Articles tagged with "david murphy"
Hall and Day (2009) report that the EROI for coal might be as high as 80 and that for hydropower, EROI is 40. Does this mean that coal is twice as ‘good’ as hydro? The answer is no, and in this post I will discuss how this relates to the idea of an EROI Threshold.
The Net Energy Cliff
This post is based on a presentation that I gave at the recent ASPO conference on November 4th, 2011.
The 9th International ASPO Conference will take place in Brussels, Belgium from 27 to 29 April 2011. Based on the theme of "European Energy Policy in an era of expensive energy" ASPO 9 will cover a wide range of topics related to fossil fuel depletion. The conference will zoom in on consequences of diminishing oil exports to importing nations, the availability of natural gas, unconventional supplies of oil, gas, and coal, effects of high oil prices on the economy and agriculture, Integrating Renewable Energy Sources into the electricity grid, and European energy policy.
The conference includes over 45 speakers with talks by Oil Drum Contributors Euan Mearns and David Murphy. Conference details and the full program can be found below the fold. Detailed information is also available via the conference website www.aspo9.be
Posted by David Murphy on January 14, 2011 - 10:55am
Tags: bets, david murphy, depletion, john tierney, julian simon, matthew simmons, original, paul ehrlich, scarcity [list all tags]
For decades, economists (Cornucopians or optimists) have been at odds with natural scientists (Malthusians or pessimists) when it comes to the scarcity of natural resources. The economist’s argument, summarized here by Julian Simon, is as follows:
More people, and increased income, cause resources to become more scarce in the short run. Heightened scarcity causes prices to rise. The higher prices present opportunity, and prompt inventors and entrepreneurs to search for solutions. Many fail in the search, at cost to themselves. But in a free society, solutions are eventually found. And in the long run the new developments leave us better off than if the problems had not arisen. That is, prices eventually become lower than before the increased scarcity occurred. (Simon 1996)
The viewpoint of natural scientists seems to be a bit simpler; the more scarce something is the higher the price, leading to increasing prices as resources deplete over time. These opposing views have led to some famous wagers in the past. The most famous occurred in 1980 between economist Julian Simon and natural scientist Paul Ehrlich. The wager was whether the price of five metals would increase in ten years time. Simon won the bet. Another bet was made more recently. In 2005, John Tierney of the New York Times wagered with Matt Simmons over the price of oil. Simmons bet $5,000 that the price of oil would be $200 per barrel in 2010. Tierney won the bet.
As a result, Tierney has publicly applauded himself and the economists’ view in a recent article in the New York Times. He states: “Maybe something unexpected will change these happy trends, but for now I’d say that Julian Simon’s advice remains as good as ever. You can always make news with doomsday predictions, but you can usually make money betting against them.”
But what is the real message (if any) to be gleaned from these bets? Is it that economists are always right and natural scientists always wrong? Is it that prices decline for commodities over time?
I argue that there is very little (if anything) to be learned from these bets, and I explain why below the fold.
It is easy to become befuddled by the current discourse on peak oil. Peak oil is defined generally as the point at which the flow rate of oil to society has reached a maximum. But this simple definition has issues too, such as what should be considered "oil." Take, for example, the following sentences from the executive summary of the International Energy Agency’s recent publication of the World Energy Outlook (WEO) 2010:
…[In 2035] Global oil production reaches 96 mb/d, the balance of 3 mb/d coming from processing gains. Crude oil output reaches an undulating plateau of around 68-69 mb/d by 2020, but never regains its all-time peak of 70 mb/d reached in 2006, while production of natural gas liquids (NGLs) and unconventional oil grows strongly.
According to this data, a peak in the production of conventional crude oil occurred in 2006, but a peak in total “oil” production (including unconventional resources such as tar sands, natural gas liquids, etc.) may not occur for some time. So, should we consider this a confirmation of peak oil or not?
Posted by David Murphy on October 25, 2010 - 10:45am in The Oil Drum: Net Energy
Tags: american, american petroleum institute, david murphy, economics, eroi, growth, institute, m. king hubbert, oil, peak oil, petroleum [list all tags]
After the conference, Jane Van Ryan from the American Petroleum Institute (API) asked to interview me for her weekly podcast for the Energy Tomorrow blog. You can listen to the interview by clicking below, or alternatively, I have copied the transcript of the interview below the fold. The interview is 15 minutes long for those who would like to listen.
The Oil Drum recognizes that API (and hence Energy Tomorrow) is funded by the oil and gas industry. But the interview here relates to my research, which is not funded by such interests. I think the interview serves a useful purpose, because it makes my work accessible to a wider audience.
Posted by David Murphy on September 17, 2010 - 10:16am in The Oil Drum: Net Energy
Tags: david murphy, economic growth, eroi, feedbacks, insidious, original, peak oil, prices [list all tags]
The following is a brief portion of a paper of the same title that we (Charles Hall and I) wrote and that is currently under peer-review. I will be presenting on this topic at this year’s ASPO conference in Washington, D.C. I hope that our readers will attend!
Numerous theories attempting to explain business cycles have been posited over the past century, each offering a unique explanation for the causes of--and solutions to--recessions, including: Keynesian Theory, the Monetarist Model, the Rational Expectations Model, Real Business Cycle Models, New (Neo-) Keynesian models, etc…
Yet, for all the differences amongst these theories, they all share one implicit assumption: a return to a growing economy, i.e. growing GDP, is in fact possible. Historically, there has been no reason to question this assumption as GDP, incomes, and most other measures of economic growth have in fact grown steadily over the past century. (Note: economic growth and “business as usual” economic growth are used synonymousy to mean an annual growth in GDP)
But if you believe as I do that the world is entering a unique period defined by flattening and then declining oil supplies, then for the first time in history we may be asked to grow the economy while simultaneously decreasing oil consumption, something that has yet to occur in the U.S. In this post I attempt to answer the following question: Is a return to long term economic growth possible?
Posted by David Murphy on August 9, 2010 - 10:30am in The Oil Drum: Net Energy
Topic: Alternative energy
Tags: corn yield, david murphy, ethanol, original, sensitivity analysis, spatial [list all tags]
The following is the second of two posts based on a recent paper published under the same title in the journal Environment, Development, and Sustainability. I was the lead author for the article. The other two authors were Charles Hall and Bobby Powers. Part 1 of this series can be found at this link.
In the analysis underlying our paper "New Perspectives on the Energy Return on (Energy) Investment (EROI) of Corn Ethanol," we performed four major analyses relating to the EROI of corn ethanol. The first was a meta-error analysis, in which we quantified the error associated with the calculation of EROI of corn ethanol based on various estimates of the energy inputs and outputs found in the literature. The second was a spacial analysis of the EROI of corn ethanol. These two items were discussed in Part 1 of this series.
In this part, we will discuss a two additional research areas from the paper. These two additional research areas are:
- A sensitivity analysis, in which we assess the extent to which corn yields and co-product credits impact the EROI of corn ethanol.
- An assessment of how much net energy was delivered to society by ethanol in 2009.
We have also included our more general conclusions.
Posted by David Murphy on July 26, 2010 - 10:30am in The Oil Drum: Net Energy
Topic: Alternative energy
Tags: corn, david murphy, ethanol, meta-analysis, original, spatial, united states [list all tags]
The following is the first of two posts based on a recent paper published under the same title in the journal Environment, Development, and Sustainability. The paper is divided into five sections, and to keep each post succinct, we have divided the paper into two posts. The first post will present the first two sections of the research and the second post will present the last three sections and the conclusions of the research.
Fig. 2. Map of the EROI of corn ethanol production for counties within states that produced at least 1% of the corn harvest in 2005, and biorefinery locations.
What is the Minimum EROI that a Sustainable Society Must Have? Part 3: Calculating the minimum EROI to support the U.S. transportation system
The following multi-part series is taken from a paper we published last year in the free, on-line journal Energies. You may access the entire PDF here. All references can be found in the pdf. Part 1 can be found here. Part 2 can be found here.
In this final installment of the Minimum EROI series we calculate the minimum EROI required from our energy sources to support the current transportation infrastructure of the U.S.
What is the Minimum EROI that a Sustainable Society Must Have? Part 2: The Economic Cost of Energy, EROI, and Surplus Energy
Posted by David Murphy on March 24, 2010 - 10:03am in The Oil Drum: Net Energy
Tags: cost, david murphy, economic, minimum eroi, original, society, surplus, sustainability [list all tags]
The following multi-part series is taken from a paper that my colleagues and I published last year in the free, on-line journal Energies. You may access the entire PDF here. All references can be found in the pdf. Part 1 can be found here.
The first section of this post discusses how the economic cost of energy changes with changes in the price of energy. The second section discusses the impact of declining EROI on economies; specifically this section addresses whether or not the time trend of EROI supports the claim by some economists that advances in technology will overcome the depletion of fossil fuels. The third section discusses how surplus energy is used to run the economy by analyzing a simplified economy that is powered by oil only.