The Golden State

The forty-niners with their pickaxes and burros may be long gone from the California landscape, but folks still pull gold out of the ground here in the Golden State. There’s a mining company from Vancouver, B.C. called Kore that has two potential California projects on their website. One is on the east slope of the Sierras in Long Valley, Mono County. The other is in the Sonoran desert of Imperial County, not far from the Arizona line.

A million tons of earth contains ten pounds of gold. At least, that’s roughly the frequency at which gold is distributed in the crust. It’s not uniform, of course. Gold occurs in concentrated deposits of which the famous Mother Lode is an example.

These days gold mining is done on the surface in giant pits. Much safer for the miners and much more profitable for the companies. Here’s the interesting thing: they only need one gram of gold per ton of ore to make it work.

Here’s a gram of gold, the smallest investment you can make in bullion:

cambi-bar

A ton of ore is about 13 cubic feet or roughly 100 gallons of rock. Can you picture that? Two of those big 55-gallon oil drums. Twenty 5-gallon paint buckets. That’s how much rock you have to process in order to get the amount of gold you see in the picture.

It doesn’t seem like a lot of rock, but the Imperial project mentioned above is supposed to produce around a million troy ounces which is thirty million grams! So that’s thirty million tons of ore to process. Three thousand million gallons of rock—that’s three billion—has to be crushed and treated on-site. Mostly the stuff is piled up on top of a clay layer and some plastic and sprinkled with a cyanide solution. That reacts with the gold and the effluent is collected and the gold bits extracted via some process like carbon adsorption. Cyanide heap leaching, as the process is called, also works for silver. Copper, nickel, and uranium are also extracted using heap leaching but with sulfuric acid instead of cyanide.

They have mining trucks that can carry 200-400 tons of ore in one load. I saw haulers like that when I toured the McLaughlin Mine, the tires alone are mind-boggling. That mine, located at the intersection of Napa, Yolo, and Lake Counties produced 3.5 million troy ounces (that’s over 100 million grams) from 1985-2002. There are 38 million tons of mill tailings from that project and that does not include the overburden and material that was moved but not processed. You can’t make low-grade ores work financially unless you can deal with massive quantities of them.

Speaking of massive quantities, one of the biggest open-pit mines in the world is just outside Salt Lake City. The Rio Tinto/Kennecott Bingham Canyon Mine is two-and-a-half miles wide and half a mile deep. That is a really big hole in the ground! It has been operating for 100 years.

If you can’t grow it then you have to mine it. Californians are lucky that much of the (non-fuel) mineral wealth of their state is located in remote places like deserts and high mountains. The extraction of minerals from the earth is usually not pretty. But if we want to stay golden we have to keep digging.

Keep it in the ground?

California oil production is half of what it was thirty years ago. In 1985 the Golden State produced about a million barrels of crude oil per day. In 2018 that number dropped below 500,000. California is the largest consumer of gasoline and jet fuel in the nation as well as the second-largest consumer of all petroleum products. The state ranks third in refining capacity and accounts for one-tenth of all crude oil refining in the country.

Domestic production is declining but the population continues to grow. In 1985 there were 27 million of us and now there are almost 40 million and we have about 15 million cars. That means we have to import more oil. In fact, about half of the oil refined in California comes from foreign sources. Here’s a chart:

foreign_oil_sources2018

Those are some charming places. Angola? Really? And do we have to get in bed with the Saudi Arabians? At least we are buying oil from Colombia instead of just cocaine. This chart does not include oil from Alaska, of course. Here’s another chart:

crude_oil_receipts

The Trans-Alaska Pipeline starting flowing in 1977, the year I graduated from high school. There is a large shipping and refining infrastructure in the Bay Area and Alaskan crude was a big part of that. Many of the refineries near where I grew up relied on regular deliveries via tanker from Alaska. We also get a lot of oil by rail, particularly from North Dakota, New Mexico, and Wyoming.

California sees itself as a leader in fighting climate change. We are a very green place, man. We lead the nation in solar energy, for example. That’s good. We need action on global carbon emissions. The problem is that we consume a lot of fossil fuels. Still. And we will continue to do that. Natural gas is an important fuel for home heating and cooking and gas turbines supply about one-third of our electricity. We use a lot of hydrocarbon products, just like all Americans and those of us lucky enough to live in wealthy, developed countries.

There’s a movement afoot that wants to keep fossil fuels “in the ground.” The assumption is that will lead to lower greenhouse gas emissions. In other words if you don’t drill for it then you can’t burn it, and if you can’t burn it you won’t pollute.

The problem is that crude oil resources are ubiquitous. They are located all over the world in all kinds of places like the North Sea, Nigeria, Malaysia, Canada, Guyana, Qatar, the Arctic, you name it. What happens is that if the supply is reduced or curtailed in one locale another will pick up the slack. Oil demand is robust because people need the stuff. If Californians don’t like oil exploration and development in their back yard that’s OK because they can buy it from somewhere else.

And as you can see that is exactly what is happening. We have a stable society in California. We have laws and a functioning legal system. We have a representative democracy. This means that citizens can actually impact policy decisions and can counter-balance, somewhat, the enormous political power of corporations. Much is made of the influence of the oil and gas industry on the Office of the Governor and the State Legislature. That may be so, but it is also clear that the “voice of the people” is having an impact. There’s substantial political momentum in the state for new restrictions on the fossil fuel folks, reducing or even eliminating new oil wells, pipelines, and other such infrastructure.

If we don’t dig it up, we won’t use it, right?

Wrong. We will just buy it from other places. You can see those other places—do you think they do as much as California does to regulate their oil industry? Do you think they do a better job with environmental laws, public health monitoring, and employee workplace protections? I don’t.

Californians have already indicated their hostility to one power source that could help us with our energy transition to cleaner fuels: nuclear. There aren’t going to be any new nuke plants in the state anytime soon, in fact, the whole country has mostly soured on atomic energy (with the exception of the US Navy, of course). We are blessed with a well-developed hydro-power network but that source can’t really grow. We are going “all-in” on solar and the mild, sunny climate helps with that, but that source can’t help the transportation and manufacturing sectors. Those need oil, and will continue to need oil.

So, we can drill our own or we can buy it from Mexico, Iraq, Ecuador and other places.

You decide.

Boring

Elon Musk used to be an interesting character. Certainly all the SpaceX stuff is very dramatic and exciting, not to mention even somewhat useful, if only to serve as a model for possible modes of space exploration. Tesla looks like an interesting venture but the business woes seem to keep piling up for the company. The mainstreaming of EVs is bound to happen at some point and I’ll give Tesla credit for giving it a shot regardless of the outcome.

But now we are on to Boring. Yes, The Boring Company, one of Musk’s other ventures. It digs holes. Tunnels, actually. There’s not much you can do with tunnels, but Musk is convinced that this sort of thing requires his particular brand of “disruption” and “innovation” which are the Silicon Valley Cult’s two favorite words.

Neither SpaceX nor Tesla invents anything new. Rocket technology has not changed much since the 1950s and electric vehicles have well-known, well-established engineering constraints. Musk’s gift seems to be to find more efficient and economical ways to do these things. Though it should be noted that SpaceX is privately-held and thus little is really known about its financial health. And Tesla’s stock is volatile in the extreme and appears to this market amateur to be insanely over-priced.

I want Tesla to succeed. We need EVs and other such solutions. But I’m wary. I’m tired of the hoopla. After all, the first four letters of Hyperloop spell “hype.” And there’s too much hype with Musk.

Case in point: Boring. They claim they can build tunnels cheaper than anyone else and then fill them with electric vehicles (Teslas!) and “revolutionize” transportation. I neglected to mention “revolutionize” in my list of the Silicon Valley Cult’s favorite words.

The problem, if you look at this stuff with a critical eye, is that it is mostly crap. I know it is exciting to ride the coattails of a billionaire while he “re-imagines” (there’s another for the list) our future. But my goodness does anyone really believe he can dig tunnels ten times better than the next guy? And even if he could, would stuffing them with Teslas actually do a better job of moving people than existing transit systems? If you look at the numbers the answer is unequivocally “no.”

And let’s not get started on Hyperloop. There are existing maglev trains that go 200 mph! Do we really think maglev trains in a vacuum tube is that significant of an innovation even if it were possible? It certainly is not practical, but practical doesn’t play well in the Silicon Valley Cult culture, where the pronouncements of futurists and other bullshit artists are treated like sacred scripture.

These days Elon Musk sounds a lot less like his hero Nikola Tesla and more like P.T. Barnum. That’s too bad because the world needs creative, intelligent people to tackle our many problems. But some of those problems don’t need bored billionaires bullshitting local governments into buying their goofy schemes. Public transit systems actually work. They move people around. They could be better, but that is mostly due to a lack of commitment. We don’t have the political stamina to invest in these things. The wealthy decision-makers in our country don’t ride BART or Amtrak or the MTA or any of those things. They wouldn’t be caught dead on a public bus system. But the rest of us need our governments to believe in public transit systems and do the mostly dull work of revitalizing them and keeping them healthy and effective for today and tomorrow.

Silicon Valley’s response is to give us Uber and Lyft which did a great job of destroying the taxicab industry and adding thousands of additional private vehicles to already traffic-choked streets. Neither of these companies makes money! When drivers for Uber and Lyft start charging fees that actually cover expenses for the company and deliver proper wages to the employees (er, I mean “contractors”) then fewer people will use them. Revenues will decline and stock values will plummet. But don’t tell that to the IPO-obsessed public! They can’t wait to get in on the ground floor and become full-fledged Silicon Valley Cult members.

I’m not a Luddite or techno-phobe. Just the opposite. I have faith in human ingenuity. I just think people should not be afraid to yell “bullshit” when bullshit is coming at them, even if it is coming from rich guys and other celebrities.