Healthy soil and sustainable growing

[tradingpost <tradingpost@lobo.net>]

I referred to the "energy cost", which includes the cost of natural gas versus the oil price output. And the cheaper source of BTUs will be exploited to rise to the cost of oil. Further, let's take into acount the messed up tax laws that subsidize parts of these operations to skew the financial outcomes.

Our food prices have been rising. Still artificially low due to massive taxpayer subsidies to processors, middlemen, & corp farms. Those restrictions you're under there are ridiculous.

Let's get free of the market rigged against us.

On 3/27/2014 1:53 PM, John D'hondt wrote:

Very interesting mails Paul. but the situation is much more complex than even this good article shows I fear.

 

For instance, I am reading that  the tar sands in Alberta use enormous amounts of natural gas to extract that heavy bituminous oil and heat it enough to make it "flow" through a pipe line. Sources differ but I think it is generally accepted that 2.5 times more energy from gas is used than comes out in the oil. This is still profitable because gas prices are much lower than oil prices.

 

More or less the same is true for fracking although it is again the cost and profit that are the driving factors and not the energy difference between production cost and product extracted. I have for a few years been following a web site "Capital and energy" that is really there to "advise" investors of where to put their money. Usually they advise to invest in very small companies that are about to strike gold with oil production, rare earth metal finds and gmo's. A self fulfilling prophecy since if their readers do invest in the companies they push forwards then these stocks are bound to go up.

Anyway, in recent weeks this website has been warning that many fracking companies are loosing money. Put the fever to drill more is still there.

 

Another point that I find dangerous in the article is that it seems to take for granted that nuclear will take over from oil. I most sincerely hope that this will not be the case after quite a few nuclear disasters in recent years that will have enormous effects on all life on earth.  What is happening in Fukushima alone could well sterilise the planet.

 

As to you own reply, I think that big oil companies, the military industrial complex and almost all big food companies are owned by the same small group of extremely rich people. We see that small group getting ever richer and the 99 % of all the rest of the world population get ever poorer and that is not by accident. It is this flow from poor to rich that drives the whole economy.

And of course this can not keep going and it will probably all fall over the cliff as you say.

 

The thing with big agriculture is that since the end of WW2 food prices have steadily dropped and are still dropping. No matter what you produce, milk or meat of plant crops, the profit margin per unit is ridiculously small. You need to sell hundreds of 80 kilo pigs per week to make some sort of a living income. You need to produce thousands of gallons of milk per week or your cost will be higher than your profit.

 

One of the main effects has been that many small producers have been forced out. And this too is still going on today. We here in Ireland on our 75 acre farm are under enormous pressure to become part of the "green revolution" right now. It is illegal now to bed animals down on straw and wood shavings and we really should have a slurry tank to catch the watery wastes. It is also illegal to have a compost heap for a large part of the year. And it is also illegal to use compost on most of our land.

Solid manure with straw we can handle with a few hand tools and a wheelbarrow but that toxic liquid slurry can only be handled by big machines.

 

Anyway, I got that $ 150 for a barrel of crude from several different articles. In the first place there is really no alternative to oil to run all these big ag machines. Completely impractical to let them run on their own mini nuclear plant. A solar roof on a tractor would do absolutely nothing. Hydrogen gas (made via alternative energy) could possibly be used but hydrogen is enormously unsafe and you need a volume at least 28 times higher than for the same energy content of oil.

Further I understood that when oil goes over $150 that then even small profits per product unit would no longer be achievable. Seems that then King's law starts playing and food prices would at least have to quintuple from one day to the next to make it worth while for a farmer/farm worker to start up an oil guzzling tractor. Who amongst common people will be able to pay those prices? And what farmer will be able to take the risk that he will get rid of his harvest?

 

I agree with you completely that it is wise to stay away from oil as a production factor. And yes, the downside looks like a steep cliff.

I have said it before, as far as I am concerned it would be good to reach that cliff fairly soon for otherwise we are bound to loose the war against all these new regulations that demand big machines and the use of roundup and the extermination of all that is left of our wildlife.

 

John

   Afraid of getting some angle wrong on EROEI, I checked this:
Will the decline in world oil supply be fast or slow? by Gail Tverberg (also known as Gail the Actuary)
http://ourfiniteworld.com/2011/04/11/steep-oil-decline-or-slow-oil-decline-expanded-thoughts/

   About Gail Tverberg http://www.resilience.org/author-detail/1007104-gail-tverberg

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On 3/26/2014 8:32 PM, tradingpost wrote:

53338DB1.2080001@lobo.net" type="cite">
Or we can see oil as horribly expensive requiring 100's of billion$ for military protection of our sources overseas (how did our oil get under their sand...) . You raise the issue of what happens when it goes over $150 bbl. Why $150 exactly? As oil goes up, costs of industrial ag go up in lockstep, has for generations. Good for me - I don't use inputs made from it - bad for big ag & food buyers.

But one thing I am sure of, it takes X amount of energy to get Y amount of energy from the ground & to the customer, & this ratio has skyrocketed since the first oil drilled. After picking the low hanging fruit, they now risk billion$ to tap new sources, & the energy cost of recovery is still increasing much faster than the increase in pump price. At some point, in some places, it costs more energy to get it than it will yield once recovered. At that point, production STOPS COLD. Drilling, pumping, refining, transporting - stops when every drop is an energy & financial loss. And how much reserves are untouched then becomes moot. The Hubbert model doesn't account for this. The downside is not the bell curve; it's a cliff. The implications are dystopic.