Potential Impact on Commodities
The United States, for better or worse, is a sprawling, suburban-dominated country with large supplies of freshwater in some regions and limited amounts in other regions. Suburban sprawl has put intense pressure on local water supplies. The millions of acres of perfectly manicured green lawns and millions of backyard “cement ponds” require vast quantities of water to retain that glorious green hue. The Ipswich River near Boston now "runs dry about every other year or so," according to Sandra Postel, director of the Global Water Policy Project. "Why? Heavy pumping of groundwater for irrigation of big green lawns." In drought years like 1999 or 2003, Maryland, Virginia and the District have begun to fight over the Potomac -- on hot summer days combining to suck up 85 percent of the river's flow. With 67 million more people expected to inhabit the United States by 2030, these water shortages will only become more severe.
Source: The Big Picture
Kansas is considered part of the fertile mid-section of our country that has allowed the average American to become morbidly obese. The story of Scott City, Kansas should be a warning to all farming communities in the Midwest. Mike Shedlock describes what happened to Scott City:
“Farmers around Scott City pumped with abandon from the underground reservoir called the Ogallala Aquifer in the 1960s, ’70s, and ’80s, raising record wheat, corn, and alfalfa crops, and never once worrying that they might hit ‘E’ on the tank fueling the economy. But today, in a withering downtown that no longer has a place for residents to buy shoes or dress clothing, some have likened the situation to a car running out of gas.
“‘If you run out of water for your crops, that’s one thing,’ farmer Kelly Crist says, recalling the day about a decade ago when his well went dry. ‘But when you go to your house and turn the shower on and there is no water, it’s a serious situation. Today, the 46-year-old farmer relies on an 800-foot-deep well that pokes into a deeper but smaller aquifer to fill his toilets, sinks, and bathtub.
“Water levels in the Ogallala, which stretches from Texas to South Dakota, vary in depth, and some communities have decades — or even more than a century — before the water runs out.Scott City sits atop a shallow portion of the aquifer. Water experts say that makes it a window into the Plains’ future.
“‘The area around Scott City is beginning to experience what the rest of the region is going to experience if we continue to pump the way we do,’ says Rex Buchanan of the Kansas Geological Survey. ‘If they keep going at the rate they are, it’s not a sustainable lifestyle. Something has to give.’
Food production around the world has begun to flatten or decline. The last 10 years have seen steady erosion in the amount of grain grown per capita. And since wheat and rice and corn are all world markets, with developing countries growing at a breakneck pace, the need for imports elsewhere could drive up the cost of food everywhere. The Chinese are relentlessly converting farmland to industrial uses (even as they continue to demand more meat and grains in their diet). The price spike in 2007 and 2008 was not a onetime event. It was a foreshadowing of a much more costly future for consumers. The U.N. said global food reserves in 2008 were at their lowest level in 30 years, which was good for only 53 days, compared with 169 days in 2007. Peak oil and peak water are misleading terms. They should be changed to peak cheap oil and peak cheap water. We’ll be able to produce oil and water for decades, but it will cost significantly more to do so. This will result in much higher commodity prices as farming requires prodigious amounts of oil and water to produce the food for the 6.7 billion people that inhabit the planet (8.3 billion projected in 2030).
More Dire Consequences
“In real life our species has such a modest ability to deal with distant outcomes or to defer gratification that a bad ending is probably inevitable. We need, it seems, the shock of a Pearl Harbor to really gear up and make sacrifices.” - Jeremy Grantham
Americans seem to have a problem facing up to imminent threats until they hit them like a sledgehammer. This penchant for delay is going to cause much heartache and pain for most Americans. Hoping for a good outcome will not work. Thirty years of delay has set the stage for eventual conflict over resources. Peak oil is the more likely trigger for armed conflict. We know who has the oil – Middle East, Russia, Brazil, Canada. We know who needs the oil – United States, China, Europe, Japan. Peak water as a trigger for conflict isn’t on anyone’s radar screen. It is interesting that Brazil, Russia, and Canada also have the greatest amount of renewable freshwater on the planet. South America, which has 28% of the world’s freshwater and consumes only 6%, is the prize. Asia, which has 29% of the world’s freshwater, consumes 50% of all the freshwater on the planet. With high population growth and industrial development something will have to give in Asia.
Total Renewable Freshwater Supply, by Country
Annual Renewable Water Resourcesa (km^3/yr)
United States of America
Congo, Democratic Republic (formerly Zaire)
Source: Pacific Institute
A looming future crisis of food shortages and skyrocketing commodity prices is inevitable. Peak water will play a significant role in the crisis. The facts are undeniable:
- Droughts in key farming belt areas due to climate change.
- Less snow pack in the mountains resulting in less freshwater flows during growing season.
- Contamination of freshwater sources by industrial waste.
- Soil erosion and depletion of underground aquifers.
- Higher oil prices resulting in higher fertilizer costs, food transport, and industrial agriculture.
- Expansion of bio-fuels as an energy source.
- Worldwide population growth, with developing countries expanding the diets of their middle class.
- Subsidies and tariffs that protect farmers and distort market prices.
- Inability to transport water economically.
War over resources has happened before and it will happen again. Japan attacked Pearl Harbor because the U.S. was cutting off its oil supply. The devastating combination of peak oil and peak water in the next five years will combine to create a commodity crisis that is likely to spur armed conflict as countries contend for declining resources. The question is who will attack who and when. In the meantime, plant a vegetable garden.