Why is the Arab world convulsing with social and political unrest when triple digit oil prices should be bringing enormous wealth to the region? The answer may be that the link between energy inputs and food prices suddenly makes soaring oil prices a double-edged sword in the world’s largest food importing region.

Egyptians are about to find out that it is a lot easier to eradicate your local dictator than feeding your population. The crush of poverty is felt under the weight of a population of 80 million people who live in a country where average annual rainfall is less than two inches and where only 3% of the land is arable. Aside from a narrow strip along the life-sustaining Nile River, Egypt is basically an inhospitable desert.

Yet the population of Egypt has tripled to 80 million today from 27 million in the early 1960s. While the birth rate for an average Egyptian woman has fallen from six children  to just over three, it  still fuels more than 2% annual growth in the population. At this pace, Egypt’s population will double to 160 million by 2050.

But the country is already importing 40% of its food supply and 60% of its grain. Even a brutally repressive regime like Hosni Mubarak’s still spent 7% of the country’s GDP on food and energy subsidies. Can a replacement regime afford to spend more?

Not likely, particularly when the country’s oil production peaked in 1996 and has subsequently declined by 30%. Oil exports are down 50% thanks to strong demand for its subsidized fuel.

The problem facing Arab countries today is higher oil prices feed directly into higher food prices.  While oil may be massively subsidized in the Middle East, it’s not in major grain exporting countries such as Canada, Russia and Australia that Arab nations increasingly count on for their food supply.

From the diesel fuel that runs tractors and combines to the power needed to pump water through irrigation systems, modern agriculture is one of the most energy intensive industries. And the Middle East is the largest food importing region of the world. As the price of oil goes up, so does the price of food imports.

Egypt’s problems feeding runaway population growth is not unique to the region.. They are in evidence throughout the Middle East given the masses now out in the streets in Libya, Algeria, Yemen, Jordan and Bahrain demanding regime change. Could Saudi Arabia be next?

Population growth in the Middle East is rapidly outstripping the carrying capacity of the land. Democratic reform may be what is on the protestors’ lips but demographic reform  is at the heart of the region’s problems.

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  • Chris

    With WTI April contracts that may tick over $100 today and now Nomura calling $220 oil – Jeff you remain ahead of the curve…

  • Can

    Seems like a cut in energy subsidies is a possible solution. This would weaken domestic demand and thereafter increase oil exports, allowing for the government to invest in programs that would address some of the more serious problems, namely investment in renewable energy technologies and the population issue. What effect that would have on other industries, or whether the Egyptian people would stand for it in the first place is another matter entirely.

  • http://www.gasolinegangsters.com Dusko

    I agree with you that the strip along the Nile is the only place agriculture works in Egypt. But not for much longer without cheap fossil fuel inputs. Crop yields in Egypt will continue to decline without fertilizer. The Egyptians had the worlds greatest renewable source of fertilizer, annual flooding of the Nile. After the Aswan High Dam went up most of the nutrients never made it to the Delta. The soil errosion is really bad along the Nile. And Egypt is literally falling into the sea.

  • JB

    Demographic reform? Good luck to any government who will seriously attempting it…

    The plain reality is that governments have no hope of having any control related to demography, except through wars.

    Hence, there is really only one solution: we need to find another Earth asap. Let us hope that the Kepler satellite will soon find at least another one and that a few “black labs” will provide a related mass transport methodology.

    JB

  • Rojelio

    Is large scale desalination a possible recourse for agriculture in that region? If not, where do millions of environmental refugees go?

  • Jackie

    I suspect that the trend of exploitation of natural resources, and the ensuing grab for control will soon include water. Canadians may find themselves under seige.

  • Jlfisher

    We are again being faced with the limits to growth and there is a natural reaction. It begins with denial and then as the limits become evident, anger sets in. Scapegoats are sought and attention diverted to punishing those thought responsible. As the limits to growth become impossible to deny, a sense of hopelessness may prevail. Thrown back on our own resources we feel betrayed, lonely, and isolated We become homo economicus and are stripped of our self-imposed illusions about the future. We may seek to survive economically by destroying ourselves environmentally. The limits to growth removes our comfortable assurances that our ever expanding economy will continue to work its magic. In a very real sense we become like children whose toys have been suddenly taken away.

    The limits to growth can only be ignored by thrusting ourselves into a hell of our own making, where that hell can best be described as a truth realized too late. The events unfolding in the middle-east make Jeff’s forecasts look optimistic. I’m sure he was warned by his former employers that such opinions were not career building, but Jeff – you were right and you have earned the right to say “I told you so”.

  • ra

    Good question. Mr. Rubin addresses this prospect, as well as pressing water shortages in the Middle East, in the book. As for refugees, there was recently an article suggesting approximately 50 million environmental refugees will be looking for new homes as soon as 2020.

  • ra

    http://citywire.co.uk/global/oil-could-hit-220-a-barrel-says-nomura/a473938

    First article I’ve seen suggesting oil could go to $200/b or more.

  • Larsa

    Peak Oil is the reason ALL oil producing repressive political regimes including Saudi-Arabias ruling elite eventually has to fall. Now it’s just a matter of when. Then note that e.g. Egypt peaked oil in 96, imports some 50% of its food and 60%of it’s grain. Compare this to the US where their oil peaked in 74 and now imports some 70% of all their oil. Sure the US got grain but given future oil prices how sustainable is it agricultural system as it’s designed today? Bottom line – when will the revolution hit the US?

  • Fraser_fox

    We already are.

  • Denny

    Do the Saudi rulers have enough money to continue billion dollar “peace hand-outs” while also increasing oil production? The cost of placating the population will also increase domestic oil consumption making increased exports from aging fields even more difficult. However, maybe following through with the plan to increase solar power will make all this nasty talk of revolt go away.

  • David

    Readers of this blog are probably aware of this article, but just in case…

    “Crude Questions”, FP magazine, Friday February 25.
    http://www.foreignpolicy.com/articles/2011/02/25/crude_questions?page=full

  • Steve Manders

    When I was born, the planet could support 2.5 billion people. With modern agriculture, it now supports 7 billion. Much of that is dependent on cheap crude oil. We use 10 calories of oil energy to grow one calorie of food. Take away abundant cheap oil, you take away abundant cheap food, take away abundant cheap food, you take away abundant poor people. Egypt now has 80 million people on the same amount of land that the pharos had, only now, half is burried under cities and cannot produce food. The next step is very clear to me, and it is not pretty, and it cannot be avoided. The rest of the world faces this too, just at different dates. Haiti is there now.

  • Nik

    When I was in Eygpt my taxi driver said he and his wife had 10 children along with the rest of their extended family. As he drove us along the Nile one could see only a thin arable strip of land and the desert was right there. Unfortunatley like our Canadian politicians he could not understand that unabated populaton growth only leads to poverty and unmitigated environmenal disaster. Eygpt is a basketcase no matter who runs the country. Ditto Yemen, Tunisia, Algeria, Syria, Jordan, etc.

  • Nik

    When I was in Eygpt my taxi driver said he and his wife had 10 children along with the rest of their extended family. As he drove us along the Nile one could see only a thin arable strip of land and the desert was right there. Unfortunatley like our Canadian politicians he could not understand that unabated populaton growth only leads to poverty and unmitigated environmenal disaster. Eygpt is a basketcase no matter who runs the country. Ditto Yemen, Tunisia, Algeria, Syria, Jordan, etc.

  • Rojelio

    That’s so boring. You’re such a drag. Did you see Charlie Sheen on CNN last night? I wonder what he’s going to do next?

  • Abitibidoug

    That’s consistent with my observations also. I also remember a taxi driver in Cairo who said he had 5 or 6 kids and probably wasn’t making a lot of money. As for here in Canada, politicians still think that growth which consumes large amounts of agricultural land for urban sprawl is a good thing that we need more of. Given that this foolishness will continue, I wonder what investments will do best in the years to come when energy and food costs soar and unrest gets worse.

  • Abitibidoug

    That’s consistent with my observations also. I also remember a taxi driver in Cairo who said he had 5 or 6 kids and probably wasn’t making a lot of money. As for here in Canada, politicians still think that growth which consumes large amounts of agricultural land for urban sprawl is a good thing that we need more of. Given that this foolishness will continue, I wonder what investments will do best in the years to come when energy and food costs soar and unrest gets worse.

  • Mythslayer

    The country has to stabilize politically first and foremost. Perhaps Egypt is ahead of Libya in the long run in that regard.

    Then, a century-long forecast will enable people to see the potential of sun-drenched nations. There is enough solar radiation falling on the Sahara to power the world several times over in perpetuity using current technology, and at already predictable prices. The price per kw/hr will come down to current levels for fossil fuel-fired generation of electricity with large orders for solar power plants.

    http://www.desertec.org/

    Concentrating solar power (CSP), as proposed in the Desertec project, exists today in California and Spain and will devote a portion of the power generation to desalination of seawater, which can then be used for agriculture under the arrays of mirrors and piped to cities for domestic urban uses. The rest is exported to Europe for profit via high voltage DC cables.

    The sooner large scale investments (and small neighbourhood and household scale too) are made in these ideas the sooner the petrocorporate state will disappear.

  • Mythslayer

    Mark Jacobson (Stanford) and Mark deLucchi (UC Davis) authored a piece in 2009 published in Scientific American on how, with a substantial commitment, the energy requirements of our civilization world-wide could come from clean and renewable sources by 2030 in order to adequately combat climate change. Basically, stop using combustion and invest heavily in solar, wind and hydro power.

    http://www.eurekalert.org/pub_releases/2009-10/su-stw101909.php

    There is no shortage of well-founded ideas. But there is a shortgage of leadership and political courage that are independent of entrenched interests.

  • http://twitter.com/tryfreedomUS Thomas Harrington

    Hmm…I wonder if the world is ready to actually try moderating population growth. China did it – but their model is too restrictive and unsavory. Perhaps it might be easier to accomplish through economic incentives: paying people to have less children. That’s the reason they have children now – in order to help them on farm or in their old age.

    What do you think? (full analysis at http://www.tryfreedom.us/?p=100).

  • Anonymous

    We have already debated this in a previous post by Jeff (“How do oil shocks Cause recessions”), namely that there might not be enough copper or rare metals to convert even a small percentage of cars to clean-tech.

    “…. politicians should stop selling lies like electrical cars, which are supposed to give people the impression that things will go on like before, but with clean-tech. There is no way electrical cars are a viable solution. Do the numbers: 250.000.000 cars in the US. petrol cars have 20 kg of copper and electrical cars need 90 kg. That 70 kg of copper for every car (17.500.000.000 kg of new copper) and we are currently extracting at 0.6%. It is NEVER going to happen. Now expand that to all the cars in Europe and Asia also or all the worlds 800.000.000 cars. Its a pipe dream.

    It seems very obvious that the politicians are flogging a dead horse and are at their wits end as what to do.”

    and “One source was here:

    “”You see more hybrids on the roads these days and that has generated a lot of excitement about these dynamic new products,” Weed says. “The public is definitely interested.”

    That’s good for the copper industry. The average car produced in North America has 50-55 pounds of copper in it. In an electric car, the amount of copper will triple – to 150-180 pounds, Weed says. More than half the copper is in the car’s wiring harness and electrical components.

    There’s significantly more copper used in vehicles today, particularly electric and hybrid electric vehicles, says Pete Savagian, director-hybrid and electric architecture for General Motors Engineering. According to Savagian, the new Chevrolet Volt contains two electric motors and two inverters.

    “The motor is larger in the electric vehicle because it drives the wheels, causing the current to go up by hundreds of amps,” Savagian says. “Cables (made with copper wiring) are larger and heavier in order to carry the current and higher voltage.””

    http://www.copper.org/about/pr...

    The strange thing is this – its not rocket science. We are given numbers and its just a question of basic arithmetic to test whether it can be done in economies of scale or whether there are resources to replace existing technologies on a global level. And the fact is: it cannot be done! Even if the goal was to replace say 5% of the worlds current cars with electric, it would stretch the copper and rare metals resources way beyond anything current markets could handle.

    The truth is this: the populations are given these idiotic projects to pacify them for a while yet, cause there would be a general uproar if politicians started addressing the fundamental sustainability of the current situation.

    I mean – jesus christ – here in denmark they build motorways left right and centre, and have just decided to build an 18 km tunnel to Germany from Zeeland and planning megamarkets so people have to drive 30 km to get their groceries, all the while depletion rates suggest that the first petrol shortages will begin to affect the world in 2012-13.

    “The US Joint Forces Command forecasts that: “by 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10mb/d.” [30]
    The UK Industry Task Force on Peak Oil and Energy Security predicts: “as early as 2012/2013 and no later than 2014/2015, oil prices are likely to spike, imperilling economic growth and causing economic dislocation.” [31]
    Lloyds of London says: “an oil crunch is likely in the short to medium term” and “appears likely around 2013.” [32]
    A German military report states: “some probability that peak oil will occur around the year 2010 and that the impact on security is expected to be felt 15 to 30 years later… [there will be] “partial or complete failure of markets… [including] shortages in the supply of vital goods could arise.. A restructuring of oil supplies will not be equally possible in all regions before the onset of peak oil.” [33]
    The IEA writes: “current global trends in energy supply and consumption are patently unsustainable…the era of cheap oil is over.” [34] ”

    http://www.parliament.nz/en-NZ...

    It is essential that politicians stop talking about money and start talking about resources!”

  • Anonymous

    Jeff, Things are moving so fast now on the oil market, I wish you would post comments more frequently. There are many end of world doomers out there who argue from insane premises and I find that your arguments are stringent, informative and rational and thoroughly credible.

    Please post more :)

  • Guest

    Marry Britney, move to Egypt and have 10 kids. What a reality show that’s going to be!

  • Bob

    Bill Gates focus only on efforts to eliminate disease is misguided, since it igores population growth and birth control.
    Famines have been with us since the time of the Bible. If the world has 2 “bad” years of crops, famine will sweep through countries like the Grim Reaper.

  • Mmmm

    http://www.ivanhoemines.com/s/Oyu_Tolgoi.asp?ReportID=379189

    http://www.katangamining.com/kat/operations/

    these two companies who are not producing yet, have combined resources of over 40 billion kg of copper, which would cover most of the additional 56 billion kg of copper needed to convert our 800M global fleet of cars based on the 20-90-70 numbers above. there is plenty of undeveloped copper in the world. also, copper is fully recyclable.

  • Xophist

    should the article end with “but demographic reform is NOT at the heart of the region’s problems” [since overpopulation and rising food prices are]

  • Anonymous

    I like to refer to this thing called the real world:

    http://www.telegraph.co.uk/finance/newsbysector/transport/8355762/Ford-warns-electric-cars-may-be-only-for-the-rich.html

    All this paper copper is great when you are looking for investors. Not only that – copper production is massively oil dependent in every production stage. So there may even be copper left, but it will swiftly come so expensive to produce that it would be unfeasible to use it.

    http://www.bloomberg.com/news/2011-03-02/chilean-peso-weakens-as-100-a-barrel-oil-hits-copper-futures.html

    You count turning every internal composition engine into electric and the added requirements for charging infrastructure and the steady exponential growth in existing markets I think you will find that copper is about to become very scarce over the next 10-15 years. An then we haven’t even begun talking about rare metals shortages, which are also vitally important in clean-tech.

  • http://www.facebook.com/pablo.fuentes.leiva Pablo Fuentes Leiva

    You’ve never heard of China and it’s One-child policy? Or informed yourself regarding the effects to demography of promoting women’s rights (that is, falling population growth, since women who get education and can find a decent job tends to postpone childbirth). To say that governments can’t have ANY control regarding demography seems to me patently absurd. It’s all a question of political will.

    /Paulus Indomitus

  • Anonymous
  • Mythslayer

    There is one stratospheric assumption in your conjecture about cars and copper … that cars will continue to dominate our cities. There may be enough copper (or not, depending on your source), but there sure won’t be enough energy or public resources to continue supporting the car at current levels, electric or not, and that is based on their sheer lack of efficiency from several perspectives (energy, massive public subsidies for car infrastructure, the idiocy of moving 1,500 kg of metal to transport one or two human beings, the huge land resources consumed by roads, etc). Therefore, its the number of cars, not their form, that will give, in my opinion.

    Copenhagen can be used as a model for North American and Australian cities, namely for it’s higher densities, compact form, and pedestrian, bicycle and transit infrastructure. It will certainly be better off than Calgary or Denver or Atlanta when fuel shortages really hit. Not that Danish cities won’t suffer, but there are arguments that would conclude that most European cities won’t be as hard done by.

  • Anonymous

    I agree completely with your assessment in the first paragraph.

    That being said, I live in Denmark and move about routinely in Copenhagen and the whole country, which in size is more on the scale of a city state (the whole country has only 5.5 million inhabitants, copenhagen 1.5 million). Don’t let yourself be taken in by the effective branding of Denmark as a green country – its an utter myth.

    First of all we are currently working on the biggest car based infrastructures in Europe:

    http://newsfeed.time.com/2011/02/08/denmark-and-germany-to-be-linked-by-11-mile-underwater-tunnel/

    We have the biggest and longest motorway bridges in Europe

    http://www.tv2fyn.dk/modules/xphoto/cache/72/16072_590_0_0_0_640_359.jpg

    Denmark is swiftly becoming covered with motorways and sprawl, left right and centre.

    While we have quite a few windmills, they are highly inefficient and the true backbone of electricity production is coal. All the windmills have done is give us fantastically expensive electricity: 3 dollars per KWH between 5 and 7 pm. In fact in quiet winters such as the last two (with very little wind) we would have been up shit creek if we had not sponged off swedish and German nuclear power (the danes hate nuclear).

    Last but not least Denmark has many highly polluting industries such as agro-industeries (meat, milk, ect), Mærsk, Portland cement. According to WWF this makes Denmark the third most polluting country in the world, only surpassed by Qatar and the United Arab Emirates!!!!!! page 37:

    http://assets.wwf.ca/downloads/lpr2010.pdf

    Here are some flabbergasted Danish articles – perhaps google translate can give you a sense of how deep the illusion of danish environmentalism had apparently spread even in denmark:

    http://penge.dk/nyheder/danmark-forurener-ligesaa-meget-som-oliestater

    (Denmark pollutes as much as oilstates…. one leading politician says: “”The government must let go of the strange self-awareness that Denmark is an extremely climate-friendly country. we are not. And before you get a better understanding, we can not act,” “)

    http://www.b.dk/klima/wwf-danskerne-de-tredjestoerste-miljoesvin
    (Danes the biggest environment-swine in the world….here a different leading politician notes: We must consider this as an eye opener. We can no longer label the U.S. and the oil states because we are one of the very worst”

    Let me put it this way: a few bikes don’t make a dent in the massive pollution required for the affluent lifestyles we experience here in Denmark. I only wonder what things would look like if we included the carbon footprint of all the stuff we imported from China??? So copying Denmark is a gimmick nothing less.

    If the west is gonna become truly low energy – its gonna hurt, nothing less. Taking your bike for a spin every now and then is not gonna cut it. :)

  • Mythslayer

    Very interesting links there, Cleitophon. My experience has been confined to western North America so far, so you’ve educated me on Denmark, a nation I’d still like to spend some time in. The Alberta tar sands and a host of coal-fired power plants, pulp mills and hydrogen sulfide-spewing oil wells makes western Canada seem as bad as the Denmark you portrayed, only that the point sources of pollutin are far more spread out.

    My comments pertained more to cities. In Canada 85% of its population of 34 million resides in cities greater than 100,000 people, and the point souces of emissions mentioned above are not as great as those emitted by the cars and buildings collected in our cities. Only the addition of industrial-scale agriculture will tip the balance toward non-urban emissions.

    You mentioned bikes rather cavalierly … bike afficionados here in Vancouver worship Copenhagen and Amsterdam as the cycle heaven of the world (obviously ignoring Beijing, probably more because the European cities are more pleasant). Something like 55% of people bike and / or take transit year round in Copenhagen. We’re lucky to get even a third of that here in Vancover. Moreover, the urban design standards there are better in the view of many design professionals over here. Jan Gehl is a great architect / urban designer who is very popular over here. The fact Copenhagen has the Stroget — a 6 km pedestrian steet network — makes that city very unusual in comparison to even progressive Vancouver, where the private car lobby still has a tremendous amount of sway.

    So, focusing on cities makes sense, and I believe transit, pedestrian streets, bikes and compact, human-scaled urban form have a huge role to play.

  • Anonymous

    Just about every Danish town has the equivalent of Strøget, though they are usually called “gågaden” or “the walking street” and they are of course lovely.

    Here is my local town, Svendborg:

    http://www.apmoellerkollegiet.dk/files/billeder/Svendborg_%20Gerritsgade.jpg

    However, the current centre -right government is aching to americanize everything.
    They want stripmalls and megamarts, not to speak of motorways and sprawl. My God – they nearly wet themselves with excitement at anything that is big. How about the new city outside Copenhagen called Ørestaden: a corbusieresque monstrosity that has been heavily criticized by for instance Jan Gehl

    http://farm1.static.flickr.com/33/42765317_a90cb18d20.jpg

    http://www2.blst.dk/udgiv/Publikationer/2007/978-87-92256-02-7/html/images/s14.jpg

    How about this thing from Ørestaden that makes me want to scratch my eyes out:

    http://www.dahl-as.dk/files/manager/toemrer-snedker/107s.jpg

    http://www.peltzdyr.dk/kbh/images/Motorvej_401.jpg

    http://2.bp.blogspot.com/_bnrvgjDNqlc/S_6yYHU9-PI/AAAAAAAAALg/KlUwq66qJO8/s1600/jsbyggestyring+dk.jpg

    And there is the local High School (Gymnasium as it is called in Danish) – going to school in a piece of lego HAHAHA:

    http://www.orestad.dk/Indhold/Skoler/~/media/Orestad/Images/skoler/gymnasium/gymnasium1.ashx?w=480&h=309&as=1

    I would have to kill myself if I lived there – it just cannot get modernistic, futuristic and sterile enough. There are canals between the buildings that are so miserable that the ducks and swans don’t even want to be there.

    I think we agree on many things, like integrated use and walkable cities and so forth :)

  • ra

    From Ronald Bailey at reason.com

    “University of California, San Diego, economist James Hamilton noted in a recent study that 10 out of 11 post-World War II recessions [PDF] in the United States were preceded by a sharp increase in the price of crude petroleum. The only exception was the mild recession of 1960-61 for which there was no preceding rise in oil prices.