Question

Distinguish between reserves and resources.

Short answer

Reserves are economically extractable quantities today, while resources include all potentially extractable quantities.

Step-by-step solution

Define Reserves

Reserves refer to the known quantities of a natural resource that can be extracted economically and legally at the present time with the current technology. They are evaluated based on geological and engineering data and are the subset of resources that hold economic potential.

Define Resources

Resources encompass all quantities of a natural resource that are potentially extractable. These include reserves, as well as those quantities that are considered currently undiscovered or uneconomic to extract due to technological or economic constraints. Resources give an overall picture, including what might be exploited in the future.

Compare Characteristics

Reserves are always a subset of resources. Reserves are known and can be extracted profitably today, whereas resources may not yet be fully discovered or currently economically viable. Therefore, reserves represent what is immediately available, while resources include both current and future potentials.

Illustrate with an Example

Consider an oil field: "Reserves" would refer to the oil that has been found and can be extracted using current technology and economic conditions. "Resources" would include this reserve oil, plus any additional oil that has yet to be discovered or that could potentially be extracted with future advancements in technology or changes in market conditions.

Key concepts

Reserves

Reserves are the part of natural resources that we can access and utilize under current conditions.
They are well-defined and legally or economically feasible to extract.
Reserves rely on a few key factors:

• Current technology: The tools and methods we have today to extract resources efficiently.
• Economic factors: If the cost to extract is less than the value of what we extract, it makes financial sense.
• Legal considerations: Regulations govern what can be extracted and how.

Think of reserves as the portion of natural resources we see and can practically make use of right now.

Resources

Resources are all quantities of a natural resource available, whether discovered or not.
This includes reserves as well as potential resources.
A few points to understand about resources:

• They offer a broader picture of what a region can provide.
• Resources include materials we have yet to discover.
• They consider future technological advancements allowing current unfeasible extractions.

Resources help us plan for possible future utilizations beyond the immediate scope of reserves.

Extractable Quantities

Extractable quantities embody the part of reserves and resources that are feasible to be extracted.
The quantities depend on the efficiency and availability of current technologies and methods.
Extraction assessment considers:

• Geological data: Understanding the earth's composition and how resources are situated.
• Engineering: Capabilities to design and operate machinery to reach and extract materials.

Determining extractable quantities is crucial to ensure that natural resources are used effectively and sustainably.

Economic Viability

Economic viability determines if the extraction of a resource is worthwhile financially.
It ensures that the cost to acquire the resource is balanced by the value gained.
Factors influencing economic viability include:

• Market prices: Demand and supply dynamics directly impact whether it's profitable to extract a resource.
• Extraction costs: Involves expenses linked to labor, technology, and operations.
• Regulatory conditions: Legal restrictions can influence the cost and method of extraction.

Understanding economic viability helps in selecting which resources to prioritize and when to exploit them.