Ending the Age of Resource Scarcity Part 1 – Why mineral shortages won’t derail clean energy

It’s often believed that the clean energy disruption could be fundamentally constrained by resource scarcity in the form of insurmountable raw materials and mineral bottlenecks. Increasingly, some argue that it entails a net decrease in the energy available to societies, and therefore warn of an unavoidable decline in material prosperity in coming decades.  

In the following two-part series, we will address some of the most notable perspectives that uphold this mythology. Doing so, we will show that if societies make the right choices – and that’s a big ‘if’ – the clean energy disruption can represent a fundamental break with historical patterns of scarcity, and a breakthrough into a new age of energy abundance. 

That’s because the nature of resource scarcity is itself widely misunderstood due to a confusion between stocks and flows. Scarcity doesn’t occur as an intrinsic feature of the natural order, but rather purely in our relationship to that order. Resources exist on the earth in abundance as ‘stocks’. Our capacity to extract those resources depends, ultimately, on how we apply energy and labor to generate ‘flows’ from these stocks into society. Episodes of scarcity occur when these energy and labor relations restrict those ‘flows’, but they don’t prove that the stocks have diminished.  

With that in mind, this analysis will explore how the idea that stocks of raw materials will deteriorate to a point that they restrict the flows enabling the clean energy disruption is unfounded; and, further, that the clean energy disruption will be able to create a profound transformation in how we apply energy and labor to extract resources. 

Our research at RethinkX has shown clearly that the end of the age of fossil fuels is approaching fast – incumbent carbon-intensive industries in the energy, transportation and food sectors will be disrupted over the next two decades, a process driven by fundamental economic factors.  Our new report, Rethinking Climate Change: How Humanity Can Choose to Reduce Emissions 90% by 2035 through the Disruption of Energy, Transportation, and Food with Existing Technologies, finds that most conventional analysts grossly underestimate the scale and speed of this transformation due to pseudoscientific assumptions which presume slow, incremental change within a siloed, linear framework.  

But applying the RethinkX systems lens based on the Seba Technology Disruption Framework – which has been used to successfully anticipate a wide range of phenomena from the collapse of coal to peak oil demand – reveals that by deploying and scaling key technologies that exist today, humanity will be able to not just reduce carbon emissions by 90% within the next 15 years, but begin withdrawing dangerous concentrations of greenhouse gases out of the atmosphere far more rapidly and cheaply than widely believed possible. 

The disruptive technologies in question include solar, wind and batteries (SWB), autonomous electric vehicles (AEVs) and the Transport-as-a-Service (TaaS) business model, as well as precision fermentation and cellular agriculture (PFCA). But a question that has frequently emerged is whether we have enough raw materials and mineral resources to sustain the global deployment of these technologies. 

Conventional forecasts 

The belief that the clean energy disruption necessarily represents a dramatic increase in the material intensity of the global economy is widespread, because it has been promoted by some of the world’s most influential institutions. But this is an over-simplistic view. 

According to the International Energy Agency (IEA)’s report, The Role of Critical Minerals in Clean Energy Transitions, solar PV plants and wind farms “generally require more materials than fossil fuel-based counterparts for construction.” The IEA points out that an EV typically requires “six times the mineral inputs of a conventional car and an onshore wind plant requires nine times more mineral resources than a gas-fired plant of the same capacity.” As a result, minerals and metals demand will skyrocket, the IEA projects, as the transition to clean energy accelerates. By 2040, as we attempt to replace the existing fossil fuel system with a clean energy system, demand for materials could either double or even quadruple with a faster rollout, encompassing minerals and metals like copper, cobalt, nickel, lithium, chromium, zinc, aluminium and rare earth elements. 

The World Bank’s assessment is that production of minerals like graphite, lithium and cobalt could increase by as much as 500% by 2050 to meet demand for the clean energy transition. Yet the report also notes that mining for “low carbon technologies” will only generate 6% of the carbon emissions of fossil fuel technologies – a significant reduction. 

Even within the conventional frameworks of the IEA and the World Bank, they recognize that there are solutions: mining can be expanded in a way that is environmentally and socially responsible, but we must also ramp up the scope for recycling and reuse. 

On the other hand, a number of other studies claim that even with such approaches in place, the clean energy transition is bound to hit materials bottlenecks.  

For instance, one major EU-backed model appears to show that the full electrification of cars, trucks and trains to run on clean energy will be constrained by mineral bottlenecks in a global economy which continues to grow at the current rate. The EV transition will “require higher amounts of copper, lithium and manganese than current reserves” by 2050, even with high recycling rates of 57 percent, 30 percent and 74 percent respectively, the study says. 

Similarly, a report by the Geological Survey of Finland concluded that there are insufficient global reserves of nickel and lithium to produce the number of batteries required to replace the existing global transport fleet with EVs, while also providing a power buffer for when intermittent solar and wind energy is unable to meet electricity demand in the winter. The report arrives at the following grim verdict: “… replacing the existing fossil fuel powered system (oil, gas, and coal), using renewable technologies, such as solar panels or wind turbines, will not be possible for the entire global human population. There is simply just not enough time, nor resources to do this by the current target set by the world’s most influential nations. What may be required, therefore, is a significant reduction of societal demand for all resources, of all kinds.” 

Yet these conventional approaches are deeply flawed. They completely fail to understand the dynamics of the disruptions, because they assume that clean energy technologies are supposed to simply replace incumbent fossil fuel technologies by way of a one-for-one substitution: hence the use of the phrase ‘energy transition’. The underlying assumption is that the system itself will pretty much operate in exactly the same way we are familiar with, albeit transitioning from one set of things to another.  

In reality, this is not an energy ‘transition’ – implying a smooth and incremental progression from one set of technologies to another within the same architecture. Rather this is a complete transformation of the energy system, ushering in entirely new dynamics, rules and possibilities. Only when we understand those new dynamics can we accurately grasp the risks and opportunities ahead. 

Clean disruptive transformation: a whole systems lens 

Conventional methodologies attempt to understand technologies and sectors in isolation, rather than recognizing how they work as interconnected systems. But the energy disruption is not happening in isolation. It is intimately connected to disruptions in the information, transport, materials and food sectors, and the dynamics of each of these disruptions cannot be fully understood without recognizing their cross-sector interconnections. Mainstream institutions largely fail to understand this crucial nexus between disruption, societal change, and system transformation. 

Key Technologies, Convergence, and Interaction Between Sectors. Source: Rethinking Climate Change (2021)

Because of this siloed way of seeing the world, institutions like the World Bank, DNV and the IEA are incapable of anticipating how disruptions in each sector represent phase changes with cascading effects across all sectors. These will not only accelerate one another, but indelibly transform the dynamics of the disruptions themselves. One of the biggest obstacles to understanding the opportunities of the unfolding disruptions in the energy, transport and food sectors is a failure to see how they will bring in entirely new system dynamics that will render the rules of the old, incumbent system obsolete. 

For instance, the information disruption has played a crucial role in the disruption of the global oil industry. In Rethinking Humanity: Five Foundational Sector Disruptions, the Lifecycle of Civilizations, and the Coming Age of Freedom, our co-founders James Arbib and Tony Seba explain how the arrival of the smartphone not only disrupted the telecoms market, but disrupted retail, food and transport with the introduction of ride-hailing and food delivery services. It also drove rapid improvements in lithium-ion batteries which, in turn, went on to make EVs far more affordable and competitive.  

Cheaper EVs with increasingly powerful batteries has meant their cost per mile is rapidly becoming cheaper than gasoline vehicles. As ride-hailing converges with EVs, that lower cost per mile will make Transportation-as-a-Service (TaaS) more affordable than owning and running your own private car. When the information disruption makes autonomous EVs viable (A-EVs), TaaS will become so cheap – approximately ten times cheaper to be more precise – that it will strongly reduce individual car ownership and become the predominant paradigm for transport. That’s because, as RethinkX co-founder Tony Seba has said: “A 10x cost differential has always caused a disruption in history. Every single time.” 

But of course, the information disruption did not stop at energy or transport. The application of information to materials has led to dramatic improvements in precision biology, which have driven down the costs of precision fermentation and cellular agriculture (PFCA) for the production of animal proteins without killing the animal.  

This is driving a revolution in food production that is already on track to become cost-competitive with the livestock industry as early as 2025, and which will become ten times cheaper in as little as ten years. Shortly thereafter, it will only be a matter of time before the technology will begin disrupting industrial agriculture for products like soybeans and palm oil 

A decreased, not increased, material footprint 

The World Bank, IEA, EU and others have failed to understand that all these disruptions across the energy, transport, food, information and materials sectors are inherently interconnected. This means that we cannot hope to understand the ‘energy transition’ in a silo, but only as an integral part of a wider process of disruptive transformation across all five foundational sectors that define civilization.  

That’s why these institutions overlook the novel properties of the new system that is emerging. As described in our Rethinking Climate Change report, the combined impact of the energy, transport and food disruptions mean that the entire infrastructure of the incumbent fossil fuel-based energy, transport and food paradigm will become obsolete. With demand for oil, gas and coal crashing down, the huge global logistics and shipping infrastructure which operates today to transport vast quantities of oil, gas and coal around the world will no longer be needed. Neither will the vast infrastructure of oil rigs, coal power plants, pipelines, and beyond; nor will the complex networks of shipping to transport livestock and livestock products across vast distances, as they will be disrupted by locally-based PFCA production hubs. 

Cascading effects of disruptions on iron and steel. Source: Rethinking Climate Change (2021)

Vast quantities of vehicles dedicated to heavy transport by land, air and sea will therefore become unnecessary. And by disrupting private ownership of cars, the EV and A-EV transformation along with the rise of TaaS will mean that only a fraction of cars will be on the roads. Instead of everybody owning their own car, most miles traveled will be by TaaS for ride-hailing with a much smaller fleet of vehicles in service. So EVs will not replace gasoline vehicles as a one-for-one substitution – instead we will use a fraction of the number of vehicles we used previously. Therefore, models which predict raw materials scarcity on the basis of a one-for-one substitution of gasoline vehicles with EVs are entirely wrong.   

Maintaining the old industrial fossil fuel infrastructure with all its huge raw materials inputs in the form of minerals and metals will no longer be necessary. An analysis by Carbon Tracker compared the mineral inputs into the fossil fuel system to a clean energy system by weight. Coal generation needs 2,000 times more material by weight than solar, and overall the fossil fuel system requires over 300 times more materials by weight than a clean energy system. This means that although clean energy entails an increase in specific minerals requirements, it still entails a dramatic reduction in the global energy system’s total material footprint, including its logistics and transport requirements. 

Conversely, the obsolescence of that huge infrastructure, as well as of the old internal combustion engine industry and its associated vehicles, will make a vast global repository of metals such as steel, copper, aluminum, nickel, and cobalt available for recycling to build out the clean energy, transport and food industries. We will therefore be able to meet demand for these metals and materials from the clean disruptions by a combination of new mining with recycling at a much higher order of magnitude than conventional models recognize.  

Of course, none of this implies that we should be sanguine about the need for environmentally-sound circular economy approaches to mineral supplies. Such approaches will become even more important, and the locus of environmental legislation and policy will need to focus on ensuring stringent practices in place. 

Promising findings from one landmark study 

So far, there are no studies which have modelled these cascading effects of the energy, transport and food disruptions in relation to minerals and recycling. However, some research offers more accurate insights. 

The first major global life cycle assessment of a potential renewable energy system, published in the Proceedings of the National Academy of Sciences (PNAS) in 2015, corroborates the analysis set out here, although it didn’t fully appreciate or account for the novel dynamics of the new clean energy system because it focused almost entirely on the energy sector alone. Nevertheless, the assessment led by the Norwegian University of Science and Technology found that over time, the environmental impact of extracting raw materials for clean energy technologies would decline, while the total quantity of those materials would be a fraction of the volume of materials being mined today.  

In the PNAS scenario, solar, wind and hydropower would make up 39 percent of total global power production. But because wind and solar power generation require no additional raw materials inputs over their lifespan (unlike conventional power plants which require continued additional mining and refinement of oil, gas and coal), overall renewable power requires far less raw materials. That crucial nuance has not been incorporated into other models.  

In the PNAS scenario, new clean energy installations would increase demand for iron and steel by just 10%, with the copper required for solar panels equivalent to two years of current global copper production. When solar and wind installations need to be replaced, the raw materials to do so would be available from recycling of older power generators. Other benefits would be marked: freshwater pollution would reduce by half, and air pollution would decline by 40%. The human health benefits alone of a decline in air pollution would be enormous. 

There are significant gaps in this model, which doesn’t incorporate the vast scope for metals recycling from the incumbent fossil fuel infrastructure in a 100% global clean energy scenario – but a cursory analysis of the paper’s figures show that if its findings were extrapolated to such a global system, much of the excess iron, aluminium and copper production required would potentially be acquired from the recycling of that obsolete infrastructure.  

The rare earths error 

Rare earth elements are another area where it’s commonly believed that mineral production bottlenecks could derail the emergence of a global clean energy system. But once again, the relevant challenges have been overblown.

In 2014, the World Wildlife Fund commissioned Ecofys, the leading Dutch energy consultancy, to explore supply risks for critical materials. Their report, Critical Materials for the Transition to a 100% Sustainable Energy Future, found that minerals like indium, gallium and tellurium used for solar panels would not pose bottlenecks due to easy substitutability with other abundant materials like silicon. As for rare earth elements like neodymium and yttrium used in wind turbines, their supply is mostly projected to exceed demand. And while supplies of lithium and cobalt could theoretically pose supply challenges, the report said, these can be solved through recycling, substituting lithium in other sectors, and substituting for cobalt in cathodes. Nickel and cobalt are not used in lithium-iron-phosphate batteries, for instance.  

Bottlenecks that might emerge are therefore not geological, but rather geopolitical and economic. China, for instance, is not actually rich in lithium, cobalt or nickel, but procures these metals and refines them internally, a process it heavily subsidizes to keep costs low. That’s why although the world’s largest lithium mining company is based in southern China, all its resources are held in Australia, Argentina and Mexico. There is therefore ample scope for other countries to ramp up mining activities and challenge China’s current market monopoly.  

Writing in the Bulletin of Atomic Scientists, physicist Amory Lovins, chief scientist at the Rocky Mountain Institute, explains how ‘rare earths’ are not actually rare, but available in abundance though not always in concentrated form. In 2010, many analysts mistakenly predicted that soaring prices signalled a coming rare earth supply shortage. What actually happened is that following the price rises, “stockpiles rose, idle mines reopened, explorers sought and found new deposits, and recycling increased.” Companies simultaneously sought to cut costs and boost performance, using costlier materials more frugally and substituting them with cheaper and better solutions where possible. The result was that prices crashed as supplies became abundant. As such, Lovins concluded, they “are very unlikely to shift the world’s strategic balance or create resource crises.”  

Lovins’ analysis speaks to the fact that many who see critical minerals as a scarce resource are confusing the economics of commodity cycles with geological scarcity, as one study in the journal Energy Research & Social Science points out. Rising prices of minerals due to coming demand increases will increase revenues, make recycling more affordable, and generate new markets for novel circular economy practices and industries which previously would have been less feasible. It will also drive further innovation.  

In many cases, rare earths can be substituted out completely simply by better design principles. Some EVs and wind turbines might well use motors and generators relying on supermagnets that require rare earth elements like neodymium, but as Lovins says: “Everything that such permanent-magnet rotating machines do can also be done as well or better by two other kinds of motors that have no magnets but instead apply modern control software and power electronics made of silicon, the most abundant solid element on Earth.”  

Current recycling rates for critical metals are at below 1%, with some rare earth elements not being recycled at all. This means that the potential for recycling is vast.  

According to a recent study released in April 2021 by the Sydney University of Technology’s Institute for Sustainable Futures, the IEA’s assessment of how critical materials recycling could alleviate demand for new mining is far too conservative. The study finds that demand for nickel, cobalt, lithium, and copper for EV batteries could be reduced by as much as 55% through increased recycling.  

There is therefore no serious evidence that the clean energy disruption will face any insurmountable obstacles from minerals or raw materials bottlenecks. To the contrary, as we will see in Part 2, a new global clean energy system can overcome materials bottlenecks by sustaining recycling and circular economy practices – along with the instalment of new solar, wind power and battery (SWB) systems – without new fossil fuel inputs. And even that is only the beginning of what will be possible.  

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