Resources and Reserves

Early humans began to recognize the importance of the earth's natural resources first for shelter, weapons, and tools. Metal such as copper was mined, smelted, and used for trading with other civilizations. We have now developed thousands of uses for our natural resources, uses that support our modern‐day standard of living. Most of our lifestyles depend on nonrenewable resources that come from the earth—resources such as petroleum, coal, metal, sand, and gravel. Our demand for these materials far exceeds the amounts recycled. Thus, we have a constant need to discover new deposits, which are becoming harder to find as the “easy” ones are discovered at the surface and mined out. Geologists and scientists are beginning to look for deposits deeper below the surface, a more challenging and expensive endeavor. Geophysical and satellite photography techniques are being refined to allow us to “look” below the surface of the earth. New metallurgical and processing technologies permit the mining of what were once considered unmineable deposits.

A resource is that amount of a geologic commodity that exists in both discovered and undiscovered deposits—by definition, then, a “best guess.” Reserves are that subgroup of a resource that have been discovered, have a known size, and can be extracted at a profit. For example, of the world's estimated oil resource of three trillion barrels, the world's reserves are estimated at about a third of that amount. Factors that affect profitability include the demand, market price, mining costs, transportation costs, new technologies that can extract the material at a lower price, taxes, environmental laws, and government price controls. Understandably, a deposit's economic value can change with time as these factors change.