In an editorial called Be persuasive. Be brave. Be arrested (if necessary) which recently appeared in the science journal Nature, Jeremy Grantham argues that the world's supply of phosphorus and potash is at risk. For your convenience, I have included a graph which appeared in my one and only post on this subject Phosphorus In The Age Of Scarcity (September 16, 2010).
Then there is the impending shortage of two fertilizers: phosphorus (phosphate) and potassium (potash). These two elements cannot be made, cannot be substituted, are necessary to grow all life forms, and are mined and depleted. It’s a scary set of statements. Former Soviet states and Canada have more than 70% of the potash. Morocco has 85% of all high-grade phosphates. It is the most important quasi-monopoly in economic history.
What happens when these fertilizers run out is a question I can’t get satisfactorily answered and, believe me, I have tried. There seems to be only one conclusion: their use must be drastically reduced in the next 20–40 years or we will begin to starve. The world’s blind spot when it comes to the fertilizer problem is seen also in the shocking lack of awareness on the part of governments and the public of the increasing damage to agriculture by climate change...
A Hubbert-like model of future phosphorus production showing a peak in 2033, referenced in 15 facts you absolutely need to know about phosphorus (slide #6). Phosphorus comes from two sources: manure and phosphate rock (slide #3). You can see that the data is quite scattered, but the bell, or gaussian, curve fit appears to be based on assumed economically recoverable reserves for phosphate rock of 15,000 million tons, as cited in David Vaccari's Phosphorus: A Looming Crisis. Vaccari cites the current R/P (reserves to production) ratio as 90 years, meaning that we have that many years of phosphorus left at current consumption levels.
Grantham's lugubrious forecast has apparently enraged Vaclav Smil, who wrote a rebuttal called Jeremy Grantham, Starving for Facts. This article appeared yesterday (December 5, 2012) in the online magazine American, which is published by the often less-than-credible American Enterprise Institute. (That is not to say that Smil is not credible.)
A column by legendary asset manager Jeremy Grantham is more suitable for the tabloids than for one of the world’s oldest and most prestigious scientific weekly magazines.
Jeremy Grantham, a well-known presence in the financial world, recently published a World View column in the journal Nature in which he concludes that, “simply, we are running out’’ of almost all commodities whose consumption sustains modern civilization. There is nothing new about such claims, and since the emergence of a vocal global peak oil movement during the late 1990s, many other minerals have been added to the endangered list...
His direst example is “the impending shortage of two fertilizers: phosphorus (phosphate) and potassium (potash). These two elements cannot be made, cannot be substituted, are necessary to grow all life forms, and are mined and depleted. It’s a scary set of statements…. What happens when these fertilizers run out is a question I can’t get satisfactorily answered and, believe me, I have tried.’’ Well, he could have tried just a bit harder: an Internet search would have led him, in mere seconds, to World Phosphate Rock Reserves and Resources, a study published in 2010 by the International Fertilizer Development Center (IFDC) and funded by the U.S. Agency for International Development.
This detailed assessment of the world’s phosphate reserves (that are the part of a wider category of resources that is recoverable with existing techniques and at acceptable cost) concluded that they are adequate to produce fertilizer for the next 300 to 400 years. As with all mineral resource appraisals (be they of crude oil or rare earths), the study’s conclusions can be criticized and questioned, and the statement by the Global Phosphorus Research Initiative is perhaps the best document of that kind. But even the most conservative interpretation of IFDC’s assessment shows that phosphates have a reserve/production ratio well in excess of 100 years, higher than that of many other critical mineral resources.
Grantham could have also checked the standard, and the most often quoted, sourcebooks on the world’s mineral resources, Mineral Commodity Summaries, published annually by the U.S. Geological Survey (USGS). In the latest edition, he would have found that the USGS made significant revisions to its phosphate rock reserves data for Morocco, Russia, Algeria, Senegal, and Syria, and that it now puts the global reserve/production ratio at about 370 years. Or he could have consulted the materials put out by the International Fertilizer Industry Association, whose members include many of the world’s most prominent fertilizer producers, traders, and shippers. The association (emphasis in the original) “does not believe that peak phosphorus is a pressing issue, or that phosphate rock depletion is imminent. Nevertheless, it believes that efforts to minimize phosphorus losses to the environment and optimize phosphorus use should be encouraged.’’
I don't have any particular stake in the outcome of this "peak phosphorus" fight, so I don't have any axe to grind. I quoted Smil at length because his text contains links to valuable information sources which might inform this debate. I am in the process of looking at those and other sources to try to figure out what's going on.
However, before I postpone a more thorough review of this critical topic, it would behoove us to consider some general rules of thumb concerning reserves and resources, to wit—
- Technological breakthroughs can increase recoverable reserves (e.g. shale oil and natural gas). Consumption depletes them.
- Reserves are often overstated because those holding the reserves have a vested interest in doing so. In any case, there is usually a lot of uncertainty in reserves numbers (proved, probable and possible).
- The situation for resources is even worse because these sources are always conjectural, and often appear to be imaginary—these alleged resources are "undiscovered"— with respect to future prices and technology (e.g. look at the use of Monte Carlo statistical techniques in United States Geological Survey estimates).
- Production of reserves and the size of those reserves is often not well correlated. For example, the world's crude oil and condensate (C & C) reserves always stay the same or even rise from year to year, but production of C & C exhibits a very small growth rate over the last seven years (graph below). This rate is well below the historical norm. And bear in mind the first point above—reserves are often overstated, which would explain some of the lack of correlation.
A graph of EIA data from Stuart Staniford's Trend in Global Crude And Condensate Production (August 20, 2012). "The trend is only 130kbd/year - less than 0.2%/yr - but it is an upward slope. Thus it seems we have likely not yet reached peak oil for any reasonable definition of "oil". However, oil supply since 2005 has been growing far slower than it traditionally did, which is why oil prices remain much higher than they were in the 1980s and 1990s."
And with that, I will study the issue further and write about it in the future.