The Problem Of Energy and Food

What happens when pumps slow down? What happens when the party is over? When the cheap oil ends? What will you do when the products and services which depended on cheap oil are expensive?

Food

Food production is heavily dependent on petroleum products. Everything from tractors to plow the fields to the transportation industry to move the food to market, depends on access to petroleum. When fuel prices rise, the consumer's cost of food increases. (see: http://sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2005/10/19/BUG26FADJU1.DTL&type=business ) The price increase is passed on to the consumer or the profit margins of the producers shrinks. What do you think happens more often?

When oil prices rise, the consumer is soaked. Energy induced inflation has affected the food industry, but the soft economy has prevented companies from passing those prices directly on to consumers. That's about to change. (see: http://www.chicagotribune.com/business/chi-0512280270dec28,1,7346604.story?coll=chi-business-hed ) The Chicago Tribune reports, "Clorox, the largest household-bleach maker, cut its 2005 profit forecast in October because of higher prices for oil and resins. Now, the Oakland, Calif.-based company plans to raise prices on about 40 percent of its products next month." (emphasis added).

The manufacturers are ready to pounce at the first sign of lower energy costs in the spring. Yet, Mlive.com reports (see: http://www.mlive.com/news/statewide/index.ssf?/base/news-7/1135721403211440.xml&coll=1 ) that "energy officials estimate that homeowners and manufacturers nationwide could end up paying 50 percent to 70 percent more for natural gas, 31 percent more for heating oil, 41 percent more for propane and 17 percent more for electricity than last year." If the manufacturers cannot immediately pass this cost increases to the consumer, the business will suffer. The MLive.com article goes on to note "high natural gas prices are beginning to result in job losses, salary freezes and a reduction in market share for U.S. manufacturers."

Smart Energy Alternatives doesn't opine that the peak crisis is upon us yet. What we do want consumers to be aware of is how slight disruptions in production affect both companies and consumers. Higher prices, layoffs and salary freezes are just a faint foreshadowing to what awaits those who are unprepared for the peak energy crisis which looms around the bend.

Population

Energy levels cannot decrease and population levels remain the same. As discussed above, food production is closely intertwined with easy access to cheap fuel. As energy prices rise, so does the cost of food. If energy prices rise beyond the ability of the poorest segments of a society to heat their homes in winter for survival, pressures will build which we believe will result in increased crime, violence and social disintegration.

Malthusian predictions have failed to materialize in the past because readily accessible energy stores were still available and advances in agriculture allowed population increases. That situation has changed.

Population pressures will dictate a rapid response

from the authorities resulting in an ever increasing prison population. Already, the U.S. prison population is so vast that prisoners may have to take turns sleeping. (see: http://www.thesundaymail.news.com.au/common/story_page/0,5936,17790260%5E1702,00.html )

Without access to heat in winter and affordable food, a population crisis would result. We aren't ready to predict mass starvation, but societal envy would be exacerbated and the release valve, we suggest, will be violence in some circumstances.

The elderly and others on limited/fixed incomes can be expected to have to choose between life-giving heat and other essentials such as food and medication. (see: http://www.lamardaily.com/Stories/0,1413,121~7979~3197192,00.html )

As bears repeating often at Smart Energy Alternatives, energy is the oxygen of modern civilization. Society cannot exist in its present form without it. So, what about civilization?

Civilization

Civilization is in crisis. It is witnessed in the insane confrontation some people have against Nature, in the angry or depressed citizens who struggle to make ends meet(1), in an economy which floats atop fiat currency which is printed at will to keep asset prices inflating in price to make people "feel" wealthy.(2) Yes, folks. We're in crisis, but many don't see the root causes. That's why Smart Energy Alternatives is here. As mentioned in the sections above on Food and Population, energy is the oxygen of civilization. Modern standards of living require increasing amounts of energy inputs for the expected outputs of goods and services which is referred to as our "standard of living." With increasing energy inputs coming at higher costs in both money(3) and conflict risk, it is only with internal disruption that a society can continue on a fossil fuel course without serious consequences.

Fortunately, there are voices being raised about the situation. There are voices which are warning individuals, NGO's and governments that the current course in untenable. Smart Energy Alternatives counts itself among those voices.

There is a growing awareness that conflict over dwindling energy resources is brewing and must be avoided.

SmartEnergyAlternatives.com provides readers with news and commentary to stay on top of the most recent energy developments.

Footnotes: (1) http://www.chinadaily.com.cn/english/doc/2006-01/11/content_511279.htm (2) http://www.bloomberg.com/apps/news?pid=10000103&sid=aHaeIL47jIUg (3) http://www.msnbc.msn.com/id/5612507/ (4) http://www.gasandoil.com/goc/features/fex52517.htm

Best regards,

J. Thomas Senior SmartEnergyAlternatives.com Researcher

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