During our lifetime most of us have enjoyed – even taken for granted – the benefits of ‘cheap’ oil. Peak Oil refers to the point when the maximum amount of oil that can be extracted globally is reached. Thereafter, production will tail off as remaining reserves become more difficult and more expensive to harvest.
Having looked into this issue in depth, the Soil Association is convinced that in the very near future (perhaps as soon as 5 to 7 years’ time), all our lives will be changed significantly by this reduced availability and affordability of oil.
After the peak oil year – which could be as soon as 2008 – the price of oil is likely to rise dramatically. Putting it graphically, ‘Imagine having a taxi meter in your car. Try tripling the fare and then see what happens!’
By 2021, it has been estimated that we will have to adjust to a supply of just 50% of today’s volumes. Under that scenario, many of the services that we currently take for granted – cheap flights, cheap imports and global distribution of food – will be radically curtailed.
One of the greatest impacts will be on how and where our food is produced. The dominant models of intensive agriculture and the global food trade depend on vast inputs of oil. In a post peak oil world, the combination of higher transport costs, climate change and increased conflict will necessitate us all relying far more on re-localised food supplies. Even though it requires far lower amounts of oil, organic farming is not exempt from the need to adapt.
Peak Oil
The Issue
- the subject of ‘Peak Oil’ concerns the forthcoming peak and ensuing gradual run-down in global oil supplies, as the exploitation of existing oilfields is not fully compensated by supplies from new oilfields
- the oil industry’s reserves are highly overstated in public. Analysis of the figures shows the point of peak supplies is likely to be by 2008
- contrary to popular opinion, new technologies such as ‘enhanced recovery’ and alternative oil sources (such as tar sands) are not a solution (eg. the latter is very energy intensive). Anyway, these are already included in the 2008 peak estimate.
- the increasing oil shortage will be compounded by the structural crisis that the industry already now faces, where it needs to make a massive infrastructure investment just to keep up with supplying the rising global demand for oil
- the societal effects of the growing shortage will be compounded by the reactions of the stock market on oil prices and political responses to the crisis
- so major global economic shocks in the near future seem pretty much a certainty and society is not prepared.
Peak Oil and Nitrogen Fertiliser
‘Peak Oil’ will substantially affect agriculture, as many aspects of industrial production are energy intensive. In particular, Peak Oil will affect the viability of N fertiliser, because ‘natural gas’ is the basic chemical from which nitrogen fertiliser is produced, and there are no realistic alternatives. The use of fossil fuel energy for N fertiliser accounts for 37% of the total energy used by UK agriculture and its price tracks the price of natural gas. UK N fertiliser prices are rising significantly and are the highest they have ever been. Comparative analyses of organic farming show that it requires about half the amount of energy to produce the same quantity of food.
Implications of Peak Oil for the Soil Association
On the one hand, the increase and greater volatility of oil prices, and increasing physical shortage of oil could mean:
- severe and prolonged global economic recession (ie. unemployment, low incomes/high cost of living, low expenditure, less business opportunities etc.). This could mean a fall in sales of more costly organic food.
- severe impacts on Western lifestyles (high cost of transport, food and other goods). This could lead to increasing social unrest, such as fuel riots.
- short-term and increasingly nationalistic Government policies. For example, more war in the form of foreign invasions to secure energy supplies.
- significant pressure for Government investment in securing conventional and centralised energy sources, ie. nuclear and coal
- in response to the harshening economic climate, more pressure to exploit natural areas and general downward pressure on environmental protection
- change or even possible reversal of the comparative power and stability of countries, with those that are less ‘developed’ and thus less dependent on fossil fuels and trade, becoming more stable compared to the West
On the other hand, Peak Oil should mean an increasing move away from centralised and fossil fuel based systems, and a general move to self-sufficiency:
- rise in agricultural input prices, so reduced use of fertilisers & other inputs
- more organic farming, because of greater comparative economic viability and greater interest in non-fertiliser based production. At some stage, organic food could become cheaper than non-organic which would significantly increase sales
- more composting and use of sewage sludge, as alternatives to N fertiliser
- rises in the cost of food processing and packaging (especially plastic), so less processed food and reduced viability of supermarkets. So, more whole food (though food companies could react by investing in renewable energy)
- less imported food especially less air freight, so more local food
- economic pressure on the intensive indoor livestock sector from rise in the cost of electricity, so more outdoor rearing (and/or rise in use of anaerobic digestion)
- economic pressure on out-of-season indoor glasshouse horticulture, which is highly energy intensive, so greater seasonality (and/or rise in Combined Heat and Power (CHP) which is a form of efficient low-carbon generation of energy, where you use the heat during the electricity production for heating.
- reversal of the trend towards ever larger and more centralised industries and multi-nationals, because of higher transport costs and an increasing need to secure local energy and other resource supplies. So, more localised economies.
- greater interest in individual, community and national food self-sufficiency, ie. allotments, Community Supported Agriculture, direct sales, forward contracts
- rise in individual and company energy conservation and self-sufficiency measures, ie. wind turbines, solar panels, local biomass, CHP etc
- less use of machinery and rise in the value of human labour (possible rise in interest in horse-power)
What does the Soil Association aim to do?
The Soil Association is looking ahead and preparing for a post peak oil world as an organisational priority. Initiatives we want to take forward include:
- Focussing our 2007 National Conference on the theme of ‘Food and Farming – Post Peak Oil’
- Producing practical research to enable cities, towns and communities to re-localise their food supplies
- Launching a national campaign, alerting public and politicians alike, to the urgency of this challenge
- Promoting re-localised food systems in schools, hospitals and businesses
- Investing in our local groups as key catalysts to build a new resilient food culture at the grassroots
Over the last 20 years, the Soil Association has established organic farming as the most sustainable method of production and helped grow a burgeoning market for organic food. Now we must refine our focus if we are to adapt to the changing external circumstances which will touch all our lives very soon. The phrase that comes to mind is that we are ‘building the ark of sustainable agriculture’ for the new era ahead.
The challenge is immediate, but fear should not be the driver. The Soil Association is optimistic that we have the vision and means to create a new, localised food culture that will deliver long-term quality of life in place of the old dynamic of unrestrained globalisation and short-termist exploitation.
