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107 comments on EROEI Short #3: Price-Estimated EROEI

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Nate Hagens on August 31, 2007 - 12:05pm Permalink | Subthread | Parent | Comments top

I can't parse this, can you elaborate just a little? For example, even the Dutch have pretty much stopped making more land, so the notion that anyone with a functioning brain cell would be assuming that there is a 3:1 return of land on land is patently incomprehensible. I suppose they might be assuming 3:1 on something to do with land, but what could that something possibly be?

I mean that when a net energy analysis is undertaken, they dont adjust for other inputs. So the movement from a 3:1 to a 5:1 EROI assumes a concomittant increase in non-energy inputs, like land, labor etc from 3:1 to 5:1 as well. A 3:1, 5:1 20:1 EROI all say nothing about labor, time, land, etc. WHich is why even the low EROI numbers on ethanol are too favorable - there is a huge land input needed for biofuels that is not needed for most conventional fossil fuels, or wind.

I'm not fully in sync with the hatred of economics often expressed around here

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I donthate economics as its part of my doctorate studies. Conventional economics has been a great allocation mechanism on an 'empty' planet. But by definition, the pursuit of 'utility' through growth,and concomittant allocation mechanisms will not work on a planet full of people and high quality resources already spent - some tweaks are needed as a minimum, and a total overhaul might actually be in order.

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PaulS on August 31, 2007 - 12:18pm Permalink | Subthread | Parent | Comments top

I mean that when a net energy analysis is undertaken, they don't adjust for other inputs. So if a 5:1 EROI, assumes away other non-energy inputs, like land, labor etc. A 3:1, 5:1 20:1 EROI all say nothing about labor, time, land, etc.

Ah. In other words, for the purposes at hand, we can only regard an energy analysis (EROEI, net, or other), as useful if it takes scalability into account. And this remains so if I use price as a proxy for energy, which is an additional viewpoint that may shed light on the matter. Or, to put it another way, if someone manages to put together a magical 'zero point energy' device that extracts one nanowatt-hour per year from the volume of the Earth, we can, for our purposes, disregard it absolutely and utterly. Yup, I'm OK with that.

So we add scalability analysis as a criterion or requirement to examine when refereeing energy-source analysis.

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Nate Hagens on August 31, 2007 - 12:22pm Permalink | Subthread | Parent | Comments top

Precisely

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PaulS on August 31, 2007 - 12:22pm Permalink | Subthread | Parent | Comments top

...some tweaks are needed as a minimum...

Perhaps a start would be to examine the possibility that resource constraints (i.e. a non-'empty' planet) introduce significant correlations between some variables currently treated as uncorrelated in statistical and/or econometric models... ?

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memmel on August 31, 2007 - 1:15pm Permalink | Subthread | Parent | Comments top

YES !!!!!!!

And correlations lead to positive feedback loops.
Thats the problem once you start looking at a finite system driven by a decreasing critical resource you get correlation and thence positive feedback.

Think of the microphone feedback case right before they go into exponential feedback their is a correlation event where the inputs and outputs become shared then boom you go positive feedback. So increasing amounts of correlation implies positive feedback. So if your concerned about correlation your really talking about positive feedback loops forming.

This is why strained complex systems tend to crash too many routes exist for positive feedback as the system becomes highly correlated.

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TheTransition on August 31, 2007 - 10:50pm Permalink | Subthread | Parent | Comments top

Perhaps a start would be to examine the possibility that resource constraints (i.e. a non-'empty' planet) introduce significant correlations between some variables currently treated as uncorrelated in statistical and/or econometric models... ?

Yes. I totally agree with this but I don't know how to do it. I think the classic example are economists who think the long term price for oil will tend to around $40 per barrel because that was the cost of CTL produced Oil when Oil cost $20 per barrel.

As memmel says above, there are almost certainly feedback effects that cause the general price of all inputs to rise so that $40 CTL Oil in a world where Oil from from the ground costs $20 is unrealistic where Oil from the ground costs $100.

The escalating costs of the Oil Sands projects are another.

Another is here in Australia where we are benefiting from a mining boom which is inducing massive investment in projects all over the place. However the costs of the these projects keep rising because they're driven by the rising costs of the commodities that is inducing the investment in the first place... etc.

How does one go about scaling input costs to projects that will increase supply to meet the demand for the commodities?

I dunno. Seems like a good Ph.D. project to me.

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