Welcome to Price-Induced Rationing

A few thoughts on energy-linked food crises

Richard Norris of Energy IQ, reflecting on the burgeoning food crisis that is inextricably linked to energy, writes:

We are already in the early stages of potentially devastating socio-economic turmoil – energy is the industry that powers all other industry, and it is getting more expensive.   Increases in the price of food are noted in the western super-markets and in the inflation figures (despite apparent manipulation to limit this).  The price-rationing of food into poorer countries is not newsworthy yet – but as the energy crisis flows into the food crisis (via fertilizer and diesel) – so price induced rationing will occur.  “Price induced rationing” sounds benign – but it means that poorer people will simply be out bid and will not be able to buy food.  This is economic speak for famine. 

He closes with the following:

We need reliable, secure and affordable energy – and wind turbines and solar farms are part of that – but in the same way that fossil fuels are seen as being all bad with no positives, so wind and solar are promoted as all good with no negatives.  The reality is that a headlong rush to transition will have many unintended consequences. Forecasting “peak oil demand” to fit placate stakeholder activists, declaring that “no new fossil fuels investments are needed” and crusading to divest from fossil-fuels has lead to the supply crunch we are seeing today. Shutting workhorse power-plants with no plan for how to bridge low renewable days/weeks/months destabilizes the electricity grids – and whilst the grid is socially invisible when it works, it is essential to the functioning of any modern economy. Something we only discover when it breaks.

Framing the narrative as an easy transition is dangerous. Reality has a harsh way of reframing the narrative – physics pummels platitudes, and physics is winning, as it always will.

That’s a good analysis of the current situation, although I’d add that unintended consequences are never really unintended. The people in charge of energy policy have access to all kinds of modeling and forecasting tools, they hold endless numbers of workshops, they have vast troves of data. If they’re being blindsided by “unintended” consequences, it’s likely willful. Many of these people are just shoehorning their desired outcome into our lives, probably in denial about who it might harm.

My next post will be more optimistic.