Archive for May 18th, 2008

But Won't We Prioritize Energy Resources for Agriculture?

Sharon May 18th, 2008

Quite a lot of people who are worried about peak energy aren’t very worried about the future of food, and see no reason to change our agriculture - they note that only 2.2 percent of oil goes to agricultural production, and they quite rationally observe that because agriculture isn’t a very large user of oil, it would only make sense to prioritize energy for agricultural production.  And if that’s the case, why would we ever have shortages?  So I thought it would be worth considering the question of whether and how we would allocate energy resources to agriculture, say, either because of a contraction in available  supply or a sudden drastic price rise.

 Now for some time, I’ve been answering this argument with historical examples about what actually has happened in places like Cuba, North Korea and the former Soviet Union.  I point out that even though Cuba only lost 85% of its oil imports, and that the remaining 15% technically left plenty for agriculture,  they entered into a food crisis almost immediately.  The same is true with the Soviet Union.   And since Cuba,  with (for good and ill) a strong centralized government were not able to prioritize oil for agriculture, why do we imagine that we will be able to rapidly overturn our practices and do so?

The reason very small shortages or price rises can have such a shock in a system is that there is no rationing system in place – no way of sorting out between someone who grows potatoes and someone who makes Bratz dolls.  They are both entitled to as much oil as they can get their hands on.   

That’s not to say that the problem would be completely resolved, in the event of either a radical reduction in availability (the most likely problem here is diesel shortages) or ins a super-spike of energy prices. The problem is that there are so many highest priorities in any society – do you cut back on police protection?  Medicines? Ambulances?  Heat for the freezing? Public transport? The transport of relief supplies?  Military engagements?  In times of radical shortage, prioritizing becomes the struggle of competing priorities, political interests, black markets and a host of other factors,  none of which ever quite get what they need.  But I never felt like this answer quite got to the heart of things – and there’s a tendency for such discussions to lead back to discussions of communism vs. capitalism, which inevitably lead us away from anything useful.

And then recently Gail the Actuary, who is one of the clearest and most rational voices in the Peak Oil movement made a comment on a thread on The Oil Drum that helped me fully articulate that difficulty I’d had with the assumptions written into that question.  She said,

“I’ve discovered when you say, “There may not be medications”, I get a lot of arguments that this is the highest use, so of course we would have medications, even if we had nothing else. Also, if I say there may not be plastics, someone believes that since they take such a small share of the petroleum, surely they will be spared. And so on.”

I was very much struck by how clearly and simply Gail articulated a concept that is so difficult for so many people.  Taken in isolation, the idea that we’ll prioritize one thing or another does make a lot of intuitive sense - as long as we are talking about some discrete, neatly isolated thing “agriculture” or “medications.”  So it is easy to think that the reprioritization of resources will be both logical and inevitable -  but the problem is that intuitive responses aren’t always right.  In actual working systems, there are a host of first priorities, all of them extremely difficult to triage. 

The other difficulty, as I keep observing here,  is that it is always difficult (not impossible, merely very difficult) to turn a big ship around.  That is, we have a system for the allocation of resources – we call it “ability to pay.”  We ration food, housing, energy and everything else based on income – if times are tight, we strip everything from the bottom (an ever expanding group), rather than taking a little away from everyone.  It is almost certainly true that this system will probably be modified as fewer and fewer people are able to pay, but it is also the case that many powerful interests will have every reason to try and keep things going as they are.  

And it won’t just be the people in power fighting it.  Americans are so deeply attached to the notion that money tells you something about someone’s virtue and moral state that it will be tremendously difficult for even those just barely getting by to to accept that those who are already failing to get by should get a share of the remaining resources.  

And, of course there’s the reality that the 2.2% of oil in agriculture doesn’t include processing, refrigeration or transport.  The total essential use of oil in agriculture is probably much closer to 8-10% of usage.  This is an estimate derived from Dale Pfeiffer’s definitive _Eating Fossil Fuels_ – I’ve lowered the energy costs in some places, but in others, they cannot be avoided – meat cannot be moved, for example, from midwestern feedlots without refrigeration in trucks or supermarkets.   To refine our usage more than that would require massive dietary and infrastructure changes – and while these probably will happen, they may not happen much in advance of a crisis, if at all.

Nor does that statistic include the implications for natural gas, since we are already seeing fertilizer shortfalls and people priced out of fertilizer markets.  As I’ve discussed in other posts, the combination of high input prices and high grain prices that aren’t keeping up is keeping farmers in many cases from responding to high grain prices.  In some areas, agricultural foreclosures are rising again in the US, while in poor nations, agricultural land is simply going unplanted because of the lack of availability or high cost of fertilizers.

At $125ish a barrel oil, we are already seeing complex mixed signals in agriculture – while rising prices  (driven by oil costs and biofuels growth in large part) and demand say “plant more,” rising prices for inputs and fertilizers are saying “plant less.”  It is hard to say what the final result of this battle will be – neither food nor energy prices are headed down.  But (and it is early days yet, so this is uncertain) it seems as though in the poorest parts of the poor world, rising energy prices are overwhelming even skyrocketing grain prices.  If that pattern extends to the rich world, it is not out of the question to imagine, as was seen in the Great Depression, farmers shooting their cattle and leaving them to rot in the fields because they can’t afford feed for them and can’t transport them to market.  At the same time, Chicagoans were rioting over the price of food, and Chicago schoolchildren posted malnutrition rates of 25%.  Will it happen this year?  Probably not, unless the price of oil truly skyrockets.  But what is happening now to the world’s poor may happen to us as we become poorer, and it would be foolish to deny that

It is certainly possible that price stabilizations and subsidies to enable farmers to buy scarce or very expensive energy may well be put in place.  It is almost certain that if they are, non-farmers will find ways to take advantage of them, and that problems of access and distribution will still remain.  It is also hard not to imagine that any centralized infrastructure for obtaining and distributing these resources would itself be energy intensive, subject to corruption and intensely difficult to manage.   

Over at Running on Empty 2, Roberg Waldrop some time ago calculated that the US has sufficient oil to run agricultural and food transport infrastructure for the whole populace for upwards of 100 years, relying only on the accessible oil in the ground in the lower 48 states.  And this should be reassuring to all of us.

But in order to imagine a system in which oil was carefully and wisely used, we must imagine one or multiple central organizations who put personal greed and powerlust aside, and allocate energy with perfect equity.  We must imagine that most of us would be willing to put our old system, and its equation of poverty and immorality aside, and create a more equitable strategy of rationing food and energy.  We would have to imagine the rich being willing to do with a simpler, staple diet and fewer biofuels just as the poor do. We would have to imagine Americans giving up their fierce allegience to the idea that they are entitled to what they have earned, without consideration of everyone else.  And that might be difficult, given how little we are finding we have in fact earned.  And perhaps most importantly, we must imagine a world in which we are prepared to give up with minimal complaint a host of other things we now value enormously - in order to ensure that everyone has food.

 While these things are within the realm of technical possibility, I think it is generally wiser to imagine smaller systems, relocalized economies and systems of distribution that rely minimally, if at all, on fossil fuels, and can readily dispense with them in their absence.  My own take is that while it is possible to imagine us allocating energy wisely to agriculture it is best not to count on it.