The Future Is Here — But The Resources May Not Be

by BWK ~ April 8, 2008

As commodity markets become more mainstream for investors its interesting to know that energy and food shortages may very well come hand in hand. Here is a recent column that my collegue Kevin Kerr wrote for Outstanding Investments, it sheds a little bit of light on the situation:

As the world scrambles for precious resources and solutions for its various ills — from energy to food shortages — attention, as always, turns to technology. Lately, we’re always hearing about hydrogen fuel cells, cars that run on switch grass, radiated corn, solar homes, indoor vertical farming, etc. How real are these things? I mean, concept is one thing, but practical application is quite another.

There is no doubt that throughout history, real needs and higher prices have spurred innovation. Many of the advances in technology we have today are direct results.

So what is fact and what is fantasy? Can our current problems simply be solved by new technology?

I remember my parents telling me of the time they went to the New York World’s Fair in 1965. My parents were in their early 30s in 1965, and I was still a future development. They told me it was such an exciting time with so much hope. The idea of landing a man on the moon, sidewalks that would move people, ovens that would cook food in only a few minutes, phones without cords…

Let your imagination take you to a world that was supposed to have been here by now! At the World’s Fair, many major industrial manufacturers had exhibits looking at — or at least trying to guess — what the future would hold. The most notable of these was General Motors Corp.’s Futurama II, a show in which visitors seated in moving armchairs glided past detailed scenery showing what life might be like in the “near future.”

My parents went on this ride a couple of times they said because it was just fascinating to think about and see what the future would be like. They were not alone. Futurama II proved to be the fair’s most popular exhibit. Nearly 26 million people rode into the future during the fair’s two-year run.

Many of the utopian or undersea city ideas seem a bit far-flung, even now. However, the ideas of sidewalks that move people, traveling to the moon and many other things that seemed just as impossible are now something we simply take for granted — even things that were not even dreamed of by Futurama II. Home computers, cell phones, fax machines, advanced medical treatment — the list goes on and on.

Take a minute today and look around at all the things you use. Imagine going back to the first New York World’s Fair, in 1939. If those people could have seen then how our world is today, they would have been astonished.

For all our technological advances, we are now faced with a crisis of epic proportions that technology may not be able to fix. However, that hasn’t stopped scientists from trying, innovating and inventing.

The Future Is Here, But The Resources May Not Be…

Food that cooks itself in two minutes and cars that drive themselves are one thing. But what happens if you don’t have the food in the first place or anything to run the car on? The problem becomes quite different, and the answers are not just for convenience, but for necessity — urgent necessity.

As the world’s population continues to explode and energy, food and raw materials continue to dwindle, the real need for solutions to these problems becomes more immediate. On my recent trip to Singapore, I spoke at and attended the Plantation Investment Asia conference, which focused on agriculture, biofuels and the future.

There was no Futurama ride at the conference, but there sure could have been. I met with and listened to individuals from all over the planet, with some of the most incredible ideas, investment schemes and outlooks I have ever heard. The question is how long will it take for the technology to actually be implemented? For many of the technologies I learned about in Singapore, the answer is at least 10 years, and even then, they will take years to assimilate.

I remember when microwaves first became common. We were one of the first families we knew to get one, and it was crude compared with today’s standards. It was also expensive, I am sure. Nowadays, of course, everyone has a microwave, and it’s as standard as a toaster. While it’s still more expensive than a toaster, prices have come down a lot since they first came out.

The point is once the heavy lifting of actually getting new technology to work is done, you still have to make it affordable. It can take a long time until the masses can afford to buy it. It’s a Catch-22, in a way.

Going Vertical

Some of the incredible concepts I learned about at the conference included vertical indoor farming. A 12-story building, say, in the middle of New York could be filled with various food crops — soybeans, wheat, corn, etc. — hydroponics, fully controlled climate, automated robotic spraying of water, etc. The concept is intriguing. The idea is to keep food close to where the people are, rather than trucking that food in from 150 miles away. It is an idea championed by our friend James Howard Kunstler, I believe.

The idea of the ability to have our masses in one location and all our food and resources in another means the use of a lot of energy to bring the two together. That must change, and fast.

The concept of a vertical farm is not that far-fetched, and in fact, when I was at NYU back in 1985, I was part of a similar (well kind of) vertical living trial. During my freshman and sophomore years, I was a member of Sigma Phi Epsilon fraternity. My father was a Sig Ep, as was his dad, too. So I guess you would call it a tradition. I called it a cheap place to live in New York.

Anyway, the fraternity was located at 3-5 Washington Place, a five-story building. In it were five fraternities. I can only tell you that Thursday-Saturday, it had to be the biggest party in all of Manhattan.

So while we weren’t growing anything in there (at least I wasn’t), I guess it would be possible to do so in New York. In my conversations in Singapore, though, I began to see the real problems something like an indoor farming setup would not solve. Now that we have all these indoor 12-story farms every 15 blocks, we will need a heck of a lot more water, electricity and many other things. This is on top of the loads many of these cities’ power and pipe grids can barely handle now. No, the concept is promising, just like biofuels are, but the solutions often raise more questions than answers.

In coming articles I will discuss some of the other New Age technologies that were discussed in Singapore, things like jatropha, algae power and others. Many of these ideas and technologies may sound far-out, but just take a look at what the Futurama II ride from the 1964/1965 World’s Fair told visitors and then look at where we are in 2008 :

“It is now Tomorrow. Now we can find our way along the dark, star-studded corridors of space, and make that long-dreamed voyage to our nearest neighbor in the great unknown. That silent satellite of Earth we call the moon.

“A new system of highways spans the continents, to transport men and goods swiftly and separately across the land.

“And for our deserts — a new technology — waters from the sea made fresh as rain to nourish crops planted in the sand. Produce from seed to shipment, programmed and processed by a new agriculture.

“All roads lead, as they have for centuries, to the great centers of commerce and communication. As the continental highway now leads us to the City of Tomorrow. Here the city first receives its goods and produce from the factories and the fields of the world. Plazas of urban living rise over freeways. Vehicles electronically paced, travel routes remarkably safe, swift and efficient. Towering terminals serve sections of the city, make public transportation more convenient, provide ample space for private cars. And from a lower level, covered moving walks radiate to shopping areas that are now truly marketplaces of the world.”

Kevin has plenty of views on the U.S. agriculture topic, so stay tuned for more from the commodities sector…

Until next time,

Byron

Note: Byron King is a frequent contributor to the free e-letter Whiskey & Gunpowder. To receive daily insights into energy, oil, commodities and other natural resources sign up here!

Additional Resources:
BioFuels and the U.S.
U.S. Energy Policy - And Getting It Right
A Technological Energy Competition
Population Growth and the United States’ Depleting Resources…
The Worldwide Resource War is just beginning