Is there no End to Rising Gas Prices? by Richard Komorowski – April 26, 2011

Cornwall ON – Since last autumn, gas and diesel prices have gone up by about 30%, and are showing no signs of stabilising, never mind dropping. One of the main culprits is Libya, which, prior to its civil war, was producing about 1.8 million barrels a day (somewhat more than all Alberta production). The second major culprit is China, already the world’s largest single energy consumer, which is constantly accelerating its own oil imports, raising world prices.

Why is Energy so Important?

Energy controls society, and always has since apes began the slow evolutionary journey to become humans.

Primitive hunter-gatherer societies, (there are still a very few to be found deep in the Amazon rain forest and in New Guinea) were completely self-sufficient. Very simply, each family in such a society has enough energy to travel around, gathering edible vegetation and hunting small animals. They walk everywhere they go, their housing is made of local products that require no processing of any sort, clothing is minimal, and because of the climate, they do not have to make any provision for winter or a dry season. The societies were completely self-sustaining and in total harmony with their local environment. A tropical climate, however, was not absolutely essential to hunter-gatherer societies – the Arctic regions, where the Inuit flourished, is a prime example, as the local hunters could go after high calorie fur bearing animals.

Agriculture

Hunter-gathering societies are very limited by the tribe’s territory – it takes a lot of area to support one family, so populations were always small and limited. This, in turn, restricted the technology such a society could invent. Any tribal “research” would have been directed to making better hunting or gathering tools. It was the discovery of agriculture in the Middle East (primarily Iran and Iraq) which laid the foundation for modern society as we know it.

The inhabitants of this area were extremely lucky, for it is one of the few places in the world where there were wild seeds (primarily grains) and animals (sheep/goats, cattle, horses and chickens) that could be domesticated. An acre of grain could provide far more calories for human consumption than an acre of rain forest or tundra. Animals such as sheep, goats and chickens could raise the protein content, and with their dung, maintain soil fertility. Cattle or horses could pull a plough or a wagon, letting the human population cultivate more intensively and swap their goods at a market.

Theoretically anyone can plant a patch of ground in the spring, tend the crop during the summer, harvest it in the fall, and put enough of it away to last to the next growing season. It would be a very tenuous existence, however, with little chance of growth or improvement. With a draft animal, (the ancient equivalent of a rototiller or tractor), it becomes possible to cultivate a much bigger area and produce a useful surplus. The draft animal (horse, donkey, ox or whatever) requires food (energy), but the extra food production (and manure) that it provides more than pays for what it eats.

Energy Return on Energy Invested – EROEI

For the ancient Iraqi farmer, the work his horse could do in his field outweighed the cost of feeding him – in other words, there was a positive energy return for the energy the farmer invested in feeding the horse. If the energy return had been negative (i.e. had the horse eaten more than it was worth), the farmer would have gone hungry, and horses pulling ploughs and wagons would never have become popular.

The horse, of course, was only the beginning. People discovered how to make iron, using charcoal as the energy source, and how to build wind and water mills to take the drudgery and effort out of grinding grain into flour. With iron they could make better ploughs, and grow more for the same amount of work. No one realised it at the time, but this was the start of agriculture as we know it today. The energy needed to run a farm and produce a surplus of food did not have to come from human and animal muscle, and therefore from the farm itself; it could be imported from other sources.

However, no matter how efficient the plough and other farm machinery became, until the 19th century, most of the energy needed to run the farm came from muscle, fed by the farm itself. Society was still basically agricultural, with most of the working population directly involved in food production.

The development of the steam engine in England ended this agrarian society, and was the start of the so-called “Green Revolution.” The only real muscle power required on a farm now was to shovel coal into a steam boiler, which would in turn do all the work previously done by humans and horses. A horse on almost any farm today, except for a western ranch, is an expensive anachronism. Coal (which today has been replaced by diesel and gasoline) did the real work.

The Energy Return that the farmer gets from a tankful of diesel is so massive compared to the investment that he can grow the same amount of food that at one time would have needed fifty or more people.

Paying the Price

The price of diesel has risen from a few cents to the current exorbitant rate, but even at over a dollar a litre, diesel is still a bargain. But diesel is not the only energy input a modern farm needs. Horses and other livestock were excellent sources of fertiliser. These days, chemical fertilisers replace manure.

Chemical fertilisers are made with, or from, fossil fuels. The Cominco phosphate plant in Warfield, BC, requires a tremendous amount of natural gas. Ammonia, the basic feedstock for nitrate fertilizers, is made directly from methane, (natural gas), and needs even more natural gas to provide the energy for the chemical process. Note, too, that the fossil fuel is not needed only for the manufacturing process – phosphate (and potash) mining takes a tremendous amount of energy. Once mined, it must be transported from the mine to the manufacturing centre, and thence to the farmer’s field. Without diesel to power the trucks and locomotives, this transportation is simply not going to happen.

Modern livestock production, with its intensive feedlots, also creates other problems. Cow manure, which would have harmlessly kept the ranch fertile, now gets concentrated in the feedlot as the animals get force fed with grain trucked in from other farms. The manure, instead of being an asset, becomes in itself a polluter, as there is simply too much in too concentrated an area. The grain farm needs to buy chemical fertilisers to replace the manure it would have had free at one time, when it was still a mixed farm. And with too much chemical fertiliser come problems of soil erosion – i.e. a dust bowl.

The 2008 Depression

Sub-prime mortgages in the US did not cause the current depression, despite what the politicians would have us believe. The true cause of the depression was the spike in oil prices. It was $147 per barrel that caused the price of gas and diesel to rise to beyond what the economy could handle. As fossil fuel prices increased, so did transportation, food and everything else. Production went down because consumers could not afford to buy. Companies went bankrupt, or demanded government bailouts (remember GM and Chrysler)? People who were not in the best financial circumstances were forced to make a fatal choice – whether to buy food for their families, gas for the SUV so they could commute to work (assuming they still had jobs) from far out suburbia, or pay a mortgage and other debts.

Certainly shady, if not criminal financial transactions on Wall Street and Bay Street contributed to the collapse of the economy, and made the depression worse than it need have been, but the real cause was the price of oil. In fact, sudden increases have caused every recession since around 1970.

No more Government Bailouts

Once the election is over, instead of helplessly watching gas prices rise, trade in the gas-guzzling SUV and buy a compact import; plant a garden; demand better public transportation; insist local municipalities stop wasting energy; insulate your house – things will never be the same. And don’t depend on any more government make-work schemes, because with the resultant credit crunch, many governments worldwide will probably go bankrupt.

No doubt as the world dives back into the worst of the current depression, gas prices will drop again as demand dies, as they did towards the end of 2008. We might even see 70¢ a litre again. Will they go up again? Who knows? If we can get out of Depression Part II, perhaps. If not…? It may be the end of the world as we know it.