In his day M. King Hubbert was a great geologist who spent his life studying the planet's deposits of oil and gas. But as he got older, he simply lost it. His "peak oil" theory--which many people are citing these days--is a case study in junk economics.
Hubbert was born in 1903. By 1949 he had concluded that the fossil-fuel era was going to end, and quite soon. Global production would peak around 2000, he predicted, and would decline inexorably thereafter. By 1980 the aging Hubbert was certain that the impending crisis "was unique to both human and geologic history.... You can only use oil once. You can only use metals once. Soon all the oil is going to be burned and all the metals mined and scattered." Indeed we would soon be forced to abandon our entire "monetary culture," replacing it with an accounting tied to "matter-energy" constraints. An editor of Geophysics magazine summarized Hubbert's views in 1983: "The science of matter-energy and the historic system of finance are incompatible."
Today this same nonsense is often dressed up with numbers in an analysis that's dubbed "energy return on energy invested" (Eroei). According to this theory it can never make sense to burn two units of energy in order to extract one unit of energy. The Eroei crowd concedes, for example, that the world has centuries' worth of junk oil in shale and tar sands--but they can also prove it's irrelevant. It takes more energy to cook this kind of oil out of the dirt, they argue, than you end up with in the recovered oil. And a negative Eroei can only mean energy bankruptcy. The more such energy investments we make, the faster things will grind to a halt.
Eroei calculations now litter the energy policy debate. Time and again they're wheeled out to explain why one form of energy just can't win--tar sands, shale, corn, wood, wind, you name it. Even quite serious journals--Science, for example--have published pieces along these lines. Energy-based books of account have just got to show a profit. In the real world, however, investors don't care a fig whether they earn positive Eroei. What they care about is dollar return on dollar invested. And the two aren't the same--nowhere close--because different forms of energy command wildly different prices. Invest ten units of 10-cent energy to capture one unit of $10 energy and you lose energy but gain dollars, and Wall Street will fund you from here to Alberta.
As it happens, the people extracting oil out of tar sands today use gas from the fields themselves to power their refineries. There's gas, too, under what has been called Alberta's "trillion- barrel tar pit," but it's cheap because there's no pipeline to deliver it to where it would be worth more. As an alternative to gas, Total S.A., the French oil giant, is thinking about building a nuclear power plant to supply heat to melt and crack the tar. But nuclear reactors extract only a minuscule fraction of the energy locked up in the nuclei of uranium atoms; all the rest gets discarded as "waste." On Eroei logic, uranium would never be used to generate either electricity or heat. But per unit of raw stored energy, uranium is a thousand times cheaper than oil.
Greens touting the virtues of biomass as a source of energy rarely note that almost all of it is used by lumber mills burning branches and sawdust on site. No one cares how much energy the sun "invested" to grow all that waste wood. And every electric power plant, whatever it's fueled with, runs a huge Eroei deficit, transforming five units of cheap, raw heat into two units of electrical energy. But it all works out because the market values the energy in electricity at about 30 times the energy in coal.
The economic value of energy just doesn't depend very strongly on raw energy content as conventionally measured in British thermal units. Instead it's determined mainly by the distance between the BTUs and where you need them, and how densely the BTUs are packed into pounds of stuff you've got to move, and by the quality of the technology at hand to move, concentrate, refine and burn those BTUs, and by how your neighbors feel about carbon, uranium and windmills. In this entropic universe we occupy, the production of one unit of high-grade energy always requires more than one unit of low-grade energy at the outset. There are no exceptions. Put another way, Eroei--a sophomoric form of thermodynamic accounting--is always negative and always irrelevant. "Matter-energy" constraints count for nothing. The "monetary culture" still rules.
Peter Huber is executive vice president of ICx Technologies, a fellow of the Manhattan Institute and coauthor of The Bottomless Well (Basic Books, January 2005). Visit his home page at www.forbes.com/huber.
Ah well. It's progress that they are ridiculing us. That's one stage past ignoring us, right? The next stage will be to claim everyone knew this all along and it's old news.
I don't see why this is an "us vs. them" issue. The point he is making is valid and important. People run many processes where the output energy is less than the input energy. The idea that energy production will stop when EROEI<1 is ridiculous. That would only be true in a world where there is just one type of energy.
Here's another example: the shift from hunting/gathering to agriculture. That was a step down in EROEI. You have to put in a lot more energy to get a calorie from farming than from hunting. Nevertheless, the shift to a lower EROEI food (energy) source led to a massive increase in food availability. A lower EROEI source can be better than a high EROEI source if the lower EROEI source is more plentiful and reliable.
They applied a match to what was left of the "woods", namely to the ashes. The ashes wouldn't catch fire. EROI of the lit match was less than unity. So production stopped. Most of the population died-off.
We don't really produce energy, we convert it from one form to another (ex: from heat to mechanical force). Having an EROI < 1 is not a problem as long as you can rely on another source of cheap energy (slaves, cheap gasoline or electricity).
"It's progress that they are ridiculing us. That's one stage past ignoring us, right?"
Spot on.
I've actually read `The Bottomless Well" from cover to cover - and there's no mention of Hubbert in it whatsoever, no mention of Campbell, Laherrere, Deffeyes, Simmons or any of the big names of the `peak oil' community - although the book was published in late 2004. The sacrilegious term peak oil isn't used at all. Needless to say there is no mention either of Malthus, Hardin, Catton, Georgescu-Roegen or Daly - all apparently on the index librorum prohibitorum. The only treatment intellectual adversaries get in the book is what one might call `dynamic silence'. And the only section in TBW that addresses oil depletion at all is Chapter 11 on `Infinite Supply' - in a couple of paragraphs and one footnote (page 181). But as Stuart points out, al least the silent treatment of Huber 2004 has since been replaced by mockery, derision and calumniation of Huber 2005.
This is what Huber had to say in TBW on how technology will save us:
"[T]he day is not far off when 6-inch diameter pulsed beams produced by advanced high-power lasers will replace rotary mechanical drills. Bundles of optical fiber will channel the energy down the 5-mile borehole, with lenses at the end to focus the laser light on the rock face. The intense heat will melt the rock, extend the borehole, and then sheath it in colid ceramic, eliminating the need for a steel casing. The power of the photon will pursue and retrieve fuel created a hundred million years ago by the power of the sun. [...] The logic of fuel-retrieving machines has advanced much faster than the fuels have retreated - we keep getting closer to the receding horizon. [...] Energy supplies are - for all practical purposes - infinite.*"
Cornucopian, futuristic, exuberant fantasies about salvation through laser? Sounds like a fairy tale to me.
To the above paragraphs Huber adds the following footnote:
" *In May 2004, with $40 dollar-per-barrel oil generating daily headlines, Science published a piece arguing that periodic panics about imminent exhaustion are almost as old as oil production itself, and are invariably followed by new bonanzas of production. "The world is not running out of oil"; there will be "abundant supplies for years to come." Leonardo Maugeri, "Oil, Never Cry Wolf - Why the Petroleum Age is Far from Over," Science 304, no 5674 (21 May 2004): 1114-1115."
And basically that's all a book about the `bottomless well' has to say about the `bottomless well'. Actually apart from that the book contains a lot of fascinating tidbits on laser technology, fuel cells and the environmental impact of fuel consumption. It's just that it doesn't really address the subject-matter of its full title: `The Bottomless Well - The Twilight of Fuel, the Virtue of Waste, and Why We will Never Run out of Energy."
Typical economics lunacy. What he seems incapable of realizing is that we've been "deficit spending" ever since we started using fossil fuels, burning up world "savings" that took hundreds of millions of years to generate. This is why we can spend five units of energy to produce one unit of electricity - we have surplus to burn. But physics and thermodynamics don't give a damn for voodoo economics and when there is no more surplus to burn, he can't make it happen just by wishing it were so. Unlike fiat money, which you can magically create out of thin air, mass and energy are not so cooperative.
Unlike fiat money, which you can magically create out of thin air, mass and energy are not so cooperative.
It is time for those of us who understand science to go to war against the alchemists of our modern times, namely, "Economists", "Wall Street Moguls" and "Candyman Politicians".
But to fight these manipulative marauders, we must first come to understand the power and pull of their hypnotic psycho-babble. Rather than succumbing to their language, their enchanting "framing" of the issues, we must develop our own language. We need new words.
There is no such thing as an "oil producer".
There are only "oil depleters".
These are the people who stick their straws in Our Earth, make claim of "ownership" over the endowment that Mother Nature has amassed over millions of years --long before Adam Smith was born--. These phony-named "producers" suck out the energy necter as if it belonged only exclusively to them. They use "advertising" to brainwash the clueless masses into burning the extracted hydrocarbons off into the atmosphere under a glowing cloud of self-engrandizement they call "progress" and "growth". They are "destroyers of worlds" (ours) and not builders of civilization.
"Geez" is the right response because Economics is mostly a mind manipulating religion and very little in the way of a science. "Price" is a whimsical number created out of thin air by "negotiating" human beings. It is not an objective measure of any physical, scientific quantity. Just tell all those people on Madison Avenue that the "Economy" is about "rational "consumers bargaining a "fair" price for pet rocks. They should get a laugh out of that one.
Economics today is as much a science as a political tool as much religion was before. I don't believe that anybody from the policymakers believes these guys, I'm not sure even if they believe themselves.
The only way economics can survive and help us solve our problems is to clear itself from the politically induced dogmas. Don't outlaw it just make it a true science not a religion.
Gloomy,
I concur.
Economics "could" become more of a science if the alchemists who practice it were to come clean and admit (confess) that much of what they preached thus far is contradicted by observed "facts".
For example, at the microeconomic modeling level, economists tell us that we have "rational" human beings negotiating over the "fair" valuation (a.k.a. "price") of a given transaction (i.e., the purchase of a Pet Rock circa 1980). Easily available observations of Madison Avenue behavior indicates that we are not dealing with "rational" creatures but rather with highly emotional beings who are easily manipulated by advertisements and other forms of persuation. If economists admitted to this indisputable "fact", they would go a long way towards moving their area of study from the realm of alchemy/religion and towards the realm of a properly measured science.
What does this have to do with Peak Oil?
Everything.
There are certain factions of our society that have a clear "conflict of interest" in being truthful about what the actual situation is regarding our "energy situation".
Do we have to start listing "them"?
O.K.
Automobile companies,
Construction companies that build highways and suburbia,
Petrochemical companies,
Politicians who receive campaign money (a.k.a. "bribes") from factions 1-3 (&5-8 below),
Military-Industrial complex needed to maintain factions 1-4,
Accountants who keep the "books" for Enron and friends in factions 1-5, where the accountants had better arrive at good numbers if they want to remain in the good graces of factions 1-5,
Financial wizards who used the cooked books of faction 6 to predict what is coming our way next,
Economists who are paid by factions 1-7 to write "scholarly" papers supporting the infrastructure created by factions 1-7, ...
I'm sure I must have still missed a couple of biggies. It's hard to keep it all in one's head. Anyone want to add to the list? ... Oh yeh, number 9) Airline industry, 10) ???
Lay people are convinced that "price" is a good "signal" of what is going on in our world. They are wrong ... and they are the ones who are going to be dead because they're wrong.
When a gun is being pointed at your head, what good is "price" as a measure of what is going on? When you have to pay for gasoline or else you cannot survive, because you can't get to work, what information does the "price" of gas give us? When the infrastucture is built to make alternatives too pricey (unsubsidized), what valid information does the "price signal" give us?
Can we do away with money?
Of course not. We need a medium of exchange. We do need to be able to value things and prioritize among them.
But we also need to do away with the lies and deception.
The problem with economics is that it is quite static and some things that are truth in some occasions are stubbornly claimed to be all-times-and-places valid laws.
I am absolutely positive that this is done on purpose and you pointed out some of the reasons why. Yes price is a signal - and people will react. But how come that each reaction transforms into a successful adjastment? The economy does not question this assumption - it just says that's what it is. This is the core of the Western view of man embodied in economics - and it is that a mankind can do anything if he wants. He can find new forms of energy, spoil the nature, than fix the nature and so on and so on... This is our new religion and economics is just a function of it, but the problem is mainly in our heads - we have forgotten where we came from and we even don't know what we are.
10) You missed perhaps the biggest vested interest of al: Major oil-exporting nations - chief among them the Saudis, of course. In this light, the fact that Chavez is willing to come clean is even more remarkable.
For first time visitors, EROEI is an acronym standing for "Energy Returned On Energy Invested. It is defined here at eroei.com. Also Wolf At The Door has a small write-up.
Unfortunately, a quick Google search doesn't reveal that "Eroei calculations now litter the energy policy debate". Also, bear in mind when you read statements like
And every electric power plant, whatever it's fueled with, runs a huge Eroei deficit, transforming five units of cheap, raw heat into two units of electrical energy. But it all works out because the market values the energy in electricity at about 30 times the energy in coal.
that this illustrates a fundamental error about what EROEI actually is. Coal-fired plants are inefficient (below 40%) at converting the energy the coal contains into electricity; this is what Huber is talking about. The EROEI actually involves the energy costs of mining the coal, transporting it, converting it to electricity, etc. You could not run such a plant if these energy costs exceeded what you could get for the electricity generated. See here for some rough numbers. EROEI is not negative as Huber asserts. The energy stored in the coal itself, of course, came from the Sun and was put into a useable form by Nature. So, it is provided to us free of charge ;)
The EROEI actually involves the energy costs of mining the coal, transporting it, converting it to electricity, etc.
If the EROEI involves converting it to electricity, then the EROEI is already negative, and adding in all that other stuff will only make it more negative.
You could not run such a plant if these energy costs exceeded what you could get for the electricity generated.
The term "energy costs" is ambiguous and should be qualified if you want to be clear. It could mean: a) the price of the energy in $, or b) the amount of energy in btus.
You can't run an energy production/conversion operation where the energy costs ($) exceed the energy return ($). You CAN run an energy production/conversion operation where the energy costs (btus) exceed the energy return (btus). We do it all the time, just like Haber says, converting cheap, dirty, inconvenient energy into expensive, clean, convenient energy.
To clarify, EROEI does not go negative. Rather, the question is whether it is less than 1. (For those mathematically inclined, this is equivalent to whether log(EROEI) is negative.)
For a very energetically inexpensive resource, EROEI. As resources begin to take more energy to be recovered, EROEI falls. When EROEI gets down to 1, it takes a much energy to acquire the resource as the resource is worth. At that point the resource is no longer an energy source.
It is not a question of EROEI going negative. That would mean that the product you have spent energy to produce is actually an energy sink, that it sucks up energy rather than producing it.
So Huber is wrong to talk about EROEI going negative, he means that log(EROEI) goes negative, i.e. that EROEI is less than one.
When it comes to math and accounting, I'm not the brightest bulb on the tannenbaum. Yet I feel as if the article is hoodwinking me. For example, he says:
Invest ten units of 10-cent energy to capture one unit of $10 energy and you lose energy but gain dollars, and Wall Street will fund you from here to Alberta.
My question is: does such a thing exist as an energy dime "capturing" an energy sawbuck?
Also: he makes the claim
Put another way, Eroei--a sophomoric form of thermodynamic accounting--is always negative and always irrelevant.
I have a feeling this is patently false, that he's leaving something out.
Eroei is almost always negative and almost always irrelevant - only in the primary energy production is has to be positive and this is always important. Eroei is negative in transforming one form of energy to another - in other words consuming energy. But the be able to produce energy for consuming we must get positive eroei.
This is simple. Imagine that we had only one primary energy source in the world - for instance oil. Producing oil needs energy - for instance for pumping. The is no other energy than oil so oil is pumped with oil. Now, if the pumping consumes more oil than the pumps bring up the oil production would soon cease. There is no difference if we used electricity generated with natural gas.
Primary energy producing with negative or very low positive Eroei is mainly transforming energy. It makes sense to produce oil from coal to keep planes flying if there is no other oil sources.
Re: "Eroei is negative in transforming one form of energy to another - in other words consuming energy. But the be able to produce energy for consuming we must get positive eroei"
Just to be clear, since I think this is a bit confusing, the physics of the transformation that TI refers to (eg. coal to electricity) is necessarily inefficient because energy must be lost in the conversion. I would not refer to this as EROEI, however. Instead, as you suggest, I would restrict the term EROEI to the production ratio of energy returned that we can consume over energy invested to get that energy, and this must, of course, be positive as you say. Huber conflates the two senses of the term -- and this is obviously a source of confusion for him and perhaps others.
Just to be clear, since I think this is a bit confusing, the physics of the transformation that TI refers to (eg. coal to electricity) is necessarily inefficient because energy must be lost in the conversion. I would not refer to this as EROEI, however.
The technical term for the efficiency of an energy conversion is "thermal efficiency". If the amount of electricity produced (in btus) is x, and the amount of energy in the coal burned (in btus) is y, then x/y is called the thermal efficiency. Thermal efficiency is always negative. You can clear up the confusion by using the proper terminology.
Nevertheless, Huber makes a good point. According to EROEI theory, it is irrational to do any energy conversions because energy coming out is less than energy going in. But that's absurd.
A classic example is the tar sands. If you build a nuclear reactor to melt the oil out, you can waste massive amounts of uranium producing oil. But who cares? Uranium is cheaper and more plentiful than oil. Having an EROEI<1 is not a problem if the input energy is plentiful and cheaper than the output energy.
How about making it a bit simple. TANSTAAFL. There Aint No Such Thing As A Free Lunch (from Robert Heinlein's "The Moon is a Harsh Mistress" (at least that's the first time I heard the phrase)). You have to do something to get anything.
For simplicity, let's assume that the only energy source in the world is oil. Some oil leaks into a farmer fields in the 1800's and he stores it (ok, this might be a free lunch, but remember some farmland was ruined). Drake comes along, realizes the find, and buys the oil, and uses that oil to drill for and find more oil. Back in the first finds of oil, oil was sometimes free (farmers hated finding oil oozing up onto their property), and otherwise quite cheap. One would drill a shallow hole and it would come squirting up out of the ground. Forever 1 unit of oil, one could find 100 units of oil.
Because one is finding 100 for every 1 unit spent the amount of oil increases greatly. However, the easy stuff to find is no longer around and it one only gets about 30 units of oil for every one spent. Also, keep in mind that there are other uses for oil, so while we have some stored up oil, we don't have humoungous stores. But it's ok, becase we still find more oil per oil spent.
A few more decades pass and it gets harder and harder to find and extract oil. Part of it is more drilling, but of it is pumping water to the field and then into the ground to force the oil out of the deep holes. All told, we're only getting 3 units of oil for every one unit spent. At this point things are beginning to look dire. However, the optimists point out that we're still getting more than we're putting into the system.
However, as soon as oil is so hard to find/extract that we're getting less than one unit of oil per unit spent, it's only a matter of how big the stocks are until one runs out of oil. For example, suppose you have a stock of 10 oil units. You spend one to get 0.5 unites. You now have 9.5 units. That's not commercially smart.
The tricky part is that our world has many sources of energy. The vast majority of it comes from oil, natural gas, coal (fossil fuels), and nuclear fission. However, one gets energy from these sources via a 1-time process. You can't reuse oil, or start a reaction which just keeps giving energy. This is only partially true for nuclear fission. I don't know enough about breeder reactors to get into the specifics about just how reusable uranium is.
Some of our energy comes from sources which continually keep giving. Solar power, wind power, hydro power. So, in theory even if EROEI for oil was less than one, so long as one had abundant other energy sources, there's no actual problem (well, there is a question of capacity, but we'll ignore that for the sake of utopians). However, as stated the bulk of our energy right now comes from finite sources. In North America, natural gas and oil are both declining (we find less each year) and coal is horrible to the environment.
Currently I believe most of the world's oil EROEI are between 3-20 (3 for tar sands, 5-10 for US oil, 20 for OPEC). So this means that for the oil that we keep looking for, not only is it harder to find and there's a danger of us not being able to meet "expected" capacty, but it is taking increasingly more energy to get out of the ground.
However, until electric cars are viable, I wouldn't find it hard to believe that society would invest in oil programs with EROEI's less than one. Because, as the author of the article points out, it is (and likely will be) economically viable. However, a thinking person might wonder about the wisdom of our current actions and the likely future that we're walking into. Picture the Fool card from a tarrot deck (A vagabond walking with his eyes up in the air a few steps from walking over a cliff). Hopefully breaking it up a lot might have helped.
Yes, thanks. This is the argument I thought I understood. I get confused because, as others have said here, people like Huber confuse energy with exergy (thanks, marek), either willfully or ignorantly.
But what about JD's argument that your scenario is only true IF there is only one source of energy, AND that there is no historical examples of an energy extraction enterprise being abandoned when EROEI was less than 1?
I would say Huber intentionally confuses energy with exergy. He has a Ph.D. in mechanical engineering. On the other hand, he also has a law degree from Harvard and is a fellow of the Manhattan Institute. The latter two elements on his resume lend credibility to the assumption that he knows what he's talking about, but says what he sees politically convenient.
Note: technically, the phrase "negative EROEI" is also incorrect. The minimum EROEI is zero. To reduce confusion, I was following the language in the original post, but "negative EROEI" should actually be "EROEI<1".
EROEI is a physical measure, it must not be confused with price and profits, economic measures. EROEI is relevant only for primary energy production. There EROEI must be greater than 1 because otherwise there is no net primary energy production. Energy conversion means always some energy loss but this is not energy production.
What happens, primary net energy production or conversion depends on EROEI. If it is smaller than 1 then there is only conversion - even if seems to be energy production. If we need more energy to get oil than we can get from the oil it is only conversion.
EROEI comparisons are important. If we produce oil from tar sands and EROEI is 1.1, ie. we get 10% more energy than we put in this is net energy production. It is also energy conversion. If EROEI is 0.9 we lose 10% of the energy and this makes it a conversion process - oil from nuclear. This may be rational if we have no better way to get oil. If we have an energy crisis this should not be done because the we lose energy in the process. The prices have nothing to do here. Here we measure energy only. To use free energy to produce expensive energy with EROEI considerably less than 1 has no sense from energy viewpoint - we should use the free energy directly and get more total energy that way.
If we have an energy crisis this should not be done because the we lose energy in the process.
You don't actually lose energy. You just get less than you would if you used the primary source without the conversion. The process still adds net energy to the total.
This is a curious way of thinking when you apply it (for example) to coal liquefaction. According to the approach you are describing, it's better to directly burn coal than to liquefy it into a cleaner fuel for reasons of pollution control and convenience.
Converting coal to electricity "loses" a huge amount of the original energy. Does this mean people should clean their houses with vacuum sweepers powered directly by coal?
Thermodynamics And Money
In his day M. King Hubbert was a great geologist who spent his life studying the planet's deposits of oil and gas. But as he got older, he simply lost it. His "peak oil" theory--which many people are citing these days--is a case study in junk economics.
Hubbert was born in 1903. By 1949 he had concluded that the fossil-fuel era was going to end, and quite soon. Global production would peak around 2000, he predicted, and would decline inexorably thereafter. By 1980 the aging Hubbert was certain that the impending crisis "was unique to both human and geologic history.... You can only use oil once. You can only use metals once. Soon all the oil is going to be burned and all the metals mined and scattered." Indeed we would soon be forced to abandon our entire "monetary culture," replacing it with an accounting tied to "matter-energy" constraints. An editor of Geophysics magazine summarized Hubbert's views in 1983: "The science of matter-energy and the historic system of finance are incompatible."
Today this same nonsense is often dressed up with numbers in an analysis that's dubbed "energy return on energy invested" (Eroei). According to this theory it can never make sense to burn two units of energy in order to extract one unit of energy. The Eroei crowd concedes, for example, that the world has centuries' worth of junk oil in shale and tar sands--but they can also prove it's irrelevant. It takes more energy to cook this kind of oil out of the dirt, they argue, than you end up with in the recovered oil. And a negative Eroei can only mean energy bankruptcy. The more such energy investments we make, the faster things will grind to a halt.
Eroei calculations now litter the energy policy debate. Time and again they're wheeled out to explain why one form of energy just can't win--tar sands, shale, corn, wood, wind, you name it. Even quite serious journals--Science, for example--have published pieces along these lines. Energy-based books of account have just got to show a profit. In the real world, however, investors don't care a fig whether they earn positive Eroei. What they care about is dollar return on dollar invested. And the two aren't the same--nowhere close--because different forms of energy command wildly different prices. Invest ten units of 10-cent energy to capture one unit of $10 energy and you lose energy but gain dollars, and Wall Street will fund you from here to Alberta.
As it happens, the people extracting oil out of tar sands today use gas from the fields themselves to power their refineries. There's gas, too, under what has been called Alberta's "trillion- barrel tar pit," but it's cheap because there's no pipeline to deliver it to where it would be worth more. As an alternative to gas, Total S.A., the French oil giant, is thinking about building a nuclear power plant to supply heat to melt and crack the tar. But nuclear reactors extract only a minuscule fraction of the energy locked up in the nuclei of uranium atoms; all the rest gets discarded as "waste." On Eroei logic, uranium would never be used to generate either electricity or heat. But per unit of raw stored energy, uranium is a thousand times cheaper than oil.
Greens touting the virtues of biomass as a source of energy rarely note that almost all of it is used by lumber mills burning branches and sawdust on site. No one cares how much energy the sun "invested" to grow all that waste wood. And every electric power plant, whatever it's fueled with, runs a huge Eroei deficit, transforming five units of cheap, raw heat into two units of electrical energy. But it all works out because the market values the energy in electricity at about 30 times the energy in coal.
The economic value of energy just doesn't depend very strongly on raw energy content as conventionally measured in British thermal units. Instead it's determined mainly by the distance between the BTUs and where you need them, and how densely the BTUs are packed into pounds of stuff you've got to move, and by the quality of the technology at hand to move, concentrate, refine and burn those BTUs, and by how your neighbors feel about carbon, uranium and windmills. In this entropic universe we occupy, the production of one unit of high-grade energy always requires more than one unit of low-grade energy at the outset. There are no exceptions. Put another way, Eroei--a sophomoric form of thermodynamic accounting--is always negative and always irrelevant. "Matter-energy" constraints count for nothing. The "monetary culture" still rules.
Peter Huber is executive vice president of ICx Technologies, a fellow of the Manhattan Institute and coauthor of The Bottomless Well (Basic Books, January 2005). Visit his home page at www.forbes.com/huber.
(related articles from Peter Huber)Here's another example: the shift from hunting/gathering to agriculture. That was a step down in EROEI. You have to put in a lot more energy to get a calorie from farming than from hunting. Nevertheless, the shift to a lower EROEI food (energy) source led to a massive increase in food availability. A lower EROEI source can be better than a high EROEI source if the lower EROEI source is more plentiful and reliable.
Easter Island.
They ran out of trees (=fuel for fire).
They applied a match to what was left of the "woods", namely to the ashes. The ashes wouldn't catch fire. EROI of the lit match was less than unity. So production stopped. Most of the population died-off.
The End.
"It's progress that they are ridiculing us. That's one stage past ignoring us, right?"
Spot on.
I've actually read `The Bottomless Well" from cover to cover - and there's no mention of Hubbert in it whatsoever, no mention of Campbell, Laherrere, Deffeyes, Simmons or any of the big names of the `peak oil' community - although the book was published in late 2004. The sacrilegious term peak oil isn't used at all. Needless to say there is no mention either of Malthus, Hardin, Catton, Georgescu-Roegen or Daly - all apparently on the index librorum prohibitorum. The only treatment intellectual adversaries get in the book is what one might call `dynamic silence'. And the only section in TBW that addresses oil depletion at all is Chapter 11 on `Infinite Supply' - in a couple of paragraphs and one footnote (page 181). But as Stuart points out, al least the silent treatment of Huber 2004 has since been replaced by mockery, derision and calumniation of Huber 2005.
This is what Huber had to say in TBW on how technology will save us:
"[T]he day is not far off when 6-inch diameter pulsed beams produced by advanced high-power lasers will replace rotary mechanical drills. Bundles of optical fiber will channel the energy down the 5-mile borehole, with lenses at the end to focus the laser light on the rock face. The intense heat will melt the rock, extend the borehole, and then sheath it in colid ceramic, eliminating the need for a steel casing. The power of the photon will pursue and retrieve fuel created a hundred million years ago by the power of the sun. [...] The logic of fuel-retrieving machines has advanced much faster than the fuels have retreated - we keep getting closer to the receding horizon. [...] Energy supplies are - for all practical purposes - infinite.*"
Cornucopian, futuristic, exuberant fantasies about salvation through laser? Sounds like a fairy tale to me.
To the above paragraphs Huber adds the following footnote:
" *In May 2004, with $40 dollar-per-barrel oil generating daily headlines, Science published a piece arguing that periodic panics about imminent exhaustion are almost as old as oil production itself, and are invariably followed by new bonanzas of production. "The world is not running out of oil"; there will be "abundant supplies for years to come." Leonardo Maugeri, "Oil, Never Cry Wolf - Why the Petroleum Age is Far from Over," Science 304, no 5674 (21 May 2004): 1114-1115."
And basically that's all a book about the `bottomless well' has to say about the `bottomless well'. Actually apart from that the book contains a lot of fascinating tidbits on laser technology, fuel cells and the environmental impact of fuel consumption. It's just that it doesn't really address the subject-matter of its full title: `The Bottomless Well - The Twilight of Fuel, the Virtue of Waste, and Why We will Never Run out of Energy."
It is time for those of us who understand science to go to war against the alchemists of our modern times, namely, "Economists", "Wall Street Moguls" and "Candyman Politicians".
But to fight these manipulative marauders, we must first come to understand the power and pull of their hypnotic psycho-babble. Rather than succumbing to their language, their enchanting "framing" of the issues, we must develop our own language. We need new words.
There is no such thing as an "oil producer".
There are only "oil depleters".
These are the people who stick their straws in Our Earth, make claim of "ownership" over the endowment that Mother Nature has amassed over millions of years --long before Adam Smith was born--. These phony-named "producers" suck out the energy necter as if it belonged only exclusively to them. They use "advertising" to brainwash the clueless masses into burning the extracted hydrocarbons off into the atmosphere under a glowing cloud of self-engrandizement they call "progress" and "growth". They are "destroyers of worlds" (ours) and not builders of civilization.
WillYouJoinTheFight ?
Geez... Do you plan to outlaw economics? Is economics going to be banned as an occupational category, like salesmen were banned in the USSR?
The only way economics can survive and help us solve our problems is to clear itself from the politically induced dogmas. Don't outlaw it just make it a true science not a religion.
I concur.
Economics "could" become more of a science if the alchemists who practice it were to come clean and admit (confess) that much of what they preached thus far is contradicted by observed "facts".
For example, at the microeconomic modeling level, economists tell us that we have "rational" human beings negotiating over the "fair" valuation (a.k.a. "price") of a given transaction (i.e., the purchase of a Pet Rock circa 1980). Easily available observations of Madison Avenue behavior indicates that we are not dealing with "rational" creatures but rather with highly emotional beings who are easily manipulated by advertisements and other forms of persuation. If economists admitted to this indisputable "fact", they would go a long way towards moving their area of study from the realm of alchemy/religion and towards the realm of a properly measured science.
What does this have to do with Peak Oil?
Everything.
There are certain factions of our society that have a clear "conflict of interest" in being truthful about what the actual situation is regarding our "energy situation".
Do we have to start listing "them"?
O.K.
- Automobile companies,
- Construction companies that build highways and suburbia,
- Petrochemical companies,
- Politicians who receive campaign money (a.k.a. "bribes") from factions 1-3 (&5-8 below),
- Military-Industrial complex needed to maintain factions 1-4,
- Accountants who keep the "books" for Enron and friends in factions 1-5, where the accountants had better arrive at good numbers if they want to remain in the good graces of factions 1-5,
- Financial wizards who used the cooked books of faction 6 to predict what is coming our way next,
- Economists who are paid by factions 1-7 to write "scholarly" papers supporting the infrastructure created by factions 1-7, ...
I'm sure I must have still missed a couple of biggies. It's hard to keep it all in one's head. Anyone want to add to the list? ... Oh yeh, number 9) Airline industry, 10) ???Lay people are convinced that "price" is a good "signal" of what is going on in our world. They are wrong ... and they are the ones who are going to be dead because they're wrong.
When a gun is being pointed at your head, what good is "price" as a measure of what is going on? When you have to pay for gasoline or else you cannot survive, because you can't get to work, what information does the "price" of gas give us? When the infrastucture is built to make alternatives too pricey (unsubsidized), what valid information does the "price signal" give us?
Can we do away with money?
Of course not. We need a medium of exchange. We do need to be able to value things and prioritize among them.
But we also need to do away with the lies and deception.
I am absolutely positive that this is done on purpose and you pointed out some of the reasons why. Yes price is a signal - and people will react. But how come that each reaction transforms into a successful adjastment? The economy does not question this assumption - it just says that's what it is. This is the core of the Western view of man embodied in economics - and it is that a mankind can do anything if he wants. He can find new forms of energy, spoil the nature, than fix the nature and so on and so on... This is our new religion and economics is just a function of it, but the problem is mainly in our heads - we have forgotten where we came from and we even don't know what we are.
I did not want to explain about vacuum-tube black & white TV's or crystal set radio. It may be too much to absorb for the new generation.
Unfortunately, a quick Google search doesn't reveal that "Eroei calculations now litter the energy policy debate". Also, bear in mind when you read statements likethat this illustrates a fundamental error about what EROEI actually is. Coal-fired plants are inefficient (below 40%) at converting the energy the coal contains into electricity; this is what Huber is talking about. The EROEI actually involves the energy costs of mining the coal, transporting it, converting it to electricity, etc. You could not run such a plant if these energy costs exceeded what you could get for the electricity generated. See here for some rough numbers. EROEI is not negative as Huber asserts. The energy stored in the coal itself, of course, came from the Sun and was put into a useable form by Nature. So, it is provided to us free of charge ;)
If the EROEI involves converting it to electricity, then the EROEI is already negative, and adding in all that other stuff will only make it more negative.
You could not run such a plant if these energy costs exceeded what you could get for the electricity generated.
The term "energy costs" is ambiguous and should be qualified if you want to be clear. It could mean: a) the price of the energy in $, or b) the amount of energy in btus.
You can't run an energy production/conversion operation where the energy costs ($) exceed the energy return ($). You CAN run an energy production/conversion operation where the energy costs (btus) exceed the energy return (btus). We do it all the time, just like Haber says, converting cheap, dirty, inconvenient energy into expensive, clean, convenient energy.
For a very energetically inexpensive resource, EROEI. As resources begin to take more energy to be recovered, EROEI falls. When EROEI gets down to 1, it takes a much energy to acquire the resource as the resource is worth. At that point the resource is no longer an energy source.
It is not a question of EROEI going negative. That would mean that the product you have spent energy to produce is actually an energy sink, that it sucks up energy rather than producing it.
So Huber is wrong to talk about EROEI going negative, he means that log(EROEI) goes negative, i.e. that EROEI is less than one.
My lay-brain thanks you.
Also: he makes the claim
I have a feeling this is patently false, that he's leaving something out.Anyone know what that is?
This is simple. Imagine that we had only one primary energy source in the world - for instance oil. Producing oil needs energy - for instance for pumping. The is no other energy than oil so oil is pumped with oil. Now, if the pumping consumes more oil than the pumps bring up the oil production would soon cease. There is no difference if we used electricity generated with natural gas.
Primary energy producing with negative or very low positive Eroei is mainly transforming energy. It makes sense to produce oil from coal to keep planes flying if there is no other oil sources.
Just to be clear, since I think this is a bit confusing, the physics of the transformation that TI refers to (eg. coal to electricity) is necessarily inefficient because energy must be lost in the conversion. I would not refer to this as EROEI, however. Instead, as you suggest, I would restrict the term EROEI to the production ratio of energy returned that we can consume over energy invested to get that energy, and this must, of course, be positive as you say. Huber conflates the two senses of the term -- and this is obviously a source of confusion for him and perhaps others.
The technical term for the efficiency of an energy conversion is "thermal efficiency". If the amount of electricity produced (in btus) is x, and the amount of energy in the coal burned (in btus) is y, then x/y is called the thermal efficiency. Thermal efficiency is always negative. You can clear up the confusion by using the proper terminology.
Nevertheless, Huber makes a good point. According to EROEI theory, it is irrational to do any energy conversions because energy coming out is less than energy going in. But that's absurd.
A classic example is the tar sands. If you build a nuclear reactor to melt the oil out, you can waste massive amounts of uranium producing oil. But who cares? Uranium is cheaper and more plentiful than oil. Having an EROEI<1 is not a problem if the input energy is plentiful and cheaper than the output energy.
If EROIE is this difficult to understand, I'll just leave it alone.
For simplicity, let's assume that the only energy source in the world is oil. Some oil leaks into a farmer fields in the 1800's and he stores it (ok, this might be a free lunch, but remember some farmland was ruined). Drake comes along, realizes the find, and buys the oil, and uses that oil to drill for and find more oil. Back in the first finds of oil, oil was sometimes free (farmers hated finding oil oozing up onto their property), and otherwise quite cheap. One would drill a shallow hole and it would come squirting up out of the ground. Forever 1 unit of oil, one could find 100 units of oil.
Because one is finding 100 for every 1 unit spent the amount of oil increases greatly. However, the easy stuff to find is no longer around and it one only gets about 30 units of oil for every one spent. Also, keep in mind that there are other uses for oil, so while we have some stored up oil, we don't have humoungous stores. But it's ok, becase we still find more oil per oil spent.
A few more decades pass and it gets harder and harder to find and extract oil. Part of it is more drilling, but of it is pumping water to the field and then into the ground to force the oil out of the deep holes. All told, we're only getting 3 units of oil for every one unit spent. At this point things are beginning to look dire. However, the optimists point out that we're still getting more than we're putting into the system.
However, as soon as oil is so hard to find/extract that we're getting less than one unit of oil per unit spent, it's only a matter of how big the stocks are until one runs out of oil. For example, suppose you have a stock of 10 oil units. You spend one to get 0.5 unites. You now have 9.5 units. That's not commercially smart.
The tricky part is that our world has many sources of energy. The vast majority of it comes from oil, natural gas, coal (fossil fuels), and nuclear fission. However, one gets energy from these sources via a 1-time process. You can't reuse oil, or start a reaction which just keeps giving energy. This is only partially true for nuclear fission. I don't know enough about breeder reactors to get into the specifics about just how reusable uranium is.
Some of our energy comes from sources which continually keep giving. Solar power, wind power, hydro power. So, in theory even if EROEI for oil was less than one, so long as one had abundant other energy sources, there's no actual problem (well, there is a question of capacity, but we'll ignore that for the sake of utopians). However, as stated the bulk of our energy right now comes from finite sources. In North America, natural gas and oil are both declining (we find less each year) and coal is horrible to the environment.
Currently I believe most of the world's oil EROEI are between 3-20 (3 for tar sands, 5-10 for US oil, 20 for OPEC). So this means that for the oil that we keep looking for, not only is it harder to find and there's a danger of us not being able to meet "expected" capacty, but it is taking increasingly more energy to get out of the ground.
However, until electric cars are viable, I wouldn't find it hard to believe that society would invest in oil programs with EROEI's less than one. Because, as the author of the article points out, it is (and likely will be) economically viable. However, a thinking person might wonder about the wisdom of our current actions and the likely future that we're walking into. Picture the Fool card from a tarrot deck (A vagabond walking with his eyes up in the air a few steps from walking over a cliff). Hopefully breaking it up a lot might have helped.
But what about JD's argument that your scenario is only true IF there is only one source of energy, AND that there is no historical examples of an energy extraction enterprise being abandoned when EROEI was less than 1?
What happens, primary net energy production or conversion depends on EROEI. If it is smaller than 1 then there is only conversion - even if seems to be energy production. If we need more energy to get oil than we can get from the oil it is only conversion.
EROEI comparisons are important. If we produce oil from tar sands and EROEI is 1.1, ie. we get 10% more energy than we put in this is net energy production. It is also energy conversion. If EROEI is 0.9 we lose 10% of the energy and this makes it a conversion process - oil from nuclear. This may be rational if we have no better way to get oil. If we have an energy crisis this should not be done because the we lose energy in the process. The prices have nothing to do here. Here we measure energy only. To use free energy to produce expensive energy with EROEI considerably less than 1 has no sense from energy viewpoint - we should use the free energy directly and get more total energy that way.
You don't actually lose energy. You just get less than you would if you used the primary source without the conversion. The process still adds net energy to the total.
This is a curious way of thinking when you apply it (for example) to coal liquefaction. According to the approach you are describing, it's better to directly burn coal than to liquefy it into a cleaner fuel for reasons of pollution control and convenience.
Converting coal to electricity "loses" a huge amount of the original energy. Does this mean people should clean their houses with vacuum sweepers powered directly by coal?