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What is the Minimum EROI that a Sustainable Society Must Have? Part 2: The Economic Cost of Energy, EROI, and Surplus Energy
Posted by David Murphy on March 24, 2010 - 10:03am in The Oil Drum: Net Energy
The following multi-part series is taken from a paper that my colleagues and I published last year in the free, on-line journal Energies. You may access the entire PDF here. All references can be found in the pdf. Part 1 can be found here.
The first section of this post discusses how the economic cost of energy changes with changes in the price of energy. The second section discusses the impact of declining EROI on economies; specifically this section addresses whether or not the time trend of EROI supports the claim by some economists that advances in technology will overcome the depletion of fossil fuels. The third section discusses how surplus energy is used to run the economy by analyzing a simplified economy that is powered by oil only.
2.2. Economic Cost of Energy
In real economies, energy comes from many sources – from imported and domestic sources of oil, coal and natural gas, as well as hydropower and nuclear, and from a little renewable energy – most of that as firewood but increasingly from wind etc. Most of these are cheaper per unit energy delivered than oil. So let’s look at what this real ratio of the cost of energy (from all sources, weighed by their importance) is relative to its benefits.
Economic cost of energy = Dollars to buy energy / GDP
By this token the relation of the proportional energy cost in dollars is similar, as we shall see, to the proportional energy cost in joules; in 2007 roughly 9 percent (1 trillion dollars) of the U.S. GDP was spent by final demand for all kinds of energy in the US economy to produce the 12 trillion dollars worth of total GDP (Figure 1). This ratio certainly increased in the first half of 2008 as the price of oil exceeded $140 a barrel and then fell again. The abrupt rise in the 1970s, subsequent decline through 2000, and increase again through mid 2008 of this value had large impacts on discretionary spending because the 5 to 10 percent change in total energy cost would come mainly out of the 25 or so percent of the economy that is discretionary spending. Thus we believe that changes in energy prices have very large economic impacts. At least thus far the changes in price seem to reflect the generally decreasing EROI only sporadically although that seemed to be changing recently until the economic crash of fall 2008, when collapsing demand took over. What future prices will be is anyone’s guess but even as economies crash there is a great deal of information implying that dollar, and hence presumably energy, costs of fuels are increasing substantially. Our guess is that declining EROI will take a huge economic toll in the future [6].
Figure 1. Percentage of GDP that is spent on energy by final consumers (2006-2008 estimated).
2.3. EROI for U.S. and North American Domestic Resources and Its Implications for the “Minimum EROI”
In the past the first author worked with Cutler Cleveland and Robert Kaufmann to define and calculate the energy return on investment (EROI) of the most important fuels for the United States’ economy. Since that time Cleveland has undertaken additional and updated analyses for the US economy and Nate Gagnon and Hall have attempted to do that for the world average. Our results indicate that there is still a very large energy surplus from fossil fuels -- variously estimated as an EROI (i.e. EROImm) from perhaps 80 to one (domestic coal) to perhaps 11-18 to one (US) to 20 to one (World) for contemporary oil and gas. In other words, globally for every barrel of oil, or its equivalent, invested in seeking and producing more oil some 20 barrels are delivered to society. Thus fossil fuels still provide a very large energy surplus, obviously enough to run and expand the human population and the very large and complex industrial societies around the world. This surplus energy of roughly 20 or more units of energy returned per unit invested in getting it, plus the large agricultural yields generated by fossil-fueled agriculture, allows a huge surplus quantity of energy, including food energy, delivered to society. This in turn allows most people and capital to be employed somewhere else other than in the energy industry. In other words these huge energy surpluses have allowed the development of all aspects of our civilization -- both good and bad.
That’s the good news. The bad news is that the depletion of fossil fuels has been occurring since the first ton of coal or barrel of oil was mined, since these fuels need about 100 or so million years to regenerate. Many economists argue that technology, the market and economic incentives will continue to find oil to replace that which we have extracted, or that prices will increase as oil reserves deplete and society will substitute away from oil as technologies are developed that allow for such a substitution [21]. Thus one can argue that depletion and technology are in a race over time. Which is winning?
We argue that one can determine this from the time trend of EROI. The EROI for oil in the US during the heydays of oil development in Texas, Oklahoma and Louisiana in the 1930s was about 100 returned for one invested [22]. During the 1970s it was about 30:1, and for about 2000 it was from 11 to 18 returned per one invested [3, 4, 22]. For the world the estimate was about 35:1 in the late 1990s declining to about 20:1 in the first half decade of the 2000s (Gagnon et al. in preparation). In addition there is considerable evidence that, in the case of oil, we are mostly just pumping out old fields rather than replacing extracted oil with newly found oil. Globally we are using between 2 to 3 barrels for each new barrel found [23]. The analysis of Gagnon et al. suggests that if current trends continue linearly then in about two to three decades it will take one barrel of petroleum to find and produce one barrel of petroleum, and oil and eventually gas will cease to be a net source of energy. (A special case can be made for e.g. tar sands, where it may make sense to extract two barrels from the ground, use one for the process and then deliver the second barrel to society). This also means that the question is not necessarily what the size of global oil reserves is but rather what is the size of that portion that is extractable with a positive net energy value and at what rate the high EROI fuels can be produced. The implications of this are obvious and huge, and help make an argument for seeking possible substitutes earlier rather than later [6].
But the problem with substitutes to fossil fuels is that of the alternatives available none appear to have the desirable traits of fossil fuels. These include: 1) sufficient energy density 2) transportability 3) relatively low environmental impact per net unit delivered to society 4) relatively high EROI and 5) are obtainable on a scale that society presently demands (Figure 2). Thus it would seem that society, both the US and the world, is likely to be facing a decline in both the quantity and EROI of its principal fuels. Our next question is “what are the implications of this?”
Figure 2. “Balloon graph” representing quality (EROI – Y axis) and quantity (X axis) of the United States economy for various fuels at various times. Arrows connect fuels from various times (i.e. domestic oil in 1930, 1970, 2005 – “today”), and the size of the “balloon” represents part of the uncertainty associated with EROI estimates, i.e. larger “balloons” represent more uncertainty. The horizontal line indicates that there is some minimum EROI that is needed to make society work, and the vertical line to the left indicates one estimate of maximum forestry potential and the vertical line to the right is David Pimentel’s earlier estimate of total photosynthesis in the United States (Source: US EIA, Cutler Cleveland and C. Hall’s own EROI work in preparation). (Reprinted with minor changes from [6]).
3. The surplus available to run the rest of the economy
We first generate a simplistic view of the economy in every day units to try to develop for the reader an explanation of how an economy obtains the energy needed for its own function and how differences in EROI might affect that. Assume for the moment that the United States’ economy runs 100 percent on domestic oil, and that energy itself is not what is desired by the final consumer but rather the goods and services derived from the general economy. In the early years of this new millennium the U.S. Gross Domestic Product (proxy variable for the size of the U.S. economy) was about 12 trillion dollars, and it used about 100 quadrillion BTUs (called Quads, equal to 1015 BTUs), which is equivalent to about 105 ExaJoules (1 EJ equals 1018 Joules). Dividing the two we find that we use an average of about 8.7 Mega Joules (1 MJ equals 106 joules) to generate one dollar’s worth of goods and services in 2005. By comparison, gasoline at $3 per gallon delivers about 44 MJ per dollar (at 130.8 MJ per gallon of gasoline), plus roughly another ten percent to get that gasoline (refinery cost ≈ 4 MJ), so if you spend one dollar on energy directly vs. one dollar on general economic activity you would consume about 48/8.3 or 5.8 times more energy.
In the 1970s analyses were undertaken by Bullard, Hannon, Herendeen [24] and Costanza [25] that showed that (except for energy itself) it does not matter enormously where money is spent within final demand due to the complex interdependency of our economy (that is, the final products that consumers buy are relatively unimportant to overall GDP/energy efficiency because there are so many interdependencies, i.e. each sector purchases from many others within our economy, although this does not apply to the intermediate products purchased by manufacturers). According to Costanza [25], the market selects for generating a similar amount of wealth per unit of energy used within the whole economic “food chain” leading to final demand. While this is not exactly true it is close enough for our present purposes and it is certainly true for the average of all economic activity.
What is the energy “price” of the oil in this example to 1) the country (either domestic or if it is imported) and 2) to the consumer -- relative to the total economic activity of each entity? One can do some simple math. There are about 6.1 GJ in a standard 42 gallon barrel of oil, so the 105 EJ of industrial energy the U.S. uses to run its economy for a year is equivalent to roughly 17 billion barrels of oil. At $70 per barrel that amount of oil would take 1.2 trillion dollars to purchase (or at 3 dollars a gallon, 2.1 trillion to the consumer), which is either about one tenth of GDP, or one sixth if we consider it from the perspective of the consumer (the difference between the two estimates going to the oil companies after production or to refineries, gas station attendants etc. as inputs, profits, wages, delivery costs etc.). Thus the price of energy delivered to the consumer is roughly twice that of the wellhead price (or much more if converted to electricity).
Now assume that the real price of oil, that is the price of oil relative to other goods and services, increased by two, that is to $140 a barrel in today’s dollars (which it did briefly in 2008), and that the total size of the economy stayed the same – that is some other components of the economy were diverted to pay for that oil. If that happened, then one fifth (17 billion times 140 = $2.38 trillion/12 trillion) of the economy would be used to buy the oil to run the other four fifths (that is that part not including the energy extraction system itself). If the price of oil increased to $250 per barrel, about one third of all economic activity would be required to run the other two thirds, and at $750 a barrel then the output of the entire economy, that is 12 trillion dollars, would be required to generate the money to purchase the energy required to run the economy, i.e. there would be no net output. While in fact in a real economy there would be many adjustments, alternative fuels and nuances this analysis does at least give an overview of the relation of gross to net economic activity, and the importance of EROI in energy and economic terms to the rest of the economy. As the price of fuel increases (or as its EROI declines) there are large impacts on the rest of the economy. These impacts can be especially influential because changes in the price of energy tend to impact discretionary, not base, spending.
Of course most of our energy costs less than oil so that the 70 dollars a barrel we used in the example above translates to – in the real economy -- the equivalent of about $35 a barrel equivalent at the source or $70 a barrel by the time the consumer gets the energy, hence we can assume for this scenario that on average about 10 percent of the dollar economy (i.e. $70 times 17 billion barrels or 1.2 trillion out of 12 trillion dollars) is used just to purchase the energy that allows the rest of the economy to function, which produces the end products we want. This 10 percent of our economic activity means that roughly ten percent of all workers’ time, ten percent of the energy used in their jobs, and ten percent of the total materials consumed were used in some sense to simply get the energy to the final consumer to make the rest of the economy work. According to the official statistics of the U.S. Energy Information Agency in 2007 the cost of energy to the consumer was about 9 percent of the total U.S. economy Figure 1), so our numbers seem about right on average.
What is the Minimum EROI that a Sustainable Society Must Have? Part 2: The Economic Cost of Energy, EROI, and Surplus Energy
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167 comments
What is the Minimum EROI that a Sustainable Society Must Have? Part 2: The Economic Cost of Energy, EROI, and Surplus Energy
PDF version
167 comments
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I was mildly surprised to see nuclear so low.
The biodiesel does not seem to incorporate algal diesel. If so, please provide the references.
I also note that solar thermal (hot water, passive heat, active heat) is not provided, though has a good EROI and EROEI.
Estimates for the EROEI for nuclear have been trending down for years as the factors that were included have been refined. For example, some early estimates were based on thermal energy; but upwards of 70% of the thermal energy produced by the reactor is wasted to the atmosphere or nearby bodies of water in a typical situation. Other items included more accurate information about the energy required to mine, enrich, and fabricate the fuel; the energy cost of reprocessing; plant decommissioning.
I have been slowly coming to the conclusion that expanding the current thermal-neutron once-through fuel cycle used in the US is, if not a waste of effort, not a long-term strategy. OTOH, some combination of modular designs and fast-neutron fuel cycles would seem to address a number of the issues and have better EROEI characteristics.
You should be surprised; the graph is BS like the Storm Smith Van Leuwen papers. Even with the LWR once-through fuel cycle, using centrifuge enrichment the EROEI is over 100:1. Worldwide, 2/3 of uranium enrichment is now done using centrifuges.
Using Integral Fast Reactors, it may be as much as 1000:1. These reactors would eliminate the need for mining, milling, and enrichment of uranium.
http://bravenewclimate.com/2010/03/08/tcase8/
It is also absurd to put coal so high; coal in recent decades has fallen to the same EROEI as nuclear LWRs using diffusion enrichment: around 15 or 20:1. Why did we go with coal? Why do you think-- religion and ideology.
http://www.sustainablenuclear.org/PADs/pad0509till.html
EROEI comments aside, this article is about EROI (I = money, not BTUs).
Wrong. "I" here refers to energy not money. See here (page 2 of the pdf) for David Murhpy's terminology defined.
This is one reason I never use the term "EROI" myself.
So, lemme see if I get this.... if the EROI from all sources averages out to less than 10:1, things start to break. The higher the EROI, the lower the percentage of GDP spent on energy required to keep everything afloat.
Yup, it appears to be breaking.
Where would human-power fall on the "balloon" graph? That is, human labor fueled by food acquired through slash/midden farming, hunting and gathering?
You are starting at the "top" and working your way down. Why not start at the "bottom" and work your way "up"?
from: http://www.smithsonianmag.com/history-archaeology/gobekli-tepe.html#ixzz...
Read more: http://www.dailymail.co.uk/sciencetech/article-1157784/Do-mysterious-sto...
Abel presented God a sacrifice of animals from the herd. Cain presented God a sacrifice from the things grown in the field. God looked with favor on Abel’s sacrifice and disfavor on Cain’s sacrifice. God prefers meat eaters. Just joking. People became farmers because they could store more calories over time allowing civilization to grow.
hotrod
-Seen in this way, the Eden story, in Genesis, tells us of humanity's innocent and leisured hunter-gatherer past, when we could pluck fruit from the trees, scoop fish from the rivers and spend the rest of our days in pleasure.-
The Daily Mail has rose tinted glasses 3 feet thick.
EROEI is only valid in cases where the form of energy in and the form of energy out are the same or nearly the same. It is valid for oil where oil is the main input and also the main output. It was also valid back in the day of coal powered coal mines.
EROEI is not valid when comparing different forms of energy since there might be a gain in utility or other attributes that offset low EROEI numbers. This is true with fossil fuel electricity and also ethanol.
Things that are different can not be compared. If they are anyway the result is silly nonsense.
Except in the case of like input and output EROEI is junk science.
x,
I'm intrigued by your objection but I don't fully understand it.
To take an example, isn't the extra utility derived from installed infrastructure (say, roads or fiber-optic cables) something that can only be properly considered by accounting for the energy inputs required to construct those things over their usable lifetimes? So, are you asserting that the utility of such things is so great that their energy cost is negligible?
Thanks
Matt,
as you appear to be a relatively new member to TOD, you would need to read across years of posts to get a clearer picture of some of ideologies of the persons that frequent here. X's response (to me) would appear to be a post that comes accross as based on personal ideologies.
IIRC based on what I have been following, X has LONG been a staunch supporter (to put it mildly) of corn based (CB)ethanol as a realistic alternative to FF. While yes, there is a niche for CB ethanol, it cannot escape thermodynamic laws. Is it net positive? arguably yes - although barely. Will it be a silver bullet? no.
I'm not trying to dredge out this CB ethanol argument for further re-hashing - this has been done over and over and over again on this site.
So as a long time reader, part time poster, this comes across as yet another attempt to push arguments against EROEI - to eliminate/discredit one of the arguments against CB ethanol.
I think you guys have been way too snotty/snobbish regarding x. A very closed minded attitude in my opinion. I am not supporting his ethanol bias in the slightest but in general he is either ignored or treated rudely. How open minded is that? The guy is not stupid and even a cat may look at a king.
Given that he repeats the same thing over and over but refuses to have an conversation about it, I'd say the treatment he gets is to be expected.
X you need glasses. This thread is not about EROEI, it is about EROI. That is Energy return on INVESTMENT! When you are talking about investment you can compare different things. You can definitely figure out which type of energy INVESTMENT gives you the best returns. You can figure corn ethanol verses coal, or coal generated electricity or anything else. In other words what kind of bang do you get for each buck when looking at different types of energy.
Your rant would not work with EROI so you tried to change the subject of the thread to EROEI. Didn't work, you got caught.
Ron P.
This is the second post of mine in a row that got this same retort from x.
I think the sad reality is that X is yet to understand what EROI research really means, despite numerous posts here at TOD and peer-reviewed papers. X complains that a joule of ethanol is not the same as a joule of electricity which is not the same as a joule of oil, and that these quality differences discredit EROI analysis. Spoiler alert: WE KNOW about quality differences and have been dealing with quality adjustments in EROI calculations for nearly 20 years (see Cleveland 1992 for an easy explanation - although quality adjustments appeared much earlier). Now i would be the first to admit that there are still uncertainties involved when adjusting energy quantities via quality adjustments, but these uncertainties are no greater or worse than that which arise from discounting in cost-benefit analysis or other similar statistical techniques. Furthermore, nobody claims that EROI is the one and only statistic to be used, rather it is just another statistic, one which we feel is particularly enlightening in a world dominated by cost benefit analysis.
-Dave
Actually Ron, although I'm not in agreement with X's longstanding arguments for corn ethanol, I think this is indeed supposed to be a post about EROEI, that is the ratio between energy return and energy invested.
Indeed, that's rather what I'm on about in noting that EROI is an inherently-confusing acronym. You and I are both intelligent and quite educated, yet one of us (maybe me?) is wrong about what the article is even about.
Indeed, the metric used in much of this paper is "dollars", so maybe I am wrong: except that much of the rest would not make sense if it was about energy returned on money invested.
Again, I suggest that EROI be retired in favor of some unambiguous term.
Peak oil folks usually use EROEI while the rest of the world uses EROI. So you have the world to convince if you wish it changed.
Just curious, how do you calculate the EROEI of human labor, or that of a draft animal? What is the energy input of beans and taters, or hay? And how do you calculate the energy returned? One horsepower per horse? Or one manpower for each person? Wouldn't it be a hell of a lot easier if you just figured out how much you had to pay each man, or how much the hay upkeep of the horse cost, then figure out how much profit you made from what they produced?
I hope you get my point.
Ron P.
Hi Ron; I didn't sleep well, and the last thing I expected was to be posting today while waking up and perusing this article.
But I have raised a point; perhaps the author of the article could say whether I'm wrong or not.
Because you are an intelligent fellow, and when I'm awake I'm an intelligent fellow. You have said: "This thread is not about EROEI, it is about EROI. That is Energy return on INVESTMENT! When you are talking about investment you can compare different things. You can definitely figure out which type of energy INVESTMENT gives you the best returns." I have said "I think this is indeed supposed to be a post about EROEI, that is the ratio between energy return and energy invested." One of us is wrong about the central theme of the article. Even if that person is me, it illustrates the fact that the concepts are easily conflated and confused.
My understanding is that for reasons of precedent only, EROI is used by a small branch of energy-analysis academics to mean the ratio between energy invested and energy returned, despite the fact that the term "return on investment" and its acronym ROI has a default meaning in our society, and it's about money. Really, ask anybody. It would be better expressed as ER/EI or just making up a new word, IMO.
For instance, if it's about money, a 1:1 EROI is a ratio of different units, not a fundamental barrier. What would it even mean? The title of this series is "What is the Minimum EROI that a Sustainable Society Must Have?" If it was about money, that question wouldn't make much sense.
The important thing about EROEI or ER/EI is very important; it embodies a central truth which is fundamental to the foraging of bears and the survival of societies.
I've convinced the world to change things before, but if the TOD cognoscenti won't pick up the ball there's little likelihood others will. My expertise lies in getting things done in the real world, and I'm pointing out an unnecessary impediment to that. I certainly won't crusade, though; I'm familiar with the workings of academia.
I fully agree that energy returned on dollar investment is far easier to calculate. It's just that it's not what the article, indeed this series of articles is centrally about. Although this article itself seems to jump back and forth a bit, seemingly, while playing with both concepts.
There's a dead baby gecko on my desk which wasn't there last night. It performed the complex calculation of ER/EI by failing to forage efficiently enough and expiring after its egg hatched. The density of prey was not sufficient in my office for it to thrive.
by all means, the author of the article should let me know I'm wrong if I am.
__________________________________________________________
EDIT QUITE AWHILE LATER: testing 1-2-3... is this mic on?... paging Mr. Murphy... who's wrong about the theme of the article, me or Ron?
__________________________________________________________
EDIT SEVERAL ADDITIONAL HOURS LATER: I see a post from Will Stewart claiming that EROI means money in this article. I see new posts from a lot of other people who think it means energy return on energy invested. I see a number of posts by the author since I requested clarification. So once more, Mr. Murphy, if you please: is this series of articles primarily about energy return on energy invested, or energy return on money invested?
I like the article series a lot, but there is obviously confusion on this point. Please speak to it.
Concerning the issue of whether the article is about ERoEI or EROI, the author, David Murphy, uses the term EROI but switches back and forth between money invested and energy invested. In section 2.2 he is referring to money invested and in section 2.3 he is referring to energy invested as shown by:
The following sentence suggests the author thinks that EROI and ERoEI are approximately identical which may explain why he uses the concepts interchangeably:
I think equating EROI and ERoEI is nonsense because money is affected by many factors unrelated to energy such as inflation and OPEC artificially restricting production to force the price of crude oil up. During the oil price shock of 2008, the global average EROI should have decreased substantially while the global average ERoEI should have barely changed.
"For instance, if it's about money, a 1:1 EROI is a ratio of different units, not a fundamental barrier. What would it even mean?"
Exactly
If the economics of extraction are not there, it's a problem.
If the energy for extraction is not there, it's game over.
Seems to me the argument here is "what is money?" and is it the best indicator of the viability of extraction? and IMO its not. The dollar, which is the globally accepted unit of measure for energy (and all strategic resources for that matter) is so totally manipulated, debased, etc. that it would be dangerous and ignorant to rely on that as an indicator.
Other countries are waking up to this also and if anyone complains...there will be blood!
Greenish - here is my response, I hope it helps.
1. EROI, EROEI, Net Energy Ratio are all terms used synonymously within the academic literature. Fundamentally, EROEI implies that only energy inputs and energy outputs are used while EROI implies that a variety of different "investment" inputs (money, energy, etc) could be used to generate some energy output. Net Energy Ratio is another term used to describe the ratio of energy inputs to outputs.
That said, every EROI, EROEI, and NER calculation uses Energy out / Energy in to actually calculate the final value. EROI is never calculated as Energy out / money in. However, money is often used as a proxy for energy costs, but it is converted (usually using thermal equivalents and energy intensities (MJ/$)) to an energy unit before the calculation of EROI.
2. What is this series about: It is about the idea that energy surpluses are needed operate society. We provide (included in the next and last installment) a first attempt calculation at the minimum EROI (i.e. minimum surplus energy) needed to support the transportation system of the U.S. The article is not about EROI vs EROEI.
Does that help?
Actually, I wasn't looking for help so much as brief clarification to commenters. I'm on your side in wishing to see the concept of net energy more widely understood, and I think that the concept of "minimum ER/EI" for a given sort of society is both vastly important and entirely off the radar of most educated humans.
I only posted since I saw a very basic confusion developing within the comments, with some posters feeling you were writing about energy return on money invested, while others thinking you were writing about energy return on energy investment. I noted this as yet another clear example of an inherently and unnecessarily confusing terminology.
I sought brief clarification of a yes or no question which you waited a very long time to respond to, and still didn't directly answer in your response the next day. So at this point I'm also posting a bit on "academic timidity" using you as an example, which was far from my original intention.
I don't do so to bust your chops, but because I think that it's an additional important concept with direct bearing on whether or not this sort of thinking has the potential to go more mainstream in its current form. I understand that the paper itself is by niche academics for other niche academics, so is not flawed per se. My points are entirely about making the transition of concepts and methods from academic obscurity to mainstream acceptance.
For instance, when Ron posted - incorrectly - in rebuttal to X that this article was about money and not EROEI, you accepted his support against X without pointing out that he was incorrectly characterizing your article. This seems disingenuous. As author of a keypost, it should be you and not me pointing out that some respondents misunderstood the theme.
I take that as an indirect way of saying that I was correct and Ron was incorrect, in answer to the simple question I repeatedly posed yesterday. We certainly were not both correct since we said vastly different things. Again, a timid answer; by all means clarify if I have misinterpreted it.
I don't blame Ron or others for that misimpression: while I have enjoyed both articles and the larger paper they were pulled from; it was clear to me that you were talking about net energy since the writing only makes sense in that context, and indeed you defined it in the paper as net energy. However, it is obviously not clear to everyone. If I had done a keypost on the inadvisability of sloppy terminology in pushing a new concept, I could not have illustrated the point as well as it was here in response to your article, with very smart people talking past one another.
You state "EROEI implies that only energy inputs and energy outputs are used while EROI implies that a variety of different "investment" inputs (money, energy, etc) could be used to generate some energy output." That's the first time I've seen that stated. The use of the term "implies" in description of your central scientific term is something I find extraordinary. Moreover, how is this consistent with them being "used synonymously within the academic literature"? How is one to tell when they're synonymous and when something else is implied? Secret handshake? Gang tattoos? Reading between the lines?
I'm not a heckler, I'm a supporter. You've just defined your central term in two different ways. How can I not point that out?
I think that goal is very important. Presumably you would like this basic concept to gain broader understanding and acceptance. I don't have an acronym fetish; my expertise is in what works to insert a new idea into the culture. If Amazon called their new reading device a "Spatula" rather than a "Kindle", it would not be helpful... particularly if the ads for it featured a cooking motif. Although even that would be less egregious than this, since what's being presented is a rather intangible and non-intuitive concept with no obvious functionality to demonstrate.
It seems unfortunate to me that the authors - to the extent this paper is meant to push the concept to a broader audience at all - don't seem to understand the main conceptual hurdles faced when bringing the concept of "net energy" to a broader audience. Stuff like your section 2.2 should be kept a mile away from a mass-audience paper on net energy, since it tends to further confuse the issue in exactly the way the imprecise terminology promotes; and as proof I point you to the comments of other posters here, who have varying notions of what your paper is about. This is a very intelligent audience, and you haven't even made it clear to all those who have read it.
"Surplus energy" in principle has little to do with money; my example of the dead baby gecko is a decent illustration of this. The deep message is that baby geckos and human societies face the same ultimate tests. That core truth embodies a nearly Copernican revolution in the way we should see energy, and it should be treated with commensurate importance.
Indeed, one can imagine any number of sustainable societies which don't even use money, but I don't wish to digress further. I will simply point out the obvious once again: these concepts are not ready for prime time in this incarnation because they are confusing. They are not inherently confusing, they have been confused by a silly and arbitrary convention of terminology, and by an academic culture which is timidly hell-bent on not breaking with illogical precedent. And in this case, they are made more confusing by your hopping back and forth between the very concepts which will tend to be conflated due to this terminology, as in section 2.2 and 2.3.
Presumably, the goal of this paper is to begin to alert the general population and decision-makers to deep truths about the energy basis of society in the real world, and the nature of its limits. How in the world can that happen if the small clique of academics pushing it are - forgive me - promotionally obtuse? If they focus more on what their peers and elders think about precedent and correctness than about making the subject matter accessible outside their narrow specialty?
So thanks for the paper and article series, I've enjoyed them. And I hope I've given a little food for thought in how to improve them for a broader audience, should you care to do that.
cheers.
Thank you! That needed to be said.
I second that, Greenish. IMO, when speaking about EROEI (perhaps the most vital aspect of our energy future, and definitely the least appreciated) dollars should not even be mentioned. They are utterly irrelevant to the laws of thermodynamics that apply. And while I do understand why it is attempted, as energy input data is horrifically hard to come by, even attempting to use dollars as a proxy for energy inputs seriously confuses the issue, especially when attempting to take this topic to a broader audience, who are largely ignorant of energy units, processes and dynamics, and have been ingrained with the belief that throwing money at a problem can solve it. Well, not this one.
energy in food minus energy remaining in waste.
http://en.wikipedia.org/wiki/Calorimeter#Bomb_calorimeters
I agree with the first part, basically.
Another way to say it is that we can turn more of a less useful form of energy (sunlight) into a more desirable (liquid or gas). ROEI is an academic construct which can be defended only in the abstract. Since there is more energy in our environment (accessible with current technology) than we could ever use it's not a practical concept.
And yes we will build the machines to get that energy in a low oil environment.
Energy scarcity may impact the economy for a period of time. But the degenerative process describe by purest doomers is from a woefully inadequate model of how things work. It's "signs of the Apocalypse" for high IQ people.
Well it could be done if you are talking about using solar energy to generate hydrogen from water. But right now the EROI with batteries is much greater than the electricity you get from turning water into hydrogen then the hydrogen into electricity. The hydrogen hope has turned into The Hydrogen Hoax.
So really I doubt your statement that we will build machines to get that energy (efficiently). We already have machines that will do it but the cost is atrocious.
Ron P.
Efficiency doesn't matter. Cost and opportunity costs matter.
Efficiency may matter if you believe there is a shortage of energy. (As opposed to a shortage of a specific form of energy). Efficiency also matters if the energy conversion uses a limited resource (rare earth metals). But green energy companies know this. Hydrogen proponents understand the efficiency issue. But there looking at future cheap solar and new ways to make hydrogen. The "Hydrogen Hoax" guy is just just not very bright. There isn't enough lithium or lead to make the number of batteries needed. There isn't enough energy density in batteries. Going down multiple paths for oil replacement is smart.
Nonsense! The whole industrial revolution has been about improved efficiency. The flying shuttle enable the efficiency of cloth making to improve several fold. It is far more efficient to build roads, farm land, build bridges or do anything else with modern equipment than pure human labor alone.
The Egyptians built pyrmids with only human labor. It took tens of thousands many years to built one pyrmid. How many and how long would it take today? Efficiency is everything!
If we must depend on hydrogen made from water to power future transportation vehicles, we are in deep doo-doo indeed. There may not be enough lead or lithium to make batteries that still doesn't mean hydrogen power is a great idea.
Is It Time to Give Up the Hydrogen Hoax?
So you say the hydrogen hoax folks are not bery bright. Then that would be to say that the marketing people are the bright ones and the engineers are those who are not bery bright. I kinda doubt that.
Ron P.
Nothing you say here shows efficiency matter. The industrial revolution has been about cost per unit. Why does it matter how long it took to build the pyramids? You assume that for the decision makers fast would be better.
A black box making 1 MW costs $100000 to buy and one dollar a day to run. It's 10% efficient running on rock as fuel, and 90% efficient if run on sea water. Which process is preferable? Efficiency only matters as a function of costs.
As far as Hydrogen, if you can find a better way to turn electricity into a gas or liquid, great.
DC, your whole post is just silly. Greater efficiency means that one farmer can now produce what it once took 100 to produce. Efficiency means that a shoe factory can produce many pairs of shoes per day per employee. In the past it took one cobbler many days to just produce one pair. Greater efficiency is what feeds the world's population. Without greater efficiency of food production the world's population would be a fraction of what it is today. Not that this is a good thing or a bad thing, it is just what enabled the population to explode. But good or bad greater efficiency in food production was the most important thing that ever happened to humanity, population wise.
It is nothing short of insane to argue that efficiency doesn't matter. And as I write this I simply cannot believe that I am arguing with a person who claims that efficiency does not matter. I am beginning to think I am crazy for doing such a silly thing.
No I cannot! And that is the point. There is no efficient way to turn sunlight or electricity into a gas or liquid. That was my point DC! You were the one who claimed that it would be done. (Implying, whether you realize it or not, that it could be done efficiently.)
Ron P.
You need to read what I write. I'm making a precise argument that you have not come close to rebuking.
Let me try a simple question. Is a 17% efficient solar panel better than a 14% efficient solar panel?
Strictly in the context of your question, it depends on the scarcity of space. For example, if a properly sized 17% efficient set of panels does not take up the whole roof of a house but the 14% efficient array does, then there seems to be no difference. However, if a solar hot water heater is planned, and there is no more room for it, then efficiency becomes a factor.
H2O electrolysis and recombination via hydrogen is another matter. The 'round trip' efficiency has to be compared to other energy storage methods, along with cost, materials abundance, and longevity, among other factors, some of which are of high importance for mobile uses (i.e., weight, shock resistance, size, etc).
I think the answer depends far more on costs than on available space. eg. how many hours of my labour or other available valuable resources eg. firstborn son etc. must I trade for the 17% vs. the 14%? In an efficient market, that should translate into a simple calculation of installed-and-operating cost comparison for an equivalent output.
Darwinian, are you referring to efficiency or productivity?
Blue, they are two parts of the same thing. Greater efficiency improves productivity. The larger plow a tractor can pull the more land the farmer can plow in a day. The larger tractor enables him to be a more efficient farmer therefore he can produce a lot more.
Which is more efficient tool for harvesting wheat, the combine or the scythe? The combine of corse. One farmer with a combine can harvest more wheat over a hundred with scythes. Therefore, as I said before, one farmer can produce more than a hundred farmers once were able to produce.
Think of it this way, more efficient tools allow people to produce more. The more efficient tool allows one to produce more in a shorter period of time.
Ron P.
Bring this back to inefficient hydrogen production
I have a 1000:1 EROEI fast reactor creating electricity to hydrogen at an EROEI of 1:10. Does that give me a Total EROEI of 100:1? Wouldn't I then compare my hydrogen EROEI to alternatives?
Sure, let's compare it to using the reactor to charge batteries at 8:10. Then you get 800:1 and you choose the batteries. So how is it again that efficiency "doesn't matter"? I think you are trying to make the point that it's not the only thing that matters, but you've chosen the wrong words to make that point.
That is called economic efficiency.
The other one:
That answers your question about solar panels. Higher EROEI means in this case less panels and less space needed to get the same amount of usable energy.
Is the factor time important ? In this world certainly it is. It is even more important than fuel efficiency: ships and planes can save a lot of fuel by reducing speed. Up to about 30%.
dcmiller, are you sure ?
From Wikipedia:
There are allready EV's on the road and battery technique is improving rapidly.
The tesla motors battery pack is roughly 900 lbs from what I've read. If there is 35 million tons of lithium there is 7000000000 lbs of it. That's enough for 77,777,778 tesla motors vehicles. Let's say the cars are smaller and use a third of the lithium that tesla does. Is 234 million lithium eletric cars enough to replace the U.S. automobile fleet?
The other issue is how fast the lithium can be extracted.
Could be. Nick writes that there is enough lithium, maybe he has another calculation.
Yes. Some think that the maximum EV production is 6 million per year.
The tesla motors battery pack is roughly 900 lbs from what I've read
There isn't 900 lbs of lithium in the battery pack! I forget, but as a wild guess, there's maybe 50 lbs....
Is 234 million lithium eletric cars enough to replace the U.S. automobile fleet?
Actually, it would be, but of course the calculation that said we could only do 234M EVs is incorrect.
See http://energyfaq.blogspot.com/2009/02/could-we-run-out-of-lithium-for-ev...
Nick, the forbes article from your blog post says the volt's lithium-ion battery weighs 400 lbs, is this not entirely lithium? Can you provide any sources showing the amount of lithium present in a volt or tesla motor EV?
The Trouble with Lithium: Implications of Future PHEV Production for Lithium Demand, William Tahil, Research Director, Meridian International Research, January 2007, page 12 (327 kB PDF warning):
If a Chevy Volt battery is rated at 16 kW·hr, then it contains 4.8 kg of lithium. Tahil thinks there will not be enough lithium for EV's because the only economically viable reserves are in salt deposits.
Lithium-Ion Battery Recycling Issues, Linda Gaines, Argonne National Laboratory, May 21, 2009, provides a table on page 13 for various batteries. Gaines thinks recycling of lithium will be necessary. World reserves of contained lithium: 4.1 billion kg. Current amount of lithium used for other purposes: ~18 million kg / year.
The chemistry of a Chevy Volt battery seems to be some type of lithium-manganese. 4.8 kg of lithium per battery might be an over estimate.
More people are thinking this. That must be the reason that they are experimenting with other elements, like Zn.
Tahil was the first person to raise this issue - since then it has become pretty clear that lithium resources are adequate.
See the Gaines article just above for better information.
Gaines mentions this:
Tahil thinks for example this (mentioned by Bluetwilight):
Could be that with rising prices other reserves will become viable, but lithium is expensive allready.
And there is this:
Gaines mentions this: - Gaines thinks recycling of lithium will be necessary.
Yes. That's not a problem.
Tahil thinks
Tahil started this conversation - see my discussion here: http://energyfaq.blogspot.com/2009/02/could-we-run-out-of-lithium-for-ev...
lithium is expensive allready
At $2.75/lb for lithium carbonate, that's only $137.50, or 3.4% of the likely Volt battery cost of $4k (wholesale in 2-4 years). A doubling in the price of lithium would only increase the cost of a $30K vehicle (after $7,500 credit) by $137.50.
The total amount of Lithium metal required to make 60M PHEV20s with a small 5kWh LiIon battery would therefore be 90,000 tonnes – nearly 5 times current global Lithium production.
Again, that's Tahil's out of date info.
Tahil is referring to making batteries for the entire world production of automobiles, 60 million vehicles/year in 2006, while Gaines is referring to the subset of U.S. electric automobile production projected to peak at ~21 million vehicles/year in 2050 (465 million vehicles total, graph on page 9). Consequently, in a successful conversion scenario Gaines underestimates the global demand for lithium over the next 40 years by a rather large amount.
Gaines' table on page 13 shows the amount of lithium per battery with a 40 mile range for the four battery chemistries listed as 3.0 kg, 1.9 kg, 1.4 kg and 5.1 kg. This makes me suspect the estimate of 4.8 kg of lithium in a the battery of a Chevy Volt (based on Tahil's data) is a bit high. She assumes 300 W·hr/mile which uses 12 kW·hr/(40 miles) which is more energy than a Chevy Volt uses operating the battery at 50% discharge (8 kW·hr to drive and ~10 kW·hr to charge). She seems to assume a deeper discharge which would cause her lithium masses to be low. She could also be assuming the average efficiency of the battery over its lifetime.
Nick's blog entry, Could We Run Out of Lithium for EV Batteries uses a simple analysis that does not consider the technical and resource issues involved with tripling or quintupling lithium production at the few mining sites that produce the bulk of world lithium production. As with peak oil, the size of the tap, not the size of the tank, determines how much resource is available for use. Since recycled lithium will not become available until the batteries wear out in 10 to 20 years, the rate of production of PHEV's could be limited by the rate at which lithium production can be expanded. Since these mines will have to be expanded while Export Land Model rapidly shrinks the supply of crude oil and creates economic havoc, I am doubtful about Nick's optimism. The world might not be able to manufacture 60 million PHEV batteries per year using new lithium. If the batteries have a 10 to 20 mile range and a global economic depression reduces demand, the probability of satisfying demand would be improved.
the size of the tap, not the size of the tank, determines how much resource is available for use
As innumerable historical commodity boom & bust cycles have proven, commodity production is slow to increase in the short term, but generally catches up in just a few years and then overshoots demand.
EV's aren't going to grow overnight; lithium is generally quite abundant*; lithium prices could go up by 10x without endangering li-ion battery cost competitiveness; and there are a lot of alternative chemistries.
Export Land Model rapidly shrinks the supply of crude oil and creates economic havoc
ELM isn't a very helpful guide. It's much more useful to look at overall supply and demand in all countries. If you really want to look at a subset of supply and demand, I'd also look at a Import Land Model: US imports have fallen by 1.2M b/d in the last year.
* Here's one example:
"Geothermal power plants draw hot brine from underground as a power source, and these brines can contain dissolved minerals. Thus, for example the seven Geothermal plants at the Salton Sea are reported to be able to produce up to 16,000 tons of lithium per year. The facilities are better known as a source of zinc (pdf). However the potential as a source of lithium is becoming increasingly recognized."
http://bittooth.blogspot.com/2010/02/updated-look-at-lithium-production....
Engineer-Poet's comments on this: "16,000 metric tons of lithium is enough for 8 million Volt-class batteries, or enough to convert about 2/3 of the current US vehicle market to plug-ins.
This would take a while. By the time it was done, don't you think that we could develop some other sources? There's a lot more than just the Salton Sea brines out there; there's the Great Salt Lake (520,000 tons), and other sources adding up to over 4 million tons. 4 million tons is enough active material for 2 billion Volt-class packs, or 400 million packs of 80 kWh apiece. By the time we had to fall back to mining seawater to make up for recycling losses, I think we'd have more than enough to make do."
Yes, but lithium cannot be compared with copper or steel. How abundant it seems to be, it is only IIRC ranked on place nr. 25 in abundancy in the earth.
It seems that there is no problem for now. In the long run there is needed much more, part of which can be obtained from recycling. Apart from the possibility one can question if it is wise to do it. Growth, with finite or infinite resources cannot continue. Because there are other limits. Humanity is destroying the earth. Every year many thousands of species go extinct, deforestation and climate change is a growing problem. Dropping watertables and peak fosfor also. Every growth must and will come to an end. This counts for whatever species that devastatingly dominates others.
Growth, with finite or infinite resources cannot continue...Every growth must and will come to an end.
Sure, but it doesn't require growth in resource consumption to get there. An EV will take you places even better than an ICE, and if the electricity comes from wind...the passengers don't feel any difference.
The consumption of hard goods in developed economies levels off. Take a look at car sales and Vehicle Miles Traveled in the US: they've both leveled off. Ask Whirlpool if washer/dryer sales are continuing to grow exponentially (they'll tell you no....).
Humanity is destroying the earth... deforestation and climate change is a growing problem. Dropping watertables and peak fosfor also.
Those can be used renewably. We don't have to foul our air and water. Soil can be renewed and used without destroying it. And, in the very long-term, there's no reason we couldn't build food production that's completely isolated from nature: enormous hydroponic hot-houses. That's pretty theoretical, but I think that's kind've how you're thinking: where will we be in 500 years? Well, the answer is that there's no physical, technical reason we can't be just about wherever we want to be. If we want to reduce our footprint on wildlife habitat by retreating to giant domed cities that occupy 1% of the world's land (kind've like Singapore)....we could do so. If we really wanted to and needed to.
Every year many thousands of species go extinct,
Again, that's a choice. We can choose not to destroy habitat, etc.
Nick, I am not going to eagerly jump on an optimistic bandwagon without critically studying the subject. You mention the Great Salt Lake as a possible source of lithium, I follow your links to sources and discover:
being used as the minimum concentration in a range of known salt deposits. Tahil on page 8 indicates the Mg/Li ratio is 250 making this an uneconomic prospect for long into the future.
Another link indicates that SQM thinks the mine at Salar de Atacama, Chile, will never be economic to use fossil fueled kilns to dry the salty muck leaving the system stuck with slow, high water consuming, solar evaporation ponds. Tahil states:
which suggests there are few remaining resources to expand production there.
Tahil says that extraction from spodumene deposits will never be able to economically compete with extraction from salt deposits due to the high energy required for processing, eliminating a significant fraction of current lithium production. That means extraction from spodumene will decline and not return until the production capacity from salt deposits peaks at which time the world will be more severely energy making the cost difficult to estimate.
Jack Lifton argues that the concentration of lithium of 0.028% and the Mg/Li ratio of 19.9% makes extraction from Bolivia’s Uyuni Desert uneconomic at present. Thus the extraction of lithium from the world's largest deposit remains insignificant.
You make the statement, "lithium is generally quite abundant" in the Earth's crust, which is true, but you do not point out that the concentration is diffuse. Concentrating increasingly diffuse deposits of lithium will generally require increasing amounts of energy and resources. A declining ERoEI will eventually make the processing uneconomic.
Tahil argues that extracting lithium from seawater for use in EV/PHEV batteries is preposterous due to the financial and energy costs. Lithium from Bolivia's Uyuni Desert would be past peak production before anyone would be desperate enough to try large-scale extraction from seawater.
As for the lithium at the Salton Sea, stating the annual amount of lithium in the brine flowing through a zinc extraction plant is not the same thing as the potential extraction rate of lithium.
There will likely be additional expense to separate the other elements and compounds so the economics might be unsuitable. Assuming 200 ppm is a reference to weight and not molar concentration, the solar evaporation ponds would have to process 80 million metric tons of brine per year. That is about 80 million cubic meters. Assuming a pond .5 m deep requires a year to evaporate one needs a square about 13 km on each side. That is a lot of expensive agricultural land around the geothermal plants to purchase and destroy judging by the photo.
This is too complicated to make projections based on qualitative reasoning. We need a computer model that understands economics, ERoEI and resource constraints to figure it out.
I'll have to find some time to research this further. Let me answer some things in the meantime...
You mention the Great Salt Lake as a possible source of lithium
Well, no, that was Engineer-Poet.
Tahil on page 8 indicates the Mg/Li ratio is 250 making this an uneconomic prospect for long into the future.
But more economic than seawater.
Tahil says that extraction from spodumene deposits will never be able to economically compete with extraction from salt deposits
That's not feasibility, that's competitiveness.
extraction from spodumene will decline and not return until the production capacity from salt deposits peaks at which time the world will be more severely energy making the cost difficult to estimate.
That's assuming facts not in evidence: I don't think we have any real risk of "peak energy".
extraction from Bolivia’s Uyuni Desert uneconomic at present
Again, that's not feasibility, that's competitiveness. Lithium prices could rise by 10x, and li-ion batteries would still be economic.
Concentrating increasingly diffuse deposits of lithium will generally require increasing amounts of energy and resources. A declining ERoEI will eventually make the processing uneconomic.
E-ROI doesn't apply here. Again, Lithium prices could rise by 10x, and li-ion batteries would still be economic.
Tahil argues that extracting lithium from seawater for use in EV/PHEV batteries is preposterous due to the financial and energy costs.
Does he provide calculations to back that up? I agree that it's not likely to be competitive any time soon, if ever. That doesn't make it infeasible, as a limiting case.
Lithium from Bolivia's Uyuni Desert would be past peak production before anyone would be desperate enough to try large-scale extraction from seawater.
I'm not sure what you mean here. If conventional sources become increasingly expensive, there will be a move to what's available.
That is a lot of expensive agricultural land around the geothermal plants to purchase and destroy
A solution that takes less land is likely to be more expensive, and yet still be feasible.
This is too complicated to make projections based on qualitative reasoning. We need a computer model that understands economics, ERoEI and resource constraints to figure it out.
Tahil's argument is very simple: there are not sufficient resources to manufacture the needed batteries. That's not hard to disprove. Would a more sophisticated model be nice? Sure. OTOH, we start getting into very chaotic systems. If we could develop really effective econometric models that could predict commodity boom/bust cycles, we'd be really, really rich.
Nick, extracting Lithium from sea water can not be cheap. I live on the water and have never seen Lithium floating in it. It appears there is 0.1-0.2 lithium ppm in sea water. I've read that uranium can be extracted from sea water as well, it doesn't really seem like doing this would be economical.
How much sea water for a proper flow rate and energy would be required in order to recover that Lithium in sea water? At .1-.2 ppm I imagine it would require a massive water flow.
http://www.ioes.saga-u.ac.jp/ioes-study/li/recovery/seawater.html
I've read that uranium can be extracted from sea water as well, it doesn't really seem like doing this would be economical.
I agree - it's unlikely to be competitive cost-wise with other sources any time soon. It does seem likely to be feasible in the long-term, if necessary.
This competitiveness reduces the number of mines in operation reducing the rate of production. Increased production from the salt deposits will have to compensate.
The ERoEI of the fossil energy source(s) used to process the lithium is declining. More energy is needed to process increasingly diffuse deposits. More surplus energy is hard to obtain in this environment.
The ability of an economy to absorb a 10 times increase in the cost of lithium depends on why the price increases. If the price of the crude oil needed to ship the brine 50 miles to the processing plant increases, there is a double burden on the cost of manufacturing and the ability of the consumer to purchase the battery. The consumer has to simultaneously pay more for the battery and other items while his income fails to keep pace. The reason a spodumene deposit is more expensive to refine than a salt deposit is mainly the amount and thus cost of the energy used in production. The economic viability of lithium is determined both by the cost of production and the ability of the consumer to pay. Assumptions (like the consumer's ability to pay increasing or holding constant) that worked during the rising edge of world crude oil production may not hold during the falling edge. Life is good while the cost of things decreases and income rises, but bad when they are reversed. If the cost of necessities rises by, say, 4 times simultaneously with the price of lithium rising 10 times (due to more expensive energy and the need for more energy to process a spodumene deposit), the lithium-ion battery does not necessarily remain economic.
When you choose favorable assumptions, such as an abundant supply of energy to process lithium, the cost of the other materials used in the battery remaining static or declining, a constant ability of consumers to pay for batteries and all lithium reserves equally easy to produce (the price does not matter because it can increase 10x), you fail to disprove Tahil's argument. Gaines' analysis helps because she includes recycling, but one will probably have to wait 20 years before significant supplies of recycled lithium become available. The batteries will probably be in the cars for 10 years and then possibly used for load leveling of the electric grid for another 10 years. To disprove Tahil's argument one must carefully consider the rates of production from the existing lithium mines, how much those rates might change over the next 20 years and the rates of production from any new lithium mines that might be developed during the next 20 years. If we do not get the bulk of the conversion to PHEVs done before crude oil becomes scarce, we probably will not complete the conversion leaving the world with a reduced demand for lithium and fewer cars.
This competitiveness reduces the number of mines in operation reducing the rate of production.
If a resource is uncompetitive, it's not used until prices rise to the point that is becomes competitive. At that point, it becomes "economic", and it's use starts or expands.
The ERoEI of the fossil energy source(s) used to process the lithium is declining.
Not really. Sure, the E-ROI of oil and gas have fallen, but wind and coal are doing just fine. Really, oil is the only problem (we have enormous amounts of gas at less than $10 per decatherm, which is almost certainly an E-ROI of more than 10:1).
More energy is needed to process increasingly diffuse deposits.
True, though energy is unlikely to be the limiting factor.
More surplus energy is hard to obtain in this environment.
No, we have plenty of high E-ROI wind and coal.
If the price of the crude oil needed to ship the brine 50 miles to the processing plant increases
Then the processor is almost certainly going to move to something cheaper: an electrically powered pipeline, perhaps.
there is a double burden on the cost of manufacturing and the ability of the consumer to purchase the battery.
That starts to confuse the issue. We started with the large question of whether the economy is sustainable: I suggested that EVs were one solution, and we moved to the smaller issue of lithium. Let's stick with lithium, for the moment, else the argument becomes circular. The economy will fail for lack of energy; why a lack of energy? because the economy will fail; why will the economy fail? because of a lack of energy, and so on, ad infinitum.
The reason a spodumene deposit is more expensive to refine than a salt deposit is mainly the amount and thus cost of the energy used in production.
No, it's mostly labor. Energy is a small % of most mining, processing and manufacturing (there are large exceptions, of course).
When you choose favorable assumptions...you fail to disprove Tahil's argument
Tahil doesn't make any of those arguments - he's just arguing that there is inadequate lithium resource.
To disprove Tahil's argument one must carefully consider the rates of production from the existing lithium mines
No, that's not his argument. He doesn't examine alternative sources and suggest that they are available, but can't be developed quickly enough. Further, anyone with experience with mining will tell you that argument is unrealistic: give Rio Tinto 5 years and an adequate resource to work with, and they'll give you pretty much whatever you need.
In The Tourble with Lithium 2: Under the Microscope (2008 May 29), page 2, Meridian International Research responded to that argument:
They argue that the increasing demand for lithium for computer batteries will consume most of the foreseeable production increases at the mines.
On page 35 a detailed consideration of lithium production from sea water is given showing how ridiculous that process would be.
He estimates that there will be sufficient lithium available to allow production of 1.5M GM Volt type vehicles by 2015. That doesn't appear to indicate a short-term problem.
They would have higher production costs and lower production rates than the South American and Chinese brine deposits
Both in this summary, and in many points of the study, he seems to be confusing feasibility and competitiveness. Given that lithium pricing could rise by 10x and still allow affordable batteries, this is important. Many of the analyses he points to say that a particular source wasn't economic - that tells us very, very little about the value of the resource in a rising price environment.
For example, he doesn't include 23,000 tons/year in North Carolina, because it was slightly more expensive than brine sources.
unproven and heretofore undeveloped processes. All such nebulous resources were excluded
This appears arbitrary, especially for a long-term forecast. It doesn't allow the author to say anything stronger than "there may be a problem - this bears further study".
For example, he dismisses very, very large resources in the Congo (.6 to 4.6 billion pounds) as being distant, and in an unreliable country. That's way too superficial.
On page 35 a detailed consideration of lithium production from sea water is given showing how ridiculous that process would be.
That's a mighty superficial analysis. It amounts to saying: "Gosh, you'd have to process a lot of water!". I've seen similar arguments that purported to debunk solar and wind power ("Gosh, you'd have to use a lot of land!"). You really need to start to address cost and process. I have to think someone has made tentative proposals in this regard - he could address them seriously.
As for the amount of lithium in a battery for a Chevy Volt:
Tahil's data gives 4.8 kg.
Gaines' data, assuming one of the battery chemistries is applicable, gives a range from: 1.4 kg to 5.1 kg.
Engineer-Poet's comment gives: 2 kg.
Does anyone have a reliable reference?
I tend to agree that, as yet, this sort of analysis is far too simplistic to the point of useless. In point, the positioning of "nuclear energy" on the graph above. What is ignored is that nuclear energy is all produced as electricity, which is provably at least twice as "useful" (econiomically utilitarian) as natural gas and closer to three times as "useful" as coal (simply based on the average plant efficiencies of installations which convert those fuels into electricity) or is the correct number six times as useful (based on using the electricity in a COP 5.5 heat pump to do the same space heating job as a 90% efficient natural gas furnace)? What is the relative economic value / utility to a steel mill of 1 GJ of electricity turning a rolling mill motor vs. 1 GJ of coking coal?
This sort of information is less than useful, it is misleading with a bias to reinforce an erroneous agenda.
The real analysis as FAR more complex.
Actually I agree in part with x although x may not like the conclusion I draw. What form of EI is important, because the EI has an ERoEI itself. This matters most if the ERoEI of the EI is very low. Thus if you used corn based ethanol to produce CB ethanol you have a different outcome than if your EI is 20:1 oil. You couldn't do it. I think the same will hold true for solar and wind. You can produce them with relatively high ERoEI oil and get a positive figure but once you have nothing but solar and wind to make new panels or windmills you will end up with a negative. Thus you need to add into the EI the energy used to extract it. The EROI would also be effected but by specifying the type of EI you would get a clearer picture of whether or not an alternative will be viable after the age of oil.
Strictly speaking, you don't get a negative. Suppose you have a two part process, the first part of which has an EROEI of 20:1 and produces inputs for the second part which has an EROEI of 4:1. The overall EROEI is 80:1. If you the EROEI for the inputs then drops to 5:1, your overall EROEI drops from 80:1 to 20:1. That's a huge drop but it's not the same as "ending up with a negative."
Note that in David's graph wind and solar PV are still above the threshold to maintain "civilization", whatever that is.
jaggedben, that depends on whether or not you are counting ALL the inputs to solar and wind, such as the energy credits to employees, energy to maintain roads to transport raw materials or the energy to keep a large military to protect your right to expropriate raw materials that exist in other parts of the world.
No if your ERoEI is 20:1 and your ERoEI of the input is 4:1 then your actual ERoEI is 20:1.25 or 16:1 not 80:1. But that said, I should have said might. If solar and wind are really 4:1 and 20:1 after you include all the uncounted inputs you would not end up with a negative. No question that ethanol would be a negative and probably already is per Pimental.
I do agree that there is a large amount of uncertainty as to what such inputs amount to and also whether they are necessary. Which is why I said "strictly speaking...".
You got the math wrong and also got my example backwards. I clearly stated that the first part (20:1) produces the input for the second part. Even so, the other way around still produces 80:1, and I'm baffled as to which numbers you crunched to get 1.25.
Also, I was certainly not referring to solar and wind respectively with my 20:1 and 4:1. (Actually, I had oil and solar in mind, but don't take the numbers as referring to real world examples. My point was about the math.)
OK I did get what you were saying turned around, but you are still wrong. At 20:1 it takes 1 BOE to get 20 or .05 to get 1 BOE. If that is your input then the 1 BOE that gets 4 is actually 1.05 BOE - thus 4:1.05 which is about 3.8:1
If you drop down to using as your input 5:1 that would mean that each barrel would require .2 for input so you would now have 4:1.2 or 3.3:1.
I am baffled as to how you would think you could add in the addition BOE to get your input to that input and get a better ERoEI. You are in essence saying that solar (4:1) which now is made using oil (20:1) actually getting 80:1. We don't extract any oil at 80:1 anymore. If I have to use oil to get oil to make solar how can I quadruple my ERoEI. If that were so there would be solar panels everywhere.
I said it was a two part process, and yet you insist on looking only at the second part of the process. For the whole process, if I start with one unit of energy, get 20 units of energy back in the first part, then take all 20 units of energy and get 4 back for each of them, then at the end of the whole process I've gotten 80 for one. The intermediate 20 are not counted as inputs or outputs of the process as a whole, since they are internal to it.
The reason people don't use oil exclusively for making solar panels is because it's not competitive on the market. The company that takes one unit of energy and offers you 20 in return will be able to offer you energy at a lower price than the one that offers you only 4 in return. Put another way, if the intermediate 20 in the above example can be used to get 400 instead of 80, people will go for the 400.
Thus, 'solar' will generally not be competitive with 'oil' as long as solar's EROEI is more than marginally lower than oil's, even if solar's EROEI is high. Nonetheless, lots of people are installing solar panels everywhere, because it does offer an energy (and thus a financial) return, and they can put solar panels on their roof even when they cannot drill for oil in their backyard.
I am quite surprised by the lack of critical thinking when people make statements like:
>> EROEI is not valid when comparing different forms of energy since there might be a gain in utility or other attributes that offset low EROEI numbers.
& then people dance around on the other side of argument. The basic fact is that EROEI is a necessary condition for a system to be viable but it is definitely not the sufficient condition. In other words the fact that You gotta get significantly more energy return than what you put in is quite basic. Unless you gotta convert it in a form that is very desirable. However even that scenario is plausible as long as you have ample energy to 'waste'. My contention there is that when serious oil decline kicks in you won't have loads of energy (in usable form such as oil) to throw at such low efficiency endeavors.
The other thing (& I wanted to say this to a gentleman arguing with Gail yesterday about there being no dearth of good investments in specific areas even after oil decline kicks in) is that there may be good niche investments out there but as capital returns wane & economy stagnates/declines the cost of discovering good investment starts to become quite. So high in other words failures will be difficult to sallow & the risk appetite will be quite low.
If you ask me I'll say starting tomorrow we should spend every last bit of this highly concentrated energy source (oil) into creating other high EROEI sources such as wind & solar.
Also, Purely from corn ethanol's point of view, it is quite absurd to want to convert oil energy to ethanol at 1.3 EROEI. The only reason it seems okay for now is that the cost of energy that goes into the process is hidden away & quite subsidized by easy to obtain oil from mega-fields which are not yet (questionably) in decline.
I would be favor algae-based biomass ethanol much more than corn though but even that will have scalability issues. But I have a feeling that the corn-ethanol nonsense will wane away when oil starts to become really expensive & the real price of all the 'non directly oil' components starts to skyrocket. At that point the govt subsidies will have to be increased significantly. But then again political factors are the only reason holding corn ethanol in place & who knows how they play out going forward.
That's probably true in some situations. But I expect future energy will be like drinking water. The problem is one of distribution, not quantity. What TOD generally ignores is that energy conversion devices are designed by cost of production, not energy in. The market is the mechanism that will handle most of the change away from oil. We don't need to make PV panels with oil energy. Nothing in the supply chain needs oil energy.
If energy wasn't essentially infinite, or we were not a technological society, the situation would be dire. But oil brought us to semiconductors, genetic engineering, and amazing material sciences. That's plenty far enough to now lose oil. It's almost like mother earth fed us oil until we could evolve into cleaner energies. It's pretty cool that oil will decline as the eco system may need it to decline.
huh? What? Who is claiming or ignoring the fact that energy converters are designed on a least cost basis?
One way the market could "handle" the change away from oil is to simply force people to use far less energy.
You are thinking many moves ahead. The question is if all the moves can be made.
Can the economy keep on growing that way ?
I'm not sure if you profoundly understand the exponential function.
The energy input into making ethanol includes natural gas and coal, not just crude oil. (energy returned in ethanol) / (energy input as crude oil) should be much larger than 1.3.
One factor left out of the discussion, so far, is the income either to consumers or producers, available to service debt. The TOD crowd probably doesn't need to be told how our monetary system works. When one figures out how declining EROEI affects the flow of money, it's redily apparent that a decrease in debt service has an enormous ripple effect. Defaulted assets (bad loans) cause banks reduce lending and thus the overall stock of money. We have declining EROEI on one side demanding more money and failing loans on the other in effect destroying money. In the 1930's, a relatively per capita resource rich era, the chain of payments contracted and left many destitute. In 2008, we were on the "bumpy plateau" which one might suspect that a moderate slow-down would ensue. What happened? An overleveraged economy shuddered and huge sinkholes appeared in the supply of capital, i.e., the stock of money. Upshot is this. Our first question about EROEI should be how it affects the chain of payments that service debt. Until the monetary system is reformed away from debt based currency, it is vulnerable to collapse due to loan defaults. With a value based currency, the stock of money can be regulated to preserve, as much as possible, price stability. In an era of increasing scarcity there will be by definition a gradual contraction. All things being equal, I'd prefer a gradual contraction over a collapse.
Where is your sense of fun?? A collapse might be more interesting than a decline!
But seriously, a value based currency was already tried (the dollar pegged to gold) and that didn`t work out. I think it`s too late for the elites to implement another go `round along those lines now without alerting everyone that the seats on the lifeboats are limited and that the Titanic is sinking....
Peak oil is already getting some play in the regular media.
DurangoKid - you are quite correct but from a technical and scientific perspective money is not relevant, nor credit/debt. As I have said before, these are all constructs of the current paradigm and, while politically very, very difficult to change, could none the less be changed. After all, the USSR had a very different monetary system to the western world of today and they still beat the US into space. When push comes to shove and a civilization has only one Golden Goal a people-backed command economy can work. This sort of thinking is heretical in modern American political thinking but it has worked in the past. There is therefore no need to have 'access to capital' to build 100 off-shore wind turbines. All that is needed is access to the raw materials, access to skilled and unskilled labour and each labourer provided with three hot meals per day and a warm place to rest his/her head at night. Not an investment banker in sight!
[access to raw materials is paramount and why we should be preserving them now]
Believe me, when a populace truly accepts that a command economy is necessary to achieve a Golden Goal it can be done. But only with the full consent of the people.
Which is why propaganda is such a dangerous instrument, which we need to guard against at all times and counter by all means available under our various constitutions Glenn Beck, Faux News
Just to expand on that a bit... Consider changes in general attitudes over perhaps a 50 year period. Changes in attitudes to parental discipline of the 1950's to present. From enthusiastic volunteering for war in 1914 to the anti-war protests of the 60's which essentially reduced the military-industrial complex to the shadow which carefully experimented with new methods during Reagan by invading Grenada and Panama, finally figuring out that all that was necessary to re-initiate was minimizing of casualties with vastly improved arms, tactics and training. Germany in the 1940's developed the exploitation of mass media for propaganda, but the key bit in that is not that it was a nation-state which did so, but that the mass media was used. MIC has probably figured out that control of mass media is key to the goal of making gains by use of military force, but that there is no requirement that such media be controlled by a government. Any co-operative business conglomerate can be just as effective, eg. that of Mr. Murdoch et. al.
With hindsight, it is easy for us to see how this was accomplished 60 years ago in Germany, to the everlasting shame of that people. 60 years from now, will people be looking back at these times and writing books on the topic of business use of mass media for propaganda? Probably.
[added] Its interesting to speculate on why MIC still considers such propaganda important (if they still do) given eg. the noting yesterday that pilots are not longer required for military aircraft and are in fact now the weakest link limiting performance. We're surely not far away from unmanned destroyers and cruisers. Submarines also assuming the communications are already worked out. It's not too hard to propose the near-term development of unmanned cavaly brigades with tanks, scouts, support helicopters and refueling / re-munitioning. With ASIMO now making TV commercials, even infantry will soon be do-able though not likely very affordable compared to humans. So the propaganda machines are not required to raise and motivate troops but to motivate the officer corp and taxpayers?
Two points:
2) The local economic impact of imported oil is far different than home built energy
3) Inflation or (deflation) is the real determinant of how much the lender is repaid.
Folks, this thread is about EROI. That is significantly different from EROEI. EROEI is complicated because one must figure out how much ENERGY is invested and what kind of return you are getting on your invested ENERGY! TOD editors seem to have gotten the message. There have been several reports on EROI lately. Here is a recent one focusing on corn ethanol.
Recent Applications of Energy Return on Investment
Pimentel uses EROI, along with just about everyone else. We should follow the lead of TOD editors and simply drop the second E. It generates nothing but confusion and gives naysayers like X an opening to say it is junk science.
Ron P.
Completely agreed Ron,
(and thanks for calling me on that too)
Investment needs to include the [often] unconsidered but absolutely required elelments such as: NPK, Water, basic infrastructure, and transportation elements. Dropping the second E, forces us to consider these things too.
The key points I took from the presentation you presented were:
a) the devil is in the details - that whole slide following that comment (slides 4-5)
b) the net energy cliff (slide 8)- how quickly the % available energy drops in the range from 10-4:1 and how desperate we would have to be to use anything below 8-4:1
Thanks for that link.
hmmm... Back to "peak everything" and population becoming the real question again?
Right, the dollar value of everything can be calculated. Pimentel calculates the dollar value of all inputs, including human labor, the cost of all fertilizers, the cost of equipment and the cost of the land, (how much you could rent it for if you did not grow corn), and all other costs. Then he calculates the dollar value of the corn ethanol produced, plus byproducts that can be sold, and then comes to the conclusion that corn ethanol has an EROI of less than 1.
That is the only way to do it with any accuracy. That leaves no opening for corn ethanol zelots to claim it is junk science.
Ron P.
Darwinian and Enviro Tech,
I just want to let you know that Dr. Charles Hall will be editing a special edition of the journal Sustainabilities focused specifically on EROI. As an introductory chapter we [Dr. Hall and I] are writing a chapter called (tentatively) "EROI Protocol" in which we lay the ground work to try and codify EROI language and methodologies.
-Dave
I'm not going to get into a grand critique of this series until it's done in entirety.
In this critical section of the relationship between energy and investment the most critical component is left out; the relationship between oil energy or available power and money/credit, capital flows and currency exchange.
Beginning last November, the world's currency regimes shifted from an inflationary fiat system to a deflationary 'hard dollar' system.
People don't understand hard currencies. Why? Because there haven't been any since the early 1930's. Those who used them are now mostly dead and the interval has convinced the living that there is no chance of their reappearance.
Hard currencies are not announced or brought into existence as a consequence of policy. The hard currency in this instance is both simple and diabolical. It is the more of less fixed exchange between the dollar and crude oil. A dollar today is worth about a half- gallon of crude. The rate of exchange is set by the aggregate consumption rate of the oil consuming infrastructure against the price level that causes that infrastructure to cease functioning.
Consequently, any dollar investment must provide a capital return equal to that of a half- gallon of crude. While this appears simple, the entire infrastructure of the so- called industrial world is unable to provide a capital return at this rate. Consequently, the world economy is unraveling, and has been for some time.
Why? Because the world's economic infrastructure is designed to expand and meter consumption rather than provide capital returns. Most of the world's industries exist to amplify consumption. Automobiles, houses in the suburbs, office towers, jet skis, lawn mowers, naval vessels, jet fighter aircraft, plastic lawn chairs ... do not return any capital for either their being brought into existence or as a consequence of their use. Their Net Return on Energy Invested is zero.
The human race has burned through a trillion barrels of oil plus the equivalent in coal over the past 100 years and there is nothing to show for this expenditure except bulging landfills, pollution and waste, the devastation of the natural world, the loss of thousands of species with thousands more at the brink, the massive expansion of human poverty world- wide and the diminishing means to find replacement supports for our human experiment.
Five hundred years of human minds and hand tools prior to 1858 gave the world Florence, Venice, old Shanghai, Edo (Tokyo), Kyoto, the Enlightenment, the Renaissance, the flowering of art, poetry, music, literature, theater, gardening, science, philosophy ... and great pleasure. The industrial revolution has given America the SUV and 60% obesity.
The hard dollar makes it the proxy of crude oil. The dollar value of crude has been stable since last fall. It is likely that this relationship will remain fixed until the world 'goes off' oil the same way the world's economies went 'off gold' in the mid- 1930's and for the same reason. Hard currencies are inherently deflationary. People/businesses/governments tend to hoard them. Consequently, they fall out of circulation. As in the early 1930's, the productive assets remain while the money to make use of them disappears. Eventually, the productive assets themselves corrode or the skills needed to use them are forgotten.
Unlike the condition during the 1930's period there is NO WAY POSSIBLE to escape the current peg between the dollar and crude oil without repudiating oil use. Amplifying 'growth' or additional consumption simply cements the dollar/crude peg and makes the dollar more valuable.
The only thing worse than being a dollar holder is to hold any other currency which will always be less valuable than the dollar and thus less useful for obtaining fuel.
Increasing the money supply by main force will simply cause oil prices to rise to the level where demand is destroyed along with the economy that represents that demand. After prices fall temporarily, they will recover to the level where the peg is re- established.
OR -
Increasing the money supply by main force will cause all prices and wages to rise more or less simultaneously which represents the peg under a different numbering system. The value relationship between the dollar and crude will remain.
The outcome of the peg on currencies will be a devaluation of all currencies relative to the dollar. As the dollar gains, it will be preferred by oil producers which will hoard dollars as substitutes for diminishing dollar demand. After all, in the post peak world (now) the producers themselves become middlemen as their own reserves are depleted. They will have to buy oil in order to continue in their business.
As Gail Tverberg has suggested here several times, the ability to support and extend credit will diminish. The catalyst for this will be the hard dollar and the preference for cash against all forms of credit including that denominated in dollars.
As countries like China and Japan seek dollars they will trade their US Treasury holdings for cash creating a funding competition for the US government. As the US government is unable to create more dollars to fund itself the cost to obtain loans will increase for all.
The hard dollars will enforce conservation as these will be hoarded even as the desire to wastefully consume oil will continue. The tension between the desire to waste against the desire to hoard will be won by the hoarding tendency. Wasting will transfer dollars from those who don't hoard to those who do. Once the wasters run out of dollars, they will be unable to find more; the 'good dollar' mechanism will make waste proportionately more costly than hoarding.
This is the obverse of Gresham's Law which has bad money driving out the good, that is, the good being driven into hiding by money spent which is then bad money.
Oil producers' currencies will be purchased by users looking to obtain crude from these countries: Russia/rouble, Saudi Arabia/ryal, Nigeria/niara, etc. Eventually all foreign exchange in these currencies will cease unless the host country devalues and increases the money supply in these currencies. Either way, the result will be dollar preference in producer countries. The outcome will be large and increasing declines in local fuel usage in producing countries, even as the ELP suggests otherwise. This is both creeping dollarization and dollar hegemony as those without dollars will not be able to afford fuel even in producing countries.
I suspect the current - and probably the most profound - deleveraging leg began in mid- November of last year. This is when the price of gold 'broke down' against the dollar which reflected the dollar's gaining the characteristic of a hard currency. The outcome will be onrushing deflation and credit revulsion leading to default and finally restructuring. Nevertheless, unless the countries involved go 'off oil' the same way that countries abandoned the gold standard the dollar/crude peg will maintain and deflation will continue until all debt is priced into extinction.
Please see any of the articles by Stoneleigh for more detailed examination of the outcome of deflation: here..
Dollars will disappear and alternate currencies will have little value as a crude- obtaining substitute. While many are vague about both the cause of the upcoming Greater Depression and its beginning, it is likely the result of the dollar/crude peg beginning on the 'Ides of November', 2009.
I think you're considerably off the mark. The conditions you arbitrarily assume will prevail for the US dollar, are actually prevailing for producer nation currencies. If your thesis held, then the Canadian dollar vs. US currency should be staying in lockstep value with the US dollar, since Canada is a net exporter of oil. In fact, the Cdn $ has stayed approximately stable vis, most world currencies (euro, Yen, Won), and the US $ has dropped in value from Cdn $0.65 / $US five years ago to today's Cdn $0.98 / $US and still rising, while Cdn govt. is doing everything it can think of to devalue it because the too-rapid appreciation is killing cdn. manufacturing export industry and dramatically altering calculations in eg. oil sands etc.
I project the future for the $US is not much brighter than for the British Lb. The only reason that the $US is holding fairly constant vs. oil is because S. Arabia wants that for now, while they re-deploy their investments no doubt.
Ron -- I doubt it would change the economic value to any significant degree but one could argue against some of those cost assumptions. As you know so well we have never used an EROI calc to make drilling decisions. Nor will we ever. It's always rate of return and payout time that matters most. Dollars in...dollars out. The cost of the drilling rig (and the energy expended to build it) doesn't play a role in the decision process. It's the day rate we're being charged for the rig. For an offshore rig that could change from $14,000/day to $80,000/day in just a few years. Such changes obviously make a huge difference in the economics. But the sunk energy costs in the rig matter not to us.
If a farmer's land is sitting fallow and his tractor is sitting in the barn collecting dust then one could assume these wouldn't be costs factors in the calc. Of course, there still remains other big cost factors. I know you can only guestimate but if you drop such sunk costs out of the calc how low might the EROI still be? Granted for that to be relevant you would need a huge portion of the farming industry to fall into such a category.
Thanks in large part to people like Ron I am beginning to think that EROI is purely hypothetical nonsense. Simple ROI works for me.
At least in principal I do not see why it matters if investment is in energy or “money”. The basic relationship seems to be that as the energy return on energy invested goes to 1:1 “money” cost will go to infinity. Using dollar cost already includes the energy investment factor.
The big advantage to using “money” is that the numbers come easy. Putting a number to the energy side is wickedly complex and difficult but this inconvenience hardly invalidates the critical importance of this factor.
Agreed Ron, including the human labor is important because what they are paid in (what we are all paid in) is in essence energy credits to use in the market place to buy energy or products produced using energy. If you were counting just energy and mechanized some part so that some human labor was now replaced by a machine you would count the energy used by that machine. So also you should count the energy used by humans and since they are paid in dollars (or euros or whatever) they should be included.
Darwinian states:
But the article says:
Which seems to indicate that it is talking about Energy Returned on Energy Invested. Unless the author means "its dollar equivalent" rather than "its energy equivalent".
My problem with EROI is that it doesn't necessarily factor in externalities. This is one of the basic flaws in market systems when producers are allowed to degrade the commons to avoid costs that would make a commodity unattractive.
Then there's the apples and oranges argument. Money is not the same as energy. The qualities of money don't vary according to what kind of paper it's printed on or the color of ink. Energy sources can vary enormously in their EROEI, environmental effects, production rates, reserves, and so on.
Last, it's obvious that some at TOD DO NOT understand monetary theory. In a monetary system that allows fractional reserve lending, the backing of the currency by gold is pretty much meaningless. Reserve requirements can be extended, secondary lending can create more currency that is not directly backed by gold. If fractional reserve lending were not allowed, then the stock of money would equal the stock of gold. The only possibility of economic expansion would be to find more gold. This puts a severe limit on specie currencies. Also, gold being in short supply is subject to hoarding. To return to a gold standard where gold recipts (currency) are 1:1 with gold would be a castastrophe and fundamentally unnecessary.
A problem with Federal Reserve notes and money of account is that their quantity is set by a private banks out of any control of the public. Then there's the interest burden payable to those same banks. Our monetary system does not exist for the public benefit, only for the benefit of those who lend it into existance.
The result is an ever increasing quantity of debt chasing a diminishing quantity of economic activity as EROEI or EROI diminishes. See? I did tie it to energy after all. I would go one step further to add that a discussion of energy that does not recognize EROEI as a physical limit, EROI as a financial limit, and the nature of our bank credit/debt currency will always come up short.
What to do about our tyranical monetary system is probably best left to another thread. Just don't forget that energy and money are linked in many ways.
And in regards to the gentleman known as X, his ilk will jump on anything they regard as a weakness or inconsistency whether it is weak or inconsistent or not. Very often they do not understand the issues in play nor do they care to. Quite often their thinking is based on magic and not science. Scientific method requires rigor that magic cannot supply. They would dearly love for their magical nostrums to have the strenght of science, but unfortunately for them, science serves no master. It can't be controlled to produce a desired outcome and therefore it is of little use to the magical thinkers. Attempts to bend science to magic sooner or later fail. That doesn't keep the magical thinkers from trying. They'll resort to name calling or trying to stir up uncertainty and sometimes they succeed in the political realms. But in scientific terms, they reap only what they've sown.
Magical thinkers are trying to discredit Peak Oil so that their world without end, Amen, construct can grow exponentially forever. Physical limits are a blow to their gods of I-deserve-all-I-can-get. The EROI and EROEI arguments are a direct affront to that and they won't take it lying down.
The EROI and EROEI problem spaces are as yet poorly defined and constrained. That doesn't mean they don't exist or that the physical laws in the Standard Model don't govern their behavior. When they are well characterized, you can bet the magical thinkers will move on to the next perceived threat to their gods. They won't give up the teat without a fight.
Actually, the two are used interchangeably in most places.
Very interesting data David. Thanks.
One question. Since so many of the oil "finds" that make the front page news are offshore and in deep water - is there any EROI data you can share on that?
Texas_Engineer
Is there data? Not really, or I should say, yes, we just don't have it. I can tell you this, which is fairly obvious, the EROI for deep offshore certainly much lower than shallow off shore and on shore.
-Dave
So how much lower is "certainly much lower" ? Half? Lower than heavy shipped in from the middle east? Somewhere between onshore light sweet and Cdn Oil sands?
This whole discussion is so simplistic it is usless.
lenny -- I wasn't going to take issue with that statement since I don't have specific hard numbers to back it up. Also, as we discussed some time ago, I really don't know who to calc EROI for a drilling deal in any energy unit. I can do the economics in dollars all day long so if we make a rough correlation between $'s and energy I can offer a range: EROI of a Deep Water field can range from crappy to excellent. Just like a field on the shelf or onshore. A DW field that nets 100 million bo at a full development cost of $3 billion gets your oil out of the ground at $30/bbl. Not bad if you're selling at $80/bbl. OK but nothing to brag about if you sell at $40/bbl.
Last year I drilled a DW dry hole for $148 million that completely killed the potential of the prospect. No oil...no cigar...go home. Want to calc the EROI of that deal? Just drilled two wells on the shelf. One worked...one didn't. EROI: That NG will cost us around $5/mcf. If NG prices stay around where they're at for a few years we'll probably breakeven: spend a $ to make a $.
I understand it can seem unfair to throw specific examples into the discussion. The TODers make a great effort at coming up with generalizations that help convey various situations. But when it comes to questions like the EROI of Deep Water GOM fields one needs a profile of all fields developed to date to make a generalization. Unfortunately I don't know of anyone who has done so. For every play in the world where a crappy EROI has been attained for one drilled prospect I can dig up one that produced great positive EROI results. And can easily go the other way around. Sometimes the answer is "I don't know" but that doesn't mean I don't have a guess but without all the facts to back that guess up. I don't know what the overall EROI has been to date for the DW GOM. Just a guess but I would say adequate. And compared to onshore drilling during the same time span? Maybe about the same: I've seen many onshore dry hole and marginal wells drilled. Yes...onshore development is a lot cheaper than DW. And you also find a hell of lot less oil/NG in a typical onshore success.
Of course, we can talk about fields discovered 50 years ago with great EROI's. But I'm not sure how that's relevent to what's going on today other then the obvious: EROI has decreased over time. Sorta like my position on corn-based ethanol: if it were economical under current conditions we would be producing billions of bbls per year. Just like a drilling deal: a good EROI won't get it drilled or an ethanol plant built. Only economic incentive will get it done. With the tax breaks given to ethanol producers and the general lack of expqansion that seems to answer the question for me.
Ayres and Warr have derived related results using models where the decreasing EROEI is manifested in an increasing share of the available labor and capital having to go into energy production. I have been reproducing some of their work with an eye to extending it to include the capital costs of major changes in energy sources. Even without those costs, the models provide a depressing picture: real US GDP tops out in 2019 and it's all downhill from there, baby.
EROI is a weird concept as it isn't about energy as much as how much of OUR energy we need to keep the whole system running.
The US uses ~100 quads of energy of which 28 quads goes to transport fuel, 5 quads being consumed at oil/gas refineries, 13 quads going to products like plastics, fertilizer, etc., 14 quads to heating, 12 quads to actual electricity and 28 quads consumed in power plants. So 33 quads of that primary energy is wasted even before we see a drop of it. The remaining 67 quads represents energy we can use.
What EROI folks are concerned with is transport energy and 'embodied energy' which together they call energy invested.
A small portion of that energy is further wasted by delivering it to us.
For electricity it is about 5% transmission loss and pretty much the same for other means of transport.
Transmission of coal by electric or diesel train is about 700 Btu per ton-mile, gas by pipeline is 300 Btu per ton-mile, oil by pipeline is 400 Btu per ton-mile, etc, fuel transport by truck is ~2400 Btu per ton-mile,etc.
http://www.che.utexas.edu/course/che359&384/lecture_notes/topic_3/Chapte...
Embodied energy goes into products and buildings and is thus lost if not recycled.
These two cost-of-doing-business items are probably less than 10% of the energy they deliver to the consumer so out of 67 quads we need only 7 quads of energy investment. Of course we are still consuming 100 quads of primary energy but EROI folks ignore that.
In the case of corn ethanol for every 100 Btu of FF we input we get 101 Btus out(Shapouri)(not including co-product) thus yielding 33 extra Btus of energy. In the case of oil
for every 100 Btus of FF we input we get 82 Btus of gasoline, diesel etc. out.
If our economy used corn ethanol instead of petroleum where we use 33 quads of crude oil to make 28 quads of transport fuel, we would use 28 quads of primary energy to make 28 quads of transport fuel.
The EROI folks don't care about depletion, their arithmetic is wacky and now they
are reaching beyond their btu based analysis to tack on GDP and other flawed financial analogies.
Are you saying that all energy inputs to ethanol production are in the form of crude petroleum or wellhead unprocessed gas?
Do you read any of the primary literature? It is clear that you do not understand EROI as you continually conflate conversion efficiency with EROI.
I also find your comment that "EROI folks don't care about depletion" particularly disturbing. I have wrote for TOD and am currently writing a manuscript dedicated to the impact of declining net energy (EROI) on peak oil and economic growth.
I read your postings above and at TOD.
I think I do understand your EROI and I obviously don't 'conflat' your meaning of EROI with energy efficiency. As I said your term 'energy invested' is the energy to transport it to the point of use along with 'embodied energy'.
And as I noted you've been dragging in GDP to clarify/confuse things.
Depletion is not an issue for you, only allegedly declining EROI( in fact EROI rises over time due to technological innovation).
EROI and depletion are not interchangeable ideas IMO, however if you would like to post a mathematical proof that they are I'd be interested in seeing it.
If you accept depletion then alternative energy sources that are net energy positive are to be welcomed as they increase the amount of available energy.
If you accept EROI, then only energy sources that mean your arbitrary minimum EROI are accepted, shrinking the amount of available energy. Worse, there is the assumption that new energy sources are more burdensome than old ones.
Majorian, we have been down this road before...
I will reference your calculation in todays comments:
"In the case of corn ethanol for every 100 Btu of FF we input we get 101 Btus out(Shapouri)(not including co-product)..." - this is based on the EROI of corn ethanol being roughly 1.4ish:1 (although your numbers are off - is that coproducts?).
But you compare it to this:
"In the case of oil for every 100 Btus of FF we input we get 82 Btus of gasoline, diesel etc. out." - This is a calculation of the efficiency with which a refinery can convert oil into gasoline - i.e. a conversion efficiency.
the point is this: you use the EROI of growing, harvesting, transporting, distilling, etc. of corn into ethanol, a process which yields a positive net energy gain, to the refinement of crude oil to gasoline, where the energy yield is constrained thermodynamically to be less than 1. They are two different, incommensurable analyses.
The proper EROI comparison would be the EROI of corn ethanol (1.4ish:1) to the EROI of oil extraction from the ground (roughly 20:1).
OR
Compare the refining of crude oil to gasoline - which you posit to be 0.82:1 - to the refining of fryer oil to biodiesel, or some mix of alcohols into ethanol, or whatever.
Do you see what I am getting at? They are two separate, distinct analyses.
Right.
That is an energy efficiency calculation and that is not what you are about.
Yeah, I got that. Message understood.
You don't want to talk about energy efficiency.
You want to talk about energy surplus or rather EROI.
Energy invested is the amount of consumer energy that is diverted from the surplus
to produce more energy.
For the US, we produce 67 quads of 'consumer energy', 28 quads of transportation fuel, 16 quads of natural gas for heating, 13 quads of 'embodied energy'--products made from FF and 12 quads of electricity.
We also produce 28 quads of waste heat from power plants and 5 quads of waste heat from chemical processes like oil refining. For the sake of EROI analysis we can ignore that.
Our total energy output is 67 quads.
How much energy must be invested to move 67 quads of energy to the consumer?
Take coal for example. The energy required to mine coal is ~2000 Btu per ton.
The energy to transport the coal is 600 Btu per ton-mile. The US used 722 billion ton-miles to deliver 1.2 billion tons of coal(coal represents 40% of US ton-miles) worth 20.5 quads of energy which produces 6 quads of electricity. That equals .433 quads of energy plus .0024 quads of energy for mining plus things like pollution control is about .5 quads of energy investment for 20.5 quads. So coal has an EROI of ~ 41:1
The EROI for coal electricity would seem to be 6 quads/(14.5 waste energy +.5 quads)=.4, not an EROI of 6/.5 = 12 as EROI experts seem to think.
Or natural gas, the energy required to transport natural gas is about 300 Btu per ton mile. The US moved 18 Tcf over 350 billion ton-miles. That equals .1 quads.
The energy required for processing NG is 5% of the input gas, which is equal to
0.9 quads. Also there is some losses from venting and 4 quads was reinjected to maintain field pressure so the production total is ~ 22 Tcf.
So natural gas has an EROI of ~18:1.
http://ops.fhwa.dot.gov/freight/freight_analysis/faf/faf2_reports/report...
http://dnr.louisiana.gov/sec/execdiv/techasmt/natural_gas/ngprocess_2006...
Based on these two fossil fuels it seems that the amount of energy required for extraction and transport is not more than 10% of the fuel consumed, not counting oil and uranium which are not mainly domestically produced and so easy to analyze.
Looking back at dry milled corn ethanol, the energy ratio(EROI) without co-product DDCS animal feed is 1.1, including transport, processing, etc.
http://www.usda.gov/oce/reports/energy/net_energy_balance.pdf
This is energy net positive where more 'consumer' energy is produced than used up.
Same thing applies to tar sands and oil shale.
For tar sands a barrel of syncrude of 5.7 million btus is produced with .8 million btus of externally supplied natural gas. After going to the oil refinery
it will be equivalent to ~42 gallons of gasoline. EROI= 5.8
I think I do understand what you are doing but you omit the inevitable waste in energy conversion and overestimates energy of extraction and transport and adds in 'embodied energy' to complete the confusion.
I believe this type of analysis is nteresting. However, I also believe it is not possible to answer the question: What is the Minimum EROI that a Sustainable Society Must Have? The answer would be dependent on the actual state of the society/economy – which varies. In response to higher energy cost the economy will adapt, i.e. use fewer Joules for every dollar (or SEK) of economic output.
Thus at least to a certain extent it is possible to combat rising energy costs by using it more effectively. Obviously, such an adaption in order to be of importance needs time – much time. Here we probably would need to count in decades rather than in years. It is high time to increase the pace of adaption to increasing energy costs.
This topic may be interesting, but only in so far as it is accurate and reflects reality. As long as it compares apples to oranges, fails to consider economic issues such as Rockman's sunk costs discussion or alternatively to declare over what time-frame it is being applied, it is more misleading than useful. (re time frame, eg. is the discussion considering time periods over which every asset sunk cost must be fully replentished, eg. 80 years for nuclear or 30 years for an offshore platform or indefinitely for the land used by a solar thermal plant? If so, then Rockman's issue may be less significant but then other complexities raise their ugly heads.)
The EROI required is really much higher because we have such a huge infrastructure and natural resource depletion debt.
Plus we wasted huge amounts of high-energy manufacturing on SUV's, new homes that won't last more than a few decades, etc that could have gone to drinking water, waste, and rail infrastructure.
As agriculture gets larger and larger shares of the remaining energy pie, cascading failures in infrastructure will lead to mass migrations, which will increase social disorder, leading to more systemic failure and war.
http://www.infrastructurereportcard.org/
America's Infrastructure GPA: D
2009 Grades
D Aviation
C Bridges
D Dams
D- Drinking Water
D+ Energy
D Hazardous Waste
D- Inland Waterways
D- Levees
C- Public Parks and Recreation
C- Rail
D- Roads
D Schools
C+ Solid Waste
D Transit
D- Wastewater
Given that we are burning so much fossil fuel that we risk driving our species and up to 90% of the rest extinct, collapse isn't such a bad thing, i.e. Peter Ward's bpok "Under a Green Sky" (hydrogen sulfide emitting oceans), NASA James Hansen believes we could boil the atmosphere away, etc.
We not only need to stop burning so much fossil fuel now, but somehow only burn the remainder over the next 3,000 years because the current rate is too fast for the oceans to cope with. It's hard to imagine that this will be possible given that coal is too easily mined.
And I doubt that the extinction of all of humanity in the future is enough to get people to stop having babies or cut back on their lifestyle given that people believe whatever makes them feel the best. And after collapse the belief systems will get even crazier...
Alice in Oakland, CA
Good points Alice. I presume the electric grid is under Energy.
We should, if we had any wisdom. begin rationing energy to put most of our fossil fuel use into upgrading the infrastructure. Much of that will not be able to be done with electricity. While big equipment can run on electricity it has to use heavy power lines and therefore is tethered to one location such as a mine. To run the heavy equipment to runs over our highways and byways we need fossil fuels.
I am not sure that collapse would save us from the scenario's in Peter Ward's book. One factor is global dimming
http://en.wikipedia.org/wiki/Global_dimming
Particulate that causes dimming drops out quite quickly while CO2 lasts a long time. If the factories that burn coal such as in China, stop we may have a sharp rise in warming. I think that may qualify as a Catch 22. This clip is part of a BBC documentary on dimming and tells what one researcher found about temperature after 9/11 when the jets were grounded in the US. http://www.yourdailymedia.com/media/1154771106/Global_Dimming The full documentary can be found at http://www.youtube.com/watch?v=bLfBXRPoHRc
And I doubt that the extinction of all of humanity in the future is enough to get people to stop having babies or cut back on their lifestyle given that people believe whatever makes them feel the best. And after collapse the belief systems will get even crazier...
Yes I watched a program once were people were asked what would they do if they knew a meteorite that would end life on earth was coming in 10 years and there was nothing we could do. One woman said she would have a child so that she could experience that before she died. Hmm no concern that a new life would also have to die.....Yes belief systems will no doubt get crazy, if for no other reason than to deny that we did this to ourselves.
Economic cost of energy = Dollars to buy energy / GDP
A dollar is not a unit of measure. To be a unit, it must not vary in different frames of reference. The dollar varies from hour to hour minute to minute. The GDP can not be measured because there is no legitimate unit.
Dividing a no thing by another no thing still does not solve the problem. Foot of head is used to measure energy per pound of liquid, ft-lb / lb. The unit lb is cancelled but the concept is still the same energy per pound of liquid. A lb force and lb mass being equal at sea level.
Economic cost of energy is not a scalar. Time is a scalar, Speed is a scalar.
There is no error bound on GDP. Since this such a large number, it would be wise to know the amount of error. Young’s Modulus is a very large number. If this number varies by any amount, deflections of a cantilever will be all over the map. I could adjust the GDP and get the proper economic cost of energy.
This EROEI and EROI thing has proven to be a never-ending source of contention here at TOD.
Many intelligent points of view have been presented on this subject, both supportive and in disdain. It is a very slippery subject, indeed.
First, I doubt that any thoughtful person would disagree that the more one expends additional energy in acquiring usable energy, the more one will be in trouble, in a downward spiral of ever decreasing radius.
But where problems arise is when one divides one quantity by another and then professes to draw profound conclusions from the resultant ratio. Ratios are largely artificial and should be scrutinized carefully for all sorts of built-in fallacies. While I can easily divide cumquat production by sunspot frequency and attempt to draw all sorts of conclusions, can we really say it means much?
Ratios are very seductive, largely because they imply some sort of causative relationship between numerator and denominator, e;g,, cumquats versus sunspots. That is why it is so easy to be fooled.
In our subject article (very well done, by the way), we have the ratio consisting of amount of money paid for energy divided by GDP playing a core role in the whole argument. The thing that is problematic for me is that, in the US at least, GDP has increasingly become decoupled from energy consumption. There are so many components of the US GDP that have little if anything to do with expending energy, (e.g., real estate commissions, stock broker commissions, lawyers' fees, medical expenses, etc.).
So, if these things have little if anything to do with energy consumption, then what is the relationship between those things and actual physical energy consumption? In other words, we could easily double the dollar value of real estate commissions, stock broker commissions, and lawyer's fees with virtually no increase in energy expenditure and the ratio would at least appear to be far more favorable without much changing physically.
Thus, I think we what we have here is a rather tenuous connection between EROI (or EROEI) and US economic output as measured by GDP.
Now, I think it would be far more meaningful if we could separate out those components of the US GDP that are highly energy-dependent (such as actually making things, which the US doesn't do that much of anymore) and then use that modified energy-intense GDP in this ratio. I think then we would see how much better or worse we've been doing than in the past.
Just my two cents worth.
Excellent comments.
BTW, if you believe the U.S. doesn't make anything anymore, I suggest you look at manufacturing statistic.
dcmiller -
Oh I didn't say the US doesn't manufacture ANYTHING ..... my point was that the UD GDP is comprised of increasingly large components that have little or nothing to do with expending energy, thus weakening the link between energy and GDP.
While I'm sure you have the actual numbers at hand more readily than I do, is it not true also that the amount of energy directly consumed by US industry is a much smaller fraction of total US energy consumption than transportation and domestic heating and electricity use?
What do you think of the idea of comparing the annual cost of total US energy consumption with total annual US after-tax personal income? However, if that were done, there would have to some differentiation between wholesale and retail energy cost. There might also be some problems with double accounting,.e.g, counting the cost of the coal purchased by a power plant and then adding that on top of what the consumer pays for the electricity coming out of that power plant.
Come to think of it, might there not be some double accounting already built into this energy/GDP exercise? Example: a refiner buys a barrel of domestic crude for say $70/bbl. He then refines it into a barrel of refined products having an average retail selling price of say $2.50/gallon, or $105/bbl. While both the $70 for the crude and the $105 for the refined products count toward GDP (I think), is not the true "cost" only the $105 the consumer in the end pays for the refined product? The logic being that the refiner is merely passing his cost onto the consumer, so why should it be counted twice? What do you think?
Maybe it's not such an easy thing to do after all, but I think if some of these problems are ironed out, such an exercise might have some value, as I think it would provide some sort of a 'pain index' regarding the increasing difficulty in obtaining usable energy.
I must confess that this post has brought a lot of noise into the discourse.
Can we just admit that all work, of any kind, including thinking, requires energy? And not just any energy. It requires exergy, that is, energy matched in potential (e.g. voltage), quantity (e.g. amperage), and delivery quality (e.g. level of line losses) to the prime mover or work process being motivated. Exergy is what gets work done. Can we also agree that all work processes, including energy conversion processes, are subject to the second law of thermodynamics in that some energy will be lost to waste heat and that the work accomplished will represent only a fraction of the energy in and the rest is lost as waste heat? Can we all agree on these basic physics principles?
If so then I do not understand this wide divergence in opinions about what the significance of EROI (EROEI, ERoEI, EROeI and what other variations you care to include) is to economic activity (production). Here is a simple diagram (well it is simple on the surface!) that shows the principle as it applies to economic production.
The principle is really pretty simple, no matter that it might be hard to actually measure (more on that later). You need to have capital equipment capable of converting some form of raw energy (e.g. oil) into usable exergy (redundant I know, but e.g. gasoline) to drive prime movers in production systems. That capital equipment must be produced by the production system itself and maintained by a steady flow of emergy (parts and stuff) back to the capital. This feedback loop is the energy investment. The exergy is the energy return. It is an extremely simple bit of arithmetic to derive the EROI from this relation. I cannot understand the confusion being expressed. Or actually the certainty of what is being talked about when that certainty is very misplaced.
Note that production is a cascade process. The exergy to the prime mover is actually a kind of raw energy since the prime mover is not 100% efficient. Yes Virginia efficiency is important! The prime mover produces motive power to the production process, which itself has an inherent efficiency. The final products and services out are what are demanded by the consuming hoards (not shown). Heat is lost at every stage. So at every stage you have to compute an energy return on energy invested (after the prime mover and after the production process).
What I have left as open questions here is the contributions from labor (these days more often used as control inputs more than muscle power) and low entropy material inputs. Both will have their own emergy calculations, one starting from photosynthesis and home heating (television and all other energy consumptions demanded by the workers today), the other from an entire work process similar to the one pictured. In other words, the production of economic work is actually recursively defined, with appropriate amortization back through the web of inputs.
The concept of EROI that Charlie Hall has developed is a direct take-off from trophic systems ecology in which energy flows from the sun through the food chains/pyramid and ends up as emitted heat that can do no more work. This is hard and well developed science. It is a perfect model for what happens in the human economy if we only had the sense to see it.
As for money. This is an extremely complicating factor. Originally money did have value in terms of the work it could purchase. In other words, it was related to exergy directly. This worked because people in simpler times understood what they were buying in terms of how it supported their livelihood. Today money is just another commodity and how do you really value an iPod in terms of your survivability and reproductive success? On top of that, the debt-basis of most money today has significantly uncoupled the value of work (emergy captured in goods and services) from monetary measurement. I have to admit I part company with Charlie and David when it comes to trying to understand this concept using monetary values (esp. GDP!) The food web doesn't use money for currency. It uses calories (joules), plain and simple. Money doesn't do work. Only energy does work. Physiological, mechanical, electrical, you name it. In the end it is only energy that counts as currency. Charlie's mentor, Howard T. Odum, brilliantly addressed the relationship between money as a message signal for energy flows. That is all money started out to be. It was our oh-so sophisticated (read clever but unwise) beliefs that money was itself a form of wealth that has been our undoing. There should be a relationship between monetary measure and real value in terms of work, but unfortunately the finance boyz long ago managed to uncouple that relation. Today it is but a sad shadow of its former self. I would love to convince Charlie and David that that road leads nowhere in the long run. But I do understand what they hope to accomplish by trying to keep some semblance of a relation. Let's face it, most people only understand money. Few have a grounding in physics which is what it would take to grasp energy.
As far as the difficulty of measuring real energy investments, yes it is going to be difficult because we do our accounting in monetary terms. However, just because it is difficult doesn't mean it can't be done. The problem we have in the US and most of the OECD is that data on production costs (which can actually be translated to real energy inputs because the utilities that supply energy to companies maintain those records!) is proprietary and therefore protected from inspection by the science community. I have seriously considered approaching the Chinese government with a proposal to do a bottom-up EROI analysis, of say, solar or wind, so that we can once and for all know what we are talking about. I am thinking they could mandate access to the right data! Right now everybody who takes a shot at pronouncing an EROI number for some particular technology is shooting in the dark. I will say that after visiting Charlie and David and seeing how they go about their work, I have greater confidence in their numbers than much of what I have read here on TOD from advocates (X are you paying attention?).
Question Everything
George
I forgot to mention: There seems to be an awful lot of ideology showing through in some of these comments. Could we stick to physics please?
''Economic Cost of Energy'' = comedy
.. George.Mobus
I am sure you have noticed George, that most of the people on this site are mostly clueless and that includes Charles Hall in regard to meaningful alternative outside the monetary box.
There does not seem to be much of any semblance of thought connected with his interpretation of energy economics, because it is based on Price System flunkyism/logic ie Adam Smith throwback to Sumeria contract society and low energy conversion era.
By the way... human energy is negligible in the current dynamic. It is laughable that people even bring that up in regard to productivity. How much is one twentieth of a horsepower worth in regard to the calories burned for each of you posters each day? Funny disconnect here by posters http://docs.google.com/Doc?docid=dfx7rfr2_55dh6wv9&hl=en
How can this many people not understand energy economics? Is this really a science related site? http://telstar.ote.cmu.edu/environ/m3/s3/05account.shtml
Sorry but with Odum and Hubbert and others leading the way ... how is it that a non market biophysical economy based on energy accounting, is not the main debate here (Technocracy technate design)?
Shall I say that all of these issues were figured out and figured out well, by at least 1934 and can I say that all the pointless monetizing of energy is done from the perspective of corporate fascism and special interest groups??? http://www.technocracytechnate.org/index.php?PHPSESSID=699d9fa70fe9df419...
A bit harsh John. While I do diverge from Charlie re: use of monetary surrogates for energy, I must say that his methods are far better than many I have seen in the literature. He makes a very earnest effort to make the proper adjustments to convert dollars into BTUs (if you will), as this paper outlines. He does it, I think, because the vast majority of economists only understand money-based measures and not physics. And it is the economists who are going to have to be educated on the deep issues involved.
Yes, Odum and Hubbert and many others have long noted that the true basis for a currency is the capacity to do work (energy, and meaningful or useful work). And it is true that over the past century, in particular, the financial markets, aided and abetted by governments anxious to stay in power, have distorted the connection between money and work so badly that it is now nearly impossible to denominate work in monetary terms. But it is not totally impossible if we can find the right Rosetta Stone translation. Charlie, et al, are working toward that translation from aggregate (global) data on both energy consumption and GDP (adjusted in various ways to attempt to get at real production, not an inflated version that our governments try to foist on us (e.g. see: Shadow Gov. Statistics). They seek what amounts to an upper bound condition, not a definitive xBTUs = y$s.
Truly, before passing judgment on Charlie's and colleagues' works you need to get deeper into what they are doing and not just assume that your insight into the technocratic ideology gives you a superior vision from which to pontificate. We are all trying to better understand what is going on in the economic realm and we are all applying our best efforts, knowledge background, and talents to a scientific quest for understanding. This paper presents one possible route to take. It is based on using real available data as best possible. My approach remains highly problematic, though feasible in principle. I feel that if I were able to carry out a bottom-up analysis I would eventually be able to say more definitively what the net energy gain would be on any number of proposed energy capture and conversion technologies. And, as a result we could better calibrate the use of monetary analysis to speak the language of the traditional economists. That latter part is essential if we are to ever succeed in changing minds about how to formulate policy for the future benefit of humanity.
George
That's the issue. It's not about the physics. It's about the ratios and how EROI is applied to future scenarios.
It's about the physics dude.
Thanks George. The last paragraph, especially, is a great articulation of a big part of the problem.
Should there still be any life in this thread I will mention that I have posted the blog entry that I extracted the above diagram from on Question Everything. There is a longer discussion of EROI (EROEI, ERoEI, etc.) and net energy there. Don't know if it will help or make matters worse!
George
Just to throw another wrench into the calculation, I noticed this press release tonight.
http://www.newswire.ca/en/releases/archive/March2010/23/c3481.html
Apparently AECL (Atomic Energy Canada) and the Chinese nuclear industry have begun fueling China's two CANDU6 740 MW reactors at Quinshan with fuel recycled from China's light water reactors. Given what I've seen about how badly the once-thru LWR fuel cycle affects EROI calculations, this should fix much of that up.
Which is why I don't understand the constant "drumbeat" here on declining total energy. We have very large problems of resource depletion and degraded environment. We have a problem with replacing liquid fuel. We don't have a problem with total energy. Well, we have a problem with total energy, but not a fundamental problem.
I really don't find changing the definition of EROI and trying to do ratios with GDP useful. There's enough bad thinking covered up already that another helping of ratios hiding assumptions doesn't help.
And what about the localized economic effect of building energy machines as opposed to importing oil? Trying to get at real economic effects is in the details.
The problem is that we currently lack technology that can supply energy with the same rate and low cost as we have gotten used to with liquid fuels. Saying we don't have a problem with total energy is a truism that has little or no bearing on the problem we actually have.
Right now in the US the grid can deliver to you nuclear generated electricity at significantly lower cost per raw GJ than you presently pay for gasoline. You need to look deeper. eg. you didn't say "in the form of portable transport fuel which I prefer today because that's what my present infrastructure is accustomed to using, and it will cost me $xx over yy years to sufficiently convert." Then you need to put reliable, unassailably accurate figures on $xx and yy years including detailed analysis in at least annual economic forcasts and projections for why you may think, if you do, that such investment may not be possible.
Are you disagreeing with something I said? Sure, there are nuclear plants, and there's also this technology called the Tesla Roadster. But if people can't afford the Tesla roadster, it might as well not exist for them. Even if they can, the predicament is pretty much still the same as I stated: To get the actual kinetic energy to move themselves from place to place in cars, people will have to pay more than what they have gotten used to with liquid fuels. And not everyone could do it at the same time, at least with present technology and infrastructure.
More than whom has gotten used to, US citizens, Europeans or Chinese?
In the long run, anybody who uses liquid fuels.
This exercise would be more useful if there was an explicit recognition that GDP is not gross output but gross value added. If a country imports all of its oil, GDP is the income generated by production net of cost of the imported energy. At a minimum, this implies that the benchmark is not GDP but rather the sum of GDP + energy costs, i.e. the value of gross output. The idea that all of GDP would ever be required to pay for energy would literally imply that nothing other than energy makes a contribution to the value added chain.
Very important concept. The outcome of any EROI type calculation is entirely dependent on the boundaries drawn and the myriad estimations and assumptions incorporated.
Can someone explain the bits I have marked in bold? How does 1 MJ (Mega Joule) = 106 joules ?
Is a Joule diffrent to a joule ?
How does a quadrillion BTUs equal 1015 BTUs? I don't understand.
I puzzled on that one for a bit also. Actually there's an "^" (to the power of) sign missing from items like "106 joules", eg. should be "10^6 joules" as similarly "1015 BTUs" should be "10^15 BTUs"
Thanks lengould!
Maybe someone at the oildrum can correct it?
the problem with substitutes to fossil fuels is that of the alternatives available none appear to have the desirable traits of fossil fuels. These include: 1) sufficient energy density 2) transportability 3) relatively low environmental impact per net unit delivered to society 4) relatively high EROI and 5) are obtainable on a scale that society presently demands (Figure 2).
Wind and solar have all of these attributes, except they aren't quite as transportable. They'll do for everything we need - aviation might continue on biofuels, synthetics, or something like hydrogen, but aviation isn't essential, so that's moot.
Not essential, however employment for a lot of people.
Nick, can you check the lithium for EV's issue in the comments here ? It seems that indeed there is not enough for complete car fleet replacement.
aviation isn't essential, so that's moot. - Not essential, however employment for a lot of people.
Sure, and realistically I think aviation will be ok. First, while jet fuel is probably the hardest use for oil to replace, it's only very roughly 40% of airline costs, and there are things airlines can do to reduce consumption, like buying more efficient planes, and filling the planes more fully. This means that if oil prices were to rise by 100%, airline ticket prices would only go up by 25%. That's not going to stop people from flying.
2nd, it's very unlikely that oil prices will rise by 100% in a sustained fashion. First, oil prices above $150 would slow down economic growth (if not stop it entirely). 2nd, all of the major uses for oil have substitutes that are cheaper when oil rises above, well, about where it is now. If oil prices went to $150 and stayed there for any length of time, consumers would move to carpoooling, mass transit, hybrids, EREVs, EVs, rail, heat pumps, etc, etc, very very quickly. Both of these effects would keep prices from rising further, and probably reduce them from that peak.
30 years is enough time for aviation to become more efficient - that will keep it going another 20-30 years. 50-60 years is enough to find substitutes...
See my comments on lithium above.
If most aircompanies still will or can do that.
And most are doing this:
There is also this:
Like everywhere, this industry is planned on growth. Spendings that must be gained back in the future. That is a problem, as can be read for example in the 'Tipping point' article from Gail (22 march).
reduce consumption, like buying more efficient planes - If most aircompanies still will or can do that.
As long as travelers are still flying, why not?
Fuel costs are spiralling for the entire industry, which is having a significant impact on many operators' bottom lines. These rising operating costs are forcing airlines to get creative in their thinking and to examine new ways of reducing their fuel consumption
That's a good example of what I was talking about: aviation will get more efficient.
or face extinction
Remember that aviation is extremely competitive: the more efficient airlines will grow, the less efficient will fail.
this industry is planned on growth
It will be ok with less growth.
Air France-KLM is a big one and seems healthy.
Unless one believes this can happen
(source: article 'Tipping point' posted by Gail)
Our primary question is what happens if there is a net decrease in energy flow through our civilisation? For it is absolutely dependent upon increasing flows of concentrated energy to evolve and grow, and to form and maintain its complex structures.
• A decline in energy flows will reduce global economic production; reduced global production will undermine our ability to produce, trade, and use energy; which will further decrease economic production.
• Credit forms the basis of our monetary system, and is the unifying embedded structure of the global economy. In a growing economy debt and interest can be repaid, in a declining economy not even the principle can be paid back. In other words, reduced energy flows cannot maintain the economic production to service debt. Real debt outstanding in the world is not repayable, new credit will almost vanish.
I know you are convinced that the economy can grow with declining energy available, but I have serious doubts. Of course thinks like biking and carpooling is possible, but heavy losses for carcompanies would be the result. What in 2008 happened with GM would follow, only worse and with more workers losing their job.
Air France-KLM is a big one and seems healthy. - Air France-KLM said Thursday that losses for the first nine of its fiscal year 2009-2010 stood at 868 million euros
Many healthy businesses will have losses at the bottom of a recession - that doesn't really tell us anything.
civilisation...is absolutely dependent upon increasing flows of concentrated energy to evolve and grow
Not necessarily so. For instance, US oil consumption is falling quite sharply, but growth is continuing. From 2005 to today, world GDP grew strongly even as oil production plateaued. US oil consumption today is lower than it was in 1978, but the economy (including domestic manufacturing) is much larger.
A decline in energy flows will reduce global economic production
We have two separate problems: climate change, and liquid fuels, not a general problem of peak energy. If wind and natural gas are inadequate, we have more than enough coal to keep the lights (and whatever else we want to power with electricity) on during a transition (for better or worse). See Are we running out of coal? and Are we running out of coal? - part 2
for more, see http://energyfaq.blogspot.com/2010/03/can-we-really-transition-from-oil-...
However it is uncertain how long the recession will last.
IMO (and others) that was mainly because of growth in China and India.
Maybe not peak energy, but it is the liquid fuel problem that is going to hurt.
The coal issue we discussed allready. But it is much less a matter of keeping the lights on.
From 2005 to today, world GDP grew strongly even as oil production plateaued. - IMO (and others) that was mainly because of growth in China and India.
Yes. Nevertheless, overall world GDP grew, while oil production/consumption did not. The world saw growth in steel production, car production, housing, etc, etc, etc. This tells us that there is not a rigid, one-to-one relationship between energy in general, and oil in particular, and economic growth.
it is the liquid fuel problem that is going to hurt.
I agree. OTOH, it's not going cause economic collapse.
Oil consumption grew however in China and India. And the U.S. and Europe and a lot of other countries take advantage of goods that are made there (not seldom by U.S. and European companies)and exported all over the world. So it was above all oil consumption growth in two countries with together more than 2 billion people which did the trick from 2005-2010.
Maybe, but I suspect that things are different when the oil production plateau is finished.
Not when you think this is not possible:
One can think that the world economy can still grow, but in fact something like what is stated here above is happening allready. One can argue that following news about U.S. and overseas financial collapse are exaggerations, but where smoke is, is fire. A small selection:
And not when you think this is not possible:
So it was above all oil consumption growth in two countries with together more than 2 billion people which did the trick from 2005-2010.
Yes, but why does that matter? Oil consumption fell elsewhere, and overall oil consumption was flat, yet overall GDP grew quite strongly. In fact, it wasn't slowed down at all until the US credit crunch hit.
This tells us that there is not a rigid, one-to-one relationship between energy in general, and oil in particular, and economic growth. - Maybe, but I suspect that things are different when the oil production plateau is finished.
But, why? Clearly oil has some importance, but why should it be all-important?
One can think that the world economy can still grow, but in fact something like what is stated here above is happening allready.
Actually, it's not. World GDP growth is reasonably strong.
where smoke is, is fire
You'll always find these kinds of headlines during a recession (the bottom of a business cycle). In fact, you'll always be able to find them even during the top of a business cycle.
hoarding
That would be stupid on their part, and I think it's very unlikely that they'll be that stupid. The export earnings are much more valuable than the oil. In fact, as net exports fall, exporters will cut domestic subsidies, reduce domestic consumption, and export more than otherwise.
It matters, because the strongest growing economies supported world growth.
Just a little more than a feeling that it turns out to be very important for preventing economic downturn when plateau production is over.
Of course the big question is when and where the bottom is. The next oilprice spike could lead the world one step further down, with more unemployment. Of course the government can keep on printing money for bail-outs, until...
Do you expect all oil-exporters to think reasonable or could some panic when the bad situation becomes clear ?
Depends. Small oil-exporters that have other export products are not hurt very much. Big oil-exporters would make the same amount of money with oil at $120 if they export 20-30% less oil than now.
Maybe in the future, maybe not.
KSA is still booming with year on year increasing oil consumption. Last weak Iran decreased the amount of low tax gasoline for citizens with 25% to 60 liter a month, but the question is if this will have much effect on ELM, especially past world peak. KSA saw net exports falling since 2005, however domestic consumption is still rising. If your guess would be right, than oilprices wouldn't have continued to rise from 2005 on. But in fact the world faces an oil-export crisis since 2006.
the strongest growing economies supported world growth.
How does that relate to the need for oil to grow? If the world economy overall can grow without more oil, how does the location of that growth matter? Some economies are always growing faster than others...
Now, if you want to focus on just oil importers, take the US: it's GDP grew by 6% in the last quarter of 2009, while it's oil imports fell by about 4%. That doesn't support the idea that oil imports are necessary for GDP growth.
the big question is when and where the bottom is.
The world economy is growing again, right now.
Do you expect all oil-exporters to think reasonable or could some panic when the bad situation becomes clear ?
Even panicking people who are shooting wildly, try not to shoot themselves right in the foot.
Small oil-exporters that have other export products are not hurt very much. Big oil-exporters would make the same amount of money with oil at $120 if they export 20-30% less oil than now.
Then why would they panic? Furthermore, they know that oil at $120 will push consumers to alternatives. Saudi Arabia is deathly worried about that, as is all of OPEC.
If your guess would be right, than oilprices wouldn't have continued to rise from 2005 on. But in fact the world faces an oil-export crisis since 2006.
But, there's no hoarding going on. The status quo, which combines a lack of export controls with price controls/subsidies, has a fair amount of inertia. It will take an actual fall in export earnings to force a reduction in price controls/subsidies (although Iran is moving now....). The point is, the reaction is likely to go in the direction of freer markets, not less so.
Then it's a coincidence that growth is strongest in countries with rising oil consumption. The future will tell, but I doubt that the world economy can continue to grow if almost all countries are forced to lower oil consumption, each following year less than the year before.
Agree to some degree. There is 'low hanging fruit' to reach better fuel efficiency. OTOH SUV sales are rising again and GM continues the desire to make money with SUV's. Companies really have to hit the wall a few times, before they learn and understand the situation profoundly. And I read in several comments that the recent GDP numbers for the U.S. are suspect. The reasons don't seem weird IMO.
Exactly. That could be a reason to diminish oilexports to be sure that the country has some left for their (grand)children. I can imagine that the importance of making money in the short run will diminish in favor of looking at the situation in the long run. But it depends on the intelligence of the government from a specific country and on the amount of other exports they have. I don't know what other export products for example Equador has, but if oil is a not to important fraction of total exports, I expect that a country certainly will start to look more in the future. An oil exporting country past peak is something different from the whole world past peak oilproduction. If that becomes clear, oil exporting countries may start to think that in the not to distant future they have to do it with their own oil, because there will be no other countries left to import from. Now most governments still think that the way it goes can go on many decades more, in fact I think that most governments not even think on oil problems apart from global warming, which real dangers are not considered to happen in the near future. So it will be a shock for most.
Then it's a coincidence that growth is strongest in countries with rising oil consumption.
Not at all, but it's a question of the direction of causality: growth in China is likely to make their oil consumption grow. On the other hand, does that mean that a limit to their oil consumption will make growth impossible? The answer is no.
I doubt that the world economy can continue to grow if almost all countries are forced to lower oil consumption, each following year less than the year before.
If the world can grow strongly while oil consumption is flat, it can grow with declining oil consumption. Obviously it makes it somewhat harder. At the least, capital that could go elsewhere will be diverted to investment in alternatives to oil. It just won't make it impossible. Now, how much will it be slowed down by a headwind caused by declining oil production? That's not clear. What is clear is that people on TOD often greatly overestimate the power of oil.
I read in several comments that the recent GDP numbers for the U.S. are suspect
Even those who distrust official GDP methodology don't suggest that it changed suddenly very recently.
That could be a reason to diminish oilexports to be sure that the country has some left for their (grand)children.
Being careful to not deplete one's oil prematurely is different from hoarding, and refusing to export. Refusing to export makes no sense. It's much, much better to sell your oil at the best price, and then use the revenue carefully.
Not only on TOD. And the question is for me if it is a overestimation. IMO you underestimate the importance of oil. You think that economic growth causes oil consumption to rise, I think it goes hand in hand until there are sufficient alternatives for the transport sector and when most people who lost their job in work that is related to making things that burn oil have found other jobs. IMO that's going to be very difficult.
I didn't write refusing. I meant exporting less, because then they know that the only way is down and that in the not to distant future there will be only a few exporting countries left unless the economy collapses before.
I think it goes hand in hand until there are sufficient alternatives for the transport sector
Those alternatives exist right now: HEVs (and EREV/PHEV/EVs very, very soon), carpooling, telecommuting.
when most people who lost their job in work that is related to making things that burn oil have found other jobs
In the aggregate, that's not that hard. The car industry is by far the important thing in this category, and they are converting to making HEV/PHEV/EREV/EVs.
exporting less, because then they know that the only way is down
"They" don't really think that way. Most need the money right now (Mexico, Venezuela, Iran, etc). The only exception might be KSA, and KSA is correctly afraid of allowing prices to go too high, and pushing importing countries to find alternatives.
I meant when alternatives are heavily in use. You think here one step further. Carpooling will only happen in an emergency situation, but maybe the emergency will be massive unemployment in which case carpooling will not be necessary.
In this case, I was thinking one step further. Still most governments don't know what is going to happen soon. If they think something it is that until 2030 everything is ok, or that there is oil for at least 40 more years. No idea about flow rates. When the shock comes, their way of thinking can radically change.
I meant when alternatives are heavily in use.
But, they're available now - they just need to grow quickly. An oil shock would make that happen.
Carpooling will only happen in an emergency situation
Yes, but it's available - it's availability clarifies the fact that OECD economies won't stop because of a physical lack of energy.
maybe the emergency will be massive unemployment in which case carpooling will not be necessary.
Unemployment can be solved by a move to a command economy, as was done in WWII (which ended the Depression).
No idea about flow rates. When the shock comes, their way of thinking can radically change.
But why would they worry about the global oil situation? Each country has it's own oil production situation, and they'll base their strategies on what's going on in their own country. In any case, it would be counterproductive to their own best interests to refuse to export oil. If there was a shock and oil prices were at a peak, that would be the best time to sell their oil - in a few years oil importers would find substitutes, and make their oil obsolete. That's how oil exporters, especially Saudi Arabia, think about this question.
I keep on writing that the situation 70 years ago is in many ways incomparable with the one now.
Most will worry, because until now never they have thought that oil supply could be at risk anytime soon.
As I said before, I didn't mention 'refuse'. With oil at 160 dollar
they could cut export by 50% and make the same amount of money as now.
Come on Nick, most know that it is not a matter of years to make oil obsolete, but a matter of decades.
the situation 70 years ago is in many ways incomparable with the one now.
How would those differences make a command economy not work? Remember, this is in the context of strategies being available under a command economy that would make energy supplies adequate.
why would they worry about the global oil situation? - Most will worry, because until now never they have thought that oil supply could be at risk anytime soon.
But why would that change their strategies? Remember, these are oil exporters - they will know their own situation better than anyone else - if they believe their own supply is adequate for both domestic consumption and export, why would more knowledge about depletion elsewhere change their strategy?
With oil at 160 dollar they could cut export by 50% and make the same amount of money as now.
Why wouldn't they maximize their income?
most know that it is not a matter of years to make oil obsolete, but a matter of decades.
Sure, to make it fully obsolete. But remember, even small changes in the balance of supply and demand can destroy the pricing power of exporters. Besides, we're talking about long-term strategies here. Short term strategies would always dictate maximizing income - so the question is, what's the best long-term strategy? Saudi Arabia especially thinks in terms of decades, and ever since the fiasco of the 1970's price spike followed closely by the 1980's price crash, they've always felt very strongly about preventing price spikes. Preventing or minimizing price spikes means maximizing exports when a price spike is starting to form.
Past peak most governments will realise (if the truth cannot be hidden anymore; I think this will take a few years after world oilproduction starts to go down) that it is a finite resource. Combine this with what you wrote:
Long-term strategies become more important after the above mentioned truth becomes clear. If (governments from) small oil-exporting countries are smart, they are then going to search who are the big exporters and then see there are only a few. You mentioned KSA regarding long term strategy, but they have still so much oil to export that they are an exception. And even KSA announced that they want to let some oil in the ground for future generations. Small oil-exporters can become more reservated in developing new projects. It is not easy to predict, because all countries are dependent on a strong world economy, so cutting exports has disadvantages also. A dilemma, that could lead to fear and panic.
Past peak most governments will realise (if the truth cannot be hidden anymore; I think this will take a few years after world oilproduction starts to go down) that it is a finite resource
I think that oil exporters are pretty aware of depletion. In fact, most countries in the world are more aware than the US.
If (governments from) small oil-exporting countries are smart, they are then going to search who are the big exporters and then see there are only a few.
I think that oil exporters are already very aware of this.
even KSA announced that they want to let some oil in the ground for future generations.
But did that comment from the King of KSA change their export strategy? No.
Small oil-exporters can become more reservated in developing new projects.
I'd say that's highly unlikely. Except for KSA (and maybe Kuwait), there isn't a country in the world that isn't desperate for more oil income. Fear and panic will only make planning more short term.
Also, I don't think you understand just how aware oil exporters are of their fragile situation. They have been clobbered several times in the last 30 years by very low oil prices. They're extremely worried about substitutes like biofuels and EVs. We know that biofuels aren't very scalable, but exporters are still worried about them - imagine how worried they are about a real threat, like EVs. They're very worried that high oil prices will be followed by a crash - they'll try to sell while the selling is good.
How do you know that ? I think most believe that there will be at least an undulating plateau production until 2030.
A few days ago on Drumbeat there was an article published that says that Washington thinks of the possibility that world oilproduction starts to decline between 2011 and 2015. But 'saying it' and 'thinking of the consequences each and every day' are two different things.
I wrote that they are an exception. They have still some 80 undeveloped 'small' fields waiting for the next generations.
Nick, this comment is in contradiction with your writing that 'they' are 'pretty aware of depletion'. If they understand the situation well and don't believe in the Yergins and Lynchs then they are not afraid of EV's. And they should know that planes and ships and big trucks will ask for oil until 'the last drop' of it.
Besides, countries like KSA and Kuwait recently were talking about alternative energies. For local use and to export. So it seems that some are indeed aware of depletion, and last week it was Kuwait which announced Peakoil for the year 2014.
How do you know that ?
From what I read, the governments of most oil exporters are pretty aware of their own problems with depletion, and much more aware of the rest of the world than the US.
I think most believe that there will be at least an undulating plateau production until 2030.
Which is not that different from ASPO. Look at Aleklett's projection for all liquids - he projects only a 11% decline from now - page 40 of the presentation: http://www.aspo-australia.org.au/References/Aleklett/20090611%20Sydney4.pdf
If they understand the situation well and don't believe in the Yergins and Lynchs then they are not afraid of EV's.
You're assuming that a good understanding of the situation will make them see it the way you are seeing it. I don't think that's the case.
And they should know that planes and ships and big trucks will ask for oil until 'the last drop' of it.
Not really. Personal transportation is the major consumer. The cost of HEV/EREV/PHEV/EVs is falling every day. Already, a Prius's hybrid premium pays off when oil is over $60/barrel. EREVs are cheaper when oil is over $80/barrel. Their costs will keep falling, as they achieve greater economies of scale.
EREV/EVs are more fun to drive than ICEs - they'll take over, and make oil obsolete for personal transportation.
Now, you mention planes and ships and big trucks. Well, when oil is over $60/barrel, rail is cheaper than long-haul trucks. Planes and ships account for a relatively small percentage of oil consumption, and their efficiency will continue to increase.
No, oil is not that hard to replace, and when it gets expensive, that replacement will accelerate. A lot of oil will be left in the ground.
Not everyone agrees. And I think a lot are afraid to make the change.
41% of oil consumption in Holland in 2005 was for ship- and airtransportation.
EREV/EVs are more fun to drive than ICEs - Not everyone agrees.
Well, you have to drive one. The instant acceleration is great! No gear change delays, instant acceleration at any speed...well, it's a lot of fun even in a medium-powered EREV like the Chevy Volt. For instance, here's a review of the Volt:
"The experience was exhilarating. "
http://energyoutlook.blogspot.com/
Monday, January 25, 2010
Story title "910 Miles Per Gallon*"
And I think a lot are afraid to make the change.
Well, an EREV doesn't have any compromises or disadvantages.
41% of oil consumption in Holland in 2005 was for ship- and airtransportation.
That makes Holland very unusual. Is some of that related to some very large ports and airports that really serve much more than Holland?
I read the entire paper; thanks to all who made it available.
One conclusion that follows from this paper is that energy (or “fuel”) conservation at the point of consumption (e.g. gasoline consumption in a car’s engine, burning natural gas in a furnace) actually saves considerably more “fuel” than is apparent at first glance.
Also, energy and money are commonly used to evaluate and to value just about anything one wants to; both can serve as the medium of exchange for Lord Darlington’s “man who knows the price of everything and the value of nothing” in Oscar Wilde’s “Lady Windemere’s Fan”. Personally, I don’t think they are as readily confused as some commenters here maintain.
The authors’ point that energy could reach a price such that all a society’s activities would be expended in achieving the oil. Kinda like where medical expenditures appear headed.
I think it merits consideration, that a high rate of consumption of energy ― such as in my beloved United States at present ― is not necessary for the advancement of civilization, the pursuit of justice, pick your worthy aim. Prior to the initiation of the fossil-fueled industrial revolution, mathematics had advanced to the calculus, great arts had been achieved, much of the world had been explored… and much infernal horror had been perpetrated. In other words, a decreasing energy consumption rate need not force a “degradation” of human life.
No question, there are sickeningly many millions of humans whose lives could be and should be spectacularly improved by freedom from the fumes and soot of cooking food over certain types of fires. But these people do not need the energy consumption rates “enjoyed” by my American contemporaries. Just how much is a difficult but far from impossible question, one which does not call for an answer precise to five significant figures.
I have read in various places (sorry, I cannot remember a source at the moment) that hunter-gatherer societies moving into new territories (e.g. the first humans in New Zealand or Hawai’i) were distinctly more egalitarian and healthier than agricultural societies with what we have traditionally called “civilization”. (I suspect that this follows from higher per-capita energy consumption rates in the former and higher total energy consumption rates in the latter, but this is only a surmise.)
Back to the conclusion in the 2nd above. Now is the time to expend the energy (&/or cash) on facilitating a transition to lower rates of consumption.
hunter-gatherer societies moving into new territories
It likely also had something to do with the fact that there were no other humans with which to compete. New territories become old territories pretty quickly, and hunter-gatherer societies in old territories had a very high war-related death rate...much, much higher than we see today.
sohbet
bitanem