Monday, September 27, 2010

EROI doesn't matter

EROI, or "energy return on investment," refers to the amount of energy we get in return for some amount of energy invested. It's a ratio of energy return for energy investment. For example, if we spend 1 unit of energy on building an offshore oil rig, and the rig yields 5 units of energy over its lifetime, then it has an EROI of 5:1, or just 5. In other words, it has "paid back" 5 units of energy for every unit of energy invested. As another example, assume I walk one mile and burn 200 calories, in order to acquire some stawberries which have 400 calories. In that case, the stawberries had an EROI of 2, because they yielded twice as much energy as was spent in acquiring them. Usually, EROI refers to industrial sources of energy generation, like coal-burning power plants, windmills, etc.

Various kinds of energy generation have different EROIs. For example, a typical coal-fired power plant has an EROI of 30, which means that it yields 30 times as much energy over its lifetime as it took to build it and supply it with coal. Other forms of energy, like wind and solar, have lower EROIs. Corn Ethanol is the worst, since it yields only about 20% more energy (EROI of 1.2) than was spent in manufacturing the fertilizer to grow the corn.

Over time, the average EROI for all energy sources has been falling steadily. It was about 100 in the early 20th century, and has fallen to about 30 now. It's continuing to fall. The reason is because we have "used up" the easiest sources of energy first, and must turn increasingly to lower and lower quality sources of energy thereafter. For example, we used up the shallow oil first, and now we must dig deep wells (at great energy expense) to get more oil. EROI is falling and will continue to fall, and probably will never again reach the heights experienced in the early 20th century.

There is an argument that declining EROI will cause the destruction of our civilization. The argument runs as follows. As EROI declines, we must spend more and more of the energy available to us, on generating more energy. As a result, the amount of energy left over, for our uses, is less and less. In other words, net energy (which is the amount of energy left over after subtracting energy investment) must decline as EROI declines. It's an inevitable physical fact. At some point, EROI will decline so far that we won't have enough energy left over to sustain our industrial civilization, at which point, civilization will collapse, and we'll revert to a medieval mode of life.

Or so goes the argument. This argument (which I'll call the "energy decline argument") was first advanced by Prof Charles Hall, who is a professor of ecology at SUNY. He first articulated the argument several decades ago. He also invented the concept of "EROI" at that time, and pointed out that EROI was precipitously declining. Since then, the energy decline argument has gained many adherents. It has achieved a widening influence. Recently, it has inspired an impressive number of books, articles, papers, websites, lectures, and so on, all claiming that energy flows will soon decline and that civlization must decline thereafter.

The problem with the energy decline argument is that it's totally wrong. It's wrong from beginning to end. It relies on incorrect implicit assumptions, and it reaches incorrect conclusions.

In this paper I will refute the energy decline argument by showing that its assumptions are wrong. I will show that EROI is unimportant and does not threaten our civilization. I will also show that energy is abundant and will grow over time.

ANALYSIS OF THE ENERGY DECLINE ARGUMENT

The fundamental problem with the energy decline argument is this: it implicitly assumes that the rate of energy production is constant. In other words, it assumes that we have a constant number of power plants in the world and cannot build any more. If that were true, then the energy decline argument would also be true. If the amount of energy we generated were constant, then declining EROI would, in fact, imply declining net energy, because we would have to spend a larger fraction of the fixed amount of energy available to us in acquiring more of it. However, the assumption is false; in fact, the amount of energy we produce is not constant. We can build more power plants. As a result, we can easily compensate for declining EROI by just building a few more power plants to compensate for the EROI decline, while still generating the same net energy output. In other words, the assumption underlying the energy decline argument (namely, that enregy supply is constant) is wrong, and therefore the argument is false.

Let me provide a simple example. Suppose we have a 1000-megawatt coal-fired power plant with an EROI of 10; in other words, it produces 1000 megawatts continuously over its lifetime, and it consumes 1/10th that amount (100 megawatts) continuously over its lifetime. Now assume that we are running out of coal to supply that power plant, and must replace it with lower-EROI power plants. So we replace it with two 1000-megawatt solar thermal plants with EROIs of only 5 each. Despite a reduction of EROI by half, we still have increased total energy output by by almost 80%. (The high-EROI plant produced 900 (1000-100) megawatts of net energy, but the two low-EROI plants combined produce 1600 (1000-200)*2).

Each power plant with an EROI higher than 1 is an energy multiplier1. It multiplies the energy available to us, because it produces more energy than it consumes. With each power plant we build, we multiply the total amount of energy yet again, albeit by some small factor. From this fact, it's clear that we can produce any amount of energy we wish, by multiplying often enough (building more power plants), regardless of EROI. This reasoning follows from simple arithmetic: you can reach any number you wish, by multiplying by any factor higher than 1, provided you can multiply as often as you wish.

In fact, the energy available to us can grow exponentially with any EROI higher than 1. The reason is because the output of any plant can be used to build several other plants, each of which can then be used to build several more plants, and so on. For example, we can use the output of a single power plant, to smelt the iron ore, manufacture the components, and make the hydrocarbons necessary for the construction of several more power plants. In that way, we can increase the amount of energy available to us exponentially, with any EROI higher than 1. In fact, our society has already done that. We've already used the output of power plants to build more power plants. That's how we were able to increase the amount of energy generated in this country (USA) by a factor of ten in the six decades from 1920-1980, despite never having invested more than a small fraction of our energy in acquiring more energy.

Let me provide an example of what I mean. Suppose we build one power plant with a very low EROI of 8. We use the full output of that plant to build another 8 plants just like it and adjacent to it. Then we use the full output of the other 8 plants, to build an additional 64 power plants, and so on. After ten generations, we'll have about 1 billion power plants, without any outside investment of energy except what was needed to construct the first plant. Of course, we can't really build a billion power plants. At some point, we would reach the maximum theoretical amount of energy we could generate. However, that maximum amount is enormous and is more than 1,000 times higher than current worldwide energy production, so we won't reach it any time soon.

The only practical limits to energy generation are imposed by cost and demand. Cost and demand determine how much energy we can generate, not EROI. Cost and demand are the only reasons we don't quadruple our energy output in short order.

Nor does it matter if EROI declines. At present, we have an average EROI of about 30, which means that we spend only 3% of our energy in acquiring more energy. If our EROI fell by half, we could compensate for it by building ~3%2 more power plants, thereby keeping total energy output the same. (Assume 100 power plants, 3 of which are used to generate the energy needed to power the others. Now assume EROI falls by half, and the 100 power plants require twice the energy input for the same output. In that case, we would require 6 power plants (rather than 3) to supply the others. So we would then require 103 power plants (rather than just 100) to compensate for a 50% decline in EROI while keeping output constant).

Nor is there any reason to believe that EROI will decline any further in the future. The dramatic decline in EROI experienced during the 20th century was a one-time event which is now over. The reason is because there is exponentially more energy available at lower EROIs. At an EROI of 100, which is very high, there was a small amount of energy available, which was exhausted within a few years; but at an EROI of 15, which is much lower, the amount of energy available is practically limitless. As a result, the average EROI for the world will probably never decline below 15.

Nor should we bother to pursue higher EROIs. Higher EROIs don't necessarily lead to larger total energy production or lower cost. Larger total energy production would be achieved by pursuing the cheapest (in money) sources of energy, not the ones with the highest EROI. (By "cheapest" I mean the lowest-cost net energy). Cheaper energy leads to greater demand, which leads to more construction of power plants at that cost, which leads to higher total energy production and lower costs despite lower EROI.

The irrelevance of EROI is demonstrated by history. As doomers like to point out, EROI was about 100 in the early 20th century and has declined to about 30 now. During that time, we increased worldwide energy production by more than ten-fold, and increased per-capita income in the advanced countries by more than eight-fold. In this case, declining EROI didn't imply declining net energy (quite the opposite). Nor did it destroy the economy, nor constrain production. EROI made no difference.

SUMMARY

We do not face declining energy flows. Quite the opposite, we have virtually unlimited amounts of energy available to us. We could increase the amount of energy we generate, practically without limit, subject only to cost and demand. Energy production can grow exponentially, which allows us to generate any amount of energy we require.

Declining EROI is not particularly worrisome. We can easily compensate for declining EROI by building a few additional power plants, thereby keeping energy output constant. For example, we could compensate for a 50% decline in EROI by building only about 3% more power plants.

Even if declining EROI were destructive, EROI is not declining much any more. EROI will probably never fall below an average of 15, over any time scale, because there are vast amounts energy available at that EROI.

EROI doesn't matter. It doesn't matter if it's increasing or decreasing. It doesn't matter that it decreased in the past. It doesn't cause decreasing energy flows, nor does it limit our energy generation, nor does it threaten our civilization. As long as EROI remains higher than 1, which it always will without any special effort on our part, it makes no difference. All that matters are cost (of net energy) and demand.

NOTES:
1 When we multiply energy, we're really only multiplying the amount of usable energy, like mechanical energy, electrical energy, chemical energy in food, and so on. We don't really increase or decrease the amount of energy in the universe. In fact, when we "generate" energy, we're really only converting energy, from a non-usable kind into a usable kind. Power plants multiply the amount of usable energy.

2 This figure is an estimate. In fact, we would need to increase the number of power plants by slightly more than 3% to compensate for a decline of EROI from 30 to 15.

79 comments:

  1. Please note: I will delete any comments which are childish, inflammatory, uncivil, or devoid of relevant content.

    ReplyDelete
  2. Hello, this post is not meant to be inflammatory so please do not censor.

    You say:

    Energy production grows exponentially, which will allow us to generate any amount of energy we require

    I urge you and readers to view this video lecture given by an eminent physics professor explaining why, as you say, exponential energy production is not possible

    http://www.youtube.com/watch?v=F-QA2rkpBSY

    The video is quite long and dense at times, however is mathematically sound.

    ReplyDelete
  3. Good luck with your new blogging endeavor Tom!

    I think you are the third POD alumnus to start his own blog after Al Fin and DB.

    Regarding the topic of your first post do you have any idea why Hall et.al. claim industrial civilization will collapse if average EROEI falls below 5?

    I have seen this claim made several times on the oil drum, but they never seem to provide any references supporting this claim.

    ReplyDelete
    Replies
    1. The theory of the minimum EROI discussed here, which describes the somewhat obvious but nonetheless important idea that for any being or system to survive or grow it must gain substantially more energy than it uses in obtaining that energy, may be especially important. Thus any particular being or system must abide by a “Law of Minimum EROI”,

      http://www.google.es/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&ved=0CEgQFjAC&url=http%3A%2F%2Fwww.mdpi.com%2F1996-1073%2F2%2F1%2F25%2Fpdf&ei=sKLAUeKuE6PQ7AaAioDoDw&usg=AFQjCNEhEjBqwHSaeDdHugYMkjP4jd4mWA&sig2=8m0MYhNY6B-bVdMqg7K5Eg&bvm=bv.47883778,d.ZGU

      Delete
  4. This blog reminds me of the old SNL skit about the company started to make change for a dollar - four quarters! Ten dimes! Twenty nickles!

    When asked how they make a profit, they answer "volume."

    ReplyDelete
  5. What you're really trying to say is EROEI - or Energy Returned on Energy Invested. If you're going to "debunk" anything, you should at least spend 5 minutes trying to understand the concept first.

    ReplyDelete
  6. "EROI doesn't matter. It doesn't matter if it's increasing or decreasing."

    Wrong.Return on Investment does matter. For capitalists, it's the only thing that DOES matter. It's hard to tell if you really understand the difference between "return on investment" in purely economic terms, and harder still to determine if you understand Energy Returned on Investment (of capital) or Energy Returned on Investment of Energy.

    Regardless, ROI in all its forms is the most important concern for a true capitalist. ROI is what drives oil markets just like it drives other commodity markets.

    Oil, like all the other hydrocarbons, is finite, so the ROI to extract them and sell them will always matter.

    I have long pondered what motivates the likes of you, JD and RGR. It would appear to be cult of techno-optimism that simply cannot abide any expression of pessimism or skepticism when it comes to energy distribution.

    ReplyDelete
  7. Great first post!

    It's not the amount of energy that went into an energy product that matters, but the value of that product. E.G. liquid ethanol fuel may be more valuable than the solar energy that went into making it.

    ReplyDelete
    Replies
    1. And what about the fossil fuel spended in harvesting, transpotation, irrigation, fertilizers, storage, corn transformation...?
      Have you ever heard about the so called "Green Revolution"? It is used to name the tipping point when agroindustry get rid from solar energy cicle and started to consume more fossil fuel calories than it pays back. If you have got lots of abundant cheap oil, you can do that in order to get food, but not fuel.

      Delete
  8. Here's an idea for future posts -

    "How technology is increasing exponentially, and how that applies to energy production."

    Interesting video here:

    http://www.youtube.com/watch?v=cL9Wu2kWwSY

    ReplyDelete
  9. This comment has been removed by the author.

    ReplyDelete
  10. Anon:
    "This blog reminds me of the old SNL skit about the company started to make change for a dollar - four quarters! Ten dimes! Twenty nickles! ...When asked how they make a profit, they answer "volume."

    I've claimed that EROI will probably never decline below 15, which obviously is not analogous to giving change for the same amount.
    -tom

    ReplyDelete
  11. Yogi:
    "Regarding the topic of your first post do you have any idea why Hall et.al. claim industrial civilization will collapse if average EROEI falls below 5?... I have seen this claim made several times on the oil drum, but they never seem to provide any references supporting this claim."

    I read Hall's paper, in which he claims that our civilization couldn't survive an EROI lower than 5.

    I thought that paper had several errors which invalidated its conclusions.

    I would have to write another article to describe the errors of that paper. Perhaps I'll address that paper in some future post.

    One significant error is that the paper treats the entire transportation infrastructure as "energy investment" because the transportation infrastructure is SOMETIMES used to transport fuel, equipment, etc.

    -tom

    ReplyDelete
  12. greenJamie:
    "Hello, this post is not meant to be inflammatory so please do not censor."

    Your post was not inflammatory. It was quite appropriate. I have no intention of deleting it.

    "I urge you and readers to view this video lecture given by an eminent physics professor explaining why, as you say, exponential energy production is not possible"

    I've watched the video already.

    Exponential energy growh certainly is possible, since it happened alreday. What isn't possible is exponential energy growth forever. However, I don't claim that we could have exponential energy growth forever. From my paper: "Of course, we can't really build a billion power plants. At some point, we would reach the maximum theoretical amount of energy we could generate. However, that maximum amount is truly enormous and is more than 10,000 times higher than current worldwide energy production, so we won't reach it any time soon."

    Perhaps I should have repeated this point or spelled it out in greater detail.

    I can't find anything else from the Bartlett video which contradicts the claims I've made here. If you feel there is something from that video which contradicts my claims, or which is relevant to my argument, could you please quote the exact section you feel is relevant and explain the relevance? Thanks,
    -tom

    ReplyDelete
  13. Anon:
    "What you're really trying to say is EROEI - or Energy Returned on Energy Invested. If you're going to "debunk" anything, you should at least spend 5 minutes trying to understand the concept first. "

    Anon, you're being pedantic and purposefully stupid. You know perfectly well what "EROI" refers to, or at least I hope you do. Whether it's called "EROI" or "EROEI" or "EROeI" is totally unimportant.
    -tom

    ReplyDelete
  14. Anon:
    "Wrong.Return on Investment does matter. For capitalists, it's the only thing that DOES matter. "

    What matters to capitalists is return on investment of MONEY, not return on investment of energy. Capitalists invest based on monetary returns regardless of EROI. That is why nobody in business even bothers to track EROI, and why the EROI of some sources of energy (like solar termal) remains unkown. That's why capitalists invest in tar sands, despite very low EROI. It explains why capitalists even invest in things with negative EROI (like corn ethanol).

    "It's hard to tell if you really understand the difference between "return on investment" in purely economic terms, and harder still to determine if you understand Energy Returned on Investment (of capital) or Energy Returned on Investment of Energy."

    You're being purposefully dense again. You know what "EROI" means in this context, or at least I hope you do.

    I'm following the standard usage when I use the term "EROI." If you don't know what that is, then you can look it up in the wikipedia article about it, and read the first sentence.

    "Oil, like all the other hydrocarbons, is finite, so the ROI to extract them and sell them will always matter."

    The second half of your sentence does not follow in any way from the first half. Finitude does not imply that EROI matters.

    Look at it this way. Assume two sources of energy (both of which are finite). Assume that source A has an EROI of 100, and source B has an EROI of 2. Assume that source A has a monetary cost of net energy which is twice that of source B, because of engineering costs and intellectual property issues. Which would the capitalist choose? Why would he care about the lower EROI, if he can gain twice the net energy for a given monetary cost?

    "I have long pondered what motivates the likes of you, JD and RGR. It would appear to be cult of techno-optimism that simply cannot abide any expression of pessimism or skepticism when it comes to energy distribution."

    I have written one dissenting paper, in contrast to an avalanche of doomer literature. Yet this one dissenting opinion, prompts you to try desperately to misinterpret it ("what does eroi mean?"), then revert immediately to ad hominem attacks and assumptions of bad motives.

    I suspect you're the one who "can't abide any expression of...skepticism."

    Also, who's in a cult here? I'm not the one who awaits doomsday in his hideout.

    -tom

    ReplyDelete
  15. Tom wrote:


    What isn't possible is exponential energy growth forever.


    It may not be "probable", but it might be "possible".

    SBSP opens up a whole new dimension in what's possible for energy production. And it's not science fiction, Japan for one is seriously working on an SBSP project:

    http://news.discovery.com/space/japan-solar-space-station.html

    ReplyDelete
  16. SG, we still couldn't continue exponential growth forever, because the Sun is finite.

    Nevertheless, we still don't face any realistic physical limits to energy generation. We'd encounter limits to food production (which would curtail population and energy usage) long before we approached limits to energy generation. Limits to energy generation will never be reached.
    -tom

    ReplyDelete
  17. "Why would he care about the lower EROI, if he can gain twice the net energy for a given monetary cost?....we still don't face any realistic physical limits to energy generation."

    Because he's a capitalist and ROI is King. Physical limits aren't the ONLY limits to energy generation. Billions of barrels of oil underground are absolutely useless unless one has the means/capital to extract it, refine it and get it to market safely at a price that people are willing to pay.

    ReplyDelete
  18. "I have written one dissenting paper, in contrast to an avalanche of doomer literature."

    You have written one dissenting paper that is virtually indistinguishable from the reams of techno-utopian pap from JD/RGR and Wired magazine. If you're looking for sympathy and support, you're in for a lot of disappointment.

    ReplyDelete
  19. Perhaps those power plants work on cold fusion.

    ReplyDelete
  20. US wave power project gets grid connected:

    http://www.brighterenergy.org/16869/news/marine-hydro/opt-is-first-to-connect-wave-power-device-to-us-grid/

    ReplyDelete
  21. "Each power plant with an EROI higher than 1 is an energy multiplier. It multiplies the energy available to us, because it produces more energy than it consumes."

    Please tell us how to calculate the efficiency of a coal-fired electrical generator. I wasn't aware that the energy content of coal was measured in watts.

    ReplyDelete
  22. Please tell us how to calculate the efficiency of a coal-fired electrical generator. I wasn't aware that the energy content of coal was measured in watts.

    You remove time from the equation by comparing electricity generated to coal consumed over some arbitrary time period, and then make any necessary unit conversions e.g. Tons of coal into BTUs of coal into Joules.

    http://en.wikipedia.org/wiki/Watt

    http://www.physics.uci.edu/~silverma/units.html

    ReplyDelete
  23. Let me provide a simple example. Suppose we have a 1000-megawatt coal-fired power plant with an EROi of 10; in other words, it produces 1000 megawatts and consumes 1/10th that amount (100 megawatts)."

    What tortured logic. It's hard to say if "Tom" doesn't understand the difference between energy and power, or if this conflation of his is just debunker handwaving. For any kind of useful discussion, he'd have used watt-HOURS, not watts.


    " Now assume that we are running out of coal to supply that power plant, and must replace it with lower-EROi power plants. So we replace it with two 1000-megawatt power plants with EROIs of only 5 each."

    If (in your little fantasy) you're running out of coal to run ONE power plant, where do you get the coal to for all these smaller plants?


    "Despite a reduction of EROI by half, we still have increased total energy output by by almost 80%. (The high-EROI plant produced 900 (1000-100) megawatts of net energy, but the two low-EROI plants combined produce 1600 (1000-200)*2)."

    Besides the fact that you don't have the coal to run one larger plant, you completely overlook the cost of building the smaller power plants and hooking them to the grid.

    Bizarre.

    ReplyDelete
  24. Anon:
    "What tortured logic. It's hard to say if "Tom" doesn't understand the difference between energy and power, or if this conflation of his is just debunker handwaving. For any kind of useful discussion, he'd have used watt-HOURS, not watts."

    What I meant was, watts continuously over the lifetime of the plant. In other words, I meant that the power plant generates 1000 megawatts continuously, and that it takes 100 megawatts continuously in expenditure to provide for it.

    You can pick any time scale you want and can convert to any energy units you want. If you want, you can pick 10 hours and convert to calories.

    I didn't spell it out, because I considered it so obvious that I didn't want to belabor the point.

    "If (in your little fantasy) you're running out of coal..."

    Anon, it's not a "little fantasy", it's an example which is meant to demonstrate a simple mathematical point. Do you honestly not understand the purpose of an example here?

    "If ... you're running out of coal to run ONE power plant, where do you get the coal to for all these smaller plants?"

    The other plants aren't coal-burning, quite obviously. If we run low on coal, and must replace our coal-burning plants, we obviously won't replace them with other coal-burning plants. That point was so obvious that I didn't see the need to spell it out.

    "Besides the fact that you don't have the coal to run one larger plant, you completely overlook the cost of building the smaller power plants and hooking them to the grid."

    No. EROI includes the energy required to build the plant, in addition to the energy required to extract the fuel for them. That has always been included in EROI. If it weren't included, then renewable sources of energy (like wind) would have extremely high EROIs because they don't require any energy input after their construction.

    I have spelled out clearly and repeatedly throughout the article, that EROI includes the cost of building the plant. I don't wish to spell it out again, because that would belabor the point.
    -tom

    ReplyDelete
  25. Yogi:
    "You remove time from the equation by comparing electricity generated to coal consumed over some arbitrary time period, and then make any necessary unit conversions e.g. Tons of coal into BTUs of coal into Joules."

    Thanks for spelling that out. I appreciate your patience.
    -tom

    ReplyDelete
  26. Anon,

    You've consistently misinterpreted what I wrote. For example, you misinterpreted the term "EROI," even though I use that word in exactly the same way as everyone else. You also misinterpreted whether the power plants used to replace coal-burning plants are also coal-burning (obviously not). Then you misinterpreted EROI yet again and claimed that it doesn't include the energy cost of constructing the plant, when it obviously does include that.

    My article was not ambiguous on these points. In all these cases, my article was quite clear, and there was really no room for misinterpretation. Yet you misinterpreted anyway.

    It seems like you're trying very hard to misinterpret what I wrote, so you can argue against a misinterpreted version, rather than arguing against the actual thing. What you're doing seems to be some kind of straw man argument.

    You're not seriously responding to what I wrote. You aren't even addressing the actual content. You're making little snide remarks like "I'm not sure you understand..." when you're the one who doesn't understand, and purposefully so.

    What you're doing has some value, because you will eventually misinterpret everything on purpose which is even slightly ambiguous, which may indicate to me where I need to spell things out more. But you aren't really offering a criticism of the actual content.
    -tom

    ReplyDelete
  27. Robin:
    "Perhaps those power plants work on cold fusion."

    I'm not sure which power plants you're referring to, or which post you're responding to. Could you clarify?
    -tom

    ReplyDelete
  28. Everyone: I added two notes to the bottom of the article. Those two notes provide additional detail. I added them so we can avoid any possible confusion.
    -tom

    ReplyDelete
  29. "Let me provide an example of what I mean. Suppose we build one power plant with a very low EROI of 8. We use the full output of that plant to build another 8 plants just like it and adjacent to it. Then we use the full output of those, to build an additional 64 power plants, and so on. After ten generations, we'll have about 1 billion power plants, without any outside investment of energy except what was needed to construct the first plant."

    What kind of perpetual motion fantasy is this? How does one build another plant from the "full output" of another plant? Power plants burn fossil fuels and use the heat to produce steam to drive a turbine. How does one use the "full output" to build another plant? I suppose you'll say that the electricity is sold and the money is used to build another power plant? And how long would the plant have to run to generate enough income to build additional plants? And where does the fuel come from for all these plants if no additional investment is needed? The pesky element of time is missing in all your fantasies.

    There is no free lunch, no perpetual motion. This is not just one person noting your little ambiguities - this is bad science fiction.

    ReplyDelete
  30. "What matters to capitalists is return on investment of MONEY, not return on investment of energy...That's why capitalists invest in tar sands, despite very low EROI. It explains why capitalists even invest in things with negative EROI (like corn ethanol)."

    No, tax subsidies explain why capitalists invest in corn ethanol. Without tax subsidies and a platoon of lobbyists, there would be no corn ethanol fuel industry in the US.

    ReplyDelete
  31. The oil and gas industries have their own lobbyists, and have been receiving subisdies as well. In much greater amounts, and for a much longer period of time.

    ReplyDelete
  32. "The oil and gas industries have their own lobbyists, and have been receiving subisdies as well. In much greater amounts, and for a much longer period of time."

    You say that like it's a good thing...

    ReplyDelete
  33. "...EROI will decline so far that we won't have enough energy left over to sustain our industrial civilization, at which point, civilization will collapse, and we'll revert to a medieval mode of life. Or so goes the argument."

    So goes whose argument? Citation? No one's arguing that low EROI alone causes collapse - you're wrong on that point.

    "The fundamental problem with the energy decline argument is this: it implicitly assumes that the rate of energy production is constant."

    Please, one citation to support that assertion.

    "The reason is because the output of any plant can be used to build several other plants, each of which can then be used to build several more plants, and so on. In that way, we can increase the amount of energy available to us exponentially, with any EROI higher than 1."

    This is pure nonsense. If your goal was to discredit JD and RGR and the little band of cornucopians over at POD, you should give up and leave it to RGR. He's much better at dissembling and equivocating than you.

    But I am interested in seeing you explain this perpetual exponential growth. Please.

    ReplyDelete
  34. Anon:
    " How does one build another plant from the "full output" of another plant? Power plants burn fossil fuels and use the heat to produce steam to drive a turbine. How does one use the "full output" to build another plant?"

    You could use the electricity to extract aluminum from bauxite, to fabricate components of new power plants, to smelt iron, to power electrified rail lines for transportation of fuel or components, to manufacture hydrocarbons using Fischer-Tropsch for use in trucks, and so on.

    Anon, in this case a "power plant" is being used as an abstraction. Whether it's a coal-fired plant, or an engine inside a truck is unimportant. It could also be a windmill which provides electricity for a battery inside a bulldozer.

    We already use power sources to build additional power sources. We have always done that.

    "There is no free lunch, no perpetual motion"

    This isn't perpetual motion, because there's an input of energy into the system.

    Exponential growth for awhile does not imply perpetual motion.

    "So goes whose argument? Citation? No one's arguing that low EROI alone causes collapse - you're wrong on that point."

    There are many books with ominous-sounding names like "power-down" and so on, which claim that.

    "[With regard to doomers implicitly assuming fixed energy supplies:] Please, one citation to support that assertion."

    Let me quote the first sentence, from the first comment, of today's story at the Oil Drum: "One way to look at the situation [declining EROI] is that on the physical side we have less exergy, meaning a larger % of societies energy/resources need to be diverted towards the energy production sector over time."

    That implicitly assumes that the rate of energy production is constant. Otherwise, we do not face "less exergy" as a result of declining EROI, because we could compensate for declinig EROI by building additional power plants and thereby generating more energy despite lower EROI.

    Every remark which says "declining EROI implies declining energy flows" or anything similar is implicitly assuming that the rate of energy production is constant.

    There are thousands of such remarks on the oil drum, in papers, in books, and elsewhere. I found one example without needing to read further than the first comment I encountered at random.

    "This is pure nonsense. If your goal was to discredit JD and RGR"

    That's ad hominem. You don't provide any counter-argument other than a silly speculation into my motives.

    "But I am interested in seeing you explain this perpetual exponential growth."

    I didn't claim the growth is perpetual. Quite the contrary, I said: "at some point, we would reach the maximum theoretical amount of energy we could generate. However, that maximum amount is truly enormous and is more than 10,000 times higher than current worldwide energy production, so we won't reach it any time soon."

    That remark obviously implies that growth is not perpetual, but that we're not near the end of it.

    " If your goal was to discredit JD and RGR and the little band of cornucopians over at POD, you should give up and leave it to RGR. He's much better at dissembling and equivocating than you."

    I remind you not to place inflammatory or childish material in your posts. If you continue to do that, I'll delete what you write. It would be one thing if you were responding (in kind) to childish attacks from others; however you're initiating childish remarks in a forum where they were absent previously.

    If you really want to have the kind of debate you're trying to start, then you can return to POD and be smacked down by RGR some more. If you wish to remain here, then I expect your posts not to contain any provocative remarks about the other posters.

    ReplyDelete
  35. "One way to look at the situation [declining EROI] is that on the physical side we have less exergy, meaning a larger % of societies energy/resources need to be diverted towards the energy production sector over time." That implicitly assumes that the rate of energy production is constant.

    No, that explicitly assumes that entropy (in our coal/gas/oil/nuclear powered world) is increasing.

    "power plant" is being used as an abstraction.

    Now we're getting somewhere - the key element missing from your abstraction is that the electricity produced at your power plant must first be converted into money to accomplish any of the work involved in making another power plant, and the cost of that conversion is not accounted for anywhere in your piece. Money is what's invested, and the return on that investment - in money (or energy that is sold) - is what drives this process.

    It takes money to design and build a power plant, to pay the laborers, to build and maintain the grid and most importantly to extract and deliver the fuel to power the plant. The environmentally conscious among us will point out that it takes money to mitigate the costs of mining coal, building NG pipelines, etc.

    Again you've conceded that EROI is falling, and we all know that energy prices are rising, as is inflation.

    "at some point, we would reach the maximum theoretical amount of energy we could generate. However, that maximum amount is truly enormous and is more than 10,000 times higher than current worldwide energy production, so we won't reach it any time soon."

    ROI will have as much to do with that as the free hydrocarbons waiting to be mined.

    ReplyDelete
  36. Anon:
    " Money is what's invested, and the return on that investment - in money (or energy that is sold) - is what drives this process... It takes money to design and build a power plant, to pay the laborers, to build and maintain the grid and most importantly to extract and deliver the fuel to power the plant. The environmentally conscious among us will point out that it takes money to mitigate the costs of mining coal, building NG pipelines, etc. Again you've conceded that EROI is falling, and we all know that energy prices are rising, as is inflation."

    I definitely grant that point. It seems that sustainable sources of energy (like wind, solar, and nuclear) and plug-in hybrid cars are more expensive in terms of labor, capital, etc. With regard to electricity generation, sustainable sources seem to cost about twice as much as pulverized coal plants, all things considered. (Wind requires pumped hydro storage and gas peaker plants to compensate for its intermittency, so some published figures of its costs are too low).

    Exhaustion of fossil fuels will definitely have consequences; I'm not saying otherwise. We will have to switch to more expensive forms of energy, and so will face higher energy costs and a modestly reduced standard of living compared to what would have been. That's inevitable. However, I don't think it will cause anything like "power down" or the scenarios we sometimes read about in doomer literature. One country (France) has already freed itself from FF dependence to some extent (electricity generation and much of their transportation), and they have retained a 1st-world standard of living. Of course, they still benefit from FF subsidies, for example, fertilizer and car usage and some space heating. However, their total FF usage per capita is about 1/3rd that of the US (estimating from c02 emissions per capita), and they accomplished it without grave sacrifices.

    Personally, I think that peak oil, and declining EROI of FF more generally, might be a blessing to industrial society. We'll find out that renewables and nuclear aren't that expensive or hard to use. We'll reduce c02 emissions (and hence the rate of global warming) even though political will is lacking.
    -tom

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  37. So, the whole premise of this blog - the EROI doesn't matter - is false. It does matter, even if it is not the most important metric.

    ReplyDelete
  38. "In other words, I meant that the power plant generates 1000 megawatts continuously, and that it takes 100 megawatts continuously in expenditure to provide for it."

    Nonsense - that is simply impossible - no power plant is 100% efficient, much less 1000% efficient.

    ReplyDelete
  39. This comment has been removed by the author.

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  40. Good post buddy, here's my (very similar) post on this from 2008:
    http://dieoffdebunked.blogspot.com/2008/03/eroei-for-doomers-debunked.html

    I've taken the liberty of linking to your blog. I hope you might do the same with mine.

    Nice work.

    ReplyDelete
  41. "Nonsense - that is simply impossible - no power plant is 100% efficient, much less 1000% efficient."

    I'm assuming you're a troll, but I'll answer your objection anyway.

    Efficiency in power plants refers to the ratio of energy in the fuel which is converted to useful energy (like electricity or mechanical energy) to the amount which is radiated as waste heat.

    A power plant with an EROI of 10 is not "1000% efficient". EROI has nothing to do with thermodynamic efficiency. For example, a typical coal plant has an EROI of 30, but is only 40% efficient, not 3000% efficient.
    -tom

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  42. It might have been safer to focus on primary energy production e.g. the EROEI of a coal mine or an oil well rather than include a transformation to secondary energy by an electric power plant in your example.

    Nevertheless, I think you made a valid point about EROEI and energy availability. As long as life cycle EROEI is greater than one you still have a net energy “profit” and, as anyone familiar with CVP analysis can tell you, you can compensate for decreased contribution margins by increasing production volume, as long as you still have a positive contribution margin.

    ReplyDelete
  43. Anon:
    "If ... you're running out of coal to run ONE power plant, where do you get the coal to for all these smaller plants?"

    If we're running out of coal, and we needed to replace our coal-burning plants, then we obviously wouldn't replace them with more coal-burning plants. That point is so obvious that nobody could fail to understand it. Nobody is that stupid.

    "Nonsense - that is simply impossible - no power plant is 100% efficient, much less 1000% efficient."

    Anon, a power plant with an EROI of 10 is not "1000% efficient." There is a big difference between EROI and thermodynamic efficiency.

    "What kind of perpetual motion fantasy is this? How does one build another plant from the "full output" of another plant? Power plants burn fossil fuels and use the heat to produce steam to drive a turbine. How does one use the "full output" to build another plant?.. There is no free lunch, no perpetual motion."

    Anon, you can't possibly be this stupid. Do you honestly not know how we would use the heat and electricity from burning coal to build components for another plant?

    I'm afraid I'll have to delete comments (from now on) which are obviously just trolling. Previously I banned anon because he would eventually post comments like "fuck you, technology worshipper" or whatever. I deleted those posts, but I left his other comments alone. Looking back on it now, I notice that his other comments are scarcely more intelligent.

    I repeat that this is not a forum where trolling is allowed. I will delete any comments which are devoid of serious content.
    -tom

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  44. Yogi:
    "It might have been safer to focus on primary energy production e.g. the EROEI of a coal mine or an oil well rather than include a transformation to secondary energy by an electric power plant in your example."

    I don't think it matters. I think the article is fairly clear as it is. Obviously I omitted some small details but it remains fairly clear. I don't wish to get bogged down too much with spelling out things which people already understand.

    I think people can do the mental conversion, and they realize that there is some efficiency loss through converting to electricity but it does not alter the conclusion.
    -tom

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  45. "Do you honestly not know how we would use the heat and electricity from burning coal to build components for another plant?"

    I do know, honestly, how we would could use the heat and electricity from burning coal to build components for another plant, and as you admit in a previous post, you understand that complete omit the conversions from coal burning to currency to achieve the construction of a new plant. And therein lies the rub - you factor out the most complex part of the equation as if it did not matter that the parasitic nature of contemporary finance makes converting coal into new plants such a difficult enterprise.

    In short Return on Investment is essential to your equation of burning coal into new coal plants. This is the problem with you technopolists - you always think you can get something for nothing if you can fudge the math.

    ReplyDelete
  46. Thanks for such a good argument!

    Now, all we need is competing and robotic solar PV (and or concentrated thermal) companies that "do it all under one roof" (including the robotic arms, lawyers and installers)! Guess that will come after the peak of easy oil and before the peak of shale oil...

    ReplyDelete
  47. "Exhaustion of fossil fuels will definitely have consequences; I'm not saying otherwise. We will have to switch to more expensive forms of energy, and so will face higher energy costs and a modestly reduced standard of living compared to what would have been. That's inevitable."

    "So, the whole premise of this blog - the EROI doesn't matter - is false. It does matter, even if it is not the most important metric."

    This pretty much sums it up. You've admitted that your premise is false.

    How do you support the conclusion that living standards will fall "modestly" when alternative energy sources are TWICE as expensive as conventional sources?

    If the energy available to us grows exponentially because we build exponentially more power plants, so too do the costs grow exponentially.

    I'm not a doomsdayer by any stretch, but humanity faces more than a "modest" decline in the luxuries we've grown accustomed to. I'm with you in that this is not necessarily a bad thing.

    ReplyDelete
    Replies
    1. Anonymous:

      " 'So, the whole premise of this blog - the EROI doesn't matter - is false. It does matter, even if it is not the most important metric.' ...This pretty much sums it up. You've admitted that your premise is false."

      You're mis-reading, and mis-quoting here. That quotation is from somebody else, and you've wrongly attributed it to me.

      "How do you support the conclusion that living standards will fall 'modestly' when alternative energy sources are TWICE as expensive as conventional sources?"

      That is factually wrong. Solar and wind are both only slightly more expensive than electricity from fossil fuels, and the price of solar is dropping fast. In all likelihood, renewables will be cheaper than electricity from fossil fuels fairly soon. Of course there's still the issue of storage.

      -Tom S

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  48. In the real world economic/social /political implications of energy alternatives to fossil fuels depletion cannot be disregarded.
    What capital/energy investment is needed within how long a time frame for a peaceful civilized switch to renewable energy.
    Have you considered this issues?

    ReplyDelete
    Replies
    1. daniel:

      "What capital/energy investment is needed within how long a time frame for a peaceful civilized switch to renewable energy."

      The capital and energy requirements for renewables are similar to those for fossil fuels, except natural gas which is considerably less capital-intensive.

      The time frame is between now and when fossil fuels are totally exhausted. By then we must have COMPLETED the transition to renewables if we wish to avoid any shortfall. We would need to start transitioning to renewables when declines of fossil fuel production started occurring, and build renewables quickly enough to offset declines as they occur. Even transitioning at 0.5% per year would probably be quickly enough to prevent any energy shortfall.

      -Tom S

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  49. Undoubtedly, your ideas are very interesting. It's a original that is different from doomers, but also different from the traditional view.

    However, there are studies that show a strong relationship between the EROI and ROI (http://www.smartplanet.com/blog/energy-futurist/what-eroi-tells-us-about-roi/361)

    It would generate some consequences.

    1) The price of energy will increase significantly over the years, as the average EROI go down. This will have an inflationary effect on increasing prices of all products.

    2) The part related to power generation
    gradually will increase its share in GDP, which tends to weaken other sectors of the economy, assuming a growth close to 0 in the global economy.

    3) Solar and Wind power has a huge upfront investment in the initial plants. This accounts for the relatively low EROI (8 for solar power and 18 for wind power) and a negative energy balance that takes years to equalize.

    Wind Power has paybacksranging from 4 to 10 years.
    ( http://www.wind-power-program.com/turbine_economics.htm ). Solar Power tends to have longer paybacks

    It is very difficult to forecast how the world will adapt the dynamics of having a core asset (energy) by making a lasting and gradual inflationary pressure on the economy.

    ReplyDelete
    Replies
    1. Paulo:

      "1) The price of energy will increase significantly over the years, as the average EROI go down. This will have an inflationary effect on increasing prices of all products."

      No, because EROI is not price. An energy source could have a high EROI but still be expensive. Similarly, an EROI could have a low EROI but be cheap.

      Price depends on a lot of things, like the amount of skilled labor available, the amount of capital required, whether it can be mass-manufactured (like solar panels) or must be one-off power plants (like nuclear), research and development costs, and so on.

      That's why it's the cost of net energy which matters.

      -Tom S

      Delete
    2. Do you realize how unconvincing this argument is?

      You argue that EROI is not identical to price. That is correct. But you implicitly argue that price is not even correlated with EROI -- that they're completely independent variables:

      "No, because EROI is not price. An energy source could have a high EROI but still be expensive. Similarly, an EROI could have a low EROI but be cheap."

      It's certainly possible that price and EROI are completely uncorrelated, but it seems extremely implausible for that to be the case. The price of energy is determined, as all prices are, by supply and demand. EROI seems at least intuitively like it would have a big effect on the supply side of the equation. More capital is required to supply the same amount of energy at an EROI of 10 than would be required by an EROI of 20 (not twice as much, necessarily, but certainly more). Thus, we would expect that the cost of energy at a lower EROI, everything else being equal, would be higher.

      You need to make a better argument that EROI and price are truly statistically independent to make this stick.

      And this rather simple logical error on your part suggests to me that the overall tone of this blog -- quite an arrogant one -- is unjustified by your acumen in research and argumentation.

      That's assuming it's an honest error and not an intentional misdirection.

      Delete
    3. "More capital is required to supply the same amount of energy at an EROI of 10 than would be required by an EROI of 20 (not twice as much, necessarily, but certainly more)."

      Assuming the same source, of course. But if the cost of energy from renewables is actually so much lower than the cost of fossil fuels, then we would not expect such a heavily subsidized industry to gain so little market share over the course of several decades.

      More importantly, when we build a solar plant, the price of that plant (and therefore the resulting energy) is driven in part by the price of energy used to construct the plant (in addition to the cost of actually producing energy with that plant). Thus, the current market price of energy (based largely on the costs of producing and refining fossil fuels) feeds back into the price of energy from renewables.

      Delete
    4. Dan L:

      "But you implicitly argue that price is not even correlated with EROI"

      I do not implicitly argue that. Read the material again.

      "It's certainly possible that price and EROI are completely uncorrelated"

      That's not what I'm claiming.

      Incidentally, if EROI and price were highly correlated, then that would imply that renewable sources of energy have comparable EROI to gas or coal right now, and much higher EROI than oil. Renewables are CHEAPER at present than fossil fuel sources of electricity. They have intermittency problems etc, but their cost is low.

      "More capital is required to supply the same amount of energy at an EROI of 10 than would be required by an EROI of 20 (not twice as much, necessarily, but certainly more). ..everything else being equal..."

      If everything else were equal, then the source of energy with an EROI of 10 would require only 5% more capital than the source with an EROI of 20. Since everything else is not equal, that 5% difference would be overshadowed by other factors.

      "And this rather simple logical error on your part suggests to me that the overall tone of this blog"

      There is no logical error on this blog which you've pointed out; there is only your own misunderstanding.

      "is unjustified by your acumen in research and argumentation"

      In my opinion, your own acumen in argumentation is seriously impaired. Your argument basically consists of misunderstanding what you're reading.

      -Tom S

      Delete
    5. Dan L:

      "But if the cost of energy from renewables is actually so much lower than the cost of fossil fuels, then we would not expect such a heavily subsidized industry to gain so little market share over the course of several decades."

      Wrong, because the price of renewables has been dropping. Renewables were much more expensive decades ago, but are cheaper now. That explains why they didn't obtain market share over prior decades, but are quickly gaining market share now.

      -Tom S

      Delete
  50. So EROEI does not matter as long as we can build one powerplant for each ligth bulb existing in this world. Problem solved, Thanks!

    ReplyDelete
    Replies
    1. El Erial:

      "So EROEI does not matter as long as we can build one powerplant for each ligth bulb existing in this world."

      What? Where did you get that from?

      I think you need to read the article more carefully.

      -Tom S

      Delete
  51. Cant help but say, that if you spend time building 10 powerplants with an eroei of 5 instead of building one with an eroei of 50 you are now using more energy, work force and raw materials for a lesser return on investment, It's like saying, If I only walk 200 m more i will get more strawberries, yes but you have to spend time on walking instead of doing something useful like getting educated on things that matter, building things and dealing with things that matter

    ReplyDelete
    Replies
    1. ALI B:

      "Cant help but say, that if you spend time building 10 powerplants with an eroei of 5 instead of building one with an eroei of 50 you are now using more energy, work force and raw materials for a lesser return on investment,"

      No, because eroei is not the same thing as work force or raw materials. It's possible to have an energy source with a very high eroei but which is still much more expensive in terms of work force or raw materials.

      That's why it's the cost of net energy which matters, not eroei.

      -Tom S

      Delete
    2. Hi Tom,

      That might be true in theory, but my feeling is that (for the energy sources we actually have available) EROI is inversely related to the cost of net energy. The transition to renewables can be described as a transition to power with a higher cost of net energy, surely?

      Cheers, Angus

      Delete
    3. Hi Angus,

      If that's true, then renewables already have an EROI which is much better than oil, because renewables cost less than oil. It also implies that the EROI of renewables has been improving greatly and continues to improve, because their cost has been dropping. It also implies that the EROI of renewables is only modestly worse than fossil fuels, because they cost only modestly more.

      -Tom S

      Delete
    4. It's very plausible that the EROI of renewables has increased as research into renewable technologies has progressed. However, any conclusions as to whether the EROI of renewables surpasses that of fossil fuels would have to take into account the amount of subsidies given to each industry, which I don't see you tackling here. The string "subsid" doesn't even appear in the OP.

      It also doesn't take into account that liquid fossil fuels are used in great amounts for transport. Converting from most renewables to liquid fuels is a highly inefficient process, so the effective EROI for renewable energy used specifically for transport would be muuuuuuch lower than the EROI for fossil fuels used for transport. This also has implications for the millions of users of generators run on liquid fuel, whether it's for energy in remote areas or backup generators for hospitals.

      It also doesn't take into account the cost of retooling infrastructure to rely on difficult-to-transport renewable energy rather than (relatively) easy-to-transport fossil fuels. And it doesn't take into account the fact that overall energy efficiency would decrease if the relative amount of energy supplied via the grid increased versus energy supplied on-the-spot because transmission inefficiencies now need to be taken into account. The EROI from the fuel in my car is not impacted by the distance from my home to a power plant -- only by the distance from my home to a gas station. For the electric equivalent, the overall EROI of the energy used to charge the battery would indeed be affected by my distance from the power plant.

      Delete
    5. Dan L:

      No.

      "However, any conclusions as to whether the EROI of renewables surpasses that of fossil fuels would have to take into account the amount of subsidies given to each industry, which I don't see you tackling here."

      No, because the subsidies for renewable are monetary incentives. If some government decides to offer a $0.05/kwh subsidy for solar PV then that has no effect on its EROI.

      "It also doesn't take into account that liquid fossil fuels are used in great amounts for transport. Converting from most renewables to liquid fuels is a highly inefficient process,"

      I'm not suggesting we convert renewable electricity into synfuels. Instead, I think we should use battery-electric cars, and trains with overhead wires. It would make no sense to manufacture synfuels using electricity.

      I agree that manufacturing synfuels would greatly reduce the total EROI, mostly because small internal combustion engines are so inefficient. It would make little sense to convert a high quality source of energy such as electricity into something you would burn.

      "so the effective EROI for renewable energy used specifically for transport would be muuuuuuch lower than the EROI for fossil fuels used for transport."

      Definitely not. Small internal combustion engines have extremely low thermal efficiency (25% or lower) so most of the energy is lost as waste heat, which correspondingly reduces the EROI. The EROI of oil running your car is extremely low if you count waste heat losses (probably lower than 3). The EROI of renewable energy powering battery-electric cars is certainly far higher.

      "This also has implications for the millions of users of generators run on liquid fuel, whether it's for energy in remote areas "

      Small generators have low thermal efficiency so the EROI of the entire system (fossil fuel extraction, transportation, and the generator) would be extremely low. It's worth it for hospitals, because they can't tolerate downtime, but the EROI is very low.

      The EROI of a solar panel in a remote location would be far higher. Incidentally, the price of solar power in a remote location would be far lower (less than a quarter) than the price of generating electricity using a diesel generator.

      "It also doesn't take into account the cost of retooling infrastructure to rely on difficult-to-transport renewable energy rather than (relatively) easy-to-transport fossil fuels."

      Oh goodness, no. The electricity grid is BY FAR the most efficient means of transporting energy long distances. High voltage lines impose a loss of a few percent for every 500 km. HVDC lines are even better than that. There is no way of transporting energy which is more efficient than the electricity grid.

      "The EROI from the fuel in my car is not impacted by the distance from my home to a power plant -- only by the distance from my home to a gas station."

      The EROI from fuel in your car is impacted by where the oil was pumped out of the ground, and the distance to that. Not just the distance to the gas station. The oil must be transported from Saudi Arabia or North Dakota or wherever else, to a port, to a refinery, and then by truck to the gas station which is usually hundreds of miles from a refinery. Then you must drive to the gas station.

      Furthermore, tanker trucks impose enormous road wear, because damage to roads and bridges increases with the fourth power of axle weight. There is no wear upon the grid from transporting electricity. Of course the grid must be replaced gradually anyway (corrosion of electricity poles, etc) but transport of energy does not impose additional wear or the necessity of frequent infrastructure repairs.

      "It also doesn't take into account the cost of retooling infrastructure"

      Estimates of solar EROI DO take into account the cost of grid connection. The grid connection to your house was already there for other reasons.

      -Tom S

      Delete
  52. This comment has been removed by a blog administrator.

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  53. I discover this site today, as I was doing some googling on Solar EROI. I took pleasure reading your posts, which shows that you have done some homework. However, I think that you are underestimating some human and physics limitation, so I don't entirely share your optimism. I'll try to make my points in the posts I feel are most appropriate. See you in this space !

    ReplyDelete
  54. I have two and a half remarks about your argument :
    First, when some people put the threshold for viability of modern civilisation at 7, it doesn't necessarily mean that they don't agree with your argument. As you pointed out in a later post about the computation of EROI for renewables, the EROI goes as low as your analysis deepens. Must the police and the justice apparatus costs be allocated to energy (after all, without police, people would steal energy with impunity)? And what about the army (especially when it is dimensioned to conduct expedition in oil rich desert countries) ? And the cost of teachers who teach the workers of the energy industry ? and the farmers who grow the food to feed the energy industry ? Etc... etc...
    The bottom line (and the word is appropriate here) is that one has to have an "engineer margin" over the threshold of 1 to to be sure that one is indeed above 1, because the consequence of being below 1 are really frightening (it means essentially eating the seed corn, and as an economist, you know where it ends...). Establishing such margin is more an art than a science. Maybe the people who say that 7 is critical are too conservative, but again, maybe not...

    ReplyDelete
  55. The second remark is about what an economy with low EROI looks like.
    If one equates energy production with working, an economy with low EROI is essentially an economy where most of the work is devoted to producing energy. At an EROI of 1.1, 91% of the economy is the energy sector, which leaves only 9 % of the economy for essentials (food, shelter and clothing) and fun (movies, spring break parties, etc...). That would not be a fun economy, it would be a subsistance one, like in the middle ages. As an economist, you should not be satisfied by it.
    The way to escape this predicament is to actually to NOT equate energy production with working. I.e. energy production is mostly associated with automated process that require little human input. The power plants essentially become self-replicating robots who devote most, but not all, of their production to create a clone of themselves. The energy sector would then be a boring part of the economy, with huge assets and low return on these assets. People would work to produce and consume the stuff they are interested in (the 9% above), and, provided that the energy sector is a common good, you are right, life would go on as usual, albeit with a huge gross production of energy, which can be a problem in its own right (but that is for another comment).
    I really thank you that the reading of your blog made me realise the tight relationship between automation and EROI.

    ReplyDelete
  56. Hi Charles,

    Thanks for your insightful remarks.

    "The bottom line (and the word is appropriate here) is that one has to have an "engineer margin" over the threshold of 1 to to be sure that one is indeed above 1"

    I see your point. Something with a reported ERoEI of 3 may have an actual ERoEI of 1 when everything is considered, which means civilization is in trouble.

    I was referring to the actual ERoEI in my article, including all energy investments.

    The thing is, the ERoEI of oil is certainly very low. The reported ERoEI of 15 or so is the "mine mouth" (or well mouth) figure which does not include refining, nor does it include waste heat losses from the engine of your car. Counting those obvious losses puts the ERoEI of oil at around 4 or so, which is much lower than any renewable source of energy.

    Oil has an ERoEI of 4 or so _before_ we start counting policemen, judges, the army, management of oil companies, and so on.

    So, an apparent ERoEI of 4 (without counting everything) is sufficient to maintain the civilization we have. If an apparent ERoEI of 4 is sufficient to maintain society than the actual ERoEI must be higher than 1.

    "At an EROI of 1.1, 91% of the economy is the energy sector, which leaves only 9 % of the economy for essentials"

    I think that's a mistake. With an ERoEI of 1.1, 91% of all _energy_ is devoted to the energy sector, not 91% of the economy.

    If the source of energy were extremely cheap (meaning it takes very little labor, capital, or scarce materials) then the total energy INPUTS for society could be much higher than they are now. If we were generating 10x as much gross energy as now, then devoting 91% of that gross energy to obtaining energy would yield almost as much net energy as we have now.

    As an example, having 2GW worth of solar cells (2GW average continuous output, not nameplate capacity) with an ERoEI of only 2, would yield the same net energy as 1GW of some other energy source with infinite ERoEI. In that case, half of the energy of the society is devoted to obtaining energy, but the gross energy produced is twice, leading to the same net output. It would be better to pursue the energy source with an ERoEI of 2 (rather than the source with an ERoEI of infinity) if the capital and labor cost of the infinite ERoEI source were more than twice as much. That's why it's the cost of net energy which matters, not ERoEI.

    -Tom S

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    1. Hi Tom,

      I think the second part of your argument and mine are not contradictory, but stem more from a different vision of what constitutes GDP and the associated asset base. Consider the two following situations :
      Situation A : The self replicating solar power plants are operated and built by the same company ACME Global Inc. The EROI of the technology is 1.1 across 20 years lifetime. Little labor, no scarce material. Seen from outside, ACME Global is a source of cheap net energy with Infinite EROI and the value of its assets is the actualisation of the income derived from the sale of net energy. In such case, 100% of GDP comes from the consumption of that net energy. All fine and good. That is your vision. This is for instance what happens when EDF uses one its plants to enrich its nuclear fuel.
      Situation B : The building and the operating of the power plants are done by two different companies, ACME E&C and ACME Power.
      ACME Power sells 90% of its power to ACME E&C and 10% to the Public, ACME E&C uses that power to replace the power plants that reached the end of their lives and sells them to ACME Power with a 5% profit margin. From the point of view of accounting, GDP is multiplied by 10, power plant construction is 90% of GDP, and, as the average life of power plant in ACME Power is 10 years, ACME Power shows a balance sheet with an asset base equal to 10*90% of GDP = 900% of GDP. This is my vision.
      From outside, it is the same thing, the public still gets the same amount of dividend from ACME E&C and ACME Power than from ACME Global in Situation A, and consumes the same amount of net energy, but my vision ads new information in that it shows how the economy is operationally leveraged. Just a 10% adjustment on the useful life of the solar panels and the economy tanks ! That should get everyone worried. Replace "useful life of the solar panel" with "depletion rate of the fracked wells" and you get something much closer to present reality....
      At some point, society could decide that it is better to go for the energy source with "real" infinite ERoEI even if it is more expensive on a net basis, because there is less operational leverage risk.
      Amazingly , this is actually a central argument in favour of Nuclear Power. I say amazingly because Nuclear Power is deemed as risky because of accidents and waste, but most people underestimate the risk reduction coming from the ability to store many years of full (so no geopolitical supply risk as for oil) and the vast capacity for improvement of EROI with breeding technology.

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    2. "So, an apparent ERoEI of 4 (without counting everything) is sufficient to maintain the civilization we have. If an apparent ERoEI of 4 is sufficient to maintain society than the actual ERoEI must be higher than 1."

      First of all, you can't assume that because liquid fossil fuels have an apparent EROI of 4 and an effective EROI >1 that any energy source with an apparent EROI of 4 will have an effective EROI >1. As a I pointed out above, electricity supplied by renewables cannot simply be substituted for fossil fuels -- they are simply too different in terms of distribution and utility.

      Second of all, you're neglecting change over time. You concede that EROI for fossil fuels has dropped (significantly) over the course of the 20th century, but the argument above (implicitly) relies upon a steady-state model. One can plausibly argue that the higher EROI in the early 20th century provided an energy surplus (relative to the current situation) that was used to build much of the infrastructure that it still in use. Therefore, while you can argue that we are obviously capable of maintaining the civilization we have in the short term, but you cannot get from there to either arguing that an apparent EROI of 4 is enough to maintain the economic and technological growth of the 20th century or that an apparent EROI of 4 is enough to retool our infrastructure in the ways that would be needed to accommodate renewables rather than liquid fossil fuels.

      You also neglect that possibility that an apparent EROI of 4 is only enough to stave off total disaster, but that it doesn't produce enough of an energy surplus to maintain existing infrastructure. That is, we may be engaged currently in a slow decline that is masked by potentially fictitious "economic growth", or that any actual economic growth that is occurring is inertial in nature, similar to the fact that even when birthrates decline, population continues to grow for several decades. I don't really expect you to come to grips with such possibilities since your purpose is clearly not to understand the world but to push a particular point of view.

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  57. Like your post. I kinda have a question. Because most don't want nuclear, that fusion is a ways off and that renewables require storage or global powerlines, that: will they're be enough of an EROEI for all of civilization after storage and additional capacity is accounted for.
    Say solar gets 7 but has a capacity factor of 25% (and that out will be the primary source fire to fossil fuels causing too much excess co2. Also assume that batteries will get an ESOI or energy stored on investment of less than 10. Also, that their charge/discharge efficiency is 90%. Also assume that there will not be global power lines giving is solar power at night because of political resistance.
    Will there still be enough Overall EROEI to power everything without resorting to fossil fuels and nuclear fission?
    Thanks

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    1. My (phone) bad.
      In order, they're is supposed to be there, fire is supposed to be "due",
      Out is supposed to be it, and "is" is supposed to be "us".
      I think it's possible but that it may be close. If we had to rely on lead acid, it would be impossible because they only get an ESOI of about 2, and that the extra capacity build up of solar already would lower it's EROEI. Thus, it would all be wasted on the old battery and in the battery inefficiency (33% lost).
      Thankfully, we have better batteries and pumped hydro!
      The reason i say "the extra capacity buildup" is bad is because of the following thought pattern: Say there is a gigawatt each of space based solar, and ground based, and that they both had the same eroei. Since the ground based solar had to have up to 4x the build up, it'll eat up that much extra energy plus all the extra energy to make and recycle batteries. Whereas, the space based would be (at least for sake of argument here) a constant base load source.
      So the point is that it has to be a fact that eroei alone is not accurate until capacity factor and storage is factored in.
      Again, i still believe it's possible (because both solar and batteries are improving all the time). In fact, i believe that we should build a global grid using fossil fuels to further the carrying capacity, so to speak, of the extra solar capacity that will have to be built here on earth. That'll reduce storage requirements, too.
      I tried to figure an equation which accounts for these variables but i think it could be wrong. ..
      http://whatsthebackupplan.com
      Under the oil and excess co2 widgets.

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    2. Hi fireofenergy,

      That's okay, I was able to understand your post just fine.

      I think the ERoEI of solar PV would still be high enough that it would make little difference. The storage would only reduce the aggregate ERoEI of solar PV+storage by a modest amount.

      Let's assume that solar PV has an ERoEI of 6, which I think is a reasonable estimate. Also assume that storage has a round-trip efficiency of 90% and an ESOI of 10. Also assume that the sun shines for 5 full-sun hours per day, that electrical demand is twice normal during mid-day, and that storage is relied upon the rest of the time (in other words, 2/3rds of electricity demand comes from storage).

      With those assumptions, it appears to me that the adjusted ERoEI of solar PV plus storage (including storage losses) would be 5.24. This is calculated as follows: (1/3 * 6) + (2/3 * (6*0.9*0.9)).

      This does not assume any over-building of storage or solar panels, so there would still be some days when gas backup was required. If we overbuilt storage and solar panels then the ERoEI would be lower.

      However, the ERoEI of 5.24 is still fine. It implies that 19% of the output of the solar panels would be needed to construct the replacement solar panels. Since solar panels are rapidly becoming cheaper (in money) than other sources of generating electricity, we could build slightly more solar panels to obtain the same net energy as fossil fuels for the same cost. This includes storage.

      In my opinion, the ERoEI of solar (and the ESOI of storage) is good enough that it doesn't matter. The bigger problems with solar+batteries are: 1) monetary cost; 2) potential limitations on lithium and cobalt availability to make the batteries; and 3) seasonal storage. During the winter, solar insolation is much lower and we can't store 2 months of electricity using batteries.

      -Tom S

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    3. Thanks for the reply! I also like the idea of long distance HVDC lines to enable more solar connection, like being able to charge electric cars at night with solar with only about a 10% or so line loss.

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  58. There is a discussion here of your post that you might like to look at.
    https://georgejetson.org/2017/04/13/the-eroi-energy-multiplier-hypothesis/

    " As a modern society, we choose to reinvest 20 or so percent of our production. Energy industries exist to support society, not themselves. So if we take the 20% that is surplus energy (for an EROI of 1.2:1) and multiply it by the 20% that is available for reinvestment, we get only 4% that is available to ‘grow’ the energy source."

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    1. Thanks David. I'll take a look.

      -Tom S

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