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.
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

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About Gail Tverberg

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.

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

    • 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=

      • 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.

        • 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.

          • 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.

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

          • Yep – they missed the spent fuel pond issue….

            It is my claim to fame

        • 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.


              Live Large Now. For Tomorrow – we are DEAD

        • 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.

          • 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

          • 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.)

      • “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.

    • 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.

  1. “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…”

  2. 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.

      • 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).

      • 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.

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  4. “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.)

      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.

      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.

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