Non-Renewable Resources
A. Supply Issues from Ideological and Geopolitical Perspectives
Mar 11 (Th) Measuring Stocks and Future Supplies
- Define resource base
- Differentiate proven, conditional, hypothetical and speculative reserves
- Explain 2-3 reasons that assessments of proven and conditional reserves vary by producer/country
- Explain 2-3 reasons why there is a strong incentive to overestimate proven reserves, illustrating the issue with the Saudi Arabian Oil case
- Place the 4 types of reserves in a matrix of cost and certainty
- Explain in words, and graphically, how Malthus depicted the supply and demand for resources
- Explain in words, and graphically, how optimists depict future trends in the supply and demand for resources
- Identify 2-3 reasons WHY optimists expect these trends in the supply and demand curves
- Explain in words, and graphically, how pessimists depict future trends in the supply and demand for resources
- Identify 2-3 reasons WHY pessimists expect these trends in the supply and demand curves
- Clarify how optimists and pessimists view the impact of population growth
- Clarify how optimists and pessimists view the impact of rapid consumption in rich nations
- Describe in words and graphically Hubbard’s Model – a “pessimistic model” for the “end of cheap oil”
Mar 16 (Tu) Rates of Depletion under Perfect and Imperfect Markets
- Explain why perfect markets are believed to be an optimal mechanism for setting the rate and quantity of resources extracted
- Explain why, at a societal level, exploiting too slowly or too rapidly are considered problems
- Identify 3-4 factors that make perfect market conditions
- Describe why perfect markets do not lead to socially optimal results when considering: 1) environmental externalities, 2) future generations, and 3) economic development needs. For each, identify whether it leads to exploitation being too rapid or too slow, and explain why.
- Define types of supply concentration: vertical and horizontal integration
- Explain why supply concentration occurs in the mineral industry, highlighting those reasons that are somewhat unique to the minerals industry and those that are not
- Describe why imperfect markets do not lead to socially optimal results when considering: 1) monopolies/high prices 2) risk of substitution, and 3) risk of political instability For each, identify whether it leads to exploitation being too rapid or too slow, and explain why.
Mar 18 (Th) Spatial Distribution and Supply Security in a Global Economy
- Define scarcity, strategic materials' and 'vulnerability'
- Identify the time frame of the Era of Supply security, and describe 3-4 factors that lead to that perception
- Identify and describe 2-3 government mineral policies during the Era of Supply Security
- Identify the time frame and describe 3-4 factors that ended that Era, explaining the context behind each factor
- Clarify 2-3 reasons why MDC's have more mineral production and exports than LDCs
- Clarify when and why a supply spurt and price crash occurred
- Define 'dematerialization,' and describe 2-3 factors thought to drive it
- Identify 2-3 examples of governmental mineral policies within the Post-Supply Security Era
- Explain why supply security concerns may be on the rise again
B. Economic and Social Development and Environmental Sustainability
Mar 23 (Tu) Ownership, Control and Environ. Liability in U.S.
- Provide evidence that minors operated within an “open access” environment, and that they did not
- Before the Hardrock Act of 1872, describe a minor’s rights, and 2-3 key limitations to those rights
- After the Hardrock Act of 1872, describe the “pathway to privatization” identifying 2 key rights given to minors, and 2 key limitations to those rights (or costs incurred by minors) at each step: 1) before discovery, 2) unpatented discovery, and 3) patented discovery)
- Clarify the test of discovery
- Clarify the meaning and implication of a “vested right” in the Hardrock Act and when that right is obtained
- Explain two reasons why the Hardrock Act is subject to abuse, and provide examples
- Contrast provisions to mitigate environmental damage from mining on Federal lands pre-81, post-81, and almost post-2001 (revoked by Bush). Clarify Standards for Issuing and Revoking Permits in each of these eras.
- Provide solid arguments for each side of the debate concerning whether or not the mining industry can afford to pay more to mine on Federal lands
- Explain how foreign corporations get access to federal mining lands, and explain why many people in the U.S. are upset about that
- Explain 2 reasons why the Hardrock Law of 1872 remains on the books, even though most U.S. citizens who actually know about it believe that it needs to be changed
Mar 25 (Th) Socioeconomic Development in More Developed Countries
- Identify and explain the four components of the 'Resource-based economic development model'
- Describe the structure of an 'export-enclave economy' that contradicts each of the model's four components
- Use the article on Australia to illustrate each of the four components of an 'export-enclave economy'
- Describe the cause of booms and busts in commodity markets, and explain why the mineral industry faces stronger boom/bust cycles than any other industry
- Identify 2-3 ways in which workers and local governments display bad economic behavior during busts in extractive industries
- Explain the NEW resource-based development model clarifying the 'base' of that economy, and the 'multipliers' that are generated from that base
- Use the Superior case to illustrate that new economy, identifying its 'base' and the specific multipliers it hopes for
- Describe evidence that the jobs and wages associated with the new model are better than the old
- Use the Superior case to argue either for or against the argument that the old and new resource-based economies can coexist in a single town
- Explain why a 'new' resource-based economic future may not apply to many U.S. mining towns
Mar 30 (Tu ) Resource Curse or Blessing: Socioeconomic Dvlpmnt in LDCs
- Define Resource Curse
- Use the Nigerian case to illustrate the four components of an extreme export-enclave structure
- Explain 2 reasons why resource-extractive economies are particularly susceptible to the concentration of wealth and power
- Explain 2 reasons why resource-extractive economies fall into debt
- Explain why the resource extractive industry can actually undermine economic and social development
- Explain why the resource extractive industry can cause political conflict
- Describe 2-3 strategies that developing nations use to ‘break’ enclave structures and stimulate broader economic multipliers
- Explain why raising royalties and nationalizing are not promising approaches to improving fiscal linkages
- Describe how transparency, permanent trust funds and corporate community involvement each try to improve fiscal linkages
Apr 1 (Th) Social and Environmental Justice Issues
- Describe the benefits and costs (environmental, health and cultural) of oil extraction as experienced by the Cofan
- Describe how the oil industry has established itself in the Huarani territory, including early contact and contract negotiations. Comment on the relative power of each side in these encounters/negotiations
- Describe how some Huarani are trying to fight against the oil industry, and explain why their efforts are relatively weak
- Describe the main complaint of the Cofan people against ChevronTexico, and the two ways in which they are defending their interests
- Explain two of ChevronTexico’s main defenses
- Explain why the Ecuadorian government is not creating strong environmental laws, or enforcing what they have
- Explain why diamond mining in Sierra Leone are particularly susceptible to smuggling
- Describe how the Kimberly Process Certification Scheme attempts to stop the flow of smuggling and blood diamonds, and explain its main weaknesses
- Describe how the Diamond Area Community Development Fund attempts to stop smuggling, and explain its main weaknesses