How did the human race progress from cave dwelling to space station in such a relatively short time? Is it through our ability to learn, to build on what we have learned and then to learn from what we have built? But in this modern world, many of us have allowed that ability to become dormant, in favour of a desire for power, wealth and acquisition. And so we perhaps should not be surprised that many wealthy bankers seem to have lost the ability to learn from previous experience. Back to this later!
There has been some publicity over the last couple of years on the immense gas and oil reserves discovered in the USA, to be accessed by miraculous modern technology such as ‘fracking’ and horizontal drilling. It is proposed that the tar sands being mined in Canada will further supplement the USA’s insatiable need for fuel via the Keystone XL pipeline. We are told (by bankers?) that the USA has become self sufficient in fossil fuel for the foreseeable future. Yeah right!
The Americans (by which, of course, I mean the North Americans!) are desperate. They do not want to remain dependent on external supplies of fossil fuel. So they (including President Obama) are pulling out all the stops to avoid that dependency, with the willing help of the banks, naturally.
Let us consider the tar sands in Canada; this is actually a fascinating subject on its own. The Canadians say to the Americans, ‘if you want the crude from tar sands you have to build a pipeline (the Keystone XL pipeline) to take the crude to your refineries, otherwise we can find plenty of other customers for the crude!’ The pipeline is going to cost around $7 billion, which in the scheme of things is small change.
But to process the tar sands to produce the crude, they need copious quantities of natural gas (about a fifth of Canada’s entire production). They also need a lot of water, and a lot of diluent. Diluent? OK – to allow the stuff to flow through a pipeline it has to be diluted with some kind of light oil, which at present they are importing at a rate of up to 200,000 barrels a day. They could produce it themselves, from the bitumen they are digging up, but that is very expensive too. And by the way, there is a limit to the amount of gas they can use, because they have domestic users, as well as a binding agreement to export a proportion of the gas they produce to America! So we can deduce that production of crude from these tar sands is incredibly expensive, hardly cost effective, and about as efficient as you can get at producing greenhouse gases! Unsurprising therefore, that Canada pulled out of the Kyoto protocol!
The President long ago expressed his support for the pipeline – the only reason for a delay has been the choice of route. But the Americans are grasping at straws – the product will barely supply 10% of their daily needs, and at a massive production cost and a very small net energy gain. Globally Canadian tar sands are a drop in the ocean at massive environmental costs, and because of the restrictions on production in terms of energy, water and transport, it is hard to see a long term future for the process.
But don’t worry, the USA has its own stock of tar sands (not much), shale oil and shale gas.
It seems that this ‘revitalisation’ of the American energy industry attracted the attention of the investment bankers. I don’t pretend to have the slightest idea how investment finance works; but evidently money was poured in to the extent that production amounted to four times demand – resulting in a catastrophic drop in price, and a desperate drive to export to where prices were higher. The result has been that production costs have exceeded prices by a significant amount, resulting in a phenomenal amount of business in the mergers and acquisitions market, and thus huge profits for the banks.
Let us switch for a moment to considering the traditional and diminishing oil industry. You may remember that a gentleman called M King Hubbert produced the famous Hubberts curve in 1956, a graph which he used to predict that American oil production would peak somewhere about the late sixties or early seventies. There was much criticism and disbelief, but he was proven correct in his thinking as American oil production peaked in 1970. Hubbert was able to apply his mathematics to individual oil fields, oil producing countries and by extension to the planet, predicting that world oil production would peak in the early 21st century. Nothing yet, not even this latest alleged US bonanza, has shown him to be wrong.
You can apply Hubbert’s curve to almost any non-renewable resource; but it seems that the curve, which indicates a rise, a peak and then a decline in a roughly symmetrical format, doesn’t readily lend itself to these modern production methods. And the reason is this: the depletion rate of these wells is extremely fast, so instead of a gentle decline after the peak we have a cliff. To maintain production levels new wells need to be brought on stream all the time, at a cost of many billions of dollars. Required input annually to maintain current shale gas production in the States is around $42 billion. (Lucky we have those bankers!) Value of shale gas produced in 2012 was $32.5 billion! Shale oil is also horrendously expensive to produce and a well’s production rate will decline by in excess of 80% in the first 24 months. Tar sands produce oil at a cost of about $100 dollars per barrel, which leaves little room for profit! Many of the production sites of all these fossil fuel elements are already in decline. It seems unlikely that this 'foreseeable future' could last more than another five years or so!
The reason that Hubbert’s prognosis has proven so accurate time and time again is because, self evidently, the oil companies go for the easiest first. Thus the oil becomes progressively more difficult and more expensive to access, until you get to a point where it is no longer viable. Tar sands are not that far from that point of diminishing returns, and the great oil and gas bonanza so enthusiastically promoted by the bankers cannot possibly be other than a great big bubble!
The good news? Although carbon emissions from the USA continue to cause immense damage to our atmosphere in the short term, in the longer term that cannot continue because the bubble has to burst, and carbon emissions from the USA is certain to decrease!
And the bad news? Well… remember all that sub-prime nonsense when the house mortgage market collapsed? It is going to happen all over again with American oil reserves! I said we would come back to the bankers!
So what about our own UK shale gas reserves? I would steer clear of investment there if I were you! It will be better for us all if we just reduce our energy needs.
Data has been lifted from reports by Deborah Rogers of the Energy Policy Forum and J David Hughes of the Post Carbon Institute
Friday 22 February 2013
Sunday 10 February 2013
Thoughts Arising from 'Horsegate'
I suppose there are millions of people who think as I do, that the latest bit of food-related drama, or something like it, was bound to happen sooner or later. Both governments and large commercial organisations have been colluding over time to make the simple business of growing and selling food more and more complicated, with this inevitable consequence.
The now largely discredited trend towards globalisation of our food markets has disadvantaged, and often destroyed, local community food production in favour of monocrop agribusinesses, often foreign-owned, determined to export because that way they can make more money, and satisfy their competitive desire for economic growth. They grow food in relatively poor countries where labour is cheap, and sell to rich countries where people are too busy making money to worry about down to earth matters like where their food comes from or how it is prepared!
The profit motive, having replaced the survival motive, encourages those businesses to try to increase the crop yield by any means possible using oil-based fertilisers, and often genetically modified seed. Mass production at the growing end of the chain means that the soil is merely a growing medium (supplemented with chemicals just like in hydroponics) for a monocrop where pests are drawn to the feast by the sheer area of their favourite food, to be slaughtered with chemicals which then find their way into the food chain. Mass production at the processing and packaging end means that the consumer can never be absolutely sure that they are getting what they think they are. Different countries have differing standards for their labelling, and controls of pesticide also vary from country to country. In the US, food labels are not even required to show whether the food is genetically modified.
The globalisation of our food brings about two significant effects; the distancing of the consumer from the producer, and a loss of control by the consumer over what he is eating.
Most consumers don’t know where what they eat comes from, and many of them really don’t care! If they want a French bean in February, they can buy it at the supermarket; and they have to buy it packaged, because the packaging protects the food during its long journey from Kenya. The production of that bean, like so many other products, is drenched in oil, contributing disproportionally to global warming, through its planting, its harvesting, its packaging and its air transport.
The modern way of growing food is for the most part inefficient, destructive and anti-communal. Large areas of land are ploughed, sown, fertilised and sprayed without any regard to the contours of the land, the flow of the run-off water, the underlying structure of the soil or the health and biodiversity of the surrounding environment. Productivity depends on chemical input and control of the wild life. A relatively recent addition to this ‘mess’ is genetic modification; and we are starting to see the negative side of that particular set of techniques.
Soil has been denuded of its natural health and essential minerals. The earth itself is being washed down hill when it rains, and carried down to the rivers, damaging the aquatic environment. The habitats of much of our wild life have been lost. The bird and insect populations have been drastically and noticeably reduced, even in the last decade.
Genetic modification of crops is losing credibility day by day. There is a widely held view that GM crops are carcinogenic (a view recently supported by a French scientific study). A recent report by the European Food Safety Authority states that most commonly found GM foods contain a rogue viral gene called Gene VI, which is potentially extremely damaging (check it out!). But the main reason why GM is losing credibility is because the promised increase in yield has simply failed to materialise. Additionally the claim that crops modified to be resistant to weed killers would enable a reduced use of chemicals has proven unfounded, and the amount of chemicals being used, and being absorbed by us through our food, is increasing. The patenting of GM seeds is putting small farmers out of business (although not yet in the UK).
In 2010 a report submitted to the UN by their Special Rapporteur on the Right to Food made it clear that the way forward for agriculture was to move away from large agribusinesses and genetic modification, and towards small production units using organic methods. Incorporating the lessons being taught by permaculturists into our food production would save water, preserve and enhance our soil and significantly increase yield per hectare. Small farmers already produce more per hectare than large scale producers, and are more likely to supply their local communities, thus reducing transport cost and pollution, as well as increasing our awareness of seasonality. Biodiversity would be increased. The nutritional value of our food would start to improve (although we have a long way to go before it will equal its value in the 1940s).
There is no question but that the UK could again be self sufficient in food production for the foreseeable future if these lessons were learned. It would also increase our resilience to climate change, because as the changes to our weather patterns occur, we would be in a position to adapt both our crops and our growing methods to these changes. It is completely inevitable that we will learn to eat less meat, as awareness grows that mass production of beef and lamb is an inefficient way of using the land to give us our main source of protein. And of course we should stop building over agricultural land!
Now consider how are food is dealt with once it has been grown. It is processed, packaged, transported, distributed to retailers and put on the shelf for us to collect. Returning to our French bean from Kenya, the grower may get less than 12% of the final price. (The retailer makes about double that.) It has to be packaged to protect it during its passage to our shelves. The transport has to be by air because of the bean’s limited shelf life, and in common with much fruit and vegetables it may have been treated in some way to extend the shelf life: there are treatments involving calcium chloride, and irradiation, for example. And after all that it is beyond doubt that much of this imported produce has to be thrown away because it didn’t sell.
The recent and emerging ‘crisis’ surrounding certain prepared meals, burgers and the like, labelled as beef but containing horse meat, has brought a few points to public attention. One is that from high end to bottom end brands, the brand name means little – they all get their products from the same small number of suppliers. In the mass market, that will never change. The retailers pressurise their suppliers to keep the price low, and those suppliers go to whoever will give them the lowest price. The latest revelation is that the French processer supplying Findus was getting its meat from Eastern European sources. Thus a Findus lasagne may contain meat from more than one country, and now we learn, from more than one species. Cheap burgers are bulked out with such supplements as chicken skin. One thing is clear – make a ruling specifying the required meat content and you open the door for that rule to be manipulated both legitimately and illegally. And when the product is labelled, who can possibly know what is written between the lines? And who can possibly know how old the meat is and how far it has travelled? And in spite of European legislation, how can we possibly know whether we are buying produce which has been genetically modified? After all imported soya bean is frequently used as a bulking agent or protein supplement, and most soya today is genetically modified.
The source of wonder is that there is so much surprise at these revelations!
A result of all this globalised food production is that prices are driven down at the expense of the farmer, in order to provide substantial profits to all the middle men. Costs arising are broadly as follows: producer, exporter, packaging, air freight and handling, importer charges and commission, supermarket costs, supermarket mark-up.
Think how much better for everyone if the exporting countries were able to grow food for themselves, and we were sensible enough to buy local! In that immense and convoluted food chain, we can never really know what we are eating. And what aggravates the situation further is that there is so much regulation of one kind or another that we have stopped thinking for ourselves. Who reads the label or even knows what half the terms mean? Watch your fellow shoppers and see if you can spot anyone doing that! We foolishly trust the retailers and the food producers to do our thinking for us.
In this society of ours, blanketed with traffic signs telling us where to walk, how to drive, what to eat, when we should throw food away, we have forgotten that when an apple goes off it goes brown and squishy and when milk goes sour it stinks!
So please – think for yourself, buy local and see if you can eat a little less meat!
The now largely discredited trend towards globalisation of our food markets has disadvantaged, and often destroyed, local community food production in favour of monocrop agribusinesses, often foreign-owned, determined to export because that way they can make more money, and satisfy their competitive desire for economic growth. They grow food in relatively poor countries where labour is cheap, and sell to rich countries where people are too busy making money to worry about down to earth matters like where their food comes from or how it is prepared!
The profit motive, having replaced the survival motive, encourages those businesses to try to increase the crop yield by any means possible using oil-based fertilisers, and often genetically modified seed. Mass production at the growing end of the chain means that the soil is merely a growing medium (supplemented with chemicals just like in hydroponics) for a monocrop where pests are drawn to the feast by the sheer area of their favourite food, to be slaughtered with chemicals which then find their way into the food chain. Mass production at the processing and packaging end means that the consumer can never be absolutely sure that they are getting what they think they are. Different countries have differing standards for their labelling, and controls of pesticide also vary from country to country. In the US, food labels are not even required to show whether the food is genetically modified.
The globalisation of our food brings about two significant effects; the distancing of the consumer from the producer, and a loss of control by the consumer over what he is eating.
Most consumers don’t know where what they eat comes from, and many of them really don’t care! If they want a French bean in February, they can buy it at the supermarket; and they have to buy it packaged, because the packaging protects the food during its long journey from Kenya. The production of that bean, like so many other products, is drenched in oil, contributing disproportionally to global warming, through its planting, its harvesting, its packaging and its air transport.
The modern way of growing food is for the most part inefficient, destructive and anti-communal. Large areas of land are ploughed, sown, fertilised and sprayed without any regard to the contours of the land, the flow of the run-off water, the underlying structure of the soil or the health and biodiversity of the surrounding environment. Productivity depends on chemical input and control of the wild life. A relatively recent addition to this ‘mess’ is genetic modification; and we are starting to see the negative side of that particular set of techniques.
Soil has been denuded of its natural health and essential minerals. The earth itself is being washed down hill when it rains, and carried down to the rivers, damaging the aquatic environment. The habitats of much of our wild life have been lost. The bird and insect populations have been drastically and noticeably reduced, even in the last decade.
Genetic modification of crops is losing credibility day by day. There is a widely held view that GM crops are carcinogenic (a view recently supported by a French scientific study). A recent report by the European Food Safety Authority states that most commonly found GM foods contain a rogue viral gene called Gene VI, which is potentially extremely damaging (check it out!). But the main reason why GM is losing credibility is because the promised increase in yield has simply failed to materialise. Additionally the claim that crops modified to be resistant to weed killers would enable a reduced use of chemicals has proven unfounded, and the amount of chemicals being used, and being absorbed by us through our food, is increasing. The patenting of GM seeds is putting small farmers out of business (although not yet in the UK).
In 2010 a report submitted to the UN by their Special Rapporteur on the Right to Food made it clear that the way forward for agriculture was to move away from large agribusinesses and genetic modification, and towards small production units using organic methods. Incorporating the lessons being taught by permaculturists into our food production would save water, preserve and enhance our soil and significantly increase yield per hectare. Small farmers already produce more per hectare than large scale producers, and are more likely to supply their local communities, thus reducing transport cost and pollution, as well as increasing our awareness of seasonality. Biodiversity would be increased. The nutritional value of our food would start to improve (although we have a long way to go before it will equal its value in the 1940s).
There is no question but that the UK could again be self sufficient in food production for the foreseeable future if these lessons were learned. It would also increase our resilience to climate change, because as the changes to our weather patterns occur, we would be in a position to adapt both our crops and our growing methods to these changes. It is completely inevitable that we will learn to eat less meat, as awareness grows that mass production of beef and lamb is an inefficient way of using the land to give us our main source of protein. And of course we should stop building over agricultural land!
Now consider how are food is dealt with once it has been grown. It is processed, packaged, transported, distributed to retailers and put on the shelf for us to collect. Returning to our French bean from Kenya, the grower may get less than 12% of the final price. (The retailer makes about double that.) It has to be packaged to protect it during its passage to our shelves. The transport has to be by air because of the bean’s limited shelf life, and in common with much fruit and vegetables it may have been treated in some way to extend the shelf life: there are treatments involving calcium chloride, and irradiation, for example. And after all that it is beyond doubt that much of this imported produce has to be thrown away because it didn’t sell.
The recent and emerging ‘crisis’ surrounding certain prepared meals, burgers and the like, labelled as beef but containing horse meat, has brought a few points to public attention. One is that from high end to bottom end brands, the brand name means little – they all get their products from the same small number of suppliers. In the mass market, that will never change. The retailers pressurise their suppliers to keep the price low, and those suppliers go to whoever will give them the lowest price. The latest revelation is that the French processer supplying Findus was getting its meat from Eastern European sources. Thus a Findus lasagne may contain meat from more than one country, and now we learn, from more than one species. Cheap burgers are bulked out with such supplements as chicken skin. One thing is clear – make a ruling specifying the required meat content and you open the door for that rule to be manipulated both legitimately and illegally. And when the product is labelled, who can possibly know what is written between the lines? And who can possibly know how old the meat is and how far it has travelled? And in spite of European legislation, how can we possibly know whether we are buying produce which has been genetically modified? After all imported soya bean is frequently used as a bulking agent or protein supplement, and most soya today is genetically modified.
The source of wonder is that there is so much surprise at these revelations!
A result of all this globalised food production is that prices are driven down at the expense of the farmer, in order to provide substantial profits to all the middle men. Costs arising are broadly as follows: producer, exporter, packaging, air freight and handling, importer charges and commission, supermarket costs, supermarket mark-up.
Think how much better for everyone if the exporting countries were able to grow food for themselves, and we were sensible enough to buy local! In that immense and convoluted food chain, we can never really know what we are eating. And what aggravates the situation further is that there is so much regulation of one kind or another that we have stopped thinking for ourselves. Who reads the label or even knows what half the terms mean? Watch your fellow shoppers and see if you can spot anyone doing that! We foolishly trust the retailers and the food producers to do our thinking for us.
In this society of ours, blanketed with traffic signs telling us where to walk, how to drive, what to eat, when we should throw food away, we have forgotten that when an apple goes off it goes brown and squishy and when milk goes sour it stinks!
So please – think for yourself, buy local and see if you can eat a little less meat!
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