Fossil and mineral resourcescarcityCourse materialsMarisa Vieira | Senior Technical ConsultantPRé Consultants, The Netherl...
Research objective and approachObjectiveApproach1. Stakeholder consultation2. Cause-effect chain3. Characterization factor...
Stakeholder consultation• To bring clarity on issue of concern regarding the use of abioticresources• 20 participants in t...
Mineral resourcesMineralextractionOre gradedecreaseThe concentration of a mineralresource element within an ore,defined as...
Mineral resourcesMineralextractionOre gradedecreaseMarginal costincreaseOre tonnageincreaseThe higher the grade of a miner...
Mineral resourcesMineralextractionOre gradedecreaseMarginal costincreaseFuture second.productionFuturedemandEconomicgrowth...
Mineral resourcesMineralextractionOre gradedecreaseMarginal costincreaseFuture second.productionFuturedemandEconomicgrowth...
• Use of cumulative grade-tonnage relationships per deposit type– Marginal modeling– Loglinear regression• Data source: U....
Mineral resourcesEndpoint indicator – Surplus costSurplus cost modelled according to threeperspectives following the Cultu...
Mineral resourcesEndpoint indicator – Surplus costEndpoint characterization factor:in US$/kg where OTx is the ore extracte...
Fossil resourcesMarginal costincrease of crudeoilReducedavailabilityat current costCrude oil useFutureproductionof crude o...
• Relationships between production costs and cumulative fossil resource used to determine marginal costincrease of each fo...
Endpoint characterization factor:in US$/kg or US$/m3 where MCIx is defined asthe extra cost resulting from the productiono...
Characterization factorsEndpoint indicator – Surplus cost14• 18 metal and 3 fossil resource commodities covered• Endpoint ...
Normalization factors15• 2 regions covered: EU27 – 27 EU member countries World• In year 2010StakeholderconsultationChar...
Discussion• Data on ore grade and cumulative metal production only available for 18mineral commodities -> more data needed...
Authors:Marisa Vieira|Senior Technical Consultant vieira@pre-sustainability.comTommie Ponsioen|Technical Consultant ponsio...
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Course material task 1.4

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Course material task 1.4

  1. 1. Fossil and mineral resourcescarcityCourse materialsMarisa Vieira | Senior Technical ConsultantPRé Consultants, The Netherlands
  2. 2. Research objective and approachObjectiveApproach1. Stakeholder consultation2. Cause-effect chain3. Characterization factors4. Normalization factorsTo develop an operational impact assessment method foraddressing abiotic resource scarcity and correspondingcharacterization and normalisation factors2
  3. 3. Stakeholder consultation• To bring clarity on issue of concern regarding the use of abioticresources• 20 participants in total representing policy, industry and experts• Identification of issue of concern for different time frames: short term (< 5 years): availability of resources constrained by geopoliticalfactors midterm (5-20 years): increase in extraction efforts long term: overall availability/depletion3Publication: Vieira M, Storm P, Goedkoop M. 2011. Stakeholder Consultation: What do Decision Makers in Public Policy and Industry Want to KnowRegarding Abiotic Resource Use? In M. Finkbeiner, Towards Life Cycle Management (pp. 27-34). Springer Science+Business Media B.V.StakeholderconsultationCharacterizationfactorsNormalizationfactorsCause-effectchain
  4. 4. Mineral resourcesMineralextractionOre gradedecreaseThe concentration of a mineralresource element within an ore,defined as ore grade, is a qualityproperty of a mineral resource.Assuming that mines with highergrades are explored first, when amineral resource is extracted, itsaverage ore grade worldwidedecreases.4StakeholderconsultationCharacterizationfactorsNormalizationfactorsCause-effectchain
  5. 5. Mineral resourcesMineralextractionOre gradedecreaseMarginal costincreaseOre tonnageincreaseThe higher the grade of a mineral in adeposit, the larger the volume ofmineral extracted per ore mined.Consequently, if the ore gradedecreases, in order to extract the sameamount of mineral resource, more oreneeds to be mined. Because more oreis mined, the extracting costs permineral extracted also increase.5StakeholderconsultationCharacterizationfactorsNormalizationfactorsCause-effectchain
  6. 6. Mineral resourcesMineralextractionOre gradedecreaseMarginal costincreaseFuture second.productionFuturedemandEconomicgrowthPopulationgrowthOre tonnageincreaseSubstitutionTechnologicalchangeFuture extractionWealthThe significance of marginal costincrease is connected with the futureresource to be extracted. Futuremineral demand is influenced by aregion’s economic development andpopulation size, the consumptiontrends (technologies expected), and byresource substitution. The fraction ofmineral demand remaining after takinginto account secondary productionmust come from extraction.6StakeholderconsultationCharacterizationfactorsNormalizationfactorsCause-effectchain
  7. 7. Mineral resourcesMineralextractionOre gradedecreaseMarginal costincreaseFuture second.productionFuturedemandEconomicgrowthPopulationgrowthSurplus costsOre tonnageincreaseDiscountingSubstitutionTechnologicalchangeFuture extractionWealthDiscounting is included to account forvaluing the impact of cost increase inthe future differently than in thepresent. The combination of marginalcost increase, future mineral extraction,and discounting results in the proposedendpoint indicator, defined as surpluscosts.7StakeholderconsultationCharacterizationfactorsNormalizationfactorsCause-effectchain
  8. 8. • Use of cumulative grade-tonnage relationships per deposit type– Marginal modeling– Loglinear regression• Data source: U.S. Geological Survey0.00.51.01.52.02.51 10 100 1000 10000Oregrade(%)Cumulative copper produced (109 kg)Porphyry copperLoglogistic Loglinear Observed data8Mineral resourcesEndpoint indicator – Surplus costStakeholderconsultationCharacterizationfactorsNormalizationfactorsCause-effectchain
  9. 9. Mineral resourcesEndpoint indicator – Surplus costSurplus cost modelled according to threeperspectives following the Cultural Theory9StakeholderconsultationCharacterizationfactorsNormalizationfactorsCause-effectchainIndividualist (I)Hierarchist (H)Egalitarian (E)Future demand scenarios can beestimated using two approaches:• Bottom-up: from demand per sector• Top-down: using the intensity of use hypothesisFuture production estimates can also bederived using historical trends.15%3%0%Discounting
  10. 10. Mineral resourcesEndpoint indicator – Surplus costEndpoint characterization factor:in US$/kg where OTx is the ore extracted permineral x extracted, Cx are the operating costs perore mined, MTx,t is the annual primaryproduction of mineral x in year t, and d is thediscount rate.10StakeholderconsultationCharacterizationfactorsNormalizationfactorsCause-effectchain
  11. 11. Fossil resourcesMarginal costincrease of crudeoilReducedavailabilityat current costCrude oil useFutureproductionof crude oilMarginal costincrease of naturalgasReducedavailabilityat current costNatural gas useFutureproductionof natural gasMarginal costincrease of coalReducedavailabilityat current costCoal useFutureproductionof coalSurpluscostProductiontechnique/locationProductiontechnique/locationProductiontechnique/locationCrude oil demand Natural gas demand Coal demandPopulationgrowthEconomicgrowthSubstitutionTechnologicaldevelopmentPopulationgrowthEconomicgrowthSubstitutionTechnologicaldevelopmentPopulationgrowthEconomicgrowthSubstitutionTechnologicaldevelopment11StakeholderconsultationCharacterizationfactorsNormalizationfactorsCause-effectchainWhen all conventional oil is depleted,alternative techniques, such asenhanced oil recovery, will be appliedor oil will be produced in alternativegeographical locations, e.g. in thearctic. The additional production costresulting from the change inproduction technique or location isdefined as the marginal cost increase.The pathway between marginal costincrease and surplus cost is similar tothat of mineral resources, namely byincluding future production of thefossil resource and discounting.
  12. 12. • Relationships between production costs and cumulative fossil resource used to determine marginal costincrease of each fossil resource• Data source: International Energy Agency12Fossil resourcesEndpoint indicator – Surplus costStakeholderconsultationCharacterizationfactorsNormalizationfactorsCause-effectchain01020304050607080901000 1000 2000 3000 4000 5000Productioncost(2008USDperbarrel)Cumulative production (billion barrels)Oil shalesHeavy oil bitumenArcticAll deep waterOther EORCO2 EOROther conv. oilMENA conv. oil0.00.10.20.30.40.50.60.70.80.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7Cost(US$perkgoileq.)Cumulative production (1015 kg oil eq.)Lowest slope Highest slope• Future production for three perspectives retrieved from the IPCC Special Report on Emissions Scenarios (2000)• Discounting rules are the same as for mineral resources
  13. 13. Endpoint characterization factor:in US$/kg or US$/m3 where MCIx is defined asthe extra cost resulting from the productionof one additional kg or m3 of fossil fuel, Px,t isthe annual production of resource x in year t,and d is the discount rate.13StakeholderconsultationCharacterizationfactorsNormalizationfactorsMarginal costincrease of crudeoilReducedavailabilityat current costCrude oil useFutureproductionof crude oilMarginal costincrease of naturalgasReducedavailabilityat current costNatural gas useFutureproductionof natural gasMarginal costincrease of coalReducedavailabilityat current costCoal useFutureproductionof coalSurplus costProductiontechnique/locationProductiontechnique/locationProductiontechnique/locationCrude oil demand Natural gas demand Coal demandPopulationgrowthEconomicgrowthSubstitutionTechnologicaldevelopmentPopulationgrowthEconomicgrowthSubstitutionTechnologicaldevelopmentPopulationgrowthEconomicgrowthSubstitutionTechnologicaldevelopmentCause-effectchainFossil resourcesEndpoint indicator – Surplus cost
  14. 14. Characterization factorsEndpoint indicator – Surplus cost14• 18 metal and 3 fossil resource commodities covered• Endpoint CFs derived for 3 human perspectives• 11 orders of magnitude difference between the endpoint CFs obtained• CFs obtained for fossil fuels similar to those obtained for main industrial metalsStakeholderconsultationCharacterizationfactorsNormalizationfactorsCause-effectchain
  15. 15. Normalization factors15• 2 regions covered: EU27 – 27 EU member countries World• In year 2010StakeholderconsultationCharacterizationfactorsNormalizationfactorsCause-effectchainNormalization factor:in the impact category i, reference region rand year z (USD2010/person·year), where CFx isthe characterization factor of resource flow x,M is the amount of resource flow, and P is thepopulation size.Surplus costE H I E H IIndicatorRegionMinerals Fossil fuelsEU27 2.0 1.1 0.4 210 22.4 5.5World 14.7 7.8 2.1 574 95.9 21.7
  16. 16. Discussion• Data on ore grade and cumulative metal production only available for 18mineral commodities -> more data needed for method completeness• Future mineral/metal production was calculated based on historical trends-> future forecasts based on scenario analysis are preferable• Better estimates for mining costs are needed• The role of extraction technological development to cost reduction isexcluded• Supply restrictions due to geopolitical trade barriers are excluded16Research in this topic must continue!
  17. 17. Authors:Marisa Vieira|Senior Technical Consultant vieira@pre-sustainability.comTommie Ponsioen|Technical Consultant ponsioen@pre-sustainability.comMark Goedkoop|Managing director goedkoop@pre-sustainability.comAdditional information:Website of PRé Consultants: www.pre-sustainability.comWebsite of LC-IMPACT project: www.lc-impact.eu17The research was funded by the European Commission under the 7th framework program on environment;ENV.2009.3.3.2.1: LC-IMPACT - Improved Life Cycle Impact Assessment methods (LCIA) for bettersustainability assessment of technologies, grant agreement number 243827. We thank Prof. Dr. MarkHuijbregts for his continuous feedback and support in the research we carried out.Acknowledgments and Contact info

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