The Oil Drum

159 comments on The Next Agriculture?

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westexas on March 7, 2008 - 12:11pm

http://en.wikipedia.org/wiki/Liebig's_Law_of_the_Minimum

It also seems to me industrial agriculture is more exposed to the Liebig's Law of the Minimum problem than are small farms close to urban areas.

Also, as I have repeatedly stated, the key problem regarding energy supplies, IMO, is net export capacity, especially net oil exports. The Saudis continue to assure the world that they can supply oil to the market for decades to come--while the volume of oil that they are actually delivering to the market has shown an accelerating annual decline rate from 2006 to 2007.

It occurs to me that there is a parallel between refineries and industrial food producers.

I have suggested a geometric progression in crude oil prices (per barrel) as importers bid for declining net oil exports:

$50, $100, $200, $400. . .

This results in a geometric progression in product prices (gasoline, diesel, jet fuel, etc., per gallon):

$2, $4, $8, $16 . . .

At each product price doubling, what happens to demand, i.e., the volume of product that consumers can and will buy?

As demand falls, it stands to reason that refinery operators, especially in importing countries, will curtail their refinery runs, in order to match their product output against declining demand.

As noted in the article, this is also the problem with the industrial agricultural model, where they have to match higher fuel and fertilizer costs against the demand for food products, i.e., what consumers can and will buy.

However, unlike petroleum products, consumers can, to some degree, do something about becoming closer to a net food producer.

My long time recommendations:

ELP Plan (April, 2007)
http://graphoilogy.blogspot.com/2007/04/elp-plan-economize-localize-prod...

A real life case history:

http://www.energybulletin.net/5673.html
Published on 22 Jul 2004 by San Francisco Chronicle. Archived on 25 Apr 2005.
Berkeley: Urban farmers produce nearly all their food with a sustainable garden in their backyard

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docscience on March 7, 2008 - 10:13pm

My opinion as to why I agree that a geometric progression in crude oil prices or fuel will occur, is that it would take a similar percentage rise to cause a similar percentage demand destruction.

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For example, if it takes a 20 % rise in production to cause a 20 % demand destruction,
at $50 dollars/barrel the price would have to rise to $60., a $10 dollar rise.

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If the price was $200/B , a $10 dollar rise to $210/B would just not be significant enough to cause a 20 % demand destruction.

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If the price was $200/B , For those people that can afford $200/B, the price would have to rise to $240 to drive another 20% out of the market.

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What this means in the markets, is that the higher the price of oil rises, the faster the price of oil will rise. So if the price of oil can rise 40% from $50 to $70 in one month, it can rise 40% from $200 to $280 just as easily in one month.

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DocScience
http://www.angelfire.com/in/Gilbert1/tt.html

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yiedyie on March 8, 2008 - 9:41am

Kunstler is right never underestimate the power of mases. If you would had lived in Romania you would knew how easy is for the people to go from working their workplaces to looting their workplaces(regular employees with the bag and managers with the truck), you don't need people to be starved, you just need the overall sentiment and mass agreement that something will surely go wrong. They serve the system because they trust it when they will not have sleep because the fear or uncertainty, it is needed just a guy to say loud and clear "Dudes, lets take what is ours, our work!".