READING TEXT 1
THE SEED OF THE ENERGY CRISIS LIES IN TOMATOES
Economists miss the fact that gas prices affect everything, not just fuel bills
Every time I need a reminder of how utterly entangled our lives are with natural gas, my
mind turns straight to tomatoes. This will doubtless sound a little odd. For most people,
natural gas is all about heat and power, about those bills the government has just committed
to cap, at extraordinary expense. And yes, this is all incredibly important – and we’ll get to it
in a moment, but please: indulge me for a moment by thinking of a glistening, ripe, cherry
tomato.
If it was bought from a supermarket, the chances are that this tomato was grown in an
enormous greenhouse. Most of our domestic crop comes from these surreal places: wide,
cavernous halls of glass with rows of tomato vines – and for that matter, cucumbers and
peppers – sprouting from hydroponic substrate, stretching in lines as far as the eye can see.
The roots are drenched in water and nitrogen-rich fertiliser; the air is kept over 20C and
artificially enriched with carbon dioxide, about double the concentration outside . In the most
advanced greenhouses in the Netherlands there are artificial-lamps that flick on during
cloudy days or in the winter.
The upshot of all of this is that those tomatoes photosynthesise and hence grow at an
extraordinary clip. A single acre in these greenhouses can yield 400 times that of a typical
field. There are other benefits: growing with hydroponics means you can be more forensic
with your fertiliser. These places use far fewer chemicals than traditional farms. And more
tomatoes per acre, means a lower price in the supermarket. In the decade between 2010
and 2020 the price of the average British tomato barely budged.
What on earth has all this got to do with natural gas? Only everything. Nearly all the world’s
nitrogen-based fertiliser is made from natural gas; we use methane to “fix” nitrogen from the
air. The boilers keeping the greenhouses warm are almost all fuelled by natural gas. And the
cO2 being pumped in to aid photosynthesis is captured from the boiler’s flue. The tomato is
quite literally a fossil fuel product.
When economists glance at the “basket” of goods whose prices are collected and
aggregated into the official inflation data, they are often struck by how little of it is formally
categorised as “energy.” The other week, a Financial Times columnist remarked that “energy
prices account for 10 per cent” of inflation. He had totted up things such as electricity bills
and petrol prices. But, I found myself shouting at the newspaper, what about tomatoes?
Tomatoes are also energy products. For that matter, so are peppers and aubergines and
anything else grown with fertiliser and transported in trucks. And tomato inflation, it turns out,
is running at 20 per cent – even higher than the headline rate.
1
,I’m quite serious about this. I have a suspicion that part of the reason economists at the FT
and for that matter the Bank of England missed the recent build-up of inflation (which
pre-dated the Ukraine war by months) is that they didn’t spend enough time pondering
tomatoes. They failed to understand that energy costs are not just a sub-category of
inflation, they are everywhere: in food prices, product prices, services prices. They also
failed to notice the bug at the very heart of conventional economics, which blithely presumes
that if the price of something goes up, people can just buy an alternative product. Tomatoes
too expensive? Just buy a different vegetable. Fine. But you can’t really substitute for
energy: you go cold or you do nothing.
All of which is why we were heading for such an economic cliff-edge until last week’s
intervention. It also helps explain why even an instinctive libertarian used her first piece of
legislation to fix prices. There are no free-marketeers in an energy crisis. Liz Truss’s energy
guarantee, as she called it, is a very big deal indeed. It might even prevent a recession, just
about. But that success will come at a price. Quite what that price is no one can tell you. The
Treasury didn’t even bother trying, which infuriated the City’s economists but is in some
senses more honest than attempting to put a number on it. Perhaps we’re talking £100
billion, perhaps more; probably the biggest peacetime splurge in modern history
… but frankly no one has the foggiest because it all depends on what Vladimir Putin does
next. Some Russian gas is still flowing to Europe at the moment, mostly via Ukrainian
pipelines (the irony!), but how soon until Russia confects an excuse to cut that supply off,
doubtless blaming it on Volodymyr Zelensky? So the price could go higher still.
However, beyond the cost and detail of how it will work, there are at least two other problems
with Truss’s intervention. The first is that it assumes that this will all be over in a couple of
years. Yet look at the timeline of forthcoming global gas projects, and it’s clear that the hole
left in European markets by Russian gas will not be filled until the second half of this decade.
There is a good chance, in other words, that what looks today like a very expensive subsidy
could soon turn so costly that it could threaten the solvency of the nation. Don’t panic: we
are nowhere near that yet, but it’s enough a prospect that investors are getting a wee bit
nervous.
The other problem is that the energy guarantee failed to ask the most obvious question:
since Russia benefits from high energy prices and since we use so much energy, might it not
be prudent to think how we could use a bit less of it in future? Back to those tomato farmers.
They are having a terrible time of it; half the glasshouses in northern Europe are empty
because growers can’t afford the gas. Truss’s measures might make it just about affordable
to switch the boilers back on, but there’s another model, which draws inspiration from the
pandemic. In much the same way as we paid people then to stay at home, this time around
shouldn’t we be paying businesses not to burn gas? Sure, cherry tomatoes may be harder to
come by for a few years, but a less colourful salad is surely a small price to pay for a policy
that might hit Putin where it hurts: smack bang in the gas price.
2
,The final lesson to draw from tomatoes is a deeper one. If we are going to reduce our carbon
emissions and get to the much-vaunted net zero, something Truss recommitted herself to
last week, it won’t just come about by replacing our gas boilers with heat pumps and our
power stations with wind turbines. We’ll have to come up with new ways to make fertilisers
without natural gas (and without cannibalising the world’s electricity). We’ll have to try to
disentangle the million different ways we are reliant on fossil fuels. We’ll have to reimagine
nearly every corner of industry. In the great energy transition. Tomatoes are a mere
appetiser.
3
, VOC
- utterly entangled
= deeply involved / totally linked
(volledig verstrengeld)
- committed to cop
= to set a limit on something
→ in context:
A maximum limit on how high those bills can go, but doing zo will cost the
government a huge amount of money
- indulge
= asking the reader to go along with their thought or idea
- domestic crop
= a type of plant that’s grown locally
(binnenlands teelt)
- crop
= a plant such as a grain, fruit, or vegetable grown in large amounts
- cavernous
= describing a very large space
- sprouting
= the early stages of plant growth, where the seeds are starting to develop after
being placed in the hydroponic substrate
- artificially
= a way that uses an industrial process or substance, rather than being natural
- to enrich
= to improve the quality of something by adding something else
- upshot
= something that happens as a result of other actions, events, or decisions
- yield
= to produce
- hydroponics
=a method of growing plants where liquid chemical plant foods are added to water,
rather than growing them in soil
4
THE SEED OF THE ENERGY CRISIS LIES IN TOMATOES
Economists miss the fact that gas prices affect everything, not just fuel bills
Every time I need a reminder of how utterly entangled our lives are with natural gas, my
mind turns straight to tomatoes. This will doubtless sound a little odd. For most people,
natural gas is all about heat and power, about those bills the government has just committed
to cap, at extraordinary expense. And yes, this is all incredibly important – and we’ll get to it
in a moment, but please: indulge me for a moment by thinking of a glistening, ripe, cherry
tomato.
If it was bought from a supermarket, the chances are that this tomato was grown in an
enormous greenhouse. Most of our domestic crop comes from these surreal places: wide,
cavernous halls of glass with rows of tomato vines – and for that matter, cucumbers and
peppers – sprouting from hydroponic substrate, stretching in lines as far as the eye can see.
The roots are drenched in water and nitrogen-rich fertiliser; the air is kept over 20C and
artificially enriched with carbon dioxide, about double the concentration outside . In the most
advanced greenhouses in the Netherlands there are artificial-lamps that flick on during
cloudy days or in the winter.
The upshot of all of this is that those tomatoes photosynthesise and hence grow at an
extraordinary clip. A single acre in these greenhouses can yield 400 times that of a typical
field. There are other benefits: growing with hydroponics means you can be more forensic
with your fertiliser. These places use far fewer chemicals than traditional farms. And more
tomatoes per acre, means a lower price in the supermarket. In the decade between 2010
and 2020 the price of the average British tomato barely budged.
What on earth has all this got to do with natural gas? Only everything. Nearly all the world’s
nitrogen-based fertiliser is made from natural gas; we use methane to “fix” nitrogen from the
air. The boilers keeping the greenhouses warm are almost all fuelled by natural gas. And the
cO2 being pumped in to aid photosynthesis is captured from the boiler’s flue. The tomato is
quite literally a fossil fuel product.
When economists glance at the “basket” of goods whose prices are collected and
aggregated into the official inflation data, they are often struck by how little of it is formally
categorised as “energy.” The other week, a Financial Times columnist remarked that “energy
prices account for 10 per cent” of inflation. He had totted up things such as electricity bills
and petrol prices. But, I found myself shouting at the newspaper, what about tomatoes?
Tomatoes are also energy products. For that matter, so are peppers and aubergines and
anything else grown with fertiliser and transported in trucks. And tomato inflation, it turns out,
is running at 20 per cent – even higher than the headline rate.
1
,I’m quite serious about this. I have a suspicion that part of the reason economists at the FT
and for that matter the Bank of England missed the recent build-up of inflation (which
pre-dated the Ukraine war by months) is that they didn’t spend enough time pondering
tomatoes. They failed to understand that energy costs are not just a sub-category of
inflation, they are everywhere: in food prices, product prices, services prices. They also
failed to notice the bug at the very heart of conventional economics, which blithely presumes
that if the price of something goes up, people can just buy an alternative product. Tomatoes
too expensive? Just buy a different vegetable. Fine. But you can’t really substitute for
energy: you go cold or you do nothing.
All of which is why we were heading for such an economic cliff-edge until last week’s
intervention. It also helps explain why even an instinctive libertarian used her first piece of
legislation to fix prices. There are no free-marketeers in an energy crisis. Liz Truss’s energy
guarantee, as she called it, is a very big deal indeed. It might even prevent a recession, just
about. But that success will come at a price. Quite what that price is no one can tell you. The
Treasury didn’t even bother trying, which infuriated the City’s economists but is in some
senses more honest than attempting to put a number on it. Perhaps we’re talking £100
billion, perhaps more; probably the biggest peacetime splurge in modern history
… but frankly no one has the foggiest because it all depends on what Vladimir Putin does
next. Some Russian gas is still flowing to Europe at the moment, mostly via Ukrainian
pipelines (the irony!), but how soon until Russia confects an excuse to cut that supply off,
doubtless blaming it on Volodymyr Zelensky? So the price could go higher still.
However, beyond the cost and detail of how it will work, there are at least two other problems
with Truss’s intervention. The first is that it assumes that this will all be over in a couple of
years. Yet look at the timeline of forthcoming global gas projects, and it’s clear that the hole
left in European markets by Russian gas will not be filled until the second half of this decade.
There is a good chance, in other words, that what looks today like a very expensive subsidy
could soon turn so costly that it could threaten the solvency of the nation. Don’t panic: we
are nowhere near that yet, but it’s enough a prospect that investors are getting a wee bit
nervous.
The other problem is that the energy guarantee failed to ask the most obvious question:
since Russia benefits from high energy prices and since we use so much energy, might it not
be prudent to think how we could use a bit less of it in future? Back to those tomato farmers.
They are having a terrible time of it; half the glasshouses in northern Europe are empty
because growers can’t afford the gas. Truss’s measures might make it just about affordable
to switch the boilers back on, but there’s another model, which draws inspiration from the
pandemic. In much the same way as we paid people then to stay at home, this time around
shouldn’t we be paying businesses not to burn gas? Sure, cherry tomatoes may be harder to
come by for a few years, but a less colourful salad is surely a small price to pay for a policy
that might hit Putin where it hurts: smack bang in the gas price.
2
,The final lesson to draw from tomatoes is a deeper one. If we are going to reduce our carbon
emissions and get to the much-vaunted net zero, something Truss recommitted herself to
last week, it won’t just come about by replacing our gas boilers with heat pumps and our
power stations with wind turbines. We’ll have to come up with new ways to make fertilisers
without natural gas (and without cannibalising the world’s electricity). We’ll have to try to
disentangle the million different ways we are reliant on fossil fuels. We’ll have to reimagine
nearly every corner of industry. In the great energy transition. Tomatoes are a mere
appetiser.
3
, VOC
- utterly entangled
= deeply involved / totally linked
(volledig verstrengeld)
- committed to cop
= to set a limit on something
→ in context:
A maximum limit on how high those bills can go, but doing zo will cost the
government a huge amount of money
- indulge
= asking the reader to go along with their thought or idea
- domestic crop
= a type of plant that’s grown locally
(binnenlands teelt)
- crop
= a plant such as a grain, fruit, or vegetable grown in large amounts
- cavernous
= describing a very large space
- sprouting
= the early stages of plant growth, where the seeds are starting to develop after
being placed in the hydroponic substrate
- artificially
= a way that uses an industrial process or substance, rather than being natural
- to enrich
= to improve the quality of something by adding something else
- upshot
= something that happens as a result of other actions, events, or decisions
- yield
= to produce
- hydroponics
=a method of growing plants where liquid chemical plant foods are added to water,
rather than growing them in soil
4
