What Are Nonrenewable Resources?

Nonrenewable Resources Explained

An oil derrick drills for crude oil in a field
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Non-renewable resources refer to finite energy sources. Unlike renewable resources, such as wind and solar, non-renewable sources of energy do not replenish quickly or naturally. Our use of them outpaces their ability to restore themselves. 

Let’s further define what resources are non-renewable, and illustrate their significance from economic and environmental perspectives. 

What Are Nonrenewable Resources?

When you use up all that exists of a finite resource, it’s gone and may never come back. From an economic standpoint, this isn’t the end of the story, though.

As we deplete non-renewable resources, there comes a point when it’s no longer financially prudent to do the work to extract and produce them. 

With this in mind, nonrenewable resources are finite energy sources that become increasingly less cost-efficient because we deplete them more quickly than we can reproduce them. In other words, the effort to turn nonrenewables into power becomes so damaging and intensive that the costs become prohibitive and the benefits less evident. 

  • Alternative name: Fossil fuels

Types of Nonrenewable Resources 

Traditional nonrenewable resources include petroleum, natural gas, coal, and nuclear electric power. 

To best understand the different types of nonrenewable resources and America’s domestic energy mix, consider the following chart from the U.S. Energy Information Administration (EIA): 


The U.S. uses fossil fuels, such as petroleum, coal, and natural gas, to generate the majority of its electricity. Fossil fuels are simply the remains of prehistoric plants and animals submerged, for thousands of years, under layers of earth. This process causes fossil fuels we ignite to have a high carbon content. From an environmental standpoint, this is a problem. 

While some natural causes contribute to climate change, they don’t account for what we’re experiencing in terms of rising temperatures around the world. Humans induce climate change in a variety of ways, with carbon emissions—via the burning of fossil fuels—being the main contributor to the warming of the planet. 

According to a National Oceanic and Atmospheric Administration (NOAA) analysis, 2020 was the second hottest year on record, moving 2019 to third place. Across land and oceans, the average temperature in December 2020, was 1.4 degrees higher than the 20th-century average. 

Over the last two decades, the transformation of fossil fuels into energy is responsible for roughly 75% of emissions caused by humans. On the bright side, help to mitigate this problem exists, both now and in the future. 

Alternatives to Nonrenewable Resources

The solution is intuitive. Renewable resources are both the primary alternative to and exact opposite of nonrenewable resources. Renewable resources, also known as “clean energy,” are simply energy sources that replenish themselves and are virtually inexhaustible. They include solar, wind, water, biomass, geothermal, and hydrogen/fuel cells. 

Solar

Energy derived from the sun is one category of renewable resource. Earth has enough solar energy to satisfy the world’s energy requirements by at least 10,000 times. 

Wind 

We generate wind-based energy via wind turbines, which are complex machines made of roughly 8,000 different parts. The higher a wind turbine reaches in the sky, the more energy it can produce, due to generally windier conditions at greater height. 

Water

When we harness flowing water, it’s called hydroelectric power. The kinetic energy produced by water flowing downstream endlessly gets converted into electricity via turbines and generators. 

Biomass

Bioenergy refers to taking biomass—basically plants and other agricultural and forest outputs—and converting it to electricity and biofuels. 

Geothermal 

Deep in the Earth’s surface, pools of hot water exist. To convert this clean resource into energy, we dig wells to bring hot water and steam to the surface, where a variety of methods can be used to generate electricity and other forms of heating and cooling. 

Hydrogen/Fuel Cells

We can produce hydrogen from multiple sources, including natural gas and renewables such as solar and wind. Depending on the source, different methods are employed to turn hydrogen into an energy source. When converted to electricity in a fuel cell, hydrogen only emits water as a byproduct, making it an incredibly clean source of energy.

Future of Renewables 

While renewable resources exist in infinite supply, they don’t generate energy without human intervention. Infrastructure and production systems are required to turn the sun and wind, for example, into usable, reliable energy. As the U.S. Nuclear Regulatory Commission explains, renewable resources “are virtually inexhaustible but limited in the amount of energy that is available per unit of time.”

As the EIA chart above shows, the U.S. generated 11% of its energy via renewable resources in 2019.

The year 2019 marked the first year in more than 130 years that the consumption of renewables as a group surpassed the consumption of coal. It wasn’t by a wide margin, but it highlights the growth of renewables and slow but steady move away from nonrenewable energy sources in this country. 

The EIA forecasts that renewable sources of electricity generation, such as wind and solar, will exceed the use in the U.S. of nuclear and coal for electricity in 2021, and use of natural gas by 2045. By 2050, the EIA projects renewables will account for 38% of domestic energy production, up from 19% in 2019. 

Investment in Renewable Energy

As environmental consciousness increases, there’s increased scrutiny among investors, both institutional and individual, of the types of energy-related stocks that money managers hold in the investors’ portfolios. Investors can easily determine the extent to which mutual funds hold stock in companies focused on non-renewable energy operations. At the same time, it’s possible to find and put money in investments with relatively low or no exposure to fossil fuel companies, as a matter of principle. 

A growing number of “green” mutual funds and exchange-traded funds (ETFs) now exist, as well as green bond options, all of which allow people, pension funds, and other large institutions to invest in climate change solutions

Key Takeaways

  • Nonrenewable energy resources, such as oil and natural gas, are finite and contribute to global warming. 
  • As we deplete nonrenewable resources on earth, they become more expensive to turn into energy. 
  • Increasingly, the U.S. is turning to renewable resources for power, such as solar and wind, that replenish themselves at a rate much closer to the pace at which we consume them.  
  • Investors today have easy access to research that helps identify environmentally friendly assets, along with portfolio holdings more closely tied to fossil fuel production.