55. WILL PEAK OIL MAKE LONG DISTANCE SHIPPING TOO EXPENSIVE TO CONTINUE?
MYTH: The rise in fuel prices occasioned by peak oil will make it too costly to transport food over long distances. Food production will have to be relocalized. As the peak oilers say: "The 3000-mile salad will be a thing of the past".
REALITY: A kilogram of rice (in Japan, where I live) costs about $3.64. The fuel cost of transporting this rice by container ship, at current fuel costs, over a distance of one-half the circumference of the earth, is about $0.015 (one and a half cents). Ship fuel accounts for 0.4% of the cost of the retail product.
So let's look at how fuel costs for long-distance shipping will affect the price of this bag of rice as oil prices skyrocket:
If crude=$65/barrel, rice=$3.64/kg
If crude=$130/barrel, rice=$3.655/kg
If crude=$260/barrel, rice=$3.685/kg
If crude=$2600/barrel, rice=$3.775/kg
Clearly, demand destruction is going to occur long before crude costs make long-distance shipping too expensive. Fuel costs for long-distance shipping are a minute fraction of the retail price of food.
==== CALCULATION DETAILS ====
Shipping is by far the most energy efficient method of moving goods around. Careful analysis has found that a long-haul truck uses between 0.7 to 1.2 megajoules per tonne-kilometre , while a train hauling a load of freight wagons consumes around 0.6 megajoules per tonne-kilometre. A fairly fast ship carrying around 25,000 tonnes of cargo at 18.5 knots uses only 0.12 megajoules per tonne-kilometre.Source
Using the above figure, we need 0.12 million joules (= 120,000 joules) to move 1 tonne (= 1000kg) a distance of 1km by cargo ship. This means it takes 120 joules to move 1kg over 1km.
The circumference of the earth is roughly 40,000km, and half of that (20,000km) is a good upper limit on transport distances. (If you were going to travel further, it would be shorter to go the other way around.)
To move a 1kg bag of rice 20,000km will, therefore, take (120)(20,000)=2.4 million joules.
Converting this to btus (using the nifty conversion calculator listed in the "Links" section on this page), we get: 2275 btus.
One barrel of residual fuel oil contains 6,287,000 btus. (Source)
A barrel contains 42 gallons, so one gallon of residual fuel oil contains about 150,000 btus.
The price of residual fuel oil (New York Harbor, July 2005) is $1.01 per gallon.Source (pdf)
So the cost of residual fuel oil, per btu is: $0.0000067.
Transporting the rice will therefore cost: (2275 btu) ($0.0000067/btu)= $0.015.
Thanks to nero for the hints on this calculation.