Tag Archives: Shell Oil

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.