Crisis Update

I write this update just about every month for a newsletter I run, and I thought this month I'd post it here as well.

CRISIS UPDATE
Unless you’ve been living (or hiding –hey, I for one would understand! And if you’ve got any room, would you like a roommate?) under a rock for the past few months you might have noticed that the world has plunged into multiple crises. One each for energy, the food supply, the economy, and the environment. These are separate but intertwined crises which each have multiple effects on the others. I’m not going to call them the Four Crises of Doom as some less optimistic (yes, its possible) commentators have but I will note that they bear an odd resemblance to a certain set of horsemen Americans have tried to forget about over the past century or so. Jokes aside, this is serious stuff, and I’m going to attempt to give an update on each of these crises over the next few paragraphs so we can get a good idea where we stand.

Food –let’s start with the basics. Food is as basic as you get. There is nothing more vital than food. And it’s getting harder to come by. Prices are skyrocketing and supplies are running short. Earlier this year a report came out that said we’d need record crops this year to prevent famine. Guess what folks? That’s not going to happen. Not only is the U.S. hit hard by floods and all manner of whacked out weather but Australia lost 90% of its harvest to drought, and Africa is expected to lose virtually all –that’s right ALL –of its wheat harvest to the stem rust that has now also blown into Iran and Pakistan and is expected to debut in India and China soon, followed by the U.S. in a few more years. One report projected that if the U.S. can’t get some of the flooded fields replanted and some kind of harvest uptick we may run OUT of corn before the harvest in 2009. And we’ve added something like 70 million people to the planet in the past year. Not good. This is a recipe for disaster folks. A lot of people are going to die. Some selected food headlines:
Floods cause food prices to surge: He’s wrong about one thing. The corn growing season isn’t young; most places that are flooded absolutely have to replant by July 4th to have any hope of a harvest –and the fields have to be dry for at least 10 days before they can plant. Let’s do the math: we were on schedule to produce 11.7 billion bushels of corn this year (out of a needed 12.5 billion). Reduce that by 15% and you get roughly 9.95 billion bushels, for a total shortfall of 2.55 BILLION bushels of corn. Of course, that assumes the harvest is only down by 15%. Given the weather so far this year, that’s a bet I wouldn’t want to take. So, what’s going to give? Oh yeah, and Australia’s harvest is down too.
http://business.timesonline.co.uk/tol/business/columnists/article4186944.ece
One Billion Hungry: It bears repeating: one billion hungry. And if they don’t get fed, eventually they’ll die. The death certificate may not read starvation; it rarely does and instead reads pneumonia or some other condition that wouldn’t be fatal if you weren’t starving, but lack of food will be the reason. One billion people. If this doesn’t get straightened out soon, I see a LOT of dead people.
http://www.timesonline.co.uk/tol/news/world/article4064650.ece
Food Supply Must Double by 2030: Oh yeah, that’s going to happen. We’ll never hit the 9 billion population number; we can’t keep feeding what we’ve got now.
http://www.timesonline.co.uk/tol/news/world/article4056801.ece
U.S. Has NO Grain reserves left: Or anything else for that matter.
http://standeyo.com/NEWS/08_Food_Water/080606.no.grain.reserves.html
Hunger in the U.S.: This last line is worth remembering: “It's not dignified, but we are hungry, and hunger is ugly."
http://www.counterpunch.org/colson06182008.html
With Hunger Comes Anger: And this is only the start. Governments are going to fall over this.
http://www.nytimes.com/2008/04/18/world/americas/18food.html?_r=2&oref=slogin&oref=slogin
How far is the U.S. from food shortages and riots? A good article but now outdated: we had our first ‘food riot’ last week over free food vouchers in Minnesota.
http://www.indybay.org/newsitems/2008/04/12/18492403.php

Energy –This is our second horsem –er, crisis. (I promise, I’ll stop.) Oil has peaked. That’s just the plain out truth, folks. Denial can only go on so much longer. We’re on the bumpy plateau where output is relatively steady while demand keeps climbing. Any day now we’ll tip down on the other side. Prices have gone up so far because demand has out run supply. Demand destruction has been taking place for a couple of years now; I’ve seen pictures of countries that have gone dark because their electricity was generated by oil and they stopped being able to afford the oil a while back. What’s going to happen when output starts noticeably shrinking and no matter how much we drill we can’t get it back up to what it was? Remember peak oil doesn’t mean that we’re out of oil –it means we’re at half a tank and the half that’s left is harder to get at, more expensive, and more ecologically destructive. Thus supply will keep going down and demand will be forced to match. Tar sands won’t save us; not only do they require almost as much energy to extract the oil as you get out of the oil, but they require massive inputs of water and natural gas. The former is hard to come by in the locations of the tar sands and the latter has peaked too. Uh-oh. Drilling off shore won’t save us; no 200,000 b/d field is going to replace mighty Cantarell, which is crashing so hard and fast Mexico might be out of oil to export next year. Not only that, but the U.S. alone uses 21 million barrels a day and the world, 84 million. Divide 200,000 into one of those figure and what do you get? Spare change.
Heating oil. Heating oil comes from oil. It’s about $4.50 a gallon right now. People may freeze to death in the northeast this winter because they can’t afford to heat their houses. Others may turn to electric space heaters which some project could bring down the entire northeast electrical grid. Why? Not only is it all ready at capacity, but its as antiquated as a Ford Model-T. (As are all the grid in the U.S. btw, which is one of the main problems with electric cars.) Hydrogen cars are a joke. Natural gas has peaked, and most of what’s left on the continent is in Canada –how long will they keep sending it to us when they need it to heat their own homes? Next we’ll be invading Canada.
Electricity. Most electricity in this country comes from coal, natural gas, nuclear, or oil. Aside from the problems with nuclear it requires massive amounts of water. They almost had to shut the nuke plants here in the southeast down last summer because the drought had lowered the water tables so much. But at least we have enough coal to last a lot longer –right? Right???? I hate to break it to you, but we don’t have nearly as much in the way of coal reserves as we’ve been led to believe. A report I read not too long ago suggest that coal may peak in as little as 30 years. That ‘peak’ word is going to become a four letter word soon, huh? That’s what happens when you base your society on non-renewable resources. Basically we’re…nah, I won’t say it. You get the idea. Some recent headlines on energy:
The U.S. at $200 a barrel oil: A good look at the impacts of oil at $200 a barrel. (Here’s a hint: it ain’t pretty. It’s also just about inevitable.)
http://www.latimes.com/business/la-fi-oil28-2008jun28,0,5808547,full.story
OIL: Problems, problems, and more problems Check this out: China imported 25% more oil in May, oil production fell last year, oil stockpiles dropped in the U.S. for the 4th week in a row. Can anyone spell higher prices?
http://www.bloomberg.com/apps/news?pid=20601087&sid=aeEdT.gCehSQ&refer=home
$150 a barrel oil, happy 4th of July: Analysts are now saying oil will hit $150 a barrel by July 4th. Others are also predicting $200 a barrel by New Year’s. I see even more dead people.
http://www.theglobeandmail.com/servlet/story/RTGAM.20080606.woilole0606/BNStory/Front
Coal in the U.S.: From Richard Heinberg. http://globalpublicmedia.com/museletter_194_coal_in_the_united_states

Credit and the Economy –ok, the globalized economy is going down the tubes. That’s the way it is and there won’t be any changing it. A lot of this is due to the rising price of oil. The projections I’ve seen suggest the airlines will be dead (at least for ordinary folks) within two years with oil this high, much less higher. Not only do we have the housing collapse, but we have the beginnings of what may be a greater depression than the ‘great’ depression. A lot of people are going to lose their jobs and/or their homes. Some manufacturing is starting to shift back to the U.S. because the shipping costs bite. Paradoxically, other jobs are starting to be off-shored precisely because they don’t have any shipping costs, and these are the jobs that have always been ‘safe’ before: engineering, accounting, management, etc. A lot of people are going to be in a race to see whose finances collapse first: theirs or the banks.

Climate –Climate change is rapidly becoming an out and out crisis. Sea level is rising at an inch a year, the weather’s gone completely crazy in many places, and temp’s are going up, up, up. This one is only going to get worse . Buckle up, folks. It’s going to be a bumpy ride. Projections range from a rainy day at the park to Armageddon; the reality will be somewhere in between but probably slightly closer to the latter. Some relevant headlines:
North Pole May Be Ice Free This Summer: So long to the polar bears (and thanks for all the fish).
http://www.cnn.com/2008/WORLD/weather/06/27/north.pole.melting/index.html
Oceans warming 50% faster than thought: This partly explains the higher than anticipated sea level rise. Of course, the rest is explained by the faster than anticipated glacial and ice cap melt.
http://www.telegraph.co.uk/earth/main.jhtml?xml=/earth/2008/06/18/scisea118.xml