 100 .E CO. uK SPAIN
MANGANESE 99 BR AZtL GABO'. ALSTRALIA SOUTH AFRICA
COBALT 98 ZAIE 6E.G.oUM LUXEM6OURG. FINLAND. N ORWAY.CANAOA
TANTALUM 95 THAILAND, CANADA. AUSTRALIA. BRAZIL
CHROMIUM 91 SOUTH AF RCA. USZR. TURKEY. RHODESIA
ASBESTOS 86 CA.ASA SUTH AF-RCA
ALUMINUM (ores'& metaIl 85 i JAvACA E: NAM. AUSTRALIA. DOMINICAN REPUBLIC
FLUORINE 82 MEXICO. S"AN. ITALY
BISMUTH 80 1 PER ', JA,A MEXICO. U K.
PLATINUM GROUP METALS 80 SOUTH AF R ICA. U K. U USS R.
TIN 75 MALAYSIA. THAILAND. BOLIVIA
MERCURY 73 CANADA. ALGERIA, MEXICO.SPAIN
NICKEL 71 CANADA. NORWAY
ZINC 64 CANADA. MEXICO. AUSTRALIA. HONDURAS.PERU
TELLURIUM 59 PERU. CANADA
SELENIUM 58 CANADA, JAPAN. MEXICO
ANTIMONY 56 SOUTH AFRICA. P R. CHINA. BOLIVIA. MEXICO
TUNGSTEN 54 CANADA BOLIVIA. THAILAND. PERU
CADMIUM 50 I EXICO. CANADA. AUSTRALIA, BELGIUM-LUXEMBOURG
POTASSIUM 49 CANADA
GOLD 45 CAN.ADA. SWITZERLAND. U K., FRANCE
GYPSUM 39 CANADA. MEXICO. JAMAICA
VANADIUM 36 SOUTH AFRICA. CHILE, U SS.R.
BARIUM 35 IRELAND, PERU. MEXICO
PETROLEUM inc. Nat. Gas Iq.) 35 CANADA, VENEZUELA, NIGERIA, SAUDI ARABIA
SILVER 30 CANADA, MEXICO.,PERU
IRON 29 CANADA, VENEZUELA, JAPAN, COMMON MARKET (EC)
TITANIUM (ilmenite) 28 CANADA. AUSTRALIA
SALT 6 CANADA. ME XICO. BAHAMAS. CHILE
PUMICE 5 1 GREECE. ITALY
CEMENT 4 g CANADA, BAHA'AS, NORWAY, U.K.
LEAD 4 M CANADA, PERU. AUSTRALIA. MEXICO
NATURAL GAS 4 I CANADA
MAGNESIUM (nonmelallc) 3 11 GREECE. IRELAND. JAPAN
I I I l
0% 25% 50% 75% 100%
NET IMPORT RELIANCE



APPARENT CONSUMPTION US PRIMARY BUREAU OF MINES. U.S. DEPARTMENT OF THE
4 SECONDARY PRODUCTION NET IM'.PORT INTERIOR import-export data from Bureau of the
RELIANCE
Census)
* NETIMPORTRELIANCE = IMPORTS EXPORTS
I GOV'T STOCKPILE AND INDUSTRY
STOCK CHANGES







Cartels
The OPEC cartel is serving as a successful example for other pro.. ducer countries. Many studies, both within and without the government, have targeted a number of commodities for possible cartel action and, in fact, cartels of various characteristics have been formed. A cartel impacts on economic welfare by restricting the supply of a material and raising its price well above long-term costs. The objective of the cartel is quite clear-to maximize the profits or rents to be earned from the deposits controlled by the cartel. The cost to society is also clear in that a disproportionate share of other goods must be exchanged to obtain the materials.
The most effective anti-cartel policy is to place reliance upon the market forces to speed the collapse of the cartel. A study done by the Secretary of Interior indicated, historically, that the life of cartels which are not supported by governments is less than three years. Economic pressures on the cartel are very great, both from supplies outside of cartel production, and consumers, reacting both to price and possible embargo uncertainties, seeking production functions which minimize or eliminate the use of a material concerned. When the cartel is of a traditional nature, i.e., an organization of producers, opening up and permitting market forces to operate in the non-cartel areas of the world, is the most effective and efficient means of rapidly causine the demise of the cartel.
However, this may not be so when the participants in the cartel are national states. It is not obvious that national states will respond to economic criteria of profit and present value. National-state cartels may have other objectives covering the entire gamut of political power and coercion to matters of national prestige. The growth of government-operated firms and cartels including national states does raise a series of other more basic issues. For example, such firms or cartels may make materials available not on economic terms but in return for other kinds of payment--such as military shipments, treaties, lon r-term investment commitments, or other such matters. This is not to say that economics is not important to the new breed of cartel. It clearly is. But the best policy response to the new breed needs careful evaluation.
Thus, natural subjects for congressional examination are the issues of nationalized firms and cartels containing national states as memhers. These subjects raise non-traditional sets of problems and issues, for which new legislative and policy answers may be desirable.
Environmental an. Social essie
A factor that could create material shortages without geological basis is the closing of large areas of the world's land mass to mineral exploration or exploitation. Although mining takes a very small area of the earth's crust, much of the earth must be explored in order to find the high-grade deposits that can be mined. Withdrawal of land from exploration through preservation for wilderness purposes, or the denial of development of land in large areas because of perceived other values of that land can, over the long term, severely restrict the geologic availability of mineral resources. This issue is one which