Friday, October 12, 2007

La Niña, a Potential Benefit ?

The NOAA issued a forward guidance earlier this month regarding the development of a mild-moderate La Niña formation occurring in the central Pacific Ocean. La Niñas often occur shortly after a preceding El Niño. This was the case during the 1997-1998 El Niño and again this year as the most current La Niña comes on the coattails of an El Niño which began in the fall of 2006. According to the NOAA, these tropical pacific formations typically last 12-18 months and can accurately be predicted 6 months in advance.

According to the NOAA, El Niño episodes occur roughly every four-to-five years. El Niños are characterized by increased precipitation and warmer-than-normal pacific sea surface temperatures along the equator. These increased temperatures correlate to drier fall and winter conditions in the U.S Pacific Northwest and a wetter-than-normal winters along the Gulf Coast states and in central and south California if the El Niño is particularly strong.

Interestingly, the effects of a La Niña are nearly complete opposites to that of an El Niño. La Niñas equate to wetter conditions in the pacific west and southwest as well as drier winter weather in the Southeast. Additionally, La Niñas typically alter ambient temperatures around the United States. This is defined by above average temperatures throughout the continental states, with the exclusion of the Pacific Northwest, which is expected to experience colder conditions. The intensity of these climate changes correlate to the amplitude of their respective La Ninas/El Niños. Since the NOAA expects a historically weaker formation this year, this could lessen the over all climate impacts felt by the United States. That being said, weather formations and the prediction of their effects are highly variable and subsequent to frequent amendments.

Economic Impacts

The impacts of La Niñas and El Niños on our economy are diverse and dependent on the strength of the correlating formation. As with virtually all economic stimuli there are expected winners and losers. Variations in weather patterns such as increased precipitation in the Northwest could lead to enhanced hydro-electric recovery as previous El Niño/La Niñas have risen reservoirs by as much as 30%. Since hydro-electricity is derived from the potential energy stored in a column of fluid, the greater the stored reserves the greater the potential for energy generation. More importantly, this La Niña could improve the fragile tug-o-war for water in the Corn Belt as agriculture and residential users compete for this scarce resource.

Cēterīs pāribus, this most recent La Niña could prove to be a minor blip on the emerging trend of water scarcity and ever increasing demand. Agricultural needs the precious commodity to grown the food we eat as well as the food we burn. As the ethanol industry continues to grow so does its demand for water; Precious water to nourish the energy intensive crop and wash water to process the ethanol. It is estimated that a 50 million gallon per year facility will require upwards of 300 million gallons annually. Corn harvests and the ethanol producers such as VSE and ADM which depend on them could temporarily benefit if this most recent La Niña can provide the rain that the parched corn belt, desperately requires.

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