Tag Archives: Natural Resources

The desire for a cleaner planet is an impulse that virtually everyone shares. The question is how to go about that. Based on two recent polls from Gallup, approximately 60% of respondents say they would like to see the country rely less on fossil fuel for energy usage over the next 10 to 20 years and nearly two-thirds say they prioritize the environment’s ongoing health more so than the U.S. economy’s (30%).

Recognizing their customers’ priorities — not to mention their own personal desires to be better stewards of the world’s natural resources — business owners are going to greater lengths to reduce their carbon footprint. Whether it’s eliminating single-use bottles or encouraging shoppers to bring their own bags, small efforts such as these serve as effective strategies that pay dividends.

But one thing that can’t be eliminated entirely is energy production. From what keeps the lights on in homes and facilities to maintaining comfortable temperatures during scorching summers and frigid winters, life as we know it would grind to a halt without electricity. Even though many Americans would like to see fossil fuels used less often, the vast majority of the country’s energy output derives from oil, natural gas and coal, according to the National Academy of Sciences.

The scientific community largely agrees: The best way to reduce such reliance is by increasing investments in renewable energy, like wind, solar, geothermal and hydroelectric. By just about every measure, natural resources such as these are significantly more efficient than legacy sources like coal, natural gas and oil. In other words, it requires less effort and overall output, on an apples-to-apples basis, to yield maximum productivity.

It raises an interesting question, however: Which energy source is the most efficient of them all? In other words, which one gets you the most power delivery for your investment dollar? As is so often the case, the answer is somewhat muddy.

Fossil fuels weak in efficiency

What is clear is fossil fuels tend to be the least efficient, from a standpoint of energy and monetary expenditure and resulting overall output. There are several studies and polls that demonstrate this, including those done at the worldwide level. For example, according to the American Council for an Energy-Efficient Economy, Germany leads the world in energy efficiency, which in 2019, saw renewables accounting for 40% of the country’s electricity production, according to Reuters, overtaking coal. Germany is hoping that by 2030, approximately two-thirds of its energy will derive from sources like wind and solar.

Tied with Germany, receiving 75.5 points out of a possible 100, was Italy, followed by France (73.5), the U.K. (73), and Japan (67). The U.S. finished within the top 10, but near the bottom at No. 8 in energy efficiency.

Steve Nadel, executive director at ACEEE, said every country in the world would benefit from investing more in renewable energy.

“These policies will reduce dependence on energy imports, create jobs, cut pollution, and save people and businesses money,” Nadel explained.

EIA: Half of world’s power to come from renewables by 2050

Although the U.S. isn’t in the top-five for energy efficiency, this isn’t to say the country hasn’t made some serious headway in this regard. Aside from being a net exporter of energy — particularly natural gas — the nation is spending a significant amount on renewables. For instance, according to the most recent figures available from the Energy Information Administration, construction costs for solar photovoltaic systems averaged $2,343 per kilowatt in 2017 and roughly $1,647 for onshore wind turbines. EIA believes that these kinds of investments put renewables on the path to providing close to 50% of the world’s electricity production by 2050. The total currently stands at 28%, when combining hydropower, wind, and solar technologies. That’s up from just 10% in 1990 and roughly 13% in 2000.

That solar, hydropower and wind are often combined when it comes to assessing their output suggests that they’re equally efficient. However, some studies suggest that wind is the best, even though it’s not the least expensive form of electricity to produce and is inherently intermittent.

Based on calculations conducted by energy analysis and enterprise management  company Energy Points, wind retains an estimated 1,164% of its energy when converted into fuel for electrical usage, The Wall Street Journal reported. That compares to geothermal at 514%, hydroelectric in a distant third at 317%, nuclear at 290% and solar at 207%. The least efficient were natural gas (38%), oil (31%)  and coal (29%).

While this study suggests wind is far and away the best when it comes to bang for your buck, others say it’s not so clear cut. Michael Webber, deputy director of the Energy Institute at the University of Texas, told the Houston Chronicle the answer is largely dependent on what resources you’re using and from where you’re operating

“What is more affordable depends on where you are,” Webber explained.

He added that in addition to energy expenditure, there’s also the matter of how much labor that’s devoted to it, not to mention land and capital. Webber also cited a variable known as capacity factor, which assesses how much energy a facility or system produces at any given time. While a nuclear power plant is typically in operation 24 hours a day, seven days a week, wind turbines and solar panels are more intermittent.

Understanding energy efficiency varies

Furthermore, definitions of “efficient” can run the gamut. While one business or government may consider a power source efficient in the classic sense — maximum production through minimal effort — others may look at efficiency from a standpoint of pollution control. For example, Energy Points says hydroelectricity has the lowest carbon footprint of all electricity sources, averaging 4 grams of carbon dioxide for every kilowatt hour. Others, still, may not take issue with one renewable energy source being more efficient than another, so long as it pays for itself in terms of output and the capital spent for development.

Whether you’re in the energy industry or simply want to save on operational and utility expenses, USC Consulting Group can provide you with the services you need to become leaner and cleaner.  Please contact us today to learn how we can make process improvements a reality.

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The times they are a-changin.

If there was one song that could best describe the current state of the mining and metals industry, the 1964 classic sung by Bob Dylan sums it up. In just about every way you can imagine — consumer interests, technological innovation, regulatory scrutiny, automotive production, political developments — a variety of forces largely beyond producers’ control are causing businesses to re-examine how they operate.

In some respects, these influences have fueled the sector’s prosperity. For example, metals and mining remains a major contributor to the nation’s economy, adding an impressive $2.5 trillion per year, according to the most recent statistics from the National Mining Association. Additionally, it’s also one of the more high-paying professions, directly employing 419,000 Americans directly and 1.2 million indirectly.

Yet at the same time, many of the successes experienced by producers are raising the stakes for other companies so that they too can remain profitable and avoid being left behind. After all, metals and mining is a competitive, performance-based industry, where only those who truly thrive can survive. The best way of going about this comes from reading the tea leaves and making the proper investments to improve the ongoing supply chain and reduce cycle time.

Here are four forces catalyzing change in the mining and metals industry. Recognizing these influences and making the appropriate adjustments may be the difference between prosperity and insolvency:

1. Automation

For years, economists have described artificial intelligence as the wave of the future. In reality, it’s the here and now. Americans have a love-hate relationship with AI, as a recent poll from Gallup found 77% of adults believe the process improvements endemic to AI as mostly positive. Yet at the same time, close to 60% of respondents in a separate survey viewed it as a threat to people’s jobs.

Metals and mining is certainly no exception to AI’s influence. This industry is steeped in tradition, being one that traces back thousands of years. However, economic realities, employment conditions, and the supply and demand of mineral deposits have impelled producers to embrace AI to improve work processes and output. Many of the activities involved in extraction, for instance, are labor intensive and entail repetitive actions. Thanks to automation, however, some of the grueling work that used to be done by people is handled by robotics.

As referenced in a recent Reuters article, AI adoption has dramatically improved output, rising between 15% and 20% among some companies. If trends continue, the automation market is poised to reach a valuation of nearly $3.3 billion by 2023, according to estimates from Markets and Markets.

2. Natural resource depletion

The Earth is rich with minerals and thanks to enhanced technological capabilities, they’re more easily extractable and locatable. The U.S. is heavily invested in exploration, responsible for around 7% of such spending in 2016, based on estimates from the National Mining Association.

The problem? Other parts of the world are spending much more, including Canada, Australia and Latin America (accounting for the largest percentage at 28%). In fact, were it not for imports, the U.S. mining industry would be unable to contribute many of the metals used for fabrication purposes, such as in fighter jets or catalytic converters.

One of the leading natural resources that isn’t nearly as plentiful as it once was is gold. According to data compiled by Bloomberg, gold discoveries slipped 85% in the 10 years leading up to 2016, and gold reserves are down by double digits tracing back to 2011.

Reversing this trend won’t come easily, but by more fully embracing innovative extraction activities and more targeted utilization of public funds, producers may be able to more assiduously plumb uncharted tracts of land and compete with other countries upping the metals exploration ante.

High demand for gold and depleted resources is forcing producers to strategize.

 

3. Ubiquity of mobile technology

If there is one thing that has taken the world by storm in recent years, smartphones may top them all. Everywhere you look, people are looking at their phones. Indeed, in the U.S., 81% of the public owns a smartphone, according to figures from the Pew Research Center. In other parts of the globe, ownership is substantially higher, including South Korea (95%), Israel (88%), and Sweden (86%).

The multifunctional element of smartphones wouldn’t be possible without actual elements. As the U.S. Geological Survey so aptly puts it, ordinary minerals give smartphones extraordinarily capabilities, utilizing a sweeping array of deposits that include bauxite, sphalerite and arsenopyrite.

It’s safe to assume that smart device ownership will continue to surge as technologies and consumer interest further develops. But since natural resources are inherently finite, producers must be constantly thinking a few steps ahead to make the most of the minerals available. For example, computer chips at one time were fabricated from primarily 12 minerals. Today, the number is closer to 60, according to the National Mining Association.

Producers must continue their research to further extract the potential available in mineral resources.

4. Resource capacity planning

In a global marketplace, where countries and companies vie for a smaller pie of natural resources available, miners must make capacity planning a central focus of their operations.

The decisions made in this regard are often determined by the realities on the ground. Take steel as an example, which is an alloy of primarily carbon and iron. According to S&P Global Ratings, worldwide steel capacity in terms of utilization is fairly low by today’s standards compared to previous years, operating at approximately 78%, based on the most recent figures available. However, the worldwide steel landscape could be fundamentally altered with the ArcelorMittal acquisition of Ilva, an Italy-based steel developer, which became official in November 2018. Combined, the companies represent a combined 50% market share in flat production for the whole of Europe.

Whether it’s the manufacturing of steel or obtaining the minerals needed to fabricate it, resource capacity planning in the current trade environment is a core component of day-to-day workflow that mining organizations must prioritize.

Change, by its very nature is difficult. Yet it’s life’s only constant and one that mining and metals must embrace to improve output and remain competitive in a global marketplace. USC Consulting Group can help you control the variables by assessing your work processes and charting out a plan for what’s next. We have a 98.2% satisfaction rating from our clients and are confident you’ll be pleased with what we have to offer. Please contact us today.