The World Wants Oil..and Fertilizer

Sat May 24 20:23:00 -0700 2008
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The commodity that no one thought much about for the past three decades-fertilizer-is now the commodity investor's dream. Global demand for food and biofuel have sent prices soaring and billions are being poured into developing new fertilizer plants and expanding mining for potash and phosphates.

.."The high-stakes fertilizer issue is bound to intensify. For 30 years, global agriculture was marked by low prices, weak investment and state meddling. The spike in demand has delivered a shock to an ill-prepared system. Grain inventories have been shrinking steadily the past eight years and stand at about 50 days of supply."

Good farm land needs less fertilizer

Sun May 25 02:52:37 -0700 2008
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To belabor the obvious, good farmland needs less fertilizer (and less work) to produce good yields.  Unfortunately, much of the best lasd (soil-wise and geographically) had been scouted out and put into production by the 1800's and subsequently destroyed irrevocably by realestate speculation / urban sprawl / so-called 'development'. 

Most regions in the US lack, in practice, coordinated zoning and even urban planning. You can only import (for the sake of argument, non-violently) if there is a surplus others are willing to sell.  As this model is copied elsewhere, the problems with scarcity of food started to occur.  Regular fluctations (disease, weather) and disasters (climate change) magnify the effect.

I've been watching in parts of Northern Europe as dairy farms and dairies are destroyed in favor of realestate speculation and hit-and-run re-zoning building. It's been especially bad the last few years.  Suddenly it's a 'mystery', complete with investigating reporters and television programs, why milk and dairy products are expensive and of lower quality. 

There are many factors in why food is growing scarce.  So-called 'developers' are one of the larger factors.  That includes, especially, those who bought large lots, split them and built on and re-sold the smaller lots. 

 

Good farm land needs less fertilizer
Sun May 25 08:09:46 -0700 2008
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Or as an anti-immigration politician once told me "Cities have roots", and without strict population control legislation, WILL grow into the best farmland, because that's where the food to support the population is.

Oregon has some of that growth regulation- not enough in my book. My house, built in 1968, sits on land that my father picked strawberries on in the 1950s.

Urban planing and strict zoning

Sun May 25 08:24:29 -0700 2008
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The option I was recommending was actually strict zoning and urban planning which would solve that problem. You are right though, that humans as a species tend to 'shit where they sleep'. In most other species it's self limiting more directly, but we've had the chance to move around. In the old days it emmigrate, nowadays with satellite dishes, phones and the Internet, it's transmigration.

It's a population level version of using the right tool for the job. You can't, without tremendous extra effort, grow food on rocks. You can, however, build on rocks and even burrow in them.

Urban planing and strict zoning
Mon May 26 14:44:00 -0700 2008
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Oregon USED to have the best zoning and urban planning in the United States (before the recent property rights measures).  VERY strict- which is why the property rights measures passed so easily.  There was a LOT of pent up demand.

Even now, cities are limited to spreading within their urban growth boundaries.  But if you owned your land before 1973- before the first zoning laws- you can now create your own city.

The World Wants Oil..and Fertilizer
Sun May 25 12:03:15 -0700 2008
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The wealthy have too much money - or too few brains, or both.

What we appear to be seeing is the law of supply and demand, but in a strange, perverted way.  The wealthy have all of this money and need to "invest" it.  So they run from place to place, "investing" their money.  Unfortunately the amount of money they have to invest dwarfs the "natural" capital level of that market, so a bubble is created.  Too much demand for investment, too little supply of investable goods, price rises, and because it's "investment" instead of usage driving the price, the rise is really fictional - a bubble waiting to pop as the investment money is taken back out.

I use the quotes around "investment" because IMHO most of today's "investment", indeed most of the stock market, is really gambling, not investing.  Certainly there is some investing going on, some capital is being extracted and used for expansion, but the lion's share is just a great big horse race - or Fantasy Baseball game, pick either.

Why I say too few brains...  Right now we have a real need for investment, in the truest sense of the word, in several areas like alternative energy, more efficient transportation, non-petroleum-based fertilizers, etc.  Any of those fields could also be incredibly lucrative to whoever chose to *invest* there.  Unfortunately like the stock market, there's some true investment going on, but far too little.

People talk about a "Manhatten Project" for oil independence.  There are enough investment dollars floating around that we could do it, too.  But instead, we've wasted our mortgage system turning it into "financial instruments" for investment, we're driving up fuel and other commodity prices, and we continue to drive stock market prices up based more on cost cutting than revenue expansion.

The World Wants Oil..and Fertilizer
Sun May 25 14:29:06 -0700 2008
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People talk about a "Manhatten Project" for oil independence.? There are enough investment dollars floating around that we could do it, too.

Yeah but none of those people suggest private investment money be used.

Every last one of them want the massive manpower and investment to come from governnment edict. It's not as you suggest simply a matter of throwing money at the problem but an urgent need to change the way people behave because they aren't smart enough to do it in a time frame that is fast enough to satisfy those calling for such a project.

So the plan is for the government to take charge of massive amounts of private capital and 'invest' it in a way that will accomplish the goals of the advocates of this 'Manhattan Project'...and people wonder why I call them neo-Marxists...

The World Wants Oil..and Fertilizer
Sun May 25 15:13:12 -0700 2008
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Maybe that's what "people suggest", but that's not the way it has to be done.  There are any number of solutions to the current problems mentioned that are currently half-developed.  Maybe some of them aren't ready to be helped by sudden infusions of cash, but some of them are. 

Part of the frustrations watching events play out is that clearly a lot of people are waiting for the silver bullet, and they want to hop on that.  There doesn't seem to be a lot of recognition that it's probably going to take a whole arsenal, and practically all of that arsenal is going to be made of base metal, instead of silver or gold.

As for private investment, it's an opportunity to make money.  With some of the more recent technology developments in photovoltaics make economic sense in a growing range of situations, for instance.  Maybe it's not the silver bullet, but that doesn't mean it won't be profitable.

The World Wants Oil..and Fertilizer
Sun May 25 15:12:16 -0700 2008
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Is there a simple way for private individuals to collectively fund research? Something like "I want to fund X% of this project, and get .95X% of any returns", or even "I want to fund up to $X of research in this category (someone else picks the individual projects), and get the corresponding percent of any returns" ("up to" in case they just can't find enough worthwhile projects to fund).
The World Wants Oil..and Fertilizer
Mon May 26 04:24:32 -0700 2008
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That sounds like a managed fund, in theory.  In a real manged fund the fund manger milks the fund for a percent or two of its total value each year irrespective of its income.  Unless times are good the fund manager gets wealthy and the clients see their money slowly drain into the fund manager's pocket.

Organic techniques solve the latter...

Mon May 26 06:34:01 -0700 2008
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Basic organic techniques -- planting "green manure" cover crops, etc. work as well as fertilizer and give you much healthier soils. So a high cost for fertilzier will simply educate people to try these approaches, which will be better for everyeone all around.

The fuel part though, that's a much harder row to hoe. I guess I have to put my bets on a combination of oily-algae farming and solar (esp molten salt solar).

Organic techniques solve the latter...
Mon May 26 15:01:30 -0700 2008
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Here in Vermont there are a few farms that run their waste manure through a methane reactor, generate electricty, and then use the residue to fertilize the fields.

Of course that approach only works where you have:

Animals and crops at the same farm, or at least close.

An regulatory system that allows/encourages selling excess electricity back into the grid.  In Vermont the regulatory support is only in place for renewable generation.  I've toyed with the idea of a Eurpoean-style household-scale cogeneration plant, but I wouldn't be able to sell the excess back, and that kills the economics.