Metals in short supply ?
February 13, 2010
A program from BBC Radio 4 that looks at possible shortages in the metals supply chain.
This link will only be active until Feb 18th, sorry.
http://www.bbc.co.uk/iplayer/episode/b00qjx5q/Out_Of_This_World/
Its an OK program. It covers the basics well, the researcher obviously found the two main sides of the argument. He didn’t chase down their fundamental positions though.
He looks a new technology as a solution mainly in recycling of metals, skipped over substitution in a sentence, had some kook from Surrey Uni muddying the waters with talk about space mining phosphorous (of course you aren’t going to mine bulk commodities in space to throw down Earth’s gravity well, that’s stupid ! If you were that desperate you’d use them to farm in space and throw the products down the well. Idiot !)
The guy who seems to being interviewed in a pub is a co-author of the UK’s only public, government sponsored report that I’ve seen on this topic. The report is OK, though quite why someone would employ a consultancy that specialises in the environmental impacts of waste disposal to conduct a metals supply study is a mystery. Its a bit like employing an undertaker to speak about health issues.
The MaterialsUK group is carrying out a much fuller examination of all this including something that I advocated in my thesis on copper supply, a full materials flow analysis to find out how much of what is where in the UK’s economy. Once you know that, only then can you really start to tailor policy towards material consumption. David King was right that we must eventually get to a post-consumption economy, but there are a few steps that we must take to get there. Knowing how we consume is one of them.
A quick question; at what point did mining engineers suddenly become the people who find minerals ? As a resource geologist I must have missed that meeting 
Just a final word on the whole materials security discourse. This is being driven by two main movements; the anti-consumption environmental movement and the American economic/energy independence/security side of the tracks. Bit of an unholy alliance really It should be recognised that the majority of pressure coming from West of the Atlantic is from the industrial/military and for those who are really interested; the US’s stance towards material security is embodied in the book “Minerals, Critical Minerals and the US Economy” . The majority of public pressure coming from Europe is from the anti-consumption angle, but economic imperatives to support high value, high-tech manufacturing in Germany and the Franco-centric nuclear industry are also important factors behind the scenes.
The flip side of the argument comes from the economists (Humphries on the program) and the materials scientists.
My own opinion is that there is no generalisation to be made here about materials running out on a global scale. Each material has a specific set of consumption pathways that it may take, each has a set of potential physical substitutes, each has a potential set of new sources, each has an availability to recycling, each technology that uses each material has its own pathway.
There is however likely to be issues over local availability as geology, politics and economics conspire to restrict efficient supply, and that really is the point. If we want to fight over ‘stuff’ we can, all we need to do is keep increasing its consumption without increasing the efficiency of its supply or recycling, human nature and politics will do the rest for us. However, since we know that conflict (physical or economic) is pretty much inevitable without concrete action to change course, do we not have an ethical responsibility to try and alter course whether it be though scientific/technological innovation or policy-led initiatives ?
The miners will mine only what they can sell, nothing other than economics is required to control that, so putting on the table products or policies that adjust consumption projections has to be the way to go.
Plastic Fantastic
February 5, 2010
I briefly mentioned the interplay between the plastic industry and the demand for oil, well the Financial Times recently did a piece on petrochemical prices that has shed a lot of light on the subject for me. Unfortunately the piece is behind a paywall, but you may be able to get to it with a free trial subscription.
The main thrust of the matter is that the major petrochemicals that plastics are made from (naptha, benzene, ethylene and propylene) are under massive and rising demand pressure from Asia. So much so that the FT reports that an index of their prices has risen by 150% in the last year, now don’t get too excited. Just before that year started the same index as reporting an all-time low as demand stagnated during the recession. The story of surging demand is also told by this Indian site in a bit more detail.
My point is this; running oil refineries is an expensive, energy intensive, dirty (in terms of emissions) and sometimes economically uncertain business. The price volatility of the raw natural resources (including water) is multiplied by the energy intensive nature of its processing and carbon emissions pricing. Also the demand for the products is dependent on macro-economics that, to a large part, are tied to crude oil prices as well. It seems to me that the price risks that ‘oil as fuel’ users face are minor when compared to those that ‘oil as feedstock’ users face.
The demand imbalances that cause supply price shocks, like the one we are seeing now, are temporary and transient as we can see from this paper from the Middle Eastern Economic Survey, so long as they are not coupled with oil price rises. However, since most mid to long term forecasts show oil price rising steadily we can reasonably expect the price of petrochemicals to rise as a function of the raw material price rises, possibly a multiple of oil price rises.
Lets have a little context;
China currently imports around 21m tonnes of oil per month or 200m tonnes for 2009 (and rising fast). Some estimates see global peak consumption of around 100m barrels per day, thats roughly 5,000m tonnes per year, against today’s 85m barrels per day (4,250m tonnes per year).
Lets compare that to our main petrochemicals;
naptha – 215m tonnes per year
benzene – 10m tonnes per year
ethylene – 25m tonnes per year
propylene – 15m tonnes per year
That’s a total of 265m tonnes of the products per year or, in broad terms, a similar amount of oil to that which China will be using in 2010-2011. I pose the question – what happens to global oil prices if you take China out of the equation ?
So here’s where bio-plastics and biomass derived chemical feedstocks come in. China and India are the two main marginal consumers, they swing oil prices by their increases in consumption. Take ‘a’ China out of that equation and my strong guess is that your oil price volatility drops by a significant amount.
So by replacing petrochemicals with bio-mass derived petrochemicals you can actually have a disproportionate effect on energy price security, because you have taken the price and volatility multiplier that is refining out of the equation.
Of course you still need the energy and the water, but your raw material would be forestry products or agricultural byproducts. These are generally grown in climates where water isn’t a major issue, but you would need to be a little careful over both water supplies and food production.
Anyone fancy setting up a bio-petro-chemical production facility in the Canadian forests (to supply North America) or the Russian Tiga (to supply Chindia) ?
Lip Up Fatih !
August 3, 2009
If there was ever doubt in my mind that times are a changin’ it was dispelled by Fatih Birol, the Chief Economist of the International Energy Agency (IEA) who, in an interview with The Independent, today predicted an ‘oil crunch’ within the next 5 years. For those outside the in-crowd, the IEA has historically been the OECD’s oil, sorry, energy analyst of choice, collating and distributing data on energy production and use around the world. Its data is about as hard as it gets and the WEO (World Energy Outlook) series are required reading for anyone with an interest in energy. These are no sandal-wearing, tofu munching, beardy wierdies. They are people who know the energy business from the inside out.
The IEA has been executing what is starting to look dangerously like a 180 degree turn over the last year or two, but to hear Dr Birol say that we have 5 years before the OECD is in hoc to the Gulf states is stark to say the least. I can’t say that I’m massively surprised by the information, but its a bit of a shock to hear who is saying it and in what terms.
So what does that mean ? My guess is that we are going to start to see some ‘encouragement’ given to oil exploration outside the Middle East as well as accelerated investment in non-oil based transport systems. A few weeks ago I was at the Royal Society where the head of research for Toyota’s fuel cell division (Dr Hirose) said that Japan was ready and raring to do a commercial roll-out of hydrogen fuel-cell vehicles in 2015. I admit I scoffed. Maybe I should re-think.
First item on my shopping list – get my Land Rover converted to run on LPG. I tried about 18 months ago but the garage put the price up on me because we were in the middle of that price spike.
Trends or Noise ?
May 11, 2009
So what have we seen over the last couple of months that is significant ? In my opinion these are the big energy stories;
The Yucca Mountain waste depository was cancelled and the US made new moves towards getting START-III up and running before START-II runs out. For me this is a clear signal from the new US administration that any new nuclear will come with moves towards uranium self-sufficiency through reprocessing. The HEU from disarmament will plug some of the the gap in fuel supplies until the US has reprocessing up and running. The US has benefited the ‘peace dividend’ and appears to want that benefit to continue. Around 10% of nuclear electricity generated over the last 20 years in the USA has used recycled Russian warheads. I haven’t managed to find out the amount of fissile material from decommissioned American bombs used for power generation (yet). For any remaining doubters on US nuclear energy policy I’d just say this – you don’t hire a nuclear physicist to run your energy department and expect him to ditch his Nobel prize-winning subject. Check out his confirmation speach here
Miliband has been to China to report that the UK is ready and willing to do a deal on the latest in CCS tech. The UK government has committed to at least three CCS developments, probably four. In contrast to the half-arsed single site competition previously announced, this gives the opportunity to explore the different technologies in parallel. The money is significant and so was the trip straight to China to finalise a technology transfer deal that sees the UK and China both contribute equally to the organisation (£5m each to set up the organisation). Miliband then went on the Andrew Marr show to trumpet the developments and got mugged as the government rep over the expenses row, though apparently he himself is pretty clean. He was trying to say something about electric car tech and China, but didn’t manage to get it out. I expect the tech transfer back to the UK to include guaranteed supplies of rare earth magnets and rechargable batteries, but that’s conjecture at present. Lets not get too carried away with what will be coming back, it feels much more like a cash for ideas deal to me.
From other sources we are told that Chinese entrepreneurs are massing at Europe’s doors to invest inwards and are targeting the UK specifically. I’m constantly mystified by the global attention that we get. The Arabs, the Russians and now the Chinese. I need to speak to some people from overseas to clear this up.
Right now, to me, it looks like the movement to non-fuel energy sources (the new terminology starts here) will be demand driven over the next 50 years rather than government driven over the next 15. Or I may just be seeing things in the media static, who knows.
Update on the China deal – apparently it covers nuclear, wind, marine and ‘renewables’. The cities of Wuhan and Chonqing are to be the pilots for development of sustainable cities. To me the biggest deal though is that China is going to let UK companies list on its stock exchange thus opening direct access to Chinese investors.
