When I was a small kid, I learned something important from my Pop. He always said: "Find two solutions for every problem, and then find one more, just in case."
Gail Tverberg's professional life was spent as an insurance actuary, one who priced risk, and now she blogs at Our Finite World. She says the effects of oil being a finite resource are financial. She says that these effects will be felt when we can no longer afford to pay what drillers want in order to drill.
Oil Prices Lead to Hard Financial Limits
Posted on August 28, 2013
by Gail Tverberg
We live in a finite world. Clearly, a finite world has limits of many kinds. Yet economists and other researchers use models that assume that these limits are unimportant for the foreseeable future. They have certainly not stopped to think that any of these might be very hard limits that are difficult to get around, and furthermore, that we might be reaching them in the next year or two.What are the hard limits we are reaching? One of the main ones is that at some point, there is a clash between the oil prices importers can afford, and the amount oil exporteuire.
Figure 1. Author's view of conflict in required oil prices [Used with permission from Our Finite World]
In fact, there can even be a conflict between prices producers in a non-exporting country like the US or Brazil need, and the prices citizens can afford to pay....
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When I started seeing our farm costs rising, I started looking into the reasons. That led me to attend what's been five annual conferences now given by the Association for the Study of Peak Oil (ASPO). I went to learn about oil, so I could position my farm for the future.
Over the five-conference span, I have found several people in different disciplines that I consider very credible. Gail Tverberg is one of them. Although her outlook is gloomy, I have not been able to find fault with her views.
If what she says comes true, we are heading for financial and societal collapse and sooner than we think. If that is the case, some of what we now think is important will recede into the past.
But I'm an optimist, so I take her views into consideration and try to find solutions for the problem -- and then one more, like my Pop always said.
Geothermal energy is my one-more, "just-in-case" solution for the Big Island. This solution takes care of what I call the "rubbah slippah" folks, because the result is cheaper energy and cheaper food. It utilizes resources that we have here in Hawai'i, and gives us a competitive advantage over the rest of the world.
It makes sense to leverage our geothermal because scientists tell us the Big Island will be over the volcanic "hot spot" for 500,000 to a million years. And it is half the cost of oil, and the price will remain stable. It generates extra energy at night, which right now we just throw away, but we can utilize or store that energy in a strategic way to prepare ourselves for the future.
In combination, and taking advantage of our year-round growing season, we should ask our universities and the USDA to help us develop crops that generate their own nitrogen fertilizer, and resist diseases and pests. These biotechnologies will help farmers by lowering their cost of fertilizers and pesticides, and this means locally produced foods will be cheaper. That will give our farmers a competitive advantage over their mainland competitors.
Derek Kurisu, executive vice president of KTA Superstores, talks about how Hawai'i farmers can gain an advantage in this very interesting video:
A recent bill up before the Hawai'i County Council, however, would have criminalized Big Island farmers for using biotechnology to grow their crops with less fertilizer and fewer pesticides. A second bill is still on the table, and I almost cannot think of anything that would take us further away from where we need to be heading.
Both bills send the wrong message to our next generation. In their actions, they imply that conventional farming is not an honorable profession. This, in turn, threatens our goal of food self-sufficiency.
They threaten the livelihoods of Big Island farmers. Competitors who are not on the Big Island would be allowed to use new biotechnology, but not Big Island farmers. New technology generally results in lower costs, thus this would leave Big Island producers as high-cost producers.
We are criticizing and threatening the farmers, the very people who feed us and the ones we should be encouraging to help us achieve food self-sufficiency.
In the old days, farmers were held in high esteem. Criminalizing farmers is a new, and ill-advised, concept. What we need now is to slow down, take a deep breath and do things in a steady, rational manner.... Read the rest
I've also written before that food security has to do with farmers farming. If the farmers make money, farmers will farm:
"Food security" means being able to get adequate and sufficient food, regardless of where it comes from. These days, it comes from all over the world. We are able to buy food from all over because money comes into our economy from the outside, with military spending and tourism being primary contributors. That provides us with money to pay for general services to our society and to buy our food. ... As long as our economy functions smoothly, we have food security.
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Lowering the cost of food will give the rubbah slippah folks extra money to spend, and we know that two-thirds of our economy is made up of consumer spending. When people have disposable income, this helps businesses.
This entire discussion is about attitude. My pop also told me when I was a small kid: "Get thousand reasons why NO Can. I only looking for the one reason why CAN!!"
Who are we? Are we people who say "No can" to everything? Or are we the folks who look for the one solution that CAN, for all of us?
Not, no can. CAN!!