April 21, 2008

Now The REAL Resource Wars Begin

Posted by Aurelius @ 8:52 am

I have long been opposed to ethanol (and many bio-fuels) on many grounds, not the least of which is that I feel it immoral to use foodstuffs to create fuel while millions starve in the world.

Many others have noted that as the population increases, along with standards of living in the developing world, that the most basic resources will become scarce, including the two most basic: Food and Water.

I will leave speculation on the coming water wars for another time, as shortages of food are far more pressing today.

I had not given much thought to food shortages in the past, as, like most Americans, I was content that the Breadbasket of the World (in which I include the US and Canada) could easily produce enough to feed not only the North America, but the world. 

I began to reevaluate this stand when the ethanol craze began to kick in, and perfectly good food crops, and wonderfully arable land, began to be dedicated to the production of an absolutely horrible alternative energy source.

Then, in December, I read a piece in the Economist (excepts below):

Rising incomes in Asia and ethanol subsidies in America have put an end to a long era of falling food prices.

The Economist's food-price index is now at its highest since it began in 1845, having risen by one-third in the past year.

The overall rise in the price of Cereals (grains, including Corn), was due to to major factors:

One is increasing wealth in China and India. This is stoking demand for meat in those countries, in turn boosting the demand for cereals to feed to animals. The use of grains for bread, tortillas and chapattis is linked to the growth of the world's population. It has been flat for decades, reflecting the slowing of population growth. But demand for meat is tied to economic growth… and global GDP is now in its fifth successive year of expansion at a rate of 4%-plus.

Not surprisingly, farmers are switching, too: they now feed about 200m-250m more tonnes of grain to their animals than they did 20 years ago. That increase alone accounts for a significant share of the world's total cereals crop. Calorie for calorie, you need more grain if you eat it transformed into meat than if you eat it as bread: it takes three kilograms of cereals to produce a kilo of pork, eight for a kilo of beef. So a shift in diet is multiplied many times over in the grain markets. Since the late 1980s an inexorable annual increase of 1-2% in the demand for feed-grains has ratcheted up the overall demand for cereals and pushed up prices.

Because this change in diet has been slow and incremental, it cannot explain the dramatic price movements of the past year. The second change can: the rampant demand for ethanol as fuel for American cars. In 2000 around 15m tonnes of America's maize crop was turned into ethanol; this year the quantity is likely to be around 85m tonnes. America is easily the world's largest maize exporter—and it now uses more of its maize crop for ethanol than it sells abroad.

Ethanol is the dominant reason for this year's increase in grain prices. It accounts for the rise in the price of maize because the federal government has in practice waded into the market to mop up about one-third of America's corn harvest. A big expansion of the ethanol programme in 2005 explains why maize prices started rising in the first place.

With the twin gravities of Ethanol production, and increased Meat (and Cereal) consumption by the developing nations, we find ourselves in a food crunch.  Supplies are short, and the modern "just in time" replenishment model used in the industrialized world, is having a hard time coping:

From the New York Sun:

Major retailers in New York, in areas of New England, and on the West Coast are limiting purchases of flour, rice, and cooking oil as demand outstrips supply.

Spiking food prices have led to riots in recent weeks in Haiti, Indonesia, and several African nations. India recently banned export of all but the highest quality rice, and Vietnam blocked the signing of a new contract for foreign rice sales.

"I'm surprised the Bush administration hasn't slapped export controls on wheat," Mr. Rawles said. "The Asian countries are here buying every kind of wheat." Mr. Rawles said it is hard to know how much of the shortages are due to lagging supply and how much is caused by consumers hedging against future price hikes or a total lack of product.

"There have been so many stories about worldwide shortages that it encourages people to stock up. What most people don't realize is that supply chains have changed, so inventories are very short," Mr. Rawles, a former Army intelligence officer, said. "Even if people increased their purchasing by 20%, all the store shelves would be wiped out."

Now, this is far from the doomsday scenario painted by the Club of Rome in The Limits of Growth(or the Charlton Heston classic film Soylent Green), but it is certainly a foreshadowing of the coming wars for resources on this planet.  However, this is, by no means a certain result.  There are action which can avert the food crisis, at least.  One of these is the use of Genetically Modified (GM, aka Biotech) foods.

Courtesy of the International Herald Tribune:

Soaring food prices and global grain shortages are bringing new pressures on governments, food companies and consumers to relax their longstanding resistance to genetically engineered crops.

In Japan and South Korea, some manufacturers for the first time have begun buying genetically engineered corn for use in soft drinks, snacks and other foods. Until now, to avoid consumer backlash, the companies have paid extra to buy conventionally grown corn. But with prices having tripled in two years, it has become too expensive to be so finicky.

In the United States, wheat growers and marketers, once hesitant about adopting biotechnology because they feared losing export sales, are now warming to it as a way to bolster supplies. Genetically modified crops contain genes from other organisms to make the plants resistance to insects, herbicides or disease.

In Britain, the National Beef Association, which represents cattle farmers, issued a statement this month demanding that "all resistance" to such crops "be abandoned immediately in response to shifts in world demand for food, the growing danger of global food shortages and the prospect of declining domestic animal production."

The chairman of the European Parliament's agriculture committee, Neil Parish, said that as prices rise, Europeans "may be more realistic" about genetically modified crops: "Their hearts may be on the left, but their pockets are on the right."

Of course, the Ludditesstill oppose GM/Biotech foods:

Opponents continue to worry that such crops have not been studied enough and that they might pose risks to health and the environment.

Biotechnology still certainly faces obstacles. Polls in Europe do not yet show a decisive shift in consumer sentiment, and the industry has had some recent setbacks. Since the beginning of the year France has banned the planting of genetically modified corn while Germany has enacted a law allowing for foods to be labeled as "GM free."

In the end, however, this resistance will give way to public acceptance, and continuing development.  Or people will go hungry (best case) or starve (worst case - which is actually happening now in less developed places).  People are already rioting in places where food is scare, or growing too expensive for average people to buy.

Another part of the rise in food prices, is the cost of production and transportation.  As the price of Oil increases, the price of nearly everything else increases with it.  Oil, and Petroleum products, are used in nearly ever phase of food production, in some capacity or another, up to, and including, running the trucks that take the produce to the market.  The ripple effects of sharp increases in fuel prices are large and sweeping.

And many of the same factors that contribute to the spiraling food costs are also helping to spike the price of Oil:  Increased demand from developing nations, with burgeoning middle-classes, and all the things to go into making and supporting the lifestyle that we North Americans, and (to a slightly lesser degree) Europeans have enjoyed for many years.

And the REAL fun hasn't even started yet.  Along with Climate Change (always has, always will - man has little or nothing to do about it) will come changes to the availability of fresh water supplies.  That's when things will start to get really nasty.

Not that they have too… For much of the world, water conservation, and Desalination can alleviate the worst of this problem, if not eliminate it entirely.  But for regions, this will be the greatest threat they will face.

None of the problem that will cause the Resource Wars are inevitable, or unsolvable.  Indeed, many of the answers are at hand today.  We just need the courage to move ahead. 

We must try new things, and new technologies, if we are to save lives, and ensure everyone a decent lifestyle.  We must be willing to try GM/Biotech foods.  We must be willing to exploit existing fuel reserves, while working on ways to exploit new ones.  We must stretch beyond the confines of this single planet, to the veritable cornucopia of resources that awaits us on the moon (including Hydrogen 3, which can be used for Fusion power) and other bodies (every type of metal we need, in enough quantity that it is virtually limitless).

Or we can play it safe.  Cut back, economize, refuse to use GM foods, refuse to install Solar Power farms (because they would displace some desert tortoises) or Wind-farms (because the ruin the view from Hyannisport), or drill for oil off the coast (not that we can stop our neighbors from doing so) and keep converting food into fuel…

UPDATE:  Just ran across an intersting, and related editorial at USA Today, by Oliver Thomas.  While I find his faith in the IPCC and antropogenic Global Warming distrubing, though not surprising from a man of Faith, he has some very good points to make.

UPDATE 2Japan's hunger becomes a dire warning for other nations

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