A revolution in fertilisers may be starting with reactive nitrogen

Imagine you were writing a complete history of the human race – but you had to get it down on a single side of paper. What would you put in? The Roman Empire? Shakespeare?

I wouldn’t bother with such trivia. I’d concentrate on the really big shifts in mankind – the fundamental moments of mastery over the natural world. These are the events that any aliens observing our world would use to measure our progress.

Some of the most important of these are: mastering fire; generating electricity; and inventing vaccinations, radio, and computers. These gave us mastery of heat, disease, global communications, and information.

There’s another of these leaps forward that you’ll probably have overlooked in your potted history. It’s the moment when we mastered nitrogen. Even when I write it out, you might be unaware of how unbelievably important this step is. Let me make it plain to you: you may well owe your life to Fritz Haber.

Haber was an industrial chemist who did two remarkable things. Firstly, he was instrumental in the development of chemical weapons. His pacifist wife shot herself soon after the Second Battle of Ypres – one of the major gas attacks of the First World War. His other famous achievement was far more noble – and, indeed, Nobel. He became the first person to take nitrogen from the air, and “fix” it into ammonia in a commercially-viable way. And that’s why he won his Nobel Prize.

The world’s population is literally made from the product of this innovation. A very large percentage of the nitrogen in your body (save what’s in your lungs) results from Haber’s genius. This isn’t a matter of convenience or choice. Based on our current diet and farming approach, there simply isn’t enough reactive nitrogen in the world to sustain the world’s current population without this innovation.

It’s ironic, for a man who did so much to try and kill people, that Haber is responsible for an epic population explosion in the 20th and 21st centuries. The protein and DNA that’s in all these extra people comes from his process. You are physically made by Haber’s invention.

Let’s take a step back a moment and see how this fits into the bigger investment picture. Plants need a range of minor nutrients to be healthy, but there are three “macronutrients” that they need in large doses: nitrogen, phosphorous and potassium.

Nitrogen is all around us in the air – but it’s absolutely useless to plants. Bacteria, which live in plants like clover and peas, are the only natural way to get the nitrogen into a form that plants can use. And leaving fields to grow clover every four years, as they did in the 1700s, really doesn’t cut it with modern agriculture. That’s why we need the Haber-Bosch process, to provide this much-needed reactive nitrogen. But there are some serious problems with nitrogen production – and some great opportunities to profit from fixing them.

Nitrogen is incredibly energy-intensive to make in a useful form. It uses around 1-2% of the entire world energy supply. So there’s a huge prize to win if we can find a lower-energy way to achieve this. Fortunately, there are a couple of opportunities to make this transition – and to profit from it.

Firstly, there’s a new technique developed by Paul King and his team at the National Renewable Energy Laboratory in the US. This uses cadmium sulphide, and energy from sunlight, to produce ammonia – the “useful” form of nitrogen. However, this doesn’t require either the heat or pressure of the Haber-Bosch process. That results in a huge energy saving. If they can commercialise this approach, the team will be responsible for a game-changing innovation.

Secondly, the Bill & Melinda Gates Foundation is working on an alternative strategy. It’s funding an organisation called Engineering Nitrogen Symbiosis for Africa (ENSA), which is planning to genetically-engineer food crops like maize. The goal is to make them do the same trick that peas do – making their own fertilisers, using bacteria. This approach will certainly get rid of the need for nitrogen fertilisers; but it will also result in lower yields, as some of the plants’ energy gets used up in looking after the bacteria.

It’s early days yet for the above technologies, but this is a market you need to watch like a hawk. It’s not merely a possible profit opportunity – it’s a slam-dunk wallet-filling opportunity. All it’s waiting for is for an invention like one of those above to become commercialised. Anything that can knock the Haber-Bosch process off its perch will change the whole way we supply food – just as transistors replaced the valves previously used in early electronics. So keep your eyes peeled for opportunities to back innovative firms in this market.

However, the opportunities in the fertiliser space don’t stop with nitrogen. So let’s continue with the other nutrients.

Potassium is available in abundance in seawater, although it’s actually mined from naturally-occurring salt deposits. We’ll likely never run out, as useable purities of it can be obtained from the sea. It’s a potentially useful by-product of the salt manufacturing industry, and scientists at the Central Salt and Marine Chemicals Research Institute in India have developed a process for purifying from seawater – meaning that we’re now no longer dependent on mines. Keep an eye out for developments in commercialising that process, too.

Now, onto the final of our three macronutrients: phosphorus. It’s used to make DNA, and cell membranes.

And I’ve got some really bad news for you. But we’re out of time, and out of space. So in tomorrow’s post, when we’ll be doing a “deep dive” into the issues with phosphorus. These are potentially so serious that they could ultimately lead to wars and famines.

Category: Commodities

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