Review of FAO Issue Paper, Energy-Smart Food for People and Climate

The United Nation’s Food and Agriculture Organization (FAO) released an interesting document during the UN Conference on Climate Change in Durban last week. Energy Smart Food for People and Climate (ESF, 78 pgs) focuses on the mitigation of food-related carbon emissions. The document argues that mitigation can be achieved through efficiencies behind the farm gate and beyond it. ESF also stresses the imperative of decoupling fossil fuel use from the food supply chain but acknowledges that the latter task “will require fundamental changes in global food systems” (p. IV)

by Rick Munroe | Energy Bulletin | Dec 7 2011

There are several references to risks surrounding the future availability and affordability of oil, but the primary driver of this document and its call for fundamental changes in food production is climate change, not concerns over future oil supply. This is unfortunate, as a dual focus would have brought a greater urgency to the report’s recommendations and perhaps to the Durban conference itself.

What is conspicuously absent in this document is acknowledgement of the impending “peak oil” phenomenon. The FAO, like other United Nations agencies, displays a gross disinterest in this topic: searches at the websites of both the FAO and the UN have so far yielded absolutely nothing on peak oil.

Given the increasingly stark warnings from the International Energy Agency (IEA) and the near-unanimity of military analysts, it is shocking that on the eve of 2012 our leading global agency cannot provide a single link to what will surely be one of the most significant events in human history. The peaking of global oil production presents the entire world with “an unprecedented risk management problem,” yet the entire United Nations organization continues to ignore this threat.

Data and trends indicate that global oil consumption (currently over 1,000 barrels per second) cannot increase much further. When oil production finally reaches its historic pinnacle and stalls (for whatever reason), the entire world will indeed face unprecedented problems.

Foremost among these will be the challenge of maintaining viable food supply chains.

Yet in its section titled, “The key challenges,” ESF makes no direct reference to the impending liquid fuels crunch. Instead, it provides only an oblique reference to “projected higher costs of oil and natural gas, as well as insecurity regarding the limited reserves of these non-renewable resources (IEA, 2010)…” (p. 3).

Invoking the supply concerns of the International Energy Agency was certainly a good idea, but the ESF authors would have achieved more by including the following sharp warnings from the IEA’s 2008 World Energy Outlook (emphasis in original):

“The world’s energy system is at a crossroads. Current global trends in energy supply and consumption are patently unsustainable…. We [must] tackle the two central energy challenges facing us today: securing the supply of reliable and affordable energy; and effecting a rapid transformation to a low-carbon, efficient and environmentally benign system of energy supply. What is needed is nothing short of an energy revolution” (WEO, p. 37).

“Some 64 mb/d of additional gross capacity — the equivalent of almost six times that of Saudi Arabia today — needs to be brought on stream between 2007 and 2030. Some 30 mb/d of new capacity is needed by 2015. There remains a real risk that under-investment will cause an oil-supply crunch in that timeframe” (WEO, p. 41).

“For all the uncertainties highlighted in this report, we can be certain that the energy world will look a lot different in 2030 than it does today. The world energy system will be transformed, but not necessarily in the way that we would like to see. [I]t is becoming increasingly apparent that the era of cheap oil is over…. Time is running out and the time to act is now” (WEO, p. 49).

It is puzzling that for all of their efforts to bring about effective action on climate change, not one UN agency has pressed the additional argument that we must reduce our consumption of fossil fuels because of imminent supply insecurities. Thomas Homer-Dixon and others have argued that we face “twin crises” in climate change and oil depletion, that the two are linked in a multitude of ways, and that both must be addressed simultaneously.

The only mention of peak oil in ESF is this understatement:

“Once conventional oil and gas flows reach a peak as is predicted, the food sector’s continued reliance on these non-renewable resources for production, processing and transportation activities will lead to greater business risks, especially from price spikes” (p, 9).

This guarded statement is puzzling for several reasons.

First, the FAO seems unaware that over a year ago the IEA predicted, “Crude oil output reaches an undulating plateau of around 68-69 mb/d by 2020, but never regains its all-time peak of 70 mb/d reached in 2006…” (p. 6, emphasis added).

In short, the FAO predicts “greater business risks” once conventional oil peaks, but has failed to note the IEA’s admission that the peak in conventional oil has already occurred. It is incomprehensible that such a significant warning went unnoticed by the FAO.

Conventional petroleum has been the mainstay of global liquid fuel production for over 150 years. When the IEA declared that the world’s primary source of diesel fuel peaked a half-decade ago, that historic conclusion should have sent alarm bells ringing at agriculture departments around the world, nowhere more loudly than at the FAO. Unfortunately, this did not occur: not at the FAO, nor at USDA, nor at Agriculture Canada, nor at DHS or Public Safety Canada. None of these agencies seems concerned over the increasing likelihood of a liquid fuels crisis or the severe implications for global food supplies if a major oil shock were to occur. Consequently, proactive planning has not been undertaken.

The FAO’s understatement is also puzzling because a global oil shock would do far more than simply create “greater business risks.” Last year the German military released a thorough analysis of peak oil, warning that the widespread unaffordability/unavailability of our primary energy source could result in a ’tipping point,’ which might then lead to uncontrolled, destabilizing outcomes.

Bundeswehr analysts warned that these outcomes could be unprecedented, even life-threatening.

Almost every statement in Energy Smart Food relating to future oil supply seems understated, such as this: “However, if an inexpensive supply of fossil fuels becomes unavailable in the future, options for increasing food productivity may become severely limited” (p. III). An appropriate correction might read, “When fossil fuels become unaffordable to farmers and other sectors in the food supply chain, food supply will become severely limited.”

Presently, family farmers in many countries are enduring record low net farm incomes and struggle to absorb the high cost of diesel fuel. During a severe oil price shock, these farmers would be forced to curtail critical agricultural activity. Cutbacks in production would occur at the very moment when local farmers need to produce more, not less (because of the increased cost of food imports). In short, an oil supply shock could quickly become a food supply crisis. This predictable scenario is clearly a recipe for trouble on several fronts, yet it has been ignored by agri-food analysts and by emergency planners.

Another predictable scenario is the threat of export decline. Most countries now rely heavily on imported oil to fuel their economies. As oil-rich countries reach their peak and enter the decline phase, their exporting capabilities decline as well. Clearly, we can’t all be importers, and the threat of diminishing oil export capacity is one of the most urgent aspects of the peak oil issue. The potential effects of constricted oil exports on long-distance food supply chains should be obvious.

Section 6 of ESF, titled “Policy options,” is interesting because its tone is more pointed. It also contains numerous typographical errors, so perhaps this section was not heavily edited. Some key points:

• Food and agriculture policies should be implemented in conjunction with energy policies (p. 40).
• The free market approach followed by several high-GDP countries is not generally considered optimal for providing access to energy services in rural areas of low-GDP countries (p. 46).
• The time needed to develop new energy-smart food systems… is often under-estimated (p. 47).
• There is a need for an effective policy environment to support the transition of the global food sector to one depending less on fossil fuels and more on renewable energy (p. 48).
• A supporting policy environment without the appropriate allocation of financial and human resources is unlikely to succeed… (p. 48).
• Because of its urgency, scope and complexity, it will require the participation of a broad constituency of interested parties. An international effort will be essential… (p. 50).

Energy Smart Food contains an extensive 11-page bibliography which dates back to 1976. Conspicuously absent from this bibliography is the landmark study published in 1986 by Gever et al, Beyond Oil: The Threat to Food and Fuel in the Coming Decades (306 pgs).

This reviewer respectfully suggests that FAO analysts examine Beyond Oil, which appears to have been the first book on peak oil, and which specifically flags the food & fuel nexus as a major concern in the years ahead. One might also suggest that the FAO familiarize itself with the recent literature from the IEA and from the international military/security research community with respect to the data and trends which surround the ongoing peak oil debate.

An annotated bibliography of the military literature is available here.

The new FAO study, Energy Smart Food for People and Climate is available here.

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