May 3, 2011
With the sun glinting off the Shannon, boats meandering across Lough Allen and green rolling hills in the distance towards Fermanagh, this county on this gorgeous morning easily lives up to its tourist billing of ‘‘lovely Leitrim’’.
In the centre of Drumshanbo, under a plaque to a local fiddler named Ciaran Emmet, a knot of old ladies gossip and marvel at the ‘‘savage’’ weather before one of them says, ‘‘I’m off, girls, for the wedding,” and they disperse to watch the swanky royal nuptials taking place in England.
A few anglers march by, heading for one of the many lakes, while lads outside the Pyramid Bookmakers, dockets in hand, drag deeply on their Rothmans, certain that this will be their lucky day. Down past Conways bar is Laird House, once home to the ‘‘Bo Peep’’ jam factory, an Irish brand which, along with Cadet Cola and Soda Stream, reminds me of a time when little towns like this made things.
Towns like this can do so again.
In fact, in a climate like this, you could grow anything around here.
Up on the hills surrounding Drumshanbo, the huge windmills attest to another environmental gift – wind. Lots and lots of wind. There are natural resources aplenty here and what is needed is the wonderful chemistry of human creativity to make something happen locally.
Without that creativity and the lubricant of credit, the faded photos in Drumshanbo Library from1958 of local people being waved off at the train station on their way to England will simply be re-mastered in digital form as young locals flee again.
Luckily for this part of Leitrim, four local entrepreneurs have come together privately to create an initiative called LABS (Lough Allen Basin) Energy Hub.
But what sort of businesses are they targeting and why? What has this part of the world got going for it, and what is going on in the rest of the world that might make remote parts of Ireland attractive? Let’s consider the following.
The greatest economic dilemma for the future will not be about banks, balance sheets and the movement of paper money all around the world. The big issue is resources, who owns them, who can renew them and their price.
We are potentially moving into a neo Malthusian world, where the irresistible force of six billion new consumers (mainly from China, India and Brazil) crashes into the immovable object of the world’s finite resources, with potentially catastrophic consequences.
We are seeing already this as the price of all commodities goes through the roof.
The price of oil has gone up fourteen-fold since 2000.The price of coal is up five times over a similar period, as is uranium. It is not so much that we are at ‘‘peak oil’’ ,we are at ‘‘peak everything’’, and the prices of all energies will continue to skyrocket. Sure there’s an element of speculation driving prices, but what is really behind this is that the only thing that isn’t scarce these days is us – humans. The world’s population is rising at 80 million per year.
That is the population of Germany – Europe’s most populous country. So every year there are 80 million more mouths to feed.
Not just that, but the type of food they want has changed. The Chinese and Indian middle classes – making up an estimated population of 200 million – have dramatically changed their diets in the past few years, demanding meat and dairy like never before.
This is the biggest change in global agriculture in a generation.
On its own, the change in global demand would increase the price of food worldwide, but what is also propelling the price of food and amplifying this demand shock is the fact that intensive production of food demands lots of petroleum-based fertiliser and huge amounts of diesel. Put simply, the world is eating fossil fuels!
Look at the chart (above right).This is the trajectory of commodity prices. While the peaks and troughs are the result of speculation, the upward movement is caused by these real factors.
So what has this to do with lovely Leitrim on a glorious spring day?
The first implication for Leitrim (or any county really) is that places where it is easy to farm will do exceedingly well, given the chance. In the future, agriculture will move from being a low-yielding pursuit where the return on equity was modest, to a high-yielding, profitable game where the return on equity will be considerably higher.
The policy implication of this is that it puts into question the EU’s ‘‘set aside’’ policies, where huge tracts of land in Ireland lie fallow and the farmers are paid not to farm. Can you imagine anything more ridiculous in a world facing food shortages than farmers in the part of the world that is climatically best placed to farm, being paid to do nothing?
In Ireland, unlike other parts of the world, grass for cattle farming is free. In the likes of Brazil, they have to pay for fertilisers to grow the grass, while over here it just grows.
Wouldn’t it be smarter to begin to increase agricultural production by deploying the resources we have in order to farm more intensively? If we increased investment rather than subsidising idleness, there could be an agricultural revolution in Ireland, with enormous positive implications for rural communities.
The other implication of the world’s Malthusian conundrum is that the shift to alternative energy will be accelerated.
As the price of oil rises, the opportunity cost of other energies, even if the initial outlay is expensive, will fall.
Even without greenhouse emission concerns and the imperative of carbon neutrality, the move to alternative fuels is unstoppable.
So what about the cost of this alternative energy? According to the Irish Academy of Engineering, the cheapest alternative and environmentally-friendly source of energy in Ireland is the biomass used in existing peat stations.
The next cheapest source is wind-farms on land, while – according to the Academy wave energy technology is still very expensive. Approximately one-third of Ireland’s wind energy capacity – current and future – is within 40kms of the Drumshanbo LABs site, so you can see why the Malthusian conundrum has clear implications for this part of the world.
Now let’s also consider biomass. If the land lies fallow, why not give it over to the plantation of willow, to fuel Bord na Mona’s power stations? Willow has a three-year renewable cycle, will grow in this area and Bord na Mona will guarantee a return to the farmer in advance, which they can then use as bank collateral to invest further. Every three years this cycle can be repeated.
It’s clear that the world is changing and the major shift in energy and food prices is positive for us, simply by virtue of our climate. Sometimes fate deals you a decent hand, it is up to us now to play it.