Energy Return on Energy Invested – Prof. Charles Hall’s Comments

In my most recent post, Why the Standard Model of Future Energy Supply Doesn’t Work, I made some comments about the calculation of Energy Returned on Energy Invested. Professor Charles Hall sent me the following response to what I said, which he wanted to have published. I have a few follow-up comments, but I will save them for the comments section.

Section of Why the Standard Model of Future Energy Supply Doesn’t Work Upon Which Comments Are Being Made

The Energy Return on Energy Invested (EROEI) Model of Prof. Charles Hall depended on the thinking of the day: it was the energy consumption that was easy to count that mattered. If a person could discover which energy products had the smallest amount of easily counted energy products as inputs, this would provide an estimate of the efficiency of an energy type, in some sense. Perhaps a transition could be made to more efficient types of energy, so that fossil fuels, which seemed to be in short supply, could be conserved.

The catch is that it is total energy consumption, that matters, not easily counted energy consumption. In a networked economy, there is a huge amount of energy consumption that cannot easily be counted: the energy consumption to build and operate schools, roads, health care systems, and governments; the energy consumption required to maintain a system that repays debt with interest; the energy consumption that allows governments to collect significant taxes on exported oil and other goods. The standard EROEI method assumes the energy cost of each of these is zero. Typically, wages of workers are not considered either.

There is also a problem in counting different types of energy inputs and outputs. Our economic system assigns different dollar values to different qualities of energy; the EROEI method basically assigns only ones and zeros. In the EROEI method, certain categories that are hard to count are zeroed out completely. The ones that can be counted are counted as equal, regardless of quality. For example, intermittent electricity is treated as equivalent to high quality, dispatchable electricity.

The EROEI model looked like it would be helpful at the time it was created. Clearly, if one oil well uses considerably more energy inputs than a nearby oil well, it would be a higher-cost well. So, the model seemed to distinguish energy types that were higher cost, because of resource usage, especially for very similar energy types.

Another benefit of the EROEI method was that if the problem were running out of fossil fuels, the model would allow the system to optimize the use of the limited fossil fuels that seemed to be available, based on the energy types with highest EROEIs. This would seem to make best use of the fossil fuel supply available.

Charlie Hall responds:

I have always been, remain and will probably always continue to be a huge fan of Gail Tverberg, her analyses and her blogs. I am also committed to try and make sure science, such as I understand it, remains committed to truth, such as that is possible, which includes an accurate representation of the scientific work of others. In that spirit I wish to correct a short piece (referenced above) that is attempting to represent my own work on Energy Return on Investment (EROI or EROEI) but does not do so in a way that is fully consistent with the published work of myself and my colleagues.

I define EROI as a simple ratio, not a model, but have no particular concern about Gail’s use of the word model other than that it may imply something more complicated than it is. EROI is an observational tool for analysis, not a model with an objective in mind. My perspective is summarized in my 2017 book “Energy Return on Investment: A unifying principle for Biology, Economics, and Sustainability” although my approach is consistent throughout my published work with occasional small additions as our understanding expands, changes in available data occur or new questions arise. For example my methods going as far back as Cleveland et al. 1984 and Hall, Cleveland and Kaufmann (1986) are available for anyone to see and virtually the same as those in Murphy et al. 2011 and Hall 2017. The field is rich and very active today, with an entire well-funded and attended four day meeting at the French Institute of Physics at Les Houches dedicated to EROI last year, a two day session on petroleum (including many papers on EROI) at the American Chemical Society in New Orleans a month ago, and many very interesting publications by, for example, Carey King, Marco Raugui, Adam Brandt, Mohammed Masnadi, Victor Court and Florian Fizaine among many others.

As others increasingly used EROI there became increasingly different approaches used, so, in order to generate a consistent nomenclature and basis for comparison (EROIstandard) while allowing flexibility and creativity in use we published a protocol for performing EROI analysis (Murphy et al. 2011; Carey King has also addressed making the nomenclature and methods more explicit). Sometimes EROI studies are not easily comparable due to limitations in data or philosophy (see point 3). This is not something that escapes EROI researchers and is widely discussed in the literature. Sometimes we have examined the reasons for different EROI’s in the literature (e.g. Hall, Dale and Pimentel). Another issue is that it is common for blogs and reporters to read more into the results of scientific publications on EROI than the authors sought to assess, and such false conclusions can move very quickly on the Internet.

I now address some of Gail Tverberg’s specific points (in bold):

1) “The catch is that it is total energy consumption that matters, not easily counted energy consumption”. To understand this one must begin with the definition of EROI, for example on page 66 of the above book:

As we define again and again we have used the direct (e.g. natural gas to pressurize an oil field) plus indirect (energy to make the capital equipment: see Fig. 6 legend of Cleveland et al.) energies that are used to exploit fuels from Nature. We have consistently defined EROI to mean energy at the wellhead, mine mouth, bussbar or farm gate unless explicitly stated otherwise. We consider the energy used subsequently to deliver or use that energy as efficiency (as in food chain efficiency) of the use system. These data are not easy to gain, requiring many months of research in many libraries and government archives (See Appendix 1 of Guilford et al.) and are becoming more difficult as much of our National data gathering erodes. Such difficulties and their consequences are usually referred to in peer-reviewed EROI research papers by the authors themselves.

2) “The standard EROEI method assumes the energy cost of each of these is zero.” This is most explicitly not true. As appropriate (and as we have become better at the analysis) we have included energy costs of taxes (e.g. Prieto and Hall), Roads (Hall, Balogh and Murphy; Prieto and Hall), labor (e.g. Hall et al 1986; Prieto and Hall) and so on. We have tended to avoid the contentious issue of whether or not to include labor as “input” or “consumption” but occasionally undertook it as sensitivity analysis.

Gail is correct in saying that there are many more costs associated with energy, and that these costs are extremely important to society. But we normally consider these as costs associated with use of energy, but not its extraction from Nature which is the point and definition of EROI analysis. We have considered these before as EROIpou, that is at the point of use, or more recently (and better in my opinion now) as the EROI (at the mine mouth) required to support various levels of societal well-being (e.g. education, health care, arts etc.; Lambert et al.). At the logical extreme we may wish to include all of civilization’s activities as supportive of the energy extractive process so that EROI would be (by definition) 1:1, but that does not seem useful to me. We need to know how much energy it takes to get each actual or potential energy resource. For example, with an EROI of close to 1:1 corn-based ethanol is not a net energy source to a modern complex society. The lower EROI of renewables after accounting for intermittency (see below) will make the transition to renewables, if that is possible, very difficult.

3) “The ones that can be counted are counted as equal, regardless of quality”. This is absolutely not true. We have considered quality exhaustively, and have even presented our results with and without quality corrections from our earliest publications (Cleveland et al., Hall et al.) through our most recent publications (Hall 2017 p. 133 etc.). Murphy et al. includes a sophisticated procedure called the Divisia index to correct qualities of input and output energy which we sometimes use in our results. The question of intermittency with wind and photovoltaic energy is a difficult issue repeatedly considered in EROI analysis although not fully resolved by the greater scientific community, but also clarified with the recent publications of Palmer (and Tverberg) for certain systems. Depending upon the penetration of renewables, including intermittency in the analysis greatly reduces the EROI of these technologies. Whether one corrects for the quality of energy output for these sources is best handled with sensitivity analysis.

EROI is not some flawed tool of the past, but a consistent yet evolving and improving tool becoming more and more important everyday as the depletion of our primary fuels continues and as replacement with renewables is increasingly considered. While EROI analysis is hardly precision science, mostly due to data limitations, nevertheless as I reviewed my older publications for this response I was impressed by the general consistency of our results (corrected for e.g. depletion over time) from 1979 and especially 1984 to present. A large problem is the erosion of the Federal support for, and hence quality of, the data of e.g. the U.S. Bureau of Census and the increasing use of EROI (and scientific analysis more generally) for advocacy rather than objective analysis and hypothesis testing. Essentially all credible analyses show a declining EROI of our principle fuels and a much lower EROI for those fuels we might have to replace them. The economic consequences are likely to be enormous. It continues to astonish me that there is essentially no Federal or other support for good, objective analysis of EROI and its implications. EROI is not only as important as when it was created it is critical now as we choose, or more likely will be forced into, making an energy transition. With appropriate support we have the conceptual and procedural tools to undertake needed analyses which can be an important tool in understanding and (with other tools) guiding our transition to renewable energy resources, if indeed that is possible.

Having said this I would like to point out where Gail does have a very good point. The amount of energy necessary to maintain the infrastructure within which our energy extraction industries can function (e.g. roads, schools, health care, perhaps civilization itself) is enormous and is not counted in my most of my studies as part of the investments to get the energy. OK good point. How to do this i.e. how to prorate this relative to e.g. all of the health care investments for all of the population? One might add up all of the labor in the appropriate energy industries, compare this to the total population and multiply the ratio by the total energy used in health care. Or one might assume that all of the energy required to support labor, including the energy associated with the depreciation of the worker (i.e. the energy used to support the family of the worker) is well represented by the worker’s salary. So if a worker makes \$70,000 in a year one could multiply that by the mean energy intensity of the U.S. economy (about 6 MJ per dollar) to generate the energy used to support labor for year (420 GigaJoules, equal to about 70 barrels of oil). Again doing this for all energy workers would be a huge sum. When as part of sensitivity analysis we added in an estimate of the energy to support workers’ salaries for building solar facilities in Spain it doubled the energy cost of building and maintaining the PV structures and halved its EROI. The main point that I think Gail is making is that as our high quality fossil fuels are depleted and we contemplate shifting to renewable energies we will have a lower and lower net energy delivered to run the non-energy portion of society with very large consequences. I completely agree with this.

References (in chronological order – there are many more that could be added)

Hall, C.A.S., M. Lavine and J. Sloane. 1979. Efficiency of energy delivery systems: Part I. An economic and energy analysis. Environ. Mgment. 3 (6): 493-504.
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Hall, C.A.S., C. Cleveland and M. Berger. 1981. Energy return on investment for United States Petroleum, Coal and Uranium, p. 715-724. in W. Mitsch (ed.), Energy and Ecological Modeling. Symp. Proc., Elsevier Publishing Co.

Cleveland, C.J., R. Costanza, C.A.S. Hall and R. Kaufmann. 1984. Energy and the United States economy: a biophysical perspective. Science 225: 890-897.

Murphy, David J., Hall, Charles A. S. 2010. Year in review—EROI or energy return on (energy) invested. Annals of the New York Academy of Sciences. Special Issue Ecological Economics Reviews: 1185, 102-118.

Murphy, D.J, Hall, C.A.S. 2011. Energy return on investment, peak oil, and the end of economic growth. Annals of the New York Academy of Sciences. Special Issue on Ecological economics. 1219: 52–72.

Hall, C.A.S., and Hanson, D. (Eds.) 2011. Sustainability: Special Issue on EROI

Murphy, D., Hall, C.A.S., Cleveland, C., P. O’Conner. 2011. Order from chaos: A Preliminary Protocol for Determining EROI for Fuels. Sustainability: Special Issue on EROI. 2011. Pages 1888-1907.

Guilford, M., C.A.S., Hall, P. O’Conner, and C.J., Cleveland. 2011. A new long term assessment of EROI for U.S. oil and gas: Sustainability: Special Issue on EROI. Pages 1866-1887.

Hall, C. A. S., Dale, B. and D. Pimentel. 2011. Seeking to understand the reasons for the different EROIs of biofuels. Sustainability 2011: 2433-2442.

Prieto, P., C.A.S. Hall. 2012 Spain’s Photovoltaic Revolution: The energy return on investment. Springer, N.Y.

Hall, Charles A.S., Jessica G. Lambert, Stephen B. Balogh. 2014. EROI of different fuels and the implications for society Energy Policy Energy Policy. 64,: 141–152.

Lambert, Jessica, Charles A.S. Hall, Stephen Balogh, Ajay Gupta, and Michelle Arnold. 2014. Energy, EROI and quality of life. Energy Policy Volume 64: 153-167

Hall, C.A.S. 2017. Energy Return on Investment: A unifying principle for Biology, Economics and sustainability. SpringerNature N.Y.

Palmer, G. 2017, A Framework for Incorporating EROI into Electrical Storage, BioPhysical Economics and Resource Quality, vol. 2, no. 2

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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381 Responses to Energy Return on Energy Invested – Prof. Charles Hall’s Comments

1. Chester Energy and Policy says:

“The amount of energy necessary to maintain the infrastructure within which our energy extraction industries can function (e.g. roads, schools, health care, perhaps civilization itself) is enormous and is not counted in my most of my studies as part of the investments to get the energy.”

Come on, friend, that’s a dangerous slope you’re going down. What about the energy being used by the computers to have these conversations? What about the weather satellites that give us information about the upcoming hurricanes that let drillers know when they need to shutter their operations? It’s not a fruitful exercise to try to expand the scope that wide and only serves as an argumentative point for the sake of being argumentative.

• Perhaps, but the issue is that historically we have used the selling price of an energy product, and the ability of the group selling the energy product to pay very high taxes at that price, as a way of showing that an energy product is truly producing an energy surplus. I don’t know whether you have seen this chart of tax rates of oil companies around the world. Governments basically take whatever energy surplus is available from energy providers. The tax rates depend on prices. This chart is from before prices dropped in 2014. Rates are likely lower now, leading to problems for governments of oil exporters. (These governments were depending on the subsidy provided by oil producers.)

https://gailtheactuary.files.wordpress.com/2013/06/pe_worldmapunfold1-comp.jpg

Chart showing “government take” as a percentage of operating income by Barry Rodgers Oil and Gas Consulting.

Basically, companies are required to transfer a large share of their energy surplus to governments as taxes. This is one major way they support the economy.

The EROEI calculations for wind and solar tend not to be comparable to those for fossil fuels because so much is valued at zero (land lease costs are assumed to have no energy costs; interest on debt has no energy costs; wages of workers providing installation have no energy cost). Furthermore, the output is not ready to use. Many others must provide subsidies in the form of extra power lines and running at low capacity so that they can provide back-up power for wind and solar. None of this gets counted. When all is said and done, we end up with an “energy source” that requires subsidies instead of being able to pay high taxes. It seems pretty clear to me that they are simply energy sinks. A broader analysis would show this.

https://gailtheactuary.files.wordpress.com/2016/08/euan-mearns-europe-electric-price.png

Figure by Euan Mearns showing relationship between installed wind + solar capacity and European electricity rates. Source Energy Matters.

It is only when all costs are included that it is possible to see that the proposed approaches can really afford to pay high rates of tax, so as to truly provide an energy subsidy to their economy.

2. Fast Eddy says:

“Elon Musk is one of our planet’s great hopes. I would offer a kidney to him if he needed it”

https://www.bloomberg.com/graphics/2018-tesla-burns-cash/

There are those who would take a nail for Jesus as well….

3. richarda says:

Thanks for posting this Gail. It’s particularly intereting to see where the arguements form.
I’ll recap, if I may, some of the background material.
Petroleum products form a surpisingly large part of the fuel for electricity generation. I do not know the exact economics behind this, but I assume the value placed on kerosene and it’s use by the military is the primary driver for petroleum extraction. Gasoiline (pertol) and heavy fuel oil were initially waste products that found a use in personal transport and in electricity generation. Their economics adjusted as demand changed. Later, large quantities of hydrocarbon gas found a use as the primary energy for electricity generation.
Volatility in the prices of hydrocarbon fuels drives changes in other parts of the electricity generation industry.
We tend to think of electricity in much the same way as we think about money, but there are important differences. The urility of electricity changes form minute to minute, hour to hour and throughout the year. Hence when comparing the ERoEI of solar power, and of FF, I’d suggest keeping the calcuation of ERoEI as simple as practicable.
Not much more than framing a level of civilisation can be derived from knowing the overall ERoEI of the World’s energy production.
Similarly, the microeconomics of a single local solar panel system cannot be extrapolated into the macroeconomics of the World’s energy and economic systems. Clearly, there are boundaries, and it is interesting to see where the limits might be.
Hence, I’m unsure that a calculation of ERoEI for solar power has much relevance until after a fair assessment of the economic return on capital has been made.

• I am not quite sure where you are coming form on the petroleum products and electricity generation. Perhaps back in the year 1, petroleum products were important, but in the current situation, no one would use diesel or other petroleum product unless they had few other options–for example, living on a small island, where natural gas, coal, and nuclear are not economic. Greece, with its many islands, uses a lot of petroleum products for electricity generation. So does Puerto Rico and Hawaii. Some undeveloped countries do as well. In today’s world, natural gas is the petroleum product used for electricity generation.

Coal is not a hydrocarbon, since it doesn’t contain hydrogen. Perhaps you mean changes in the prices of coal and natural gas drive changes in other parts of the electricity generation system.

We don’t have a way of going backward, so “framing a level of civilisation can be derived from knowing the overall ERoEI of the World’s energy production,” seems to me to be a useless exercise. Also, we already seem to be in trouble, where we are now. If we are adding lower EROEI energy products than we are using, it would seem to be a step toward collapse.

I think the EROEI of solar panels, to the extent it makes sense, makes sense for use only for off of the electric grid. If someone wants to use it to run a desalination plant, or to charge batteries, this is where the calculation counts. It has little to do with making intermittent electricity.

• NikoB says:

Coal does contain hydrogen but not in the same way as oil and gas.

Coal can be defined as a sedimentary rock that burns. It was formed by the decomposition of plant matter, and it is a complex substance that can be found in many forms. Coal is divided into four classes: anthracite, bituminous, sub-bituminous, and lignite. Elemental analysis gives empirical formulas such as C137H97O9NS for bituminous coal and C240H90O4NS for high-grade anthracite.

• When CO2 calculations are done, it is always assumed that coal is all carbon, at least the way I understood things (which may be wrong).

This reference says “The composition of a bituminous coal by percentage is roughly: carbon [C], 75–90; hydrogen [H], 4.5–5.5; nitrogen [N], 1–1.5; sulfur [S], 1–2; oxygen[O], 5–20; ash, 2–10; and moisture, 1–10.”

It later says,”Anthracite, a hard black coal that burns with little flame and smoke, has the highest fixed-carbon content, 86–98 percent.”

I started from “In organic chemistry, a hydrocarbon is an organic compound consisting entirely of hydrogen and carbon,” which is the Wikipedia definition of Hydrocarbon. I have also heard someone else giving similar reasoning, regarding why coal doesn’t seem to be a hydrocarbon.

When I look up on line, you seem to be correct, that coal is considered a hydrocarbon, even if it doesn’t meet the organic chemistry definition.

I see that Britannica says:

In general, coal can be considered a hydrogen-deficient hydrocarbon with a hydrogen-to-carbon ratio near 0.8, as compared with a liquid hydrocarbons ratio near 2 and a gaseous hydrocarbons ratio near 4. For this reason, any process used to convert coal to alternative fuels must add hydrogen (either directly or in the form of water).

• NikoB says:

always good to be clear as your arguments are very compelling Gail.

• richarda says:

I got that wrong. I should have double checked as the data was a surprise. Perhaps the chart became a test for the colourblind. World electricity generation from oil is presently 4~5 percent. That said, much of what was said is still relevant, if clarified.
As the energy intensity of the fossil fuel declines, it makes increasing sense to build the power station beside the gas or coal or lignite field rather than transport the fuel to a distant power station. Hence for hydrocarbon gases, the financial structure of electricity generation allows more flexibility in generation and less risk for investment, relative to sources which require much higher initial capital costs. Those fuels which are less energy intensive, lower ERoEI, are more difficult to finance because the risks are higher. for these types of project it’s all about ERoEI, even if it appears that costs are the driving factor. Where a power station is built on top of a coalfield, transport costs and transport energy is minimised. EroEI is relatively well defined.
Solar generated electricity is a very different prospect, focussed on the need to justify the high initial capital costs. After that there are still a good number of technical factors eg spinning reserve, fault clearance capacity that make, in particular, solar pv difficult to match to the needs of grid electricity supply, not to mention its intermittency.
I think what I’m trying to say is that an ERoEI figure for solar electricity generation, particularly pv, does not tell you very much.

• A large share of the capital costs of solar electricity is excluded in EROEI calculations. Then there are the issues you mention. No one should use wind and solar EROEI to prove that they can save us from our current problems. In defense of Charlie Hall, he and Pedro Prieto have written a book showing how bad the EROEI of solar is in Spain, if you look at costs on a comprehensive basis. The problem is that most people look only at “meta-studies.” These meta-studies combine lots of results, for individual generating devices. The calculations tend to be narrowly defined. They often are based on what wind or solar “might do” under optimal conditions, including lasting as long as expected. In fact, some calculations (using a Life Cycle Approach mandated by the IEA) assume that solar panels will last five years longer than they are guaranteed for. I gave a link in another comment.

4. Harry Gibbs says:

“Super-light crude is flooding the US oil market, and there’s little demand to meet it.

“All of the industry’s growth in the US over the last year was thanks to crude with a gravity above 40 on the American Petroleum Institute’s scale, which measures the weight of a petroleum liquid compared to water, according to analysts at Morgan Stanley.

“That’s a problem for domestic shale explorers. Most refineries in the US are designed for heavier crude grades, around 32 API. And refiners are running out of room to process super-light shale without seeing losses.

“”Domestic refiners cannot take much more of this and are close to hitting the ‘shale wall,'” the analysts said…”

5. SomeoneInAsia says:

Come, friends, let’s work to make our world green and liveable again! (Several ‘before’ and ‘after’ photos here.)

https://medium.com/age-of-awareness/beyond-sustainability-we-are-living-in-the-century-of-regeneration-4f2b116a65d1

What do you think?

• Kurt says:

Riiiiiiight. I’d like some of what they are smoking. That’s some powerful stuff.

that is the future of our civilization a sustainable planet the scientists are running the show now and it’s all got to do with global warming whether it’s true or not the best thing about global warming is the simplicity of it we must reduce C 02 that is why it is so popular had it been peak cheap oil it would have been the same results but the message would have been different we have wasted all the easy oil on ruining this planet and ourselves the result would have been sheer panic and global collapse or the end of civilization a managed collapse is better than an un-managed collapse civilization survives this way. Interesting article about the scientists current plan towards sustainability= http://www.eco-business.com/news/mission-2020-a-new-global-strategy-to-rapidly-reduce-carbon-emissions/

• It is amazing how our scientists can manage to get almost everything wrong. They don’t understand integrated systems, and the important role energy plays. They don’t understand that the financial system is connected to economic growth, and economic growth is connected to energy consumption. Their plan is not a sustainability plan; it is a plan for collapse.

• xabier says:

When I recall the brilliant young scientists and medics I shared university lodgings with, I’m not so surprised! An odd rather disconnected bunch. and of course, all specialists…..

Perhaps one also has to be outside a demanding profession, and not caught up in the struggle to earn a living -most scientists are grant-chasers and academia is highly political – in order to have any chance of considering these topics at leisure and objectively.

• Curt Kurschus says:

Perhaps another factor is that, as a general rule, everybody likes to be right (and recognised as such) and nobody likes to be wrong (or to be seen to be such). Even more so when one person has spent years learning in a higher education establishment and the person being conversed with has not.

• Sungr says:

Do you thin that the scientists who put together “Limits to Growth” got it all wrong?

• Fast Eddy says:

Yep – they missed the spent fuel pond issue….

It is my claim to fame

• Sungr says:

You are here worrying to death about whether US “consumers” can afford to keep their car tanks filled up.

But you have apparently zero concern about a collapsing biosphere?

• We are also dead without oil. It is not consumers keeping their car tanks filled up; it is keeping the whole system operating.

• Fast Eddy says:

We are also dead without oil.

+++++++++++++++++++++++

Live Large Now. For Tomorrow – we are DEAD

• Fast Eddy says:

What do you suggest we do about the collapsing biosphere?

• HideAway says:

Gail you are so correct in how these ‘scientists’ get everything wrong.

A quick look at their plan of massive renewables by 2020 and reducing to zero carbon in a couple of decades. Despite their conversation morphing straight into electricity, instead of all FF use, let;s look at replacing all current FF use by solar and wind over 20 years. I’ll even assume we ‘only’ need 100,000Twh of energy instead of the current ~175,000Twh of energy used per year and growing at ~3%/yr.
5,000Twh/yr needs about 2.75Tw of capacity built, assuming an average of 5.5hrs of sunshine/day, so VERY GOOD locations.

2.75Tw = 2750Gw of capacity compared to current Solar 99Gw and Wind 56Gw (2017).
So that is 18 times current capacity add, starting next year (obviously not possible).

The real numbers that the ‘scientists’ fail to grasp is the amount of copper needed. it takes about 5.5 tonnes of copper per Mw of wind or solar capacity, so a simple multiplication gives us a needed 5.5t X 2,750,000Mw = 15,125,000 Tonnes of NEW copper needed just for this much renewable generation. much more again needed for the cars,batteries, inverters, buses trucks etc that all need to be electric, say another 10,000,000 tonnes.
We need an EXTRA 25 Million tonnes of copper/yr compared to the current copper production of around 20 Million tonnes/yr.

In other words world copper production would have to more than double for this to be possible.
Sorry there is more bad news!! Average copper ores mined have fallen from about 1.2% 20 odd years ago to about .6% in 2017, so TWICE as much ore has to be mined to get 1 tonne of copper.

At a grade of about .55% it takes ~25,000Kwh of energy to mine,process, refine 1 tonne of copper, so the new copper mined (25MT) will need an EXTRA 625 BILLION Kwh of power!!!
To get this 625 BILLION Kwh is the equivalent of 80, Nuclear power plants, each supplying 1,000Mw at a capacity factor of 90%.

This is still leaving all the intermittency etc issues aside.
The real catch 22, is that to double the output, the above energy is just the operating energy, not the energy used in building the mines, and the resources that go towards that, plus the fact that trying to mine 45 Million Tonnes of copper each year instead of the current 20 Million tonnes, would mean mining lower grade ore, with much higher costs.

Why do these ‘scientists’ come up with these numbers/plans without looking at the reality?? Are they too dumb??
NO, they have probably already worked out that putting forward the real numbers, show it is just not possible, so would destroy all hope. Anything to keep the appearance of BAU going gets put up, just not real numbers.

• Fast Eddy says:

In their matrix it all makes sense…

Had a gathering tonight… bon voyage and all the jazzz….. someone was regaling me about their EV…. how nice it is to be able to take your time driving 800km… having to stop and stay over two nights … because the EV has to charge… great chance to chill out .. relax.. blah f789ing blah f789ing blah… as if this is a good thing…

Meanwhile… I will load up my diesel powered beast… hook on the trailer… and drive the entire distance in about 11 hours… no relaxing overnights in a hotel on the way… door to f789ing door…

And then there are those people who — went informed that a dent in a Tesla fender can cost \$30,000 to fix… will respond with — just make sure not to get into an accident…

Wot The FoOOK

• Fast Eddy says:

Now if one is facing a hang over.. one might wish one owned an EV

• Raymond Lutz says:

Who are ‘your scientists’? Aren’t actuaries scientists too? “Their plan is a plan for collapse” Whose plan?

• I suppose actuaries are scientists. Some of them put together the Social Security plan (pay as you go). Others put together pension plans. Neither approach lasts indefinitely in a finite world.

(I did not work on either Social Security or pensions plans. I worked on medical malpractice, workers’ compensation, and some other line. I was close enough to the situation to see that the assumptions probably did not make sense in a finite world. Hence the name of the website: Our Finite World.)

• Greg Machala says:

“a managed collapse is better than an un-managed collapse” – If you mean humans can manage collapse, i disagree. The Earth and its resources is managing us – we don’t manage the Earth and its resources. We like to thing we humans are in control and that we are stewards of the earth and its ecosystem – but we are not.

• Fast Eddy says:

This sort of thing causes me to experience reflux….

• Christiana says:

I like it. And I hope we will do it. I come from the region in Germany, where the word “sustainability” was invented. For forestry. Always plant trees if you cut some. The forests in Europe were devasted in the 17th/18th century. And they made it!
But still, “sustainable growth” as an economic buzzword makes me sick.

6. MG says:

Engineering a plastic-eating enzyme

“Scientists have engineered an enzyme which can digest some of our most commonly polluting plastics, providing a potential solution to one of the world’s biggest environmental problems.”

http://uopnews.port.ac.uk/2018/04/16/engineering-a-plastic-eating-enzyme/

• But what adverse effects does the plastic eating enzyme have? If nothing else, creating this enzyme and distributing it adds a new layer of costs to “protecting the environment.” If we used the self-organized system of plants and animals, the waste products of one system would be inputs of the next system. Instead, we add a new layer of costs to the system. We also don’t know how the broken down products affect the environment–certainly better than plastic, but do they add a different kind of pollution?

• Third World person says:

this is bullshit here why

These enzymes work well on amorphous PET, but commercially PET is highly crystalline – in fact my reading of the literature it is possible that crystalline PET is never broken down by enzymes.

Recycled PET pellets currently cost more than virgin PET. This is because collection, separating, cleaning, remelting etc is expensive. This makes this technology a non-starter at present though economics will change in future.

The enzymes are used in dilute broths (to avoid product inhibition or deactivation of the enzymes). That makes a huge energy cost in extracting the monomers back again

PET is a small part of the plastic waste stream – PE or PP accounts for 90%

PET is one plastic that can be and is recycled either chemically or by just remelting the plastic into lower grade applications (e.g. matting)

7. guusrs says:

Thanx Gail and Charlie to point out your views on current EROI definitions.
Charlie wrote “So if a worker makes \$70,000 in a year one could multiply that by the mean energy intensity of the U.S. economy (about 6 MJ per dollar) to generate the energy used to support labor for year (420 GigaJoules, equal to about 70 barrels of oil). Again doing this for all energy workers would be a huge sum.”

Would it be a good idea to convert all costs to energy?

for example using a formula, such as:

E = c * P

where
E = estimated energy invested (Kwh)
c = a constant factor (Kwh/Dollar)
P = price of a product that generates energy output (Dollar)

So that “huge sum” could become very simple. And mainly we could focus on that “constant” factor c. This factor is probably not constant over time and also strongly dependent on the (world-wide average) Kwh production price or other .

c could for example be estimated as c=w/k where
k= worldwide average (net) price of 1 kwh currently ≈ 0.04 dollarcent
w = a welfare factor, which part of our welfare is due to cheap (fossile) energy. I guess at least 80%. Or in other words: How much “welfare” dit the average world citizen have in, let’s say the year 1800? And how much did we win since then?

My best guess is c ≈ 20
Definitely worth a discussion!

Also still worth a discussion: is P the selling price with or without tax and subsidy. And with or without seliing margins.

But with such a working formula the math would be much easier to calculate an EROI? Agree?

This formula already helped me to decide not to buy solar panels on my roof.

• xabier says:

I didn’t buy solar panels because a Pole was trying hard, really hard, to sell them to me…..

• SomeoneInAsia says:

You don’t like Poles?

• Fast Eddy says:

Poles… dancing … what’s not to like?

• Interesting thoughts! Solar panels are definitely a high-cost product, producing something that is close to a substitute for natural gas or coal (because of its intermittency). When we think of it that way, the wholesale cost per kWh is more in the \$.02 to \$.03 range per kWh, making the comparison even worse.

Part of the question is whether in total, all energy products are adding enough energy growth to the economy to maintain necessary economic growth. If we look at the US economy, we see this pattern in GDP growth and 10 year treasury interest rates.

https://gailtheactuary.files.wordpress.com/2018/04/10-year-treasuries-and-gdp-growth-rate.png

(Chart produced by Federal Reserve of St. Louis (FRED) showing a comparison 10 year treasury interest rates and the annual change in GDP rates (where GDP growth includes inflation).)

Clearly there has been a very long downtrend in rate of return of both, suggesting that the current level of energy growth is not enough. (World data would show something similar, except recent world data is more distorted by “fake” GDP growth, IMO.) The economy is growing less and less quickly, in response to less and less energy consumption growth (not shown on this chart). Rates of return are lower as well.

• guusrs says:

Thanx for your comment. I’m not sure my formula E = c * P als explains GDP growth and energy growth are strongly related. The basic idea was to calculate energy invested not leaving out any money-involved component, for example building the dock that built the ship that transports the product overseas.

• I agree. We have to keep all of the pieces in the calculation. Stripping out some gets us nowhere.

8. Harry Gibbs says:

“[European] Auto sales dropped in March at eight of the 10 top-selling carmaking groups, with the steepest declines at Ford Motor Co., Fiat Chrysler Automobiles NV, BMW AG and Nissan Motor Co., the ACEA said. The slide has been particularly acute in the U.K., where car sales were down 16 percent in March and 12 percent for the quarter.”

https://www.bloomberg.com/news/articles/2018-04-18/european-car-sales-weakest-in-five-years-on-brexit-britain-drag

• Harry Gibbs says:

“Car finance has largely been shielded from the fines, headlines and scrutiny that have peppered the banking sector in recent years. However, attention is now turning to a market that represents a significant share of consumer debt in many developed economies. The UK’s Financial Conduct Authority (FCA) has announced an investigation into the industry and regulators in other countries have expressed concerns. Further pressure may come from rising borrowing costs as interest rates rise, intensifying financial problems.”

http://www.cityam.com/284142/prepared-car-makers-auto-loans-crisis

• I am sure lease rates will rise with interest rates as well. These have been a low-cost approach for some people.

The increase in interest rates has been in short term interest rates, but I believe these are what affects auto loans.

9. Harry Gibbs says:

“…a decade after the U.S. housing bubble burst, house flipping is on the rise again. Defined as reselling a house within a year of purchase, flipping is at an 11-year high in the United States and it’s the subject of dozens of TV shows and weekend workshops promising to teach real estate novices how to make a fortune.”

• Harry Gibbs says:

What could possibly go wrong?

“The prestigious Wall Street bank [Goldman] launched Marcus, an online lending business, in October 2016, and it has grown swiftly since. The unit has now originated \$3 billion in loans, according to CFO Marty Chavez. The credit quality of those loans has been a concern for Wall Street analysts, with several asking in October about the quality of the loan book.”

10. Sungr says:

Russia Is Ready For Possible SWIFT Cutoff, Debt-Sale Ban
ZH 4-17-2018

“We have been tracking the ‘relationship’ between Russia and the international payments system SWIFT since 2013, when we first reported that the NSA had somehow implanted itself inside SWIFT, and had been tracking flows through the global USD-intermediated financial transaction system.

It wasn’t long after this revelation that Russia started planning its own (possibly BRICS-based) global financial system in furtherance of its goal of de-dollarization.

A year later, the UK demanded that the EU consider kicking Russia out of SWIFT as part of the sanctions levied in response to Russia’s purported activities in Ukraine.

However, removing Russia from the system would carry certain risks, since it would create the opportunity for Russia to demonstrate that it can survive without SWIFT, possibly inspiring other countries to follow its lead.”

“But in addition to Russia’s preparations for leaving SWIFT, the country’s central bank said Tuesday that it has a plan for monetizing Russian debt should the US prevent Americans and others who want to maintain their access to the US financial system from trading in Russian debt instruments.

• Fast Eddy says:

I am still waiting for the announcement of the cut off of the gas to the EU

• Doesn’t happen in April. Look for it in November or December.

• Why waiting for such outlier scenario, Russian exports are mostly linked to German’s natgas hub, their primary customer, so there is no incentive to do that.. at least for the near-mid term.. They can’t even completely starve out parts of CEE (e.g. going pro US nuts) since there have been constructed new interconnectors from Germany, as to feed their factories-colonies.

So if you ask again properly, is it possible to selectively kick out Scandinavia and UK, while still sending natgas to Germany? I don’t know for sure, most likely it should be possible to arrange it like that.

• Fast Eddy says:

Cut off the whole lot for a week….. see how they like that

• Davidin100millionbilliontrillionzillionyears says:

hello, this is Russia…

we seem to be having a technical problem with sending gas through to you guys…

but, don’t worry…

we should have it fixed in a week or so…

lol. (Implying, if you can’t hear you must feel)

• richarda says:

” the NSA had somehow implanted itself inside SWIFT”
The best reference for this is “The Last Circle” by Cheri Seymour.
It is alleged, among other things, that the US Government “acquired” the PROMIS software, added one or more backdoors, adapted it for use with banking, and other personnel based applications and sold it to unsuspecting governments, banks etc via third parties. Versions post 1982 were managed by: the NSA; the CIA; and a foreign inetelligence service. A later (perhaps unrelated) version was mentioned in 911 interviews. The book also mentions “SWIFT” chips, re IIRC, encryption.

11. Kurt says:

I’m going out on a limb here, but I think Harry has a theme going.

• Harry Gibbs says:

• Davidin100millionbilliontrillionzillionyears says:

but is there a method to his madness?

I suspect that Harry is linking to articles about many troubled countries so that he can then end with a fantastic flourish…

as he links to an article about the troubles of the UK…

call me Sherlock…

though I could be wrong…

bloody ‘ell, there’s gotta be at least one…

• Kurt says:

Harry doesn’t mind if he doesn’t make the scene. He’s got a day time job, he’s doin’ all right. He can play the honky tonk like anything. Savin’ it up for Friday night.

• Davidin100millionbilliontrillionzillionyears says:

• Davidin100millionbilliontrillionzillionyears says:

though, without the fake “s” on the end of his name…

I suspect he’s the long lost 4th Bee Gee…

• Davidin100millionbilliontrillionzillionyears says:

speaking of Harry…

why didn’t Prince Harry pick Amber Heard?

it’s an epic injustice…

Princess Amber should have been the one…

life can be so disappointing…

• Harry Gibbs says:

“I suspect that Harry is linking to articles about many troubled countries so that he can then end with a fantastic flourish… as he links to an article about the troubles of the UK…”

Troubles? In the UK?! Our economy is purring along like one of our finely-tuned Rolls Royce engines, thank you very much! Although, come to think of it, BMW own that now. No matter – the laws of physics will prove no match for the guile and enterprise of the Englishman. All rise for the anthem!

• xabier says:

‘ I resisted all temptations, to belong to other nations! I am an Englishman, I am an Englishman!

I could have been a Roossian, a Jew, a Turk, or Proossian; but I am an Englishman, I am an Englishman!’ Gilbert & Sullivan

(Sorry Mr Gibbs,’Briton’ don’t rhyme!)

Or my favourite:

‘Other races get in a funk, but Brits don’t, because we’ve got…… Spunk! Spunk, spunk, the Brits are full of Spunk!’ Barry Humphries. 🙂

• Davidin100millionbilliontrillionzillionyears says:

bravo!

and the guile of you Brits is only matched by that of us Yankees!

huzzah…

pip pip! cheerio!

Keep Calm and OFW…

12. Harry Gibbs says:

“Despite having the greatest oil reserves in the world, Venezuela’s government is being forced to spend millions of dollars a day importing crude to prop up its ailing industry. Petrol remains the only cheap commodity left in Venezuela amid the collapse of most of its economy, but the oil industry is now also struggling to meet basic domestic demands.”

https://www.independent.co.uk/news/world/americas/venezuela-oil-imports-economy-industry-heavy-refining-efficiency-a8307161.html

• This shows how ridiculous the concept of reserves is. Reserves depend on sufficiently high prices as well as a whole system for using the crude.

• Duncan Idaho says:

Venezuela gives Russia’s Rosneft gas field concessions: Rosneft
https://www.reuters.com/article/us-russia-venezuela-rosneft-pdvsa/venezuela-gives-russias-rosneft-gas-field-concessions-rosneft-idUSKBN1EB0JN
(I don’t see Russia throwing money at a failed State- but I have been wrong before)

• The devil is in the details. It sounds like the gas will be Russia’s to sell, if they produce it. Not clear how much taxes they will need to pay and other details.

• Duncan Idaho says:

“Rosneft will have the right to sell all of the fields’ production for export, including in the form of liquefied natural gas, the Rosneft statement said.

It said total estimated reserves at the two fields are 180 billion cubic meters (bcm) of gas, and that maximum annual production would be 6.5 bcm.”

• Recall as few years ago they were announcing interest in possibly contracting Russian NPP, so given the realities of today’s Venezuela I’d not give it much chance.

However, developing at least regionally significant? natgas field there might have some legs afterall, either as standalone project or for helping to cook their heavy crude or something in between. Who knows..

• xabier says:

True, but failing states can still export stuff, so…..

I remember reading about people half-starved in the countryside in Argentina, while the produce was exported.

• Duncan Idaho says:

Argentina?
I was just there– “half-starved”?
Surely you must be on another planet.
I’ve been traveling in SA from the 1970’s.

• xabier says:

I have Argentinian relations, Duncan. It got very tough indeed -and violent – in some rural areas during the big crisis.

• Duncan Idaho says:

The 70’s rightwing dictatorship?
Yea, it was real messy.
The proletariat has seen all the means of governance, and has real time experience.
(unlike some one party states, like the US)

13. Harry Gibbs says:

“According to an article published in the Jing Rong Jie (Financial World) website, and reported by the chinascope. org website, Beijing spends a huge 15 to 17 percent of its gross domestic product (GDP) each year in meeting its interest payments.”

• China is one of the areas I worry about. I don’t remember seeing the 15% to 17% of the economy being spent on interest previously.

China already has way too much real estate that people cannot afford. They cannot afford either higher interest rates or higher oil prices; they certainly cannot afford both. Their electricity system is badly losing money, because of a combination of electricity price caps and coal prices that need to rise, if coal mines are to be economic. See this WSJ article Coal Is About to Lose Face in China.

• Rodster says:

According to David Stockman, China is a powder keg waiting to go off. As he explains, if you think the US is in bad shape, China is several times worse off and it appears the global community has little interest in the Yuan as a global reserve currency. It’s circulation is roughly 1.2% of the global reserve currency pie, only beating the Swiss Franc at 0.2%.

• Mr. David Stockman, notable “serial worrier” a side, yep that’s a point I try to hammer out frequently, basically the rich of any strata and aspiring to upper status (most people) are just starring at perceived wealth structure, which stands around \$ and its derivatives.

The world is completely nuts, e.g. few decades have passed, napalm is forgotten, and the Vietnamese would prefer US over China, given the above materialistic urges inside predominant global environment, plus some older cultural animosities..

• xabier says:

Nuts, totally: and completely natural too.

The wired-in hierarchical prejudices of the human animal (in common with other mammals) – the normal base to which we always return, and which we symbolise in the things which animals cannot make.

All the various isolated Socialist revolutions of the 20th century invariably produced a monarch, court and privileged higher-consumption class…..

We can also recall the avidity with which the upper classes of the Celts and Germans fell on the products of Rome: wine and other luxury goods, even using Roman coins apparently not for true commercial exchange – the local economy was to primitive – but in displays of prestige.

14. Harry Gibbs says:

“Some analysts have described the African debt situation as a ticking time bomb. In fact, an upcoming paper from Brookings argues that the IMF and World Bank haven’t rung the debt alarm bell loudly enough. Brookings claims they won’t do so until at least one of Africa’s big five economies—Nigeria, South Africa, Angola, Ethiopia, or Kenya—becomes debt distressed.”