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district, as on the Comstock Lode, there were rather sharp intrinsic
or geologic limits to the ore bodies; the rich iron ores of the Lake
Superior district were formed by a process related to the groundwater
table and thus tended to bottom abruptly; the Comstock vein system, an
upward-branching, tabular candelabra, is typical of fractures formed
and filled at shallow depths: rich and intricate near the surface,
barren and simple a few thousand feet below.
In the Lake Superior iron district, the old-age stage of mining has
been replaced by the youth of a new production-history curve, representing
a technologic breakthrough that created an enormous resource out of the
dense, iron-bearing rock called taconite, previously worthless. The new production-history curve will also pass through maturity to exhaustion.
As with a district, so with the mineral resources of a nation.
The complete cycle of petroleum production in the United States,
including Alaska (Fig. 3), is well past its temporal midpoint, although it may be only about halfway in terms of the total quantity of crude oil ultimately to be recovered. As in the case of the Lake Superior iron
ore, a second production-history (depletion) curve, representing synthetic
crude oil from oil shale, tar sands and coal, starting in the late mature
stage of the first cycle, will greatly extend the availability of liquid hydrocarbons and truncate the primary cycle so that it will not have an old-age stage. The synthetic-crude curve may span a considerable period of time, perhaps as much as a hundred years, but it will follow a course
similar to all the others.
Strategic importance of depletion forecasting
Whether multiple for a single end-product such as iron and oil, and
ESTABLISHMENT OF A
NEW DEPLETION CURVE
DE PLETION HISTORY OF CRUDE OIL IN THE UNITED STATES INCLUDING ALASKA AND ESTABLISHMENT OF A NEW DEPLETION CURVE FOR SYNTHETIC CRUDE
PRODUCTION (10 bols)
ULTIMATE RECOVERY (0) FIGURES ARE THOSE OF MK HUBBERT (1969, 163-184).
Whatever their shape, depletion or production-history curves must begin
at zero and end at zero; they do not represent, either singly or in sum,
reproducible events. The fact that somewhere near the midpoint of its
run, such a curve must begin an inevitable decline makes simple trend projections based on exponential rates of increase in the production of
any nonrenewable resource in the short term hopeful, in the intermediate
term quixotic, and in the longterm absurd.
On the other hand, an industrialized nation must have a continuing
inflow of mineral and energy resources at reasonable costs in order to
maintain its standard of living and national strength. Consequently, it is of great importance to try to forecast availability and costs of
the vital industrial resources.
Because both availability and cost, in
the case of nonrenewable resources, depend significantly on depletion
rates and on the control of those resources, national materials strategies
need to be based solidly on forecasts of depletion rates for both domestic
and foreign reserves.
Major factors in depletion forecasting
In forecasting depletion of domestic reserves, one must (1)
analyze the intrinsic or geologic limits of the resource of concern, (2) estimate the reserves of that resource available over a range of costs with technology constant, (3) analyze the effects of foreseeable technological improvements and innovations, (4) estimate the future
demands for the resource over a range of prices, and (5) estimate the
extent to which the demand will or can be satisfied by (a) foreign sources, (b) recycled material, and (c) substitute materials.
Reserves are never completely known until exhaustion has occurred;
at any moment before exhaustion, reserve figures involve judgment as
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well as measurement. With technology constant, costs of exploitation
tend to increase exponentially with increasing depth, increasing distance
from markets, and increasingly hostile environments for exploration and
extraction; increasing cost of exploitation widens the gap between
intrinsic limits of oil-in-place or metal-in-place and the economic
limits that determine reserves.
Of course, technology is rarely constant.
New technology can increase reserves if it results in lower costs, in
creased demand or more efficient utilization; it can decrease reserves
if it favors a competing resource.
Government intervention in the market, control of prices and end
uses, restriction of imports or exports, imposition of environmental and health constraints, and withdrawal of areas from mineral development,
can increase or decrease domestic reserves.
ation and taxation policies also affect reserves.
Depletion forecasting is based not only on geologic and production
information, but also on forecasts of demand, technology, and political
Definitions of resources, reserves, depletion, and other terms
Before going further, it is necessary to define some important
terms as they are used in this paper. They do not agree in every case
with definitions used by other authors.
A natural resource is a material or energy flow occurring in nature
which can be exploited by man at a profit. Although profit calculations
commonly are made in monetary terms, the ultimate basis of profit in
resource utilization is the amount of work that can be gotten out of,
or in exchange for, a unit quantity of a natural material, related to
the amount of work required to find, recover, transport and process the material (or to convert the natural energy flow) into usable form. By
this definition, naturally occurring useful material in concentrations
too lean, too deep, or too distant to be exploited economically, would
not be called a resource, although it might be termed a potential re
A nonrenewable resource is a material, occurring in nature and
exploitable at a net work profit if found in sufficient concentration,
which cannot be renewed at a rate meaningful to man.
Trees and fish
are renewable resources because they grow at rates and in quantities
adequate to supply many men indefinitely; renewable resources are some
times called income resources.
Coal and iron ore, on the other hand,
are formed at rates so slow as to represent no renewal as a resource
for man; they are nonrenewable resources, sometimes also called fund
Nonrenewable resources result from geomechanical and geochemical concentrations of useful material, and they range widely in
the degree of concentration. When a society has only simple exploitative
technology, such concentrations must be high to constitute resources;
but with sophisticated technology, much lower concentrations may merit
the term resource, for they can be developed at a profit.
Reserves are measured or estimated resources.
Proved or measured reserves represent material that can be extracted
at a profit under existing economic conditions and with available
technology, and which has been measured within small margins of geologic
error by properly spaced drill holes or other openings. Even this category contains an element of judgment and risk. It is the only reserve category on which delivery commitments and plant investment should be based.