The Gathering Perfect Storm

1
The Gathering Perfect Storm

• Consequences for Alberta Agriculture

2
The Agri-Food Industry is at a Fracture Point

• Agriculture is facing new opportunities, also
  new and serious challenges
• Same situation as energy Peak Oil Peak
  Food energy has some options
• Agriculture demand constrained to supply
  constrained
• Must double food production in 20 years
• Canada has best set of natural resources must
  have understanding, belief and will
• Must develop belief, understanding, and will

3
Peak Food Occurs Between2018 2022 . . . Why?

• Climate change is real global warming is the
  process reduction of 20 or more in productive
  capacity traditional cropping areas are
  disrupted
• 1.0 billion new, middle class consumers in Asia
  next 10 years equivalent to 3 new U.S.A.s in
  demand
• Population growth ¼ population of world 1960
  first 7 ½ years of 21st century

4
Global Society FacingPerfect Storm

• Four universal elements
• No person untouched anywhere in world
• Agriculture offers the broadest options to
  mitigate the Perfect Storm
• Potential effects could leave 2.0 billion
  starving

5
Four Elements toPerfect Storm

• Global Warming leads to climate change
• Health Care crisis
• Search for Energy Security and alternatives
• Need for ample, secure supplies of fresh water
  daily

6
Global Warming ? Climate Change

• Causes are debated physical effects are real
• July 15th, 2007 Britisher swims at North Pole
  2008 takes shipload of tourists
• Glaciers are melting all over the world
• Glaciers in Himalayas are source of fresh water
  to 2.0 billion people in S.E. Asia
• North west passage open for only second time
  2008 1st commercial East/West ship through the
  North West Passage.
• Arctic Ocean forecast to be free of ice 2030
• University of Colorado arctic ice melt 20 to
  30 years ahead of climatologists models

7
The Health Care Crisis

• Competing agenda different issues
• 2 billion people overfed, overweight
• 2 billion people underfed, underweight
• 66 - US population overweight 26 obese
• If unchanged 41 US adults obese by 2015
• 923 million near or at starvation daily
  increase of 149 million in 3 years

8
The Health Care Crisis continued

• Current 2 to 19 year olds in developed world
  are first generation likely to die ahead of
  parents
• Will be in health care system at same time as
  parents
• Level of obesity in this group has tripled last
  30 years
• Obese at 13 75 obese for life
• Epidemic of diabetes and other metabolic
  diseases underway

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Dr. Richard CarmonaU.S. Surgeon General 2002-2006
Obesity is the terror within. The magnitude of
the dilemma will dwarf 9/11 or any other
terrorist attempt We must stop overweightness
and obesity. To fail will incapacitate the
nation. Food and health must converge on the
same agenda
10
Search for Energy Security and Alternatives

• High energy prices high volatility over last
  decade
• Western society built on availability of
  ample cheap oil

11
Search for Energy Security and Alternatives
continued

• Historical position of Petroleum Industry
• no shortage of oil or gas
• cheap easy-to-reach oil may be diminishing
• large discoveries yet to be made
• But, in 2007, the message changed

12
Search for Energy Security and Alternatives
continued

• National Petroleum Council (US)
• delivered report to US Secretary of Energy on
  July 18th, 2007
• looked to 2030 Facing the Hard Truth about
  Energy

13
Two Major Changes in Message

• We are running out of cheap oil - not making the
  big new discoveries demand around the world has
  spiked consumption
• We must align consumption with discovery
  annually
• The last year that goal 2 was achieved was 1990.

14
International Energy Agency Forecast Late October
2008 Sober Thoughts

• Investments of 360 Billion per year are needed
  to meet the future energy demands of China,
  India, and others in South East Asia.
• Current annual rate of decline of existing
  producing oilfields 6.4 - need to bring on
  line 60 Million barrels per day by 2020 to
  maintain the status quo.
• Conventional pumping fields daily capacity
  globally 100 to 105 Million barrels per day.
  Consumption will average over 86 Million barrels
  per day in 2008 not much head room.

15
Access to Safe, Ample Supplies of Fresh Water
Daily

• Fresh water is a different element
• no replacement
• no alternatives
• fresh water is the foundation of life for
  humans, animals and plants
• must be able to access daily

16
Access to Safe, Ample Supplies of Fresh Water
Daily continued

• Today we are pumping 104 out of each 100
  replenished 4 annual deficit
• Agriculture consumes 70 of fresh water
  annually
• 20-25 of fresh water in the world is in the
  Great Lakes basin
• Canada has ½ of one percent world population
  has 10 of world fresh water even in Canada,
  fresh water is not distributed where needed
  global warming has huge impact on water
  availability, when available

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Canadians are used to Certainty

• Certain we . . .
• had ample secure, economical supplies of fossil
  fuel energy
• had easily accessible, safe, volumes of fresh
  water
• could access a health professional when needed
• that next years climate would be this years
  with minor variation
• The Perfect Storm removes all certainty

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Canadian AgricultureIts Future Role in the World

• Agriculture globally has breadth to mitigate
  elements of perfect storm
• Industry and Society must recognize fracture
  point
• Society must recognize peak food possibility
• Must be seen as a solution provider to society
• water use and management
• second generation bio-fuels
• greenhouse gas reduction and capture
• quality nutrition ? preventative medicine

19
What Can We Do?

• Recognize that science is the basis and
  foundation of the solutions we put forward must
  invest in new technology must partner with
  professionals in health and environmental
  sciences technology offers the best chance of
  managing the gap between supply and demand.
• Accept that we must become equally socially,
  economically, and environmentally responsible
  cannot let one leg of the stool overtip the other
  two must become triple bottom line

20
What Can We Do? (Continued)

• Must be committed to long term sustainability
  we cannot let short term opportunism mine our
  soil and water resources in a way that we are
  unable to sustain them for the future
• Agriculture in total must accept a new leadership
  role we must believe we are the foundation
  industry within all society

21
The Gathering Perfect Storm Effects on
Alberta Agriculture

• Sustainability
• The Northern Great Plains
• Energy and Agriculture
• Animal Protein
• The Activists Plan

22
Sustainability The Word in Media and Business
Today

• Sustainability means leaving our soil, air, and
  water in better shape for future generations
• Alberta has much to gain and learn
• Must stop taking fresh water access for granted
• Must develop a fresh water strategy

23
Northern Great Plains

• One of the great food baskets of the world
• Reno Nevada to North of Red Deer
• Will be hit hard by global warming
• Scenario planning for the next 20 years
• Alberta brings knowledge and resources to
  managing changes ahead

24
Energy and Agriculture

• 30,000 foot view of Alberta
• Energy is a big industry well organized,
  lobbies government and public with one voice
• Agriculture 1000 fragmented voices
• Very partisan no single voice or uniform
  message
• Hook both industries together alignment cap
  and trade greenhouse gas management opportunity
  for both
• Outcome for Alberta, Canada bigger, stronger,
  better

25
Animal Protein

• Industry will grow three or four times over the
  next 15 years animal protein revolution ahead
• Centre of gravity switches to Asia
• China and India alone will represent 31 of
  global market
• 1 billion new, middle class consumers coming on
  stream over the next decade
• Globally increased demand of three United States
  just ahead.

26
The Activists

• Livestock practices in particular are a target
  good TV
• Consumers drive food industry to product life
  cycle assessment
• Sustainability Indexes under review by the
  Grocery Products Manufacturers
• Consumers will buy using index information
• Could see environmental footprint labelling

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Summary Conclusions

• Huge demand for animal protein is heating up in
  Asia Canada must lead in food quality, food
  safety, and food security.
• Fresh water access trumps everything else with
  10 of the world fresh water supply, Canadian
  producers are the envy of the world we must
  manage this resource prudently.
• Global warming is real. Climate change is
  happening. The Agriculture and Food Industry
  must take the lead in sustainability practices.

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If We Believe If We Have the WillWe Can Do It!
Best Way to Predict the Future is to Create It!