Category Archives: Peak Oil

Eating Locally, Peak Oil, Sustainability

Wave of the (Post-Oil) Future

We’ve had a series of lunch meetings with our fertilizer distributor over the last several months.

Back in May, we discussed the news that fertilizer prices were rising faster and higher than usual. Knowing that this was related to energy prices rising at an accelerating rate, we knew things were going to get tough. He told us that he was worried for his small farmers, and that some were actually dipping into their savings to buy fertilizer. We knew was very bad news.

In June, we had lunch and learned that fertilizer prices were going even higher. Our distributor expressed very strong concern for papaya farmers and other small farmers. His fertilizer sales were dropping, he said, and he wasn’t sure it was due to dry weather, which is expected, or to farmers dropping out of farming due to high fertilizer costs and low returns. He suspected the worst. But because of the extremely dry weather right then he wasn’t sure.

A few weeks ago, the rains came back. I gave it some time and then called him to ask if, with the change in weather, farmers had resumed buying fertilizer.

His answer was NO! That many farmers did not return to order fertilizer. Small farmers who have no capital investment can just drop out and then drop back in when the economic climate is right. These farmers, he told us — who were squeezed by rising costs on one side and shrinking margins from distributors and retailers on the other — have quit farming.

There are other farmers, though, who sell at Farmers Markets and to retailers like KTA and Foodland, which sticks with their farmers through thick and thin. Those farmers are doing okay. And now Whole Foods is coming into the market, and all indications are that they, too, will work with farmers through thick and thin.

This type of relationship is the wave of the future. I’m convinced that very soon, Hawai‘i’s people will realize how important it is that we all support local farmers.

They are the ones who will feed all of us when the “ships not going come.”

Peak Oil, Sustainability

Steps Forward

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I wrote recently that Matt Simmons, one of the world’s leading experts on Peak Oil, sounded pretty pessimistic in a recent CNBC interview. View it here
 if you haven’t seen it.

It’s one more in a long series of reminders that we here in Hawai‘i (as well as those elsewhere) need to figure out how we can be sustainable. Many people are already taking action and making changes. We can each do our small part.

We all need to look at things differently than we have been. I
 attended the Peak Oil conference this past October, so the events of today 
do not surprise me.

I’ve also had some time to think about all this. Here’s what I think is most important, and they are steps everyone can move toward:

•  Support your local farmers.

•  Learn how to grow your own food.

•  Support education. The young ones need to have the tools to solve 
the problems of tomorrow. We must help them now so they will be prepared.

•  Diversify our economy. We need to expand and cannot depend too much on tourism. If done in a sustainable way, the Thirty Meter Telescope coming to Mauna Kea can help us with
 education and diversification.

•  Avoid petroleum costs whenever you can.

Another thing you can do, of course, is to check out the E Malama ‘Aina
 Festival coming up November 7th and 8th.

Food Security, Peak Oil

We Are So Fortunate Here on the Big Island

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The effects of Peak Oil are real, and they are now! In today’s Boston Herald, Laura Crimaldi wrote this article: People will die this winter because they can’t stay warm.

From her article:

The gas and electric bill crunch is largely caused by the dismal economy, experts say, but oil presents a nightmare all its own.

“This is the first time that I have felt in years that people will die this winter because they can’t stay warm,” said Joe Kennedy, founder of the nonprofit Citizens Energy Corp. “This is by far the most grim and scary set of storm clouds on the horizon that I have seen in 30 years in trying to address the needs of the poor and elderly, in terms of their heating needs that are coming this winter.”

The skyrocketing cost of oil could saddle consumers with winter heating bills as high as $7,000, according to leading advocates. At the end of trading Friday, oil closed at $139.65 a barrel as a shocking new report from economists at CIBC World Markets predicted that gasoline would hit $7 a gallon by 2010.

We, living on the Big Island, are so fortunate. Sometimes we forget just how fortunate we are.

We were really poor growing up at Waiakea Uka Camp 6. I don’t recall ever having an extra blanket in the house. When I was in elementary school and it got really, really cold (like mid- to high-50 degrees) I remember going into the dresser drawer and throwing all the clothes on top of my blanket. No big deal.

I attended the Association for the Study of Peak Oil conference in Houston this past October. We all knew the consequence of rising oil prices on the coldest part of the country, as well as that airlines would be going out of business.

I was dressed in my usual outfit – short pants – and a pullover. I did not have the heart to tell the people I met there that I would be wearing shorts throughout the entire winter, and that we would be able to grow food all year long. I could not tell them that we in Hawai‘i have a geothermal resource we are reluctant to use.

The others were going back to their homes, elsewhere in the United States, facing a very serious and even bleak future, while I was going back to the Big Island where we live in an embarrassment of natural resource richness, but I just could not bring myself to tell them.

Those people in Massachusetts who will be freezing this and every winter from here forward would love to have jobs so they and their families can afford their heating bills.

Here in Hawai‘i, the Thirty Meter Telescope (TMT) is a once-in-a-lifetime opportunity for us to make wise decisions and help our future generations. If we bring the new telescope here, we have an excellent opportunity to negotiate educational opportunities for our keiki and create jobs for our families. But we must not compromise and we must make sure everything is pono first!

We can do this if we follow the Hawaiian style of having respect for each other.

Hotels are downsizing in Kona and the streets are less crowded. With the TMT, the streets would still be less crowded but our people would have jobs as we transition to a new economy.

Food prices for food brought here from afar will continue to rise in cost.

Are we in danger of starving to death? The answer is a resounding NO!

If the worse happened and ships visit us only intermittently, which is not likely, we on the Big Island can grow what we need to feed ourselves. Piece of cake. We have knowledgeable people at the universities and other government agencies as well as people knowledgeable in the traditional ways. And the Big Island is sparsely populated with lots of room to grow things.

We also have abundant water resources here on the Big Island. An inch of rain falling on one acre is equivalent to 27,000 gallons of water. The average rainfall at Pepe‘ekeo, where we farm, is 140 inches per year. So in an average year of 140 inches of rainfall, 3,780,000 gallons of water falls on each acre. Which means that two billion two hundred sixty eight million gallons of rain fall on our 600 acres in an average year. Most of that runs to rivers and out to the ocean.

We actually need to think of what we can do to help O‘ahu cope.

Here at Hamakua Springs Country Farms we are leasing parts of our lands to other farmers. Our objective is to get sufficient variety and volume to make interisland barge shipments economical and timely.

We need to open up a dependable transportation line for food going to Oahu. We are already shipping container loads of produce this way. We are now refining the process, so it will be dependable during tough times.

So we are not going to starve, or freeze, or overheat. And, if we choose, we can have clean, low carbon footprint jobs and energy production.

What more do we need?

Mauna Kea, Peak Oil

Moving Forward & The Mountain

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“Hawaii’s biggest industry is its tourist industry. It seems likely to me that Hawaii’s tourist industry will largely disappear in the next few years, as oil prices rise.”

Gail Tverberg wrote those words the other day in her post to theoildrum.com.

Her conclusion flows logically from the Peak Oil premise – that world oil supplies will decrease at an increasing rate. Which means that transportation fuel will keep increasing, which means that planes and people will not be able to afford to fly.

But it is very hard to look at those words, let alone process them. There does not seem to be any relief in sight. In fact, we all know it will get a lot worse. Actually, it may never get better.

Hotels are slow, everyone is saying. And some of the reservations we are seeing now were made a long time ago. People expect that new reservations will be even scarcer.

What this means is that many, many jobs will be lost. What will happen to those families whose jobs vanish? Kids in tense households, where parents cannot make ends meet, will suffer. And it will get increasingly worse as time passes.

We must do something to help us transition into the next phase. It is no longer about us. Now it’s about the keiki and the generation after that. We must all rise above our agendas and focus on the future generations.

One thing we can all do is work together to bring the Thirty Meter Telescope here.

In brief, this is a new telescope proposed for the summit of Mauna Kea. It’s an enormous project, and there is controversy about it to match.

There have long been issues – very valid issues – with the telescopes on Mauna Kea, mostly focused on poor stewardship of the mountain, a lack of respect toward the Hawaiian culture, and the lack of benefit to our local communities. I acknowledge and recognize these problems one hundred percent.

I have been involved extensively in talks re: the possibility of this Thirty Meter Telescope being built on Mauna Kea. I volunteered for the Thirty Meter Telescope subcommittee nearly three years ago because I was determined that if it is built, it will be done the right way. It’s only because I have seen the very real possibility of things being very different this time that I have stayed involved.

I am not one to be naïve. Now, unlike what has happened in the past, I see very real potential for two important things to happen. In exchange for our practically unsurpassed location for astronomical observations, I see:

• The opportunity to set up a facilitated framework where a group of stakeholders guides the process.

• The possibility for the people of the Big Island – and our keiki – to directly and measurably benefit from this new telescope being located here.

We must make an honest effort to address the very real issues in a positive way, fix what needs to be fixed and move forward.

We need to set guidelines – if this telescope happens, it must be a Big Island initiative (not controlled by people sitting at desks on O‘ahu).

If we are all willing to sit down and work toward a common solution, we can both take care of Mauna Kea and also benefit from locating the Thirty Meter Telescope here.

Siting the Thirty Meter Telescope here can be a catalyst that allows our keiki to get a good education, as I see that educational benefits for our keiki can be negotiated. A good education will help our keiki figure out sustainable solutions to the decline in fossil fuels in this changing world they are inheriting. We must help them acquire the tools they need to become sustainable.

Perhaps some of our keiki will choose to study fields such as agriculture. Maybe one of them will figure out how to make nitrogen fertilizer from excess geothermal energy. It will take something like this to feed all of our people. Let’s give our children the best educations we can.

The Thirty Meter Telescope will take 10 years to build, and many people will be employed in the construction. It is projected to cost $750 million to build. But most of all, that would give us time to transition. We must all work to ensure that our society does not fall apart with desperation because there are no jobs.

These issues are no longer about us. Now they are about our keiki and future generations.

“Not, no can. CAN!” We owe it to them.

Peak Oil

Gail Tverberg on Hawai‘i & Peak Oil

Gail Tverberg, keynote speaker at the recent Hawai‘i Island Energy Forum, posted an interesting article  yesterday about her impressions of Peak Oil as it relates to Hawai‘i.

“Hawaii seems to come up often in the thinking of people aware of peak oil,” she wrote at theoildrum.com, which is a blog with the subtitle: “Discussions About Energy And Our Future.”

She continues:

On one hand, it seems like an ideal place to relocate after peak oil – no need to worry about heating a house; clothing is mostly for protection from the sun; and crops can be grown year around. On the other hand, it produces no fossil fuel itself, and it is at the end of the supply line for both food and fuel. Hawaii’s biggest industry, tourism, is already declining, and with rising fuel costs, can only decline further.

Many of you know that I was recently in Hawaii. After visiting, I thought I might post a few of my thoughts about the situation. Read the article here.

As of last night there were already more than 120 comments, many from Hawai‘i residents.

After the conference, I was very fortunate to spend three days taking Gail, her husband Ben and son Steve sightseeing.  They enjoyed visiting Hamakua Springs Country Farms, Hawaii Tropical Botanical Garden at Onomea, the summit of Mauna Kea as well as the Hawaii Volcanoes National Park.

Peak Oil and its implications are always top of mind with me. Gail and I slipped in and out of the subject seamlessly, and I gained a lot of valuable insight as we toured around the east side of the Big Island.

I gave the introductory comments at the Hawai‘i Island Energy Forum earlier this month:

The world is changing in ways we have not seen and can only imagine. Oil jumped back to $134 today. The future price of oil had always been cheaper than the present price. But a few weeks ago, future oil price was no longer cheaper than the present. That is unnerving. We must challenge all of our fundamental assumptions. Prepare for the worse and hope for the best. The status quo is not safe any more. Actually the status quo is a very risky bet.

One hundred fifty years ago, 700 whaling ships were calling at Hawai’i ports. If we had a forum then, perhaps some would be calling for increased production of harpoons. But the 800-pound gorilla in that room would have been that oil had just been discovered in Pennsylvania and the world was about to change.

Fast forward to today. The world is changing again. This time the 800-pound gorilla in this room is the fact that we have come to rely on oil for our lifestyle. But the supply of that oil cannot keep up with demand.

The world is changing in ways we don’t even want to imagine. But with great adversity comes great opportunity. This is a scary time. But it is also an exciting time. Betting on our people and their ability to innovate is a safe bet. Betting on making more harpoons is a very risky bet.

Not, no can. CAN!! We can do this. And that is what this forum is all about.

Peak Oil

Short Supply

From the Wall Street Journal on May 27th:

Lofty Prices for Fertilizer Put Farmers in a Squeeze
By Lauren Etter

At a time when food prices are soaring world-wide, so is the price of fertilizer, producing huge profits for leading fertilizer makers and stirring anger among farmers in the U.S. and India….

The price of fertilizer “defies rational explanation,” says Robert Carlson, president of the North Dakota Farmers Union, one of the state’s most influential farmers’ groups. In a May 8 letter to North Dakota’s three-member congressional delegation, he accused fertilizer companies of “price gouging,” and asked for an investigation.

On Friday, Sen. Byron L. Dorgan, a North Dakota Democrat, said he is asking the Federal Trade Commission to scrutinize the industry’s business practices. Sen. Dorgan heads the Senate Commerce subcommittee that oversees the FTC.

Read more here.

As I mentioned in my post about fertilizer shocks, we are on the world market. And now it appears that the few world suppliers have the market cornered.

The silver lining in this fertilizer shock is that it seems to be a shortage that can be overcome by building increased capacity. But it will take a few years for that to happen, and for prices to ease.

Recognizing what was going on, we immediately bought two and a half months’ worth of supply to protect ourselves. We don’t like to do this. But we do have the ability to move quickly when we need to.

Sulfur is in short supply, too, maybe until the first quarter of 2009. And now other blends may be short when they have a sulfur component. There’s a lot to be aware of.

Peak Oil, Sustainability

An 800-Pound Gorilla

I spent all day Tuesday and all of Wednesday morning at the Pacific Basin Agriculture Research Center (PBARC) for a stakeholders’ workshop and program-visioning conference.

We were asked:

• “What do you see PBARC doing in 10 years?” and,
• “Where can PBARC provide support in furtherance of its mission?”

Our exercise seemed similar to what might have happened had Hawai‘i’s whaling industry held a conference soon after oil was discovered in Pennsylvania in 1859.

In 1846, more than 700 whaling ships were calling in Hawaii. Some of the conferees may have asked for research on potatoes so they could supply the ships, or for aggressive marketing and promotion of fish and poi to the sailors. Or for studying how whale harpoons could be mass-produced in a factory. Others, thinking ahead, may have asked for the study of sugar cane cultivation.

Back then, the 800-pound gorilla in the room was the discovery of oil. Now, the 800-pound gorilla in the room is the fact that we are running out of oil.

This meeting I attended was an important one. Andy Hammond, the Area Director of USDA, ARS, Pacific West Area, was there. There were administrators and staff from the Hawaii State Department of Agriculture, both the UH Manoa and UH Hilo’s Colleges of Agriculture as well as representatives from other supporting agencies. Most of the Hawaii agricultural industry’s representatives were there, too.

Dennis Gonsalves is the director of the Pacific Basin Agricultural Research Center. He had an illustrious career at Cornell University (he is the person who developed the Rainbow Papaya, which saved Hawai‘i’s papaya industry) and then came back home to Hawai‘i after making it big on the national scene. In all his years away he did not lose any of his local sensibilities, and that’s a big reason he is so effective in his job. We need more of these “local sensibilities” when choosing our leaders!

Let me define these two organizations for you:  Agriculture Research Service’s (ARS) mission, which applies to Food, Feed, Fuel and Fiber, is to develop and transfer solutions to agricultural problems, and support research needs of action agencies.

PBARC’s mission is to support aquaculture, plants, genetic resources, plant biological and molecular processes, as well as crop protection and quarantine.

In answer to the questions we were asked to consider (“What do you see PBARC doing in 10 years?” and, “Where can PBARC provide support in furtherance of its mission?”) industry people in normal years would just recite the priorities of their individual industries, and if the need crossed multiple lines so much the better.

But this year, there is that 800-pound “oil shortage” gorilla in the room. We hear people on the news talking about $200-250 per barrel of oil in the next couple of years. This was unimaginable to most people just eight months ago.

So it made our job a little more difficult. We were instructed to come up with action items that were of “utmost importance,” “very important” and “important.”

Some felt that generalities were nice but they wanted action. For example, the coffee industry representative did not want to waste time—he wanted specific things done for the industry. He was very effective, listing seven or eight items for consideration. All were of the “utmost importance.” Most of the other people had two to four items that were of “utmost importance.”

In the end, it turned out well because the people who were concerned about world oil shortage issues brought out points that applied across the board, so those items were adopted. And the people with specific action items for particular commodities had their issues heard as well.

By the way, I ran across a definition of sustainability that I like. It’s a German term that was coined by the Prussian Forest Administration back in 1790 or so, and it means that one should never take more wood out of the forest than can re-grow between two harvesting periods. That means we leave nature intact and just live from nature’s interest rates.

(to be continued)

Peak Oil

Changes

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We had two fertilizer shocks this past week.

First, we were told that we could not get any Monopotassium Phosphate coming out of China because of a 135 percent tariff that China has imposed. It’s not surprising that with so many people to feed, they need the fertilizer material themselves.

I should have guessed that and stocked up when I saw the press release from Potash Corporation of Saskatchewan last month. That’s the largest fertilizer company in the world, and they announced that China did not get the full amount of potassium that they needed. They only got one million tons.

Potassium and Phosphorous prices are rising faster that any of us had imagined. It turns out that we can get fertilizer. But the price has doubled.

Then we were visited by a sales manager from Yara, one of the largest nitrogen distributors in the world.

He said there is a shortage of nitrogen manufacturing plants compared to demand and so the price is going through the roof. He said to grab it if you can get it, because no one can be assured that there will be a continuous, unbroken source of supply. It will be like this for at least three years, he said, which is the time required to bring a new fertilizer production plant on line.

I tried to protest that Hawai‘i is very vulnerable, sitting here in the middle of the Pacific. The reality of it is that no one cares!

I wrote to Dr. Steiner, Dean of the College of Agriculture at the University of Hawai‘i at Hilo, in order to inform him of this. His response: “This is happening faster than I thought it would!” My exact thoughts, too.

The world is changing faster than we expect.

Company News, Our Employees, Peak Oil, Renewable Energy Sources

What We’re Doing

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Oil went over $119 per barrel yesterday. Everyone knows that this is not good. We have to take action now.

Here’s what we’re doing at the farm: I have written before about the hydroelectric project that we will soon start construction on. This will stabilize our electricity costs, which are now more than $13,000 per month. In addition, we have talked about making biodiesel from french fry grease.  In two years we will be energy self-sufficient!

We plan to let our workers charge their plug-in hybrids as a benefit of working for us.

And we will continue to offer our workers fruits and vegetables to supplement their diet. Because of rising oil costs and their effect on food prices, we feel a heightened urgency to provide our people with food to supplement their families’ diet.

I mentioned here before that I was very concerned because a couple of our workers were asking to borrow money from me for gas to come to work. When we announced that we were winding down our banana operations, I told the people about to lose their jobs that they were still welcome to come to the farm every Thursday and pick up fruits and vegetables with the rest of our workers.

Only two of the original workers did not come back to see about available work. But I am very happy to see that one of those two still comes by to pick up fruits and vegetables.

When Chef Alan Wong came by recently to do a kalua pig cookout on our farm, and we could not bring all of our workers to the cookout, Kimo made sure that we made a container of kalua pig for every one of our workers who could not attend. 

Kimo and I talk about the effects of rising gas, electricity, water and food prices on our workers. If we could, we would raise our prices so we could give all our workers raises. But in this day and age, retailers do not want to raise prices at all. So we are caught between high farming costs and sales prices that are not keeping up.

We have decided to raise pigs on the farm so we can make smoke meat and kalua pig to help supplement our workers’ diets. We will use our banana and tomato waste as pig feed.

Soon enough, we will also be raising fish and shrimp.

In addition to the banana, tomato, cucumber, lettuce, bell peppers and other odds and ends, we will be able to give our workers fish and shrimp within the year.

It is definitely not business as usual and it is important that we take care of each other.

The basic idea is that as oil prices rise by “x” percent, we need to figure out how to lower our cost of living by “x” percent. Sometimes it takes a bit of innovation, but it’s what we have to do. I think our workers hope that we can figure out a solution. We don’t want to let them down. 

Government, Peak Oil, Renewable Energy Sources

Where We’re At

An editorial in yesterday’s Hawaii Tribune-Herald reads:

Bill is Bad for Business, Bad for All Hawaii:

House Bill 2974, informally known as the “card check” bill, would have permitted labor unions to automatically be recognized whenever a majority of workers at a small business sign authorization cards. The bill also would mandate timelines for collective bargaining and impose binding arbitration in labor negotiations.

No secret ballot would be required, and there would be no independent supervision of the card check process.

Existing law requires a secret ballot election if 30 percent of the workers sign cards. The election, which is monitored by the government, determines whether the union is recognized.

When I first heard about this I was shocked to see that this bill targeted agriculture. Why in the world would our legislators want to target small papaya farmers and foliage growers? I am curious to see if the legislators choose to override the governor’s veto.

I’ve been writing in this blog that in the face of coming economic hardships, we need to make more friends and become closer to our families and community. We will need to help each other. This bill is disappointing because it will cause divisiveness, rather than togetherness.

It was another week of steadily rising oil prices, with crude moving from a low of $109 a barrel on Monday to a new high, over $117 a barrel, by Friday. By now the reasons for the continued climb are familiar – stagnant production, shrinking exports, increasing demand, a falling dollar, the flight to safety in commodities, declining U.S. stockpiles, and, of all things, the perception of an improving U.S. economy.

This week, several new factors contributed to the increase. Reports that Russian oil production slipped during the first quarter for the first time in a decade, coupled with assertions by senior Russian oilmen that Moscow’s production is not going higher, were troublesome.

Here is a link to a weekly report on the world oil situation. It is significant because it says that Saudi Arabia will be limiting its production of oil in order to save oil for future generations, which has serious long-term implications for oil importers. During the week the Saudis said they had trimmed output from 9.2 million barrels/day to 9 million.

We must be aware that their own middle class is growing and will want to use more of that oil internally, within their own country. So less and less will be available for export!

We need to move more decisively toward alternate energy. Geothermal comes to mind. HELCO needs to figure out how CAN. Not, “No can!”