Resource

I’ve just spent the last three days presenting the IEMA approved Internal Auditor course to seven delightful delegates from various sectors. I love presenting in-house courses where everyone knows each other and they have lots of experience and requirements in common but courses based in ECUS with randomly selected delegates can be wonderfully enlightening. They may sometimes be more difficult because you may be trying to meet the needs of a delegate from a major manufacturing company whilst not neglecting the needs of a delegate from an office based company but the synergies you get can be marvellous. On this course we had some real experts in their fields who were very generous in sharing their knowledge and not only was it enlightening, it was fun.

I’m often surprised by how much people already know but I’m also occasionally disconcerted about what they are not aware of. On most of our courses we link waste and resource use, and sometimes quality as poor quality management can lead to a lot of waste.

On this particular course we talk about major resource issues that we are or will soon be facing. Some resources are, of course, renewable, but only if we manage them sustainably. Examples might be timber, soil, fish and so on. Some things are not renewable except in geological time scales, for example, metals and minerals. Some are not renewable at all and will eventually be exhausted, for example helium, oil and coal. All of these things, to one extent or another, are essential to our way of life. Rare earth metals, for example, are used in tablet computers, hybrid cars, wind turbines, catalytic converters and the more efficient solar PV panels.

Many of the resource issues are exacerbated by where the deposits of the materials are and the environmental impact of their exploitation. The vast majority (~97%) of rare earths are now sourced from China and with this effective monopoly comes increasing concerns for availability. Every time I have googled ‘China, rare earth’ in news over the last several months there have been stories about this issue. Today the news is of a huge increase in taxes making the cost per tonne more than $100,000. The availability and price of oil is also very much affected by the location of most oil reserves.56% of world oil reserves are in the Middle East, currently suffering from a period of unrest.

My big surprise was that when I asked my training group who was aware of the idea of peak oil no-one said yes. Resource depletion is a massively important issue that will affect us all in many different ways and peak oil is one of the most urgent and important. With reference back to my resilience post of a few weeks ago, imagine how we would live without cheap fossil fuels. Our whole complex society depends on each complicated component being sourced from wherever it can be made most cheaply and delivered Just In Time to wherever it is needed. This can only work in an era of cheap oil. Currently oil is not as cheap as it was, bouncing around $100 per barrel.

At the same time that there is a global problem with oil, there is a national problem. The UK was, for a good amount of time, energy self sufficient thanks to the North Sea oil and gas fields. This is no longer the case. Last year we had to import more than 40% of our gas. 40%!! No wonder the Department of Energy and Climate Change (DECC) produced The UK Low Carbon Transition Plan in 2009. It wasn’t just about climate change. To a large extent it was about keeping the lights on for all of us.

I spend a fair amount of time keeping up with what is happening with resource issues and I occasionally read through the comment threads as well. When I’m feeling strong. More often than I care to remember there are major skirmishes about how best to deal with these, whether governments should try to legislate to bring down consumption and hence protect out current comfortable lives for longer or whether the market should be allowed to operate without control. The argument is that as prices increase due to scarcity the almighty market will step in and cause the production of more of the important commodity. This only works if there is more of the commodity available to be extracted within a workable timescale. With oil it takes around ten years from discovery of a resource for an oil well to become fully productive. Oil wells are also no longer being drilled in easily accessible places where the return on investment is high so prices have to be consistently high for a long time for new well to be worth developing. If this does not work then the market is supposed to rush out and produce hyper-efficient vehicles, power supplies and the associated infrastructure. Also, presumably, people will be induced, by the cost, to look at minimising their own energy usage.

This is a wonderful idea as was the idea of taxing pollution sources with a tax escalator on fuel prices. The recent UK budget has, again, dealt a blow to the theory. Oil prices are rising so the chancellor has stepped in and instead of raising tax by the expected 3p/litre has reduced it by 1p/litre. I know that all drivers and transport companies are struggling at the moment with high prices but how is the omnipotent market supposed to save us all if the government steps in whenever we reach a level where it should start to work?