Tag Archives: Food Security

If The Farmers Make Money, The Farmers Will Farm

Richard Ha writes:

Though there are 820,000 acres of farmland on our agriculture-based Big Island, our island’s farmers were not consulted when Bill
113, the anti-GMO bill, was drafted.

There is no question: Bill 113 will harm the livelihood of Big Island farmers. It also means they will have to use more pesticides. It will drive up their costs and make them much less competitive. It means our island will be less food-secure.

Is this what we really want? Call or write your councilperson and tell him or her to kill Bill 113.

Ask him or her to create a task force so we can thoughtfully determine our way forward, in the spirit of aloha – so we can provide affordable food for the rubbah slippah folks and move toward food self-sufficiency.

When new biotech seeds are developed, people will be able to buy small packets of them over the Internet. But not here. Bill 113 will make it a crime for Big Island farmers to use those same seeds. Farmers using those seeds, which will make farming less pesticide-oriented and more affordable, would become criminals.

Such seeds are being developed right now by the University of Hawai‘i and other universities and will help our crops become virus- and disease-resistant. This will result in less pesticide usage and lower cost. With Bill 113, only Big Island farmers will be banned from using them. This will force Big Island farmers to use more pesticides than farmers off-island. Farmers are responsible stewards of the land, and this is a depressing and discouraging thought for Big Island farmers.

More than 90 percent of the food grown on the Big Island is
grown by conventional farmers. Bill 113 will drive their farming costs up, not down, and this is going to discourage farmers from farming. When farmers’ costs go up, they are less able to pass those increased costs on. Farmers are “price takers,” rather than “price makers.”

As costs go up, farming becomes less attractive and fewer farmers continue to farm. Bill 113 makes the Big Island less food-secure.

Organic farmers elsewhere will benefit from new biotech animal feed crops, because these will increase the source of manure for
composting. Nitrogen is important for protein and this is a crucial weak link for organic farmers. Bill 113 means organic farmers on the Big Island won’t have these benefits that other farmers will.

There are people that want to believe GMO crops are not safe, but they are ignoring the evidence. The science. All the world’s major health organizations endorse the use of GMO crops as safe.

More than two trillion meals made of foods containing GMOs
have been served over the last 20 years. In spite of all those meals, here in Hawai‘i we have the longest life expectancy in the nation for those 65 years and older.

Since ancient times, farmers in Hawai‘i have been respected in the Hawaiian culture. Bill 113 will forever change that relationship and will, instead, criminalize farmers. Some folks may even feel justified in taking matters into their own hands. Is this really what we want?

Please contact your councilperson and tell them you want them to kill Bill 113 and form a task force to carefully, intelligently study how we move forward.

It’s not a matter of who is right. It is a matter of what is right.

‘So God Made A Farmer,’ And Now The Hawaii County Council Wants To Make Them Criminals

NOTE: I do not grow any GMO crops, and I do not have any financial or other affiliation to any large seed or other companies that advocate the use of GMOs. My interest in this topic is in finding the right direction for Big Island farming and in being able to feed our future generations.
 
The Hawai‘i County Council meets again tomorrow regarding the anti-GMO bill.

I sent a letter to the editor of the Hawaii Tribune-Herald and West Hawaii Today asking that we take a sincere look at the big picture.

We need to know what we want for the Big Island, and then formulate a plan to get us there.

We need to leverage our resources so as to provide affordable food to the rubbah slippah folks while also working toward achieving food self-sufficiency for future generations.

We need to identify how we can achieve a competitive advantage over the rest of the world.

We need to realize that the Big Island is young, geologically, compared to the older islands. We do not, therefore, have alluvial plains, which form after many years of erosion. We do not have the conditions that would support industrial-scale agriculture – flat land, a dry climate, strong sun energy, deep soil and irrigation.

The seed companies are not arriving here tomorrow to set up shop. Their tractors make money on the straightaways, and they lose money on the turns. It’s counterintuitive, but in spite of its size, the Big Island is an environment best suited for small farmers, not large one. Let’s not let a fear of industrialization cause us to make decisions that kill off our small farmers.

Margaret Wille has now suggested we do an ad hoc study group as part of the Bill 113 discussion. This is an excellent place to begin. Let’s place Bill 113 on hold while we do a fair and impartial study of how we will get from here to there. Who is right is not as important as what is right.

Kumu Lehua Veincent always asks: “What about the rest?” and that is the key question. How do we come to a solution that takes care of the rubbah slippah folks as well as everybody else?

There are a thousand reasons why, No can. We must find the one reason why, CAN!!

Some of my thoughts about all this:

Q. How is farmers’ morale now that Bill 113 is out there?

A. Big Island farmers are demoralized. Paul Harvey narrated a commercial during the last Super Bowl that said, “And on the eighth day, God looked down on his planned paradise and said, “I need a caretaker.” So God made a farmer.

It’s less than a year later, and now Big Island farmers are at risk of being criminalized.

Q. What do farmers think of Bill 113?

A. They feel it is unfair. They feel that they would not be able to use biotech solutions for insect and disease problems in the future, as will their counterparts on the other islands. They feel they would not be able to compete.

Farmers want to be good stewards of the land, and they are very distressed that they might be forced to use more pesticides than the rest of the state’s farmers.

Q. What biotech solutions are being developed for bananas?

A. Resistance to Race 4 Fusarium wilt, the biggest threat right now to banana farming worldwide, and resistance to Banana Bunchy Top virus. Both are taking place at the University of Hawai‘i right now.

Q. What biotech solutions are being developed for tomatoes right now?

A. Resistance to Tomato Spotted Wilt Virus, which could devastate a tomato farm.

Q. As a relatively large farmer, do you think the big seed companies will come to the Big Island?

A. No. They’d lose money, which is why they are not already here. They need flat land, low humidity, high sunlight, deep soil and irrigation. Because the Big Island is so young geologically, these conditions are very rare here. Big tractors make money on the straightaways and lose money on the turns.

Q. Will Bill 113 increase our island’s food self-sufficiency?

A. No. Food self-sufficiency involves farmers farming. If the farmers make money, the farmers will farm. Bill 113 would make Big Island farmers less competitive. So it would result in less food self-sufficiency.

Q. Would Bill 113 result in less pesticide applications?

A. No. It’s biotech solutions that result in fewer pesticide applications. Big Island farmers would have to use more pesticides as compared to the rest of the State.

Q. What do farmers think of registering GMO farms?

A. They worry that this would make it easy for ecoterrorists to locate them.

Q. Hector Valenzuela suggested that organic farmers seek high-end markets. Would that help provide food for the masses?

A. It won’t. That solution anticipates a niche production for people who can afford high prices.

Q. Can organics provide sufficient affordable food for the masses?

A. No. There is no winter here to kill off bugs and provide an automatic reset. There isn’t sufficient manure for compost to provide the nitrogen fertilizer, which is the basic building block for protein.

Q. How can biotech solutions give Hawai‘i farmers a competitive advantage over the rest of the world?

A. They leverage our Hawaiian sunshine, which allows us to grow food year round. Also, reducing the cost of controlling insects and diseases that thrive in the humid subtropics gives Hawai‘i farmers a competitive advantage over the rest of the world.

Q. Do you think GMOs are safe?

A. Yes. Every major scientific organization in the world has endorsed the use of GMOs. Two trillion meals have been served with no harm done. Hawai‘i seniors have the longest life expectancy in the nation.

Q. Do you think RoundUp is safe?

A. Yes.

Q. Why do you think RoundUp is safe?

A. We know that the herbicides we used 25 years ago were much more toxic. Today, we have the ability to detect minute amounts of chemicals, and we must put things into perspective. One could take a sample of sea water and detect gold. But that doesn’t mean we would invest money in a business to mine gold from the ocean. We farmers have been taught, over and over, that the dose makes the poison. We need to use common sense.

Q. In your 35 years of farming, what do you consider to be the most important trend that will affect our future?

A. The price of oil has quadrupled in the last 10 years, which has caused farmers’ costs to rise. Farmers cannot pass on their costs as efficiently as others can. Farmers are price takers, rather than price makers. Because it is a finite resource, the oil price will steadily rise and food price will steadily rise as well.

But we can leverage our sun resource with new biotech solutions. We can take advantage of our year-round growing season and lower our cost to control pests and diseases and therefore lower the cost of food production. This will increase our Big Island residents’ discretionary spending, which makes up two-thirds of our economy. By doing this, we take care of all of us, not just a few of us.

Q. What do you suggest?

A. Defer Bill 113 and form a committee of stakeholders and experts to focus on Big Island solutions to future food security. It should not be political. It should be a solution that takes care of all of us, not just a few of us.

Arianna Huffington & Pierre Omidyar Coming to Farm; New Blog

Richard Ha writes:

Have you heard that Huffington Post and Honolulu Civil Beat are partnering up to launch a new online site called HuffPost Hawaii?

As part of next month’s launch, Arianna Huffington and Pierre Omidyar are coming to the Big Island, and they have asked to visit the farm to learn more about the nexus of energy and agriculture here in Hawai‘i.

They have also asked me to write a HuffPost Hawaii blog, starting during their launch week. I’ll link to that here when it’s available.

We are in such a unique position here in Hawai‘i, with our own set of energy issues, limitations and resources and how all that relates to our situation in terms of sustainability (being able to produce what we need here, vs. being dependent, for example, as we are, on 85 percent of our food being transported here from the U.S. mainland) and food security (being able to get adequate and sufficient food, regardless of where it comes from).

Both Arianna and Pierre’s farm visit, and our HuffPost Hawaii blog, will be great in terms of helping show how Hawai‘i fits into the big picture of energy and agriculture.

They are also great opportunities to continue our GMO discussion and to discuss other sustainability practices.

We might have a lot to gain once HuffPost Hawaii starts up. We will have additional, knowledgeable, people in Hawai‘i, as well as worldwide, reading about our energy/ag situations here and possibly helping us make informed decisions as we chart our course.

What an exciting venture this HuffPost Hawaii is.

HuffPost Hawaii Is Coming Soon!

Posted: 05/29/2013 12:07 pm EDT  |  Updated: 05/29/2013 2:16 pm EDT

NEW YORK CITY AND HONOLULU – May 29, 2013 – The Huffington Post and Honolulu Civil Beat today announced a partnership to create HuffPost Hawaii, a site that will bring together the resources of The Huffington Post and CivilBeat.com. The new site, expected to launch this fall, will give a global audience access to the wonders of one of the world’s most famous destinations and the authentic community of Hawaii, including its Aloha spirit. The site will explore Hawaii as an oasis for unplugging and recharging. It will also offer Hawaii residents local news and perspectives, along with Pulitzer Prize-winning national and international coverage…. Read the rest

We Are Unwilling To Be Led To The Slaughter

Richard Ha writes:

I was part of a four-person panel at the recent GMO Summit. I was spokesperson for the farmer group that organized a convoy around the County building a short time ago. The others were

  • Kamana Beamer, who gave the cultural perspective, which is the long term view of things
  • Hector Valenzuela, who presented a negative view of biotechnology
  • Dr. Dennis Gonsalves, who gave a pro-GMO point-of-view.

Three of the speakers, then, all coming from different perspectives, were pro-GMO. I will ask the speakers if they are willing to give a synopsis of their presentation, and if so, I will post them here.

As farmers, our primary concern is that banning the use of GMOs only on Hawai‘i Island, while allowing them to be used on the other Hawaiian islands, will slowly but surely drive us out of business. We are unwilling to be led to the slaughter.

Here is what I presented at the GMO Summit:

Aloha. I am Richard Ha. Although we have a farm, I am here today as a representative of Hawaii Farmers and Ranchers United. This is a spontaneous farmer group that recently organized a convoy of more than 50 cattle, papaya and other farm trucks, as well as nearly 200 farmers, around the County building. It consists of the Hawaii Papaya Industry Association, the Big Island Banana Growers Association, the Big Island Cattlemen’s Council, the Hawaii Floriculture and Nursery Association and various Farm Bureau chapters.

In all my time in farming, I have never seen farmers so united and concerned about one issue. Why are they so concerned? Because they feel their survival is at stake.

Farmers are price takers, not price makers, and when the cost of energy quadrupled in the last 10 years, we farmers could not increase our prices to cover the increase in cost. We know how vulnerable we are to rising oil prices. The anti-GMO bill takes away future cost-saving tools for farming.

Here’s a reality check on growing food.

Hawai‘i is located in the humid subtropics and it is a weed, bug and plant-disease paradise. We have no winter here to help us kill off bugs.

Farmers are not pesticide-crazed sprayers of toxic chemicals. They use cost-effective solutions to the pest problems of their particular crops. They use what’s least toxic, because they don’t want to harm themselves. They don’t overspray, because that wastes money. Farmers have common sense.

When we send farmers into battle against the pests, don’t shoot arrows at their backs. When we send them into battle against pests that use cannons, don’t send them out with swords and clubs.

If we do not want the large biotech companies to grow corn for seed, then write a bill that prohibits that. If we do not want GMO foods at all, then start with corn flakes and soda and ban those.

Consider these facts:

  • Hawai‘i imports more than 85 percent of its food. That’s almost all of our food.
  • Hawaii uses oil to generate more than 70 percent of its electricity. The U.S. mainland, which is both our supplier and our competitor, uses oil for only 2 percent of its electricity – so its costs are not skyrocketing from rising oil prices as much as ours are.
  • The price of oil has quadrupled in the last 10 years, and will probably go higher.
  • As oil prices rise, Hawai‘i becomes less and less food secure.

These are the realities that Big Island farmers face every day. We must be one of the least food secure places in the world.

“Food security” means being able to get adequate and sufficient food, regardless of where it comes from. These days, it comes from all over the world. We are able to buy food from all over because money comes into our economy from the outside, with military spending and tourism being primary contributors. That provides us with money to pay for general services to our society and to buy our food.

Food security involves farmers farming. If the farmer makes money, the farmers will farm. And if the farmers make money, then their products will be competitive with imported foods. And that will mean lower cost foods for all.

Try to encourage those things that gives our farmers a competitive advantage. Leverage our sun that shines all year long. Don’t ban GMO corn that can give our cattle ranchers a fighting chance.

Maybe we can grow the grain that will encourage poultry farms and fish, too.

If we had poultry and cattle manure, our organic farmers would have a nitrogen source that could help them produce food for a profit.

Let’s all sit down and talk. Farmers are not the enemy.

In the 1800s, our Hawaiian population went from an estimated 700,000 to 50,000. We almost went extinct.

I’m sure they would have used new technology vaccines if they had been available.

Farmers have looked at all sides of the argument and have come down on the side of peer-reviewed science.

I would like to make one farmer observation about pesticides. The
dose makes the poison.
Margaret Wille said she wants to ban the use of Roundup. Senator Ruderman introduced a bill to ban Roundup last session.

Let’s say there is a four-foot patch of weeds that one wants to control using Roundup. The amount of spray needed, which is already diluted 50-1 with water, is less than the thickness of a piece of typing paper. By contrast, rainfall in one year at Pepe‘ekeo
would result in a column of water 10 feet high over that spot. As I said, the dose makes the poison.

Previous to Roundup, farmers here used Paraquat, which is a skull-and-crossbones grass poison.

We don’t want to go back to that. We need a little bit of common sense here.

Here are three areas of concern to farmers:

  1. Farmers on the other islands would be able to use new biotech seeds, while Big Island farmers would not. I just saw where a British researcher said he developed a technique that would give every plant the ability to fix nitrogen from air. But if other
    islands could use it and we could not, this would eventually put Big Island farmers out of business. The Tomato Spotted Wilt Virus (TSWV)  threatens the State’s tomato industry, and there is a biotech solution that is ready to be implemented. Again, if other islands can use it while while Big Islanders cannot, this will eventually drive Big Island tomato farmers out of business.
  2. Under Brenda Ford’s bill, papaya and GMO corn farmers and ranchers have 30 months to get out of those crops or they risk 30 days in jail. Making criminals of farmers is just beyond belief.
  3. It isn’t the strongest or smartest that survive, but the ones that can adapt to change. This saying is attributed to Charles Darwin.

Although the bills by Ford and Wille might seem new and different and brave, below the surface they both prevent adapting to change. And that is one of the main reasons why farmers are against both attempts to prevent the planting of bioengineered
plants.

Farmers and ranchers have an abundance of common sense. My dad was a farmer. He only went to the sixth grade, but when I was 10 years old, he told me: “Find two solutions for every problem and then find one more just in case.”

He said, There are thousand reasons why no can. I looking for the one reason why CAN adapt to change.

Growing Food: A Reality Check

Richard Ha writes: 

Hawai‘i is located in the humid subtropics and it is a weed, bug and plant-disease paradise. We have no winter here to help us kill off
bugs.

Farmers are not pesticide-crazed sprayers of toxic chemicals. They use cost-effective solutions to the pest problems of their particular crops. They use what’s least toxic, because they don’t want to harm themselves. They don’t overspray, because that wastes money. Farmers have common sense.

When we send farmers into battle against the pests, don’t shoot arrows at their backs. When we send them into battle against pests that use cannons, don’t send them out with swords and clubs.

If we do not want the large biotech companies to grow corn for seed, then write a bill that prohibits that. If we do not want GMO foods at all, then start with corn flakes and soda and ban those.

Consider these facts:

• Hawai‘i imports more than 85 percent of its food. That’s almost all of our food.

• Hawaii uses oil to generate more than 70 percent of its electricity. The U.S. mainland, which is both our supplier and our competitor, uses oil for only 2 percent of its electricity – so its costs are not skyrocketing from rising oil prices as much as ours are.

• The price of oil has quadrupled in the last 10 years, and will probably go higher.

• As oil prices rise, Hawai‘i becomes less and less food secure.

These are the realities that Big Island farmers face every day. We must be one of the least food secure places in the world.

From my blog post Definitions: Food Security vs. Food Self-Sufficiency:

“Food security” means being able to get adequate and sufficient food, regardless of where it comes from. These days, it comes from all over the world. We are able to buy food from all over because money comes into our economy from the outside, with military spending and tourism being primary contributors. That provides us with money to pay for general services to our society and to buy our food.

Food security involves farmers farming. If the farmer makes money, the farmers will farm. And if the farmers make money, then their products will be competitive with imported foods. And that will mean lower cost foods for all.

Try to encourage those things that gives our farmers a competitive advantage. Leverage our sun that shines all year long. Don’t ban GMO corn that can give our cattle ranchers a fighting chance.

Maybe we can grow the grain that will encourage poultry farms and fish, too.

If we had poultry and cattle manure, our organic farmers would have a nitrogen source that could help them produce food for a profit.

Let’s all sit down and talk. Farmers are not the enemy.

What Our Bottom Line Should Be

Richard Ha writes:

I’ve said this before, but look at it again: The energy we use to get energy, minus the energy used to get our food, equals our lifestyle.
How much is left over – after we’ve used our energy to 1) obtain more energy and 2) feed ourselves – determines how we live.

This is the nexus of energy and agriculture.

Our bottom line right now needs to be: What should we do to ensure energy security? What should we do to ensure food security?

The cost of producing food is the cost of petroleum oil plus the technology that utilizes oil more efficiently.

The cost of the energy we use to get new energy is rapidly getting to the point where consumers are resisting paying. The estimated cost of tar sand and shale oil is close to $112/barrel. The current oil price is a little bit below that. Shell Oil just announced that last quarter it lost $4/ barrel from its shale oil operations.

If producers lose money, they will eventually stop producing the expensive new oil. If they stop production, we will keep on using the old cheaper oil until it runs out. Peak Oil will happen not because we run out of oil, but because we can’t afford to buy the new, more expensive oil. And that time is not as far off as we think.

In recent years I have attended five Peak Oil conferences, talked to many experts, and even traveled to Iceland and the Philippines to observe how they leverage petroleum issues.

Using GMOs is one way we can lower agricultural costs through technology. For example, every biotech solution to a disease eliminates the need for chemicals to control the insect spreading the disease. This results in increased saving to the farmer, in terms
of increased production and fewer labor and chemical costs associated with spray control.

And how can we leverage the Hawaiian sun for its energy? GMO corn could do that. (If you are unsure about genetically modified organisms, see my post about the American Medical Association’s stand, and about how one of the founders of the anti-GMO method has completely changed his mind.)

An added benefit of utilizing GMO corn is that this could rejuvenate the hog, cattle and poultry industries. Right now, organic farmers do not have a manure source to make compost, which limits the ability of organic farmers to feed a significant
number of people.

Bill 79 would make future GMOs disallowed on the Big Island, while other Hawai‘i counties could use them, and this would give the other islands a strong competitive advantage over our Big Island farmers.

I think we need to take a time out before making a decision on Bill 79, in order to make sure we do this right.

Let’s Not Lose Sight of the Long-Term Goal

Richard Ha writes:

In the midst of the current GMO discussion, it is easy to lose sight of the long-term goal. The big question that is not being asked is: How are we going to feed Hawai‘i’s people?

It’s going to take all of us – from traditional, conventional, organic, permaculture and Korean Natural farmers to home gardeners.

For those who participate in the market system to produce food, it’s about cost. If the farmers make money, the farmers will farm. My Pop told me, when I was a small kid, to find three solutions to every problem and then find one more, just in case.

We need to have a serious discussion of how we are going to feed Hawai‘i’s people.

For people buying food, it’s also about cost. Kumu Lehua Veincent told me something important several years ago. He asked: “What about the rest?”

When I ask myself that question, the answers become easier to see. It’s about all of us, not just a few of us.

One Cost of Paradise: Food Insecurity

Richard Ha writes:

The high cost of Paradise is making us less and less food secure.

From the Economic Research Organization at the University of Hawaii:

An Insight on the Cost of Paradise

Posted July 3, 2013 | 

Whether visitors or residents in Hawai‘i, we are all aware of the high cost of living in paradise. One major contributing factor is the cost of energy. Households in Hawai‘i pay 4 times more than the average US household and nearly 7 times the households in Utah, where the residential energy cost is the cheapest in the nation.* While the US average for April 2013 hovered at 12 cents/kwh, Hawai‘i paid 37 cents/kwh for electricity in the residential sector.** … Read the rest here

Hawai‘i uses oil for more than 70 percent of its electricity, while the U.S. mainland uses oil for only 2 percent of its electricity. Any
food product from the mainland that uses lots of electricity in its processing has an increasing advantage over Hawai‘i food producers and manufacturers.

The U.S. mainland is both our supplier and our competitor. The mainland’s use of cheap natural gas versus our usage of expensive feedstock for electricity production makes all the difference. It’s all about cost. There is no free lunch. Subsidies are not free.

Agriculture and energy are inextricably tied together. Energy helps us do work. Since no one in the world has found a solution for liquid transportation fuel, we need to look to electricity.

On the Big Island, we do have a solution. Geothermal is the cheapest way to generate electricity. And with the throwaway electricity at night, we can generate ammonia, which is a nitrogen fertilizer as well as a hydrogen source. And when we generate cheap electricity, we can run electric vehicles as an alternative to using liquid fuel.

Stable cost for fertilizer for farmers, low-cost electricity for the rubbah slippah folks, clean transportation and a low walk around cost for tourists. We can have the best of all worlds.

Not no can! CAN!

Nothing Is More Important Than Being Able to Afford Food

Richard Ha writes:

How are these two things related: The Aina Koa Pono biofuel project, which is subsidized by the rate payer at $200 per barrel, and Bill 79, the anti-GMO bill submitted by Councilwoman Margaret Wille?

There is a very good chance that we will soon start down the backside of the world oil supply curve. If there is even the remotest chance this will happen, we need to be focusing sharply on the things that are crucial to us, living out here in the middle of the Pacific Ocean.

Nothing is more important than being able to afford food.

We cannot waste time subsidizing $200 per barrel oil; what is the objective there? And we cannot waste time pitting farmer against farmer. We need to focus on helping all farmers make money. Because food security involves farmers farming. And if the farmer makes money, the farmer will farm.

Here in Hawai‘i, nearly 90 percent of our food is imported. We are going to need the help of all farmers to achieve food security. Bill 79 is a distraction that takes our focus away from helping farmers become economically viable. Worse, and most distressing, is that it pits organic farmers against conventional farmers.

We need the help of all the farmers to make Hawai‘i food secure.

The problem is that farmers’ customers are being squeezed by rising energy costs. The rubbah slippah folks can only go so far in supporting locally grown products. Oil costs have quadrupled in the last 10 years and electricity rates have continuously risen. It’s as if we had a massive tax hike. We’re in the middle of a crisis and we don’t even recognize it.

The small farmers on the Big Island know it, though. That’s why they are taking valuable time off from work to show support for each other.

An Interview with Steven Kopits

 | May 1, 2013

By Steve Andrews – The following is taken from an interview with Steven Kopits, managing director of the New York office of Douglas-Westwood, an international energy analysis firm.  The views expressed are atttributable to Mr. Kopits and do not necessarily represent those of Douglas Westwood.

…Peak oil does not occur when we run out of oil.  Peak oil occurs when the marginal consumer is no longer willing to pay the cost of extracting and processing the marginal barrel of oil.  And we can actually calculate what the related numbers are.

Q:  How do we do that?

Kopits: To begin with, we refer to the price a nation’s oil consumers are willing to pay as its “carrying capacity.”  For the US, carrying capacity is about $95-100 Brent [per-barrel oil price in London].  If the oil price is above this level, oil consumption will decline—which is exactly what we see and what we predicted four years ago.  But carrying capacity is not a static number.  It changes over time, specifically, with three things: GDP growth, efficiency gains in the use of oil, and dollar inflation.  So if GDP goes up, efficiency goes up and the CPI goes up, then the amount that consumers are willing to pay for oil will increase.  For China, by the way, we estimate the carrying capacity at around $115-120 / barrel Brent.  So oil consumption will increase in China at $115 Brent, but fall in the advanced economies—exactly the pattern we’ve seen in the last few years.

Q: So the story line getting a ton of ink of late—peak oil is dead….it isn’t actually quite dead yet, is it?

Kopits:   No.  But importantly, we’re going to peak out production not because we’re “running out of oil,” but because the marginal consumer is not willing to pay for the marginal barrel.  We seem to be pretty much at that level today.

We need to understand these dynamics better.  What are the combined effects of flat oil prices and rising production costs, that’s where I think the challenge is and where our professional work is focusing on the macro side…to better understand what these trends are, what they mean, and how companies in the industry should respond to it.

I’ll give you an example.  Normally, if you look at an oil production system, it tends to be symmetrical around the peak.  The rate at which you approach the peak is the rate at which you depart from the peak.  We haven’t done that.  What we’ve done is that we’ve approached the peak and we’ve leveled out production, the so-called “undulating plateau”.  But we’ve maintained that plateau by turning to non-oil liquids, by dramatic increases in upstream spend, and also by technological innovation related to hydrofracking.  All of these, as of today, look to be running their course.  Even shale oil.  Yes, it will grow for the next few years from the three majors plays in the US, but the peak of production growth is already behind us in the Bakken, for example.  On current trends, Bakken production will be increasing by single digits within two years.  Not a tragedy by any means, but not enough to move the global oil supply at that time, either.

The Wheres & Whyfors of Hamakua Springs

By Leslie Lang

The other day Richard gave some of us a tour of Hamakua Springs Country Farms in Pepe‘ekeo, and its new hydroelectric plant, and wow. I hadn’t been out to the farm for awhile, and it was so interesting to ride around the 600 acres with Richard and see all that’s going on there these days.

Most of what I realized (again) that afternoon fell into two
broad categories: That Richard really is a master of seeing the big picture, and that everything he does is related to that big picture.

Hamakua Springs, which started out growing bananas and then expanded into growing the deliciously sweet hydroponic tomatoes we all know the farm for, has other crops as well.

tomatoes.jpgThese days there are farmers leasing small plots where they are growing taro, corn, ginger and sweet potato. These farmers’ products go to the Hamakua Springs packing house and Hamakua Springs distributes them, which speaks to Richard’s goal of providing a place for local farmers to farm, wherethere is water and packing and distribution already in place.

As we drove, we saw a lot of the water that passes through his farm. There are three streams and three springs. It’s an enormous amount of water, and it’s because of all this water that he was able to develop his brand new hydroelectric system, where they are getting ready to throw the switch.

The water wasn’t running through there the day we were there because they’d had to temporarily “turn it off” – divert the water – in order to fix something, but we could see how the water from an old plantation flume now runs through the headworks and through a pipe and into the turbine, which is housed in a blue shipping container.

hydro.jpg

This is where the electricity is generated, and I was interested to see a lone electric pole standing there next to the system. End of the line! Or start of the line, really, as that’s where the electricity from the turbine is carried to. And from there, it works its way across the electric lines stretched between new poles reaching across the land.

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He asked the children who were along with us for their ideas
about how to landscape around the hydroelectric area, and also where the water leaves the turbine to run out and rejoin the stream.

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“We could do anything here,” he said, asking for thoughts, and
we all came up with numerous ideas, some fanciful. Trees and grass? A taro lo‘i? Maybe a picnic area, or a water flume ride or a demonstration garden or fishponds?

There are interesting plans for once the hydro system is operating, including a certified kitchen where local area producers can bring their products and create value-added goods.

Other plans include having some sort of demo of sustainable
farming, and perhaps ag-tourism ativities like walking trails going through the farm, and maybe even a B&B. “The basis of all tourism,” he said, “is sustainability.”

Hamakua Springs is also experimenting with growing mushrooms
now, and looking into several other possibilities for using its free
electricity.

As we stopped and looked at the streams we kept coming
across, which ran under the old plantation roads we drove upon, Richard made an observation that I found interesting. In the Hawaiian way, the land is thought of as following the streams down from mountain to sea. In traditional ways, paths generally ran up-and-down the hill, following the shape of the ahupua‘a.

“But look at the plantation roads,” he said, and he pointed
out how they run across the land, from stream to stream. The plantation way was the opposite. Not “wrong” – just different.

Richard has plans to plant bamboo on the south sides of the
streams, which will keep the water cool and keep out invasive species.

At the farm, they continue to experiment with raising
tilapia
, which are in four blue pools next to the reservoir.

June & Tilapia.jpgJune with a full net

The pools are at different heights because they are using gravity to flow the water from one pool to the next, rather than a pump. Besides it being free, this oxygenates the water as it falls into the next pool. They are not raising the fish commercially at present, but give them to their workers.

Everything that Richard does is geared toward achieving the same goal, and that is to keep his farm economically viable and sustainable.

If farmers make money, farmers will farm.

Continuing to farm means continuing to provide food for the local community, employing people locally and making it possible for local people to stay in Hawai‘i: This as opposed to people having to leave the islands, or their children having to leave the islands, in order to make a decent life for themselves.

The hydroelectric system means saving thousands per month in
electric bills, and being able to expand into other products and activities. It means the farm stays in business and provides for the surrounding community. It means people have jobs.

This is the same reason why, on a bigger scale, Richard is working to bring more geothermal into the mix on the Big Island: to decrease the stranglehold that high electricity costs have over us, so the rubbah slippah folk have breathing room, so that we all have more disposable income – which will, in turn, drive our local economy and make our islands more competitive with the rest of the world, and our standard of living higher, comparably.

When he says “rubbah slippah folk,” Richard told me, he’s always thinking first about the farm’s workers.

This, by the way, is really a great overview of how Richard describes the “big picture.” It’s a TEDx talk he did awhile back (17 minutes). Really worth a look.

It was so interesting to see firsthand what is going on at the farm right now, and hear about the plans and the wheres and whyfors. Thank you, Richard, for a really interesting and insightful afternoon.