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Page added on April 1, 2014
Tech Talk – of Wheat and Coal
The release of the latest assessment of the IPCC on the future of the planet, failing their push to cut greenhouse gas emissions, has brought forth headlines and supportive editorials in papers around the world. Yet I could not help but note a couple of things that form the basis for this tech talk. The first was that the report discussed the impacts of climate change (for which I suspect in this case they mean global warming) on agricultural production. They stress the negative impacts on crops such as wheat, and so, being curious, I went to the Wikipedia page that provides a table of wheat production over the past eighteen years, and plotted the data.
Figure 1. Global wheat production in millions of metric tons (after the Food and Agricultural Organization via Wikipedia)
Clearly wheat production is growing rather than, as the IPCC report implies, declining with the increase in carbon dioxide levels and longer growing seasons in parts of the world. More to the point – which is providing more food – (h/t Joules Burn) the two staple crops wheat and corn, have both seen growing production, but it is the slower pace of growth of wheat (at about 0.9%) over corn (at about 1.6%) that is of current concern, and which is to be addressed with new investments in the International Wheat Yield Partnership that plan to more than double yields in the next 20 years. This is needed in large part to match the continued growth in world population, which is likely to continue to rely on wheat to provide roughly 20% of the calories that this population will consume. Gains come both from increased land acreage being used, but also from the yields of that land. In the UK, for example, yields now average 7.8 tonnes per hectare up from 2.5 tonnes in 1940, the current target is to reach 20 tonnes per hectare in the next 20 years. Given that the global average is still down around 3 tonnes per hectare, the ability to bring this productivity to the broader community will give significant help to feeding the world.
I mention this because of the clear disparity between this information and the way that material is presented by the IPCC. Further the real needs of the world and its nations are now increasingly being addressed with less attention to the strident demand of the more alarmist of those who push the climate change agenda, in part perhaps because of the overhyping of the message. The latest illustration of this comes from Japan.
Following the devastation of the tsunami following the Great East Japan Earthquake on March 11, 2011 the Japanese public has been very nervous about the use of nuclear power, banning the restart of 48 nuclear power stations until after a new series of safety checks. This has had two short-term consequences, the financial melt-down of the power companies, which is now being addressed through government bailout and the need to switch to alternate fossil fuels to replace the power that the country obtained from the reactors. The switch was largely to natural gas, and to oil but this has proved to be an expensive undertaking with companies feeling that they could only raise power prices to a limited degree, hence their need now for government funding.
Figure 2. The changing face of electricity supply in Japan following the Earthquake, (MIT technology review )
But the sustained high cost of the gas and oil is estimated to be costing the companies over $30 billion a year and even with the government bailouts this is not an acceptable long term solution, given that it is likely to be years before the safety changes are made in the reactors, and also given the continued public opposition to restarting the reactors. As a result the companies have sought permission to switch back to coal-fired power plants. Concurrently the Japanese Coal Energy Center has been looking for coal resources around the world ranging from Mongolia to Mozambique.
in 2012 Japan was the second largest of the coal-importing nations at 189 million tons (behind China at 289 million) and current plans are to increase the amount of power that the fuel will provide by roughly 20% through construction of new power stations. (Some of these will be needed since, while some nuclear power stations may come back on line others are proving to be too expensive to restart under the new codes, and thus will be permanently closed).
It is this clear benefit of cost that is driving the change, and that benefit is unlikely to disappear over the next couple of decades. The renewable energy industry has not been able to overcome the advantages of coal’s ubiquitous presence and low cost of production. In the case of Japan supplies are anticipated to come from Canada and the United States easing their dependence on Australia and perhaps helping reduce their costs as they develop more international suppliers. Glencore, for example, their Australian supplier, has now reduced costs to $88 a ton, from the $95 being paid last year. It is estimated that there is currently a glut of about 5% of the coal market, and the reduced demands for thermal coal in the United States and Europe is unlikely to change that picture in the short term.
The longer term remains more cloudy, since the potential for the United States to enter, in a significant way, the LNG market and potentially to change those supply costs is not yet clear. It seems, however, unlikely that the volumes that will become available will not have much impact on price, and if that remains the case then coal will continue to grow as the price differential continues to add pressure for the its use in generating cheaper electricity.
Whether this will change the recently better-defined coal resources off the British Isles into a reserve remains, in the short term, unlikely, but even in the UK power costs can only rise so far before the public complaints begin to have an effect.
6 Comments on "Tech Talk – of Wheat and Coal"
Davy, Hermann, MO on Tue, 1st Apr 2014 9:07 pm
ARTICLE SAID – Clearly wheat production is growing rather than, as the IPCC report implies, declining with the increase in carbon dioxide levels and longer growing seasons in parts of the world. More to the point – which is providing more food – (h/t Joules Burn) the two staple crops wheat and corn, have both seen growing production, but it is the slower pace of growth of wheat (at about 0.9%) over corn (at about 1.6%) that is of current concern, and which is to be addressed with new investments in the International Wheat Yield Partnership that plan to more than double yields in the next 20 years. This is needed in large part to match the continued growth in world population, which is likely to continue to rely on wheat to provide roughly 20% of the calories that this population will consume. Gains come both from increased land acreage being used, but also from the yields of that land.
Geeze, more fantasy on the food front. This guy is full of shit if he thinks wheat yields are going up because of CO2 increases and longer growing season. This is rubbish. The increase is due to increasing use of all those traditional inputs of the green revolution. The price of wheat has increased so much in the last 10 years that many locations that were marginal have been put in production. Many more dollars are being spent on expensive inputs which produce higher yields “BUT” at a cost. Is this sustainable ‘NO’. We know the situation with energy. We know the situation with all the other chemicals and fertilizers the prices are going up. I know of no Ag input where the price is declining. The drop in natural gas prices has help slow the rate of increase of Anhydrous and other fertilizers but not much. Ag demand is so high the prices have remained high. Water stress, development, and soil erosion are steadily at work reducing overall yield. I have read many articles analyzing corn and the effects of AGW in my area which is the southern Corn Belt (Missouri). The big issues with corn is going to be the heat. Heat that will be more intense and for longer periods. Drought and heavy rains are not good for crops either. In the last 10 years extremes have been the norm. What I have read is the CO2 component is a very low net increase to all crops (LOW). This guy is feeling warm and fuzzy to calm his cognitive dissonance. The overall yield increases are increasing at a much diminished pace. They are not keeping up with demand hence the price rises. When money and energy become more expensive i.e. when we have a financial correction negates the central bank financial repression through QE and ZIRP, we are going to see a drastic drop in yields with higher costs. I had a 1000 acre corn and soybean farm. I had input/insurance/overhead bills 10 years ago of $300,000. A small increase in energy and interest rates coupled with less lending will be serious for the food supply. This is coming because the cost of money has nowhere to go but up. You can’t tell me it will not go up when it is at historic lows now.
andya on Wed, 2nd Apr 2014 2:14 am
Doubling the yield in 20 years is a 3.5% CAGR. This goal now has the status of fusion power, always 20 years in the future. The reason average yield per acre is low, is because of poor soil, lack of water and not much in the way of fertiliser. So add irrigation and fertiliser. Easier said then done, because the reason people don’t use them is not because they don’t want to, but because they cant afford to.
Heading Out (Dave Summers) on Wed, 2nd Apr 2014 3:18 pm
Actually the new International Partnership is looking at improving the rates at which wheat converts energy (it is less efficient than other crops) in part through increased understanding of the genome, which is not yet fully mapped. The gains that have been made already in yield indicate that their targets are not unrealistic, though I can’t speak to the financial aspects since this is a much more of a local matter, requiring different answers in different places.
Kenz300 on Wed, 2nd Apr 2014 5:35 pm
Japan needs to transition to alternative energy sources.
Wind, solar, wave energy, geothermal and second generation biofuels made from algae, cellulose and waste can all be produced in Japan making them less vulnerable to price hike for fossil fuels.
Their foolish investments in Nuclear energy will cost the country dearly in clean up costs and environmental damage. It is time to wake up and move to safer, cleaner and cheaper alternative energy sources.
rollin on Wed, 2nd Apr 2014 5:36 pm
Total grain production per capita has actually fallen over time.
Total course grain production is on the rise but more than half of it is used as feed.
Wheat production has risen and is keeping up with world population growth.
bobinget on Wed, 2nd Apr 2014 7:41 pm
GE Finance is backing a huge NEW solar power plant in Japan. I reported on this yesterday.
“First Solar has completed its first utility-scale PV projects in Japan, a 1.3MW ground-mount array on the southern island of Kyushu.
First Solar kicked off construction at the Kitakyushu-shi array last November – around the same time it announced plans to invest $100m in large Japanese PV plants.
The estimated 1,400MWh of electricity expected to be generated each year”
In years past we never fed wheat to livestock.
Corn was considered mainly a food crop.
All that changed when we decided to swap diesel for ethanol.
Soybeans thrive on heat and are not as fertilizer intensive. A record crop is being planted THIS year.