Energy industry experts and insiders told FOX Business that they welcome Energy Secretary Jennifer Granholm’s call to increase domestic energy production.
Russia’s invasion of Ukraine has rattled the global economy, creating a volatile stock market and sending oil and gas prices to unprecedented levels.
High gas prices are in turn raising the price of fertilizer, which is crucial for the nutrients in crops that billions of people need to live.
FILE PHOTO: The Nutrien Redwater Fertilizer plant near Fort Saskatchewan, Alberta, Canada, October 7, 2021. (REUTERS/Todd Korol/File Photo)
But problems were brewing even before Russian tanks rolled into Ukraine, with fertilizer prices surging to historic highs because of higher input costs and supply chain issues.
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Peter Zeihan, a geopolitical analyst and author, told FOX Business the world was on the verge of “the worst fertilizer situation in modern history in terms of supply” before the Russians rolled into Ukraine.
“All three source materials that go into fertilizer (phosphate, nitrogen, potash) are subject to abject shortage. And even if the war were to stop tomorrow, it’s already too late. It’s too late for the planting season for the Northern Hemisphere this year.”
Zeihan forecasted that the crisis will hit Brazil, Africa, the Middle East and South Asia the hardest as they will likely see significantly lower yields “than what is necessary to support the global population.”
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“And as food prices rise, as they’ve been for the last two weeks – and pretty sharply – farmers will do what farmers do. They will plant what they think that they can grow for the greatest bang for their buck,” Zeihan said. “So, I can see (the United States) increasing our production and our exports by a small amount. But the scale of what we’re talking about here is insufficient food for hundreds of millions of people.”
Manish Raizada, a professor in the Department of Plant Agriculture at the Canadian University of Guelph, predicted that the crisis has the potential to impact billions of people in developing nations who rely on subsistence farms.
A view of damaged regional police station building after a Russian missile attack in Kharkiv, Ukraine on March 2, 2022. (State Emergency Service of Ukraine/Handout/Anadolu Agency via Getty Images)
“Anytime essential oil or natural gas prices increase, nitrogen fertilizer prices increase. And the last time this really happened was around 2008 when there was a big shock worldwide. It pushed 150 million more people on earth into chronic malnutrition,” Raizada said. “I really fear that’s happening right now.”
Problems will be even worse for countries that relied on wheat exports from Ukraine, the so-called “breadbasket of the world.”
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“Put those two things together – the increase in wheat prices and the increase in nitrogen fertilizer prices,” Raizada said. “You add this on top of what’s happening with COVID the last two years. That already had created a lot of problems in terms of the supply chain. It’s really terrible.”
