Discontinuity Ahead – Oil Limits will Adversely Affect the Economy

What will the world economy be like ten years from now? Or fifty years from now? Is it something that we can forecast by looking at the past, assuming that past tends will continue?

GDP Assuming 3pct Annual Growth

Figure 1

Most economists today seem to think we can rely heavily on past patterns. If we can really assume that the economy will grow at 3% per year (over and above inflationary increases), then in 50 years, GDP (Gross Domestic Product) will be 4.38 times as high as it is today. Economists might assume a 3.0% growth rate in a developed country, like the US, and a higher annual growth rate in a country like China, India or Brazil.

It seems to me that this standard view is incorrect. There is a substantial chance of a sudden shift toward a less favorable growth pattern (which I refer to as a “discontinuity”). This possibility is not obvious though, if a person bases his models on the growth that took place between 1940 and 2000, as economists today often seem to. In this post, I describe an alternate view showing how such discontinuities can occur.   

The Current (or Recent Past) “Standard” View of the Economy

Most economists today seem to believe a whole collection of theories and models that basically support the view that humans (and in particular, politicians and Federal Reserve Officials) are in charge of the economy. With this view, natural resources are not very important. If there is a shortage, either (a) alternatives will take over quickly or (b) prices will rise for a short time, leading to more extraction, thereby eliminating the shortage.

Productivity is expected generally to trend upward. In other words, the expectation is that there will be increasing output per unit of input. Part of this increase in output comes from improvement in technology. This improvement in productivity is expected to lead to increased profits for companies and higher wages for workers.

If the economy is not performing optimally, demand (that is, the ability and willingness to buy more “stuff”) can be increased through deficit spending or by very low interest rates, or both. For example, deficit spending might be used to give a worker who has been laid off unemployment benefits, so he can buy food, clothing, and other goods and services. (Without money, the laid-off worker has no demand, according to the standard economic definition.) Very low interest rates tend to make a new car or new home more affordable, or might allow an oil and gas producer to drill more wells inexpensively.

Debt, or “leverage” as it is often called, seems to be seen as beneficial. Debt is seen to being able to increase indefinitely. The primary measure of how the economy is functioning, GDP, completely ignores debt. For example, if a person goes to college for a year, tuition will be part of GDP, whether or not the individual takes out a loan to pay tuition, room, and board. If the college builds a football stadium, the amount paid to the contractors for building the stadium is part of GDP, but the loan the college takes out to finance the stadium is not considered in the calculation.

Needless to say, if politicians want to increase GDP, the easiest way to do so is to encourage everyone to “max out all their credit cards,” or do the equivalent with other types of loans. Of course, doing this in the early 2000s helped lead to the subprime debt bubble–not exactly the effect one wants.

With the foregoing view of the economy, economists can talk about substituting one energy source for another over a very long time frame. The reason economists can think in these very long time frames is because the economy is seen to always be growing, thanks to productivity growth, more human laborers, technology growth, and occasional stimulus, if needed. In this model, there is nothing to challenge the growth of the economy, so no turning points are anticipated. Thus, we can undertake very long projects, such as trying to swap low-carbon energy sources for other energy sources.

Discontinuity: Why might economic growth “misbehave” going forward?

We are aware of many situations in the physical world where there is a sudden change of behavior. We pull on a rubber band for a while. At first it stretches; then it breaks. We skate on thin ice for a while. At first the skating goes fine; then we fall through the ice, into the water. We throw a ball up in the air. It rises for a while; then it stops and falls back to the ground.

Another example is a little closer to the economic growth model we are looking at here. Yeast transforms sugars in grape juice into alcohol. Alcohol is in fact a waste product, made by the yeast, as it metabolizes the sugar. At some point, the concentration of alcohol in the wine becomes too high for the yeast to survive, and the yeast die off. Growth of yeast population, instead of continuing to rise rapidly, suddenly turns negative and the population falls to zero.

In a model such as the wine and yeast model, it is not until the pollution level becomes too high that the adverse effects are seen. We can encounter somewhat of a similar problem with our economy, with pollution of various kinds.

A similar turning point can appear with resource extraction of various kinds, such as oil. When we begin extracting resources, the cost of extracting those resources is not very high. In fact, the cost of extracting the resource may even fall, with greater use of fossil fuels and improved technology. This growing productivity enables a rising standard of living.

At some point, however, the cost of extraction begins to rise, because the easy-to-extract resource (such as oil) has already been extracted. This higher cost of extraction may set up negative feedback loops, throughout the economy. This occurs partly because resources must be diverted toward oil extraction, rather than being used for other productive purposes. From the point of view of the worker, he finds it necessary to lower his standard of living, because he spends more of his total income on the same (or a lesser amount) of oil, leaving less income for other purchases.

The original factors of production were land, labor and capital. This simplified model did not consider natural resources, or pollution caused in extracting and using the natural resources, or the role of debt. It also did not consider the fact that we live in a finite world, so that even if growth can go on for a while, there are likely to be barriers at some point. If the economic model economists are using misses important variables, it is easy for the model to miss problems that haven’t come up to date, but can be expected to come up in the future. The model may have, in fact, worked well in the 1940 to 2000 period, because resource limits did not start raising resource prices significantly until after the year 2000.

A related issue is that if economists are overly convinced that their models are correct, they may miss seeing important trends that suggest their models are incomplete.

Figure 2. US Ten Year Average Real GDP growth, based on BEA data.

Figure 2. US Ten Year Average Real GDP growth, based on BEA data.

If we look at the trend line related to US GDP growth (Figure 2), we see that there is a decided downward trend to it. While an estimate of 3% per year going forward might have made sense based on the experience through 2000, this estimate seems increasingly  less likely, based on recent experience. In fact, if experience since 2010 were included, it would further emphasize the downward trend. The IMF projects that US economic growth in 2013 will amount to 1.7%, and for advanced economies together will amount to 1.2%.

Besides slower than expected economic growth, there are many other parts of the theory that are not holding up very well now, either. Wages of the common worker have not been rising as planned. Oil prices have not come down, even with considerable success in US oil production. The Federal Reserve has needed to keep interest rates very low, and even with that, the economy is limping along. The Federal Reserve keeps printing money. In fact, it announced today that it is continuing its Quantitative Easing at $85 billion a month, because the economy is not yet doing well enough to get along without it.

What is Missing in Economic Models

What is missing is a broader view of how the economy really works. The economy is far more than land, labor, and capital. The economy includes a huge number of players–governments, businesses, and individuals, each deciding what action to take based on how the system behaves at a given time–for example, what products and services are available at a given time, at what prices. Resources of many different types play a role in this system, as does pollution, and the cost of mitigating this pollution. This complex economy has been built up over the years, by the gradual addition of new layers of businesses, governments, government rules, and consumers. Unneeded older parts drop out, as new parts are added. A system such as this is sometimes referred to as a Complex Adaptive System.

There are two parts of this system that play a special role. One part is energy products that are needed to make anything “happen.” These energy products are of many different types, including oil, natural gas, coal, geothermal energy, captured wind energy, even food. For example, if goods are to be transported, some sort of energy product is needed. It might be oil used to fuel a car or truck. Or it might be food fed to a horse pulling a cart. It might even be food fed to a human being, who is then able to carry the goods as he walks.

As another example, if heat is to used for some process such as baking, some energy product is required. It might be heat from burning oil or coal, or it might be heat from the sun captured by a solar cooker. Energy for heat might even come from food. For example, a chicken, after eating appropriate food, is able to sit on an egg and provide heat to incubate it.

Another critical part of the system, besides energy resources, is the financial system. The financial system ties everything else together through its pricing mechanism. By knowing prices, we can tell how society values many very different types of resources and products (such as a bushel of wheat, a barrel of oil, and an hour of a common laborer’s time). Because of its tie to all of the other resources, the financial system is likely to be one of the systems that is stressed earliest, if there is a major change to the system.

Besides tying the system together, money produced by the financial system also acts a “pseudo resource”. It is not the money itself that has value–it is the fact that it can be exchanged for a resource of real value, such as a bushel of wheat, a barrel of oil, or an hour of a common laborer’s time. When the amount of resources is not expanding rapidly, printing money can temporarily inject pseudo resources into the system, making things temporarily look better than they are. Of course, when this money printing stops, the temporary improvement is likely to disappear.

Oil Has Caused Recent Stresses to the Financial System

When recession hits, the financial system gives a hint that this networked system of businesses, governments, consumers, and resources is being stressed. What causes this stress on the financial system? Recently, evidence seems to suggest that rising oil prices are a major contributor.  For one thing, economist James Hamilton has shown that 10 out of the last 11 US recessions were associated with oil price spikes. He has also directly shown that the oil price in the run-up in the 2005-2008 period was sufficient to explain the Great Recession. I have also written an academic article called, Oil Supply Limits and the Continuing Financial Crisis.

Oil is part of the constellation of energy resources that allows things to happen within this complex networked system. It is not easy to substitute away from oil in the short term, because the cost of the vehicles and other equipment that we have today is extremely high. If we were to transition to other types of vehicles (say natural gas operated or electric), the cost of building new fueling stations and vehicles would be very high, and take many years. Customers would also find the new vehicles unaffordable, unless the old ones could be phased out as they wore out.

What Can Go Wrong In This More Complex System?

The problem with this more complex system is that everything depends on everything else. Things that seem obvious, such as how much oil reserves a company can expect to extract in the future, no longer are obvious, because the prices of resources can go down as well as up.  This happens because prices of resources depend upon (a) the amount buyers can afford to pay for these resources, as well as (b) how much it costs to extract the resources. If the cost of extracting resources increases, the question is whether workers will really be able to afford the cost of higher-priced resources.

There can also be conflict between the amount of debt outstanding and the amount of products (made from resources) available to repay that debt. There is no limit on debt issued, but the amount of resources extracted in a given year eventually slows down, as the inexpensive to extract resources are depleted.

Interest rates on debt are important as well. If interest rates remain very low, interest payments do not “squeeze” prospective buyers of goods too much, so they can afford additional goods. But if interest rates rise, then the financial situation changes at many points in the system. The cost of buying homes and cars increases. The resale value of homes likely drops.

Another issue with the networked system that we are operating in is that shortages in one area tend to get transferred to other parts of the system, stressing the system as a whole. For example, when we discovered a few years ago that oil supply could not grow as rapidly as desired, we started using food crops (primarily corn and sugar) to produce ethanol, as a substitute for oil. When we did that, the additional demand for food tended to raise food prices. Thus the stresses from one part of the system were spread more broadly. This can be a temporary help to oil prices, but it can eventually lead to  widespread system failure.

Because of the interlinkages in the system, we should not be surprised if what looks like a problem in one part of the system–high oil prices–has an adverse impact on other parts of the system. The financial system, since it connects everything else together, would be especially likely to be  stressed. Governments, because they act as a safety system for unemployed workers, would also seem to be at risk.

We have many real-life examples of civilizations that grew for a time, then reached limits and collapsed. These civilizations were agricultural civilizations, so admittedly not exactly like ours. But the symptoms prior to collapse were disturbingly similar to the symptoms we are seeing today. As I have discussed previously, there was a growing disparity of wages between the common workers and the elite, and increasing use of debt. Food prices often spiked. Eventually, it was the inability of governments to collect enough taxes from increasingly impoverished workers that brought the system down. Workers also became more subject to disease, because low pay and high taxes did not allow for adequate nutrition. The collapse came over a period of years–typically 20 to 50 years.

We don’t know exactly what kind of discontinuity we are headed for, but we have some clues, based on the risks we are facing and on what happened in the past. The discontinuity will likely play out over a period of years. Financial systems and political systems are likely to be involved. Because of the networked nature of the system, it will not be just one type of energy that will be in short supply–more likely, there will be problems affecting nearly all types of energy.

I have been putting pieces of this story together over time. Some posts related to this story include the following:

Oil Prices Lead to Hard Financial Limits

Humans Seem to Need External Energy

The Long-Term Tie Between Energy Supply, Population, and the Economy

Energy and the Economy–Basic Principles and Feedback Loops

Reaching Limits in a Finite World

Oil Limits Reduce GDP Growth; Unwinding QE a Problem

Reaching Debt Limits

Inflation, Deflation, or Discontinuity?

Low Oil Prices Lead to Economic Peak Oil

Energy Products: Return on Investment is Already Too Low

Peak Oil Demand is Already a Huge Problem

How Oil Exporters Reach Financial Collapse

Networked Resources, Declining Quality and Peak Oil (Guest post by aeldric)

Human population overshoot–what went wrong?

Why Malthus Got His Forecast Wrong

Twelve Reasons Why Globalization is a Huge Problem

Reaching Oil Limits – New Paradigms are Needed

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to inadequate supply.
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119 Responses to Discontinuity Ahead – Oil Limits will Adversely Affect the Economy

  1. robindatta says:

    A steady-state economy is a constant RATE OF CONVERSION of resource into product through the application of harnessed and channelled energy. The “harnessing and channelling” is also known as “technology”. The continued conversion guarantees the depletion of those resources whose rate of conversion exceeds the rate of repletion. Manipulating symbols (“money”, “capital”, etc.) to camouflage this fact is the “science” of economics.

    Energy is also a resource, and to the extent that energy is used in production of product, the product carries the cost of that embodied energy (emergy).

    A growing economy is an CONTINUOUS INCREASE in the RATE OF CONVERSION resource into product. It is like the difference between moving at 32 feet per second (a little over 21 miles per hour) and falling at 32 feet per second per second (21 miles per hour only at the end of the FIRST SECOND).

    The “increasing output per unit of input” works only when there is a surfeit of resources and/or NET energy (the energy leftover from the total extracted energy after the energy needed to extract the next batch of energy is separated from the total). Technology can improve the “harnessing” and “channelling” of energy, but there are limits to such improvements.

    Money is the symbols that can be exchanged for resource and product. Deficit spending is the taking of a bite out of every dollar in existence to cobble together a fresh supply of dollars. It takes away buying power from many Peters and gives it to a few Pauls. It is the equivalent of going to the bank and legally stealing a bit of every dollar deposited there.

    Debt is a way of making more people look wealthier. The debtor who buys something on credit is seen as wealthier, as is the creditor.

    There are only two factors of production: resource and energy. All else are the means to manipulate these two factors to produce the product.

    All services are ultimately for products. The providers of services are remunerated in symbols exchangeable for products and services.

    Wastes and pollution act through degradation of the overall resource base: another form of resource depletion.

    The “new layers of businesses, governments, government rules, and consumers” are ploys and subterfuges in manipulating resource and energy to produce product; they are not the economy.

    “The financial system ties everything else together through its pricing mechanism.” A more accurate description would be : The financial system manipulates everything else through its pricing mechanism.

    Using food to produce a supplement to petroleum energy is only possible when a small fraction of individual income is spent on food: the increase in the price of food can easily be tolerated. With globalisation the costs are also placed on those to whom food takes up much of most of their income: they have to do with less or without.

    • “With globalisation the costs are also placed on those to whom food takes up much of most of their income: they have to do with less or without.”-RD

      Doing without FOOD is obviously impossible. You might do with less food or cheaper food if you are in a surplus situation such as most in the 1st world countries, but nobody anywhere can do without it entirely. It is inelastic at a certain point.

      So for 3rd world countries where the population was already at the economic breaking point, doing without food means CERTAIN DEATH. At such a point is when the country breaks into Civil War, as there is nothing left to lose anymore. In theory, when the Civil War knocks down the population low enough, they are back in surplus. However, that is only the case if the country is itself a food producer.

      If it is not, or it’s land is very poor in production, even the smaller population requires food import, and they still cannot afford it. Any revenue the country might have earned doing Value Added labor intensive work such as Clothing Manufacture gets decreased with the decreasing population available to work in such industry. So the population will continue to fall until it matches whatever the local ag can support, which in the case of Syria these days is not too much due to severe drought.

      One thing you can say about most people and societies is they do not walk willingly or peacefully into the Great Beyond. So as food escalates in price in these locations, they will increasingly become more violent in response to that. For now, this level of violent reaction to the ongoing collapse is mostly occurring in the 3rd world, but over time it is likely to migrate into the 1st world also.

      Coming Soon to a Theatre Near You.


      • my point exactly
        all this nonsense about a ‘gentle decline into a post industrial society’
        what a sick joke that is going to be.
        Professor James Lovelock summed it up better than anybody: “Man is a tribal carnivore, not a gentle gardener”
        It has reached the 1st world, but only in a mild form yet. Riots in Greece are fundamentally about declining living standards and by definition food costs rising pro rata. People are not actually starving yet. They will starve when the Greek government finally runs out of credit and the rest of the world can’t support them
        Greece is a foretaste of our future. The USA has 44 million on food aid, supported on government credit. As with Greece the US government will run out of (oil based) money, when they do, riots will shut down the country. The USA is fully armed, the result is certain: civil war will be just a magnified Syria, the rifts are already there along religious, ethnic, linguistic and geographic lines

        • xabier says:

          I think most contemporary ‘riots’ (Brazil, Spain, Sweden, Turkey, etc) are just self-indulgent displays by people who are, after all, still well-enough fed to run about and throw things, and foolish enough to be led by the nose into protests by those pulling the strings behind the scenes.

          It’s also been shown that the Spanish police used agents provocateurs to provoke rioting, quite amusing really (very bad disguises!) One gang of fools playing with another…….

          When real famine hits, surely people just struggle at first and then die, very young, old and sick first. For real famine riots to tear a country apart, the famine would have to be so extreme that security forces could not repress protest because they themselves are starving. It’s an interesting subject to speculate on, with a full stomach.

          However, food/inflation riots arising from a sudden economic shock might well topple governments in the near-term. Let’s all keep our eyes on Egypt…….

          • Just my speculation, but as our entire life support system depends on oil, the crisis will hit suddenly when the oilflow stops.
            I don’y mean decline
            I mean stop—there wont be a decline.
            Saudi produces a third of the world’s oil, yet is an unstable fundamentally corrupt economy run on pseudo – religious lines.
            Russia is another major producer run as a gangster economy
            Nigeria, barely holding itself together
            Iraq reverting back into anarchy
            The list goes on
            All it takes is one major producer (I’d go for Saudi) collapsing its economy and ceasing oil production, and the world economy goes down with it, practically overnight.because the other producers would : a.. tip over the edge into deeper anarchy themselves, or b try to grab the world economy by the throat by trebling the price of oil—which would have much the same effect.
            We eat oil, therefore with no oil, we have no food, or anything else for that matter.

            • Scott says:

              Hello, I guess that is what I meant by an uneven collapse, it starts in places like Egypt etc. I am not sure I agree with you that it is going to happen as suddenly as you may think. I am always amazed how long systems that are failing can be kept running or just kind of barely making it along.

              Gail’s Charts do tell the story, countries like Saudi may very well be non exporters in as little a 20 years and I think that is where the rubber meets the road.

              Obesity may no longer be a problem in the desert oil rich countries soon. And I agree with you, eventually it will spread into the Europe and the USA so called fist world countries too. The USA already does have some poverty here and food is getting more expensive year by year. My wife and I are retired now and just the two of us pay more for food now than when we had 3 kids at home eating with us say 10 years ago.

              The price of food has more than doubled in the USA in the last ten years it seems to me. We do have more options these days to buy organic and that will cost you even more, but yes surely we are spending a higher percentages of our income on food and that seems to be a worldwide phenomenon. We enjoyed spending so little on food for so many years and now it is suddenly taking a bigger bite out of our wallets. Another sign of world wide collapse.

              We will see if this just grinds on slowly or if we have an uprising, not seeing that anytime soon in the USA yet – as most are contently believing in the current system.

              Best Regards,


          • Maybe I didn’t make my ‘speculation’ clear (and it’s still no more than that), but right now Saudi is buying off millions of idle young men with freebies paid for by oil.
            That can’t last, it will get too expensive and will stop long before the oil runs out.
            When it does, those young men will revert to type and insist that their oil dripfeed is reconnected.
            it won’t be of course because all the oil has been sold to the infidel west, thus the ‘west’ will be seen as responsible for their problems.
            in the ensuing uprising, the saudi oilfields will cease production because you can’t produce oil in a warzone
            the rest of world production cant make up the saudi shortfall, so the world economy collapses.

    • You make a lot of excellent points. I like your characterization of technology as a way of “harvesting and channelling” energy. I like a lot of your other ideas as well.

      I think the only place we somewhat disagree is in a couple of your paragraphs near the end. With respect to,

      The “new layers of businesses, governments, government rules, and consumers” are ploys and subterfuges in manipulating resource and energy to produce product; they are not the economy.

      I am simply talking about the fact that governments keep making new laws, based on what they perceive to be happening. For example, governments make new laws to regulate fracking or securities trading. Businesses act based on watever laws, taxes, and subsidies that are in effect. In fact, new businesses are formed and others go out of business, based on what laws, taxes, and subsidies are in effect. Consumers decide what products to buy, based on the similar the same changing framework.

      I agree that if the government thinks things are not working out well financially, then it may manipulate the financial system, or make other law changes, to try to make things come out as hoped. But I think you are overstating the situation.

      With respect to

      “The financial system ties everything else together through its pricing mechanism.” A more accurate description would be : The financial system manipulates everything else through its pricing mechanism.

      I think both things can be true. The financial system acts in many ways, simultaneously. A networked system can be perceived in many ways, looked at from different directions.

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  6. xabier says:

    Let’s lighten up Doomers! Maybe Collapse will look like farce, not tragedy? Venezuela might be worth a glance these days:

    The President, Maduro (who recently campaigned with a little toy bird on his shoulder, claiming that it embodied the spirit of the deceased Chavez, thereby competing with the Argentinian President who sells cute dolls of herself from the Presidential Palace), claims that all internal problems are due to American espionage and sabotage.

    In response he’s nationalized large farming estates and – a masterstroke propelling Venezuela into surrealist territory – has ordered his troops to occupy the national toilet-paper factory, in the wake of extreme shortages.

    The military will ensure that government policy is being followed in the production, marketing and distribution of toilet-paper. So, they do teach something useful at Staff College after all…….

    It’s not stated whether they fought a fierce battle with undercover US Navy Seals posing as factory workers while sabotaging this important national asset.

    Well, it made my Monday: at least I’m not a factory worker explaining at the point of a gun why the production line isn’t rolling…..

  7. Don Stewart says:

    Dear Gail
    Did you see this on Zero Hedge?

    It seems that you have some company thinking that the financial world is going to crash first.

    Don Stewart
    PS Fisher is the head of the Dallas Federal Reserve Bank

  8. Chris Johnson says:

    To End of More:
    Your Saudi scenario appears to be a bit precipitous. You are predicting that within a short period of time Saudi’s production will drop from 12mBB/day to what? 6mBB/day? Like the last of the water draining from a bathtub and they only have a few? I’m not sure that scenario fits. A slightly more gradual decline might well occur.

    • No Chris, what I am suggesting (and it is a suggestion based on the current scenario throughout the middle east) is that production will stop through internal violence when the ‘freebies’ stop and millions of young men realise their good life is over.
      Right now, priveleged Saudis ship their Lamborginis to the UK to drive them round the streets of London in displays of excess, that will stop sooner rather than later, as will the oil fuelled aircon that makes life in Saudi possible for their excess population (the key factor in all this)
      The oil will never run out, production will cease through fighting over what’s left by deluded individuals in denial of reality, convinced that geology and climate is subject to religion and politics.

  9. Don Stewart says:

    Dear Gail and Others
    Here is a link to a January, 2013 farm conference in North Dakota. The first two videos are 30 minutes each. I think you will find them exceptionally informative:


    I suggest that you think about the following issues:
    1. If we greatly reduce the use of oil, will the primary production (i.e., in the field) necessarily decrease, based on Paul Brown’s results? What sorts of changes has Paul Brown made that other farmers would have to make?
    2. If Paul Brown is able to achieve 12 percent soil carbon content, what effect does that have on the climate change issue? What connection is there between the increased biological activity on Paul Brown’s farm and carbon sequestration and climate change?
    3. Paul Brown presents some evidence that he is making more money than the average farmer. What he is doing is also more labor intensive. Does this suggest to you that agriculture might be on the verge of reversing Rusty Butz’ mantra of ‘get big or get out’.
    4. Do you think that older farmers will be able to change, or will it require a new generation?
    5. Do you think that, if oil prices continue to increase, which increases the price of fossil fuel based inputs, then farmers who are doing chemical farming will simply go bankrupt?
    6. Do you think that the Multinationals, which currently control the Universities, (according to Paul Brown), will be able to stifle biological agriculture? I would add that they also absolutely control the US Government…the UN still retains some independence.
    7. Do you like the way that Jay Fuhrer deals with the climate change issue? (I don’t care whether you believe in it or not, we need the carbon in the soil, not in the air.)
    8. What would be the financial implications if farmers rapidly adopted biological farming? The Multinationals would be hurting, GDP would decline, farmers would make more money and could more easily pay off their debts.
    9. If you are an expert on the subject, feel free to tell us whether similar ideas are a good idea in the humid East or the desert Southwest or seasonally dry Cascadia.

    Don Stewart

    • Scott says:

      Hi Don, I have always wonder about that, whether we could change over to a more sustainable permaculture/organic type farming using less chemicals. The problem I had with our own little garden experiment was on the second year I did not add that much new fresh compost to our gardens and by the second year they needed fertilizer and even then not same crop we had the first year with the newly composted gardens. So we had to add fertilizer. Next year I am planning to haul in more good compost to make a better garden.

      So I learned that you really need to renew these every year which involves moving lots of materials which energy and equipment. Farmers these days seem to have bypassed that by spraying chemicals on their crops but we all know this stuff is slowly killing us all.

      I am not sure what the answer is to this as surely we need to move all this stuff around somehow and we surely also cannot feed 8-10 billion people with wheel barrows or can we? Perhaps we could if all the workers in the world left their offices and joined hands in the fields, that may be what it takes, but then again I do not see that happening either.

      I have never been a fan of current farming practices, they do not even leave a hedge row for the critters and birds these day partly out of fear of germs like E coli.

      And not to mention all of these companies making huge profits on chemicals mostly derived from oil. I also imagine these chemicals will get more expensive as oil/gas depletes which will keep food prices rising, perhaps someday people will make the change over out of necessity, but not likely before crises hits. I would like to see the change over now, but I do not see it any time soon.

      Kind Regards to all,

      • Don Stewart says:

        I don’t think he makes much compost at all. It’s all about cover crops and grazing animals and stubble and stuff. He may make a little compost for things like seed starting, but mostly he is a farm guy. These guys are growing the fertility right where they need it.

        He is in a relatively dry area. So he doesn’t have reliable moisture to help with decomposition. Which is where passing the forage through the animal and turning it into manure fits in. The manure will be quickly taken underground by dung beetles. So he’s getting the carbon and nitrogen underground quickly.

        Before you get more heavily into compost, I suggest you check carefully for anyone around you who is mostly using cover crops and rotationally grazed animals.

        Don Stewart

        • Scott says:

          Thanks Don, I get your point I have been trying to garden without farm animals so we have to bring everything in. The type of farming you discuss will help if the world embraces it. Hard for the average home owner to do much of it, but we can do a little on a small scale. I will look into these things you discuss.

          Our problem is we already have four pets and the thought of taking on livestock will be a commitment although I did buy a chicken coup which could supply some good stuff for the gardens if I got chickens. I still not have set it up yet, but have it ready just in case I need to as food is getting expensive. But you have to buy all the feed and keep that in stock when you have lots of animals. Butchering them is the tough part for many people, as most small plot country homeowners do not have that talent, we love to eat them, but hate to butcher them and having them for a few years they become like pets..

          When I was a kid I remember my dad would let our old chickens go by a spring and let the coyotes get them instead of butchering them. I guess eventually people will need to get a bit tougher as times get tougher and start killing our own farm animals for food.


        • Scott says:

          Hello Don, the cover crops you discuss I will look into. I guess what these do is take over space during the down time and squeeze out the weeds and provided nutrients to the soil. Here in Oregon, it gets cold and rainy and weeds just grow in our growing areas until we till the soils in the spring, so if we scattered some seeds of something to grow instead of weeds in the winter, it may help?


          • Don Stewart says:

            What works in North Dakota won’t necessarily work in Oregon. For one thing, you have a wet winter, while North Dakota is frozen; you have a distinct wet season and a distinct dry season, while North Dakota gets precip all year.

            That said, take a look at his talk again. About 3 minutes in you see an inverted pyramid. At the bottom is tillage, which everyone agrees destroys the land. Next up is no-till, which he describes as ‘a good idea 20 years ago, but we need to move on’. No-till is generally what you do with a heavy dose of Round-Up. The Round-Up kills most all of the soil biology. Maybe the slides showing the diversity of the soil biology that these guys are achieving in North Dakota compared to the absence of soil biology in a corn field in Iowa is in the first talk. It is a stark contrast. Next up the pyramid are no-till with a diverse rotation of cash crops and then no-till with cover crops. At the top of his pyramid is what he calls Holistic land regeneration achieved by focusing on soil health, utilizing integration of biological diversity. You will understand better what that means as you make your way through his slides.

            He relabels ‘cover crop’ to ‘biological primer’, because the crops are not only covering the soil, they are specifically chosen to feed the soil biology. Later on you will see a slide with a whole bunch of plants in the biological primer. So it begins to look more like a native prairie rather than a field of alfalfa.

            After the animals move through, you are left with a lot of litter on the soil. That litter has been compacted with the hooves of the heavy cows, and is in close contact with the soil. Much of the nutrients that the cows ate reappear as dung, which is taken into the soil by dung beetles. He seeds directly into the litter…there is no tillage and there aren’t any weeds.

            Look at the slide labeled Piss Test. This is a conventional soil test which indicates that there is not enough nitrogen to grow a crop. (I suspect the name he gives the test comes from a time-honored Midwestern expression called ‘not worth a piss’.) Then he shows you the healthy corn that grew in this field with no synthetic fertilizer. So where did the nitrogen come from? It came from the soil biology. There is actually plenty of capacity in the soil to supply nitrogen to the corn because of the biological life in the soil. He shows you the Ward test which indicates that the corn is adequate or high in every single nutrient.

            Look at the slide which shows the red and green bars indicating fertility by various factors. The rotationally grazed field is significantly more fertile than a simple crop rotation field.

            Finally, look at the slides which show the progress of his vegetable field. He plants it directly into the litter. 70 different kinds of plants, as I remember. Which turns on its head everything you thought you knew about rototillers and straight lines.

            If this sounds too good to be true, I advise caution. You are not nearly as experienced as he is, and you are farming in a different place. Try to find somebody near you who is similarly situated and who is pursuing biological farming.

            As to the need for large grazing animals. You will notice that he says that ‘unfortunately’ animals are necessary (or maybe somebody else said it and I am confused). Why would somebody from North Dakota think animals are ‘unfortunate’. Back in the good old days farmers did a rotation called corn, beans, and hogs. They grew corn and soybeans and fed it to hogs right on the farm and then sold the hogs. It was called C, B, & H. When the hogs went into Confined Animal Feeding Operations, the farmer didn’t need to be around except when the row crops were growing, so they started the C, B, and F rotation with the F standing for Florida. Once a farmers gets animals, they are tied to the land in pretty strict ways. You notice that he was in Hawaii. How did he manage that, if he has animals? Perhaps he resurrected an ancient rural custom called ‘work trades’. Each neighbor looked after the others animals when they went to town or were traveling. You can find written records from 150 years ago at the old farms around here. Either that or perhaps he has a hired hand.

            The large grazers co-evolved with the perennial grasslands on the Plains. The Plains are too dry for real forests, so the grasses would degrade slowly. By pushing the grass litter into the soil with their hooves, or at least into close contact with the soil, the animals speed up the decomposition of the litter by the soil food web. They are, in effect, making the compost you want. I suppose that your area wants to be a forest, not a prairie. So things may work differently. Again, some local person will be your best guide.

            Good luck with it…Don Stewart

      • xabier says:


        Age with you there. When I see a farmworker (usually a contract worker not living here) ‘trimming’ a hedge with a mechanical flail, I always feel they should be getting that treatment themselves. It’s heartbreaking to see. From that point of view, I can’t wait for the power to run out……

        Then again, as I’ve said before I am being persecuted here in my village for my beautiful hedges, full of birds, insects and fruit. The place was humming with life this Spring, and this Autumn looks good for berries and rose-hips. Well, I shall just plant some more, and they will have to deal with it!

    • xabier says:


      Big Agriculture = chemicals and minimum wage immigrant labour. No dignity left to man, and the destruction of the soil.

      There was a perfectly disgusting individual from one of the big industrial agriculture companies in Ireland and England on the radio the other day, and he said without any shame: ‘We need to get rid of all the small farms, they’re no good at all.’

      What a pity one can’t get at them. I’m sure he never so much as gets his boots muddy.

    • I see why the problems occur:

      Sudan lost billions of dollars in oil receipts when South Sudan gained independence two years ago, taking with it about 75 percent of the formerly united country’s crude production.

      Since then Sudan has been plagued by inflation, a weakened currency and a severe shortage of dollars to pay for imports

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