From Salon.com : Andrew Leonard "How the World Works"
The upside to peak fertilizer
Synthetic fertilizer prices are spiking upwards all over the world,
inflicting economic pain on farmers everywhere. Another sign of the
peak oil apocalypse? The industrial production of nitrogen -- a key
synthetic fertilizer ingredient -- is extraordinarily energy
intensive. So when energy prices rise, so do fertilizer prices. And
if you buy the thesis that without manmade fertilizer the world will
be physically incapable of supporting a population of nine billion,
then you start to get very nervous.
Opponents of biofuels have been quick to point the finger at the
stampede to divert farming land to energy crops as another reason
explaining the fertilizer market's failure to keep up with global
demand. But that's only one factor. Population growth and the
explosion of meat and dairy consumption in the rising middle classes
of the developing world are also contributing to the worldwide
agricultural boom. Even without rising energy prices, the surging
demand for fertilizer would be overwhelming suppliers.
When demand rises, supply follows -- and sure enough, investment in
synthetic fertilizer production is booming. Intriguingly, the global
center for synthetic fertilizer production appears to be the oil
states of the Mideast. A new study by the Doha-based Gulf
Organization for Industrial Consulting reports that UAE, Saudi
Arabia, Kuwait, Bahrain, Qatar and Oman are expected to invest
billions of dollars in the next few years ramping up ammonia and urea
production. (Thanks to Energy Bulletin for the link.)
Which drops a big fat dollop of synthetic fertilizer irony in our
laps. The growth of energy crops is in part directly attributable to
rising energy prices. But the demand for synthetic fertilizer to
nurture those energy crops requires the consumption of even more
fossil fuel, thus likely pushing energy prices further, and creating
even more demand for energy crops. On second thought, that's not
ironic. That's tragic.
The price-mechanism doesn't only work in the direction of encouraging
more synthetic fertilizer. One news report, while predicting that the
current imbalance between supply and demand could last as long as two
years before new supply came on line, observed that in the meantime
farmers might be forced to "consider converting to organic production."
So you can forget about the endless argument over whether organic
food is healthier for human consumption than the product of the
industrial agricultural system. If synthetic fertilizer prices
continue to rise, organic food may end up cheaper than the alternative.