35.

Another geographic factor is the hostility of the extractive environment. For example, oil exploration, development, and production from the continental shelf or the Arctic are inherently more costly than the same activities in a more benign environment. Offshore oil and natural-gas costs for the U.S. are running about four times onshore costs. In this regard the expenditure of more work is currently adding to reserves and will continue to do so until the work cost becomes impractically high in relation to the value of the resources in their end uses.

Evolving efficiencies of nonrenewable-resource exploitation

Increasing efficiency of nonrenewable-resource exploitation has been a product of many improvements and some breakthroughs in the technology of exploration, extraction, processing, transportation, and application, as well as decreasing energy costs. The energy resources themselves furnish good examples of the effects of technology.

Power and heating devices of the early stage of the Industrial Revolution were very inefficient by contemporary standards. As late as 1860, the aggregate efficiency of the energy system of the United States was only about 8 percent (Fig. 10). In the following 100 years, the efficiency of that system almost quintupled, and increases in technical efficiency of energy exploitation and use kept ahead of the increasing work investment required to bring coal and metals out of deeper mines and oil and natural gas from deeper wells.

Well-designed spaceheaters replaced inefficient open fireplaces; process-heat systems improved, aluminum smelting, for example, today requiring less than half the heat per pound of product that it did forty years ago; diesel-electric locomotives replaced steam, with a five-fold increase in efficiency of fuel use; the heat rate (energy consumed per

37.

kilowatt-hour produced) of thermal electric generating plants improved dramatically, as did the efficiency of transmission of electricity over high-voltage lines.

Increases in technical efficiency are, however, subject to the law of diminishing returns, and the efficiency of energy use in the U.S. appears to be approaching an asymptotic limit at somewhat less than 40 percent. In 1971 the efficiency of the U.S. energy system (Fig. 11) was about 36 percent, and had probably declined a little during the previous two years. The decline came about because of lessened efficiency of energy use in electric-power generation and in automotive transportation. The heat rate in thermal electric power generation has been increasing recently, after about 50 years of almost steady decline, because of environmental requirements and a lower average grade of coal used in more than half of the powerplants. Automotive transport efficiency decreased in part because of new pollution standards, but more because of added weight and power controls. Efficiency of energy-resource use has declined each time electric heating replaced direct space and water heating by a fossil fuel.

Additional increases in efficiency of the energy system will be costly, both in effort (money) and freedom of choice. It is clear that provident technology and restriction of consumer choice must be relied upon in the future if the aggregate efficiency of energy use is to be improved further and if the availability of energy to the U.S. economy is to be maintained at a level consistent with the national welfare. Economic technology is nearing its limit for efficiency improvements.

Until recently, efficiency of energy use was not a matter of public concern in the U.S., because it had been increasing at a rate which allowed

FIGURE

END-USE CONSUMPTION

12.0

INDUSTRIAL

2.1

EXPORTS 1.6

E. COOK, 1973

39.

energy costs to decrease. Now efficiency is a matter of concern (1) because it is one of the factors in the rising cost of energy, (2) because lower efficiency depletes the finite stock of fossil and nuclear fuels faster, and (3) because lower efficiency increases adverse environmental impacts of thermal and other effluents of the energy system. Unless we put our faith in provident technology again and again to provide new stocks of energy materials faster than we can use them up, and to provide economic solutions for related environmental problems, we shall need to pay attention to the efficiency of use of energy and other resources.

The cost of energy affects the cost of other resources, especially those that require a lot of energy to extract from the ground, to process, and to transport. Mining and the metallurgical industry are significant users of energy. Rising energy costs can decrease ore reserves, by making it too costly to mine and process material classified as ore under cheaper energy conditions.

The impact of environmental controls on the availability of nonrenewable resources is a pervasive one. We decrease potential reserves by barring mining in areas regarded as scenic, historic, or environmentally fragile; by banning the use in powerplants of fuels containing impurities which will produce undesirable effluents; and by insisting on complete environmental restoration after mining.

Depletion of known reserves may be increased by application of environmental standards. When meeting environmental standards requires additional metallic equipment, lowered operating efficiencies, and more ton-miles of materials transport, depletion is increased beyond what it would be with lower standards.

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