Resources: Renewable and Nonrenewable

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Natural resources are materials from the earth that people use to meet their needs. The United States has an unusual abundance of six natural resources: a large landmass, two expansive coastlines, a wide swath of fertile land, abundant fresh water, huge reserves of oil and coal, and a diverse population.

Resources: Renewable and Nonrenewable
Six natural resources give the U.S. economy with a superior advantage.
These include a large landmass, expansive coastlines, fertile land, fresh water, oil and coal, and a diverse population.
Natural resources make up one of the four factors of production necessary for an economy.
Without natural resources, there can be no economy.
Large Landmass
The geography and geology of the United States provided a tremendous comparative advantage in building its economy. Only Australia and Canada have similar-sized landmasses that aren't bordered by enemies. China's and Russia's landmasses are the same size or larger, but are bordered by enemies, making them subject to invasion. The European Union has a similar size, but not one national government.

Note
America's large landmass under one nation allows economies of scale in government and businesses. This lowers the cost of providing services and products.

Coastlines With Shipping Access
America has 95,471 miles of shoreline, including the Great Lakes and outlying U.S. territories and possessions.

The coast contributed $346 billion to the gross domestic product in 2018. It created 3.4 million jobs. These jobs are related to tourism and ocean recreation as well as mineral extraction, boat building, living resources, and marine transportation and construction. The coast created $140 billion in wages for workers.

Countries that are landlocked or have little access to the sea find that both exports and imports are more expensive.

America is fortunate to have a large coastline. Commerce in landlocked countries is dependent upon the whims of another government.

America's large coastline means no hostile governments border it. This allowed the United States to develop peacefully without the need to incur large war costs.

Land for Farming and Agriculture
Unlike Australia and Canada, the United States had temperate climates combined with fertile soil. The early settlers found rich soil on the Great Plains. This is a more than 290,000-square-mile area between the Mississippi River and the Rocky Mountains.

The Plains was a huge basin sculpted out by glaciers during the Great Ice Age. As a result, mountain streams from the Rockies deposited layers of sediment. These streams then cut through the sediment to create plateaus. These large flat areas were untouched by erosion. That created thick sod and productive agriculture.

But the Great Plains is semi-arid, experiencing periodic droughts. The Plains became the breadbasket of the world only after irrigation was put into place. The water came from streams fed by the Rockies.

Water for Agriculture, Life, and More
Lakes, rivers, and streams provide 87% of the water used in America. The electric power industry uses an astonishing 133 billion gallons per day. Water cools electricity-generating equipment, but it is returned. Agricultural irrigation uses 118 billion gallons per day, but it is not returned. Families, businesses, and industries use the rest.

Oil, Coal, and Gas
America has the world's largest reserves of coal. This abundant source of energy helped fuel U.S. growth during the Industrial Revolution. It fueled steamships and steam-powered railroads. After the Civil War, coke, a derivative of coal, was used to fuel the iron blast furnaces that made steel. Soon after that, coal ran the electricity-generating plants.5 It still does for many, although that use is declining.

Unlike Canada's shale oil, the United States had huge reserves of oil that were easily accessible. As World War I brewed, the United States converted its coal-burning Navy ships to oil. That made ships faster, extended their range, and allowed easier refueling. Oil was also easily available on the West Coast, allowing the Navy to extend its reach across the Pacific.

Oil made possible many innovations, including cars, trucks, tanks, submarines, and airplanes. Scientists made trinitrotoluene, known as TNT, out of toluene, which they extracted from oil. The United States supplied more than 80% of Allied requirements during World War I.

After the war, oil supplied the power for the internal combustion engine. It also powered the machinery and petrochemicals needed to boost agricultural production.

Note
In 1920, America supplied two-thirds of the world's oil production.

The number of cars registered increased from 3.4 million in 1916 to 23.1 million in 1929. That allowed America to move away from public transit. By 1925, oil accounted for almost one-fifth of U.S. energy consumption. That grew to one-third by World War II.

Other countries only used oil as secondary fuel. It accounted for less than 10% of their energy consumption. When the giant East Texas oil field was discovered in 1930, overproduction became the main issue facing the oil industry.6

By 1950, those reserves weren't as cheap. Saudi Arabia and other producers in the Middle East supplied oil more cheaply than U.S. fields could. By 2005, 60% of the oil used in the United States was imported.

In 2011, oil prices were high enough to fund low-cost exploration of U.S. shale oil.7 By 2020, the U.S. became a net petroleum exporter for the first time since 1949.8

A Unique Labor Force
America has 44.9 million immigrants, comprising 13.7% of its population by 2019.9 Most of the people who came to the U.S. throughout its history have had the courage and flexibility needed to survive in a new country. They helped create an innovative culture.

How Resources Support the Economy
Natural resources are one of the four factors of production that are necessary for an economy to begin producing goods. The other three are capital, entrepreneurship, and labor. Capital is the machinery, equipment, and chemicals used in production. Entrepreneurship is the drive to develop an idea into a business. Labor is the workforce.

In a market economy, these components provide the supply that meets the demand from consumers.

Natural resources are categorized into two types. The first, renewable resources, are those that are used at a slower rate than they are replaced. These include water, wind, and the sun. Two categories, plants and animals, are considered renewable even though we may be entering the sixth mass extinction.

The second, nonrenewable resources, are those that humanity uses faster than nature can replenish them. These include crude oil, coal, and natural gas, as well as minerals. The sun could be considered a nonrenewable resource because, one day, it will burn out. But most people put it in the renewable category since that won't be for another 5 billion years.

The United States has an affluence of both renewable and nonrenewable natural resources. Most important is its diverse population of different cultures which bring fresh ideas and innovation to business endeavors. These advantages have enabled America to become a major global economic power.

How are U.S. natural resources a source of power?
U.S. natural resources such as coal, oil, and even wind and sun provide literal power in the form of energy generation. But ownership of natural resources provides another sort of power: political, social, and economic power. In the U.S., natural resources can be owned by the government and private individuals. This ownership confers power in the form of wealth and influence.

How much U.S. natural resources are left?
In the U.S., some resources are able to be renewed, such as crops and livestock, as well as solar and wind power. But the nonrenewable resources are finite. Experts from Stanford University have estimated the remaining fossil fuels could be used up in decades: 30 years for oil, 40 years for gas, and 70 years for coal