Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
unless God intervenes all man will perish
Peak Gold and Peak Platinum?
Wednesday, July 20, 2011
http://ergobalance.blogspot.com/2011/07/peak-gold-and-peak-platinum.html
On the BBC News programme this morning (http://news.bbc.co.uk/1/hi/programmes/breakfast) I noted mention that there is thought to be enough recoverable gold to fill "three Olympic sized swimming pools"(OSSP) and enough platinum to occupy one such volume "up to your ankles". According to FINA (Fédération Internationale de Natation), the body recognised by the International Olympic Committee for administering international competition in the aquatic sports, an OSSP has at least a length of 50 m, a width of 25 m and a depth of 2 m, making a volume of 2,500 m^3.
Now, this does place a tangibly illustrative physical dimension on how much of these metals might be available.
In the case of gold, we may deduce that there are 3 x 2,500 m^3 x 19.3 t/m^3 = 144,750 tonnes recoverable.
In the case of platinum, the sum may run something like 2,500 m^3 x 21.45 t/m^3 x ("up to my ankles", say 4 inches, or 0.1 m/2 m) = 2681.25 tonnes recoverable.
The value for platinum shocks me, as I had heard there were maybe 36,000 tonnes recoverable, but I have found an interesting analysis (http://www.platinum.matthey.com/production/resources-in-south-africa/) which places the issues of resources and reserves into perspective. This report concludes there are "estimated proven and probable reserves of platinum at 203.3 million troy ounces, (6,323 tonnes)"... plus... " In addition to these reserves, inferred resources were estimated at 939 million troy ounces (29,206 tonnes) of platinum." So, taken together, this is about the amount I had understood existed.
However, the bulk of this is likely to be got at far reduced EROEI, and greater difficulty/cost, though a more valuable product will urge more assiduous efforts to produce it. If one does the sum in reverse, i.e. 2m x 6,363 t/(2,500 x 21.45) = 0.24 m, I deduce that the OSSP would be filled with platinum to about nine and a half inches up my leg, which is about half way up my calf, and well above my ankles.
But how much gold is there? According to the USGS (http://oilprice.com/Metals/Gold/Recoverable-Gold-Resources-to-Run-Out-in-20-Years.html) there are 51,000 tonnes, which is more like one OSSP, rather than three. I have seen estimates that maybe up to half a million tonnes of gold might be recovered, but the quality of gold ore is falling. In 1960, one tonne of gold ore yielded 2.86 grams of gold, but by 2000 only 1.37 grams of gold were recovered per tonne. The most recent gold ore discoveries are yielding less than one gram per tonne. Thus, the situation is like oil, that most of the easily-had stuff has been had, and more energy and resources (reflected in the falling EROEI) must be expended to recover and process a poorer quality material.
In making Jewellery, the highly resistant nature of Gold and Platinum symbolises eternity, e.g. in wedding-rings. However, gold and the platinum group metals (PGM) have many important practical uses. Gold finds increasing application in the circuitry of computers, while platinum, rhodium, palladium and rhenium provide catalysts, e.g. in catalytic converters, fuel-cells, and the production of synthetic fertilizers. If the supply of these metals will fail demand for them, many central and projected technologies for communications, transport and food production must be re-thought.
Oceans on brink of catastrophe
Marine life facing mass extinction 'within one human generation' / State of seas 'much worse than we thought', says global panel of scientists
By Michael McCarthy, Environment Editor
Tuesday, 21 June 2011
http://www.independent.co.uk/environment/nature/oceans-on-brink-of-catastrophe-2300272.html
Print
Email
Text Size Normal
Large
Extra Large
Sylvia Earle: If the sea is in trouble, we are all in trouble
Tuesday, 21 June 2011
http://www.independent.co.uk/opinion/commentators/sylvia-earle-if-the-sea-is-in-trouble-we-are-all-in-trouble-2300273.html
The report that the ocean is in trouble is no surprise. What is shocking is that it has taken so long for us to make the connection between the state of the ocean and everything we care about – the economy, health, security – and the existence of life itself.
If the ocean is in trouble – and it is – we are in trouble. Charles Clover pointed this out in The End of the Line, and Callum Roberts provided detailed documentation of the collapse of ocean wildlife – and the consequences – in The Unnatural History of the Sea.
Since the middle of the 20th century, more has been learnt about the ocean than during all preceding human history; at the same time, more has been lost. Some 90 per cent of many fish, large and small, have been extracted. Some face extinction owing to the ocean's most voracious predator – us.
We are now appearing to wage war on life in the sea with sonars, spotter aircraft, advanced communications, factory trawlers, thousands of miles of long lines, and global marketing of creatures no one had heard of until recent years. Nothing has prepared sharks, squid, krill and other sea creatures for industrial-scale extraction that destroys entire ecosystems while targeting a few species.
The concept of "peak oil" has penetrated the hearts and minds of people concerned about energy for the future. "Peak fish" occurred around the end of the 1980s. As near-shore areas have been depleted of easy catches, fishing operations have gone deeper, further offshore, using increasingly sophisticated – and environmentally costly – methods of capture.
The concern is not loss of fish for people to eat. Rather, the greatest concern about destructive fishing activities of the past century, especially the past several decades, is the dismemberment of the fine-tuned ocean ecosystems that are, in effect, our life-support system.
Photosynthetic organisms in the sea yield most of the oxygen in the atmosphere, take up and store vast amounts of carbon dioxide, shape planetary chemistry, and hold the planet steady.
The ocean is a living system that makes our lives possible. Even if you never see the ocean, your life depends on its existence. With every breath you take, every drop of water you drink, you are connected to the sea.
I support this report and its calls to stop exploitative fishing –especially in the high seas – map and reduce pollution and reduce greenhouse gas emissions. But I would add three other actions.
First, only 5 per cent of the ocean has been seen, let alone mapped or explored. We know how to exploit the sea. Should we not first go see what is there?
Second, it is critically important to protect large areas of the ocean that remain in good condition – and guard them as if our lives depend on them, because they do. Large marine-protected areas would provide an insurance policy – and data bank – against the large-scale changes now under way, and provide hope for a world that will continue to be hospitable for humankind.
Third, take this report seriously. It should lift people from complacency to positive action – itself cause for hope.
Sylvia Earle is 'National Geographic' explorer in residence, the author of 'The World is Blue: How Our Fate and the Oceans Are One', and the former chief scientist for the US National Oceanic and Atmospheric Administration
Jeremy Grantham: The Days Of Abundant Resources And Falling Prices Are Over
The Oil Drum|Apr. 30, 2011, 6:47 AM|8,628|13
http://www.businessinsider.com/heres-why-the-days-of-abundant-resources-and-falling-prices-are-over-2011-4?op=1
Below is an essay by Jeremy Grantham, the Chief Investment Officer of GMO Capital (with over $106 billion in assets under management). Normally, we wouldn't highlight an investment firm's quarterly newsletter, but when one of the world's largest asset managers articulates the same themes that have been debated on The Oil Drum for the past 6 years, such a watershed for biophysical awareness deserves to be highlighted.
Grantham's essay catalogues many of the issues related to resource depletion in a no-nonsense and urgent tone, yet with an odd juxtaposition - he is saying these things about limits, resource constraints, and human behavior as the head of a firm whose objective it is to increase financial capital. I expect his message will fall on deaf ears within the industry, but as has oft been pointed out here, in order to create change, we all have to start speaking a common language. This piece is a positive step in that direction.
Mr. Grantham began his investment career as an economist with Royal Dutch Shell and earned his undergraduate degree from the University of Sheffield (U.K.) and an M.B.A. from Harvard Business School. His essay, reformatted for TOD, is below the fold.
Introduction
The purpose of this, my second (and much longer) piece on resource limitations, is to persuade investors with an interest in the long term to change their whole frame of reference: to recognize that we now live in a different, more constrained, world in which prices of raw materials will rise and shortages will be common. (Previously, I had promised to update you when we had new data. Well, after a lot of grinding, this is our first comprehensive look at some of this data.)
Accelerated demand from developing countries, especially China, has caused an unprecedented shift in the price structure of resources: after 100 hundred years or more of price declines, they are now rising, and in the last 8 years have undone, remarkably, the effects of the last 100-year decline! Statistically, also, the level of price rises makes it extremely unlikely that the old trend is still in place. If I am right, we are now entering a period in which, like it or not, we must finally follow President Carter’s advice to develop a thoughtful energy policy and give up our carefree and careless ways with resources.
The quicker we do this, the lower the cost will be. Any improvement at all in lifestyle for our grandchildren will take much more thoughtful behavior from political leaders and more restraint from everyone. Rapid growth is not ours by divine right; it is not even mathematically possible over a sustained period. Our goal should be to get everyone out of abject poverty, even if it necessitates some income redistribution. Because we have way overstepped sustainable levels, the greatest challenge will be in redesigning lifestyles to emphasize quality of life while quantitatively reducing our demand levels.
A lower population would help. Just to start you off, I offer Exhibit 1: the world’s population growth. X marks the spot where Malthus wrote his defining work. Y marks my entry into the world. What a surge in population has occurred since then! Such compound growth cannot continue with finite resources. Along the way, you are certain to have a paradigm shift. And, increasingly, it looks like this is it!
Malthus and Hydrocarbons
Malthus’ writing in 1798 was accurate in describing the past – the whole multi-million year development of our species. For the past 150,000 years or so, our species has lived, pushed up to the very limits of the available food supply. A good rainy season, and food is plentiful and births are plentiful. A few tough years, and the population shrinks way back. It seems likely, in fact, that our species came close to extinction at least once and perhaps several times. This complete link between population and food supply was noted by Malthus, who also noticed that we have been blessed, or cursed, like most other mammals, with a hugely redundant ability to breed.
When bamboo blooms in parts of India every 30 years or so, it produces a huge increase in protein, and the rat population – even more blessed than we in this respect – apparently explodes to many times its normal population; then as the bamboo’s protein bounty is exhausted, the rat population implodes again, but not before exhibiting a great determination to stay alive, reflected in the pillaging of the neighboring villages of everything edible.
What hydrocarbons are doing to us is very similar. For a small window of time, about 250 years (starting, ironically, just in time to make Malthus’ predictions based on the past look ridiculously pessimistic), from 1800 to, say, 2050, hydrocarbons partially removed the barriers to rapid population growth, wealth, and scientific progress. World population will have shot up from 1 to at least 8, and possibly 11, billion in this window, and the average per capita income in developed countries has already increased perhaps a hundred-fold (from $400 a year to $40,000). Give or take.
As I wrote three years ago, this growth process accelerated as time passed. Britain, leading the charge, doubled her wealth in a then unheard of 100 years. Germany, starting later, did it in 80 years, and so on until Japan in the 20th century doubled in 20 years, followed by South Korea in 15. But Japan had only 80 million people and South Korea 20 million back then. Starting quite recently, say, as the Japanese surge ended 21 years ago, China, with nearly 1.3 billion people today, started to double every 10 years, or even less. India was soon to join the charge and now, officially, 2.5 billion people in just these two countries – 2.5 times the planet’s entire population in Malthus’ time – have been growing their GDP at a level last year of over 8%. This, together with a broad-based acceleration of growth in smaller, developing countries has changed the world. In no way is this effect more profound than on the demand for resources. If I am right in this assumption, then when our finite resources are on their downward slope, the hydrocarbon-fed population will be left far above its sustainable level; that is, far beyond the Earth’s carrying capacity. How we deal with this unsustainable surge in demand and not just “peak oil,” but “peak everything,” is going to be the greatest challenge facing our species. But whether we rise to the occasion or not, there will be some great fortunes made along the way in finite resources and resource efficiency, and it would be sensible to participate.
Finite Resources
Take a minute to reflect on how remarkable these finite resources are! In a sense, hydrocarbons did not have to exist. On a trivially different planet, this incredible, dense store of the sun’s energy and millions of years’ worth of compressed, decayed vegetable and animal matter would not exist. And as for metals, many are scarce throughout the universe and became our inheritance only through the death throes of other large stars. Intergalactic mining does not appear in so many science fiction novels for nothing. These are truly rare elements, ultimately precious, which, with a few exceptions like gold, are used up by us and their remnants scattered more or less uselessly around. Scavenging refuse pits will no doubt be a feature of the next century if we are lucky enough to still be in one piece. And what an irony if we turned this inheritance into a curse by having our use of it alter the way the environment fits together. After millions of years of trial and error, it had found a stable and admirable balance, which we are dramatically disturbing.
To realize how threatening it would be to start to run out of cheap hydrocarbons before we have a renewable replacement technology, we have only to imagine a world without them. In 17th and 18th century Holland and Britain, there were small pockets of considerable wealth, commercial success, and technological progress. Western Europe was just beginning to build canals, a huge step forward in transportation productivity that would last 200 years and leave some canals that are still in use today. With Newton, Leibniz, and many others, science, by past standards, was leaping forward. Before the world came to owe much to hydrocarbons, Florence Nightingale – a great statistician, by the way – convinced the establishment that cleanliness would save lives. Clipper ships were soon models of presteam technology. A great power like Britain could muster the amazing resources to engage in multiple foreign wars around the globe (not quite winning all of them!), and all without hydrocarbons or even steam power. Population worldwide, though, was one-seventh of today’s population, and life expectancy was in the thirties.
But there was a near fatal flaw in that world: a looming lack of wood. It was necessary for producing the charcoal used in making steel, which in turn was critical to improving machinery – a key to progress. (It is now estimated that all of China’s wood production could not even produce 5% of its current steel output!) The wealth of Holland and Britain in particular depended on wooden sailing ships with tall, straight masts to the extent that access to suitable wood was a major item in foreign policy and foreign wars. Even more important, wood was also pretty much the sole producer of energy in Western Europe.
Not surprisingly, a growing population and growing wealth put intolerable strains on the natural forests, which were quickly disappearing in Western Europe, especially in England, and had already been decimated in North Africa and the Near East. Wood availability was probably the most limiting factor on economic growth in the world and, in a hydrocarbonless world, the planet would have hurtled to a nearly treeless state. Science, which depended on the wealth and the surpluses that hydrocarbons permitted, would have proceeded at a much slower speed, perhaps as little as a third of its actual progress.
Thus, from 1800 until today science might have advanced to only 1870 levels, and, even then, advances in medicine might have exceeded our ability to feed the growing population. And one thing is nearly certain: in such a world, we would either have developed the discipline to stay within our ability to grow and protect our tree supply, or we would eventually have pulled an Easter Island, cutting down the last trees and then watching, first, our quality of life decline and then, eventually, our population implode. Given our current inability to show discipline in the use of scarce resources, I would not have held my breath waiting for a good outcome in that alternative universe.
But in the real world, we do have hydrocarbons and other finite resources, and most of our current welfare, technology, and population size depends on that fact. Slowly running out of these resources will be painful enough. Running out abruptly and being ill-prepared would be disastrous.
The Great Paradigm Shift: from Declining Prices...
The history of pricing for commodities has been an incredibly helpful one for the economic progress of our species: in general, prices have declined steadily for all of the last century. We have created an equal-weighted index of the most important 33 commodities. This is not designed to show their importance to the economy, but simply to show the average price trend of important commodities as a class. The index shown in Exhibit 2 starts 110 years ago and trends steadily downward, in apparent defiance of the ultimately limited nature of these resources. The average price falls by 1.2% a year after inflation adjustment to its low point in 2002. Just imagine what this 102-year decline of 1.2% compounded has done to our increased wealth and well-being. Despite digging deeper holes to mine lower grade ores, and despite using the best land first, and the best of everything else for that matter, the prices fell by an average of over 70% in real terms. The undeniable law of diminishing returns was overcome by technological progress – a real testimonial to human inventiveness and ingenuity.
But the decline in price was not a natural law. It simply reflected that in this particular period, with our particular balance of supply and demand, the increasing marginal cost of, say, 2.0% a year was overcome by even larger increases in annual productivity of 3.2%. But this was just a historical accident. Marginal rates could have risen faster; productivity could have risen more slowly. In those relationships we have been lucky. Above all, demand could have risen faster, and it is here, recently, that our luck has begun to run out.
… to Rising Prices
Just as we began to see at least the potential for peak oil and a rapid decline in the quality of some of our resources, we had the explosion of demand from China and India and the rest of the developing world. Here, the key differences from the past were, as mentioned, the sheer scale of China and India and the unprecedented growth rates of developing countries in total. This acceleration of growth affected global demand quite suddenly. Prior to 1995, there was (remarkably, seen through today’s eyes) no difference in aggregate growth between the developing world and the developed world. And, for the last several years now, growth has been 3 to 1 in their favor!
The 102 years to 2002 saw almost each individual commodity – both metals and agricultural – hit all-time lows. Only oil had clearly peeled off in 1974, a precursor of things to come. But since 2002, we have the most remarkable price rise, in real terms, ever recorded, and this, I believe, will go down in the history books. Exhibit 2 shows this watershed event. Until 20 years ago, there were no surprises at all in the sense that great unexpected events like World War I, World War II, and the double inflationary oil crises of 1974 and 1979 would cause prices to generally surge; and setbacks like the post-World War I depression and the Great Depression would cause prices to generally collapse.
Much as you might expect, except that it all took place around a downward trend. But in the 1990s, things started to act oddly. First, there was a remarkable decline for the 15 or so years to 2002. What description should be added to our exhibit? “The 1990’s Surge in Resource Productivity” might be one. Perhaps it was encouraged by the fall of the Soviet bloc. It was a very important but rather stealthy move, and certainly not one that was much remarked on in investment circles. It was as if lower prices were our divine right. And more to the point, what description do we put on the surge from 2002 until now? It is far bigger than the one caused by World War II, happily without World War III. My own suggestion would be “The Great Paradigm Shift.”
The primary cause of this change is not just the accelerated size and growth of China, but also its astonishingly high percentage of capital spending, which is over 50% of GDP, a level never before reached by any economy in history, and by a wide margin. Yes, it was aided and abetted by India and most other emerging countries, but still it is remarkable how large a percentage of some commodities China was taking by 2009. Exhibit 3 shows that among important non-agricultural commodities, China takes a relatively small fraction of the world’s oil, using a little over 10%, which is about in line with its share of GDP (adjusted for purchasing parity). The next lowest is nickel at 36%. The other eight, including cement, coal, and iron ore, rise to around an astonishing 50%! In agricultural commodities, the numbers are more varied and generally lower: 17% of the world’s wheat, 25% of the soybeans (thank Heaven for Brazil!) 28% of the rice, and 46% of the pigs. That’s a lot of pigs!
Optimists will answer that the situation that Exhibit 3 describes is at worst temporary, perhaps caused by too many institutions moving into commodities. The Monetary Maniacs may ascribe the entire move to low interest rates. Now, even I know that low rates can have a large effect, at least when combined with moral hazard, on the movement of stocks, but in the short term, there is no real world check on stock prices and they can be, and often are, psychologically flakey. But commodities are made and bought by serious professionals for whom today’s price is life and death. Realistic supply and demand really is the main influence.
Exhibit 4 shows how out of line with their previous declining trends most commodities are. We have stated this in terms of standard deviations, but for most of us, certainly including me, a probabilistic – 1-in-44-year event, etc. – is more comprehensible. GMO’s extended work on asset bubbles now covers 330 completed bubbles, including even quite minor ones. These bubbles have occurred only 30% or so more than would be expected in a perfectly random world. In a world where black swans are becoming very popular, this is quite a surprise.
Exhibit 4 is headed by iron ore. It has a 1 in 2.2 million chance that it is still on its original declining price trend. Now, with odds of over a million to one, I don’t believe the data. Except if it’s our own triple-checked data. Then I don’t believe the trend! The list continues: coal, copper, corn, and silver … a real cross section and all in hyper bubble territory if the old trends were still in force. And look at the whole list: twelve over 3-sigma, eleven others in 2-sigma territory (which we have always used as the definition of a bubble), four more on the cusp at 1.9, two more over 1.0, and three more up. Only four are down, three of which are insignificantly below long-term trend, and the single outlier is not even an economic good – it’s what could be called an economic “bad” – tobacco. This is an amazing picture and it is absolutely not a reflection of general investment euphoria. Global stocks are pricey but well within normal ranges, and housing is mixed. But commodities are collectively worse than equities (S&P 500) were in the U.S. in the tech bubble of 2000! If you believe that commodities are indeed on their old 100-year downward trend, then their current pricing is collectively vastly improbable. It is far more likely that for most commodities the trend has changed, just as it did for oil back in 1974, as we’ll see later.
Aware of the finite nature of our resources, a handful of economists had propounded several times in the past (but back in the 1970s in particular) the theory that our resources would soon run out and prices would rise steadily. Their work, however, was never supported by any early warning indicators (read: steadily rising prices) that, in fact, this running out was imminent. Quite the reverse. Prices continued to fall. The bears’ estimates of supply and demand were also quite wrong in that they continuously underestimated cheap supplies. But now, after more than another doubling in annual demand for the average commodity and with a 50% increase in population, it is the price signals that are noisy and the economists who are strangely quiet. Perhaps they have, like premature bears in a major bull market, lost their nerve.
Why So Little Fuss?
I believe that we are in the midst of one of the giant inflection points in economic history. This is likely the beginning of the end for the heroic growth spurt in population and wealth caused by what I think of as the Hydrocarbon Revolution rather than the Industrial Revolution. The unprecedented broad price rise would seem to confirm this. Three years ago I warned of “chain-linked” crises in commodities, which have come to pass, and all without a fully fledged oil crisis. Yet there is so little panicking, so little analysis even. I think this paradox exists because of some unusual human traits.
The Problem with Humans
As a product of hundreds of thousands, if not millions, of years of trial and error, it is perhaps not surprising that our species is excellent at many things. Bred to survive on the open savannah, we can run quite fast, throw quite accurately, and climb well enough. Above all, we have excellent spatial awareness and hand/eye coordination. We are often flexible and occasionally inventive.
For dealing with the modern world, we are not, however, particularly well-equipped. We don’t seem to deal well with long horizon issues and deferring gratification. Because we could not store food for over 99% of our species’ career and were totally concerned with staying alive this year and this week, this is not surprising. We are also innumerate. Our typical math skills seem quite undeveloped relative to our nuanced language skills. Again, communication was life and death, math was not. Have you not admired, as I have, the incredible average skill and, perhaps more importantly, the high minimum skill shown by our species in driving through heavy traffic? At what other activity does almost everyone perform so well? Just imagine what driving would be like if those driving skills, which reflect the requirements of our distant past, were replaced by our average math skills!
We also became an optimistic and overconfident species, which early on were characteristics that may have helped us to survive and today are reaffirmed consistently by the new breed of research behaviorists. And some branches of our culture today are more optimistic and overconfident than others. At the top of my list would be the U.S. and Australia. In a well-known recent international test,1 U.S. students came a rather sad 28/40 in math and a very mediocre eighteenth in language skills, but when asked at the end of the test how well they had done in math, they were right at the top of the confidence list. Conversely, the Hong Kongers, in the #1 spot for actual math skills, were averagely humble in their expectations.
Fortunately, optimism appears to be a real indicator of future success. A famous Harvard study in the 1930s found that optimistic students had more success in all aspects of their early life and, eventually, they even lived longer. Optimism likely has a lot to do with America’s commercial success. For example, we attempt far more ventures in new technologies like the internet than the more conservative Europeans and, not surprisingly, end up with more of the winners.
But optimism has a downside. No one likes to hear bad news, but in my experience, no one hates it as passionately as the U.S. and Australia. Less optimistic Europeans and others are more open to gloomy talk. Tell a Brit you think they’re in a housing bubble, and you’ll have a discussion. Tell an Australian, and you’ll have World War III. Tell an American in 1999 that a terrible bust in growth stocks was coming, and he was likely to have told you that you had missed the point, that 65 times earnings was justified by the Internet and other dazzling technology, and, by the way, please stay out of my building in the future.
This excessive optimism has also been stuck up my nose several times on climate change, where so many otherwise sensible people would much prefer an optimistic sound bite from Fox News than to listen to bad news, even when clearly realistic. I have heard several brilliant contrarian financial analysts, siding with climate skeptics, all for want of, say, 10 or 12 hours of their own serious analysis. My complete lack of success in stirring up interest in our resource problems has similarly impressed me: it was like dropping reports into a black hole. Finally, in desperation, we have ground a lot of data and, the more we grind, the worse, unfortunately, it looks.
Failure to Appreciate the Impossibility of Sustained Compound Growth
I briefly referred to our lack of numeracy as a species, and I would like to look at one aspect of this in greater detail: our inability to understand and internalize the effects of compound growth. This incapacity has played a large role in our willingness to ignore the effects of our compounding growth in demand on limited resources. Four years ago I was talking to a group of super quants, mostly PhDs in mathematics, about finance and the environment. I used the growth rate of the global economy back then – 4.5% for two years, back to back – and I argued that it was the growth rate to which we now aspired.
To point to the ludicrous unsustainability of this compound growth I suggested that we imagine the Ancient Egyptians (an example I had offered in my July 2008 Letter) whose gods, pharaohs, language, and general culture lasted for well over 3,000 years. Starting with only a cubic meter of physical possessions (to make calculations easy), I asked how much physical wealth they would have had 3,000 years later at 4.5% compounded growth. Now, these were trained mathematicians, so I teased them: “Come on, make a guess. Internalize the general idea. You know it’s a very big number.” And the answers came back: “Miles deep around the planet,” “No, it’s much bigger than that, from here to the moon.”
Big quantities to be sure, but no one came close. In fact, not one of these potential experts came within one billionth of 1% of the actual number, which is approximately 1057, a number so vast that it could not be squeezed into a billion of our Solar Systems. Go on, check it. If trained mathematicians get it so wrong, how can an ordinary specimen of Homo Sapiens have a clue? Well, he doesn’t. So, I then went on. “Let’s try 1% compound growth in either their wealth or their population,” (for comparison, 1% since Malthus’ time is less than the population growth in England). In 3,000 years the original population of Egypt – let’s say 3 million – would have been multiplied 9 trillion times!
There would be nowhere to park the people, let alone the wealth. Even at a lowly 0.1% compound growth, their population or wealth would have multiplied by 20 times, or about 10 times more than actually happened. And this 0.1% rate is probably the highest compound growth that could be maintained for a few thousand years, and even that rate would sometimes break the system. The bottom line really, though, is that no compound growth can be sustainable. Yet, how far this reality is from the way we live today, with our unrealistic levels of expectations and, above all, the optimistic outcomes that are simply assumed by our leaders. Now no one, in round numbers, wants to buy into the implication that we must rescale our collective growth ambitions.
I was once invited to a monthly discussion held by a very diverse, very smart group, at which it slowly dawned on my jet-lagged brain that I was expected to contribute. So finally, in desperation, I gave my first-ever “running out of everything” harangue (off topic as usual). Not one solitary soul agreed. What they did agree on was that the human mind is – unlike resources – infinite and, consequently, the intellectual cavalry would always ride to the rescue. I was too tired to argue that the infinite brains present in Mayan civilization after Mayan civilization could not stop them from imploding as weather (mainly) moved against them. Many other civilizations, despite being armed with the same brains as we have, bit the dust or just faded away after the misuse of their resources. This faith in the human brain is just human exceptionalism and is not justified either by our past disasters, the accumulated damage we have done to the planet, or the frozen-in-the-headlights response we are showing right now in the face of the distant locomotive quite rapidly approaching and, thoughtfully enough, whistling loudly.
Hubbert’s Peak
Let’s start a more detailed discussion of commodities on by far the most important: oil. And let’s start with by far the largest user: the U.S. In 1956, King Hubbert, a Shell oil geologist, went through the production profile of every major U.S. oil field and concluded that, given the trend of new discoveries and the rate of run-off, U.S. oil production was likely to peak in around 1970. Of course, vested interests and vested optimism being what they are, his life was made a total misery by personal attacks – it was said that he wasn’t a patriot, that he was doing it all to enhance his own importance, and, above all, that he was an idiot. But he was right: U.S. production peaked in 1971! This, typically enough, did not stop the personal attacks. There is nothing more hateful in an opponent than his being right. In 1956, Hubbert also suggested that a global peak would be reached in “about 50 years,” but after OPEC formed in 1974 and prices jumped, he said it would probably smooth out production and extend the peak by about 10 years, or to 2016, give or take. Once again, this could be a remarkably accurate estimate!
The U.S. peak oil event of 1971 is important in rebutting today the same arguments that he faced in the 1960s. This time, these arguments are used against the idea that global oil is nearing its peak. The arguments back then were that technological genius, capitalist drive, and infinite engineering resourcefulness would always drive back the day of reckoning. But wasn’t the U.S. in the 1960s full of the most capitalist of spirits, Yankee know-how, and resourcefulness? Didn’t the U.S. have the great oil service companies, and weren’t there far more wells drilled here than anywhere? All true. But, still, production declined in 1971 and has slowly and pretty steadily declined ever since. Even if we miss the inherent impossibility of compound growth running into finite resources, how can we possibly think that our wonderful human attributes and industriousness will prevent the arrival of global peak oil when we have the U.S. example in front of us?
Exhibit 5 shows that global traditional onshore oil, in fact, peaked long ago in 1982, and that only much more expensive offshore drilling and tertiary recovery techniques allowed for even a modest increase in output, and that at much higher prices. Exhibit 6 shows that since 1983, every year (except one draw) less new conventional oil was found than was actually pumped!
Global Oil Prices, the First Paradigm Shift
We have seen how broad-based commodity prices declined to a trough from 2000-03. Oil however, was an exception and, given its approximate 50% weight by value, a very important exception. In 1974, it split off from other commodities, which continued to decline steeply. It was in 1974 that an oil cartel, OPEC, was formed. What better time could there be for a fast paradigm shift than during a cartel forming around a finite resource?
Exhibit 7, which may be familiar to you, was developed when the penny first dropped for me five years ago, and was soon after reproduced in the Sunday New York Times. It shows that for 100 years oil had a remarkably flat real price of around $16/barrel in today’s currency, even as all other commodities declined. It was always an exception in that sense. Oil has a volatile price series, which is not surprising given supply shocks, the difficulty of storage, and, above all, the very low price elasticity of demand in the short term. Normal volatility is, relative to trend, more than a double and less than a half, so that around the $16 trend we would normally expect to see price spikes above $32 and troughs below $8. Drawing in the dotted lines of 1 and 2 standard deviations, it can be seen that the series is well behaved: it should breach the 2-sigma line about 2.5 times up and 2.5 times down in a 100-year period (because 2-sigma events should occur every 44 years), and it does pretty much just that. It is also clear that this well-behaved $16 trend line was shifted quite abruptly to around $35/barrel in 1974, the year OPEC began. And OPEC began in a very hostile and aggressive mood, resulting in unusual solidarity among its members. Oil prices remained very volatile around this new higher trend, peaking in 1980 at almost $100 in today’s currency (confirming, to some degree, the new higher trend) and falling back to $16 in 1999.
Today, looking at the oil price series from about 2003, it seems likely that a second paradigm jump has occurred, to about $75 a barrel, another doubling. Around this new trend, a typical volatile oil range would be from over $150 to under $37. The validity of this guess will be revealed in, say, another 15 to 20 years. Stay tuned. There is, though, a different support to this price analysis, and that is cost analysis. We are not (yet, anyway) experts in oil costs, but as far as we are able to determine, the full cost of finding and delivering a major chunk of new oil today is about $70 to $80 a barrel. If true, this would make the idea of a second paradigm jump nearly certain.
The Great Paradigm Shift
So, oil caused my formerly impregnable faith in mean reversion to be broken. I had always admitted that paradigm shifts were theoretically possible, but I had finally met one nose to nose. It did two things. First, it set me to thinking about why this one felt so different to those false ones claimed in the past. Second, it opened my eyes to the probability that others would come along sooner or later.
The differences in this paradigm shift are obvious. All of the typical phantom paradigm shifts are optimistic. They often look more like justifications for high asset prices than serious arguments. They are also usually compromised by the source. It is simply much more profitable for the financial services business to have long bull markets that overrun and then crash quite quickly than it is to have stability. Imagine how little money would be made by us if the U.S. stock market rose by its dreary 1.8% a year adjusted for inflation, its trend since 1925. Volume would dry up, as would deals, and we’d die of boredom or get a different job. In short, beware a broker or a sell side “strategist” offering arguments as to why overpriced markets like today’s are actually cheap.
Finally, the public in general appears to like things the way they are and always seems eager to embrace the idea of a new paradigm. The oil paradigm shift and the “running out of everything” argument is the exact opposite: it is very bad news and, like all very bad news, ordinary mortals and the bullishly-biased financial industry seriously want to disbelieve it or completely ignore it. (Just as is the case with climate warming and weather instability.) It is in this sense a classic contrarian argument despite being a paradigm shift.
Metals
On the second point – looking for other resources showing signs of a paradigm shift – the metals seemed the next most obvious place to start: they are finite, subject to demand that has been compounding (that is, more tonnage is needed each year), and, after use, are mostly worthless or severely reduced in value and expensive to recycle. Copper, near the top of the standard deviation list, has an oil-like tendency for the quality of the resource to decline and the cost of production to rise. Exhibit 8 shows that since 1994 one has to dig up an extra 50% of ore to get the same ton of copper.
And all of this 150% effort has to be done using energy at two to four times the former price. These phenomena of declining ore quality and rising extraction costs are repeated across most important metals. The price of all of these metals in response to rising costs and rising demand has risen far above the old declining trend, at least past the 1-in-44-year chance. (There is a possibility, I suppose, that some of the price moves are caused by a cartel-like effect between the few large “miners.”
There just might have been some deliberate delays in expansion plans, which would have resulted in extra profits, but it seems unlikely that this possible influence would have caused much of the total price rises. These very high prices are compatible with such possibilities, but I am in no position to know the truth of it.) There also might be some hoarding by users or others, but given the extent of the price moves, it is statistically certain that hoarding could not come close to being the only effect here. Once again, the obvious primary influence is increased demand from developing countries, overwhelmingly led by China; and that we are dealing with a genuine and broad-based paradigm shift.
The highest percentage of any metal resource that China consumes is iron ore, at a barely comprehensible 47% of world consumption. Exhibit 9 shows the spectacular 100-year-long decline in iron ore prices, which, like so many other commodities, reach their 100-year low in or around 2002. Yet, iron ore hits its 110-year high a mere 8 years later! Now that’s what I call a paradigm shift! Mining is clearly moving out of its easy phase, and no one is trying to hide it. A new power in the mining world is Glencore (soon to be listed at a value of approximately $60 billion). Its CEO, Ivan Glasenberg, was quoted in the Financial Times on April 11, describing why his firm operates in the Congo and Zambia. “We took the nice, simple, easy stuff first from Australia, we took it from the U.S., we went to South America… Now we have to go to the more remote places.” That’s a pretty good description of an industry exiting the easy phase and entering the downward slope of permanently higher prices and higher risk.
Agricultural Commodities
Moving on to agriculture, the limitations are more hidden. We think of ourselves as having almost unlimited land up our sleeve, but this is misleading because the gap between first-rate and third-rate land can be multiples of output, and only Brazil, and perhaps the Ukraine, have really large potential increments of output. Elsewhere, available land is shrinking. For centuries, cities and towns have tended to be built not on hills or rocky land, but on prime agricultural land in river valleys. This has not helped. We have, though, had impressive productivity gains per acre in the past, and this has indeed helped a lot. But, sadly, these gains are decreasing. Exhibit 10 shows that at the end of the 1960s, average gains in global productivity stood at 3.5% per year. What an achievement it was to have maintained that kind of increase year after year. It is hardly surprising that the growth in productivity has declined.
It runs now at about one-third of the rate of increase of the 1960s. It is, at 1.25% a year, still an impressive rate, but the trend is clearly slowing while demand has not slowed and, if anything, has been accelerating. And how was this quite massive increase in productivity over the last 50 years maintained? By the even more rapid increase in the use of fertilizer. Exhibit 11 shows that fertilizer application per acre increased five-fold in the same period that the growth rate of productivity declined. This is a painful relationship, for there is a limit to the usefulness of yet more fertilizer, and as the productivity gains slow to 1%, it bumps into a similar-sized population growth. The increasing use of grain-intensive meat consumption puts further pressure on grain prices as does the regrettable use of corn in ethanol production. (A process that not only deprives us of food, but may not even be energy-positive!) These trends do not suggest much safety margin.
The fertilizer that we used is also part of our extremely finite resources. Potash and potassium are mined and, like all such reserves, the best have gone first. But the most important fertilizer has been nitrogen, and here, unusually, the outlook for the U.S. really is quite good for a few decades because nitrogen is derived mainly from natural gas. This resource is, of course, finite like all of the others, but with recent discoveries, the U.S. in particular is well-placed, especially if in future decades its use for fertilizer is given precedence.
More disturbing by far is the heavy use of oil in all other aspects of agricultural production and distribution. Of all the ways hydrocarbons have allowed us to travel fast in development and to travel beyond our sustainable limits, this is the most disturbing. Rather than our brains, we have used brute energy to boost production.
Water resources both above and below ground are also increasingly scarce and are beginning to bite. Even the subsoil continues to erode. Sooner or later, limitations must be realized and improved techniques such as no-till farming must be dramatically encouraged. We must protect what we have. It really is a crisis that begs for longer-term planning – longer than the typical horizons of corporate earnings or politicians. The bottom line is, as always, price, and the recent signals are clear. Exhibit 12 shows the real price movements of four critical agricultural commodities – wheat, rice, corn, and soybeans – in the last few years. Unlike many other commodities, these four are still way below their distant highs, but from their recent lows they have all doubled or tripled.
Bulls will argue that these agricultural commodities are traditional bubbles, based on euphoria and speculation, and are destined to move back to the pre-2002 prices. But ask yourselves what happens when the wheat harvest, for example, comes in. Only the millers and bakers (actually the grain traders who have them as clients) show up to buy. Harvard’s endowment doesn’t offer to take a million tons and store it in Harvard Yard (although my hero, Lord Keynes, is famously said to have once seriously considered stacking two months’ of Britain’s supply in Kings College Chapel!). The price is set by supply and demand, and storage is limited and expensive. All of the agricultural commodities also interact, so, if one were propped up in price, farmers on the margin would cut back on, say, soybeans and grow more wheat. For all of these commodities to move up together and by so much is way beyond the capabilities of speculators. The bottom line proof is that agricultural reserves are low – dangerously low. There is little room in that fact for there to be any substantial hoarding to exist.
Weather Instability and Price Rises
But there is one factor big enough, on rare occasions, to move all of the agricultural commodities together, and that is weather, particularly droughts and floods. I don’t think the weather instability has ever been as hostile in the last 100 years as it was in the last 12 months. If you were to read a one-paragraph summary of almost any agricultural commodity, you would see weather listed as one of the causes of the price rising. My sick joke is that Eastern Australia had average rainfall for the last seven years. The first six were the driest six years in the record books, and the seventh was feet deep in unprecedented floods. Such “average” rainfall makes farming difficult. It also makes investing in commodities difficult currently, for the weather this next 12 months is almost certain to be less bad than the last, and perhaps much less bad.
The Unusual Entry Risk Today in Commodity Investing: Weather …
For agricultural commodities, it is generally expected that prices will fall next year if the weather improves. Because global weather last year was, at least for farming, the worst in many decades, this seems like a good bet. The scientific evidence for climate change is, of course, overwhelming. A point of complete agreement among climate scientists is that the most dependable feature of the planet’s warming, other than the relentless increase in the parts per million of CO2 in the atmosphere, is climate instability. Well, folks, the last 12 months were a monster of instability, and almost all of it bad for farming. Skeptics who have little trouble rationalizing facts will have no trouble at all with weather, which, however dreadful, can never in one single year offer more than a very strong suggestion of long-term change.
Unfortunately, I am confident that we should be resigned to a high probability that extreme weather will be a feature of our collective future. But, if last year was typical, then we really are in for far more serious trouble than anyone expected. More likely, next year will be more accommodating and, quite possibly, just plain friendly. If it is, we will drown, not in rain, but in grain, for everyone is planting every single acre they can till. And why not? The current prices are either at a record, spent just a few weeks higher in 2008, or were last higher decades ago. The institutional and speculative money does not, in my opinion, drive the spot prices higher for reasons given earlier, but they do persistently move the more distant futures contracts up.
Traditionally, farmers had to bribe speculators to take some of the future price risk off of their hands. Now, Goldman Sachs and others have done such a good job of making the case for commodities as an attractive investment (on the old idea that investors were going to be paid for risk-taking), that the weight of money has pushed up the slope of the curve. This not only destroys the whole reason for investing in futures contracts in the first place, but, critically for this current argument, it lowers the cost to the farmers of laying off their price risk and thus enables, or at least encourages, them to plant more, as they have in spades. Ironically, institutional investing facilitates larger production and hence lower prices! Should both the sun shine and the rain rain at the right time and place, then we will have an absolutely record crop. This would be wonderful for the sadly reduced reserves, but potentially terrible for the spot price. (Although wheat might be an exception because the largest grower by far – China – is looking to be in very bad shape for its upcoming harvest.)
… and China
Quite separately, several of my smart colleagues agree with Jim Chanos that China’s structural imbalances will cause at least one wheel to come off of their economy within the next 12 months. This is painful when traveling at warp speed – 10% a year in GDP growth. The litany of problems is as follows:
a) An unprecedented rise in wages has reduced China’s competitive strength.
b) The remarkable 50% of GDP going into capital spending was partly the result of a heroic and desperate effort to keep the ship afloat as the Western banking system collapsed. It cannot be sustained, and much of the spending is likely to have been wasted: unnecessary airports, roads, and railroads and unoccupied high-rise apartments.
c) Debt levels have grown much too fast.
d) House prices are deep into bubble territory and there is an unknown, though likely large, quantity of bad loans.
You have heard it all better and in more detail from both Edward Chancellor and Jim Chanos. The significance here is that given China’s overwhelming influence on so many commodities, especially in terms of the percentage China represents of new growth in global demand, any general economic stutter in China can mean very big declines in some of their prices.
You can assess on your own the probabilities of a stumble in the next year or so. At the least, I would put it at 1 in 4, while some of my colleagues think the odds are much higher. If China stumbles or if the weather is better than expected, a probability I would put at, say, 80%, then commodity prices will decline a lot. But if both events occur together, it will very probably break the commodity markets en masse. Not unlike the financial collapse.
That was a once in a lifetime opportunity as most markets crashed by over 50%, some much more, and then roared back. Modesty should prevent me from quoting from my own July 2008 Quarterly Letter, which covered the first crash. “The prices of commodities are likely to crack short term (see first section of this letter) but this will be just a tease. [Editor’s Note: the section referred to is titled “Meltdown! The Global Competence Crisis,” which discusses the aftermath of the global financial crisis.] In the next decade, the prices of all raw materials will be priced as just what they are, irreplaceable.”
If the weather and China syndromes strike together, it will surely produce the second “once in a lifetime” event in three years. Institutional investors were too preoccupied staying afloat in early 2009 to have obsessed much about the first opportunity in commodities and, in any case, everything else was also down in price. A second commodity collapse in the next few years may also be psychologically hard to invest in for it will surely bring out the usual bullish argument: “There you are, its business as usual. There are plenty of raw materials, so don’t listen to the doomsayers.” Because it will have broad backing, this argument will be hard to resist, but should be.
Residual Speculation
Finally, there is some good, old-fashioned speculation, particularly in the few commodities that can be stored, like gold and others, which are costly per pound. I believe this is a small part of the total pressure on prices, and the same goes for low interest rates, but together they have also helped push up prices a little. Putting this speculation into context, we could say that: a) we have increasing, but still routine, speculation in commodities; b) this comes on top of the much more important effects of terrible weather; and c) most important of all, we have gone through a profound paradigm shift in almost all commodities, caused by a permanent shift in the underlying fundamentals.
The Creative Tension in Investing in Resources Today
As resource prices rise, the entire system loses in overall well-being, but the world is not without winners. Good land, in short supply, will rise in price, to the benefit of land owners. Technological progress in agriculture will add to the value of land holdings. Fertilizer resources – potash and potassium – will become particularly precious. Hydrocarbon reserves will, of course, also increase in value. In general, owners or controllers of all limited resources, certainly including water, will benefit. But everyone else will be worse off, and a constrained-resource world will increase in affluence per capita more slowly than it would have otherwise, and more slowly than in the past. Remember, this is not simply a recycling of income and wealth as it was when Saudi Arabia stopped some of its pumping for political reasons. Then, we paid a few extra billion and they put money in the bank for recycling. There was no net loss. But now when they pump the last of the cheapest $5/barrel of oil and we replace it with a $120/barrel from tortured Canadian Tar Sands, the cost differential is a deadweight loss. GDP accounting can make it look fine, and it certainly creates more jobs but, like a few thousand men digging a hole with teaspoons, it adds jobs but no incremental value compared to the original cheap oil.
How does an investor today handle the creative tension between brilliant long-term prospects and very high short-term risks? The frustrating but very accurate answer is: with great difficulty. For me personally it will be a great time to practice my new specialty of regret minimization. My foundation, for example, is taking a small position (say, one-quarter of my eventual target) in “stuff in the ground” and resource efficiency. Given my growing confidence in the idea of resource limitation over the last four years, if commodities were to keep going up, never to fall back, and I owned none of them, then I would have to throw myself under a bus. If prices continue to run away, then my small position will be a solace and I would then try to focus on the more reasonably priced – “left behind” – commodities. If on the other hand, more likely, they come down a lot, perhaps a lot lot, then I will grit my teeth and triple or quadruple my stake and look to own them forever. So, that’s the story.
The Position of the U.S….
The U.S. is, of course, very well-positioned to deal with the constraints. First, it starts rich, both in wealth and income per capita, and also in resources, particularly the two that in the long run will turn out to be the most precious: great agricultural land and a pretty good water supply. The U.S. is also well-endowed with hydrocarbons. Its substantial oil and gas reserves look likely to prove unexpectedly resilient, buoyed by improving skills at fracking and lateral drilling. And, by any standard, U.S. coal reserves are very large. All other countries should be so lucky. Second, we are the most profligate or wasteful developed country and this fact, paradoxically, becomes a great advantage. We in the U.S. can save resources by the billions of dollars and actually end up feeling better for it in the end, like someone suffering from obesity who succeeds with a new diet.
The slowing growth in working age population has reduced the GDP growth for all developed countries. Adding resource limitations is further reducing it. If our GDP in the U.S. grew 2% for the next 20 years, I think we would be doing very well. Dropping to 1.5% would not surprise me, nor would it be a disaster. In the past 28 years, we have increased our GDP by 3.0% per year with only a 0.9% increase in energy required. That is, we increased our energy efficiency by 2.1% without a decent energy policy and despite some very inefficient pockets like autos and residential housing. This would suggest that at a reduced 2% GDP growth rate, we might expect little or no incremental demand for energy, even without an improved effort. If in addition we halved our deficit in energy efficiency compared with Europe and Japan in the next 20 years, then our energy requirements might drop at 1.5% a year. Given the plentiful availability of low-hanging fruit in the U.S., this is achievable.
… as for the Rest
Other countries will not be so lucky. Almost all will suffer lower growth, but resource-rich countries will have a relative benefit as the terms of trade continue to move in their favor. Less obviously, those countries that are particularly energy efficient will also benefit. If the Japanese, for example, can produce over twice the GDP per unit of energy than the Chinese, then, other things being equal, the terms of trade will move in their favor as oil prices rise. At the bottom of the list, poor countries with few resources and little efficiency, which already use up to 50% of their income on the commodity “necessities,” will suffer. The irony that they suffered the most having used up the least will probably not make their misery less. Limited resources create a win-lose proposition quite unlike the win-win we are accustomed to in global trade. Theoretically, we all gain through global trade as China grows. But with limited resources, the faster they grow and the richer they get (and, particularly, the more meat rather than grain that they eat), the more commodity prices rise and the greater the squeeze on the poorer countries and the relatively poor in every country. It’s a gloomy topic. Suffice it to say that if we mean to avoid increased starvation and international instability, we will need global ingenuity and generosity on a scale hitherto unheard of.
Conclusion
The U.S. and every other country need a longer-term resource plan, especially for energy, and we need it now!(Shorter-term views on the market and investment recommendations will be posted shortly.)
References
(1) P.I.S.A. Test 2003, OECD.
(2) Edward Chancellor, “China's Red Flags,” GMO White Paper, March 23, 2010.
Disclaimer: The views expressed are the views of Jeremy Grantham through the period ending April 25, 2011, and are subject to change at any time based on market and other conditions. This is not an offer or solicitation for the purchase or sale of any security and should not be construed as such. References to specific securities and issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities.
This post originally appeared at The Oil Drum.
Would be interesting to know how much/gallon of ethanol exported to Brazil,I as a U.S. taxpayer subsidized?
futr
BHP Commits $10B for Australian Projects: #msg-61382100.
Twelve Unsustainable Things That Will Soon Come To A Disastrous End
Read more: http://news.iskcon.org/node/3485#ixzz1Gr6hy3KI
It’s an upside-down world when Brazil—the land of abundant sugarcane—imports ethanol from the US. But this is exactly what is happening:
#msg-60573430
Peak Coal is Moving Closer Too
By Tom Whipple
Wednesday, December 01 2010 02:23:35 PM
http://www.fcnp.com/commentary/national/7927-peak-coal-is-moving-closer-too.html
Those following the issue have known for years that peak oil was very close, but coal was always thought to be another issue entirely. Official estimates, made many years ago however, talked about 300 years' worth of coal being left which to most of us is synonymous with "eons." Neither we, nor our children, nor grandchildren, nor our great-grandchildren can expect to be around that long.
However, in recent decades, there were a number of developments that are now raising questions about the centuries-of-coal-left estimates. The most spectacular of these developments came after World War II when the Chinese got their act together and began to grow their economy, and did they ever grow it! We all know that economic growth takes prodigious amounts of energy, and while China did have quite a bit of oil, they had huge amounts of coal; something over 180 billion tons of the stuff is left according to recent Chinese estimates. This was second only to the U.S. and Russia who are currently estimated by BP to have more than 200 billion tons each. As we have come to learn, these numbers are always rather suspect for there is good quality coal and bad quality coal. There is cheap and easy-to-get coal and expensive hard-to-get coal. As with oil, it is the rate at which you can exploit it that counts - not the theoretical reserves.
To make a long story short, right after their revolution in 1949 the Chinese started digging and digging. The results were spectacular. From an annual production of somewhere around 100 million tons in 1950, production climbed to over 3 billion tons this year -- nearly half the world's coal production. It was this prodigious amount of energy coupled with a fair amount of domestic oil and, in recent years, large oil imports that has allowed China to grow at rates in the vicinity of 10 percent each year and to become the world's largest consumer of energy.
Now this worked well for a time. The Chinese made stuff and the rest of the world consumed the stuff. There were a couple of nagging problems, however, such as the amount of carbon going into the air and the issue of sustainability. Can Beijing, which is now producing and burning roughly half of the world's coal, go on increasing production by 10 percent a year much longer? The answer has to be "of course not." Adding an additional 300 million + tons of coal production each year would put China at 6 billion tons of annual production well before end of the coming decade. It is doubtful if their geology would let them dig up than much and that their atmosphere could absorb that much carbon.
Another problem with digging up all that coal is that you have to move it someplace unless you are really into mine mouth electricity generation. Now coal is obviously rather heavy stuff, unlike say transistors, so it requires large numbers of trains (currently on the order of 45,000 trainloads a month), lots of trucks and even some barges to move it where it is needed. It should not come as a surprise then that after being a coal exporter for many years China is starting to import larger amounts of coal. In 2009, China imported 109 million tons. Coal is currently being imported at around 17 million tons a month or a rate of 200 million tons a year --not much in comparison with 3 billion tons annual consumption, but double what came in last year.
Recently however, China's official news agency reported that Beijing is thinking about "capping" coal production at 3.6-3.8 billion tons during the next five years. If this turns out to be the case, then China has another two of three years of increasing production from domestic sources. From then on their 10 percent or so annual economic growth will have to come from somewhere else such as increased efficiency, increased coal imports, natural gas, oil imports, nuclear, or renewables - most likely hydro.
The major coal exporting nations -- the U.S., FSU, Australia, Indonesia, and South Africa -- are currently shipping around 900 million tons each year. Actually this is up quite a bit from the 500 million tons that was being exported a decade or so ago. The big increases in recent years have come from Australia, Indonesia and the Former Soviet Union.
So what does all this mean for global energy demand and energy prices? First of all there is not much growth left in oil exports. Any significant increase in Chinese demand for energy is likely to send prices into the stratosphere and lead to severe economic problems. Renewables, outside of hydro, do not really produce much energy on the scale we are talking about. While the Chinese recently announced a number of new hydro dams, these take many years to complete. Likewise, nuclear power is slow to come online.
So we are left with natural gas and coal as major sources of energy that could be imported in larger quantities in the next few years. The Chinese are already bringing in more gas from Russia and Central Asia, and will likely be a major importer of LNG one of these days.
It is difficult to see how China, with domestic coal consumption capped, can continue to grow without major increases in coal exports from other countries. Just three years of 10 percent growth in Chinese coal demand would eat up all of 900 million tons of coal that are currently being exported. While other sources of energy can make up some of this shortfall, this will come gradually. Something has got to give, and it most likely will be much higher prices for all forms of energy.
If what we are witnessing is the actual peaking of China's domestic coal production - which is half the world's production --then this event could turn out to be as serious as the peaking of oil.
--------------------------------------------------------------------------------
Tom Whipple is a retired government analyst and has been following the peak oil issue for several years.
Phosphorus In The Age Of Scarcity
09/16/2010
Thomas Malthus is an almost universally derided figure. He predicted that over time human population growth would outstrip our ability to increase the food supply, and thus he is the intellectual father of those who believe there are Limits To Growth.
The Reverend Thomas Malthus (1766-1834)
http://www.declineoftheempire.com/2010/09/phosphorus-in-the-age-of-scarcity.html
How Much Is Left?
The Limits of Earth's Resources, Made Interactive
This Web-only article is a special rich-media presentation of the feature, "How Much Is Left?," which appears in the September 2010 issue of Scientific American.
http://www.scientificamerican.com/article.cfm?id=interactive-how-much-is-left
The price of Britain's disappearing wildlife
30 August 2010 04:35 UK
http://news.bbc.co.uk/panorama/hi/front_page/newsid_8950000/8950389.stm
You've heard of peak oil. How about peak fish?
Wednesday, September 1, 2010
http://blogs.redding.com/dcraig/archives/2010/09/youve-heard-of.html
Why the World Is Quickly Running Out of Helium
By: Dan Fletcher (2 days ago)
http://newsfeed.time.com/2010/08/23/why-the-worlds-quickly-running-out-of-helium/
It may not match peak oil in terms of a global crisis, but the world is running out of another non-renewable resource: helium. According to a report in the The Independent, scientists estimate the world may have little more than 25 years left of the gas. What will the kids do without their balloons!?
The problem stems from a U.S. policy which has driven down the price of helium artificially. The U.S. holds a massive store of the gas in the U.S. Natural Helium Reserve, but this must be sold off by 2015. "In 1996, the US Congress decided to sell off the strategic reserve and the consequence was that the market was swelled with cheap helium because its price was not determined by the market. The motivation was to sell it all by 2015," Professor Robert Richardson of Cornell told the Independent.
Helium accumulates on earth through the gradual degeneration of radioactive rock, with no means of artificial synthesis currently in existence. The world running out of helium could spell the end for certain technologies like MRI scanners (where helium is used as a coolant) and some nuclear technology.
Richardson told the Independent he believes the price of the helium used to fill a typical-sized balloon should be set at $100, to better reflect the gas's scarcity.
Why the World's Quickly Running Out of Helium
By: Dan Fletcher (2 days ago)
http://newsfeed.time.com/2010/08/23/why-the-worlds-quickly-running-out-of-helium/
It may not match peak oil in terms of a global crisis, but the world is running out of another non-renewable resource: helium. According to a report in the The Independent, scientists estimate the world may have little more than 25 years left of the gas. What will the kids do without their balloons!?
The problem stems from a U.S. policy which has driven down the price of helium artificially. The U.S. holds a massive store of the gas in the U.S. Natural Helium Reserve, but this must be sold off by 2015. "In 1996, the US Congress decided to sell off the strategic reserve and the consequence was that the market was swelled with cheap helium because its price was not determined by the market. The motivation was to sell it all by 2015," Professor Robert Richardson of Cornell told the Independent.
Helium accumulates on earth through the gradual degeneration of radioactive rock, with no means of artificial synthesis currently in existence. The world running out of helium could spell the end for certain technologies like MRI scanners (where helium is used as a coolant) and some nuclear technology.
Richardson told the Independent he believes the price of the helium used to fill a typical-sized balloon should be set at $100, to better reflect the gas's scarcity.
Nature Stunner: “Global warming blamed for 40% decline in the ocean’s phytoplankton”
"Microscopic life crucial to the marine food chain is dying out. The consequences could be catastrophic."
July 29, 2010
http://climateprogress.org/2010/07/29/nature-decline-ocean-phytoplankton-global-warming-boris-worm/
Wind Power's latest criticism---it decreases the price of electricity--
http://europe.theoildrum.com/node/6418
futr
Peak Fish and the biodiversity crisis
by Dave Cohen
Published May 19 2010 by Decline of the Empire, Archived May 19 2010
http://www.energybulletin.net/node/52857
Peak soil: it’s like peak oil, only worse
Wednesday, May 12, 2010
http://peakgeneration.blogspot.com/2010/05/peak-soil-its-like-peak-oil-only-worse.html
Peak Everything?
Forget peak oil. What about peak lithium, peak neodymium, and peak phosphorus?
Ronald Bailey | April 27, 2010
http://reason.com/archives/2010/04/27/peak-everything
Peak phosphorus
by Patrick Déry and Bart Anderson
Published Aug 13 2007 by Energy Bulletin
http://www.energybulletin.net/node/33164
You've heard of peak oil. How about peak gold?
Solid gold in the shape of Japan's Mount Fuji
Output hit a record in 2001 and has since been in decline
Martin Mittelstaedt
From Tuesday's Globe and Mail
Published on Tuesday, Apr. 13, 2010 12:00AM EDT
Last updated on Tuesday, Apr. 13, 2010 7:24AM EDT
http://www.theglobeandmail.com/report-on-business/youve-heard-of-peak-oil-how-about-the-impact-of-peak-gold/article1532444/
The idea of peak oil has helped light a fire under the price of petroleum, but now, another peak theory has emerged, this time involving gold.
Many precious metals analysts and gold miners are taking a cue from the claims that global oil production will exhibit a peak, and then begin an inexorable decline accompanied by sharply higher prices. They're starting to say the same concept applies equally well to bullion and may lead to outsized investment returns from buying the yellow metal.
Believers in peak gold say that mining has a number of uncanny similarities to oil extraction.
Just like the slow output declines and dwindling reserves observed at aging oil fields, many of the best gold deposits are exhibiting the same sort of geriatric tendencies, with their highest grades extracted long ago.
Another resemblance is that in both industries, the pace of new elephant-sized discoveries has decreased, despite rapidly expanded exploration budgets and the spur of sharply higher prices, which in gold's case have risen about 350 per cent since the metal's bull run began in March, 2001, when prices were under $260 (U.S.) an ounce.
While the jury is still out on whether oil production has reached its ultimate high point, world gold output reached its record level in 2001, and has generally fallen since then.
The peak gold debate
"There are a lot of people that subscribe to [peak gold]," comments Jason Goulden, researcher at Metals Economics Group, a Halifax-based firm that tracks trends for the mining industry, but doesn't take a formal position on the debate over whether gold output will enter a long period of decline.
Others aren't so reticent about saying that peak oil has a close cousin in peak gold. "I think it's similar to oil," says Ronald-Peter Stöferle, international equities analyst at Erste Group Bank, an Austrian-based bank.
"Peak gold is only one part of my really positive scenario" for the metal, Mr. Stöferle notes, adding that he believes gold could ultimately double from current price levels, to $2,300 an ounce, the inflation-adjusted high it attained way back during the inflationary days of early 1980.
Besides dwindling output, Mr. Stöferle is basing his bullish call on the traditional view among some investors that the yellow metal is a refuge in times of financial uncertainty over debt and paper currencies.
Some of the same people who've pioneered and popularized peak oil have also recently turned their sights on the precious metal, giving the idea further credence.
Jean Laherrère, an influential petroleum engineer who presciently predicted the end of cheap oil in the late 1990s, last year posted a 66-page report on the Oil Drum, a peak oil website, discussing whether global gold output will follow the same scenario being outlined for oil. He speculated gold reached its maximum output back in 2001. Mr. Laherrère could not be reached for comment.
A copycat move?
The notion that oil supplies would eventually peak and then fall was first advanced by U.S. geophysicist M. King Hubbert, who accurately predicted in the late 1950s that U.S. oil production would max out around 1970, and then go into permanent decline. The prediction was based on models that show the production at individual oil fields always traces a bell-shaped curve, with rapidly increasing output for a time, followed by a plateau, and then a gradual, permanent decline as reserves are exhausted.
Because oil is consumed and can never be recovered once burned, it's a scarier prospect than having dwindling gold output. Almost all the gold ever mined is around in bars, coins and wedding rings, and could be recycled, if need be, so the world will never really run out of the yellow metal.
The argument for peak gold has some peak oil advocates viewing it as a copycat move, a self serving justification for hopes of higher prices.
"I'm sure that you'll find that many in the resource industry will claim that they are now on the back side of their own Hubbert curve," says Jeff Rubin, former chief economist of CIBC World Markets, who has written a book about the end of the cheap oil era.
Sharp fall in output
According to the peak oil theory, as long as big new fields are being continually discovered, the date when maximum output occurs will be postponed.
In the gold market, the trend in recent discoveries has been disappointing. Metals Economics tracks new large gold deposits of more than two million ounces, and in recent years, the pace has been meagre.
Of the 62 major discoveries made from 1997 to 2008, almost half were found in the first three years - from 1997 to 1999.
"There used to be discoveries of four or five a year. Now, there are maybe one, two max a year," says John Ing, a mining analyst at Maison Placements Canada Inc. who is another believer in peak gold.
Those contending peak gold has already arrived also point to the sharp fall in output among many of the major producing countries. South Africa, long the top global producer, peaked back around 1970, and has been falling ever since. In more recent years, production has generally been declining in Canada, the U.S., Australia and Russia.
Some of the slack has been taken up by China, the new top producer, but there is skepticism the country can keep growing production.
Mr. Ing says many gold deposits there have poor reserves and are being rapidly depleted. "Their No. 1 ranking is very, very tenuous."
"The world as we know it does not need gold," he says. "The global economy could run perfectly well without gold if we decided to go to a total fiat currency. But the fact is that the world economy does not run without oil."
****
THE GROWTH APPEAL OF JUNIORS]
One investment implication of peak gold is that it makes big producers unable to replace mined out reserves relatively less attractive than promising juniors sitting on newly discovered ore bodies. It also makes companies with new deposits takeover targets.
Investors "are shying away from the big caps and the mid caps now because of the lack of growth," mining analyst John Ing says. Typical of the trend away from big producers, he notes, was the sale last month by NovaGold Resources Inc. of $175-million in new stock to two savvy hedge funds, Soros Fund Management and Paulson & Co. The Soros Fund is run by billionaire investor George Soros,dubbed the man who broke the Bank of England in 1992 through a massive sale of British pounds, while John Paulson made a killing off the collapse in the U.S. housing market.
Novagold's major attraction is its stake in Alaska's Donlin Creek, one of the world's largest undeveloped gold deposits.
Mr. Ing says investors can pick up gold reserves in the ground through junior companies at the equivalent of $100 to $200 an ounce, a far cheaper way to play the trend to higher prices than buying bullion around its recent retail price of $1,150 an ounce.
If your view of the future is driven by concern about inflation, then Novagold is a good hedge, writes Lou Schizas
****
A less golden future
World gold production peaked in 2001, as a result of declining output in a number of major producing countries. The trend has caused some analysts to speculate that gold output is in a long-term decline, similar to the theory of peak oil that has been applied to falling petroleum output.
Total gold production in 2001 was 2,600 tonnes
, , , , , Big Four*
* South Africa, United States, Australia, Canada
2008 mine production
Total: 2,260 tonnes
China /12.2%
U.S. / 9.9%
S. Africa / 9.8%
Australia / 9.6%
Peru / 7.4%
Russia 7.0%
Canada / 4.2%
Indonesia / 3.8%
Uzbekistan / 3.6%
Ghana 3.4 %
Other / 29%
CARRIE COCKBURN/THE GLOBE AND MAIL 66 SOURCES: GFMS; U.S. GEOLOGICAL SURVEY
Copper Peak
by Jean Laherrère
Published Mar 31 2010 by The Oil Drum: Europe, Archived Mar 31 2010
http://www.energybulletin.net/node/52234
How to deal with the coming economic crisis
By Sheyna Steiner • Bankrate.com
http://www.bankrate.com/finance/financial-literacy/how-to-deal-with-the-coming-economic-crisis-1.aspx
Investment expert and author Stephen Leeb believes we're entering the beginning of the end when it comes to the commodities that hold our modern world together. Resources such as oil, copper and iron are being rapidly depleted -- and with the needs of developing countries, demands are only increasing.
[At a glance
Name: Stephen Leeb, Ph.D.
Hometown: New York City
Education: B.A., in economics, University of Pennsylvania's Wharton School of Business.
M.A., in mathematics and Ph.D. in psychology, University of Illinois.
Career highlights:
Editor of The Complete Investor, an investing newsletter.Author of "The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a barrel."Author of "The Oil Factor: Protect Yourself -- and Profit -- from the Coming Energy Crisis."Author of "Defying the Market: Profiting in the Turbulent Post-Technology Market Boom."Author of "Game Over: How You Can Prosper in a Shattered Economy."]
The economic fallout from the end of technology as we know it today will be enormous, he says. Many of the resources used in manufacturing today are interconnected. Oil powers much of the world: It fuels our cars and is used in the mining of other materials -- for instance iron ore and copper, each of which is a finite resource that is vital to manufacturing. The depletion of natural resources will have a profound effect on the way things are made.
Bankrate talked to Leeb about his perspective of the world and how investors could protect themselves.
You make some pretty dire predictions about natural resource shortages. Why is that, and when will they begin?
I think they're starting already. Oil is over $80 a barrel and you have 10 percent unemployment in the country -- you're already seeing it. With U.S. demand for energy down, energy prices -- except for natural gas, which is a domestic commodity -- have gone very high.
And the same thing is true with copper and other commodities. It's quite exceptional to see commodities rise to the extent to which they've risen. In the context of a pretty sharp recession in the developed world, I think you're already seeing this.
The tragedy of it is that we're going to see it more and more because what we haven't figured out, what has not occurred to so many people, is that the green movement or avoiding resource scarcity -- whatever motivates you -- whatever gets you to green, is necessary.
Whether you're an environmentalist or someone who's looking at peak energy or peak other things, green is an answer but green itself is very resource intensive.
That is a quandary that we haven't faced up to in any way, shape or form. We just don't get it. There are a lot of major dots that have to be connected and we haven't started that. We are really far behind.
And really far behind the Chinese, for that matter -- way, way, way behind in switching to green technology. In 2010 they're already the leading producer of hydroelectric and solar power and by 2011 will be the leading producer of wind power. They are literally outspending us on their smart grid by 200 to one. They have allocated $670 billion to their smart grid expenditures, their electric grid. We're spending about $3.5 billion.
This is not good.
You did mention in the book that it's easier for the Chinese to get things done quickly in some cases.
They're not as encumbered as we are. We have a wonderful society here. We are free. And one reason we can stay a wonderful society and one reason we have been able to remain free is that during times of war, we've been able to grant the president emergency powers and come together as a nation. But right now, we're not anywhere near it.
Everything is being passed along party votes. No one is even talking about resource scarcity and resource shortages. Someone has to wake us up, and if they do, I hope we'll be able to recover.
I'm certainly not rooting for any of this to be happening. I hope I'm wrong, but I'm just trying to be a messenger.
You talk about "absolute peaks" in regard to natural resources. Can you explain this?
Peak anything is when you are unable to produce more of it. I wanted to get across that it is very unlikely that you're going to reach peak energy or peak oil or anything like it without reaching peak lots of everything else.
That is because you need oil to produce iron ore; you need oil to produce copper; you need copper to produce oil. You need all these commodities to make more water. So when one critical commodity reaches peak, that might be peak for a lot of commodities and you might get to the point that the world can't produce any more commodities. And everything stops. You stop growing at that point or you find technological solutions.
We're not really at that point, we're trying to fund -- to some extent -- energy technologies, but we're not placing priorities on that at the moment.
This to me is the equivalent of a war. The Chinese are winning and we don't even know that we're in a race. Basically war may be too strong a word, but I don't think it is.
We are in the race for our lives and we don't know it. And they are running full steam ahead.
You're also predicting that inflation will reach 30 percent to 40 percent. Why will that happen and what will be the result?
In 2008 when we got into high oil prices the Fed decided to -- I can't say they got stingier -- but they kept interest rates high. They kept the economy in check because they were worried about high commodity prices.
Well it was easy then because there was no unemployment problem then.
But now here come high commodity prices again and you can't really expect the Fed to try and restrain the economy in the face of high commodity prices. Unemployment is already 10 percent. What are they going to aim for -- 20 percent?
If anything, they have to get looser. High commodity prices like high oil when you pay more to fill up your tank, that's like a tax. I think the Fed will have to get looser not tighter with high commodity prices and that is the making of an inflationary cycle.
What should people do to prepare themselves? What investments should they hold?
Canned goods, head for the hills?
I consider precious metals as an asset group. That doesn't mean you put 100 percent in precious metals, but I would certainly consider gold, silver and platinum as strong candidates for my portfolio. That is the least I would do.
Or perhaps investing in resource-rich countries.
Throwing Our Energy at Impossible Dreams
December 15th, 2009 9:15 AM
P.F. Henshaw
http://www.thepeoplesvoice.org/TPV3/Voices.php/2009/12/15/throwing-our-energy-at-impossible-dreams
"as mankind proceeded to get bigger and bigger we silently crossed a threshold"
Signs of cognition, maybe? In the haystack of contentious arguments at Copenhagen it seems only the occasional unofficial commentary pointed to the real solvable source of our monumental collision with the limits of the earth. Somehow in the process of growing ever bigger, mankind got "big", and continuing to grow still bigger is optional. Yes, it sort of "happened naturally", and is also natural for us to be a bit confused about the whole turn of events it precipitates, but it is still also definitely our own choice to be doing it too, and we're simply hiding from the problem it creates on the whole.
It may be easy to question the morality of how the Chinese chose to limit t their population growth by limiting personal freedoms, but did face the challenge. You really can't argue with the fact that virtually everyone else is just ignoring that same profound moral dilemma, that affluence naturally multiplies people. Instead we have a world desperately trying to mitigate climate change with an unqualified commitment to of sustaining the accelerating growth affluence forever.
Our technique for doing that is also our choice, trying to decrease our impacts on the earth by multiplying wealth more efficiently. What that actually does is feed our appetites at multiplying rates for profit as our first and last priority. It somewhat reduces the growth rate of our multiplying impacts, instead of reducing them, to then shortly make living on earth entirely unprofitable. Though it's completely voluntary and purposeful, I'm sure everyone swept up in steering the planet in that direction intends something rather different than the consequence of making all our problems ever more insolvable.
People even mostly know and understand that at natural growth limits, as strains multiply, the cheapest way to reduce your strains and waste of energy is ALWAYS to just skip the option of adding to your investments in expansion. If the house needs a roof and another floor might make it unstable, build the roof! That trick is even seen in nature's greatest success stories. Every organism that survives its own explosive growth from a single cell uses that as its way of bringing its own growth to a smooth and sustainable climax, for example!
Anything that reaches its climax at a peak of vitality does so by ending its self-investment in growth at the time its design is complete and worth sustaining. Our economic rule has been closer to "every good thing must be discarded". The alternative is to just turn off the growth pumps when they start to cause trouble, and sort things out to find what's worth keeping. That's the whole formula for sustainability for so very many big and small things people do for themselves, and that we rely on in things that take care of themselves in nature too.
Still, where is the cognitive path? Humanity clearly believes in and is devoting its most concentrated efforts on making its growth machine more efficient, to grow its way out of the earth's ever more severe physical constraints...
Growing your way out of environmental constraints is a plan that does work splendidly sometimes, as for a little chick inside it's egg, yes, or an infant in the womb. Then bursting from severe environmental constraints reveals fields of grain and new worlds of choices waiting, for which the new organism only has a limited appetite. The plan to just crash your limits often enough also works OK in pursuing "the impossible dream" in the worlds of ideas, within the 'noosphere', where the only real limit is imagination and failures of imagination are of little real physical consequence.
The physical world is different though. We now have a whole planet of leaders who believe we only need to physically grow our economies ever faster to burst out of the limits of an entire planet! They truly act as if wishing we had the limitless resources and freedoms of the past would surely cause them to reappear. That's the worst kind of fundamentalist delusion, a most extreme sort of misguided sophistry.
Is it a mass hysteria? Is it a case of worldwide Alzheimer's disease, leading us to withdraw into our emotional detachment from the natural world and bumble around waving amazingly clever self-deceptions.., like growth to reduce impacts? I wonder, instead of creating ever more dramatic diversions in response to our ever more desperate situations, could we 'wake up' as from a dream? It would be a great deal less expensive, in fact. Could we just shift the use of our creative powers to discovering this new reality we find, that we've clearly seen approaching for decades of decades?
There's also a need to help people understand why efficiency , productivity, hard work and big families used to be so good for everything. They once both relieved burdens and provided freedoms for people directly benefiting from them, but also created wealth and opportunity for everyone else too. That was the magic of economic growth. The problem now is that the very same things have the reverse effect, and multiply complications and constraints for everyone.
I think that's what has everyone fooled, that as mankind proceeded to get bigger and bigger we silently crossed a threshold of becoming "big", say between 50 and 75 years ago. After that, quite unnoticed, our normal way of relieving burdens on ourselves, hard work, productivity and efficiency, started ever more dominantly multiplying burdens on each other and the earth... More growth now pushes everyone all ever harder against nature's limits instead of giving everyone more freedoms.
Continuing as we always did, now that the responses of the planet have so dramatically changed meanings, seems to be how we ended up trying to reduce our burdens on the earth by multiplying them! In a world as changed as ours is, living in the past or dreaming of returning to the past, as all the world's leaders promote, is really a kind of dementia and disorientation. Nature changed her orientation and we just didn't notice...! Just pausing to learn about this unfamiliar place and our unexpected arrival, might be a more productive diversion than arguing about how to get our vehicle going ever faster again. We're marooned, as it were, on a part of the planet we never saw before, and it's a bit of luck really too. We're apparently both nearly out of gas and saved from heading over a cliff only by few flat tires and grinding gears in the transmission.
¸¸¸¸.·´ ¯ `·.¸¸¸¸
Phil Henshaw id@synapse9.com "not finding what people say interesting, but the interest in what they say". Thanks to Emily S in Massachusetts http:www.chinadaily.com.cnchina29-121content_9151129.htm Li Xing China says rest of world must submit to Chinese style population control if global warming deal is to be made (China Daily 12/10/2009 page10)
Honeybees Face Towering Threat From Cell Phones
Posted by: Dr. Mercola
November 07 2009
http://articles.mercola.com/sites/articles/archive/2009/11/07/Honeybees-Face-Towering-Threat-From-Cell-Phones.aspx
Experts worry over peak soil
ALAN DICK
12 Nov, 2009 04:00 AM
http://theland.farmonline.com.au/news/state/agribusiness-and-general/general/experts-worry-over-peak-soil/1674679.aspx
YOU’VE heard of “peak oil”, but what about “peak phosphate”, or even worse “peak soil”?
The latter two were among alarming prospects raised by speakers at the third annual Carbon Farming conference in Orange last week.
“Peak oil” refers to the time, considered to be imminent if not already here, when the maximum rate of global oil extraction is reached, after which production would enter terminal decline, leading to increasing oil shortages and steadily rising prices.
One conference speaker suggested availability of phosphate to make fertilisers was facing a similar crisis, another that the world could run out of usable soil within about 60 years.
The possibility of “peak soil” was raised by Professor John Crawford, of the University of Sydney’s Institute of Sustainable Solutions, who said Europe was losing soil at the rate of 17 tonnes a hectare, and in China soil was being lost at 57 times the rate at which it could be replaced.
In NSW the rate of soil loss was five times the speed of replacement, he said.
The conference – organised by Carbon Farmers of Australia, which is headed by Goolma district farmers, Michael and Louisa Kiely – featured a strong bias towards biological farming and related alternative soil management practices.
There was more than a whiff of evangelical fervour about the potential of biological farming to create healthier soils that could store large amounts of carbon and produce healthier food for healthier people.
But there was also scientific support for the movement’s emphasis on farming in a way that enhances the number and variety of soil microbes deemed central to soil fertility.
About 300 attended the conference – well up on last year’s 220 – with a Carbon 101 workshop the previous day attracting about 100, compared with last year’s 35.
Could Food Shortages Bring Down Civilisation?
Commentary by Lester R. Brown*
WASHINGTON, Sep 29 (IPS) - In early 2008, Saudi Arabia announced that, after being self-sufficient in wheat for over 20 years, the non-replenishable aquifer it had been pumping for irrigation was largely depleted.
In response, officials said they would reduce their wheat harvest by one-eighth each year until production would cease entirely in 2016. The Saudis would then import virtually all the grain consumed by their Canada-sized population of nearly 30 million people.
The Saudis are unique in being so wholly dependent on irrigation. But other, far larger, grain producers such as India and China are facing irrigation water losses and could face grain production declines.
Emerging Trends Threaten Food Security
Fifteen percent of India's grain harvest is produced by overpumping its groundwater. In human terms, 175 million Indians are being fed with grain produced from wells that will be going dry. The comparable number for China is 130 million. Among the many other countries facing harvest reductions from groundwater depletion are Pakistan, Iran, and Yemen.
The tripling of world wheat, rice, and corn prices between mid-2006 and mid-2008 signaled our growing vulnerability to food shortages. It took the worst economic meltdown since the Great Depression to lower grain prices.
Past decades have witnessed world grain price surges, but they were event-driven - a drought in the former Soviet Union, a monsoon failure in India, or a crop-withering heat wave in the U.S. Corn Belt. This most recent price surge was trend-driven, the result of our failure to reverse the environmental trends that are undermining world food production.
These trends include - in addition to falling water tables - eroding soils and rising temperatures from increasing greenhouse gas emissions. Rising temperatures bring crop-shrinking heat waves, melting ice sheets, rising sea level, and shrinking mountain glaciers.
With both the Greenland and West Antarctic ice sheets melting at an accelerating pace, sea level could rise by up to six feet during this century. Such a rise would inundate much of the Mekong Delta, which produces half of the rice in Viet Nam, the world's second-ranking rice exporter. Even a three-foot rise in sea level would cover half the riceland in Bangladesh, a country of 160 million people. And these are only two of Asia's many rice-growing river deltas.
The world's mountain glaciers have shrunk for 18 consecutive years. Many smaller glaciers have disappeared. Nowhere is the melting more alarming than in the Himalayas and on the Tibetan plateau where the ice melt from glaciers sustains not only the dry-season flow of the Indus, Ganges, Yangtze, and Yellow rivers but also the irrigation systems that depend on them. Without these glaciers, many Asian rivers would cease to flow during the dry season.
The wheat and rice harvests of China and India would be directly affected. China is the world's leading wheat producer. India is second. (The United States is third.) With rice, China and India totally dominate the world harvest. The projected melting of these glaciers poses the most massive threat to food security the world has ever faced.
The Harbinger of Civilisation's Demise?
The number of hungry people, which was declining for several decades, bottomed out in the mid-1990s at 825 million. In 2009 it jumped to over one billion. With world food prices projected to continue rising, so too will the number of hungry people.
We know from studying earlier civilisations such as the Sumerians, Mayans, and many others, that more often than not it was food shortages that led to their demise. It now appears that food may be the weak link in our early twenty-first century civilisation as well.
Will we follow in the footsteps of the Sumerians and the Mayans or can we change course - and do it before time runs out? Can we move onto an economic path that is environmentally sustainable? We think we can. That is what Plan B 4.0 is about.
Mobilising to Save Civilisation
Plan B aims to stabilise climate, stabilise population, eradicate poverty, and restore the economy's natural support systems. It prescribes a worldwide cut in net carbon emissions of 80 percent by 2020, thus keeping atmospheric CO2 concentrations from exceeding 400 parts per million.
Cutting carbon emissions will require both a worldwide revolution in energy efficiency and a shift from oil, coal, and gas to wind, solar, and geothermal energy.
The shift to renewable sources of energy is moving at a pace and on a scale we could not imagine even two years ago.
Consider the state of Texas. The enormous number of wind projects under development, on top of the 9,000 megawatts of wind generating capacity in operation and under construction, will bring Texas to over 50,000 megawatts of wind generating capacity (think 50 coal-fired power plants) when all these wind farms are completed. This will more than satisfy the needs of the state's 24 million residents.
Nationwide, new wind generating capacity in 2008 totaled 8,400 megawatts while new coal plants totaled only 1,400 megawatts. The annual growth in solar generating capacity will also soon overtake that of coal. The energy transition is under way.
The United States has led the world in each of the last four years in new wind generating capacity, having overtaken Germany in 2005. But this lead will be short-lived. China is working on six wind farm mega-complexes with generating capacities that range from 10,000 to 30,000 megawatts, for a total of 105,000 megawatts. This is in addition to the hundreds of smaller wind farms built or planned.
Wind is not the only option. In July 2009, a consortium of European corporations led by Munich Re, and including Deutsche Bank, Siemens, and ABB plus an Algerian firm, announced a proposal to tap the massive solar thermal generating capacity in North Africa and the eastern Mediterranean.
Solar thermal power plants in North Africa could economically supply half of Europe's electricity. The Algerians note that they have enough harnessable solar energy in their desert to power the world economy. (No, this is not an error.)
The soaring investment in wind, solar, and geothermal energy is being driven by the exciting realisation that these renewables can last as long as the earth itself. In contrast to investing in new oil fields where well yields begin to decline in a matter of decades, or in coal mines where the seams run out, these new energy sources can last forever.
At a Tipping Point
We are in a race between political tipping points and natural tipping points. Can we cut carbon emissions fast enough to save the Greenland ice sheet and avoid the resulting rise in sea level? Can we close coal-fired power plants fast enough to save at least the larger glaciers in the Himalayas and on the Tibetan Plateau? Can we stabilise population by lowering fertility before nature takes over and halts population growth by raising mortality?
Yes. But it will take something close to a wartime mobilisation, one similar to that of the United States in 1942 as it restructured its industrial economy in a matter of months. We used to talk about saving the planet, but it is civilisation itself that is now at risk.
Saving civilisation is not a spectator sport. Each of us must push for rapid change. And we must be armed with a plan outlining the changes needed.
*Lester R. Brown is founder and president of the Earth Policy Institute. "Plan B 4.0: Mobilising to Save Civilisation" can be downloaded for free at http://www.earth-policy.org/.
(END/2009)
http://www.ipsnews.net/news.asp?idnews=48650
Linking the past with the present: resources, land use, and the collapse of civilizations
By Guy R McPherson on October 5, 2009 11:20 AM
http://blog.ltc.arizona.edu/naturebatslast/2009/10/linking-the-past-with-the-pres.html
"When man interferes with the Tao, the sky becomes filthy, the earth becomes depleted, the equilibrium crumbles creatures become extinct" (Lao Tzu, Tao Te Ching, ca. 550 BCE)
The human role in extinction of species and degradation of ecosystems is well documented. Since European settlement in North America, and especially after the beginning of the Industrial Revolution, we have witnessed a substantial decline in biological diversity of native taxa and profound changes in assemblages of the remaining species. We have ripped minerals from the Earth, often bringing down mountains in the process; we have harvested nearly all the old-growth timber on the continent, replacing thousand-year-old trees with neatly ordered plantations of small trees; we have hunted species to the point of extinction; we have driven livestock across every almost acre of the continent, baring hillsides and facilitating massive erosion; we have plowed large landscapes, transforming fertile soil into sterile, lifeless dirt; we have burned ecosystems and, perhaps more importantly, we have extinguished naturally occurring fires; we have paved thousands of acres to facilitate our movement and, in the process, have disrupted the movements of thousands of species; we have spewed pollution and dumped garbage, thereby dirtying our air, fouling our water, and contributing greatly to the warming of the planet. We have, to the maximum possible extent allowed by our intellect and never-ending desire, consumed the planet. In the wake of these endless insults to our only home, perhaps the greatest surprise is that so many native species have persisted, thus allowing our continued enjoyment and exploitation.
Although insults by Homo sapiens since the Industrial Revolution are well documented and widely acknowledged, abundant archaeological evidence indicates similar actions in the more distant past have led to the rise and fall of 23 major civilizations. Humans clearly have impacted their environments since initially appearing on the evolutionary stage, and human impacts have grown profoundly since the development of agriculture and subsequent technologies (as reviewed by Charles Redman's 1999 text, Human Impact on Ancient Environments and, in more accessible prose, by Jared Diamond's 2005 book, Collapse). Concomitantly, the environment has influenced the development of humans and their societies. The interaction between humans and their environments and the relative roles of culture and resources on human societies have received considerable attention from archaeological scholars. (The word "resources" is problematic because it implies materials are placed on this planet for the use of humans. We see finite substances and the living planet as materials to be exploited for our comfort. For efficiency and familiarity, I reluctantly use the word throughout this essay. I'll save the full rant for another post while pointing out that my perspective is less imperial, and less Christian, than the traditional view.) The expansive literatures on resources, culture, and human-environment interactions indicate the important role of resources in constraining the development of several societies in the North American Southwest (as described particularly well by Timothy A. Kohler and colleagues). Exploitation of ecosystems, even to the point of destroying fertility of soils, has constrained subsequent food production (as described most notably by J.A. Sandor and colleagues). Although I recognize the importance of these topics, I leave the continued study and discussion of culture, resources, and human-environment interactions in the distant past to scholars with more interest and expertise than me, and instead turn my attention to recent and ongoing assaults by humans on the living planet.
If we accept that humans played a pivotal role in loss of species and degradation of ecosystems -- and both patterns seem impossible to deny at this point -- we face a daunting moral question: How do we reverse these trends?
Maintenance of biological diversity is important to our own species because present and future generations of humans depend on a rich diversity of life to maintain survival of individuals and, ultimately, persistence of our species. In addition, as architects of the extinction crisis currently facing plant Earth, we have a responsibility to future Homo sapiens and to non-human species to retain the maximum possible biological diversity. We must embrace our capacity and capability to sustain and enhance the diversity and complexity of our landscapes. The substantial economic cost of maintaining high levels of biological diversity will pale in comparison to the costs of failing to do so, which potentially include the extinction of humans from Earth.
Reintroducing ecological processes with which species evolved, and eliminating processes detrimental to native species, underlie the ability to maintain and perhaps even restore species diversity. Specifically, the management of wildland ecosystems should be based on maintenance and restoration of ecological processes, rather than on structural components such as species composition or maintenance of habitat for high-profile rare species. In fact, a focus on the latter goals -- a fine-filter approach -- may clog the coarse filter necessary for landscape-scale management of many species and ecosystems.
Drivers of Change
The proximate drivers underlying changes in land cover during the first few decades after European contact were mineral extraction, agricultural expansion, timber removal, and introduction of nonnative species (most importantly, livestock). The quest for silver and gold drove the Conquistadors to dismember, rape, and murder native peoples throughout the New World. The effects of mining on natural ecosystems were no less dramatic. Even before fossil fuels were employed to ease the extraction of metals from the ground, waterways were diverted and steam-powered water cannons were used to blast soil from mountains. Every tree within several dozen miles of a mining operation was cut down or pulled from the ground to power steam-powered stamp mills. Trees that escaped the eye of mine operators rarely got away for long. The western expansion of the human population across North America drove great demand for construction lumber, railroad ties, paper products, and heat from the hearth. These changes and their consequences have been well documented in a wide variety of publications (see, for example, People's History of the United States by Howard Zinn, One with Ninevah by Paul Ehrlich and Anne Ehrlich, and The Diversity of Life by Edward O. Wilson).
Farmers and ranchers followed frontiersmen, trappers, and miners into western North America. Whereas frontiersmen left a relatively small ecological footprint and the operations of trappers and miners tended to be limited in spatial scale, agriculture dominated virtually every acre of the North American West. Row-crop agriculture covered areas with fertile soil that could be fed by irrigation systems, including nearly all rivers. The massive, arid expanses unable to sustain row crops supported the dominant form of agriculture: livestock. By the early twentieth century, cattle and sheep had trampled nearly every wildland acre in search of forage. Stockmen (and, rarely, stockwomen) led the charge to exterminate perceived predators and potential competitors for forage: wolves, bears, coyotes, eagles, and prairie dogs were among the species slaughtered in the pursuit of safe environs for livestock and those who grew them. Perhaps more important than direct mortality from shooting and trapping were pronounced changes in site conditions that resulted from the collective action of millions of mouths and hooves.
Livestock have had pronounced negative impacts throughout North America. Livestock still loom large, and other biological invasions have transformed western landscapes. Some, like livestock, are politically "untouchable" despite adverse impacts on native species and ecosystems (e.g., "sport" fishes and various species of turf grasses critical to the golf-course industry). Others are universally undesirable but seemingly intractable because of ecological, rather than political, reasons.
It is not surprising that we are largely unable to manage, much less eradicate, nonnative species. After all, there are more than 50,000 nonnative species in the United States alone, invading terrestrial ecosystems at the rate of 700,000 hectares each year at an annual cost of $120 billion; they threaten 400 species with extinction (these figures come from the excellent scholarship of David Pimentel and colleagues, most notably including their 2005 paper in the journal Ecological Economics titled, "Update on the environmental and economic costs associated with alien-invasive species in the United States"). To make matters even more challenging, every species on Earth is capable of invading other sites (as assured by biotic potential), and every site is subject to invasion by at least one, and potentially many, nonnative species. Because biological invasions depend exclusively on the "match" between characteristics of biological invaders and characteristics of sites, and because there are an infinite number of potential "matches" between species and sites, solutions to the problem of biological invasions are specific to species and sites.
Given the disinterest in environmental issues displayed by citizens and their elected representatives, I doubt we will seriously address the problem of biological invasions before we cause the extinction of own species. As such, this disinterest in environmental issues reflects ignorance or disdain for the living planet that sustains our own species. It represents, in other words, omnicide that will almost certainly prove fatal.
The transition to modernity brought infrastructure, notably cities and the ever-widening, increasingly well maintained roads between them. Thus, within the last few decades, early drivers of change such as mining and agricultural expansion have been supplanted in importance by alteration of fire regimes, urbanization, and global climate change. Herein, I focus on the relatively simple impacts of each of these factors in isolation. As with historical drivers of change, interactions between these factors are complex, under-studied, and undoubtedly critically important.
A large and growing body of knowledge and empirical evidence indicates that fire was historically prevalent in North America, except in the driest deserts and the coldest tundra. It is clear that native species on the continent have evolved adaptations to periodic fires. Historical prevalence of fire ensures that even those species that seem most intolerant of fire have evolved in the presence of recurrent fires, as described in abundant ecological literature. Adaptations to fire are many and diverse, and include escape (e.g., distributions limited to rocky areas where fire rarely occurred), tolerance (e.g., thick bark), and rapid recruitment in post-fire environments (e.g., widely dispersed seeds and ability to establish in open environments).
Recognition that virtually all native species in North America evolved in concert with periodic fires leads to two general conclusions: (1) Native species have developed adaptations to fires that occur at a particular frequency, season, and extent; and (2) maintenance or reintroduction of the fire regimes with which these species evolved should assume high priority for those interested in maintaining high levels of biological diversity. A corollary to the first conclusion is that classification of native species along a gradient of adaptation to fire is simplistic and potentially misleading. Native species are "adapted" to recurrent fires, and classifying some as more tolerant than others suggests that fire is "good" for some species and "bad" for others. A more appropriate view is that recurrent fires, at the appropriate frequency, season, and extent (i.e., components of the historical fire regime), are part and parcel of these ecosystems. A corollary of the second conclusion is that reintroduction of ecological processes should be a relatively efficient and comprehensive strategy for retaining native species in extant ecosystems. Indeed, the historical prevalence of fire in these ecosystems suggests that fire is a necessary component of any comprehensive strategy focused on retention of biological diversity. Because fire was -- and is -- a dominant process in these systems, restoration of fire regimes would seem to be an important first step toward maintenance of high levels of biological diversity.
Urbanization and the associated transportation infrastructure have divided formerly large, contiguous landscapes into fragmented pieces. Fires that formerly covered large areas are constrained by fragmentation, and animals that necessarily range over large areas, such as mountain lions, bison, and grizzly bears, have suffered expectedly. These changes have been particularly pronounced since Oil War II, largely as a result of government subsidies that have promoted growth of the human population and suburban development. These trends will be reversed within the next few years because the Oil Age is drawing to a close. Unfortunately, our near-term inability to burn fossil fuels on a large scale probably will come too late to save many of the planet's species from the effects of runaway greenhouse.
Ultimately, the story of western civilization is the story of fossil fuels. Profound changes in land use and land cover have been enabled by access to inexpensive oil and its derivatives (e.g., coal, uranium, ethanol, photovoltaic solar panels, wind turbines). Dramatic fluctuations in the price of oil within the next few years, coupled with steadily declining global supplies of this finite substance, likely will cause a complete collapse of the world's industrial economy, which might usher in a new era with respect to species assemblages and land cover. Given the dependence of humans on fossil fuels for power, water, and food (including production and delivery), it seems inevitable that many people will die and the industrialized world's vaunted infrastructure will collapse, thereby giving other species a slim and dwindling chance to make a comeback. Although the pattern of dwindling access to resources and subsequent collapse of civilizations has been thoroughly described in the archaeological record, the ongoing collapse obviously exceeds previous others with respect to geographic scale, as well as the number of species and the number of humans impacted.
Peak Oil and the Collapse of Industrial Civilization
Oil discovery and extraction tend to follow bell-shaped curves, as described by M. King Hubbert more than 50 years ago. The easily reached, light oil is extracted first. Heavier oil, often characterized by high sulfur content, is found at greater depths on land and also offshore. This heavier oil requires more money and more energy to extract and to refine than light oil. Eventually, all fields and regions become unviable economically and energetically. When extracting a barrel of oil requires more energy than contained in the barrel of oil, extraction is pointless.
The top of the bell-shaped curve for oil extraction is called "Peak Oil" or "Hubbert's Peak." We passed Hubbert's Peak for world oil supply in 2005 and began easing down the other side, with an annual decline rate of 0.5% between 2005 and 2008 leading to a record-setting price of $147.27/barrel in July 2008. The International Energy Agency, which had never previously acknowledged the existence of a peak in oil availability, predicted an annual decline rate in crude oil in excess of 9% after 2008. The current economic recession resulting from the high price of oil led to a collapse in demand for oil and numerous other finite commodities, hence leading to reduced prices and the rapid abandonment of energy-production projects. Many geologists and scientists predict a permanent economic depression will result from declining availability of oil and the associated dramatic swings in the price of oil. It seems clear the permanent depression is already here. The absence of a politically viable solution to energy decline explains, at least in part, the absence of a governmental response to the issue even though the United States government recognizes peak oil as a serious problem (along, no doubt, with many other governments of the world).
Without energy, societies collapse. In contemporary, industrialized societies, virtually all energy sources are derived from oil. Even "renewable" energy sources such as hydropower, wind turbines, and solar panels require an enormous amount of oil for construction, maintenance, and repair. Extraction and delivery of coal, natural gas, and uranium similarly are oil-intensive endeavors. Thus, the decline of inexpensive oil spells economic disaster for industrialized countries. Demand destruction caused by high energy prices is affecting the entire industrialized world.
Viewed from a broader perspective than energy, economic collapses result from an imbalance between demand and supply of one or more resources (as explained in considerable depth by Jared Diamond in Collapse). When supply of vital resources is outstripped by demand, governments often print currency, which leads to hyperinflation. In recent history, the price of oil and its refined products have been primary to rates of inflation and have played central roles in the maintenance of civilized societies.
Addressing the issue of peak oil while also controlling emissions of carbon dioxide, and therefore reducing the prospect of "runaway greenhouse" on planet Earth, represents a daunting and potentially overwhelming challenge. Peak oil and the effects of runaway greenhouse are the greatest challenges humanity has ever faced. Tackling either challenge, without the loss of a huge number of human lives, will require tremendous courage, compassion, and creativity.
There is little question that the decades ahead will differ markedly from the recent past. From this point forward, Homo sapiens will lack the supply of inexpensive energy necessary to create and maintain a large, durable civilization. The fate of western civilization is in serious question, given our inability to sustain high levels of energy extraction. The population of humans in industrialized countries probably will fall precipitously if oil extraction turns sharply downward, as predicted by the International Energy Agency. The benefit of a massive human die-off is the potential for other species, and even other cultures, to expand into the vacuum we leave in our wake.
________
This post is extracted and modified from a forthcoming book chapter celebrating 20 years of archaeological research in the North American Southwest. To improve accessibility for this audience, I have removed references to the primary literature (if you'd like a copy of the academic version, please send me an email message). The book will be published by the Colorado University Press. Thanks to Carla Van West for inviting my participation in the Southwestern Symposium held in Tempe, Arizona, January 2008, and for soliciting my chapter for the book. Thoughtful comments on earlier drafts were provided by Dana Backer and Paul Taylor.
Bio Oil scarcity leads us to electric cars which leads us to Neodymium scarcity
September 4, 3:49 PM Green Transportation Examiner
David Herron
http://www.examiner.com/x-14333-Green-Transportation-Examiner~y2009m9d4-Oil-scarcity-leads-us-to-electric-cars-which-leads-us-to-Neodymium-scarcity
Peak Neodymium? A recent Reuters article quotes Jack Lifton, an independent commodities consultant and strategic metals expert, as raising an alarm about the use of rare earth materials (like Neodymium) in hybrid and electric cars like the Prius. The article raises the specter of running out of these rare earth materials dooming the possibility of adoption of electric vehicles and other technologies such as high powered wind turbines. It may not be as dire as Mr. Lifton suggests, however.
Among the many reasons for adopting electric vehicles is the looming shortage of oil. The shortage is predicted by the peak oil theory which is based on observations over decades oil field operation. The peak oil theory says that when an oil field is approximately half full it becomes harder to extract the oil and the production on that field begins to decline. Averaging the observations over all the oil fields on this planet indicates the peak of oil production either has already occurred, or will occur within a few years.
Any nonrenewable resource existing in a fixed quantity will, with continuing use of that resource, obviously face exhaustion of the resource over time. Further it should become harder to extract the resource as the supply runs low. There will be a peak of coal production, a peak of uranium production, and so on. There are lots of resources we use to run our society which exist in a fixed quantity.
Neodymium and other rare earth materials are used in a wide range of electronics gizmos. Neodymium, terbium and dysprosium are key components of an alloy used to make the high-power, lightweight magnets for lightweight powerful electric motors. Lanthanum is a major ingredient for some batteries. Production of both electric vehicles and wind turbines is expected to rise due to the move to green technology.
It's possible to substitute other materials if there is indeed a shortage of these rare earth materials. Prabhakar Patil, CEO of battery-maker Compact Power suggests the car makers could switch to induction motors and other electronics choices that are not dependent on the rare earth materials. Worldwide demand for at least 15 rare earth materials is expected to exceed supply by 40,000 tons per year, according to a recent Reuters report.
There is a China angle to this story in that China largely controls the rare earth material industry. There are several deposits of rare earth materials around the world. However a few years ago most shut down due to China undercutting the prices. China mines more than 95 per cent of the world's rare earth minerals, which mostly come from Inner Mongolia and are a crucial component of numerous technologies. Recently some of the mines outside China began to go back into production. There is an obvious geopolitical danger for any one country (whether or not that country is China) to have tight control over a vital resource.
The Chinese government appears to be planning to tighten export of rare earth materials. Some have seen a draft report titled "Rare Earths Industry Development Plan in 2009-2015" which would limit exports and completely ban export of dysprosium, terbium, thulium, lutetium and yttrium. Recently the United States and the European Union jointly filed a suit with the WTO over China's restrictions on exports of precious metals, claiming their interests are hurt by the restrictive measures taken by China. On their part China says every country has the right to control the exploitation of its resources, and that's all they are doing.
Four crucial resources that may run out in your lifetime
By Loz Blain
06:14 August 27, 2009 PDT
http://www.gizmag.com/four-crucial-resources-running-out/12630/picture/91045/
Can the Earth sustain 9 billion people? We'll find out in the next 50 years.
We're living in lucky times. Living standards - in the Western world, at least - are the highest in history. It's an era of relative peace and plenty that would amaze our ancestors. But it's not going to continue forever; we're already stretching many of our natural resources to their limits, and the world's population will jump from 6.5 billion to around 9 billion over the next 50 years. Get ready for a painful correction - here are four interconnected resources that are headed for a catastrophic squeeze within our lifetime.
Oil
The modern world is built on oil. It powers transport, construction, manufacturing, food production - our entire economy. The sky-high living standards and widespread disconnection from manual labor that we enjoy today is all thanks to the Industrial Revolution of the early 1900s, and it's based on cheap, accessible oil.
The Peak Oil theory, if you haven't already encountered it, suggests that oil production for a given reserve will follow a bell curve. Production for the reserve will rise to a peak, and then begin declining due to the fact that as levels get lower, it becomes more expensive to retrieve, ending up at a point where you have to put more energy into sucking up and refining the oil than you get out of using it. The theory is said to hold whether you're talking about an individual oil well, an entire oil field or the entire global oil reserve - and once the peak is passed, the decline in production is said to be as sharp as the rise toward the peak was.
It's a theory backed by the vast majority of scientists and energy economists, such as the International Energy Agency. And according to the theory, we're very close to that peak point right now, if it hasn't already passed. Certainly, the more positive estimations say we might be a maximum of 10 years from the peak at current projections. And this at a time when the Earth's population is ballooning, and massive countries like China and India are industrializing and increasing their oil demand at an enormous rate.
For some truly scary and apocalyptic reading on what might happen once that peak hits, check out lawyer Matt Savinar's Life After the Oil Crash website, which draws together a pretty convincing range of sources.
On the rebuttal side, there are people promoting the idea that oil isn't a fossil fuel, created by dead biomass buried beneath the Earth's surface. The Russian theory of "abiotic oil" that became popular in the 1950s claims that oil is produced from a monstrous reserve of hydrocarbons in the Earth's primordial core. Oil is created in the Earth's incredibly hot mantle layer, and pushed up into the crust, where gargantuan reserves are available to us if we just drill deep enough.
But it's a scientifically unproven theory, promoted in recent times most strongly by one man, Thomas Gold, an astronomer who died in 2004. And the responding arguments for biogenic oil, from Petroleum Geologists, are very strong.
So it looks fairly clear that sometime in the next few decades, oil production is going to start to fall, just as global demand is rising. Prices are forecast to skyrocket, and the effect on societies worldwide will reflect just how important fossil fuels are to us. Apart from oil control wars - which many would say we're already witnessing in the middle east - we can expect the industrial world to be turned on its head, starting with the economy and ending with a complete lifestyle revolution where food production, among other things, is brought right back into the backyard.
You can see why we tend to make alternative energy stories such a high priority at Gizmag.
Food
Consider this: since 2005, the price of wheat has more than tripled. So has the price of corn. Rice has gone up more than 500%. These price increases reflect a dwindling of global food stocks - demand for food is rising faster than our ability to produce it. The phenomenon has been dubbed the "global food crisis of 2008" - but some are beginning to refer to it as the "perpetual food crisis."
It's not just rising populations we're facing, it's a rising standard of living in developing mega-countries such as China and India. As these giant economies start to move, the national diet steps up from a grain base to start including more and more meat. In China, for example, the average person ate around 20kg of meat per year back in 1980. In 2007, that was more like 50kg and rising.
Meat is produced by feeding grain to livestock - and the calorie yield of meat is about one fifth of the grain used to produce it. Eating meat, in other words, is effectively throwing out 80% of the calories you could be eating if you ate the grains instead of passing them through a cow. In tough times, meat is a wasteful food - not only of calories, but of agricultural land.
As we learned from Dr. Dickson Despommier in Gizcast #9, we're already farming around 80% of the arable land on the planet. In simple terms, by 2030 we're going to have to find a way to meet an estimated 50% greater demand.
Part of our response will come in the form of enhanced genetic engineering of crops to produce higher yields, in high-tech fertilizer and pesticide solutions. But the widespread use of genetically engineered crops tends to put the planet's agricultural future - and a lot of its money - in the hands of corporate giants like Monsanto, which has already been accused of abusing its dominance.
Most fertilisers are based on fossil fuels - so as oil goes into decline, these will become vastly more expensive - and pesticides which, while they provide a degree of protection against crop losses, can often have their own issues, leaching into groundwater and causing delayed-reaction health issues.
With high obesity rates, the Western world could certainly afford to cut down on food consumption - but this would represent a seismic change in attitude, and is highly unlikely until we're forced to by soaring food prices. But, even if we do start eating less, the problem will continue to worsen unless our production capacity dramatically rises, or our population dramatically lowers. It's not a nice picture.
Water
Along with increased food and energy requirements, we're going to need vastly more water. We'll need it agriculturally, industrially, domestically and as part of energy production needs. All those demands are growing fast. And while we're not actually running out of fresh water, we can't create more to go around - at least not without considerable expense.
According to the World Economic Forum, within 20 years water will become a bigger theme for investors than oil - and water scarcity is likely to worsen the global food crisis by preventing food production equal to the size of the grain crops of India and America combined.
Climate change is already playing havoc with established weather patterns, causing drought, flood and other extremes of weather that set new records each year. In many extreme weather events, fresh water falls so fast and in such huge amounts that it becomes impossible to capture and use, and it becomes a destructive force instead of a replenishing one.
The vast majority of our fresh water supplies - somewhere around 70% - are used in agriculture, and this gives us a good place to start looking for conservation solutions. And it's an area in which technology can definitely make a big impact. But still, many are predicting that the water squeeze will hit before we even start feeling the effects of peak oil.
Fish
While food as a whole is forecast to come under intense pressure, the future for fish seems far bleaker. It's estimated that unless drastic (and extremely politically difficult) action is taken immediately, humans will eat fish pretty much out of existence within the next 50 years. According to most projections, we will be the generation that runs out of wild fish.
A combination of commercial greed, weak policy, consumer disinterest, massive waste and blatant disregard for what flimsy rules are in place has seen about 30% of fish species lose more than 90% of their populations since 1950. Once a population hits a certain terminal level, it simply can't sustain itself any more. And as each species dies out, the reduction of biodiversity accelerates the rate of decline of the other species around it.
The problem becomes far worse when fisheries and consumers ignore the minimum size limits set to allow fish to reach maturity and breed before they're eaten. Undersize fish are scarily common in European markets and others around the world.
The only plan that seems to have any chance to stall or reverse this accelerating decline is to set up marine wildlife reserves all over the globe, covering between 30 and 40% of the world's oceans. But it would be virtually impossible to reach international consensus on such a plan, let alone enforce it across the massive expanses of the world's oceans.
Fishery lobbies stridently oppose any measure to allow fish stocks to recover, and commercial boats ignore or find ways around the laws that are passed. You can understand why; their catches and their profits are in a steep decline. They feel the rules need to be relaxed so they can earn a living. It's a great example of the catastrophic short-term decision-making our species is renowned for.
This has, of course, been a hugely simplified overview of these four interconnected issues. And there are some potential solutions being developed for each - although each proposed solution seems to come with significant drawbacks and large expenses of its own. The simple fact is that our burgeoning population is already putting the planet's resources under severe stress, and it's going to take a number of broad and large-scale breakthroughs to invent our way out of trouble. If we don't, the next hundred years could look a lot like a reversal of the last hundred.
Apologies if this piece comes across as unnecessarily pessimistic - I'll get back to finding the solutions tomorrow!
Green grass of steppes falls victim to West’s stampede for cashmere
A herdsman guiding his flock to pastures in western Mongolia, where rampant desertification already being felt in China is creeping ever closer
Jane Macartney in Nayman Nur
August 8, 2009
http://www.timesonline.co.uk/tol/news/environment/article6788012.ece
Fly over Mongolia in summer and the steppes look as green as they must have done when Genghis Khan and his armies galloped across the land — but the switch is startling as the flight crosses the border into China’s Inner Mongolian region. The ground suddenly turns brown.
The danger facing Mongolia is that its steppes may be transformed into a desert similar to the one eating away at neighbouring China. The culprit is the humble goat — and the fascination of fashionistas for cashmere.
On the Mongolian steppes, the emptiness and the silence inspire awe. From time to time a huge, tawny eagle drifts on the breeze, watching for small animals to snatch amid the grasses. The only movement on the ground comes from the flocks of sheep and goats, yaks and cattle that roam, heads down, as they munch their way across the grasslands.
Here and there white yurts – the portable dwellings used by the nomadic people — stand out on the endless sea of grass. At one cluster of four yurts, a mother gathers her teenage children, slings a metal bucket over each arm and sets out to milk the horses, a hundred of which graze with their foals near by. The fermented milk is turned into airag, the national drink.
The family’s other animals have been moved for the summer to a more remote area where the grass is greener. The total flock numbers several hundred beasts; nothing too large by Mongolian standards, the mother explains. It is virtually a subsistence living. However, the goats and their fine, downy cashmere brings in cash that enables the family to buy such luxuries as a satellite dish or a motorcycle.
Most flocks now include as many goats as they do sheep. This represents a huge shift, officials say, from the days when the latter outnumbered the former two to one.
The money to be earned from “diamond fibre” cashmere, so prized among wealthy shoppers in Europe and the US, has resulted in Mongolia’s population of cashmere goats soaring to 40 million in 2007 from 25 million in 1993.
The World Bank warned of grave consequences for the environment and for farmers. “Mongolian herds will be at greater risk of severe weather conditions if growing livestock populations and deteriorating pastureland is not reversed,” it said in a report. A combination of the sharp hooves of the goats and their voracious consumption of all greenery — including roots — is harming the steppes. Sheep graze more lightly, skimming the leaves and grasses.
The Ministry of Nature and Environment has estimated that the grassland is thinning out across 75 per cent of this vast country, two thirds the size of Western Europe, while 7 per cent is already desert. This increases the risks posed by the devastating storms, or dzuds, that can wipe out entire flocks, while falling cashmere prices, as a result of the global financial crisis, could wreak havoc.
David Sheehy, of the US-based International Centre for the Advancement of Pastoral Systems, said in the World Bank report: “The decline in the quality of pastureland in Mongolia is of great concern. If the current trend continues, pastureland and herds may be more vulnerable to dzud and drought.”
He was clear about the cause. “The growing number of goats has been a major reason behind this but there is also the general problem of too many livestock and the added impact of climate warming.”
In China, where the problem of desertification and loss of pastureland is far more advanced, the authorities have decimated goat flocks and ordered more rotational farming. That means cashmere buyers have turned to Mongolia for supplies, pushing up the price in recent years. The prestigious Italian textile group Loro Piana, for example, sells its own-label cardigans for more than £1,000 each but also supplies more mainstream brands with cashmere sourced from Mongolia.
The financial crisis has taken its toll but there may be a silver lining to what herders regard as a dark cloud looming over their living standards. Wholesale prices have almost halved in the past year — but that could, in fact, be good news for the environment, according to the analyst Dalkhaijav Damiran, from the University of Saskatchewan in Canada. “The drop in cashmere prices might make it a good time to reduce the number of goats in a herd,” he said.
The UN Development Fund last year began a four-year project to combat desertification and improve land management, but Mongolian officials remain anxious. They have warned that as much as 96 per cent of the country could become desert if more is not done to stem the seemingly inexorable advance of the sands.
World faces hi-tech crunch as China eyes ban on rare metal exports
Beijing is drawing up plans to prohibit or restrict exports of rare earth metals that are produced only in China and play a vital role in cutting edge technology, from hybrid cars and catalytic converters, to superconductors, and precision-guided weapons.
By Ambrose Evans-Pritchard
Published: 5:58PM BST 24 Aug 2009
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6082464/World-faces-hi-tech-crunch-as-China-eyes-ban-on-rare-metal-exports.html
China mines over 95pc of the world?s rare earth minerals and is looking to hoard its resources.
A draft report by China’s Ministry of Industry and Information Technology has called for a total ban on foreign shipments of terbium, dysprosium, yttrium, thulium, and lutetium. Other metals such as neodymium, europium, cerium, and lanthanum will be restricted to a combined export quota of 35,000 tonnes a year, far below global needs.
China mines over 95pc of the world’s rare earth minerals, mostly in Inner Mongolia. The move to hoard reserves is the clearest sign to date that the global struggle for diminishing resources is shifting into a new phase. Countries may find it hard to obtain key materials at any price.
Alistair Stephens, from Australia’s rare metals group Arafura, said his contacts in China had been shown a copy of the draft -- `Rare Earths Industry Devlopment Plan 2009-2015’. Any decision will be made by China’s State Council.
“This isn’t about the China holding the world to ransom. They are saying we need these resources to develop our own economy and achieve energy efficiency, so go find your own supplies”, he said.
Mr Stephens said China had put global competitors out of business in the early 1990s by flooding the market, leading to the closure of the biggest US rare earth mine at Mountain Pass in California - now being revived by Molycorp Minerals.
New technologies have since increased the value and strategic importance of these metals, but it will take years for fresh supply to come on stream from deposits in Australia, North America, and South Africa. The rare earth family are hard to find, and harder to extract.
Mr Stephens said Arafura’s project in Western Australia produces terbium, which sells for $800,000 a tonne. It is a key ingredient in low-energy light-bulbs. China needs all the terbium it produces as the country switches wholesale from tungsten bulbs to the latest low-wattage bulbs that cut power costs by 40pc.
No replacement has been found for neodymium that enhances the power of magnets at high heat and is crucial for hard-disk drives, wind turbines, and the electric motors of hybrid cars. Each Toyota Prius uses 25 pounds of rare earth elements. Cerium and lanthanum are used in catalytic converters for diesel engines. Europium is used in lasers.
Blackberries, iPods, mobile phones, plams TVs, navigation systems, and air defence missiles all use a sprinkling of rare earth metals. They are used to filter viruses and bacteria from water, and cleaning up Sarin gas and VX nerve agents.
Arafura, Mountain Pass, and Lynas Corp in Australia, will be able to produce some 50,000 tonnes of rare earth metals by the mid-decade but that is not enough to meet surging world demand.
New uses are emerging all the time, and some promise quantum leaps in efficiency. The Tokyo Institute of Technology has made a breakthrough in superconductivity using rare earth metals that lower the friction on power lines and could slash electricity leakage.
The Japanese government has drawn up a “Strategy for Ensuring Stable Supplies of Rare Metals”. It calls for `stockpiling’ and plans for “securing overseas resources’. The West has yet to stir.
Running out of resources
Posted by: Natsuko Waki
05:54 July 28th, 2009
http://blogs.reuters.com/macroscope/2009/07/28/running-out-of-resources/
Oil prices are more than double the December-February troughs and commodity prices generally are going up as the market cheers signs of an economic recovery.
Jeremy Grantham, chairman of U.S.-based money monager GMO, warns that the world is running out of resources in the long run yet is not correctly pricing the fact.
“We are simply running out of everything at a dangerous rate… As we move through our remarkable and irreplaceable hydrocarbon reserves, the price will, of course, rise remorselessly to ration supplies. We need, it seems, the shock of a Pearl Harbor to really gear up and make sacrifices,” he says.
Grantham points out that in 1977 President Jimmy Carter warned that we were running out of oil and urged people to fully insulate 80% of the houses in 10 years.
“Thirty precious years have passed, and there is now no safety margin. We must prepare ourselves for waves of higher resource prices and periods of shortages unlike anything we have faced outside of wartime conditions,” he writes.
“In fact, I believe we are already several years into this painful transition but are still mostly invested in denying it.”
Running Out of Resources?
by Pete Geddes
In the Bozeman Daily Chronicle, August 08, 2007
http://www.free-eco.org/articleDisplay.php?id=570
I’m often asked about our consumption of natural resources, e.g., oil, iron, and copper. Since these resources are finite and population continues to grow, aren’t we in danger of running out? My short answer is no, we’ll never run out of anything that trades in the marketplace. But, we should be concerned about running out of “resources” that have no price and no owner, e.g., wild things and the ecosystems upon which they depend. Here’s why I’m concerned about the one and not the other.
Geologists define resources as the total physical stock of any material e.g., coal. In contrast, reserves are the portion of those resources that can be economically developed. Technological advances allow us to constantly move commodities from the resource category into the reserve pool.
Prices also expand our reserves, as yesterday’s high cost resources become today’s lower cost ones (e.g., Canada’s tar sands). Rising prices signal scarcity, and this creates incentives that spur conservation and the search for substitutes (e.g., silicon fiber-optic lines replaced copper phone wires to great environmental benefit).
The 20th Century is littered with predictions of the world’s imminent collapse from overpopulation, pollution, and resource shortage. A federal judge at a recent FREE conference noted, “When we see nothing but progress behind us, why should we see only destruction in front?” When institutions foster innovation and property rights are secure, scarcity never wins against creativity.
Ecologist Garret Hardin wrote his classic, “The Tragedy of the Commons” in 1968. The logic of this article is straightforward. When no one has control over a resource, be it a parcel of ocean or a dormitory lounge, it tends to be poorly maintained, overused, or depleted. This explains why prized resources, such as ocean fisheries, available to all, will be over exploited.
Without social or legal constraints, the incentive is for people to seek narrow personal advantages at the expense of the group and the resource. Few people act as wise stewards because others take a “free ride” on such actions, and rarely reciprocate.
Some common-pool resource problems, like climate change, present a great challenge. Since it is impossible to limit access to the atmosphere, a regulatory approach may be justified. For example, a carbon-tax to reduce CO2 emissions. Other open access resource problems, ocean fisheries for example, can be solved by assigning property rights to fishermen in the form of tradable quotas.
It’s a challenge to extend property rights to wildlife and their ecosystems. The traditional approach has been to create protected areas and limit human use (usually with a uniform and badge). But this frequently fails, especially in developing countries where poverty drives people to exploit the natural world and there are no institutions to foster conservation. A key to success is to structure institutions such that local people have incentives for conservation.
Over a decade ago, a group of conservationists gathered to discuss an approach that was sensitive to the aspirations of local people. They collected their thoughts in an attractive booklet, “The View from Airlie.” Conservation success often depends on the active involvement, rather than the exclusion, of local communities. They observed:
"The chief strategy of conservationists for more than a century has been exclusionary and implicitly misanthropic.... establish protected areas...and then safeguarding these areas by carefully limiting human use.... The protected-area approach...has often robbed rural communities of their traditional user-rights over forests, waters, fisheries, and wildlife, without offering appropriate remuneration."
Here’s the nugget: “Blockading rural people against the use of their own landscape without offering them viable alternatives will always, to the blockaded, seem perverse and intolerable. And will always, consequently be futile.”
Successful conservation groups understand this. For example, the Bozeman based Tributary Fund works with local communities in Mongolia to protect the Eg-Uur watershed, home of the world’s largest (and endangered) salmon, the taimen. The Tributary Fund generates incentives for environmental stewardship by employing local families in their operations, e.g., as fishing guides.
We should not be worried about running out of resources that fuel our economy. And fortunately, entrepreneurs like those at the Tributary Fund give us hope that we can overcome the other kind of resource scarcity as well.
Pete Geddes is Executive Vice President of FREE.
LEARNING FROM PAST CIVILIZATIONS
Lester R. Brown
http://www.earthpolicy.org/Books/Seg/PB3ch01_ss3.htm
To understand our current environmental dilemma, it helps to look at earlier civilizations that also got into environmental trouble. Our early twenty-first century civilization is not the first to face the prospect of environmentally induced economic decline. The question is how we will respond.
As Jared Diamond points out in his book Collapse, some of the early societies that were in environmental trouble were able to change their ways in time to avoid decline and collapse. Six centuries ago, for example, Icelanders realized that overgrazing on their grass-covered highlands was leading to extensive soil loss from the inherently thin soils of the region. Rather than lose the grasslands and face economic decline, farmers joined together to determine how many sheep the highlands could sustain and then allocated quotas among themselves, thus preserving their grasslands. Their wool production and woolen goods industry continue to thrive today.
Not all societies have fared as well as the Icelanders. The early Sumerian civilization of the fourth millennium BC had advanced far beyond any that had existed before. Its carefully engineered irrigation system gave rise to a highly productive agriculture, one that enabled farmers to produce a food surplus, supporting formation of the first cities and the first written language, cuneiform.
By any measure it was an extraordinary civilization, but there was an environmental flaw in the design of its irrigation system, one that would eventually undermine its food supply. The water that backed up behind dams built across the Euphrates was diverted onto the land through a network of gravity-fed canals. As with most irrigation systems, some irrigation water percolated downward. In this region, where underground drainage was weak, this slowly raised the water table. As the water climbed to within inches of the surface, it began to evaporate into the atmosphere, leaving behind salt. Over time, the accumulation of salt on the soil surface lowered the land’s productivity.
Shifting from wheat to barley, a more salt-tolerant plant, postponed Sumer’s decline, but it was treating the symptoms, not the cause, of their falling crop yields. As salt concentrations continued to build, the yields of barley eventually declined also. The resultant shrinkage of the food supply undermined this once-great civilization. As land productivity declined, so did the civilization.
The New World counterpart to Sumer is the Mayan civilization that developed in the lowlands of what is now Guatemala. It flourished from AD 250 until its collapse around AD 900. Like the Sumerians, the Mayans had developed a sophisticated, highly productive agriculture, this one based on raised plots of earth surrounded by canals that supplied water.
As with Sumer, the Mayan demise was apparently linked to a failing food supply. For this New World civilization, it was deforestation and soil erosion, likely on top of a series of droughts, that undermined agriculture. Food shortages apparently triggered civil conflict among various Mayan cities as they competed for something to eat. Today this region is covered by jungle, reclaimed by nature.
The Icelanders crossed a political tipping point that enabled them to come together and limit grazing before grassland deterioration reached the point of no return. The Sumerians and Mayans failed to do so. Time ran out.
Today, our successes and problems flow from the extraordinary growth in the world economy over the last century. The economy’s annual growth, once measured in billions of dollars, is now measured in the trillions. Indeed, just the annual growth in the output of goods and services in recent years exceeded the total output of the world economy in 1900.
While the economy is growing exponentially, the earth’s natural capacities, such as its ability to supply fresh water, forest products, and seafood, have not increased. Humanity’s collective demands first surpassed the earth’s regenerative capacity around 1980. Today, global demands on natural systems exceed their sustainable yield capacity by nearly 30 percent. We are meeting current demands by consuming the earth’s natural assets, setting the stage for decline and collapse.
In our modern high-tech civilization, it is easy to forget that the economy, indeed our existence, is wholly dependent on the earth’s natural systems and resources. We depend, for example, on the earth’s climate system for an environment hospitable to agriculture, on the hydrological cycle to provide us with fresh water, and on long-term geological processes to convert rocks into the soil that has made the earth such a biologically productive planet.
There are now so many of us placing such heavy demands on the earth that we are overwhelming its natural capacities to meet our needs. Forests are shrinking. Each year overgrazing converts vast areas of grassland into desert. The pumping of underground water exceeds natural recharge in countries containing half the world’s people, leaving many without adequate water.
Each of us depends on the products and services provided by the earth’s ecosystems, ranging from forest to wetlands, from coral reefs to grasslands. Among the services these ecosystems provide are water purification, pollination, carbon sequestration, flood control, and soil conservation. A four-year study of the world’s ecosystems by 1,360 scientists, the Millennium Ecosystem Assessment, reported that 15 of 24 primary ecosystem services are being degraded or pushed beyond their limits. For example, three quarters of oceanic fisheries, a major source of protein in the human diet, are being fished at or beyond their limits, and many are headed toward collapse.
Tropical rainforests are another ecosystem under severe stress, including the vast Amazon rainforest. Thus far roughly 20 percent of the rainforest has been cleared either for cattle ranching or soybean farming. Another 22 percent has been weakened by logging and road building, letting sunlight reach the forest floor, drying it out, and turning it into kindling. When it reaches this point, the rainforest loses its resistance to fire and begins to burn when ignited by lightning strikes. Scientists believe that if half the Amazon is cleared or weakened, this may be the tipping point, the threshold beyond which the rainforest cannot be saved. Daniel Nepstad, an Amazon-based senior scientist from the Woods Hole Research Center, sees a future of “megafires” sweeping through the drying jungle. He notes that the carbon stored in the Amazon’s trees equals roughly 15 years of human-induced carbon emissions in the atmosphere. If we reach this tipping point we will have triggered a major climate feedback, another step that could help seal our fate as a civilization.
The excessive pressures on a given resource typically begin in a few countries and then slowly spread to others. Nigeria and the Philippines, once net exporters of forest products, are now importers. Thailand, now largely deforested, has banned logging. So has China, which is turning to Siberia and to the few remaining forested countries in Southeast Asia, such as Myanmar and Papua New Guinea, for the logs it needs.
As wells go dry, as grasslands are converted into desert, as fisheries are depleted, and as soils erode, people are forced to migrate elsewhere, either within their country or across national boundaries. As the earth’s natural capacities at the local level are exceeded, the declining economic possibilities generate a flow of environmental refugees.
Countries today are facing several negative environmental trends simultaneously, some of which reinforce each other. The earlier civilizations such as the Sumerians and Mayans were often local, rising and falling in isolation from the rest of the world. In contrast, we will either mobilize together to save our global civilization, or we will all be potential victims of its disintegration.
Adapted from Chapter 1, “Entering a New World,” in Lester R. Brown, Plan B 3.0: Mobilizing to Save Civilization (New York: W.W. Norton & Company, 2008), available for free downloading and purchase at http://www.earthpolicy.org/Books/PB3/index.htm.
Released July 29, 2008
Here's an nicely written recount of what IOWA was in 1800 and what US settlers had turned it into by 1900, natural resources be dammed.
A Century of Change: 1800 to 1900
http://www.igsb.uiowa.edu/Portrait/3change/change.htm
We did it to our country but abhor others doing it to theirs, go figure.
World at Gunpoint
Or, what's wrong with the simplicity movement
by Derrick Jensen
Published in the May/June 2009 issue of Orion magazine
http://www.orionmagazine.org/index.php/articles/article/4697/
A FEW MONTHS AGO at a gathering of activist friends someone asked, “If our world is really looking down the barrel of environmental catastrophe, how do I live my life right now?”
The question stuck with me for a few reasons. The first is that it’s the world, not our world. The notion that the world belongs to us—instead of us belonging to the world—is a good part of the problem.
The second is that this is pretty much the only question that’s asked in mainstream media (and even among some environmentalists) about the state of the world and our response to it. The phrase “green living” brings up 7,250,000 Google hits, or more than Mick Jagger and Keith Richards combined (or, to look at it another way, more than a thousand times more than the crucial environmental philosophers John A. Livingston and Neil Evernden combined). If you click on the websites that come up, you find just what you’d expect, stuff like “The Green Guide: Shop, Save, Conserve,” “Personal Solutions for All of Us,” and “Tissue Paper Guide for Consumers.”
The third and most important reason the question stuck with me is that it’s precisely the wrong question. By looking at how it’s the wrong question, we can start looking for some of the right questions. This is terribly important, because coming up with right answers to wrong questions isn’t particularly helpful.
So, part of the problem is that “looking down the barrel of environmental catastrophe” makes it seem as though environmental catastrophe is the problem. But it’s not. It’s a symptom—an effect, not a cause. Think about global warming and attempts to “solve” or “stop” or “mitigate” it. Global warming (or global climate catastrophe, as some rightly call it), as terrifying as it is, isn’t first and foremost a threat. It’s a consequence. I’m not saying pikas aren’t going extinct, or the ice caps aren’t melting, or weather patterns aren’t changing, but to blame global warming for those disasters is like blaming the lead projectile for the death of someone who got shot. I’m also not saying we shouldn’t work to solve, stop, or mitigate global climate catastrophe; I’m merely saying we’ll have a better chance of succeeding if we recognize it as a predictable (at this point) result of burning oil and gas, of deforestation, of dam construction, of industrial agriculture, and so on. The real threat is all of these.
The same is true of worldwide ecological collapse. Extractive forestry destroys forests. What’s the surprise when extractive forestry causes forest communities—plants and animals and mushrooms and rivers and soil and so on—to collapse? We’ve seen it once or twice before. When you think of Iraq, is the first image that comes to mind cedar forests so thick the sunlight never reaches the ground? That’s how it was prior to the beginnings of this extractive culture; one of the first written myths of this culture is of Gilgamesh deforesting the plains and hillsides of Iraq to build cities. Greece was also heavily forested; Plato complained that deforestation harmed water quality (and I’m sure Athenian water quality boards said the same thing those boards say today: we need to study the question more to make sure there’s really a correlation). It’s magical thinking to believe a culture can effectively deforest and yet expect forest communities to sustain.
It’s the same with rivers. There are 2 million dams just in the United States, with 70,000 dams over six feet tall and 60,000 dams over thirteen feet tall. And we wonder at the collapse of native fish communities? We can repeat this exercise for grasslands, even more hammered by agriculture than forests are by forestry; for oceans, where plastic outweighs phytoplankton ten to one (for forests to be equivalently plasticized, they’d be covered in Styrofoam ninety feet deep); for migratory songbirds, plagued by everything from pesticides to skyscrapers; and so on.
The point is that worldwide ecological collapse is not some external and unpredictable threat—or gun barrel—down which we face. That’s not to say we aren’t staring down the barrel of a gun; it would just be nice if we identified it properly. If we means the salmon, the sturgeon, the Columbia River, the migratory songbirds, the amphibians, then the gun is industrial civilization.
A second part of the problem is that the question presumes we’re facing a future threat—that the gun has yet to go off. But the Dreadful has already begun. Ask passenger pigeons. Ask Eskimo curlews. Ask great auks. Ask traditional indigenous peoples almost anywhere. This is not a potential threat, but rather one that long-since commenced.
The larger problem with the metaphor, and the reason for this new column in Orion, is the question at the end: “how shall I live my life right now?” Let’s take this step by step. We’ve figured out what the gun is: this entire extractive culture that has been deforesting, defishing, dewatering, desoiling, despoiling, destroying since its beginnings. We know this gun has been fired before and has killed many of those we love, from chestnut ermine moths to Carolina parakeets. It’s now aimed (and firing) at even more of those we love, from Siberian tigers to Indian gavials to entire oceans to, in fact, the entire world, which includes you and me. If we make this metaphor real, we might understand why the question—asked more often than almost any other—is so wrong. If someone were rampaging through your home, killing those you love one by one (and, for that matter, en masse), would the question burning a hole in your heart be: how should I live my life right now? I can’t speak for you, but the question I’d be asking is this: how do I disarm or dispatch these psychopaths? How do I stop them using any means necessary?
Finally we get to the point. Those who come after, who inherit whatever’s left of the world once this culture has been stopped—whether through peak oil, economic collapse, ecological collapse, or the efforts of brave women and men fighting in alliance with the natural world—are not going to care how you or I lived our lives. They’re not going to care how hard we tried. They’re not going to care whether we were nice people. They’re not going to care whether we were nonviolent or violent. They’re not going to care whether we grieved the murder of the planet. They’re not going to care whether we were enlightened or not enlightened. They’re not going to care what sorts of excuses we had to not act (e.g., “I’m too stressed to think about it” or “It’s too big and scary” or “I’m too busy” or any of the thousand other excuses we’ve all heard too many times). They’re not going to care how simply we lived. They’re not going to care how pure we were in thought or action. They’re not going to care if we became the change we wished to see.
They’re not going to care whether we voted Democrat, Republican, Green, Libertarian, or not at all. They’re not going to care if we wrote really big books about it. They’re not going to care whether we had “compassion” for the CEOs and politicians running this deathly economy. They’re going to care whether they can breathe the air and drink the water. They’re going to care whether the land is healthy enough to support them.
We can fantasize all we want about some great turning, and if the people (including the nonhuman people) can’t breathe, it doesn’t matter. Nothing matters but that we stop this culture from killing the planet. It’s embarrassing even to have to say this. The land is the source of everything. If you have no planet, you have no economic system, you have no spirituality, you can’t even ask this question. If you have no planet, nobody can ask questions.
What question would I ask instead? What if, instead of asking “How shall I live my life?” people were to ask the land where they live, the land that supports them, “What can and must I do to become your ally, to help protect you from this culture? What can we do together to stop this culture from killing you?” If you ask that question, and you listen, the land will tell you what it needs. And then the only real question is: are you willing to do it?
Always amazes me how inordinately Long it takes for any meaningful change to take root.
Has anyone here actually taken a ride in an electric car?
futr
Goodbye Fossil Fuel Dependence, Hello Rare Earth Dependence!
http://www.treehugger.com/files/2009/06/goodbye-fossil-fuel-dependence-hello-rare-earth-dependence.php
Resource scarcity: what does it mean for business?
6 May 2009
http://www.lloyds.com/News_Centre/Features_from_Lloyds/News_and_features_2009/360/Resource_scarcity_what_does_it_mean_for_business.htm
Resource scarcity: is it a longer term risk that's overlooked?A new report, launched by Lloyd’s and the International Institute of Strategic Studies last week, advised businesses to assess their vulnerability to the increasing scarcity of resources such as fresh water, food and energy triggered by global warming.
In this, the second of two features marking the launch of the report, we explore what others are saying on resource scarcity—and what it means for business.
Risk managers worried
Although businesses are grappling with the risks posed to their immediate existence by the economic recession they cannot afford to ignore those that are looming on the horizon, particularly those created by climate change.
“Businesses that focus solely on the economic climate rather than the global climate in which we all live and work are in for a big shock,” says Julia Graham, chair of the UK risk management association AIRMIC.
“Businesses should be planning for the future and what’s really worrying me is that people are so preoccupied by the current economic environment that many of these other longer term risks are being overlooked,” adds Graham.
A world in ecological debt
In its Living Planet Report 2008, the World Wildlife Fund (WWF) said: “The possibility of financial recession pales in comparison to the looming ecological credit crunch.”
The global population’s demand for natural resources exceeds by 30% the planet’s capacity to regenerate those resources, the WWF said. Furthermore, this ‘global overshoot’ is growing.
We’re running up a global ecological debt each year of around $4 trillion to $4.5 trillion, according to a recent pamphlet by the Forum for the Future. To put that in perspective, that’s around the entire cost of the financial crisis as estimated by the International Monetary Fund.
Radical greening?
The 2009 Ernst & Young Business Risk Report suggests there is a growing realisation among companies of the environmental threats they face. Not surprisingly, the credit crunch tops its list of the top 10 risks for global business. Regulation and compliance comes second, with the deepening recession in third spot.
But in fourth place is what Ernst & Young calls the risk of ‘radical greening’—the environmental and sustainability challenges facing firms. This risk saw one of the most dramatic movements up the list (it was in ninth place in 2008), despite being unrelated to the financial climate.
Its elevation is partly due to the soaring oil price in 2008, but even though the cost of oil has fallen again few analysts interviewed by Ernst & Young see this risk decreasing in future.
Prepare for peak oil
But it seems that companies outside those industries most directly exposed to volatility in the supply of fossil fuels—oil and gas, construction and energy utilities—still do not see this as being a direct threat to their own businesses. Ernst & Young says that the risk of energy shock is a peril that is still “below the radar” for most enterprises.
However, the Industry Taskforce on Peak Oil & Energy Security—a group of UK-based companies including Arup, Foster and Partners and Virgin Group—has warned of the consequences of not being prepared for oil production reaching its peak.
“Neither the government, nor the public, nor many companies, seem to be aware of the dangers the UK economy faces from imminent peak oil …The risks to UK society from peak oil are far greater than those that tend to occupy the government’s risk-thinking, including terrorism,” the Taskforce’s report said.
These dangers are not confined to the UK, but the Taskforce calls on the British government and companies to consider the risks and to plan strategies in response to this problem.
Resource scarcity: no longer too remote a risk
Planning for remote and faraway risks can be difficult. An article in March’s Harvard Business Review said companies should adopt “sustainable risk management”.
It says: “Instead of focusing on the fact that the probabilities of catastrophic risks are extremely small, risk managers should build scenarios for such risks, and the organisation should design strategies for surviving them.”
Resource scarcity is precisely this kind of risk. The threat of increasingly scarce oil, of limited water supplies or of international tension as a result of climate change may seem remote to many businesses right now.
But forward-looking firms are already assessing their exposure to these effects of global warming, ensuring they are prepared for the changes it brings and able to exploit the opportunities that emerge
"Game Over: How You Can Prosper in a Shattered Economy"
March 28, 2009
http://www.financialsense.com/Experts/2009/Leeb.html
You already know about the devastating recession we're in. Jobs are being cut by the tens of thousands. Real estate values are plummeting. Retirement plans and 401ks are going up in smoke. And then there's rising inflation. And whether we like it or not, higher gasoline prices again are right around the corner.
Then there's the ever-present confusion and dips in the stock market, and, whether we want to admit it or not, the fact that the world is finally beginning to run out of essential raw materials, such as silver, titanium, and, of course, oil.
Yes, the economy is definitely a wreck. Even worse, according to most experts, our problems are not going away soon. We're going to be in serious financial trouble for a long time.
So . . . are you ready for some good news? As you will discover in GAME OVER, bestselling author and investment advisor Dr. Stephen Leeb shows you how to not only survive in the current economic maelstrom but actually find a way to thrive.
Dr. Leeb first tells you just how bad things are by exposing the basic suppositions of our institutions, and how quickly outdated they've become. Warning bells are sounding especially for Americans looking forward to a relaxing retirement and living off their savings, investments, Social Security, and Medicare. The time to sit up and take action is now.
Dr. Leeb provides a clear-cut and well-crafted financial road map to protect every investor in the years to come. Specifically, he reveals which key investments will steadily rise . . . the best ways to hedge surging inflation . . . and which sectors will boom.
Many will lose their savings, watch their investments shrink, and never fulfill their financial dreams. But with Dr. Leeb's advice, you can make sure yours come true.
For many years, Stephen Leeb has been one of the nation's leading experts on finance, investing, and Wall Street trends. Always ahead of the curve, he has predicted the bursting of the tech bubble, the growing scarcity of natural resources, and the consequences of the collapse in housing prices--at the same time pioneering investment strategies through such difficult times. A graduate of the Wharton School of Business with a master's degree in mathematics and a doctorate in psychology, Dr. Leeb is a regular contributor to all major financial TV networks, including CNN, CNBC, FOX Business, and Bloomberg, as well as all major financial radio stations. He lives in New York City.
Bolivia's Control of the World Lithium Supply...
http://www.nytimes.com/2009/02/03/world/americas/03lithium.html?em
futrcash
Peak Gold (and Silver)
Posted Sunday, 1 February 2009
By Andy Hoffman
Source: GoldSeek.com
http://news.goldseek.com/GoldSeek/1233538451.php
The below article beautifully illustrates a concept I have highlighted for years, in other words the horrific outlook for future gold production.
Before reading the article, which shows how gold production has been in decline for decades with little (read: no) hope for improvement, look at this graph, which shows that, amazingly, despite a now ten-year bull market, global gold production has fallen nearly every year since its commencement!
Like all commodities, there is only a finite supply in the world. We will never “run out” of gold, or oil for that matter, but given the difficulty of finding inexpensive sources, it will take significantly more money to materially increase supply, and in turn significantly higher gold prices. Aside from the fact that new sources tend to be deeper in the ground (South Africa is the best example), in more remote regions, and in more politically unstable countries, the costs of drilling equipment and personnel continue to rise due to a combination of tight supply and the ongoing ravages of inflation.
Last but by far not least, the horrific suppression of gold prices over the past decade, yielding non-stop crashes of the metal each time it has threatened to finally give the industry an opportunity to be profitable, have yielded an incredible decline in gold mining capital spending over the past few years despite the ten-year bull market.
Before reading this article, keep in mind that demand is starting to exponentially rise (for REAL, PHYSICAL gold). Based on anecdotal evidence, as well as the fact that today’s gold mining industry probably is in its worst financial shape since the treacherous, bankruptcy-yielding 1980s, I forecast that global gold production will fall by an additional 10%-15% over the next 5+ years no matter what the gold price rises to.
Notably, unlike gold roughly two-thirds of global silver production emanates as by-product from gold and lead/zinc mines, so the factors influencing its production are slightly different. However, combining the aforementioned data about declining gold production, as well as the fact that lead and zinc mines are being closed everywhere due to this year’s plunge in prices, it is easy to see that silver production, too, has nowhere to go but down. And keep in mind that silver has been in a supply/demand deficit for 15 straight years, with nearly no material global inventories to speak of.
As Jim Sinclair says, “This is it, and it is now”.
Andy
Phosphorus matters: soil erosion & contamination
by Marcin Gerwin
Published Jan 14 2009
by Permaculture Research Institute of Australia
http://permaculture.org.au/2009/01/14/phosphorus-matters
Part One: Closing the Phosphorus Cycle
Phosphate mine on Nauru island.
Currently part of it is reforested.
Photo: Jon Harald Søby
It might sound ridiculous, but for every container of bananas, coffee, tea or cocoa imported, we should send back a shipment of a fluffy, earth-like smelling compost. Why is that? With each container of food we import nutrients taken up by plants from the soil. We import calcium, potassium, magnesium, boron, iron, zinc, molybdenum, copper and many others. One of the essential elements imported in food is phosphorus. For every ton of bananas we import 0.3 kg of phosphorus, for every ton of cocoa it’s 5 kg and for ton of coffee it’s 3.3 kg of phosphorus. Tea is a bit more complicated, because the amount of phosphorus depends on the origin of tea - for example in 1 ton of tea leaves harvested in Sri Lanka there are some 3.5 kg of phosphorus, while tea from South India contains 6.6 kg of phosphorus (1).
Each year some 13.5 million tons of bananas alone are exported around the world (2), containing 4,000,000 kg of elemental phosphorus up taken by the plants from tropical soils. And most of this phosphorus never comes back to the soil it was removed from. Yes, but can’t the farmers replace the nutrients lost using fertilizers? That’s what the fertilizers are used for, are they not? Sure they can. Farmers can buy a bag of ground phosphate rocks or guano (bird or bat droppings) or even a bag of artificial fertilizer such as superphosphate if they don’t farm organically. No problem. They can replace every kilogram of phosphorus taken from the soil by plants and sent overseas with their produce.
Phosphorus Molecules
So, why should we send compost back on ships? This would add extra cost to the imported food and make it much more expensive! We should start closing nutrients cycle soon, because the world reserves of phosphate rocks, which are used for the production of phosphate fertilizers, are declining. They can be depleted even this century (3).
The problem with the lack of phosphate fertilizers does not start, however, when all phosphate rock reserves are gone. It starts as soon as the demand for phosphate fertilizers exceeds the supply of phosphate rocks available for export, meaning: farmers living in countries that do not have a local source of phosphate rocks would like to buy phosphate fertilizers, but there are not enough bags for everyone. And this situation may appear within the next 10-20 years.
This short timeframe is based upon the assumption that the demand for phosphate fertilizers will continue to grow and that within 10-20 years US reserves of phosphate rocks available for mining will be considerably depleted and USA will have to rely on imported phosphorus. It is unclear whether the phosphate exporting countries will be able to respond adequately to keep up with the rising demand by opening new mines or increasing production in the existing ones, which otherwise could lead to lack of sufficient amount of phosphate fertilizers on the market. A 50% rise in the US imports would require 50% rise of present world phosphate rock exports. A similar situation may exist in countries other than USA, but it was not taken into consideration due to lack of sufficient data. Demand for phosphate fertilizers in the USA may drop, however, owing to fall of agricultural production caused by droughts, depletion of water resources or by other climate related events. This could slow down domestic production of phosphate rocks and conserve these resources for a longer period of time.
What plants need Phosphorus for?
White sweetclover. Photo: Kristian Peters
Phosphorus is one of the key mineral nutrients that are necessary for plants growth. Phosphorus stimulates root growth, flowers blooming and seed development. It is an essential component of DNA, RNA, cell membranes, sugars and carbohydrates (4). Without phosphorus plants just don’t grow and there is no substitute for it. Although in many soils there are large reserves of phosphorus, it is often present in the form that cannot be used by plants (such as insoluble calcium or aluminum phosphate salts). Some plants, however, like white or yellow sweet clover for example (5), can mobilize phosphate by secreting organic acids (when harvested they can be used as a green manure with high phosphorus content), but far more efficient for this job are mycorrhizal fungi and microbes that secrete enzymes, various acids and chelating agents that turn organic and inorganic phosphate into a solution that can be taken up by plants (6). Nevertheless, when the content of phosphorus in the soil is low, all that farmer can do is to bring in some kind of phosphate fertilizer.
How much phosphate rocks is available for export?
Worldwide approximately 30 millions tons of phosphate rocks are exported every year, mainly from Africa (62.8% in 2006) (7). It sounds like a lot, but it is less than is needed for the consumption of a single country - the USA - the largest consumer, producer and supplier of phosphate fertilizers in the world. In 2006 the USA consumed 32.6 millions tons of phosphate rocks (8). Fortunately, USA is currently almost self-sufficient in production of phosphate rocks. In 2007 US imports accounted only for 2.8 millions ton of phosphate rocks (8.6%) and 99% of it came from just one origin - Morocco.
Phosphate rocks mine in Togo.
Photo: Alexandra Pugachevskaya
However, the reserves of phosphate rocks in USA are limited. In 2007 there were only about 1,200 millions tons left (9). As soon as USA runs out of its phosphorus there will be a huge demand for the phosphate rocks. When might this happen? If the consumption in the USA continues to grow, the US domestic reserves could be gone in 25 years (10). At the current rate of production this could be in around 40 years. Most of the phosphate rocks in USA are mined in Florida and according to Stephen Jasinski from the U.S. Geological Survey “production in Florida could begin to drop in about 5 years or imports will be needed if the new mines are not opened (11).”
Demand for fertilizers is growing at the rate of 2.8% per year (12). It is expected to continue to grow, because fertilizers are needed to feed the increasing human population and to satisfy the need for biofuels. The acreage of industrial farms around the world which rely on artificial fertilizers may still increase in the years to come (e.g. in Russia, Brazil or even Madagascar) and in consequence the overall demand for phosphate fertilizers will rise. Certified organic farms can also use phosphate rocks (in unprocessed form), when phosphorus is deficient in the soil.
There are many countries like India, Australia, Poland and most of the Western European countries which are completely dependent on imports of phosphate rocks for fertilizing soils and growing food. And we import it mainly from Morocco as well. Without phosphate fertilizers yields of wheat, maize, tomatoes, strawberries, potatoes and many other crops will drop and eventually they could even fail. In Poland we have huge reserves of phosphate rocks. The problem is that the content of elemental phosphate in these rocks is low, they are located under villages, forests or farmlands or there is too much water in the mines to continue extraction.
However, if we manage to close the phosphorus cycle, there’s no need to worry about phosphate rock reserves. What we have mined so far can circulate from farm to table and back again, without depleting the soils. Let’s have a closer look where the phosphorus is leaking now.
Where does the phosphorus go?
In tropical climate phosphorus can be lost as soon as the farmer burns the rainforest to clear the site. Most tropical soils are poor in nutrients, and phosphorus is stored not in the soil, but in the vegetation. When rainforest is burnt phosphorus is left in the remaining ashes, but these ashes can be washed away by rains very quickly. There may be some old branches or unburnt leaves left on the ground and microbes can feed on them releasing phosphorus to the crops for some two years. But later on, when there are no more sources of phosphorus for the microbes to feed on and to release for plants, the land becomes infertile. And the farmer? If he cannot afford to buy commercial fertilizers he burns down another patch of the rainforest or he is forced to move to the city. There are more than 300 million slash-and-burn farmers worldwide, each one clearing about a hectare of forest a year (13).
On many farms, however, fertilizers are applied and farmers continue to grow crops. Some minimal amounts of phosphorus may leach from farm to groundwater, especially when artificial soluble fertilizer is used (such as superphosphate) (14). Most phosphorus losses occur through surface soil erosion, when soil is washed away by strong rain, or through harvesting of plants. Runoff of the nutrient rich water from the fields into the streams, lakes and oceans often causes explosion of the algae population and can lead to depletion of oxygen, seriously affecting aquatic animals and even coral reefs.
And what was the former one? Harvesting of plants? That’s right. With each apple, carrot, cucumber, coffee, cherry or watermelon a small bit of phosphorus is taken away from the soil. It can be eaten by the farmer and his family or loaded on truck and transported to the market. It can be also shipped overseas to the foreign supermarkets. So long nutrients! Have a good time in Italy or France! Please come back… one day.
Phosphate processing plant in
Soda Springs, USA, operated by Monsanto.
Source: The Center for Land Use Interpretation
Before food reaches the table many crops are processed and there are various residues left which contain phosphorus, e.g. orange peels or rice husks. They are either composted or sent to landfill. Then, finally, the consumer prepares a meal from the food that farmers harvested, and then leftovers with the precious phosphorus are thrown into the garbage or on the compost pile. The meal is eaten and out of the pizzas, spaghettis and apple pies only less than 1% of phosphorus is absorbed by our bodies (15) and remaining 99% is, in industrialized countries, flushed down the toilet. The content goes to a wastewater treatment plant. Treated biosolids from the treatment plants are reused as soil amendments or sent to the landfills. Part of the phosphorus from the wastewater treatment plant is discharged with treated water into the rivers or the sea.
Not all phosphate rocks are used for production of fertilizers. Around 5% are used as animal feed supplements and another 5% for industrial applications, e.g. for the manufacture of detergents. Some of us (like the author) are allergic to phosphates in soaps or washing powders and are a living proof that we do not need to use them at all. There are plenty of natural soaps and washing powders without phosphates we can buy or we can make our own.
Phosphate is used also for production of glyphosate, a herbicide which is known under a trade name Roundup. The manufacturer of Roundup, Monsanto, owns even a whole phosphate mine and rock processing plant in Idaho, USA. Luckily, organic gardeners don’t have to spray any of these. A much better idea would be to use the remaining phosphate rock reserves to restore degraded lands, rather than to produce herbicides or detergents.
Closing the nutrients cycle
Ideally the same amount of nutrients that left the farm should come back to it. To achieve this goal we should compost or ferment all residues from farms, food processing plants and households and make them available for farmers. And yes, we need to compost urine and feces as well. There are many types of compost toilets, including the simplest sawdust toilet to the commercial types with electric fans. If handled properly they don’t smell badly and the final product of the compost toilet is just a plain ordinary compost. It can be collected in the city in special containers, standing along the curb near the containers for recycling glass and plastics. Joseph Jenkins’ “Humanure Handbook” is a great resource on the subject.
All organic waste can be collected as a part of a municipality recycling program and leftovers from the kitchen can be picked up weekly from the separate curbside container. For backyard gardeners and farmers who eat their own food there are many methods of composting to choose from – buckets, triangle cages, compost tumblers, worm composting, loose heaps or classic wooden containers. There are even composters which can be kept directly in the kitchen without any suspicious smells.
It seems also a good idea to extract carbon and hydrogen from the food residues in the form of biogas which is primarily methane (CH4). It can be used for cooking, heating, electricity generation or for powering vehicles. The exciting thing about biogas is that we don’t waste any of the minerals from the organic matter - carbon is taken by plants from the air in the form of carbon dioxide and hydrogen comes from water. After fermentation process in a biodigester the organic matter is still perfectly useful as a fertilizer.
If the resources of phosphate rocks become depleted this organic waste recycling program will be crucial for farmers. They will be able to buy or receive finished compost according to the amount of food they sold. It may sound absurd, but the content of phosphorus or other nutrients in crops may eventually be counted in the future, so that we can determine how much compost the farmer should receive. Ideally local food should be involved in this scheme to minimize transport needs. And what about the food from overseas farms like coffee or tea? Well, things get much more complicated here. Theoretically, we could exchange nutrients in the form of food, so that for every kilogram of coffee would send back wheat or barley with the equal content of phosphorus. What farmers can do now is to bring compost from the cities, where people eat imported food. The other option is sending compost back. Hmm… Wouldn’t it be just perfect to have a village scale economy where all nutrients would circulate without cars, trucks, cargo ships and complex municipality programs?
Growing food security
Trees in bloom in the Hunza
Valley. Photo: bongo vongo
In places like the Hunza Valley (currently northern Pakistan) and many others around the world, people have grown food in one place for hundreds of years without depleting the soil. As Rob Hopkins writes in his Transition Handbook about the Hunza Valley:
Here was a society which lived within its limits and had evolved a dazzlingly sophisticated yet simple way of doing so. All the waste, including human waste, was carefully composted and returned to the land. The terraces which had been built into the mountainsides over centuries were irrigated through a network of channels that brought mineral-rich water from the glacier above down to the fields with astonishing precision.
Apricot trees were everywhere, as well as cherry, apple, almond and other fruit and nut trees. Around and beneath the trees grew potatoes, barley, wheat and other vegetables. The fields were orderly but not regimented. Plants grew in small blocks, rather than in huge monocultures. Being on the side of a mountain, I invariably had to walk up and down hills a great deal, and soon began to feel some of the fitness for which the people of Hunza are famed. The paths were lined with dry stone walls, and were designed for people and animals, not for cars.
People always seemed to have time to stop and talk to each other and spend time with the children who ran barefoot and dusty through the fields. Apricots were harvested and spread out to dry on the rooftops of the houses, a dazzling sight in the bright mountain sun. Buildings were built from locally-made mud bricks, warm in the winter and cool in the summer. And there was always the majestic splendour of the mountains towering above. Hunza is quite simply the most beautiful, tranquil, happy and abundant place I have ever visited, before or since (16).
Rakaposhi mountain near the
town of Gilgit, Hunza Valley.
Photo: bongo vongo
Villages can provide a good life and it is easy to design a local food system that ensures food security there. Food security means that all people have access to safe, nutritious and affordable food, at all times, without degrading the supporting systems (17). No matter if your food comes from the grocery store or the backyard garden, it contains some amount of nutrients it has taken up from the soil where it was grown. If we wish to sustain fertility of our soils, and thus food security, we need to return these nutrients to the soil, so that our tomatoes, corn and apple trees will be able to grow and produce crops forever.
In a natural environment this nutrients cycle is supported by a myriad tiny creatures. There are bacteria and fungi in the soil that hold the nutrients and extract them from rocks or the air. There are nematodes, protozoa, arthropods and earthworms that cycle these nutrients and make them available for plants (18). We, humans, are also a part of the soil food web. Our job is to return the wastes to the soil. We can design our farms so that they will work just like natural systems, cycling the nutrients over and over again. A good example of such a system in an old growth forest. It doesn’t need fertilizing, weeding or irrigating. It grows by itself and it is always productive. That’s a clever system, isn’t it?
Beach in Sopot, Poland. Photo: Marcin Gerwin
We can design for food security in cities as well, but it’s not as easy as in villages. Most people living in the cities buy food rather than grow it on their own, so the whole economic system must be working properly, so that they will be able to afford it. The food shortages in 2008 around the world were not caused by a lack of food, but because people didn’t have money to buy it. The first thing to do would be to start growing food right in the city. On vacant parking lots, on roofs, in backyards. But what if there is not enough space? I live in a small city on the coast of the Baltic sea. Sopot is a summer resort bordered by the sea, a landscape park and two large cities. The land here is among the most expensive in Poland. There is no way one could buy a vacant lot for a vegetable garden, it would cost a fortune. We do have many allotments, but there’s not enough for everyone. So, what can we do?
Wooden pier in Sopot. Photo: Marcin Gerwin
Right now access to food is not a problem. It is available in every grocery store and in all supermarkets. It’s not an issue. With peak-oil or unexpected weather events this could change. With the lack of phosphate fertilizers it could change as well. A large portion of food in Poland is grown in the conventional way and farmers apply artificial fertilizers and spray pesticides. Some of them believe that plants without fertilizers don’t grow, so I think it may be a little hard to try to convince them to use compost instead of the factory-made fertilizers.
I also find it hard to believe that everyone in Sopot could easily accept compost toilets. We would have to recover nutrients from the treatment plant, which is located… er… I must admit I don’t know where our sewage goes to. We will have to collect organic waste, however, that’s what the European Union regulations will make us to do in the years to come (you see, there are some positive aspects of our county being an EU member). We could also start a co-operation program with the farmers from the area, who could supply food directly to our city, rather than through distributors. We could have long-term contracts with them, just like in the Fairtrade scheme. We could set a guaranteed minimum price for farmers, so that their security would improve as well. And what if the economic system collapses? Then we need a land reform.
In the next part of the Phosphorus Matters: what can we do to restore degraded soils?
References:
(1) Phosphorus content in food based upon: Organic Farming in the Tropics and Subtropics: Exemplary Description of 20 Crops, Naturland, second edition 2001.
(2) Calculated from: Banana facts, IITA Research for Development Review, http://r4dreview.org/2008/09/banana-facts/, accessed on 14.09.2008.
(3) D. Cordell, S. White, The Australian Story of Phosphorus, 2008, p. 1.
(4) S. B. Carrol, S. D. Salt, Ecology for Gardeners, 2004, p. 149.
(5) Sweetclovers, UC SAREP, Online Cover Crop Database, http://www.sarep.ucdavis.edu/cgi-bin/ccrop.EXE/show_crop_41, accessed on 15.09.2008.
(6) Ibidem, p. 116 - 117.
(7) Production and International Trade Statistics, International Fertilizer Industry Association (IFA), http://www.fertilizer.org/ifa/statistics/pit_public/pit_public_statistic..., accessed 14.09.2008.
(8) S. M. Jasinski, Phosphate Rock, Mineral Commodity Summaries, January 2008, p. 124, (available at: minerals.usgs.gov/minerals/pubs/commodity/phosphate_rock/).
(9) Ibidem.
(10) D. Cordell, S. White, op. cit.
(11) S. Jasinski, Phosphate Rock (Advance Release), 2007 Minerals Yearbook, p. 56.3.
(12) P. Heffer and M. Prud’homme, Summary Report “Medium-Term Outlook for Global Fertilizer Demand, Supply and Trade: 2008-2012”, 76th IFA Annual Conference, Vienna, May 2008, p. 4.
(13) D. Elkan, The Rainforest Saver, The Ecologist Magazine, 01.02.2005, http://www.theecologist.co.uk/pages/archive_detail.asp?content_id=424.
(14) S. B. Carrol, S. D. Salt, op. cit., 117.
(15) T. N. Neset, L. Andersson, Environmental impact of food production and consumption, in: Water for Food, 2008, p. 102.
(16) R. Hopkins, The Transition Handbook, 2008, from the introduction.
(17) For more information on food security watch presentation given by Bruce Darrel: Converging Crises, Policy Responses: Planning For Food Security, Festa Seminar Series, June 19th, 2008. http://www.feasta-multimedia.org/2008/seminars/Bruce_Darrell.mov
(18) The soil food web is described in detail in the excellent book Teaming with Microbes by Jeff Lowenfells and Wayne Lewis.
~~~~~~~~~~~~~~~ Editorial Notes ~~~~~~~~~~~~~~~~~~~
Marcin Gerwin graduated with a Ph.D. in political studies, from the University of Gdansk, Poland, with his thesis: “The idea and practice of sustainable development in the context of global challenges”. He is a co-founder of "Earth Conservation", a small NGO from Poland working for sustainable development. Please see his previous article on Energy Bulletin here. KS
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Peak soil
David Montgomery
December 2008
http://www.newint.org/features/2008/12/01/soil-depletion/
In a world plagued with worries about depleting resources, having enough dirt to go round seems like the least of our problems. David Montgomery dissents.
A Saskatchewan dust storm blows away the future. Photo by COURTNEY MILNE
Oil is what most of us think of as a strategic resource, yet in the long run it is soil which is the more important. Even so, people’s eyes tend to glaze over when talk turns to soil conservation, maybe because it’s so much easier to see the immediate relevance of rising gas prices and climate change in these days of peak oil. So while public attitudes on climate change have shifted dramatically over the past few years, a crisis in global agriculture remains hidden: we are, and have long been, using up the supply of topsoil we rely on to grow our food.
Those of us living in modern cities can easily forget that without fertile soil we could not survive. Yet modern agricultural techniques are eroding the very soil on which food production depends. This ongoing soil loss means we face the problem of feeding a growing population from a shrinking land base. This should be troubling because even a casual reading of history shows that, under the right circumstances, climatic extremes, political turmoil or resource abuse can bring down a society. And in the century ahead we face all three, as shifting climate patterns and depleted oil supplies coincide with progressive loss of farmland.
We have, in effect, been ‘mining’ soil for much of human history. Indeed, the decline in fertility and loss of agricultural lands through wind and water erosion is a problem as old as agriculture itself. Civilizations from Babylon to Easter Island have proven only as durable as the fertility of their land. The Roman Empire left Eastern Mediterranean agriculture in a state from which it has yet to recover. But the problem of soil loss is not just ancient history. Exacerbated by modern industrial farming, global agricultural soil loss of about a millimetre per year outpaces soil formation by at least tenfold.
Over the past century, the effects of long-term soil erosion were masked by bringing new land under cultivation and by developing fertilizers, pesticides and crop varieties to compensate for declining soil productivity. However, such ‘agrotech’ fixes become progressively more difficult to maintain because crop yields decline exponentially as soil thins. While fertilizers can temporarily offset the effects of soil erosion, the long-term productivity of the land cannot be maintained in the face of the reduced organic matter and thinning of soil that characterize industrial agriculture. Replacing soil fertility with chemical fertilizers and genetically engineered crops can boost productivity in the short run, but a world stripped of its soil cannot, in the end, feed itself.
Feeding a doubled human population without further increasing crop yields would require doubling the area presently under cultivation. Such vast tracts of land could only be found in tropical forests and subtropical grasslands – like the Amazon and the Sahel. Experience shows that farming such marginal lands produces an initial return, but the land quickly becomes degraded and has to be abandoned – if the population has somewhere to go. With the land best suited for agriculture already under cultivation, expansion into marginal areas is not a long-term strategy.
Photo: Andrew Kokotka
Small and soil friendly
In contrast to the amount of arable land, which has varied widely through time and across civilizations, the amount of land needed to feed a person has systematically declined. Hunting and gathering societies used from 20 to 100 hectares per person; our current use of 1.5 billion hectares of cultivated land to feed roughly 6 billion people equates to about 0.25 hectares of cropland per person. And by 2050 the amount of available cropland is projected to drop to less than 0.1 hectare per person. So, simply keeping up will require major increases in crop yields.
Before 1950, increases in global food production came by either enlarging the area under cultivation or improved husbandry. Since 1950 most of the increase has come from mechanization and intensified use of chemical fertilizers. The ‘green revolution’ doubled food production and averted a food crisis through increased use of chemical fertilizers, massive investments in irrigation infrastructure in developing nations and the introduction of high-yield varieties of wheat and rice capable of producing two or three harvests a year. Subsequently, however, growth in crop yields has slowed and achieving further substantial increases through conventional means seems unlikely – since crops don’t take up half the nitrogen in the fertilizers farmers apply today, adding even more won’t help.
Perhaps genetic engineering could substantially increase crop yields – but only at the risk of releasing super-competitive species into agricultural and natural environments, with unknowable consequences. So far, the promise of greatly increased crop yields from genetic engineering remains unfulfilled. And it could prove catastrophic, should genetically modified genes that convey sterility cross to non-proprietary crops. Does it even make sense to design crops that can’t reproduce?
So how do we move to sustainable agriculture and still feed the world? The answer lies in better adapting what we do to where we do it. To do this we need to restructure agricultural subsidies to favour small-scale organic farms, encourage soil-friendly farming methods such as no-tilling (see below) for larger industrial farms, and develop urban agriculture.
Among soil scientists, concern over the world’s fast-depleting soil is almost universal
Public dialogue and media portrayals of organic farming tend to the simplistic, pitting those who consider modern industrial farming unsustainable against those who argue that organic methods are unethical when hunger plagues so many people. Representatives of agribusiness like to question the relevance of organic agriculture in feeding a 10-billion-person planet and instead promote agrochemicals and genetically modified crops as keys to food security. Yet many studies over the past decades have shown that crop yields under organic methods are comparable to those achieved through conventional methods. Indeed, some of the highest crop yields come from small-scale, labour-intensive organic farms.
Many currently profitable industrial farming methods would become uneconomic if their true costs were incorporated into market pricing. Direct financial subsidies and failure to include the costs of depleting soil fertility encourage practices that degrade the land. In the US, for example, the top 10 per cent of agricultural producers now receive 66 per cent of the more than $10 billion handed out in annual subsidies, and they use it to support large farms growing single crops, particularly wheat, corn and cotton. We need to curb the $300 billion in global agricultural subsidies – more than six times the world’s annual development assistance budget – that encourage unsustainable industrial farming. Shifting public support to make organic agriculture more competitive is part of the answer.
No-till alternative
No-till agriculture also warrants greater public support, as it can effectively maintain crop yields and slow down soil loss, even on large, mechanized farms. Instead of using a plough to turn the soil and open the ground, no-till farmers push seeds into the ground through the organic matter left over from prior crops, minimizing direct disturbance of the soil. Although adoption of no-till methods is often accompanied by increased herbicide use, crop residue left at the ground surface acts as mulch, helping to retain moisture and retard erosion by as much as 90 per cent. With no-till practices currently being used on less than 10 per cent of global cropland, there is tremendous potential to expand them, and to research how to couple them better with organic methods.
Industrial agriculture will never provide a way out of hunger for the third of humanity that lives on less than two dollars a day. More innovative thinking is necessary, and on a global scale. If we are to feed those too poor to buy food, the naïve idea that all we need to do is produce cheap food must go. While food was still cheap there were still far too many hungry people on the planet. A different approach – one that might actually work – would be to promote the prosperity of small farms in the Global South so that subsistence farmers can feed themselves, generate an income and become stewards of the land. To do this they need access to enough land to grow a marketable surplus, and an agricultural support system that builds on indigenous agricultural knowledge and provides appropriate tools.
Finally, as oil and the cost of shipping food around the world become more expensive, it will become increasingly attractive to take food production to the people – into the cities. With 800 million people already involved, urban farming is not restricted to developing countries; by the late 1990s two-thirds of Moscow’s families were engaged in urban agriculture. City agriculturalist Will Allen has been pioneering urban farming in Milwaukee, Wisconsin, as a way to provide healthy, affordable diets to low-income urban populations. He has come to realize that urban farms not only deliver fresh produce to city dwellers at a lower cost of transportation, but that they typically use far less water, fertilizer and oil, and can reduce urban waste disposal problems and costs.
Among soil scientists, concern over the world’s fast-depleting soil is almost universal. Unfortunately, saving dirt just isn’t a very sexy issue. However, time grows short and industrial agriculture is proving an expensive and increasingly risky dead end. We are left with a fundamental challenge: how do we merge traditional agricultural knowledge with modern understanding of soil ecology to promote and sustain intensive agriculture? Herein lies our real hope for feeding a hungry world.
David R Montgomery is the author of Dirt: The Erosion of Civilizations and professor of geomorphology at the University of Washington.
I know something we are running out of "GOOD FOOD" now that the
FDA is syndicated.
Volume | |
Day Range: | |
Bid Price | |
Ask Price | |
Last Trade Time: |