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Monday July 04, 2011

Jim Rogers : Global agriculture supply worsening, may lead to food shortages

This article belongs to the Global food crisis story arc.

bloomberg.com :

The global agriculture supply situation has worsened and a failure to boost food production fast enough to meet demand may lead to shortages, said investor Jim Rogers. "We've got to do something or we're going to have no food at any price at times in the next few years," Rogers said in a Bloomberg TV interview. Monthly food prices tracked by the FAO have surged 9 times in the past 11 months, as global demand for corn and wheat outstripped production and drought and flooding ravaged harvests. The World Bank estimates higher food prices have pushed 44 million more people into poverty. In China, food-price inflation was at 11.7% in May 2011, the highest since the global food-price crisis in July 2008.

Global stockpiles of corn are forecast to drop to 47 days of use, the fewest since 1974. The proportion of the US corn harvest going to ethanol has almost quadrupled since 2002 and will reach 40% in the current marketing year, according to USDA. Ethanol output has increased more than six-fold since 2002, boosted by federal subsidies now being scrutinized by Congress. Corn is 92% higher than a year ago, remains the best performer in the GSCI Agriculture Index, and is currently at $6.685 a bushel in Chicago trading. Inventories of wheat, used in making pasta, noodles, bread and feed for hogs and poultry, will drop to a 3-year low of 184.26 million metric tons as output misses demand for a second year. Demand continues to outstrip global harvests because of rising ethanol production in the US and China's surging demand for meat. "Grain is a solid input into all those food sectors and so there's really no way to go to avoid grain-based inflation," said Kellogg CEO John Bryant.

- Food and energy are the two main categories that are the most sensitive to inflation, and here we are again looking at another possible 2008-style run. Food is particularly worrying what with the factors of climate change, biofuels and falling reserves converging with increasing populations and standards of living. Some say it will be different this time, with governments and central bankers fresh from the 2008 run watching most closely and acting much more quickly compared to the last round. But the primary trend will remain particularly so if the factors of demand and supply are weighted in its favour. The primary trend may be deflected for a short while yet, but the rebound will be that much the stronger.

(2011-07-04 16:50:48 SGT) [Env] Permalink

Monday December 20, 2010

Singapore in tough environmental balancing act

channelnewsasia.com :

Singapore prides itself on being a clean and green city but a booming economy and a high-consumption lifestyle have made it one of the world's biggest carbon polluters per person. Singapore's green credentials are strong and it is establishing itself as a regional renewable energy hub. Yet, if all Asians emulated Singaporeans' modern and often luxurious lifestyles, greenhouse gas emissions would spike alarmingly. "If everyone in the world enjoyed the same level of consumption as the average Singaporean, we would need three planets to meet the demands placed on our resources," WWF spokesman Chris Chaplin said. Singapore was listed by Maplecroft as the world's 7th largest CO2 emitter relative to its population size. Ahead of it were only UAE, Australia, the US, Canada, Netherlands and Saudi Arabia.

Despite a punishing auto levy and road charges, the number of motor vehicles in Singapore reached 925,518 in 2009, up more than 27% in 5 years. Singapore authorities insist that the country has no choice but to rely on imported fossil fuel. With an area smaller than New York City, Singapore has no space for wind power, and is devoid of hydro and geothermal power sources. Nevertheless, the Singapore government is committed to the fight against climate change. Singapore is investing heavily in clean energy and is building an LNG terminal that will be ready by 2013. It is also pushing its people to do more recycling, doubling its rail network by 2020 and testing electric vehicles for commercial use. In addition, Norway's REC opened one of the world's biggest solar manufacturing facilities in Singapore in Nov 2010, costing nearly $2 billion, and Danish wind-turbine manufacturer Vestas already has a global R&D centre there.

- Whenever I go to places like Malacca, Malaysia for short breaks, I am reminded of how a society's choices have an impact on resource and energy usage. I was discussing just this with a colleague not too long ago. He had remarked that the buildings in Malaysia, ah, not to put too fine a point to it, generally are not quite as well maintained as those in Singapore. My take on that was it was their people's choice, and looking at it from a Peak Oil and/or environmental perspective, that may not be such a bad thing. After all, that means lower maintenance cost, and reduced demand for resources and energy. I doubt many of my colleagues and friends see it that way. Actually, I kind of doubt that even those in Malaysia see it that way.

Conversely, a look around the Singapore of end-2010 looks to me like one of those resource-intensive, high-energy usage scenarios of the future : shiny new buildings, brand new cars, newly paved roads, bright lights everywhere. Shopping malls completely decked out with seasonal decorations, supermakets full of food from all over the world. As for the supermarkets, their motto could well have been something along the lines of "it's always in season somewhere". Oranges from California. Apples from New Zealand. Mangoes from Pakistan. Peakoilers often talk about "3000-mile Caesar salads". How about 10,000-mile chickens from Brazil? Or a brand called "Air Pork" that is imported from Australia - no prizes for guessing how it gets here to Singapore. You really can't make this stuff up.

In recent times, it has been apparent to me that even though I am continuing to track my own country's attmpted progress in bringing in electric cars, putting up solar panels, inviting clean energy companies to setup shop here, the pace of economic growth and hence resource usage seems to have completely outstripped these efforts. It is always a fine balance between economic growth and ecological preservation, and we don't really seem to have found it - yet. But at least we should try to work towards it.

(2010-12-20 00:50:26 SGT) [Env] Permalink

Sunday October 11, 2009

El Nino may force Indonesia to shelve rice exports plan

This article belongs to the Global food crisis story arc.

bloomberg.com :

Indonesia may shelve plans for the country's biggest rice exports in half a century next year if dry weather caused by El Nino causes production to miss forecasts. The world's third-biggest grower had planned to ship up to 2 million metric tons of milled rice next year, based on a production forecast of 40 million tons this year. El Nino can prolong the dry season in parts of Asia, delaying rains, leading to lower agricultural output. Global rice production may fall 3% to 668 million tons this year, the UN FAO reported.

Rice, the staple food for half the world's population, surged to a record $25.07 per 100 pounds in April 2008 in Chicago as global inventories declined, sparking a global food crisis that prompted exporters including India and Vietnam to curb shipments to secure domestic supplies and cool inflation. Rice futures prices have plunged by almost half since then as growers rushed to expand production. Rough rice for Nov 2009 delivery was recently trading at $13.125 on the Chicago Board of Trade [CBOT].

- Right, it's not the first time that Indonesia is going to limit its rice exports, but couple that with the huge flood in the Philippines that destroyed a portion of their rice crop, throw in rising crude oil prices and all-time record high gold prices and we just might end up with a recipe for rice supply issues and price inflation. I'd say it's probably best for us to stock up on a couple extra bags of rice. You know. Just in case.

(2009-10-11 22:17:30 SGT) [Env] Permalink

Thursday August 27, 2009

Palm oil : RSPO group pushes for environment-friendly standards

features.csmonitor.com :

Palm oil : companies can't get enough of the "golden plant" grown in Indonesia and Malaysia to keep up with demand. So plantations are burning and clearing rain forests - often illegally - to plant more palm trees. Clearing the jungle belches carbon into the air and is pushing orangutans to extinction. Now, a Malaysian-based network is pushing to end the destruction by adopting more eco-friendly standards. The RSPO (Roundtable on Sustainable Palm Oil) has signed up corporations such as Unilever, Johnson & Johnson, Nestle, Colgate-Palmolive, Cargill, The Body Shop, and Cadbury. The RSPO certified its first "green" batches a year ago, and now accounts for 1.4 million tons, or 3% of the world supply of crude palm oil.

It represents a first step in a very long journey for the prized vegetable oil that appears all over supermarket shelves - in detergent, soap, cooking oil, bread, candy bars, cosmetics - and, increasingly, in biofuels. There are plenty of gaps in enforcement of the new standards, however. Sustainable plantations don't produce much yet. The global appetite is so voracious that some brands mix "good" palm oil with "bad." A single chocolate bar, for instance, might contain oil from a compliant plantation and one that's not.

- Palm oil. Peakoilers are well aware that it is an incredibly useful substance, and yet at the same time it is an increasing problem : Haze and burnt forests. Questionable EROEI (Energy Return on Energy Invested). Food vs fuel.

This RSPO thing. It sounds like a good idea, and I'm glad that they at least try.

But we need to do a bit more than that.

We need to recognize that biodiesels as a whole, with energy return ratios barely over the breakeven point of 1.00, and arguably many of them don't even make 1.00, aren't a terribly bright idea. We need to recognize that food for people should take precedence over fuel for cars. We need to recognize that, the energy we use worldwide every year is equivalent to over 400 years of total worldwide plant and animal growth. We need to recognize that, well, we need to find a better way. Biofuels are not the answer. They never have been the answer.

(2009-08-27 21:38:59 SGT) [Env] Permalink

Wednesday June 24, 2009

Synthetic trees aim to capture CO2 from the air

edition.cnn.com :

Scientists in the US are developing synthetic trees capable of collecting carbon around 1,000 times faster than the real thing. As the wind blows though plastic "leaves," the carbon is trapped in a chamber, compressed and stored as liquid carbon dioxide. The technology is similar to the carbon capture methods at coal power plants, however the "synthetic tree" can catch carbon anywhere. Professor Klaus Lackner of Columbia University says it is highly efficient for its size compared to a wind turbine. Lackner and his colleagues have developed a sorbent that uses a relatively small amount of energy to release the CO2 and is not prohibitively expensive.

Lackner's colleague Professor Wally Broecker says most people still don't recognize the magnitude of the task the world faces in reducing global carbon emissions, and it was likely that one day urgent action would need to be taken. "Each unit would take out a ton of CO2 a day - which would be the amount of CO2 produced by 20 average automobiles in the U.S.A. And the cost of each unit would be about the cost of a Toyota."

- Amongst the various CO2 capture techniques that have been proposed, this looks like an interesting approach. Whether it scales or not (or if it gets Richard Branson's stamp of approval) will have to be seen, particularly regarding the issue of carbon storage. I'm a little leery about the CO2 storage part however, whether in liquid form or whatever it may be. It would make more sense if some economic use could be found for it, for example as CO2 injections to increase oil well pressure with the tertiary oil recovery method. With that, we're back to the old "find the nearest oil field" game once again.

Virgin CEO Richard Branson was talking about scrubbing a billion tons of carbon dioxide a year. A billion tons. Compared to that, the scale of nuclear waste, especially with reprocessing, looks positively miniscule, which is great, except for the political posturing part. Well, it's time to look past political posturing. The world needs all the solutions it can get, whether it's a transition to an electric car fleet, renewable energy, nuclear energy, carbon capture and storage. Anything and everything that can work, we've got to look into it.

(2009-06-24 13:21:44 SGT) [Env] Permalink Comments [1]

Sunday May 17, 2009

Canada publishes first comprehensive atlas, maps geological riches of Arctic mineral resources

This article belongs to the Polar melting, Arctic mining and mineral resources story arc.

ottawacitizen.com :

Canada has published the first comprehensive atlas of Arctic geology - everything from continental plates to rock types that signal where to hunt for gold, diamonds, gas and oil. The atlas contains $1-billion worth of data from polar countries, and carries enormous implications for contentious Arctic sovereignty claims - based partly on formations under the ocean - and for mining and earthquake forecasting. The map is available electronically and in a poster from Natural Resources Canada, showing the world north of the Arctic Circle.

Already, mining companies are eager for a look, said Marc St-Onge, a Geological Survey of Canada senior scientist. Canada, Russia, the United States, Denmark, Norway, Finland and Sweden all contributed data. The $1-billion figure represents years of field work by these countries combined : icebreakers, helicopter flights, seismic profiles, and geologists trekking on foot. It shows not only the surface, but also deeper layers in 3D "data cubes." He noted that with the economic slowdown, the mining industry has time to digest what the atlas shows, without pressure to rush out and drill right away.

- The irony of all this has already been noted a couple of years ago and it goes like this :

1. Humans burn fossil fuels to release the buried solar energy stored therein
2. Atmospheric carbon dioxide levels rise and the natural "greenhouse effect" is amplified
3. The oceans warm and ice melts
4. Melting ice opens up new prospective oil & gas provinces for exploration & production
5. Humans burn more fossil fuels ... and back to (2)

The above passage really does point out the absurdity of the situation. But there is nothing particularly funny about it if you also consider the potential global sea level rise, with 7 meters (23 feet) due to Greenland melting and, it has also been said, up to 60 meters (197 feet) if Antarctica were to also melt.

We need to break this cycle of burning fossil fuels. We need to implement solar energy, we need to implement wind energy, and at the same time we also should not rule out nuclear energy - whatever alternative energy sources that are workable and that are deployable. The alternative is for the countries of the world to start fighting resource wars - and there are those who argue that these resource wars have started already. There could be increasingly nasty conflicts over increasingly scarce resources. The Great Arctic Endgame is just one of them.

(2009-05-17 11:08:27 SGT) [Env] Permalink

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