My primary objection to the coverage of the information I presented to the Venture Southland committee earlier this week in the Southland Times this week has 2 parts to it. Firstly, it fails entirely to present my main point, which is disappointing as it’s something I feel very strongly needs more public coverage.
Secondly, the editorial where my name is mentioned in relation to a tiny part of my original submission (industrial hemp growing) is factually inaccurate, and I feel the misleading editorial title (‘Dairy vs Hemp’) attempts to substantially misrepresent what I’m about and what I’m advocating for, potentially alienating a good proportion of Southlanders, who rightly would point out that dairy is currently an essential part of the Southland economy.
I’m reposting my entire spoken submission to the council here to leave no room for doubt on that matter:
I’d like to thank you for this opportunity to speak to my submission. I’m going to focus on the first point in my submission, the question of whether chasing further economic growth, in established industries, is desirable. Actually, I’ll leave you to make up your own minds on this, as I’d actually like to look behind the question at an underlying assumption: Whether economic growth is possible, and what is probably going to happen in the next few years?
I’ve brought a printed handout with me that has the graphics that I’m presenting here, and links to further resources that will allow you to get a more in depth picture than I’m able to present in 10 minutes.
A bit about me: I’m a chartered professional engineer with a background in built environment engineering, both as a designer and energy auditor, something I also teach at SIT to the 3rd year Environmental Management students. I’ve been involved in all manner of construction projects from a $5000 shower block refurbishment, to $1,000,000,000 dollar office and retail developments in the City of London, in various capacities from design engineer right through to team leader and site engineer. I’ve been involved in cutting edge ‘sustainable’ design, from passive solar schools through to an 1100kW ground source heat pump system. I’m also involved in small business throught the agency for Magicseal for Southland / Otago, and I am a founder of the Love Local charitable trust (http://www.lovelocal.org.nz).
Having decided to make Southland home in 2010, I want to see this region succeed to its full potential. I’ve spent a good proportion of the last 5 years or so reading in depth on the actual challenges we face in the coming decade, and I would like to present to you on those challenges to give you more context for the question I pose regarding economic growth. I’m being brief to stay within my allotted time, but I would welcome the opportunity to discuss in more detail any of the information that I present today. Please just call or email me. I want to help you understand this.
BEng(Hons) CEng MCIBSE MEI
Consultant – Schema Consulting Limited
m: 021 209 6286 p: 03 221 7487
Global Energy Consumption – a historic perspective
You can see from the above chart how much we have expanded our consumption of energy. The chart below shows this process on a longer timescale. Not that the presupposition that many models still seem to make is that energy consumption growth can continue indefinitely (throught technological ‘advances’ such as nuclear).
Oil limits are a kind of limit we often hear concerns about. Being able to drill oil wells at all and refine the oil into products of many kinds requires a complex economy, which we’ve achieved. In fact, the big issue has been whether the extraction can be done in a sufficiently cost-effective manner that the whole economic system can be supported.
A major issue at this point is the fact that most of the easy-to-extract oil is already under development, so companies that want to develop new projects need to move on to locations that are more difficult and expensive to extract (Bloomberg, 2007). According to oil industry consultant Steven Kopits, the cost of one major category of oil production expenses increased by an average of 10.9% per year between 1999 and 2013. In the period between 1985 and 1999, these same expenses increased by 0.9% per year (Kopits, 2014) (Tverberg, 2014). This has led to a doubling of the capital required annually to maintain production at current levels. The situation of the economy becoming less and less efficient at producing oil is called diminishing returns. Paraphrased from:http://bit.ly/TOXvkL
Oil and Gas Resource Volume Versus Resource Quality. This graphic illustrates the relationship of in situ resource volumes to the distribution of conventional and unconventional accumulations, and the generally declining net energy and increasing difficulty of extraction as volumes increase lower in the pyramid. Source: http://bit.ly/1iqIAJa
Liquid Fuel for Transport’s correlation to Real GDP:
While our system of debt has gone on for a very long time, we can’t expect it to continue in its current form forever. One thing that we don’t often think about is that our system or promises isn’t really backed by the way natural system we live in works. Our system of promises has a hidden agenda of growth. Nature doesn’t have a similar agenda of growth. In the natural order, the amount of fresh water stays pretty much the same. In fact, aquifers may deplete if we over-use them.
Nature, instead of having an agenda of growth, operates with an agenda of diminishing returns with respect to many types of resources. Our system is, in effect, becoming less and less efficient, as it takes more resources and more of people’s time, to produce the same end product, measured in terms of barrels of oil or gallons of water.
At some point, the amount of products we can actually produce starts shrinking, because workers cannot afford the ever-more-expensive products or because some essential “ingredient” (such as fresh water, or oil, or an imported metal) is not available. Since we live in a finite world, we know that at some point such a situation must occur. Paraphrased from: http://bit.ly/1kkKSFx
What is possibly coming?
As the globalised economy has become more complex and ever faster (for example, Just-in-Time logistics), the ability of the real economy to pick up and globally transmit supply-chain failure, and then contagion, has become greater and potentially more devastating in its impacts. In a more complex and interdependent economy, fewer failures are required to transmit cascading failure through socio-economic systems. In addition, we have normalised massive increases in the complex conditionality that underpins modern societies and our welfare. Thus we have problems seeing, never mind planning for such eventualities, while the risk of them occurring has increased significantly. The most powerful primary cause of such an event would be a large-scale financial shock initially centring on some of the most complex and trade central parts of the globalised economy.
The argument that a large-scale and globalised financial-banking-monetary crisis is likely arises from two sources. Firstly, from the outcome and management of credit over-expansion and global imbalances and the growing stresses in the Eurozone and global banking system. Secondly, from the manifest risk that we are at a peak in global oil production, and that affordable, real-time production will begin to decline in the next few years. In the latter case, the credit backing of fractional reserve banks, monetary systems and financial assets are fundamentally incompatible with energy constraints. It is argued that in the coming years there are multiple routes to a large-scale breakdown in the global financial system, comprising systemic banking collapses, monetary system failure, credit and financial asset vaporization. This breakdown, however and whenever it comes, is likely to be fast and disorderly and could overwhelm society’s ability to respond.Paraphrased from: http://bit.ly/1q7yS23
Why Isn’t Central Government Telling Us About these Difficulties?
The story outlined above is not an easy story to understand. It is possible that governments don’t fully understand today’s problems. It is easy to focus on one part of the story such as, “Shale oil extraction is rising in response to higher oil prices,” and miss the important rest of the story—the economy cannot really withstand high oil (and water and electricity and metals) prices. The economy tends to contract in response to a need to use so many resources in increasingly unproductive ways. We associate this contraction with recession.
Of course, if governments do understand the worrisome nature of our current situation, they may not want to say anything. It could make the situation worse, if citizens start a “run on the banks.” The other side of the issue is that if governments and citizens don’t understand the full story, they may inadvertently do things that will make the situation worse. They certainly won’t be looking long and hard at what collapse might look like in the current context and what can be done to mitigate its impacts. Paraphrased from: http://bit.ly/1kS6L2o
How do we respond to this information then? What am I asking by making this submission:
- that you consider my presentation and the issues I’ve raised seriously. I’m happy to provide more background as needed.
- That a view of the future based on maths, physics and common sense is used as the basis for strategic decision making r.e. economic development in Southland.
- That you consider my involvement in whatever strategic planning is undertaken going forwards. I feel I have a lot to offer…
- That you consider issuing a statement of support for the Wise Response appeal, which reads:
“As demand for growth exceeds earth’s physical limits, causing unprecedented risks, what knowledge and changes do we need to secure New Zealand’s future wellbeing?”
The petition to the House of Representatives reads:
“We the undersigned, request that the House:
(1) urge Government to undertake a National Risk Assessment of: Economic / Financial Security, Energy and Climate Security, Business Continuity, Ecological / Environmental Security, and Genuine Well-Being;
(2) that from that Risk Assessment, develop and implement cross-party policies to avert any confirmed threats to future generations of New Zealanders.”
There are numerous unprecedented global trends and threats which, individually or in combination, could destabilize New Zealand’s future wellbeing. We believe it an ethical imperative that NZ be proactive in assessing and avoiding these, rather than risk being caught unprepared.
“Mo tatou, a mo ka uri a muri ake nei: For us and our children after us.”
What I’m not saying here is I’ve got all the answers. The policy response and the business development focus for this region in response to the challenges I’ve outlined will be varied and no one person had all the answers. My suggestions for other business areas in my submission are ones that I feel are probably good choices on the basis of the context I’ve presented today.
I’ll finish with this thought: If you don’t know where you’re going, you’ll end up there.
As serendipity would have it, I happened upon a great piece in the NZ Herald that (more?) clearly reiterates what I’m trying to say:
“ Time to show leadership
It is astonishing that the certainty of this outlook for severely rising costs of energy has not been recognized widely. To the contrary, apparently prestigious institutions continue to ignore it. For example, recent publications by the National Intelligence Council and The Economist newspaper – both looking out to 2050 – make no provision for the recessionary effects of energy costs. Presumably, both have been captured by the same false assurances that are providing spurious comfort to political leaders.
The global economy will necessarily adjust to permanently high average prices and use of much less energy. When this happens, LAU and BAU will no longer be feasible. It will be essential for countries and communities to adapt and innovate human ways of living creatively so that they have much lower energy requirements, while also striving to provide greater wellbeing, satisfaction and happiness for citizens.
It is obvious that the sensible time to get on with this challenge is now so that the worst aspects of disruption can be avoided. This requires a calibre of leadership that we are not currently seeing. Such leadership will include encouragement of alternative energy systems, which will flourish after countries and communities have accepted the logic of transitioning to low-energy ways of living.
Climate change is not the only motivation
These conclusions are valid without any reference to either climate change or the further effects of oil and gas on environmental degradation. Although increasing numbers of people are very sensibly calling for far more active approaches to curbing greenhouse gas emissions, the conclusion that our present ways of life will become insupportable within a few years does not rest on environmental concerns or policies – the straight economics of energy costs alone will do it.
The compounding effects of more extreme climate change and wider ecological degradation come after that. Of course, if governments do summon up the courage to ensure that the full environmental and social costs of emissions are paid by emitters, this will further increase the costs of fossil fuels, and accelerate our passage towards a low-energy future.
My best guess is that this will happen as soon as a sequence of major weather events makes climate change undeniable. The forthcoming low-energy economy will emit less carbon, but this change will be too late and too little to avert very severe climate change.
Urgent action to reduce carbon emissions further remains as crucial as ever.
What does this mean for New Zealand?
Global recessions and disruptions driven by energy costs will have direct effects on New Zealand’s export markets, its sources of imported goods and services, and the international financial markets that New Zealand relies upon.
The risks to New Zealand’s international economy should be analysed thoroughly and managed with great care. There will also be new opportunities, especially for specialised exports, and these should also be thoroughly understood and acted upon with creative vigour.
The whole globalised corporate scene will change dramatically as the sectors and companies most exposed to oil and gas prices decline, while others that are less affected step forward.
It would be foolish for New Zealanders to assume that oil and gas produced from the future deep ocean wells and fracking sources that have been proposed will supply a buoyant global market. This will not be the case because when prices are high enough to justify this production, global market demand will be severely depressed by the same prices.
It is clear that current government policy has not recognised this fundamental point. New Zealand has a very distinctive energy endowment because such a high proportion of its total energy, including nearly all of its electricity, comes from renewable sources. This is primarily hydro electricity generation but also includes significant geothermal and wind generation.
In view of the global energy scenario presented here, this endowment has the huge benefit of already providing the high proportion of renewable energy sources that most other countries will struggle to achieve.
It is true that almost all of New Zealand’s transportation system is dependent on imported petroleum but this level of dependency could be reduced by vigorous introduction of electric vehicles charged from renewable sources. In this connection, the freeing of Manapouri hydro generation from contractual obligations would provide the needed capacity.
New Zealand cannot escape the global shift to a higher energy cost economy, but it is less dependent on oil and gas than most other developed countries due to the hydro and geothermal resources that already power a high proportion of our electricity generation.
Unless these resources are sold in the meantime – as the government has started doing – New Zealand will have an extremely valuable buffer during the times of change.
It is clear that New Zealand’s hydro and geothermal endowments are truly strategic assets that should be regarded as sovereign investments. It would seem that this has not been understood by either the generating companies or by the government and its advisers. This is because mainstream traditional commercial valuation techniques do not consider the strategic holding opportunities for assets and so greatly underestimate the value of these particular assets.
Established renewable energy sources are globally very rare. To sell some of these assets at values based on projections from short-term energy prices is to sell them at values that are ludicrously low relative to future values.
Such a decision is extraordinarily naïve and irresponsible and demonstrates both an alarming absence of strategic common sense and a lack of understanding of future economic realities.
Time for a change
It is inevitable that our global tomorrow will be changed hugely by rising energy costs. Countries and communities that accept this now have the opportunity to make necessary adjustments to maximize their wellbeing. If it is looked at in the right way, this process will be stimulating and rewarding over a lengthy period.
The current energy policy of the New Zealand government ignores the future global energy situation discussed here.
While it is already too late for some decisions, all further implementations of this policy should be stopped pending proper analysis and review of the implications for the wellbeing of future New Zealanders.
Dr Wayne Cartwright has postgraduate degrees in agricultural science and economics and has served 34 years in tertiary education – including 30 as a professor in the business schools at the Massey and Auckland Universities.
He has consulted widely in business management, international business and governance, and strategic responses to future insight. He has served on several corporate boards of directors.
He is a past chair of Sustainable Aotearoa New Zealand (SANZ) and has been on the Council for Socially Responsible Investment. He co-wrote and edited the 2009 SANZ publication Strong Sustainability for New Zealand: Principles and Scenarios.“
The article is well worth reading in its entirety:http://bit.ly/1rlqJq8
To my second objection, regarding the editorial…
The original Southland Times article from Lauren Hayes (http://bit.ly/Wln52T) was a useful contribution to the discussion regarding hemp, unlike her editor’s subsequent misinformed rant about artificial milk and mythology rather than fact based objections to growing hemp (http://bit.ly/WlooyU)
I’ll deal with the 2 ‘obvious problems’ listed in their editorial in turn:
“Firstly, there are many people who, their brains turned mushy by smoking too much marijuana, will be unable to grasp the difference between hemp and their weed of preference. They will break into farmers’ fields to raid the crop and get sick from smoking the wrong dope. Dopes.”
They assert that people will ‘get sick from smoking the wrong dope’: not so. In fact, the predominant psychoactive ingredient in industrial hemp, CBD, actually counters the psychoactive effects of THC:
“As William M. Pierce Jr., Ph.D., Associate Professor of Pharmacology and Toxicology at the University of Louisville School of Medicine notes, “The THC levels in industrial hemp are so low that no one can get high from smoking it. Moreover, industrial hemp, while low in THC, is high in another kind of cannabinoid, CBD, which counteracts THC’s psychoactivity.” (Source: http://bit.ly/WloCGg)
CBD is actually a highly useful medicinal compound in its own right, and has multiple beneficial uses, including, but not limited to treatment of schizophrenia and epilepsy. A US patent filed by “The United States Of America As Represented By The Department Of Health And Human Services.” lists a long list of beneficial therapeutic effects, thus:
The patent mentions cannabidiol’s ability as an antiepileptic, to lower intraocular pressure in the treatment of glaucoma, lack of toxicity or serious side effects in large acute doses, its neuroprotectant properties, its ability to prevent neurotoxicity mediated by NMDA, AMPA, or kainate receptors; its ability to attenuate glutamate toxicity, its ability to protect against cellular damage, its ability to protect brains from ischemic damage, its anxiolytic effect, and its superior antioxidant activity which can be used in the prophylaxis and treatment of oxidation associated diseases.
“Oxidative associated diseases include, without limitation, free radical associated diseases, such as ischemia, ischemic reperfusion injury, inflammatory diseases, systemic lupus erythematosus, myocardial ischemia or infarction, cerebrovascular accidents (such as a thromboembolic or hemorrhagic stroke) that can lead to ischemia or an infarct in the brain, operative ischemia, traumatic hemorrhage (for example a hypovolemic stroke that can lead to CNS hypoxia or anoxia), spinal cord trauma, Down’s syndrome, Crohn’s disease, autoimmune diseases (e.g. rheumatoid arthritis or diabetes), cataract formation, uveitis, emphysema, gastric ulcers, oxygen toxicity, neoplasia, undesired cellular apoptosis, radiation sickness, and others. The present invention is believed to be particularly beneficial in the treatment of oxidative associated diseases of the CNS, because of the ability of the cannabinoids to cross the blood brain barrier and exert their antioxidant effects in the brain. In particular embodiments, the pharmaceutical composition of the present invention is used for preventing, arresting, or treating neurological damage in Parkinson’s disease, Alzheimer’s disease and HIV dementia; autoimmune neurodegeneration of the type that can occur in encephalitis, and hypoxic or anoxic neuronal damage that can result from apnea, respiratory arrest or cardiac arrest, and anoxia caused by drowning, brain surgery or trauma (such as concussion or spinal cord shock).”
And the second piece of misinformation:
“Secondly, hemp and marijuana look very similar. So the less dopey dope-growers will realise that hemp makes ideal camouflage for their own crop – which they will seek to hide among the legitimate crops.”
A disturbing lack of basic horticultural knowledge from editorial staff in a predominantly agricultural region. Here’s the reality:
“Hemp is grown quite differently from marijuana. Moreover, it is harvested at a different time than marijuana. Finally, cross-pollination between hemp and marijuana plants would significantly reduce the potency of the marijuana plants.
Hemp grown for fiber is planted in narrow row spacing (4 inches apart). Branching is discouraged, and plants are not allowed to flower. The stems are kept small by the high density and foliage develops only on the top. Hemp plants crowd out weeds and other hemp plants not equal to the competition. 
Marijuana plants, on the contrary, are spaced widely to encourage branching, and the flower is the harvested product. Marijuana is a horticultural crop planted in wide spacing to minimize stand competition and promote flower production. It branches thickly like a Christmas tree. In contrast, hemp selected for fiber has only a few branches.
What about seed producers who space their plants widely? Where seed is the harvested product, whether as reproduction seed or oilseed, purity is critical to marketability. The mixing of off-type genotypes would be scrupulously avoided in seed production fields.
Breeders and producers of sweet corn go to great lengths to isolate their crops from the pollen of field corn. The same applies to hemp and marijuana. People who grow strains of Cannabis for smoking try to avoid pollination of the flowers. The superior quality material is obtained from seedless plants, the so-called “sinsemilla.”
Hemp fields, in fact, could be a deterrent to marijuana growers. A strong case can be made that the best way to reduce the THC level of marijuana grown outdoors would be to grow industrial hemp near it. An experiment in Russia found that hemp pollen could travel 12 kilometers. This would mean that a hemp field would create a zone with a 12-kilometer radius within which no marijuana grower would want to establish a crop.
The reciprocal also applies. Growers of hemp seed would not want Cannabis of an “off type” (i.e., not the intended genetic type) mixing its pollen with their flowers. The isolation of genotypes is a common procedure used by the seed industry to preserve the genetic integrity of varieties. Valued strains are created by plant breeding, at substantial expense. Marijuana pollen would destroy this value.
There is another reason that marijuana growers would be unlikely to plant their crop in a hemp field. All countries that have recently begun to recommercialize hemp operate under a permit system whereby the farmer must let the local police know which field is being planted in hemp. Would a marijuana grower decide to plant his or her crop in an area high on the police radar screen and subject to monitoring without notice?
Ironically, another fiber crop, kenaf, grown in the South, resembles Cannabis in its leaf morphology so closely that it is often mistaken for marijuana. Growers report frequent incidents of kids stealing kenaf that they have taken for marijuana. Since kenaf would not cross-pollinate with Cannabis, and has a longer growing season, kenaf fields would actually be a better hiding place for marijuana than would hemp fields.”
Source for the above: http://bit.ly/WloCGg
I must admit, I found the last paragraph of the editorial fascinating:
“But here is no need to panic. Armageddon is a little way off yet. And the risks are no reason to turn our backs on meat and dairy industries. We should make hay while the sun shines.”
So on the one hand, ‘don’t panic’, on the other hand, ‘Armageddon is (only?) a little way off yet’… Classic doublethink, and no less than I’d expect from the mainstream media’s proles, seemingly ignorant in their complicity to the slow motion disaster (of trying to grow our way out of problems associated with too much growth) going on around them.
Perhaps the editorial staff should try smoking some industrial hemp? It may lower their anxiety levels, and help them to think clearly about the real issues we’re facing as a society, which it is their (IMHO) duty as the gatekeepers of popular information to present in clear and helpful news for the edification of the general population… I’m aware that some may differ on that interpretation of their role.
For the record, I’ve posted this comment to my blog as well, here: http://bit.ly/1pgtLaG, where it retains its intended formatting, and the vagaries of editorial policy cannot reach….
I have also sent this as a formal complaint to the editor as an email, prior to my making a formal complaint to the Press Council via email@example.com