45.

to be available over the length of time required for exhaustion of the remaining recoverable and discoverable reserves.

Experts do not agree on the method appropriate for forecasting

availability of a nonrenewable resource.

determines availability.

Some maintain that demand

Others hold that geologic criteria determine

availability, but these latter disagree strongly on the appropriate method of forecasting and on the assumptions which are proper or

needed.

The room for disagreement is large, because the world has yet to see its first exhaustion, on a global scale, of a nonrenewable resource -- although it has several striking historic examples of exhaustion of renewable resources.

We have examples of the exhaustion of individual mines and oil fields and even of mining districts, but there is disagreement as to the validity of extrapolating from the production histories of individual deposits and groups of deposits to the total fund of a mineral material that may ultimately be available for use. There is even disagreement about the value, for planning purposes, of any longrange forecasts of availability. It is argued that the advance of technology in extending reserves and creating substitutes is both quantitatively unpredictable and historically certain, and that longrange forecasts of availability serve little purpose, although depletion forecasts of short and intermediate range for specific resources in limited geographic areas may be helpful in allocating investments and adjusting regional political strategies.

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Because much effort and concern has been expended on methods of predicting availability to the U.S. of petroleum and natural gas, examples in the following discussion will be limited to those two commodities.

The economic method

One might say that the calculation of demand over a range of prices is an economic method of forecasting availability. Such projections, commonly based on historic trends and certain assumptions about demand elasticity and technological changes, are made; they can be equated to availability curves only on the assumption that supplies will come out of the ground somewhere to meet the projected demand, and they have no relation to depletion forecasts for a specific nation or region. The recent forecasts of U.S. demand for natural gas to the year 1995 by the Future Requirements Committee and of U.S. demand for industrial metals by the National Commission on Materials Policy are examples of demand forecasts which are at the same time availability forecasts, since they explicitedly or implicitly assume availability, from some combination of sources, of the commodity in question.

The geologic-analogy method

A method of forecasting availability which is supply-oriented rather than demand-oriented is the geologic-analogy method. As its name implies, the method is based on geologic extrapolation from areas of substantial production into areas of no production and limited exploration. For example, volumes of rock similar to those in which petroleum has been found and produced are calculated and multiplied by finding or production rates per unit volume based on historical experience in similar geologic environments to obtain figures for oil-in-place or for petroleum

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potentially discoverable and recoverable from little-known areas; the same method is applied to deep unexplored portions of productive basins. The geologic-analogy method has been used by the American Association of Petroleum Geologists, the U.S. Department of the Interior, and the National Petroleum Council (see Suggested Reading, at the end of this paper for references). This method yields no direct estimate of the length of time over which the potential reserves may be available. The exploitation-history method

Another method, pioneered by Dr. M. King Hubbert, is also supplyoriented, in that it forecasts the remaining production history, on a national or global basis, of a specific commodity, but it departs widely from the assumptions and calculations of the geologic-analogy method. Dr. Hubbert plots a curve of production rate over time as a projection from the portion of the curve already a matter of historical record. He assumes a characteristic evolutionary sequence in the production life of a nonrenewable resource, a sequence that is similar on a national, continental, or global scale to the production history of a single mining district or oil field. In this approach, the production curve, the proved-reserve curve. and the curve of discovery rate per foot of exploratory drilling are plotted, correlated, and projected to ultimate exhaustion. Dr. Hubbert assumes that complete production histories describe logistic curves that begin at zero and end at zero (Fig. 14). His method can be used only when there is already a substantial history of exploration and production in the nation or region whose production is to be forecast; in the early stages, he too would rely on estimates of total discoverable oil based on geologic analogy and volumetric calculations.

Figure 14

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Analysis of these methods

The economic method of equating demand with availability reflects a faith in technology stronger than that of many engineers; it rests on the belief that resources will be created by technology as needed by the market. C. S. Merrill (1959, n.36), for example, wrote "...there is an endlessly retreating line dividing the profitably minable from the submarginal ores in nature." Harold Barnett (1971, p.181) speaks of "... the cornucopia of scientific advance and technologic change... [which]...have created a virtually unlimited 'knowledge bank' for an endless stream of new cost-saving innovations" and the same author states that "...the long-term upward trend of economic growth will not be halted by availability of extractive goods." Carl Kaysen (1972, 0.661, 663) has stated well this cornucopian thesis: "The fact that some limits exist, that the earth is in principle finite, is hard to deny, but does not in itself lead to any very interestina conclusions... Resources are properly measured in economic, not physical, terms."

Insofar as this doctrine is supported by evidence, it rests on the history of approximately level or falling real costs of some major mineral commodities over a period of more than 100 years, despite increases in the depth of mines and wells and despite large decreases in the average grade of ores mined.

Both provident and economic technology have been at work during the century of greatest economic growth in North America. Aluminum and copper are outstanding examples of materials whose reserves have been increased greatly and whose price has been decreased by technologic breakthroughs and improvements. The Hall process of producing aluminum and the flotation process of separating copper sulphides from waste rock