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Dave Cohen

Dave Cohen

Dave Cohen writes the blog Decline Of The Empire. His commentaries cover a wide variety of subjects, including the American economy & macro-economics, the oil…

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Peak Phosphorous: What Can we Expect?

In an editorial called Be persuasive. Be brave. Be arrested (if necessary) (if necessary) which recently appeared in the science journal Nature, Jeremy Grantham argues that the world's supply of phosphorus and potash is at risk. For your convenience, I have included a graph which appeared in my one and only post on this subject Phosphorus In The Age Of Scarcity (September 16, 2010).

Then there is the impending shortage of two fertilizers: phosphorus (phosphate) and potassium (potash). These two elements cannot be made, cannot be substituted, are necessary to grow all life forms, and are mined and depleted. It’s a scary set of statements. Former Soviet states and Canada have more than 70% of the potash. Morocco has 85% of all high-grade phosphates. It is the most important quasi-monopoly in economic history.

What happens when these fertilizers run out is a question I can’t get satisfactorily answered and, believe me, I have tried. There seems to be only one conclusion: their use must be drastically reduced in the next 20–40 years or we will begin to starve. The world’s blind spot when it comes to the fertilizer problem is seen also in the shocking lack of awareness on the part of governments and the public of the increasing damage to agriculture by climate change...

A Hubbert-like model of future phosphorus production
A Hubbert-like model of future phosphorus production showing a peak in 2033, referenced in 15 facts you absolutely need to know about phosphorus (slide #6).  Phosphorus comes from two sources: manure and phosphate rock (slide #3). You can see that the data is quite scattered, but the bell, or gaussian, curve fit appears to be based on assumed economically recoverable reserves for phosphate rock of 15,000 million tons, as cited in David Vaccari's Phosphorus: A Looming Crisis. Vaccari cites the current R/P (reserves to production) ratio as 90 years, meaning that we have that many years of phosphorus left at current consumption levels.

Related Article: The World Starts to Come Apart at the Seams as it Battles over Energy Supply

Grantham's lugubrious forecast has apparently enraged Vaclav Smil, who wrote a rebuttal called Jeremy Grantham, Starving for Facts. This article appeared yesterday (December 5, 2012) in the online magazine American, which is published by the often less-than-credible American Enterprise Institute. (That is not to say that Smil is not credible.)

A column by legendary asset manager Jeremy Grantham is more suitable for the tabloids than for one of the world’s oldest and most prestigious scientific weekly magazines.

Jeremy Grantham, a well-known presence in the financial world, recently published a World View column in the journal Nature in which he concludes that, “simply, we are running out’’ of almost all commodities whose consumption sustains modern civilization. There is nothing new about such claims, and since the emergence of a vocal global peak oil movement during the late 1990s, many other minerals have been added to the endangered list...

His direst example is “the impending shortage of two fertilizers: phosphorus (phosphate) and potassium (potash). These two elements cannot be made, cannot be substituted, are necessary to grow all life forms, and are mined and depleted. It’s a scary set of statements…. What happens when these fertilizers run out is a question I can’t get satisfactorily answered and, believe me, I have tried.’’ Well, he could have tried just a bit harder: an Internet search would have led him, in mere seconds, to World Phosphate Rock Reserves and Resources, a study published in 2010 by the International Fertilizer Development Center (IFDC) and funded by the U.S. Agency for International Development.

This detailed assessment of the world’s phosphate reserves (that are the part of a wider category of resources that is recoverable with existing techniques and at acceptable cost) concluded that they are adequate to produce fertilizer for the next 300 to 400 years. As with all mineral resource appraisals (be they of crude oil or rare earths), the study’s conclusions can be criticized and questioned, and the statement by the Global Phosphorus Research Initiative is perhaps the best document of that kind. But even the most conservative interpretation of IFDC’s assessment shows that phosphates have a reserve/production ratio well in excess of 100 years, higher than that of many other critical mineral resources.

Grantham could have also checked the standard, and the most often quoted, sourcebooks on the world’s mineral resources, Mineral Commodity Summaries, published annually by the U.S. Geological Survey (USGS). In the latest edition, he would have found that the USGS made significant revisions to its phosphate rock reserves data for Morocco, Russia, Algeria, Senegal, and Syria, and that it now puts the global reserve/production ratio at about 370 years. Or he could have consulted the materials put out by the International Fertilizer Industry Association, whose members include many of the world’s most prominent fertilizer producers, traders, and shippers. The association (emphasis in the original) “does not believe that peak phosphorus is a pressing issue, or that phosphate rock depletion is imminent. Nevertheless, it believes that efforts to minimize phosphorus losses to the environment and optimize phosphorus use should be encouraged.’’

Related Article: Climate Change and the Fiscal Cliff Both Lead to the Same Outcome

I don't have any particular stake in the outcome of this "peak phosphorus" fight, so I don't have any axe to grind. I quoted Smil at length because his text contains links to valuable information sources which might inform this debate. I am in the process of looking at those and other sources to try to figure out what's going on.

However, before I postpone a more thorough review of this critical topic, it would behoove us to consider some general rules of thumb concerning reserves and resources, to wit—

•    Technological breakthroughs can increase recoverable reserves (e.g. shale oil and natural gas). Consumption depletes them.
•    Reserves are often overstated because those holding the reserves have a vested interest in doing so. In any case, there is usually a lot of uncertainty in reserves numbers (proved, probable and possible).
•    The situation for resources is even worse because these sources are always conjectural, and often appear to be imaginary—these alleged resources are "undiscovered"— with respect to future prices and technology (e.g. look at the use of Monte Carlo statistical techniques in United States Geological Survey estimates).
•    Production of reserves and the size of those reserves is often not well correlated. For example, the world's crude oil and condensate (C & C) reserves always stay the same or even rise from year to year, but production of C & C exhibits a very small growth rate over the last seven years (graph below). This rate is well below the historical norm. And bear in mind the first point above—reserves are often overstated, which would explain some of the lack of correlation.

A graph of EIA data from Stuart Staniford'
A graph of EIA data from Stuart Staniford's Trend in Global Crude And Condensate Production (August 20, 2012). "The trend is only 130kbd/year - less than 0.2%/yr - but it is an upward slope.  Thus it seems we have likely not yet reached peak oil for any reasonable definition of "oil".  However, oil supply since 2005 has been growing far slower than it traditionally did, which is why oil prices remain much higher than they were in the 1980s and 1990s."

And with that, I will study the issue further and write about it in the future.

By. Dave Cohen

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  • dcisfun on December 11 2012 said:
    and the sky is falling...once again! i think this is the kind of speculative nonsense that is planted well ahead of time to drive prices upwards and make the market manipulators rich.

    i can see it how it plays out in a few years, some other "authority" will regurgitate the same shrill about the impending mineral/commodity doom (take your pick) and will cite this reference to validate their claims, then some glorified news reader (financial analyst) will back up the assertion and submit it to the global markets and with that seal of approval, the prices will shoot up...

    just read out what happened to bacon, after someone in England started saying the same thing about pork, prices went up and ham could not be found for awhile and when it did it came back more expensive than ever...this is the new way to increase prices by having a justifier to show when consumer grumble why they are being charged more...
  • kelvinator on December 12 2012 said:
    right, dcisfun, there's no reason for anyone to get their panties in a twist just because population is growing exponentially along with global consumption and we're in a global economy that demands infinite, exponential growth in order to not go end-over-end and then collapse into a devolutionary financial black hole, as began in the fall '08 dry run. Since we're in a world that has finite resources and weakening growth being suspended in mid-air for the moment by central banks cranking out imaginary money value by the trillions of dollars each year now to keep the illusion of real growth and personal, state, and national real solvency pasted together with spit and a few toothpicks - printing $65 billion thin-air money/month in the US "To Infinity and Beyond" by senior bold monetary rocket scientist Bernanke, likely about to be bumped another $40 billion/month tomorrow, as I understand. These are all just a few minor adjustments, ripples and repairs behind the curtains and then I'm sure our usual programming will be right back on track, no doubt.

    Anyway, thanks for keeping up the cheery chatter: "Everything's normal. These aren't the droids your looking for. Move along. Go back to sleep."
  • John on September 01 2013 said:
    There is a very large elephant in the room that Peak naysayers seem to ignore. I'll try and explain; Their argument goes something like this. Oh yeah but in 1920 this happened and we survived and in 1930 that happened blah blah. The critical factor they fail to mention is TIME. When you are talking about the consumption of finite resources TIME is of course critical and cannot be ignored. The more we consume over time the less there is. FACT. Now in the 21st century with a world population 3 times what it was in the twenties and thirties and consumption of resources accelerating to an enormous level it won't be the same as the twenties or thirties. There is no room for recovery. This is the end game and the whole system could implode at any minute. I suspect and I'm not being melodramatic that WWIII will happen long before we run out. US military involvement in the world is already a road map for global oil production. The logical conclusion is WWIII followed by total collapse. We have become so technologically enamoured with our TVs iPads and cars that our brains simply cannot comprehend that it's happening. That it will all be over. Remember this. It was only around 120 years ago there were no cars or electricity or phones or TVs etc. etc. That was not that long ago! The irony is there are some things we can do to ease the pain of our headlong crash into the tarmac. The simplest thing for our Governments to do is understand that Growth based economics = Death. Economies based on paper and greed are illogical. In our current economy I can buy a v12 fuel guzzling tank. If I have fiat paper currency. I can burn as much oil as I like. Think about that. I can burn, for no good reason a finite irreplaceable resource because I have enough paper. It's ludicrous. Economies should be based on energy. In which case irrespective of how much money I have I won't be allowed to burn oil simply because I'm rich and want to drive a v12 tank. We manufacture products that are designed to fail so people throw them away and buy more. And these products are by definition all made with finite resources. It's insanity! But even today with all we know politicians still talk about growth as if it's the cure all for our future. Of course it's not. It's the end all. There is no solution with 7 billion people. Plain and simple. If you look hard enough you will see that it's happening already.

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