A group of well-placed observers have warned the world about the possibility of a major volcanic eruption in Iceland in 2015. Steen Jakobsen, the chief economist of the Danish trading and investment firm Saxo Bank, and the bank’s strategy team have issued their “Outrageous Predictions” for the coming year.
They state that these predictions are “independent calls on events that can upset global markets or politics. They are strategic in nature rather than an exercise in getting everything right, while our aim is to encourage alternative thinking.” An eruption of the Barðarbunga volcano could send a cloud of ash and noxious gasses that would threaten to block incoming solar radiation and cause crop failures across Europe, leading to rising food prices and political unrest.
Even if the ultimate consequences of the eruption were not so severe, the fear of poor harvests could drive food prices skyward and create severe economic and political disruptions. Saxo Bank mentioned other possible threats in 2015, including a housing market crash in the UK, Japanese inflation reaching 5 percent, a spike in cacao prices that would make chocolate much more expensive, and the resignation of Mario Draghi, the current head of the European Central Bank.
“The forecast is one of a series of “outrageous predictions” made by Denmark’s Saxo Bank for 2015” http://t.co/nFERxwnNE9
— Neil Jones (@Aelfrith) December 12, 2014
It might seem that these predictions are merely an effort of Saxo Bank to use improbable disaster scenarios to garner public attention during the news lull over the holiday season. But their track record is better than such a view would suggest. One of their predictions for 2014, “Brent crude drops to USD 80/barrel as producers fail to respond” came true, when oil prices fell below that benchmark on November 13 of that year. In 2011, three of Saxo Bank’s ten predictions proved to be correct: the yield on the U.S. 30-year Treasury bills fell below 3 percent, crude oil prices rose above $100 and then fell, and the price of gold surged past $1,800 an ounce. They did well with gold in 2013 as well, when the price of the metal, which had been rising steadily for more than a decade, tumbled and in December passed below $1,200 an ounce, as they predicted.
Moreover, volcanoes can indeed emit enough ash to block solar radiation and cause crop failures. The 1783-84 eruption of Laki in Iceland led to low yields in France and other parts of Europe and was, as Saxo Bank suggested, a contributing factor to the French Revolution in 1789. The 1815 eruption of Tambora in Indonesia caused food shortages in Europe and North America, and probably in Asia as well.
However, the Barðarbunga volcano and the associated Holuhraun lava field have been behaving in a fairly calm manner. Indeed, the Icelandic volcanologist Páll Einarsson has termed it a “peaceful eruption,” adding that, “it just keeps going day after day with little changes.” There are many signs of this orderly behavior. The movement of magma through subterranean passages shakes the earth in a steady rhythm, with several quakes reaching 5 on the Richter scale every month and many more less powerful ones. The volcanic caldera continues to subside, as magma flows away to new areas, where it can emerge. The fissures keeps on issuing significant amounts of lava. Holuhraun is reaching an area of 80 square kilometers, about the size of the island of Manhattan, and the volume of lava is more than a cubic kilometer. Fortunately, the lava has been moving to the north and east, away from the major glaciers, particularly Vatnajökull.
Scientists recognize that the future is uncertain. The eruption could taper off, or lava could emerge under glacial ice, it would create explosive bursts of steam, which would send large volume of ash high in the atmosphere and massive floods of meltwater as well. However, major problem for Iceland to date has been the massive releases of sulfur dioxide, a noxious gas that affects different parts of the country as winds shift, sometimes creating health problems, particularly for the elderly and people with respiratory conditions. For the time being, the warning level for an ash cloud is orange rather than the more serious level red. And the Institute of Earth Sciences told its followers on Facebook “We’ll keep an eye on the lava, but… Merry Christmas!” Let us hope that Saxo Bank’s prediction does not come to pass.