Running out of Resources - Including PotashInteresting article on how we are running out of resources. The author makes specific references to potash as it relates to other fertilizers. More evidence of "right time, right place, right resource"
https://www.gmo.com/websitecontent/JGLetter_ResourceLimitations2_2Q11.pdf
B. Fertilizers
Fertilizers are, I believe, less tractable. The three major macro nutrient fertilizers are the well-known N-P-K of lawn fertilizer: nitrogen, phosphorus, and potassium. Nitrogen, the most urgently needed of the three every year, is found in the greatest quantity so is happily the least problematical. Many crops, such as soya and alfalfa, supply or “fi x” nitrogen for our main cereal production. Bioengineering is likely to increase this ability as well as broaden the range of plants that are able to do this. Electrical storms provide large quantities of nitrogen fertilizer out of the very air itself. (This provides about 5% of all nitrogen fi xation, while modern agriculture accounts for about 50%). More dependable man-made, or rather man-processed, nitrogen fertilizer is very effi ciently made with natural gas, which is being found, fortunately, in increased quantities in many different regions of the world. Several of these regions – notably the U.S. and China – are major grain producers. Therefore, if we don’t go out of our way to waste our natural gas on less important products, we should be fi ne at least through this century. Nitrogen is the largest component of air and just needs energy to be converted into fertilizer. So, longer-term availability of nitrogen-based fertilizer is, as with water, about cost, not availability. But, starting with today’s almost ridiculously low prices for natural gas (20% BTU equivalency of oil – just about the lowest in history), farmers should count on seeing increasing multiples of the price for nitrogen fertilizer in the next 10 to 15 years.
Potassium (potash)
Potassium is in a less favorable situation. Today’s known resources are shown in Exhibit 2. Although it is found widely, very large and high grade (i.e., cheap) deposits are concentrated to quite a remarkable degree in two areas: one in Russia and Belarus and the other, happily for North America if we all stay friendly, in Canada. Unless there is considerable cartel-like behavior, which is certainly not unheard of these days with some commodities, then we have plenty of time to study the very long-term shortage problem. Luckily for us, potassium is a generously supplied element in the Earth’s crust.
Nevertheless, it is worth pointing out that both potassium and phosphorus (phosphates) have some characteristics that we are not accustomed to dealing with in our neat and short-term-oriented investment world. They are characteristics that make energy problems seem trivial because energy can be extracted in so many different ways.
? Potassium and phosphorus cannot be made. They are basic elements.
? No substitutes will do. Both potassium and phosphorus are required for all living matter, animal and vegetable. Most notably, us. We humans are, for example, approximately 1% phosphorus by body weight.
? Modern high-production, single-crop agriculture today is very dependent on fi nite mined resources, which, if used wastefully, could easily cause a severe problem within 50 years and, if used sensibility and sparsely, could last for perhaps 200 years. And then what? You must recycle and farm super intelligently, as if your life depended on it. And it will.