Book review: “The Alchemy of Air” – Thomas Hager
The subtitle of this book summarizes the content quite nicely: “A Jewish Genius, a Doomed Tycoon, and the Scientific Discovery That Fed the World but Fueled the Rise of Hitler”.
Synthetic fertilizer is one of these inventions that profoundly changed the path of humanity, but is being rarely talked about. Before synthetic fertilizer, farmers fertilized the” old way”, using animal manure,crop rotation etc. The problem with this approach is that the land can only yield so much net of what these animals need to eat themselves. The main issue is that plants need Nitrogen in a form that naturally is not so easy to come by and is used up if agriculture is intensified. Although Nitrogen is the most abundant element on Earth (78% of the Atmosphere), plants need Nitrogen in a different form and only a few of them (peas, Soy) can produce it themselves.
The book starts with the revolution that was caused by the discovery of natural fertilizer in the form of Guano on islands west of the Chilean/Peruvian coast. It took some time until farmers realized what amount of additional productivity they would get out of their soil by adding guano, but soon, towards the middle of the 19th century, hundreds of thousand tons were shipped from South America to the US and Europe.
However, the Guano was harvested much much quicker than the birds could produce it. Coincidentally, relatively nearby, in the Atacama dessert, another naturally occurring fertilizer was found: Sodium Nitrate. Sodium Nitrate had a double use as the basis for explosives which made it one of the most valuable commodities of the late 19th century.
Europe and the US soon became dependent on the stuff from the dessert, with Germany becoming one of the biggest importers in order to supplement its poor soil.
However in the early 20th century, more and more European countries were concerned about their reliance on this ingredient from very far abroad and especially about the fact that the known resources would last only for maybe another 10-20 years, which would then result in a humanitarian catastrophe.
So Chemists were looking for a way to access the abundant Nitrogen in the Air in order to produce fertilizer synthetically. The problem with naturally occurring N2 is that the two Atoms are bonded together extremely strongly (triple bond). In order to separate them, a very high temperature is required which makes it then difficult to create a further chemical such as Ammonia (which is NH3).
Against the odds, A German-Jewish Chemist called Fritz Haber developed a way to create Ammonia form Nitrogen and Hydrogen that worked in a lap. In cooperation with another Chemist, Carl Bosch, who worked at BASF, they finally succeeded in producing Ammonia at an industrial scale in 1913.
The interesting aspect of this book that it doesn’t stop here but describes the development of the German Chemical industry that was based on this Haber Bosch method. As ammonia has this double use (fertilizer and explosives), the book also explores the role of the Chemical industry, both during WWI and then afterwords, going into the Nazi era.
Both chemist got involved in wartime efforts, Fritz Haber also was the first to develop chemical weapons in the form of poisonous gas. Bosch became CEO of BASF and then later of IG Farben, the combination of the big German Chemical company. According to experts, Germany would have lost WWI much faster if it were not for the Ammonia plant
The book also describes the issues of the industry during hyperinflation and the Weimar Republic as well as the the time until WWII. Before WWII, Bosch managed as one of his other big inventions to create synthetic oil from coal which made Germany more or less independent from oil imports for some time.
Both, Haber and Bosch lived somehow complicated lives and the book tries to give an objective view on both protagonists. Haber got the Nobel price in 1918 for the invention, Bosch in 1931 for his work on high pressure chemical processes, that revolutionized the Chemical industry.
Another proof of the importance of the Haber Bosch technology is that according to the book, the first transaction between China and the West in 1972 after Nixon’s visit was an order for 13 of the world’s largest Haber Bosch Plants. Without synthetic fertilizer it is estimated that only less then half of the currently living humans could be nourished.
Although this book clearly does not create any direct actionable investment idea, I do think it is a great book for anyone who is interested on which foundations the modern world is built on.
As we see right now with the war in Ukraine, high prices or the lack of natural gas not only result in cold houses but also in a potential lack of fertilizer which in turn might lead to lower harvests and less food. Just this week, for instance Yara announced to cut Ammonia production in Europe significantly.
On the other hand, Ammonia and Bosch Haber plant also play a big role in the Green revolution, as Ammonia is a decent enough store of Green electricity that can be used as feed stock or fuel for ships.
I can therefore only recommend this book to anyone who is interested in how the modern world works. As a bonus on top of the interesting content, the book is very well written.