Posts tagged “natural resources”
A team of researchers from the University of Texas at Austin has released a detailed report on energy use in pumping, treating, delivering, and preparing water for end use makes up no less than 12.6 percent of the nation’s total annual energy consumption is devoted to the task.
Published in September’s issue of Environmental Research Letters, a peer-reviewed scientific journal of the highest standing, the report details the investigation conducted by the team as they traced water from its source to the taps of average American households and back again. The study focused on each aspect of water delivery, including pumping from natural sources, building and maintaining reservoirs, treating the water for safety and then pumping it to individual residences and businesses, including those in the industrial sector. (See more: Water Usage in an Oil Refinery)
An ongoing discussion among some of us analysts at Consumer Energy Report has been about whether having natural resources like oil or coal is actually beneficial to a country (see Are Countries With Vast Oil Resources Blessed or Cursed?, Oil Dependence — Tom Friedman’s False Narrative, and Oil — Easy to Produce, But Not Easy to Buy).
The argument which I’ve made is that a boom in natural resources production can cover up some short-sighted economic policies; in effect, the earnings from producing oil mean that countries do not have to invest in their education or produce their own manufactured goods. The other side of the argument is that it can only be a good thing for new resources to be found.
Leaving aside the question of whether natural resource wealth undermines institutions or causes corruption (and there is good evidence of a resource curse among developing countries) there is one thing that increased production of oil does, once it gets to be a big enough sector of the economy: it pushes up the value of that country’s currency.
All else equal (as economists always have to say), new production of natural resources strengthens the domestic currency. That’s because those resources are either exported or are used to replace imports.
A Complex Issue
A couple of months ago, Robert Rapier, Sam Avro, and I had an interesting debate about the resource curse in the context of a Tom Friedman column about how countries that aren’t blessed with natural resources succeed because they are forced to invest in their people. I believe, as my post (Oil – Easy to Produce, but Not Easy to Buy) said, that countries blessed with natural resources like oil “don’t have to learn how to build factories” because they can sell oil to the world instead. Robert and Sam cited countries like Norway, the U.S., and the U.K. as examples of countries that have thrived even with resources.
The new edition of The New York Review of Books features an article, “What Makes Countries Rich or Poor?” written by Jared Diamond that is a review of Why Nations Fail: The Origins of Power, Prosperity, and Poverty by Daron Acemoglu and James A. Robinson. This is another book to add to my ever-growing list of ‘must-reads’ – but Diamond’s review gave some interesting points that are very relevant to our previous discussion about the resources curse and what causes countries to grow or fail. The truth, as shown by the article, is complicated: there are many determinants to growth, and it is difficult to separate out individual causes.
I am pleased and excited to join the team at Consumer Energy Report. I have been an avid reader of the analysis here and I am looking forward to contributing to the important policy discussions that Andrew, Robert and others routinely engage in on energy, climate change and security policy.
I wanted to take the opportunity with this inaugural post to introduce myself and provide you — the reader — a brief sense of where I am coming from and what you can expect to see here on Choke Points.
First a little about myself. I am a national security and foreign policy analyst in Washington, working largely at the crossroads of science, technology and national security policy. My interests in technology and security policy has given me an opportunity to work on a broad range of issues — from cyber security to the impact of climate change on the U.S. Armed Forces. For the most part, though, my particular focus has been on natural resources and security (energy and climate change in particular), first at the Woodrow Wilson International Center for Scholars, and now at the Center for a New American Security (CNAS), a non-partisan national security and defense policy think tank.