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    'Record Volume Rise' in World Energy Consumption
    By Thomas Catan
    Financial Times.com

    Tuesday 14 June 2005

    World energy consumption surged 4.3 per cent last year, the biggest percentage rise since 1984 and the largest volume increase ever, according to new figures from BP, the oil company.

    Burning fossil fuels at a faster rate also resulted in the largest absolute increase in carbon emissions, adding to the stock of "greenhouse gases" blamed for global warming.

    BP's annual statistical review, released on Tuesday, showed that the fast-growing economies of Asia were responsible for a large portion of the rise. China's fuel consumption rose by 15.1 per cent and India's by 7.2 per cent.

    Global consumption of oil also rose by 3.4 per cent, or 2.5m barrels a day, the biggest increase since 1978. Some 900,000 b/d of that increase in demand came from China, but BP said the demand also rose strongly across virtually every region.

    "Overall, the growth of global oil demand has outstripped oil production capacity growth, reducing the level of spare capacity," said David Allen, group managing director of BP. "That has been the fundamental cause of the oil price increases we've seen over the last two years."

    The average oil price in 2004 was $38 a barrel, BP said, up from $29 a barrel in 2003 and the highest ever figure expressed in "money-of-the-day". The oil price has averaged about $49 a barrel so far this year.

    At the same time, Britain and Australia suffered large falls in oil production they pumped 10 per cent and 13.9 per cent less respectively.

    Even so, BP said there was no shortage of available energy resources. At present production rates and without taking into account future discoveries, the world has enough oil to last 40 years and enough natural gas to last 60 years, according to BP.

    Lord Browne, chief executive of BP, said last week he expected world oil prices to remain at more than $40 a barrel until new supplies came on stream in the next three to four years.

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    Oil and Food: A New Security Challenge
    By Danielle Murray
    Asia Times

    Friday 03 June 2005

    From farm to plate, the modern food system relies heavily on cheap oil. Threats to our oil supply are also threats to our food supply. As food undergoes more processing and travels farther, the food system consumes ever more energy each year.

    The US food system uses over 10 quadrillion Btu (10,551 quadrillion Joules) of energy each year, as much as France's total annual energy consumption. Growing food accounts for only one-fifth of this. The other four-fifths is used to move, process, package, sell, and store food after it leaves the farm. Some 28% of energy used in agriculture goes to fertilizer manufacturing, 7% goes to irrigation, and 34% is consumed as diesel and gasoline by farm vehicles used to plant, till, and harvest crops. The rest goes to pesticide production, grain drying, and facility operations.

    The past half-century has witnessed a tripling in world grain production - from 631 million tons in 1950 to 2,029 million tons in 2004. While 80% of the increase is due to population growth raising demand, the remainder can be attributed to more people eating higher up the food chain, increasing per capita grain consumption by 24%. New grain demand has been met primarily by raising land productivity through higher yielding crop varieties in conjunction with more oil-intensive mechanization, irrigation, and fertilizer use, rather than by expanding cropland.

    Crop production now relies on fertilizers to replace soil nutrients, and therefore on the oil needed to mine, manufacture, and transport these fertilizers around the world. Rock deposits in the United States, Morocco, China, and Russia meet two-thirds of world phosphate demand, while Canada, Russia, and Belarus account for half of potash mine production. Nitrogen fertilizer production, which relies heavily on natural gas to fuel the conversion of atmospheric nitrogen into reduced forms of nitrogen such as ammonia, is much more widely dispersed.

    World fertilizer use has increased dramatically since the 1950s. China is now the top consumer with use rising beyond 40 million tons in 2004. Fertilizer use has leveled off in the United States, staying near 19 million tons per year since 1984. India's use also has stabilized at around 16 million tons per year since 1998. More energy-efficient fertilizer production technology and precision monitoring of soil nutrient needs have cut the amount of energy needed to fertilize crops, but there is still more room for improvement. As oil prices increase and the price of fertilizer rises, there will be a premium on closing the nutrient cycle and replacing synthetic fertilizer with organic waste.

    The use of mechanical pumps to irrigate crops has allowed farms to prosper in the middle of the desert. It also has increased farm energy use, allowed larger water withdrawals, and contributed to aquifer depletion worldwide. As water tables drop, ever more powerful pumps must be used, perpetuating and increasing the oil requirements for irrigation. More efficient irrigation systems, such as low-pressure and drip irrigation, and precision soil moisture testing could reduce agricultural water and energy needs. But in many countries, government subsidies keep water artificially cheap and readily available.

    Countering the historical trend toward more energy-intensive farm mechanization has been the adoption of conservation tillage methods - leaving crop residues on the ground to minimize wind and water erosion and soil moisture loss. Soil quality is improved through this technique, while farm fuel use and irrigation needs are lowered. Zero-till farming is practiced on 90 million hectares worldwide, over half of which are in the United States and Brazil. Reduced tillage is now used on 41% of US cropland.

    Although agriculture is finding ways to use less energy, the amount consumed between the farm gate and the kitchen table continues to rise. While 21% of overall food system energy is used in agricultural production, another 14% goes to food transport, 16% to processing, 7% to packaging, 4% to food retailing, 7% to restaurants and caterers, and 32% to home refrigeration and preparation.

    Food today travels farther than ever, with fruits and vegetables in Western industrial countries often logging 2,500-4,000 kilometers from farm to store. Increasingly, open world markets combined with low fuel prices allow the import of fresh produce year round, regardless of season or location. But as food travels farther, energy use soars. Trucking accounts for the majority of food transport, though it is nearly 10 times more energy-intensive than moving goods by rail or barge. Refrigerated jumbo jets - 60 times more energy-intensive than sea transport - constitute a small but growing sector of food transport, helping supply northern hemisphere markets with fresh produce from places like Chile, South Africa, and New Zealand.

    Processed foods now make up three-fourths of total world food sales. One pound (0.45 kilograms) of frozen fruits or vegetables requires 825 kilocalories of energy for processing and 559 kilocalories for packaging, plus energy for refrigeration during transport, at the store, and in homes. Processing a one-pound can of fruits or vegetables takes an average 261 kilocalories, and packaging adds 1,006 kilocalories, thanks to the high energy-intensity of mining and manufacturing steel. Processing breakfast cereals requires 7,125 kilocalories per pound - easily five times as much energy as is contained in the cereal itself.

    Most fresh produce and minimally processed grains, legumes, and sugars require very little packaging, particularly if bought in bulk. Processed foods, on the other hand, are often individually wrapped, bagged and boxed, or similarly overpackaged. This flashy packaging requires large amounts of energy and raw materials to produce, yet almost all of it ends up in our landfills.

    Food retail operations, such as supermarkets and restaurants, require massive amounts of energy for refrigeration and food preparation. The replacement of neighborhood shops by "super" stores means consumers must drive farther to buy their food and rely more heavily on refrigeration to store food between shopping trips. Due to their preference for large contracts and homogenous supply, most grocery chains are reluctant to buy from local or small farms. Instead, food is shipped from distant large-scale farms and distributors - adding again to transport, packaging, and refrigeration energy needs.

    Rather than propping up fossil-fuel-intensive, long-distance food systems through oil, irrigation, and transport subsidies, governments could promote sustainable agriculture, locally grown foods, and energy-efficient transportation. Incentives to use environmentally friendly farming methods such as conservation tillage, organic fertilizer application, and integrated pest management could reduce farm energy use significantly. Rebate programs for energy-efficient appliances and machinery for homes, retail establishments, processors, and farms would cut energy use throughout the food system. Legislation to minimize unnecessary packaging and promote recycling would decrease energy use and waste going to landfills.

    Direct farmer-to-consumer marketing, such as farmers' markets, bypasses centralized distribution systems, cutting out unnecessary food travel and reducing packaging needs while improving local food security. Farmers' markets are expanding across the US, growing from 1,755 markets in 1993 to 3,100 in 2002, but still represent only 0.3% of food sales.

    The biggest political action individuals take each day is deciding what to buy and eat. Preferentially buying local foods that are in season can cut transport and farm energy use and can improve food safety and security. Buying fewer processed, heavily packaged, and frozen foods can cut energy use and marketing costs, and using smaller refrigerators can slash household electricity bills. Eating lower on the food chain can reduce pressure on land, water, and energy supplies.

    Fossil fuel reliance may prove to be the Achilles' heel of the modern food system. Oil supply fluctuations and disruptions could send food prices soaring overnight. Competition and conflict could quickly escalate. Decoupling the food system from the oil industry is key to improving food security.