(soft music) - Hello, and welcome to Prairie Pulse.

Coming up a little bit later in the show, we'll visit a unique business in Audubon, Minnesota.

But first, joining me now, is our guest Dr. David Ripplinger.

Dr. Ripplinger, thanks for joining us today.

You're the NDSU professor of agribusiness and applied economics.

- I am.

- All right, you are.

So tell the folks a little bit about yourself and your background.

- Yeah, absolutely.

So I'm a native of Devils Lake.

Grew up in the region.

Went to NDSU and Iowa State for my education.

I've worked in energy, bioenergy for about a decade.

In that, my role as a professor and as an extension specialist, I'm really engaged in a lot of what's going on in terms of energy, both on the renewable side, as well as fossil fuels.

Looking at issues like climate, the energy transition.

Having conversations with farmers and others to help us kind of manage these changes, which we've seen a lot of in the last few weeks.

- Absolutely.

And as we're recording this, we know things will change and continue to change.

So we're here to talk about issues we hope in your wheelhouse, and that pertain maybe to the Russian invasion of the Ukraine.

Gas prices, they were going up maybe a little bit before the invasion.

But now at some pumps, it's around $4 or more a gallon.

Can you sort of explain what's going on there?

- Yeah, absolutely.

So there's a lot of things that are driving gasoline prices.

Some of it has to do with Russia's invasion of Ukraine.

But there was a lot going on beforehand like you mentioned.

Most of that was this rapid recovery from COVID.

So we saw both an economic recovery, which led to folks having money, returning to work, driving.

Having the income to spend money at the gas pump and in other ways.

We've also had some supply issues.

We really saw a huge decline in domestic production of oil in response to COVID, because folks weren't driving.

So they in some respects overshot and have been slow to recover.

And that really laid the groundwork or this poor place to start with what's now happened in Ukraine.

And just completely jolting energy markets around the world.

- Yeah, hard to predict maybe, but how long do you foresee this going on?

And oil companies, you mentioned them, are they responsible for some of this the way it's happened?

- Yeah, so it's gonna take years.

Really if we think long term about what the broader implications are of Russia's invasion, we're likely going to have to revisit energy trade globally.

Thinking more and more about energy security as it relates to the United States itself, as well as the West.

And that's not something that's gonna happen quickly or easily.

And it extends beyond just oil, natural gas, food, fertilizer, all of those things that we'd gotten from Russia, we're now gonna try and find better, more reliable partners.

Looking at the role of oil companies.

It's the purpose of an oil company to generate profits for its shareholders.

That's why they exist.

Do they have a role in this?

Well, they are part of the system, broadly speaking.

But the idea that they're dramatically exploiting folks is a bit of a stretch.

They're playing an important role in terms of bringing supply to market, be it oil or refined products.

And they're sitting at a point where they have to balance this global market for oil, and those demands.

And again, we're essentially short, so that's why prices have gone up so quickly.

Recovered a bit in the last couple of days, but to point to just one actor or one party is really missing a lot of the point.

- Okay.

And depending on who you listen to, we hear complaining about America's energy policy having something do with this, and the issues over the Keystone pipeline.

Can you talk about this and discuss that a little bit?

- Yeah, absolutely.

So Keystone XL was a pipeline that was gonna go from Canada into mid America, bringing both Alberta oil and North Dakota oil to market.

That was essentially sidelined with the new administration and canceled by TransCanada, as they just realized that the project was no longer feasible.

That plays a really small part in what's going on.

If Excel was still under development, it wouldn't be operational today.

If it was operational today, it's impact on supply would be really small.

And so it's one small piece.

But again, there's many pieces.

Thinking more broadly about energy policy, yes, we collectively could have done things differently, can do things differently.

But for almost all of those policies, there's a cost, or there's a trade off.

And so there's no easy answers either for the short term or the long term.

And high prices are there for a reason.

In this case, we have really high demand and supply issues.

But we're trying to manage other things just than affordability for the consumer.

So if we want to transition to a cleaner energy system, if we want to be more reliant, secure, to look out for the interests of our allies, those are all things that have to be considered.

And again, keep the situation really complex.

- Okay.

Critics of green energy also point to the current instability in the world and how fossil fuels are still needed to offset things when world event impacts gas prices and energy needs.

Do you agree with that or?

- Yeah, I mean, we're undergoing an energy transition.

Just this idea that we're having increased use of renewables.

Both market driven and policy driven, primarily outside of the United States, but here increasingly more year by year.

Fossil fuels are a fundamental part of our economy, and will be for quite some time.

Especially in the United States.

The role of oil and natural gas especially, has to be there.

And what we've really seen and in some respects, one of the challenges or the shortcomings of what's happened in Europe was they're aggressive pursuit of renewables, ignoring some of the over reliance on fossil fuels from Russia.

But getting rid of other sources of energy, for example, Germany's elimination of nuclear.

All of those things kind of play into it.

And we need to have a diverse set of energy sources, which we have.

And then just be really thoughtful and maybe realize we have to incur higher costs to make sure that we have a reliable system, especially when there's geopolitical turmoil in the world.

- Yeah.

Just how reliant is Europe on Russia for energy?

- Yeah, they were arguably too reliant.

Many countries in Europe relied heavily on Russian natural gas and oil to a point where it was arguably an energy security issue.

It was relying on someone who was not necessarily reliable who's now proved to be a belligerent nation.

And so they're now actively looking for ways that they can revisit their energy supplies, getting those energy supplies, either domestically, possibly through renewables, or importing from other nations in the West who might be more agreeable, amenable outside of Russia.

- Yeah.

Well now let's talk about the US.

And of course the US has a small percentage, I understand they get from Russia on energy.

But is the US energy independent or not?

- Yeah, so energy independence is this idea that we can supply everything ourselves.

And today we're not energy independent.

If we had a goal of being energy dependent, we certainly could be.

We have abundant fossil fuel resources, we have abundant renewables, as well as the opportunity to further develop renewables, further develop fossil fuels.

We're very much energy secure, which is this idea that we have access to affordable energy all the time.

And that's primarily due, or much more due in our nation, or we're much better off than almost any other nation in terms of our natural resources, as well as our national defense.

We don't have to worry about things that most other countries have to worry about.

We're not energy independent.

We don't need to be.

We are energy secure.

We can trade for other energy, import it like we might find beneficial, but not necessarily produce it all domestically.

- Yeah.

Is there much the administration now, the Biden administration when I say this, can do about gas prices?

Even this morning, listening to news, talking about maybe taking off state taxes, federal taxes.

Which might not, I don't know.

What can happen?

- Yeah, so there's no easy solution.

So most policies that would be considered reducing taxes, having price controls, having windfall taxes on oil companies, they all have significant costs that are typically overlooked at first glance.

And so, for example, if you had a waiver of the gas tax, that sounds great.

It might slightly lower the price at the pump, but we actually want high prices at the pump, because we're short.

We're essentially, we have very high demand, limited supply globally.

And then what you'd be doing is incentivizing consumers to buy a little bit more.

And it's painful.

There's many households right now where this is too much.

But it really worries me that you would be taking these steps to address one side of the issue, ignoring that there's a reason why these high prices are there.

And that extends to all of these policies.

If there was an easy answer, I think we would've seen that action happen very quickly.

There's a lot on the table, a lot being discussed.

As an economist, I'm hoping that they don't aggressively pursue these because of those secondary effects, which might be much more negative than what they're trying to address.

- Yeah.

Let's go back to Russia.

What were the sanctions on Russia that their oil imports do and what impact might this have?

- Yeah, so the implications of sanctions on Russia are maybe very significant, especially in the long term.

If it was simply the United States that had that self-sanctioned, was no longer going to import Russian oil, it wouldn't be a big deal.

Very little of our oil is imported from Russia.

It could be easily substituted.

The problem becomes if the West as a whole decides to stop purchasing Russian oil or natural gas.

We have to find replacements for that.

Either from other sources, which we don't have readily available.

By changing the energy that might be needed.

But really what you're looking at is reconfiguring the landscape as it relates to energy.

In the long run saying, we're gonna have Western energy, and we're gonna have Russian energy.

And Russian energy might also include China and other nations who are willing to trade with Russia.

And then everybody else, and to revisit all of that is gonna be a period of high prices and disruption.

But hopefully, if that happens, you'd have more energy security across the West.

- Okay.

Agribusiness is something you specialize in and teach.

What is agribusiness?

- Yeah, really simply, so it's the business of agriculture.

So, especially here in our part of the country, agriculture's a major business.

It includes activities on the farm, as well as supporting businesses, large food companies, input suppliers, and the like, are all part of agribusiness as we view it.

Interesting tidbit, the individual who coined agribusiness was a Harvard professor who actually grew up in west Fargo.

- Oh, okay.

So with that said, what impact will all this that's going on have on farmers in the US?

- Yeah, so the impacts on farmers are tremendous.

And it's actually not fuel as you might think, it's fertilizer.

So Russia is a major producer of natural gas and a fertilizer and exporter of fertilizer.

We actually saw beginning last fall, some very, very high prices in fertilizer, caused by other issues.

Not unlike what we're seeing with gas.

Other issues and now it's compounded by Russia's invasion of Ukraine.

So, domestically we can produce enough fertilizer.

But globally taking Russia and Ukraine out of that equation is really troublesome.

And we have to get through the spring with planting, to get fertilizer in the field to get the crops going.

What'll be really scary is come the fall and early winter, our winter, when the crops in South America have to go in, and they rely heavily on Russian fertilizer.

If there are embargoes or high prices or difficulty to transport, we're gonna see significant disruptions.

But again, right now we're seeing by far historically high fertilizer prices, driven in part by what's happening in Europe.

- So how big a food supplier is Russia throughout the world with their agriculture industry?

- Yeah, well, I mean I would pair them up with Ukraine.

I mean, they're a major producer of wheat, and also, Ukraine especially, more recently of soybeans.

They're relied suppliers to much of the world for food stuffs that people depend on.

And so this disruption in Europe caused by the war is really frightening from a food security standpoint, which is, again, something we in the United States typically don't have to worry about.

But for others who are looking to buy Russian wheat or Ukrainian wheat or Ukrainian soybeans, this is a really troubling time.

And again, there's a war going on.

They need to put the crop in.

And of course in Russia, that might be a bit easier if they have inputs.

In Ukraine, you have a war in the countryside.

And if they're not busy using their tractors to pull tanks down the road, they have to be getting their spring work done.

- Yeah.

With that said, let's turn a little bit, can you talk about the pipeline in Europe that we're hearing about, the Nord Stream Project.

- Yeah, so Nord Stream 2 was a pipeline built by Russia to supply Germany and Western Europe, essentially bypassing Ukraine.

Most of the natural gas had gone through Ukraine, which was not necessarily ideal for Russia.

They view that as a potential roadblock, possible roadblock to shutting down that transport.

Nord Stream 2 is gonna bypass that going through the Baltic, going straight to Germany.

Increasing the reliance or reinforcing the reliance that Germany and parts of Europe had on Russian natural gas.

Germany's now realized that energy security needs to be a higher priority, and it's essentially gonna be scrapped.

And so with that, if Germany is no longer gonna buy Russian natural gas, they're gonna have to get energy from somewhere.

Right now, they're still, Europe is still relying on Russian natural gas now through the spring.

But longer term, they're gonna try and get away from it.

And one of the ways they're gonna do that is not utilizing that new pipeline.

- Yeah, just kind of thinking, going back to sanctions that we've been talking about.

What impact will all the sanctions have on Russia, and how crippling will it be?

- Yeah I mean, it's devastating.

If you look at the many different ways that we've applied heat to the Russian economy, it's quite amazing.

It's really quite aggressive.

Their inability to access funds, assets around the world to conduct transactions, to export, to trade, the sanctions are extremely strong.

The issue is, they typically impact the common Russian citizen, not necessarily the leadership.

And so it becomes an issue of how much will the people take?

And we really don't know.

But of course, right now, lifestyles are changing relative quickly.

And it's more than just McDonald's closing down.

It's the availability of consumer products, it's the availability of finance.

And you even think too from an individual standpoint, you shut down social media people are reliant on, or used to.

It's also a psychological issue.

- Yeah, so the question is, what is the impact of Biden's revoking the trade relations status for Russia?

- Yeah, well I mean, it just adds another piece to this.

I mean, we're basically going as far as we can, in terms of economic sanctions.

And for the most part, where we're at today and where we may continue to be is that Russia's gonna be an economic pariah, that no one will do business with Russia.

And that is devastating to the Russian economy.

They're already feeling that.

But we're also gonna feel some of that as we have to reorganize our economy and our trade flows to get the things that we need.

And also for the United States to supply our partners and allies around the world.

- Yeah, and you're hitting on the next question.

A comment to talk about how interconnected the world is when it comes to trade.

- Yeah, we've seen over the last 30, 40 years that trade is core to our economy.

The trade of goods and services around the world has become so commonplace that almost any product you have have pieces from around the world.

May have been at sale in multiple places around the world.

And to unwind that, even with some trading partner like Russia which is really focused primarily on raw inputs, it's really difficult.

It's been a good thing, because we become extremely efficient at producing products for consumers.

It's also had the benefit generally of strengthening relationships between countries, because we're trade partners, we're business partners.

At the same time, you also have reliance or interactions with nations that might not be people that you wanna do business with.

And now, like in the case of Russia, we're quickly stepping away.

- Yeah, crystal ball real quick.

Where does all this end up economically for the United States especially, regarding inflation, gas prices, energy, and all of it throughout this crisis?

- Yeah, so I think the long term impacts are gonna be very long term.

Inflation is very high.

Highest in more than a generation.

That has not been fully addressed.

The crisis in Ukraine.

As it impacts energy, energy really can push up a lot of prices.

That can make many other prices higher.

You're not gonna get any relief on that side.

And it's gonna take years for us to address inflation through policy, federal policy, federal reserve policy, for us to reconfigure trade.

I would think we have years.

You tell me when, I wouldn't be surprised either way.

- Well unfortunately we're out of time, and crystal ball is just that, time will tell.

If people want more information, where can they go?

- Yeah, they're free to contact me.

Again, I'm at North Dakota State University.

You can give me a call.

(701)-730-2202, or send me email at david.ripplinger.

It's R-I-P-P-L-I-N-G-E-R at ndsu.edu.

- Thanks so much for joining us today.

- [Dr. Ripplinger] Thank you.

- Stay tuned for more.

(soft music) Fireball Fire Pits is a family owned company in Audubon, Minnesota.

Specializing in custom made fire pits.

Eva Asplin and her daughter, Melissa, love to make people's dreams come true.

And they are selling fire pits to people all over the world.

(fire rippling) - People like the sound and the smell of a real fire, the light, I don't.

People are just sort of drawn to fire I think.

Maybe biologically.

It's the whole camaraderie, having family and friends gathering around.

(soft music) This is a business that I started on accident.

I wanted to make an earth type fire pit for my sister for her birthday.

She needed a new fire pit.

So we decided to make three fire pits.

And as we were doing that, people just started pulling up in the driveway saying they wanted the next one.

After we made a few that way, we started kind of going to a few trade shows.

And then people would say, yeah, that's cool.

But could you make something with horses, or could you make something with, and it just grew.

- I think that it's something really cool that there's not a lot of in this area.

So having something around here that is unique, tells that story, is something that I think should be popular in this area.

I help with the initial deciding what should go where, and then the fine tuning of how big something should be.

(upbeat music) - She does have great ideas, and she'll help say, no do it this way, or do it that way.

We had a customer that wanted the most unusual things.

She wanted unicorns in a night sky.

Skulls, butterflies, and mermaids.

How do you combine those things?

The concept was totally Melissa's.

We made skull pillars with the butterflies feeding on them, and then a night sky on one side and day sky on the other.

And it was amazing.

Initially, we had a pretty limited supply of standard designs.

Now we maybe have 20 different designs that we have on our Etsy site and on our website.

Even still, like someone wanted our wildfire pit with deer and whatnot.

'Cause he said, I fish a lot, so could you put a sailfish on it and a marlin on it?

A lot of people want more customized, they have their own ideas.

So we'll do either.

And I really love customized work.

I love doing brand new designs.

Typically our fire pits are wood burning.

We make them to burn wood.

So you would put a bunch of wood in it and light it and burn it.

And the thing about the ball shape is it burns really hot and really clean.

So you would probably never have to clean it out.

And the ball itself holds a lot of radiant heat.

So it's just better for heat.

We also do insert gas burners into them.

We either have the design, or we'll come up with design.

A lot of them, I just completely draw by hand.

People sort of want the same thing.

They want to know what they're getting.

So we have stencils for something like a deer or an eagle.

And so then we'll just draw it out on the ball, cut it, plasma cut it.

We'll weld the ball together, weld the base on.

And then we clean it all up, grind it.

We clean it and get rid of all the slay.

And then we'll, because a ball won't stay shiny looking, it will rust eventually when you have a fire in it.

So we rust them ahead of time, ahead of shipping them.

Then we just wrap 'em up and ship 'em out.

We buy all American made steel, and we buy the product new now.

We used to do a lot more repurposing and recycling.

But now it's almost all new and we can buy balls in hemispheres, or we can buy them in segments, pieces as many as 14.

And we have to weld them together and form a ball that way.

Typically a three foot ball is about $2,000.

I think Japan will be our farthest shipment.

We've shipped a few to Canada, Alaska.

We've had inquiries in Spain, Australia, London, France.

I think faith brings you full circle back to who you are.

I mean, creative people just have to do creative things.

A lot of days, I hate that we can't eat.

But every day when I drive away from this place and I look at what I've done, I just say, man, I love this job.

It's so much fun sort of making people's dreams become a reality for custom work like that.

- I really love seeing all the designs come together and how they kind of tell a story once they're finished.

If somebody comes with a specific design in mind, you can kind of tell that it's something that they brought to the table themselves, not just a standard waves design.

It has a meaning to them in some way.

Tells that story that they wanted, and they can share story without even having to speak about it, when you're sitting around a fire, it's kind of a nice campfire story, except the ball is telling it for them.

- Well, that's all we have on Prairie Pulse for this week.

And as always, thanks for watching.

(soft music) - [Announcer] Funded by Minnesota Arts and Cultural Heritage Fund, with money from the vote of the people of Minnesota on November 4th, 2008.

And by the members of Prairie Public.