Filed Under:Risk Management, Loss Control

The Nation’s Natural Resources

Part Five - Infrastructure Risk Management

In the old game where one had to guess some object by asking no more than 20 questions, the first was often “animal, vegetable, or mineral?” Minerals have made America the richest nation on earth, and it is minerals that will keep it ahead of the rest of the world in the 21st century.

Obviously minerals are not our only natural resource: There are our more than 300 million Americans with skills and talents in hundreds of thousands of areas. Therefore it could be said that people are perhaps our greatest resource. Animals—both in the wild and domestic—are resources for food, clothing, even fertilizer. Then there are our vegetable resources, not only agricultural products produced on farms, but also millions of acres of timber, grasslands and shoreline plants that are nurseries for fish and other seafood. What would our world be like without songbirds or game birds, or just plain old chickens? Each is a resource for something.

The Midwest and Mines

The first mine I ever entered as a child was a zinc mine in Missouri. It was “played out” but was still used as a tourist attraction for those brave enough to ride down a few hundred feet into the ground in what was basically a big tin can on a rope. Since then, I have been fascinated with mining, and have visited some of the largest ones in the country. My home town of Cleveland is built over a salt mine. Salt wells lined the Lake Erie shoreline east of Cleveland. South and west of Cleveland were sandstone quarries, some of the deepest in the world. West of that part of Ohio the sandstone gave way to limestone, gypsum and dolomite quarries. On one venture, I watched a long boat (ships on the Great Lakes are called boats) being loaded with gypsum and limestone. The next day, I found the same boat cruising up the Cuyahoga River to a steel mill.

Iron and Oil

John D. Rockefeller was a vegetable merchant (probably selling vegetable oil) when Drake discovered oil in Pennsylvania. The site is now a historic park, and the story of Standard Oil is part of the story of America. Oil and gas are still produced in Ohio, Pennsylvania, and elsewhere in the nation. Coal is a major mineral asset. For my “History of American Transportation” course at Emory University’s Osher Institute, one of the questions I ask on the initial quiz is what four types of coal are produced in America. Most guess it is anthracite, bituminous, and a few even get to sub-bituminous, but most forget lignite. Train-loads of metallurgical coal arrive daily at ports such as Norfolk for shipment to foreign steel mills.

Iron ore in our Missabe Range and Northern Michigan is still mined and shipped, but not to the same degree as in the early to mid-20th century when ore boats from Duluth, Houghton, and Superior jammed the Great Lakes each season to keep the steel mills of Northern Indiana, Ohio and Pittsburgh going. Now the best ore is shipped by rail out of Northern Labrador in Canada and sent by ship to transfer points.

Open pit copper mines still dot the West from Montana to New Mexico and Arizona. The list of metals and minerals, from lithium to cobalt produced in the U.S. is almost endless. On one trip back in the early 1950s I got to see the nickel mines in and around Coppercliff, Ontario.

Gold and ‘The Stuff Dreams Are Made Of’

It wasn’t gold that led to that famous line from Humphrey Bogart in The Maltese Falcon, but many a man has spent his life trying to find it. It was the discovery of gold in the hills of North Georgia that led Andrew Jackson to decree that all Cherokee in the state should move to Oklahoma on the “Trail of Tears” that cost so many lives. But what awaited them in Oklahoma? It was oil, which was—and still is—better than gold in many ways.

According to Jonathan Fahey of the Associated Press in an October 24, 2012, article, U.S. production of oil may soon exceed that of Saudi Arabia. Fahey reports that “U.S. production of crude and other liquid hydrocarbons is on track to rise seven percent [in 2012] to an average of 10.9 million barrels per day.” He continues, “The Energy Department forecasts that U.S. production of crude and other liquid hydrocarbons, which includes bio-fuels, will average 11.4 million barrels per day [in 2013]. That would be a record for the U.S., and just below Saudi Arabia’s output of 11.6 million barrels.”

Not only is coal production up in the Powder River Basin, but natural gas is becoming so plentiful that the price per unit is dropping. But is there still “gold in them thar hills”? You bet; gold and silver mining is also on the increase, along with other valuable minerals. Gold, of course, is still being prospected. Tourists can still pan for it in places like Juneau, Alaska, or Dahlonega, Georgia. Just don’t plan your retirement on what you’ll find.

The Hazards of Fracking

The increase in oil and gas production is due largely to newer methods of drilling for it, called fracking. It involves drilling holes deep into the earth, often far below where oil had already been depleted and at angles to the surface, pumping in some type of hydraulic fluid, and putting pressure on the fluid to split open or fracture the layers of rock underneath to allow the oil and gas to flow to the pump, where it is pumped out after the hydraulic fluid is removed. Therein lies an environmental issue—the fluids used can be toxic, and can get into the water table, polluting it. Water is itself a valuable natural resource, and if it is polluted, it is basically an irreplaceable loss. There is further exposure when the toxic fluid is being transported to or from the wells. (You can read more about fracking liability and potential exposures in this month’s cover story, which begins on page 16.)

Much of the Canadian oil that became such an issue in the 2012 Presidential campaign is produced in Northern Alberta by fracking, or from processing of oil shale. The fuss was over the President’s halting of a pipeline to transport Canadian oil from the border across the Midwest to Houston. Environmentalists warned that a leak could devastate the only real source of water in much of the Midwest, an underground aquifer with millions of gallons of clean water in it. One solution would be to build a new refinery in North Dakota where the oil arrives in the U.S.

We need more refining capacity anyway. After all, pipelines have been known to break and spill; there have been a number of spills or leaks on the Trans-Alaska Pipeline, including one in May of 2010 of more than 5,000 barrels of crude. According to the Anchorage Daily News it was the third worst spill on the pipeline, but other spills of lesser amounts are not uncommon.

‘Water Everywhere, but Not a Drop to Drink’

The sea, of course, is full of water, but we can’t drink it without desalination. Most people flying coast to coast sit in their tight little airline seats and read, watch a movie, or play with their I-things. If they were to look out the window as they travel over much of the Midwest, Colorado and Texas, they would see big green circles. These are irrigated plots of crops, and the circle is the result of the moving water distributor that makes a 360-degree trip frequently to keep the crop growing.

The water comes from wells deep into the aquifer—the same aquifer where local towns get their drinking water, and the same aquifer that environmentalists fear could end up being polluted. Yes, there are annual floods on Midwestern rivers, the Red, the Missouri and its tributaries, and occasionally even the Arkansas. However, the other rivers—the Cimarron, Canadian, Rio Grande or the Pecos—are often little more than dry creek beds. So much water is drawn from the Colorado as it separates Arizona from California that by the time it reaches Yuma there is only a trickle of water left.

Wars have been fought over water—and as the supply dwindles, or is polluted, wars will be fought again. Farmer Adams messes with his creek; Farmer B sues him. It’s the stuff of cowboy movies; only in the movies Farmer B shoots Adams.

The Great Drought of 2012 rivaled the Dust Bowl of the 1930s, but of course, there are politicians who don’t believe in Global Warming. To many it is not a scientific issue, suggested the producers of a PBS Frontline feature, it is strictly a political one. It does not matter to the seaside housing developer that 98 percent of climate scientists predict a 37-inch increase in sea level by 2030 or so—a few politically motivated scientists call that prediction hogwash.

But will there be enough water to wash a hog in 2030? That depends on how well the natural resource of water is managed. Already hooboos—the Arabic name for a sand or dust storm—have damaged homes in Arizona and Oklahoma. My wife and I drove through one back in the 1980s in Northwestern Texas, and they are not fun.

The dust collects as silt in streams and rivers, and is trapped by dams on those rivers that form reservoirs to preserve water. While oil and gas production may increase, water production is limited, and what now exists must be carefully preserved.

“CO² Is Plant Food!”

The Frontline feature on global warming filmed one politician proclaiming that the government’s attack on carbon dioxide was a waste of government money, because, he maintained, carbon dioxide is not a poison; it is absorbed by trees and plants. Yes, trees and plants do absorb CO², but we’re cutting down the trees and rain forests that used to absorb all the excess gas, and now it’s floating up into the atmosphere and doing harm.

So one political party talks about green energy (wind, water, solar, and maybe even nuclear). Meanwhile, the other suggests that we have adequate energy sources in coal, gas and oil. Well, we do, but unless the power plants that use those hydrocarbons add expensive “scrubbers” on their smoke stacks to capture and secure the CO², then we are slowly killing ourselves.

One issue is what to do with the carbon dioxide that is captured. It is a gas, and if it is stored underground, it could leak out and poison whole neighborhoods. Hopefully some smart university scientist will come up with a way to break carbon dioxide down into ­carbon and oxygen, and solve the problem. After all, a diamond is nothing but pure carbon, compressed under pressure and heat. Hmm. Maybe we can turn the gas into diamonds.

National Parks and Treasures

The U.S. Department of Interior is in charge of our national parks, monuments, and unowned wilderness. Some of that wilderness is leased to corporations to mine or drill for oil—often becoming a political issue—but it is a potential resource of money for the government if the rent were to keep pace with reality. In a tight economy, government money customarily allocated to our parks is likely to be reduced in order to pay for the deficit. It’s not unfathomable that the parks could one day be leased to private corporations to operate, and the park ranger will become some sort of private security guard. In 2012, Yosemite National Park made the news because of an outbreak of the hanta virus, a rodent-born disease. Yosemite was one of the first parks to have some private operations. Whether there is, or was, a connection is still unknown.

The National Park Service operates hundreds of sites that few would consider “national treasures.” Last fall, my wife and I visited the Portage site where canal boats were once hauled up a mountain by cable and lowered to the other side—a national treasure maintained by the Park Service. It involved John Roebling and the invention of steel cable. We then drove to Shanksville, Pennsylvania, to the site of where United Flight 93 crashed, as its heroic passengers prevented the terrorists who had taken over the airliner from crashing it into the Capitol. It, too, was established and manned by the Park Service. The entire Cumberland Canal Parkway is another federal park project, as are hundreds of large and small historic sites. These are part of our national resources infrastructure, and must be carefully maintained and manned for their survival.

Whether we protect and restore our natural resources or exploit them to the point of extinction will depend on whether children born after 2001 will have a fair shot at a safe and prosperous future. It is certainly possible, but whether or not it is probable depends on many current politically complex factors.

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