Busy Bee Bugaboo and another Unsuspected Agent of Doom
This article was posted for the benefit of subscribers on May 6, 2007.
Recently, beekeepers have reported losses of up to 80% of their hives from various locations around the globe. Over the past month, there have been several different hypotheses proposed for the sudden disappearance of bees recently coined "Colony Collapse Disorder" (CCD):
Transmissions from cell phones might be killing bees http://news.independent.co.uk/environment/wildlife/article2449968.ece. Cell phones and their networks have been around for 20 years, so a sudden decline due to phones is highly improbable.
Mites infecting bees around the globe: http://www.news.com.au/story/0,23599,21660605-421,00.html.
Interestingly, research into the mites have shown they are carriers of potential viruses that infect bees: http://www.latimes.com/news/la-sci-bees26apr26,0,7437491.story?track=mostviewed-storylevel. The article goes into detail about how fungi, Nosema cerenae have been infecting hives. This fungi is one of many bee pathogens, including mites that infect bees with RNA viruses called iflavaviruses. Protection of hives from the fungi can be used to protect hives as well as pesticides to wipe out mites.
Nosema cerenae used to only affect Asian bees, but with importation of bee colonies around the globe, this spore-forming fungi now resides in many countries. Addition of fungicides to reduce the impact of fungus on beehives will only cause a stronger, resistant strain to emerge, making it even more deadly (Okay, here is a joke: a mushroom was not having much luck with the ladies and his friends could not figure out why; they all thought he was such a fungi). This type of fungicide abuse is similar to what is occurring in hospitals. The over excessive administration of antibiotics for cuts and in soaps etc. has lead to drug-resistant bacterial strains that are deadly to immune-compromised people (organ transplant patients on immunosuppressive drugs, cancer patients, AIDS victims, elderly etc.), particularly bacteria with the genus Pseudmononas.
The above different points suggest that there are numerous pathogens that can affect bees, many affected by climate temperature. The past few years have seen the Northern Hemisphere and other places around the globe experience higher temperatures, which could improve growth characteristics for certain pests. As an example, British Columbia, Canada has had a pine beetle infestation that threatens to destroy between 70-80% of their forests by 2013. In the past, naturally occurring forest fires would burn sections of forest that would eliminate the beetle or other forest pests. Rotations of multiple fires over many years would significantly reduce the population of the pine beetle or other pests so only small regions of forest were affected at any given time. Since forest fires have been fought tooth and nail over the past 60 years, a greater percentage of the current forest is at risk from being wiped out. Man has created a monoculture in BC in a sense, by having large sections of forest not being allowed to burn.
Much warmer temperatures in BC over the past decade along with forest fire prevention have created the "setup" for a significant ecological collapse in BC over the next 10 years (less water retention in trees translates to less water storage in soil will cause flash floods, increased erosion etc. etc.). Things will eventually stabilize, but the bottom line is "Do not mess with the mechanics of Mother Nature or at some point it will come back and bite you in the ass".
The bees will continue to live, but at a reduced level until they reach a balance with nature. Saskatchewan has had a ban on importing bees for 20 years, which has resulted in preventing the introduction of foreign pests e.g. mites, viruses, fungi. The following article is very informative and discusses why CCD is not as big a problem in Canada: http://www.cbc.ca/news/background/insects/index.html.
The following article is one of the best I was able to dig up on CCD, which basically describes the condition as a summation of stresses coming to a head at once: http://www.agbio.ca/Docs/Colony_collapse_bees.pdf. Another thread I wish to address is from the one and only, Wikipedia: http://en.wikipedia.org/wiki/Colony_collapse_disorder. I do not think that genetically modified crops are having any impact on bee populations. Tests are performed prior to new crops introduced into the environment to ensure key insects are not impacted: http://www.cornpest.ca/lib/news.cfm?id=32#bottom. Other articles similar to this may be found at www.cornpest.ca.
The importance of bees can not be understated but an urban legend may have been created about a supposed Albert Einstein quote "If the bee disappeared off the surface of the globe then man would only have four years left of life". I will refer you to the following thread that questions the validity Einstein even made such a quote: http://www.snopes.com/quotes/einstein/bees.asp. It is always important to check and double check references and never assume what you hear is the gospel. Do your own research to arrive at your own conclusions in any facet of life and many bumps along the way will be avoided.
It is unlikely that ALL the bees are going to die off the face of the earth. The big problem for bee declines appears to be present in commercial beehives. Honeybees are not native to North America, instead they were introduced from other countries. Honey bees are selected for many traits, one of them being a "degree" of aggressiveness towards innocent creatures stumbling within a certain vicinity of their hive. The following thread highlights the accidental introduction of the African honeybee into the Brazilian environment and it's tracking to the north over the past 4 decades: http://edis.ifas.ufl.edu/MG113. The globalization of economies has also resulted in the introduction of new pests into ecosystems. As such, a millennium will likely be required at a minimum to establish a new equilibrium within the balance of ecosystems; far too long to even consider in the day to day driven economics. Man is going to have to quickly learn to go organic and use lesser amounts of herbicides and pesticides, not only due to the potential disruption in pollinated food crops due to declines in bee populations, but peak oil.
The first thing that pops into the head of a person first stumbling upon the term "Peak Oil" is "Oh great, now it is going to cost 3x the current amount to fill my gas tank.........@#$^$#$% great". What many people fail to realize is how integrated oil is in our day to day lives. Oil is used to make plastics, herbicides, pesticides, antibacterial agents (benzoic acid) etc. The following thread is an interactive cartoon that shows what household items contain a link to oil: http://www.priweb.org/ed/pgws/uses/uses_home.html. The number of items is nearly inexhaustible due to its presence in most items. When peak oil does become more of a reality, it will significantly impact the amount of fertilizer, herbicide and pesticide application onto fields, which will result in increasingly lower global crop output going forward.
Transportation of beehives across counties will become limited to a narrow range, so I think apiarists are going to become as common as the baker, tailor, and butcher over the course of the coming years. Operations will be local, but the apiarist will likely be one hat of many that an individual may wear e.g. the future apiarist likely run a farm or simply be a family planting their own crops.
Peak Oil, the Other Unsuspected Agent of Doom
I wanted to tie peak oil into the prior portion of the article to show how the effects are further reaching and deeper than most would initially suspect by a surface viewing of a headline. The remainder of the article will discuss two aspects of peak oil I think will have significant implications for global society: peak global GDP and peak CO2.
Peak Global GDP
Since the dawn of time, economic growth of any nation has involved exploitation of resources of another kingdom once they deplete their own. Easter Island is renowned for having numerous stone statues, but most are not familiar with the ancient economics that drove that population to death (refer to the following thread for full reference: http://en.wikipedia.org/wiki/Easter_island). A former tribe living on Easter Island made an economy for building and moving statutes. Carts were made to move the statues as well as maintain a fleet of fishing vessels and homes. The rapid explosion of their population resulted in complete deforestation of the island, which translated into no new fishing boats to be built or maintenance of current ones i.e. no fish, no food with death to follow. The sudden disappearance of the trees collapsed the statue industry and all was abandoned; the civilization as they knew it ceased to exist.
Fast forward to the 15th-17th century Europe when England, France and Spain had nearly depleted their forests. The European conquests of the new Americas during this time frame saw the accumulation of gold the European Central Banks have been selling onto the market as of late. It is interesting to note that the wealth of England, Spain, France and other notable countries was initially founded upon exploitation of resources from South America. The gold came at no cost, aside from filling ships full of prisoners and the equivalent of Hells Angels persona to go to rape and pillage the new found land, all in the name of "Her Majesty".
The USA was initially settled by those of Asian descent some 12,000-24,000 years ago (based upon current research) only to essentially be expropriated by European conquerors in the 1600's. The growth seen in the USA or any other prior culture for that matter has been, and always will be, based upon an apparent inexhaustible energy source until it became apparently exhausted. Failure to have a constant supply or an ever-increasing amount of energy will result in an inevitable implosion in society (see above). For this reason, the primary driver for countries seeking new land in the past was to secure new resource pools for continued economic growth.
Currently, it appears global oil production peaked at 86 million barrels/day and is now in the process of declining (currently producing between 85-85.5 million barrels/day). The growth in China and India has been around 8% and 10% YOY, respectively for the past 10 years. Their consumption of global energy has risen from some 5% 10 years ago to 11% today. If growth in China and India continue at their blistering pace, they must consume oil that would otherwise be consumed by other nations. Peak oil will likely result in a 3-6% decline year over year in production so in 2017, global oil production will be between 62.7 - 50.9 million barrels/day, respectively.
There have been some extremely famous people (Jim Rogers) state the current commodity boom will run for 20-30 years, with the globe currently in year 7. As stated in the recent paragraphs, expansion of other countries i.e. consumption of resources requires a constant or growing supply of energy. Once peak oil occurs, it will result in the inevitable decline of global GDP for a significant period of time until a new equilibrium is reached. Oil is used for transporting goods, so a sudden lack of oil or high oil prices are going to significantly impact the consumption profile of global consumers. High prices could literally cap consumption that could cause demand destruction.
Countries will try and get around higher commodity prices by inflating their currencies, but eventually a collapse of debt and hyperinflation will cause a severe deflation (as per Easter Island). Commodity prices are likely to remain high for the next 20-30 years, but that does not necessarily translate into a 25-year bull market in related stocks.
The Mexican government received around 40% of the money in their coffers from the Cantarell Oil Field. With Cantarell now declining around 20% YOY, this is going to significantly affect the ability of the Mexican government to function at current output. The socialist candidate in the 2006 elections, Obrador lost by a marginal 1.35% (give or take). Over the coming years, expect pressure on the government to eventually take a similar stance to Hugo Chavez in Venezuela post 2012 Mexican elections (I expect a socialist landslide at this point in time). Nearly every gold or silver company in Canada or the US has some form of operations based in Mexico. An event such as this would be more than enough to cap the bull market in gold/silver stocks. Gold and silver bullion likely would rise even higher in price due to the typical scenario of socialists mining known deposits without diverting any cash to pay for drilling to increasing reserves or maintain infrastructure.
Many countries are going to nationalize their assets by 2014, making ownership of resource stocks improbable. Fear of nationalization will drive down stock prices, just look at any stock that had exclusive presence in Venezuela or Bolivia. For the threat of nationalization post 2012, we recommend conversion of money in Mexican gold/silver stocks into gold/silver bullion around mid 2010 to no later than early 2011 (it will be the late investors that end up holding the bag in gold and silver stocks). The above scenario may take later to occur than presented, but it is better to lower the degree of portfolio risk than take any risk at all.
Peak oil also will bring many different peaks e.g. peak technology, peak GDP, peak industrialization etc. One unsuspecting item is the likelihood of peak CO2 (at least the amount from human production). The levels of CO2 have been increasing slowly since the advent of the industrial revolution in Europe in the late 18th century.
Currently, there is a 10-15 year window mankind has to establish a flat lining of CO2 production to cause a reversal of the warming trend 50-100 years from now. The expected 3-6% YOY decline in oil production will result in a similar decline in CO2 production. Many suspect that coal consumption will be increased in order to meet rising energy demand, thereby negating the percentage decline expected to be seen from declining oil production. Oil is used for transportation and I suspect that many will be surprised at how quickly the declines in extracting coal and other forms of mining on a daily basis will be seen once supplies bottleneck. As such I think although global warming is an important issue, it is relatively safe to assume that CO2 production from humankind will decline 3-6% YOY for the next 20-50 years.
Currently, the global icecaps are melting, which causes one to ponder a well-known Newton's law. "For every reaction, there is an equal and opposite reaction. There are large blocks of ice in Antarctica and other places around the globe exerting a tremendous downward pressure on the Earth's crust. Melting the ice away essentially lifts the pressure from the vice, allowing the opposite pressure to be exerted in an upward direction. This could translate into strong plate tectonic movement over the coming centuries, which translate into more volcanic activity. Since one major volcanic event can spew more CO2 into the atmosphere than man produces in a given year, Mother Nature will be the likely culprit for any increases in the coming decades.
The purpose of this article was to collate all the current information about CCD seen with bee populations and possible causes. This phenomenon should be the central focus of governments for research, because a measly 3-5 million USD/year is small compared to allowing a $15 billion/year crop industry to operate. If the trend continues, expect food prices to go off the charts.
Peak oil ties into the bee issues via herbicide, pesticide, and fertilizer production. Lower levels of these components to crops will result in lower yields. Fertilizing fields with organic means (cow, pig and chicken manure, composting etc.) will be important for attempting to maintain yields.
With Peak Oil will come Peak CO2. The Earth will return to a homeostatic balance over the course of the next 300-500 years and hopefully humankind is still around to witness this event. The release of carbon trapped beneath the surface of the Earth (oil, bitumen and coal) has increased the carbon pool of the planet, thereby carbon based life for hundreds of millions of years. One of the few benefits of humankind has had in recycling carbon back to the planet for carbon-based life.
There is a lot to learn about the web of nature and it is important to walk around such webs rather than right through, because the outcome could be rather sticky.
Last week I released an update on the US Dollar Index, which will be the last of technical analysis reports I put on the web for the next 4-5 months. The next article I put out in 3-4 weeks will be controversial to say the least...hint: it has to do with the global government system.