Peak US Societal Wellbeing: There Can Be No Recovery This Time

*The prevailing perception among the American public that we are
currently experiencing “temporary hard times”; but because our “leaders”
are implementing the proper mix of economic and political “fixes”, life
will be “back to normal” soon. While this perception is understandable
given our historical experience, it is also wrong. There can be no
recovery this time.*

*Nonrenewable Natural Resources—Industrialized Humanity’s Fundamental
Enablers*

Humanity’s industrial lifestyle paradigm—our “American way of
life”—is enabled almost exclusively by enormous and ever-increasing
quantities of finite and non-replenishing nonrenewable natural resources
(NNRs)—fossil fuels, metals, and nonmetallic minerals.

NNRs serve as the raw material inputs to our industrialized economy, as
the building blocks that comprise our industrialized infrastructure and
support systems, and as the primary energy sources that power our
industrialized society.

NNRs comprise approximately 95% of the raw material inputs to the US
economy each year. In 2008, we Americans used nearly 6.5 billion tons of
newly mined NNRs—an almost incomprehensible 162,000% increase since
the year 1800—which equated to approximately 43,000 pounds per US citizen.

*Continuously More and More—America’s Historical Reality*

Since the inception of our industrial revolution in the early/middle
1800s, but especially during the 20^th century, America’s level of
societal wellbeing—our population level and material living
standards—increased dramatically.

*20^th Century US Societal Wellbeing*

Total US population increased by 270% between the years 1900 and 2000,
from approximately 76 million to over 282 million. During the same
period, per capita US GDP, a proxy for our average material living
standard, increased by 610%, from less than $6,000 annually to nearly
$40,000 annually.

*Data Source: http://www.measuringworth.com/datasets/usgdp/result.php –
Measuring Worth, “What Was the US GDP Then?”*

This historically unprecedented increase in American societal wellbeing
was enabled by our ever-increasing utilization of abundant and
affordable NNRs.

*20^th Century US NNR Utilization*

Total annual US NNR utilization increased by an extraordinary 2100%
between the years 1900 and 2000, from approximately 300,000,000 tons to
over 6,700,000,000 tons; while annual per capita US NNR utilization
increased by 525% during the same period, from approximately 7,700
pounds to over 48,100 pounds.

.

*Data Source: Mineral Information Institute from USGS data*

It is little wonder that our cornucopian worldview became firmly
entrenched during the 20^th century—i.e., most Americans believe,
either explicitly or implicitly, that we can achieve perpetual economic
growth, continuous population expansion, and ongoing material living
standard improvement through our ever-increasing utilization of the
earth’s “unlimited” NNR supplies.

For 20^th century Americans, “reality” can be summarized as
“continuously more and more”:

*Increasing NNR Input **à**Increasing Economic Output (GDP) **à***

*Increasing Societal Wellbeing (Population Level and Material Living
Standards)*

*NNR Scarcity*

Unfortunately, NNR supplies are not unlimited. NNR supplies are finite;
and as their name implies, NNR reserves are not replenished on a time
scale that is relevant from the perspective of a human lifespan. More
unfortunately, economically viable supplies associated with the vast
majority of the NNRs that enable our industrialized American way of life
are becoming increasingly scarce, both domestically (US) and globally.

Domestic NNR Scarcity

Domestic NNR scarcity increased throughout the latter half of the 20^th
century and into the 21^st .

By the year 2008, immediately prior to the Great Recession, 68 of the 89
NNRs (76%) that enable our American way of life were scarce
domestically; that is, domestically available, economically viable NNR
supplies were unable to completely address US requirements. NNRs that
were scarce domestically include chromium, cobalt, copper, magnesium,
natural gas, oil, potash, silicon, tin, titanium, uranium, and zinc.

Moreover, imported NNRs accounted for 100% of 2008 US supplies in 19 of
the 89 cases (21%). NNRs for which the US was totally import-reliant in
2008 include bauxite, graphite, fluorspar, indium, manganese, niobium,
quartz crystal, rare earth minerals, tantalum, and vanadium.

Yet while the US has been able to rely increasingly on imported NNRs to
offset ever-increasing domestic NNR scarcity, the world has no such
“safety net”—there is only one earth.

Global NNR Scarcity

By the year 2008, 63 of the 89 NNRs (71%) that enable our modern
industrial existence—including coal, chromium, cobalt, copper,
iron/steel, magnesium, manganese, natural gas, oil, phosphate rock,
potash, rare earth minerals, titanium, uranium, and zinc—were scarce
globally.

Note that global NNR scarcity does not involve “running out” of any NNR,
it involves “running short” of many. That is, for an increasing number
of NNRs, while there will always be plenty of resources in the ground,
there are*not enough economically viable* resources in the ground to
perpetuate our industrial lifestyle paradigm going forward.**

NNR Scarcity is a Permanent Phenomenon

With the seemingly continuous emergence of newly industrializing nations
in Asia, Africa, and Latin America, global NNR requirements have
increased meteorically since the beginning of the 21^st century. Whereas
approximately 1.5 billion people occupied industrialized and
industrializing nations in the late 20^th century, that number currently
exceeds 5 billion, most of whom have yet to even remotely approach their
full NNR utilization potential.

Unfortunately, humanity’s ever-increasing global NNR requirements are
manifesting themselves within the context of
increasingly-constrained—i.e., increasingly expensive, lower
quality—NNR supplies. That is, the cost reductions associated with our
ongoing improvements in NNR exploration, extraction, production, and
processing technologies are insufficient to offset the cost increases
associated with newly discovered NNR deposits, which are fewer, smaller,
less accessible, and of lower grade and purity.

The consequence associated with this “demand/supply imbalance” is that
the earth cannot physically support our current—much less continuously
increasing—NNR requirements. In fact, NNR scarcity had become
sufficiently pervasive by the onset of the Great Recession to
permanently depress future economic growth trajectories and societal
wellbeing trajectories at both the domestic and global levels.

*Continuously Less and Less—America’s New Reality*

The episode of epidemic pre-recession NNR scarcity marked a transition
point for the United States.

*Peak US NNR Utilization*

Per capita US nonrenewable natural resource (NNR) utilization peaked (to
date) in 1999 at 48,427 pounds per US citizen, while total US NNR
utilization peaked (to date) in 2006 at 7,141,465,500 tons.

*Data Source: Mineral Information Institute from USGS data*

Given the dramatic decreases in both per capita US NNR utilization (17%)
and total US NNR utilization (21%) from their pre-recession peaks, it is
almost certain that *US societal wellbeing* *peaked permanently* prior
to the Great Recession That is, our post recession population level
and/or average material living standard will decrease going forward.
This has, in fact, been the case with respect to US material living
standards.

*Peak US Societal Wellbeing*

The average US material living standard, as proxied by per capita US
GDP, peaked (to date) in the year 2007 at $43,700, and decreased by 3.4%
to $42,200 by 2010.

Total US population increased through 2010, and will likely continue to
increase until the general public realizes that with the addition of
each new American, their slices of “the American pie” shrink.

*Data Source: http://www.measuringworth.com/datasets/usgdp/result.php –
Measuring Worth, “What Was the US GDP Then?”*

Our historical reality of “continuously more and more”—which we in
America have experienced since the inception of our industrial
revolution and have come to take for granted—is giving way to our new
reality of “continuously less and less”, for geological reasons that are
totally out of our control and beyond our capacity to “fix”.

*Declining NNR Input **à**Declining Economic Output (GDP) **à***

*Declining Societal Wellbeing (Population Level and Material Living
Standards)*

The perception among the American public regarding current “hard times”
is therefore accurate. What the vast majority of Americans have yet to
understand, however, is that notwithstanding increasingly anemic
transitory boosts from increasingly desperate government and central
bank “stimulus” programs, the declining trajectory associated with US
societal wellbeing is permanent.

Note: for supporting evidence and references, please request a draft
copy of my forthcoming book “Scarcity—Humanity’s Final Chapter?”

Chris Clugston

Energy Resources