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Sunday September 02, 2007
10:53 PM

2007 - A symbolic milestone year in economics?

[ #34319 ]

This last few years have seen the spooling up of serious changes in the War on Global Warming (trademarked!!!). For my own part, I switched my house to being powered entirely by windmills in New Zealand, and I've managed to switch a few other bits and pieces over.

More worrying for me however, is the recent huge advances in the technology, economics, and political willpower to get biofuels of various types off the ground.

This year we hit a key, albeit symbolic, milestone that will have far-reaching effects far beyond the current "climate crisis".

Because this year, the United States corn ethanol industry has grown enough to soak up the extra capacity of US corn producers. From this year on, the pricing of one of the world's more significant food price indexes will be directly linked to the price of oil. The cost of fuel is now directly linked to the price of energy.

Now, it's been partly linked for a long time, because it takes lots of energy to process the corn, package it, and get it to the point of sale. But until now, there's been at least SOME notional separation between the two. Extra corn (and other farm products) went to feed lots to make meat, which is also food.

But things are different now.


Now, the ACTUAL amount of food cost changes right now is minor, something in the order of 10% or less change in the prices. The price fluctuations from the effects of the weather on crops is more significant. There's also not a universal food -> fuel link yet. But it's the link itself that is the main point here.

But all across science and industry, people are looking for more ways to divert more human food into robot food, and to do it more efficiently.

And since humanity currently consumes more resources than is produced by the entire earth in a year, there is essentially unlimited demand for human to robot fuel conversion, as oil production gradually tapers off. There's always been some secondary uses for food products of various sorts, but now we see a literally unquenchable market. Humanity will always be hungry for more energy, all the way out until we wrap a dyson sphere around the sun.

The most worrying problem is that we are only just getting biofuels off the ground. From here on in, every time the efficiency of biofuel processes go up by 10% so does the profitable of feeding robots instead of humans. And so food prices will rise again.

Sometimes this will take a while. I would bet that feed lot operators in the US are hurting at the moment, as the cost of one of their primary inputs goes up a lot, they'll hold out for a while until the market forces them to push up prices.

It will be a long slow process of course, large scale change always is.

But I hereby declare the competition officially underway.

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  • Biofuels seem economically infeasible to me so far. We'll see if that changes.

    I did see one exception recently. At the state fair they took all the cooking grease from the food vendors, tons of it (perhaps literally!), and converted it on-site to biodiesel, which was used to fuel the tractors and other vehicles used to run the fair. Very cool.
    • Certainly much of it IS likely to be economically infeasible, just as air travel was economically infeasible for most people until mass use planes like the DC-10 came into existance, and more recently the "budget airline" business model (which ruthlessly optimised out almost all the procedural and luxury fat).

      There's certainly economically feasible models, such as sugar cane in Brazil or canola/etc oil crops and so on.
  • Most modern agricultural techniques are extremely energy intensive. We use fertilizer, pesticides, herbicides, mechanical planters and harvesters, and long distance transport, all which requires energy input. In 1940 the united states produced 2.3 calories of food for every calorie of fossil fuel used. In 1974, the ratio was 1:1 [], and it's been getting worse ever since.

    So we've been directly competing with robots for food ever since 1974. Our food supply depends upon a stable energy supply; this is n

    • I'm not concerned about the US corn situation at all.

      If it's not economically competative and is supported entirely by subsidies, then it is either will have to get more efficient (do you really think the US will be able to afford all these subsidies the next time a major recession hits?) or it's just going to get optimised out of existance.

      Stupid inefficient niches eventually go away.

      Also, if there's more energy being pumped into farming, and the price of energy goes up, it can be reduced. We already see n