Sustainability Videos & Lecture Series

Heather Sealy Lineberry: - sustainability in conjunction with the exhibition Cu29: Mining for You. In fact, this is the last week of the exhibition, so you’re squealing in to see it. My name is Heather Sealy Lineberry. I am senior curator and associate director of the ASU Art Museum and, I am happy to say, curator of this exhibition. Cu29: Mining for you explores our limited Earth materials and the range of issues surrounding their use, using the story of copper as a conduit for this complex conversation. This is a collaborative project. To begin with, by the artist Matthew Moore from Phoenix who is with us today and Clare Patey from London who unfortunately is not with us today. Working with ASU faculty member and geologist, Steve Semken, who is here; with students from geology, sustainability and art; and with community members from electricians to miners to nutritionists and a variety of other people who interface on a daily basis with copper. [Noise] Ooh, sorry about that.

The plan for today’s program is that after Vince’s lecture, Steve Semken and Matt Moore will join us to speak briefly about the exhibition and how it addresses some of the issues in Vince’s talk. Then the three speakers will return to take questions from you all. Please feel free to grab lunch along the way, and we hope that you’ll make sure and see the entire exhibition before you leave today. It’s both in this gallery—this is actually a part of the exhibition—as well as across the way. We even have pennies to give you so you can add them to the penny wall.

I’m gonna hand it over to Steve to introduce Vince. Before I do so, I just wanna thank Lauren Kuby and her team at GIOS, who organized this lecture. They’ve been really great to work with. Steve?

Steve Semken: Thank you, Heather. It’s my pleasure to introduce our featured speaker for today, a friend and colleague of mine. I’m really delighted to see him here in Tempe, a place where, as I’ll mention, he has considerable roots. Vince Matthews, our speaker today, got his doctorate from the University of California at Santa Cruz, did his research on the San Andreas Fault and this morning was still talking very actively about current research on the San Andreas Fault zone. For about two decades, maybe more than two decades, he was in the natural resources industry, and that great wealth of expertise is gonna be one of the things that you’ll be hearing about in the talk today. He was the director of the Colorado Geological Survey, meaning the state geologist of Colorado, for eight and a half years. That was the circumstances under which I came to meet him. Been very, very active not only, of course, in the geologic mission of the State of Colorado, the resources and the mapping but also a great force for geoscience education in that state. He has taught at five different educational institutions including ASU. I learned for the first time this morning that he also taught geology at the Frank Lloyd Wright School of Architecture, which I think is also really unusual.

With that, I’d like everybody, please, to welcome to the stage Vince Matthews. [Applause]

Vince Matthews: Well, I wanna start first by thanking you all. I also wanna thank Steve. We’ve got an awful lot of choices of where to be these days, and I really appreciate you all choosing to be here for this talk.

I started giving this talk about eight years ago, and I noticed that things were going on in China that were a little bit unnerving to me and interesting. It’s interesting that as this talk has evolved, copper has become a very important part of the talk, which is nice coincident with the exhibit that we’ve got going on today. What I wanna do is go through natural resources. I’m not gonna spend any time talking about oil and gas, but that’s obviously a part of this whole thing. In the hour-long version, I do go into oil and gas. It’s important to talk about the mineral parts of energy because people are not really as aware of what energy is or minerals, their contribution to energy. Also, to large part, the cost of minerals is hidden from us even though we’ve had tremendous inflation resulting from it.

As I go through this talk, and I wanna use those three countries there—China, India and the U.S.—as the main theme of what’s going on because their impact on the global natural resources stage is quite impressive. First of all, we have been suffering from a natural-resources inflation other than oil. We all know about the oil inflationary forces, but minerals are largely hidden from it. We’ve already seen that inflation start back. One question that worries me a little bit, and I’ve already seen it happen, is are we gonna be able to get the resources that we need at any price? China has tied up an awful lot of them and India has also. Then, because we’re so mineral rich, particularly in Colorado we’re mineral rich as well as you all here in Arizona, I think the pressure to develop more and more these resources is going to mount. That creates some conflicts. We’re seeing tremendous conflicts from resource development in Colorado right now. Virtually every day, in the newspapers, you find more and more conflicts occurring.

One of the problems is that, increasingly, our natural resources are being extracted by foreign-owned companies. When we have global shortages of natural resources, what are the implications of most of our extractive industries being foreign owned? Then, really, the charge is, how do we turn what could be a pretty negative situation for our country into one that’s positive? That, of course, is the students’ job to make this happen. Well, the demand for natural resources is obviously people driven. As people increase in the globe, our pressure on natural resources grows. ‘Course, we’re not allowed to talk about population growth these days, but we blithely talk about adding three billion people to the globe’s population by 2050.

In land area, these three countries are—it’s interesting that the subcontinent of India is only about a third of the ten million square miles that each China and the U.S. have. On GDP, we’re still the big elephant on the block from the technical GDP. China has been projected before the economic collapse of 2008—I haven’t actually seen any projections since then—to have passed us by 2030. There was even one forecast that India would pass us by 2050 because their economies are growing much faster than theirs. When you look at the real GDPs, you see that China is almost caught up with us. It’s predicted that they will pass us in real GDP by 2016, which is not very far away. India still has a long way to go.

Energy and GDP growth have always historically been closely linked to one another. This is for the United States. You can see in the dark line energy consumption growing with GDP. The same thing with the line is GDP, and the energy for China is in the bars. Close correlation. Same thing with India. Unless we figure out some way to grow GDP without energy, if these countries are gonna continue to grow their economies, they’re gonna continue to consume more and more energy.

I think that the world electrical growth nicely encapsulates the whole story of natural resource consumption. You can see that the growth of electricity worldwide has increased steadily. We’ve had, over this past 20 years, about an 86-percent increase in electricity consumption. Well over half of that is just the three countries of India, China and the U.S. When we break that out, we see that China is the bulk of that. Looking at the curve for China’s electricity consumption, they had a pretty robust growth during the 20th century. In the 21st century, things really took off and skyrocketed. That’s what we see in the consumption of every single natural resource, that China’s consumption was growing all through the 20th century when nobody’d ever heard about what they were doing. Then, in the 21st century, it just exploded. We’ll see this sort of break in commodity after commodity, but you can’t forget about the other 42 percent of the electricity growth in the rest of the world. All the rest of these countries want that American standard of living and are increasing their consumption of natural resources and, in this case, consumption of electricity.

People ask, “Well, doesn’t China have their own natural resources?” They certainly do. They’re the number-one producer in the world of these commodities, number two of copper in 2005. They’re now dropped to 2003 and the third in this. Unfortunately, this is the latest statistics that we have available from the USGS. Of 15 important commodities, they’re the top 1, 2 or 3 producer in the world of 14 of them. Let’s look at copper, which is the topic of this one. Their production is shown here, and it was growing through time, but their consumption was outweighing that. Notice the break in slope at the beginning of the 21st century, when they really began consuming at a huge pace, very similar to the electricity consumption. Of course, electricity takes copper wire along with lots of other things that they’re doing. Today, they are way up there, but they have to import 82 percent of the copper.

What’s happened to the price? Well, the price from 2003—and most of the charts that I’m gonna see on mineral prices start in 2003 because that’s when the real explosion of China’s consumption began—increased 457 percent just in this five-year period from 2003 to 2008. Then, in 2008, when we had the worldwide economic collapse that I don’t think we’ve fully recovered from yet, we had the price drop dramatically. That happened for all mineral commodities except for gold. We had a greater collapse in mineral commodity price in four months than we did in four years of the Great Depression, but we’ve begun to see those prices coming back. In fact, it very quickly, within a couple of years, set new record highs. With the continuing instability in the economic situation globally, we’ve had a drop-off of that quite a bit; but it still averaged much, much higher than what it was just a little over ten years ago.

I’m gonna choose Colorado because that happens to be what I’m used to. I gave this talk to the Chamber of Commerce about five or six years ago. A small manufacturer out in Western Colorado came up to me afterwards, and he started telling me about how difficult his business was because he made switches for the coal mines that handled 10—20,000 volts at a time, and copper is the main ingredient in that. He was telling me how extremely difficult it was for his business to be able to plan with these extremely high changes and rapid changes in copper price. I’m sure you all have had the copper thefts that we’ve had there. You don’t wanna leave a foreclosed home unsecured or you’ll have it stripped of the copper wiring, and on and on with that. If you’ve gone to Home Depot and tried to buy copper pipe or copper wire, you know that the price has increased dramatically.

This is an old copper mine from the 1800s out in Western Colorado that, within the last five years, has been drilled out for the potential for reopening with more modern mining techniques.

This is the Bingham copper pit in Utah before the news of a couple of weeks ago, when they had a big slide. This is a couple of miles across. It’s about three-quarters of a mile deep, and they recently had a huge landslide in it. This was a number that I got and kinda—well, we’ll actually talk about this in a while, but 50 percent of all the copper mined in the world in just the last 25 years, that’s the exact same statistic for oil. Fifty percent of all the oil consumed in the world has been consumed just in the last 25 years. We’re increasing our consumption of these natural resources at an incredible pace. I don’t make predictions in here. There are two slides that do have predictions, but they’re not mine. I don’t see how this is sustainable, this kind of pace.

One of the things that sort of, I think, gives us false hope is this idea of the resource pyramid, that we develop the easy stuff first and then we can work down, and just don’t worry cuz we’ve got all the copper we could ever need and we’re never gonna run out of copper. We’re not ever gonna run out of copper, but as you go down that resource pyramid, that three-quarter-mile-deep pit has gotta go deeper and deeper and deeper, which means the top of the pit’s gotta become larger and larger. It becomes more and more expensive. The environmental footprint generally, as you go down that resource pyramid, gets much, much higher.

This is just one illustration that at a one-percent copper grade or one-percent grade of any mineral, it takes a hundred pounds to get one pound of mineral. When that grade drops down to a hundredth of a percent, and there are grades this low of many minerals that are being mined today, it takes 10,000 pounds of ore to produce one pound of copper. That environmental footprint idea is exemplified in this chart.

If we look at iron ore, where they’re the number-one producer in the world, they also quickly became—as you see there again at the beginning of the 21st century, their imports of iron ore—they quickly became the number-one importer of iron ore, number-one producer and number-one importer. Notice the value of that, 160 million metric tons in 2002. In 2011, it was 642 million metric tons that they had to import. It’s growing, and it’s growing, and it’s growing. Steel obviously is what’s doing it. All of the building that they’re doing uses a lot of steel. You can see that change again at the 21st century of their consumption of finished steel and how much they’ve increased it.

Now we look at India down here, compared to that on the same graph, and you say, “Well, you know, that’s not really a problem” until you realize that India’s right where China was only 15 years earlier. When India really gets cranked up, with the number of people that they’ve got, over a billion, that demand could be huge.

Here’s the price of scrap steel at the Chicago Exchange here in the United States, increased 559 percent. In traveling throughout Colorado in my duties in the past decade or so, you come across farmers who, boy, they’re gatherin’ up all the scrap steel they can have that they used to just let sit around and rust. They just couldn’t afford to let it sit around anymore. Then in 2008 it dropped, but you notice that it’s recovered quite dramatically since then.

China, I can recite these numbers. It just really boggles my mind, the things that happened; 2005, 70,000 new supermarkets in one year. That doesn’t stop. It just keeps going on. Think of the steel and concrete that goes into building that. They became the number-three car manufacturer in 2006, which takes a lot of steel. Then they began selling more and more of this internally, and they became the number-two car market. They became the number-one car market the next year, in the world, buying their own cars and other people’s cars. They became the number-one car manufacturer in 2009. They passed Germany as the number-one exporter in the world. They passed Japan as the number-two economy. They passed the World Bank as the world’s number-one creditor. They are the ones lending the money to the rest of us. They passed the United States as the number-one energy consumer, and they became the number-one trading nation in 2012, and there’s lots of other of these firsts that they became during this period of time. If you think China’s a blip, you probably oughta think about that chart a little bit.

This is a picture from my hometown newspaper of Leadville. Leadville is about ten miles from the world’s largest molybdenum deposit. Freeport-McMoRan just opened it back up. Molybdenum exports here from 2003 to 2005 doubled most of that going to China. I was giving this talk to the Denver Bar Association in 2005. An attorney came up to me afterwards and she said, “You know, my husband has a small manufacturing facility here in Denver, and he had a molybdenum-based automotive lubricant that he had to drop from his line.” I said, “Well, why? Because the price went from $2.00 a pound to $40.00 a pound?” She said, “No, because he couldn’t get it.” He couldn’t get molybdenum in the nation’s number-one producer of molybdenum, Colorado. I talked to another manufacturer who made exclusive molybdenum products. He had similar problems but, because he had better connections, he was able to get it. It was extremely difficult, he said, in obtaining it. That point that I had there about are we gonna be able to get what we need at any price is one that concerns me a bit.

The price spiked up there, Phelps Dodge first and then Freeport bought ‘em later on, knew that Climax, which had been shut for a couple of decades, was economic over $15.00 or $17.00 a ton. They began thinking about opening it up. Well, they aren’t gonna open it up on a spike; they wanna make sure the price stays up for a while and looks like it’s gonna be stable. Of course, it stayed over $17.00 for a number of years. They did a study. They tore down all the old buildings. They began investing $760 million to reopen it and build new buildings. One of the buildings they built was a new crusher. This is one of two fifty-ton ball mills that’s on the way through Leadville. It stopped on the main street, in front of the city hall. The high school band played to welcome it. The mayor welcomed it. The county commissioners welcomed it. The state representative welcomed it. The banner says “A Partnership for the Future – Leadville/Lake County and Climax Molybdenum.” The mess on the street is from the wine used to christen it. [Laughter] We don’t waste champagne in Leadville. The guy on the far left is the president, Fred Menzer. Fred said, “I’ve been in this business 30 years,” and he said, “I’ve never seen anything like this, and I like it.” [Chuckle]

It went on up to 11,300 feet at the new ball mill. Within three weeks of that picture, the price went from over $30.00 a pound to under $10.00 a pound, and they shut down the remake. That happened when the board of directors of Freeport were making their visit up here to Colorado to see these new molybdenum properties that they’d purchased.

Well, it has come back. Fortunately for Leadville, they have gone ahead and opened it. It is open, had a grand opening last August, and is now producing molybdenum.

These are increases in spot prices on the London Metal Exchange of a number of minerals that I’ve been following for a number of years. You can see that the red bar is oil. During the five-year period from 2003 to 2008, oil went up 306 percent. People were writing their congressperson and saying, “You gotta do something about”—they weren’t saying the price of oil. What did they say? The price of—gasoline, right. We all know—and see, oil is sold on the spot market almost exclusively. Every time we fill up our gas tank, we know what the price of oil’s doing. We know right now it’s around $3.63 up there. I don’t even wanna look down here [Chuckle] what it is, but we know that it’s fairly high. It’s probably up there around a hundred bucks a barrel, which it is. You can see here that the lowest percentage increase is aluminum at 144 percent. Well, 144 percent over five years, any businessman would just love that. It’s a great increase. Yet, the average of all of those minerals was 630 percent. How many people were writing their congressperson and saying, “You gotta do something about the price of germanium, or the price of chromium, or the price of palladium”? We didn’t see it. We didn’t know that it was happening whereas we did know with oil.

I mentioned that the price, everything collapsed in 2008, but just in a three-year period you can see these things coming back. Oil was a little healthier there on the right. The lowest increase was 28 percent. Still, a 28 percent increase in revenues for a company in three years, that’s fantastic. The average price increase there was 139 percent just in three years. Why didn’t we know about it? Well, coal is an interesting commodity. Unlike natural gas and oil that are almost completely sold on the spot market, coal is not sold mostly on the spot market. Some of it is. Most of it is sold on long-term, fixed-price contracts. The spot price of Colorado coal, just over that two-year period, more than doubled from $17.00 a ton to $37.00 a ton in Colorado. Yet, when the spot price was $37.00 a ton, the average price of coal sold in Colorado was only $24.45. What that spot price is telling you, when your contracts expire or if you’re gonna buy new coal, like there’s a power plant that’s brand new that Xcel put in down at Pueblo, the price of the coal going into the new part of the plant is double the price of the coal going into the old part of the plant which is on the long-term contracts. What that spot price was telling us: “Get ready cuz the price is going up.” Only two years later, the average price of coal in Colorado had gone up $5.00 a ton, and it reached $42.00 a ton just a couple of years ago.

It’s hidden. Most mineral commodities are sold on these long-term, fixed-price contracts, not the spot market. Even though the spot market was shooting up [inaudible], every time one of those contracts turned over for copper or molybdenum or whatever it was, it was at a higher price and a higher price. It was insidious. We didn’t know what was going on; but it was a huge, much bigger than oil, impact on our economy. Well, I wanna talk about renewable energy. A lot of people don’t realize that renewable energy’s pretty dependent on this mining. Colorado’s got a renewable portfolio standard of, I think it’s 30 percent now. We had the original one, and we reached it so quickly with wind primarily, but every one of those wind turbines takes a thousand pounds of neodymium, and we don’t produce a single pound in this country. It takes a lot of molybdenum mixed in with the iron ore to make the towers.

This is our eight-megawatt facility down in the San Luis Valley in Southern Colorado. We’ve now got a 32-megawatt facility down there, photable tag. Depending on what type of technology you’re using for the solar panels, you need these critical minerals to make those with. If we look at all of our alternative energy technologies that we’re really pushing to try to get to, the solar—you’ve got all of these again depending on what it is. When our vehicles takes these and you’ve got some overlap with silver between the vehicles and the solar and wind molybdenum is used in both of those in the rare earth, but central to all of that is copper.

If we look at the electric vehicle, some of the electric vehicles take as much as six times the copper that a normal car takes. The average is more, now we’ve gotten it down to around two to three times. If we look at these wind turbines, every one of those 2.4-megawatt wind turbines, in addition to taking a thousand pounds of neodymium, a rare earth element, takes a lot of copper. All of those turbines are wound with copper wire. That’s the way the electricity is generated. When we talk about our goal here in the United States for wind, it’s gonna take an awful lot more copper, but China is the leader in the world in renewables. They initially, although I think they’ve changed this just recently, but they were looking at much larger targets for wind than what the U.S. was and a lot more copper. They’re saying that 20 percent of the copper they’re gonna use is going into wind. I think that they have decided to back off of this a little bit and go more toward nuclear.

Here are 65 critical minerals that are used in our modern society, copper being right here. For the U.S., this is a chart showing the percentage that we have to import. We have to import 40 percent of the copper that we use in this country. In fact, of all of these, 69 percent of these minerals, we have to import more than 50 percent. Half of these minerals, we have to import three-quarters of what we use. Almost a third of them, we have to import 100 percent of what we use. If we look at one of the rare earths down here, the REEs, they’re all exotic sorts of names that I’m sure you remember from high school chemistry. I picked this particular set of rare earths because they’re all needed in this car that we like to drive to show how green we are. There’s where all of those things are used. Of course, the engine is a very big user of neodymium and praseodymium.

Rare earths, we were the main producer in the world back in the early ‘70s when I visited our largest mine out in Mountain Pass, California, right near the California-Nevada border. The Chinese came over and took a look at it just like I did and thought it was really cool. They went back, and they decided they were gonna become the Saudi Arabia of rare earths. They began mining and flooding the market and became, after driving us out of business, the world’s supplier of rare earths. Today, they control a large part of the market.

They’ve been messing around with us a bit. They flooded the market, and it was cheap, and they were letting people having it. Then they started kinda cutting back. In 2007, all those Toyotas that the Japanese were making, the Priuses, they actually had to smuggle rare earths out of China in order to meet the demand that they had for that. China got a tight control on these rare earths. You see how drastically they have cut back their exports to the rest of the world. What their position has been: If you wanna make your Priuses and use our rare earths, you’re gonna be making them in Inner Mongolia, not in Tokyo or in Lexington, Kentucky.

They jacked up the prices of these, and here’s the percentage price increase, just from 2008 to 2011. Incredible price increases. Not only were they not playing quite fair with that because here’s the price average for these various rare earths. The red is what they were charging us from the exports. The blue is what they were charging their own companies inside China. It isn’t quite a level playing field for that. We decided, when the Cold War was—since 1914, we’ve had the thing called the Strategic Mineral Reserve. We’ve known that it’s important to have these minerals backed up so in wartime we’ll have them if we need them. When the Cold War ended, we decided that we should sell that all off. For about 20 years, we were holding sales of our strategic mineral reserve all the time and nobody said, “Has the world changed? Should we look at this? Should we keep doing this? Does it make sense to keep doing this?” Finally, in 2008, there were two National Academy of Science reports that came out, one headed by a general, and the military woke up. By 2009, they’d stopped the sale of 13 minerals, but that’s a little late in the game when you see how early China was tying up stuff worldwide and probably buying a lot of the stuff at our sales. Of course, everybody likes to talk about rare earths, and it even made the front page of The Denver Sunday Post. That’s the first time that the Colorado Geological Survey’s ever been on the front page of The Denver Post. Fortunately, it was for something good rather than something bad.

This is one of those that has a forecast, but I use it because it’s kinda cute, that somebody else did. What it shows is the doubling of the use of cement in just one decade in China. Of course, they’re projecting that it’s gonna double again by 2015. Whether that happens, who knows? Why do we care about cement after exotic rare earths? Well, we have to import 22 percent of the cement that we use, or certainly at this time we did. In 2002, China was exporting cement. In 2003, they began importing cement, and they tied up the ships to be sure that they could get the cement that they needed. In 2003, we had 27 states—it’s shown there in yellow—that had shortages of cement. By the next year, we had 38 states that had shortages of cement. Even though Colorado’s shown in green, we had huge shortages of cement during that time. Of course, the largest producers in the world, I think you’ve heard of these countries before, and the amount of cement that China uses is just mind-blowing.

Here’s that little point about the foreign companies that are extracting our stuff. Most of our cement is extracted by Swiss, French and Mexican companies.

I’m gonna skip through this one a little bit for the sake of time.

The fertilizers, I think, they are beginning to become aware. Part of that’s because of the Global Institute of Sustainability here. They sponsored a phosphate conference and just today, on the Oxford Press website, I understand the results of that conference went up for sale by Oxford Press. The price of fertilizer is $165.00 a ton to $853.00 a ton. Mind-blowing. I had farmers come up to me after talks out in Western Colorado to say, “I changed all of my ranching practices because of the increase in the price of fertilizers.”

If you look, our production is shown in the gray bars, and our consumption is shown in the black line. The green is our exports, and red is imports. You can see that our production of phosphate in the United States has been decreasing, which has caused us to have to go from a net export to a net import situation of this important fertilizer. Same thing with potash. You can see our production has been decreasing, and our imports have been increasing correspondingly. The same thing with nitrogen. Our production has been decreasing in our imports of nitrogen. This is the components of the green revolution here. We can get along without driving our cars, but try gettin’ along without food.

I think probably all of you from Arizona are aware of this inking for a potash deposit up by Holbrook. The Chinese wanna try and get off the largest producer of potash up in Canada and get some alternate supplies, so they inked an agreement to get the production if this is ever put into production up there. China is increasing its use of fertilizer dramatically. India is also, and we’re—basically been flat. Possibly, some of that’s cuz we’re bringin’ in a lot more food from other countries rather than just in our own country.

Looking at the other components of energy, those are the places where we get our sources of energy. This is where it’s used. The part of this that concerns me is this, which is what we import. We’re now down from about 16 percent of natural gas to about 5 percent of natural gas with all of the shale gas revolution. Oil, we dropped under 60 percent whereas we’re at two-thirds earlier, but we still import about 90 percent of our uranium. For the engineers in the crowd here, the actual numbers, the percent of our supply—one of the things that really surprised me, even though I’ve been in the oil industry and all, was that 37 percent of the energy that we use in this country is from oil. You wanna know why it’s so important to people.

This is the percentage price increase, and there’s that 306 percent that we saw on the right side of the graph from 2003 to 2008. Look at coal, went up 381 percent. Uranium went up 481 percent. The increase is tremendous. Natural gas is—the Mac didn’t like my PC thing, it kinda shifted the table, but it’s 206 percent for natural gas. The import numbers, we don’t have to import any coal. We do have to import, and these are in 2007 numbers, so it’s a little bit lower for that, but still a lot that we import. This is sort of my reality check chart that 92 percent of all the energy that we use in this country comes from our four traditional sources of energy. When we drop down to renewables, we’re at about eight percent. You notice that the bulk of that is hydroelectric and biomass. Actually, our hydroelectric is going down. When they begin taking out more and more dams in the Pacific Northwest, that’ll drop even lower. Solar and wind are a tiny, tiny fraction of the total energy used here. You just have to be realistic that any conversion, massive conversion to wind or solar, is not gonna happen overnight even though we’ve got good starts in a number of states on it.

I just wanna mention coal since it’s in the mineral commodity category. A lot of people think of coal as a 19th-century fuel. It’s not. It’s a 20th- and 21st-century fuel. You can see how the globe has been increasing its consumption, China being—and they get all the deservedly bad press for the pollution that that causes. Up until December of 2008 or ’09, they were able to produce all the coal that they needed. They would do exporting and importing a little bit, but in—actually 2006 was right. In 2006, they actually went into a net import situation for the first time. That had a huge impact on prices for a wide—you can see recently, they’re really increasing their import of that.

Here’s the spot price of Appalachian coal. This is when they began importing. The price was $38.00 a ton, and it shot up to $150.00 a ton. As they continued to do that, you can see the economic collapse drop there, and then we had this increase back again. They doubled theirs in consumption of coal in 20 years, and who knows how it’s gonna continue? India’s increasing their consumption. They just built a new deep-water port to be able to bring in larger shiploads of coal. They’re importing about 33 percent. We’re increasing our consumption, but we’ve been decreasing it. The Sierra Club estimates that since 2007 there’ve been 127 proposed coal-fired power plants taken off the table. Just recently, in the last year, we’ve had natural gas displacing some of that.

I’m gonna skip through this kinda complex—together, these two countries, China and the U.S., produce and consume about 60 percent of the coal in the world. Most of the reserves are in the United States. Russia is second, with China being third.

Nuclear—the world has been increasing its consumption of nuclear fairly regularly. Fukushima stopped that quite a bit. China has increased theirs. India’s increased theirs. They both proposed—India proposed in 2005 that they were gonna build 17 new reactors in the next 7 years and they did.

Usually give a quiz here but, for the sake of time, we’ll miss that.

The last nuclear power plant came on line in 1996, and since that time we’ve been increasing our production of nuclear power. When I saw that chart, I couldn’t believe it. Most people don’t know that. It was done through increasing the technology of the plants. A lot of people think France is the largest generator of nuclear power in the world, but we are the largest generator by far. We’re double the number-two country, we’re triple the number-three, and yet nobody knows these statistics essentially in the U.S.

I’m gonna scoot through here because I’m running a little long, but we shot the price up that was stable for uranium for about $10.00 a pound for a couple of decades. The price shot up to $139.00 a pound, and it’s now dropped back. We can be thankful that it’s now only five times what it was for those couple of decades before 2005 and ’06.

A lot of people think that natural gas is the answer for the world. I’ll just point that same resource pyramid. We started here for both oil and gas, with wonderful deposits of oil and sand where all you had to do was drill down, turn on the valve, let it flow and you’d get out thousands of barrels a day. We then worked down to what are called tight gas sands that were not as permeable. Then we did coal bed methane, and now we’re down to gas shales. We’re going down, down, down that resource pyramid. The environmental impact is going up, up, up. The cost of wells is going up, up, up. We’re flooded with gas now, and we think that we have lots of it. I’ll just throw out, be careful about that because the reserves that people were claiming when gas shales started are nowhere near what they were claiming at the very beginning. I think we’re gonna need everything that we can get, and we shouldn’t take anything off the table when obviously efficiency’s what we’ve got.

We’re depleting the natural resources globally very fast. The demand is growing. It’s called running up the down elevator. As this demand for energy goes up, we’re tryin’ to reduce greenhouse gases, and it’s hard to make the math on all of that work.

[Applause]