Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Category: Oil Page 3 of 6

Gas Companies Manipulated Pipeline Capacity to Rook New England Customers 3.6 Billion

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On October 12, 2017

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Shades of Enron:

The systematic withholding of pipeline capacity, particularly on the coldest days, has cost New England electricity consumers $3.6 billion…

…

On the worst days, including during the Polar Vortex of 2013-2014, up to seven percent of Algonquin’s capacity could be artificially constrained.

“When you relate that back to gas-fired generators, that’s about 28 percent of the gas that would be demanded,” Zaragoza-Watkins said.

This “capacity withholding,” researchers wrote, “increased average gas and electricity prices by 38 percent and 20 percent, respectively, over the three year period we study.”

These sorts of manipulations are always ongoing in any sphere where they can be done with a reasonable chance of success. This is similar to Enron’s price manipulation in the California market, yes, but it is typical of any industry where a few people can finangle prices. The LIBOR (London Interbank Rates) scandal was similiar: A few people could manipulate the rate and cost ordinary people billions of dollars.

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There are always key points in the economy where a few people have disproportionate power. Anything that people must have, that someone else controls, is a leverage point which can be used to extract disproportionate profits.

People must have heating during the polar vortex. People must have loans and credit (and money). People must have houses (during the housing bubble and, indeed, various housing bubbles happening right now.)

If people must, and there is a resource bottleneck, that bottleneck can be squeezed. A pipeline is an obvious bottleneck, but that only some people can create money out of thin air is also a bottleneck. That some people set effective interest rates and profit from them is a bottleneck, and so on.

Careful construction of an economic system limits resource bottlenecks, and assures that those who control the remaining resources can’t profit from squeezing them, if possible, and regulates and inspects the hell out of those bottlenecks that remain profitable to squeeze.

We do not live in such an economy. Rather, our economy has mostly been constructed to encourage such squeezing. Cases where it is genuinely punished are rare (as with virtually all the financial executives getting off in the financial crisis).

This pipeline squeeze looks like it might be the rare exception. But only maybe. Remember, if the executives come out clean, and richer than they would have been otherwise, any fines or punishments will not stop it happening again.

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The End of the Age of Oil

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On March 31, 2016

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Has the last oil boom ended?

Electric cars will be cheaper to own than conventional cars by 2022, according to a new report.

The plummeting cost of batteries is key in leading to the tipping point, which would kickstart a mass market for electric vehicles, Bloomberg New Energy Finance (BNEF) analysts predict.

This is very good news for the world, and though the technology is certainly not carbon neutral, it is better than oil, the energy used to charge the battery can be kept relatively clean. Once upon a time, that energy was coal and other conventional energy sources, but coal is now more expensive than solar, and the price of solar is continuing to drop.

While this is good for the world, it’s going to be very, very bad for many countries. The oilarchies’ days are numbered. I will state right now that I doubt that Saudi Arabia’s monarchy will survive this.  Countries that are heavily reliant on oil, especially expensive oil, are going to be in trouble. The same is true of natural gas.

All resource booms end. Eventually resources are replaced. Once there was a huge rubber boom in Brazil: Then we learned how to make synthetic rubber.

We might get one more oil boom, but that’s it.

So: Alberta oil sands oil? Done. The Alberta-dominated Conservatives damaged terribly the Canadian manufacturing sector during the last oil boom by refusing to acknowledge that the high Canadian dollar affected manufacturing sales, but the good days won’t be coming back to Alberta.  It’s possible that Alberta has a key resource which will boom in the future of which I’m not aware (entirely possible), but if it doesn’t, Alberta’s high-flying days are done.

Go down your list of major oil exporters and look at the prices they need per barrel to make a profit. A lot of them are going to have to reduce production of the most expensive wells. This process will continue for years. Saudi oil production costs per barrel are under $10, but the price they require to keep their society running is much higher.

Cheap energy is an economically good thing. But the effects of dislocation will be immense.

Unfortunately, while this is great news for the environment, it is all too late to stop runaway climate change. Methane locked into land and ocean will be released now. It is too late, we have passed the point at which the process of global warming became self-reinforcing. It is now a vicious cycle and cannot be stopped by simply reducing carbon emissions.

Whoops!

We knew this would be the case, and we decided not to do anything about it. Let no one tell you otherwise.

A large amount of the world is going to become essentially uninhabitable due to heat. Climate change will change rainfall patterns and many areas will experience a decrease in agricultural productivity. Combined with aquifer depletion, conventional agriculture will take a huge hit.

This is a fixable problem. We can grow ten times as much food as standard agriculture in small, intensely cultivated plots, even indoors. We will have cheap energy. The remaining oil can be used for fertilizer until we have better solutions.

The next problem is water. Large parts of the world will not have enough fresh water. Water reclamation, desalinization, and other technologies around water are key here.

Geopolitically, there will be water wars. Watch nations where major rivers cross borders, and the up-river nations will want to take “more.” Canada, which has most of the world’s lakes, is in great danger from America, who will want that water in amounts and at prices for which we should not settle. Meanwhile, the US may drain the Great Lakes faster than they are replenished.

The mass migrations of this period will make the current “immigration crisis” look tame. It will be worse even than it is for the countries taking the biggest groups now (none of which are European).

Sea stocks are collapsed already, and will collapse past commercial fishing viability. Essentially, all the fish you eat will be “farmed.” Ocean acidification has killed the Great Barrier Reef, but the greater risk is that the ocean’s ability to absorb carbon may effectively end.

Combined with our continued deforestation, the lack of carbon fixing capacity, along with these various vicious cycles, could lead to a runaway climate change worse than virtually all the models I’ve seen are predicting.

If we had sense, we would be transitioning from conventional to intensive agriculture NOW (well, ok, 15 years ago minimum). We have spare workers–we do not have a spare Amazon. If we had sense, we would pay Brazilians and other mass deforestors more to stop what they’re doing than they get from continuing. We must mass-reforest, and re-wild land, and do so NOW.

This is also to avoid collapse of the biosphere, an event which is within the realm of possibility. If such a collapse occurs, humanity will go with it.

Our continuing reliance on very non-competitive markets to create what we need in time may wind up dooming our race. Markets are great and useful in this situation, but market support (such as was used for decades to create the computer industry) can jumpstart industries, cutting years to decades off the time it takes for prices and costs to drop sufficiently for mass adoption.

However, in general, the way we do Capitalism is going to have to change. Capitalism may need to be replaced with something better, but even if it continues the vast waste must end. The doctrine of planned obsolesence, for example, must go.

A world where we aren’t constantly producing crap we either never needed in the first place or wouldn’t need if we allowed engineers to design products to last will be a much nicer place to live, anyway. Yes, there’s a lot of work to be done to mitigate the coming disasters, but there is so much work going on which shouldn’t be done at all that we would most likely wind up working less and living better.

Those who survive, anyway.

The Age of Oil is coming to end. Did it last 20 years too long? Is the Age of Humanity also to end?

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Dutch Disease

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On December 11, 2015

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In light of the price of oil collapsing to $36/barrel ($80 is the break even point for most Oil Sands oil in Canada), I thought it was worth revisiting this article on Dutch Disease, originally published in May of 2012. I’ll have more on the Canadian economy and how oil prices are affecting everyone else soon.

It seems a lot of people don’t know what Dutch Disease is. Here’s the short:

Dutch disease is when you sell a lot of resources, which increases your currency’s value. So if you discover a lot of oil, or oil becomes a lot more valuable due to a shortage, but you can produce tons of oil from the tar sands, you can experience Dutch Disease.

The consequence of your currency being worth more is that products you manufacture cost more for anyone outside your country. So, if Americans want to buy Canadian goods, it costs them more when the US and Canadian dollar are trading at about even than when the Canadian dollar cost only 80 cents American.

If something costs more, people will buy less of it, or they will stop buying from you entirely and buy from someone else who is cheaper.

What happened to the Dutch is that their manufacturing sector collapsed. What Canada’s NDP leader Thomas Mulcair is saying is that Canada is suffering from Dutch Disease. He says we are losing manufacturing jobs due to the higher value on the Canadian dollar caused by all the oil from the oil sands we’re shipping out of the country, which raises value of the Canadian dollar.

I observed, many years ago, that the Canadian dollar had become a petro-currency. This is now inarguable.

It is also virtually inarguable that Canada is losing manufacturing jobs due to the higher dollar. It’s just arithmetic. Unless you think price has no effect on sales, you can’t argue otherwise without creating excessive contortions.

Does this mean that Canada is suffering from Dutch Disease? It depends where you put the margin. One study, funded by the federal government, found that:

“We show that between 33 and 39 per cent of the manufacturing employment loss that was due to exchange rate developments between 2002 and 2007 is related to the Dutch Disease phenomenon,” says the study.

I am unaware of studies covering the subsequent period, and I don’t know if the study was correct. Personally, I suspect it’s higher than that, but I haven’t run the numbers myself and I probably won’t (unless the Feds want to pay for my time).

But, again, the argument is simple enough. Unless you don’t believe in higher prices reducing sales, and reduced sales leading to job losses and company closures, you can’t really argue that the oil sands aren’t hurting manufacturing. It’s just that simple.

The next question is: “Should we do anything about it?”

Canada has traditionally had what is known as a “mixed economy.” When it comes to exports, we have both manufacturing and resource sectors, the latter of which oil is just one part. Resources experience boom and bust cycles. There is always another resource bust around the corner. Always. No resource’s prices stay high forever. When resources are doing well, they support our exports.When they’re doing badly, manufacturing takes up the slack.

As with any such oscillating economy, what should be done is that when one is booming, it subsidizes the other. We don’t want manufacturing destroyed during high resource price periods, because there will always be low resource prices in the future. So we tax the high resource prices and we subsidize manufacturing. When resource prices collapse, the manufacturing sector subsidizes the resource sector.

If we allow the manufacturing sector to become badly damaged, it cannot be easily rebuilt when resource prices collapse. Nations built entirely on resources are, and will always be, subject to economic collapse when the resource prices collapse, and, again, they always do–the only question is when.

Mulcair has also talked about value-add and that’s worth discussing. Shipping raw oil, raw logs, and unprocessed fish means you get the lowest prices possible and less jobs. Value-add means you refine the oil in Canada and sell it. You turn the logs into paper or 2x4s in Canada. You can smoke the salmon in Canada. This provides jobs and the end goods sell for more. It may be that processing “in-house” will increase the price slightly compared to outsourcing the processing to the US or China, but that costs less sales than it would for the equivalent manufactured item.

Why? Because resources are finite. There is only so much oil in the world at any given price point. There are only so many salmon, especially wild salmon. There are only so many trees, especially trees that are good for construction-grade timber.  Other countries will generally buy these resources anyway, because there is nowhere else to get the product. Sales may decline slightly, but profit often increases and so do the number of Canadian jobs.

When there is a bottleneck, as there is in oil production right now, especially, you can say, “No, we’re going to process it here.” If other nations don’t like it, tough. They aren’t going to stop heating their houses and driving their cars to their suburban homes. That is not happening.

So if you can extract a bit less oil, make more money overall, and have more jobs, why not do so? That’s what Mulcair means by “value-add.”

Finally, let’s move to cap and trade, which is what Mulcair wants to do with the tar sands. Cap and trade means you cap the amount of carbon emissions allowed by oil sands extraction, and you allow people to buy and sell the rights to make those emissions. You also tax those trades and emissions. You then use the money earned to subsidize manufacturing, research, and whatever else will support the future of the country when oil prices collapse, which, again, they will, because resource booms always end, it is an existential certainty.

Once upon a time, the Canadian Maritimes were a resource boom area. They sold fish, but, more importantly, they sold trees which could be made into masts, an incredibly valuable commodity. Today, with pardon to my Maritime brethren, the Maritimes are in semi-permanent depression.

This is the future that Alberta faces. They should want to be taxed, and they should want that money reinvested in other sectors, because those sectors are Alberta’s future long after the oil boom ends. And the massive environmental destruction is incurring massive costs with which future generations will have to contend, long after the boom days are gone.

Canada’s economy has worked, and we have not become Argentina (the country we would have been compared to before WWII) because of our mixed economy. It is worth protecting, and it is necessary to protect, if we want prosperity not now, but ten years, 20 years, or 50 years from now. If we care about our children, or even ourselves 20 years from now, we must deal with the effects that the massive exploitation of the oil sands is having on our economy and our environment.

Dutch disease is just arithmetic. It is real, and it can devastate the future of a country. Non-renewable resources are the epitome of found money, and what you do with found money is invest it in something productive–something that will yield a return, something which will support you once that found money runs out.

This is Canada, and this is our future we’re talking about. If we actually care about the children we claim to love, we’ll acknowledge the simple arithmetic of what a high dollar does, and we’ll act to mitigate the damage.

(Update: Antonia Zerbisias had an article in February on Dutch Disease studies which is worth reading.)

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Putin’s Secret Intent and How It Relates to Syria

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On November 13, 2015

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Apparently Putin is difficult to understand:

Vladimir Putin Official Portrait

Vladimir Putin

The North Atlantic Treaty Organization, created in 1949 to contain the Soviet Union, said it’s not sure what Putin is trying to achieve with either his actions in Ukraine or his weapons program.

“We cannot fully grasp Putin’s intent,” the alliance’s top military commander, U.S. Air Force General Philip Breedlove, told Congress in April, according to the Defense Department’s website. “What we can do is learn from his actions, and what we see suggests growing Russian capabilities, significant military modernization and an ambitious strategic intent.”

I first studied economics back in the early eighties. The discussion of trade was perfunctory; trade was not considered particularly important to the US economy because, with the exception of oil, the US could produce pretty much everything it needed, and–just as importantly–most of what it wanted.

Modern orthodoxy maintains that trade makes one strong. This is fundamentally incorrect. Trade is necessary at times as a bootstrap up for industry, or to get things you truly cannot make yourself, but it can make you weak. The more you trade, the more vulnerable you are.

Russia is vulnerable. Putin turned Russia around by concentrating on hydrocarbon production and selling it to foreigners.

Commodity production is always a bad deal. No matter how rich it makes you, commodity prices are always boom or bust, and are always subject to technological obsolesence.

So, Russian defense spending:

Defense and the related category of national security and law enforcement now eat up 34 percent of the budget, more than double the ratio in 2010.

…

Putin signed documents creating what he called the “industrial battalions” program, which will give thousands of draftees the option of working in defense enterprises instead of joining the regular military.

After years of chronic funding problems for weapons makers, Russia has started to prepay for the goods and services it buys from the more than 1,300 organizations and 2.5 million people that make up the defense industry.

This is not hard to understand.

What part of Russian industry is most technologically advanced and does the world demand the most?

Weapons.

Russia needs to diversify what it exports. Military goods are the obvious market for which to do so. Really, there are only three sources for military goods: the West, China, and Russia.

Russia appears to have begun this strategy about 2012, before the oil price crash, the Ukraine, and so forth, but their vulnerability to oil price crashes was obvious. That the US was continuing to try to destabilize Russia’s near abroad and draw it into NATO was obvious as well.

Now, Syria.

What’s the problem with buying your weapons from the US?

Unless you’re a core US ally, the US is unreliable. If your government changes in ways the US doesn’t like, or if you are an enemy of  US core partners (Israel, Saudi Arabia, etc.), they will cut you off from parts and ammunition at the drop of a hat, as well as canceling pre-paid orders.

But: The US was able to say that they had the best equipment. No one could compete.

What is happening in Syria is a demonstration that Russia can be counted on to help its allies—meaning its customers. It is a demonstration that Russia’s new weapons, and particularly its cruise missiles and airpower, are comparable to US product, and maybe, even in the case of its most advanced fighter/bomber, better.

It is a demonstration that if you buy Russian you aren’t buying crap that US-supplied forces can roll right over any more.

The Syria issue is a trade policy issue.

That is not to deny the geopolitical element to it, there certainly is one. But most analysts are not catching that this is also economic policy in action.

Shove Russia against a wall, impose sanctions, drive down the price of oil, and of course they will reach for what else they do well, and can sell.

The failure to anticipate this, the failure to understand this at the highest possible levels of NATO, when Putin had been telegraphing his strategy for years, is a terrible indictment of our “leadership”‘s competence.

Now, add to first class armaments and reliable supplies, a proper payments and banking system with China’s aid. Add China’s industrial goods and willingness to build infrastructure, and you have a second vertical capable of supplying virtually everything the West can do, and one which doesn’t care about the internal politics outside its near-abroad.

That new world isn’t quite here yet, but it’s almost.

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The Iranian Nuclear Deal

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On July 18, 2015

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This is a Good Thing™.

I suspect, however, that one of the main reasons for it is to bring Iranian oil back online fully, thus pushing down the price of oil further, which will damage many countries the US wants damaged and will help the US economy (no, the US is not yet an oilarchy itself, low oil prices are still better).

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Syriza Wins in Greece: What It Must Do

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On July 13, 2015

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(Given the way Greek financial negotiations have played out, I think my first take is timely/relevant, and have restored it to the top. Originally published in January. -Ian)

It would have been better if they won last time, Greece is pretty fully looted now. But Greeks thought they were Europeans, and didn’t realize the contempt that French and Germans had for them, nor how willing they were to kill and impoverish large numbers of them.

There is a great deal of hand-wringing in conventional circles over the Syriza win. They are worried about the Greeks exiting the Euro (Grexit) and defaulting on their debt.

Greece should do both of these things, or something close to it. (Rolling the debt over into 100 year bonds at 1 percent, for example.) Greek debt is at a level which is effectively impossible to pay off and has been made much, much worse by all the “aid packages” and “bailouts” given by their “fellow” Europeans. (a.k.a., they should have defaulted years ago.)

As for the Euro, Greece can’t print it, and Greece will need to print money.

I worry that Syriza is serious about negotiating on the debt. There is essentially no chance the Troika (well, really, Germany) will give them acceptable terms on a write-down. Negotiations should be intended only to go on long enough to demonstrate that a good deal is not possible. While they are ongoing, the Greeks should be preparing for Grexit and repatriating all the resources they can. Since Greek debt is under foreign law, debt vultures will go to the courts to seize all foreign Greek assets once Greece does default or restructure its debt.

Greece needs to recognize that it will effectively be a financial pariah, unable to access Western money markets. It will have almost no hard currency, and no ability to buy goods which require hard currency.

This is a huge problem for Greece because it has neither oil nor the ability to feed itself. Syriza MUST have a plan to deal with both these problems. Neither is insurmountable.

For oil, Greece will simply have to make a deal with Russia, Venezuela and/or Iran. Greece will be a pariah state just like them, and they have oil. What does Greece have to offer? Well, sub voce, access to Greece. Greece will be out of the Euro, but it will still have borders with Europe. Once whatever you want into Europe is in Greece, it’s easy enough to get it into Europe. And anything those countries want from Europe, the Greeks can obtain and ship to them. Grey market, baby, and grey market finance, as well.

In terms of food, a deal must be made with a food surplus nation. I would suggest Argentina, which has plenty of food. (This is incorrect, Greece can feed itself, Greeks will just have to eat less imported foods.-Ian)

Remember that Greece has one of the largest merchant marines in the world. It has that to trade, and it has access to Europe to trade.

In addition, currency controls must be put on immediately and the borders must be secured against those trying to move goods out of the country (a.k.a., Greece’s useless rich).

Given that all this will cause Greece to be completely loathed in Washington, London, Berlin, and Paris, they may also wish to consider seizing much of whatever means of production remain in the country. If they want a reason, simply use the Lagarde list of Greek oligarchs who haven’t paid their taxes, and seize their back taxes—with plenty of interest.

The media is playing this as an anti-austerity vote, and it is. But voting anti-austerity for a country like Greece, which can’t feed itself, has no oil, and doesn’t have a lot of industry, is one thing, not being austere is another. If the Greeks want a decent life again, they will have to take on some of the most powerful nations in the world and at least fight to a draw.

Many nations are in the same boat as Greece: Russia, Iran, Venezuela, Argentina. Greece needs to make the necessary alliances with such countries and it needs to align with the rising Chinese block.

Doing this requires a psychological step that many Greeks may be unwilling to take: A recognition that their interests do not lie with Europe and an understanding that Europeans are willing to see them impoverished, homeless and dead. Greeks who are living in the past and think the EU is about prosperity for everyone in the EU need to learn otherwise.

If the Greeks are unwilling to be coldly pragmatic and give up their illusions about who they are, what their fellow Europeans are willing to do to them, and what their actual assets are, then Syriza will fail, and Greece will continue on their path of impoverishment.

I wish the Greeks all the best.

(26/01/15 – There is some dispute over whether the Greeks can leave the Euro and not the EU.  See this paper for a discussion — pp 26-29.)

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Humans to Go Extinct in Three, Two—

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On June 23, 2015

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So, a very conservative study on the rate of species going extinct has come up with the following:

Extinction Chart v06

One hundred and fourteen times faster than the normal background rate.

“If it is allowed to continue, life would take many millions of years to recover, and our species itself would likely disappear early on,” lead author Gerardo Ceballos of the Universidad Autonoma de Mexico said…

Cheerful.

This is the point where a sane species would be in a controlled panic.

Which brings us to Laudato Si. The obvious issue with Luadato Si is Pope Francis sticking to current church doctrine against birth control. It is incontrovertible that every person has a carrying load for the planet.

But Francis makes a great number of good points, starting with the fact that we are vastly wasteful. It is not that we have necessarily surpassed the Earth’s carrying capacity in theory (only in fact). Half the food in America, for example, is wasted. Suburbs are vastly wasteful. Lawns are idiocy. Most of our buildings use far more energy than they need to. Improved agricultural methods can produce up to ten times as much produce on the same amount of land, for less water. Urban indoor agriculture using LEDs is showing great promise. Centralized manufacturing, which requires concentrated power which cannot yet be provided by renewables could be decentralized even with out current tech, and within fifteen years or so we could radically decentralize it.

And so on.  There are more good ideas than one could possibly list. These ideas would allow us to support our current population on much less land and allow the environment to renew itself. We could massively reduce carbon output at the same time, stop overfishing the seas, and everyone would still be fed, have a place to live, and so on. Yes, most suburbs would be a thing of the past, but the question of “suburbs” vs. “human survival” shouldn’t be a hard one.

All of this would probably not be enough.

Yeah, sorry.

We’ve left it too late. The issue is the carbon and other hothouse gases already in the environment. They are so high that we will see release of methane from the arctic, both land and sea. This has already begun. It will continue. Even entirely stopping carbon tomorrow (which is impossible) likely wouldn’t be enough. Cutting carbon by half would definitely not be enough.

We needed to be acting back in the 1980s when climate change science first became overwhelmingly likely to be true.

We didn’t. An alien species studying our extinction, should it come to that, will only be able to conclude we did it to ourselves.

What I’m seeing is that we are on the wrong side of a self-reinforcing cycle.

We’re going to need geo-engineering. It’s messy and we’ll probably screw it up, but we don’t have much choice left.

Because there is a chance that even doing everything right, we’ll still go extinct (especially if we bork the oxygen cycle, a non-zero possibility), we need to be crashing biospheres. We’ve never made biospheres work before; we cannot create artificial environments cut off from the world which work. We need to.

That understanding will be very useful in any scenario–from cleanup of major, but not catastrophic, environmental damage, to triage on a crashing ecosystem, to saving a breeding population in a world which no longer supports humans.

A sane humanity, who self-governed in ways that made sense, and which was concerned with the welfare of their children, would have headed off most of this. A not-completely-insane humanity who had failed to take action before would now be making this the highest world priority.

We are doing neither.

Instead, our best and brightest are figuring out the best possible ways to serve ads, creating the most impressive mass-surveillance system the world has ever seen, and playing leveraged financial games which are resulting in austerity for much of the world. Destroying the human resources which we should be using to save ourselves (and so many other species, who have done nothing to “deserve” their extinction).

One can argue, and many will, that this is entirely the fault of our rulers. Maybe, maybe not, but it won’t matter when we’re all dead, and I’m not seeing widespread revolts because of mismanagement. And hey, if worse comes to worst, and enclaves are set up to save a small breeding population, remember, it’s the “leaders” who did most of the damage who will get into them.

You won’t. Your children won’t. You live or die with saving the Earth.

Probably you die.

But, then, most people probably figure they’ll die before the environmental collapse gets them. If they’re at least middle-aged, they’ll probably win that bet.

Their kids won’t. Too bad for them. Loved them enough to do everything except save their lives from a completely predictable threat.

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Oil=Water=Food

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On April 1, 2015

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One point which can’t be made enough about unconventional oil production is that it uses a TON of water.  Fracking, tar sands, shale all require water to work and a lot of it.

So even if it’s true that we have more than enough hydrocarbons to fry ourselves (as long as we’re willing to pay a premium for it), it’s a trade-off with water.  More oil = more water use.  Hydrocarbons are also key in agriculture, both for machinery and for fertilizer.

Oil=Water=Food

This problem has been thrown into sharp relief recently because of the California drought. On top of Nestle bottling water in California, agribusiness growing water intensive crops, fracking is draining resevoirs and aquifers as well.

This problem is going to continue. In coastal regions and continental regions which aren’t blocked by mountains, it’s at least theoretically possible we could move to desalinization plants on a massive scale, build canals, and move the water inland. But desalinization is still an extremely inefficient technology and canals running essentially uphill also require huge expenditures of energy.

Water, oil, agriculture, and suburban expansion (eating into naturally productive farmland which doesn’t require huge supplies of water from elsewhere) are all related issues.  We’re looking at genuine water shortages in large parts of the world as well as dust-bowls: Expect to see them in India, China, the US, and elsewhere.

There are solutions to these problems, but we should have been moving towards those solutions decades ago and we weren’t.  As a result, a lot of people are going to suffer and die who needn’t.

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