Welcome to the Everything Crisis
The crisis in Ukraine has pointed out several vulnerabilities of our modern industrial civilization. Besides taking many lives and causing immense suffering to the people, it is now threatening the livelihood of several million people living many thousands of miles away… As well as causing massive damage to the only habitable planet in a four-lightyear radius.
Discontinuity has clearly switched into higher gear.
It is worth mentioning here though, that the issues I’m about to address in this post have been simmering under the lid for months now: well before all hell broke loose in Ukraine. Another round of hand-waving is thus in order: expect pundits to blame the war for the coming round of economic woes; after phrases like “post-pandemic rebound” goes out of fashion in due time. Of course, it is much easier to blame the crisis du jour instead of pointing out the elephant in the room — but more on that later.
Now back to Eastern-Europe: Ukraine, which used to be the world’s fifth largest wheat exporter, is now experiencing serious difficulties in cultivating crops. According to Reuters:
“Ukrainian farmers — who produced a record grain crop last year — say they now are short of fertilizer, as well as pesticides and herbicides. And even if they had enough of those materials, they can’t get enough fuel to power their equipment, they add.”
In short this means much less grains to be exported, shooting wheat prices (already doubling before the war) to their highest levels — ever. Higher, than it was in 2008 when the world economy crashed, or in 2011 when the Arab-spring ended “prosperous” political careers a little sooner than it could be otherwise expected.
Notice how this news piece alone should’ve raised awareness to the fact that we have become utterly dependent on fossil fuels for growing crops:
Fertilizers being made from natural gas.
Pesticides and herbicides being derived from petroleum.
Diesel fuel being distilled from the same polluting substance: oil.
Fantastic yields in prior years — and thus our ability to feed 8 billion people — are due to us applying man-made chemicals in every step of the process. The article goes on:
“The wheat was planted last autumn, which, after a brief growing period, fell dormant for the winter. Before the grain returns to life, however, farmers typically spread fertilizer that encourages the tillers [a shoot that arises from the base of a grass plant] to grow off the main stalks. Each stalk can have three or four tillers, increasing the yield per wheat stalk exponentially.”
Food for thought…(1) Now add in the fact that the cost of fertilizers were already doubling around the world before the war — thanks to the threefold / sixfold increase in natural gas prices (depending on where you live). This fact alone has prevented many farmers around the world to buy enough fertilizer for their crops this year. A new round of hand-waving comes to the rescue however, shifting the blame from approaching resource limits (with long term consequences to be addressed) to the crisis at hand:
Svein Tore Holsether, president of Norway-based Yara International, the world’s largest maker of nitrogen-based fertilizers, said he is worried that tens of millions of people will suffer food shortages because of the farming crisis in Ukraine. “For me, it’s not whether we are moving into a global food crisis,” he said. “It’s how large the crisis will be.”
Don’t get me wrong: what is currently going on in Ukraine is just horrible in every sense of the word, and will surely have a huge negative impact on global food security. However, it is not the root-cause of the problem.
Now let’s move on to the second indispensable ingredient to modern farming — in fact to everything we consider modern (2) — diesel fuel, distilled from oil. To make a long story short: conventional (i.e. easy to get, cheap) petroleum production has peaked globally in 2005 sending oil prices haywire — till the economy crashed in 2008. After a decade of struggling to keep up with demand, and adding as many unconventional (i.e. hard to get, expensive) resources to the mix as it was economically possible, global oil production has peaked and started to descent in late 2018 again — and kept falling already in 2019.
A year before the pandemic hit.
After many oil wells had to be shut-in during the first month of lockdowns it was harder and harder to get production back to 2019 levels… Especially as most of the oil producing countries around the world have continued their long descent down their depletion curve, while others have used up their spare capacities to fill in the gap.
In 2022 oil production still did not reached pre-pandemic levels (3).
A chronic shortage has set in as a result, already in the second half of 2021. Months before the war in Ukraine... And certainly not as a fallout form a “rapid economic rebound” as many pundits would like us to believe. As a natural consequence of lower oil extraction, as well as a heightened cost of refining (due to the tripling of natural gas prices), refineries were closed and the price of fuel was climbing higher ever since…
All this was leading up to an ever more imminent diesel shortage. Now there are only two ways out from this quagmire: an economic collapse reducing demand for transportation, mining and building, or bringing barrels of cheap oil to the market by the millions. Guess which one is going to happen.
It is thus not an exaggeration to say that we were already headed towards the biggest oil supply shock since 1973. The war in Ukraine and the resulting embargoes have only brought this date closer and made its effect even larger. As a result of sanctions and its products becoming toxic, Russia — a country who have seen its peak in oil production already — is about to experience its production to fall this April by as much as 2.5–3 million barrels a day 3–4% of global oil extraction (4).
Where does this leave us? In a completely different world for sure. Europe has clearly lost its leading role in geopolitics — together with its now depleting fossil fuel reserves. Wind and solar will not be able to replace these resources, for a number of purely technical reasons.
Now the US is next to experience the same: shale oil will not be coming back due geological reasons. While oil extraction in the States will be rising for a couple of months or years to come, its days are numbered. Meanwhile Saudi Arabia considers ditching the dollar for Chinese oil sales — threatening the dollars position as a world reserve currency. Nothing to be fret about right now, but surely a sign of things to come.
If all this were happening on an ever-expanding planet, with inexhaustible resources, and an indestructible ecosystem with a rock-solid climate — I would not care. I would shrug and say: we will get over it. Unfortunately, the planet stopped growing 4 billion years ago, together with its mineral resources. Oil was a result of 500 million years of photosynthesis and is now on the cusp of a gradual decline. At the same time the climate keeps deteriorating at a break-neck speed as a consequence of us burning it (and other fossil fuels) at an ever more ferocious speed.
The elephant in the room, no pundit ever dares to mention despite a growing body of scientific evidence, is that we have overshot Earth’s carrying capacity of humans in every possible sense, and now we are approaching limits to sustain ourselves. I can but hope that governments have solid plans for rationing, as we are about to enter an era of depleting resources, climate havoc, refugees and many more (5). In fact, barring an economic meltdown, this would be the only way to at least slow climate change a bit, and help to bring some social justice into the picture.
COVID-19. Supply shortages from metals, oil and gas to food. Ukraine. Yemen. Syria. Afghanistan. And many more. These are not mere bumps on the road, but our shared future. It’s just unevenly distributed… for now. This is how “collapse” of a global civilization looks like from the inside: seemingly unrelated crises — one after another — going on for decades, if not for a century… or more.
Ask your local representative, mayor, leader etc. if they had a plan for equitably sharing resources, and an idea on how to ration them if needed. If there is no such thing, start protesting for it. Come up with low-tech / low energy ideas to solve local problems. Save a local river or forest from mining or exploitation. Team up with neighbors to store and share food and fuel.
It’s better to be prepared than surprised.
Until next time,
B
Notes
(1) I happen to live near by agricultural land and see how crops grow out of what appears to be playground sand — thanks to the literally tons of fertilizer sprinkled on them.
(2) Diesel fuel, called gasoil in many parts of the world is what moves transport and heavy machinery. All of it: from semi trucks to cargo-ships, from excavators to dump trucks… Not to mention tractors and harvesters. Everything you can touch or see was either mined or produced using diesel fuel, and was transported by burning it. Electrification of the sector has not yet even started — batteries are just too heavy for that— and the scale and the urgency of the problem goes well beyond what a handful of electric trucks could handle.
(3) In the sense of the official definition of oil, which is: crude plus condensate — i.e. the black goo plus the propane and other lighter stuff condensing in the pipeline after extraction. LNG (Liquid Natural Gas) is not oil, and certainly not a replacement for it. Nevertheless it gets calculated as such (under the umbrella term: “liquids”) — which effectively masks the fact that peak oil has already happened, and thus used to keep investors as well as decision makers happy.
(4) A few percent of persistent deficit can eat up oil stocks in a couple of months leading to either price hikes or shortages — possibly both. Now, we already had this situation before the war… which is about to add another 3–4% to the already missing production.
