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Page added on July 14, 2012

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EROEI and the Collapse of Empires

The above video is a discussion with Dr. Charles Hall of the Dept. of the SUNY-Environmental and Forest Biology. He is the primary creator behind the concept of EROEI in the field of biophysical economics. He also cowrote the new book ”Energy and the Wealth of Nations“. I just heard about this book, but from the reviews I have read it appears to be essential reading for those concerned about a world faced with depleting energy sources and an economic system ill-suited to deal with this crisis.

Throughout the history of civilizations, economies have been based on energy inputs, whether by human slaves or oil energy slaves. The bits of paper and metal we receive for our work are only tokens representing muscle or brain output. Money is simply a token of energy exchange and has no intrinsic value of its own. Without the constant input of primary energy, the economy and civilization ceases to function as it once did. The following comment by an engineer illustrates my point:

…Consider: A fit human being has a maximum productive energy output of about 100 watts.  Such a person working for 10 hours provide 1000 watt-hours of energy, which is to say, 1 kWh.  In other words, by working quite literally like a slave, a person can produce about 1kWh per day.  For this we pay $0.05 to $0.25 in most parts of this country.  Granted, that’s provided as electrical, not mechanical energy but my point is to illustrate the enormous gap between the energy intensity that was historically possible, and the energy intensity that we take for granted now.  The extreme cheapness that makes this energy intensity possible is a product of the fact that we are using up a one-time endowment of fossilized sunlight.  It is not something that can be duplicated with a renewable source.

Nor is it something that we can continue to obtain from fossil fuels for very much longer, even if we don’t care about climate change or ecosystem health.  The cheapest of fuels, coal, comes with a set of fairly immediate externalized costs – if we pursue a coal-based energy system, those externalized costs will accumulate quickly enough to drag us down in fairly short order (through e.g. medical expenses).  The current, temporary glut of cheap natural gas notwithstanding, other fossil fuels will not fill this need either.  There may be “plenty” of oil at $100/bbl, but that abundance will not be sustained at a lower price point – again, a function of declining EROEI…

The less energy you get back from the energy you invested, the worse off you are. If a civilization is expending all its energy and resources and only getting enough fuel back to function at its current state, then it is just subsisting and cannot grow and expand in complexity. With a population that is constantly increasing, this means intractable unemployment, crumbling infrastructure, and social unrest. As Joseph Tainter has explained, a complex society such as ours gets to the point where more energy is required simply to maintain the infrastructure it’s come to depend on. Forget growing or replacing, but just maintaining the present infrastructure requires more energy than was originally spent to build it. To make matters worse, a corrupt government and myopic ruling elite don’t recognize the realities of biophysical economics. Indeed, our entire economic system operates in a make-believe world that tries to impose neoclassical theorems on finite natural systems. Just as Rome imploded from the inability to maintain its over-extended reach through its limited energy resources, so too will the U.S. repeat this mistake of depleting returns on supporting a far-flung empire built from cheap fossil fuels.

collapseofindustrialcivilization.com



4 Comments on "EROEI and the Collapse of Empires"

  1. DMyers on Sat, 14th Jul 2012 11:22 pm 

    I have no problem with converting economics into a study more on the order of natural sciences. Economics is the study of economic activity. That activity is fueled by energy. Energy, and its transfer from one activity to another, follows rules set down by the natural sciences, e.g., the Laws of Thermodynamics.

    But economics involves human responses to circumstances. It is a science of psychology. Take the phenomenon of scarcity, for example. That which is most important, economically, may not be actual scarcity, but rather a strong perception of scarcity. In the case of oil, we might prefer to speak in terms of a perception of abundance.

    Even though the economic information may become more precise and comprehensive by imposing scientific discipline on the substance of that information, the most important economic reality may continue to be the stubborn denial and magical thinking which humans apply to the information.

    Interestingly, EROEI is an economically based concept. ROI is return on investment, a very economic sounding phrase. The importance of a return on an investment has not been carved out by the natural sciences but by economics. Just an observation.

    I, personally believe that, going forward, EROEI is the most important consideration we should take toward fossil fuel extraction. We don’t have energy to waste on futile ventures (e.g., EROEI, 1:1)

  2. DC on Sun, 15th Jul 2012 3:00 am 

    You do know, the Term ROI, is more causally known as,

    ‘It takes money to make money'(unless you work for Wall St-but thats a special case)

    EROEI, simply says, in less formal terms.
    “It takes energy to make energy’.

    IOW, both terms are basically identical in both theory and practice. Money does not create new energy, only old energy can do that. The trillions of dollars of subsidies to big oil, serve a very important purpose, and no its not to make oilmen rich(er), its to mask the fact that EROEI has been slowly declining over the last century. What will happen is, when oil is $500, or $1000 a barrel, and they still cant make money at it, well know for sure EROEI is less and 3 to 1 at that point.

    Right now, the oil cartel only reports to the public and its shareholders how much $$$ they are going to make on any given project. They never say, ‘it took 70million barrels of oil or its equivalent to pull up 500million barrels’ out of where-ever. Now that would make for interesting reading wouldnt it? Profit and Loss statements can hide more than they reveal…

  3. xraymike79 on Sun, 15th Jul 2012 3:43 am 

    DMyers and DC,
    I’m the author of this article and I found your comments worthwhile so I’m republishing them at my site.

  4. Mike999 on Sun, 15th Jul 2012 11:23 am 

    Converting oil to gas takes 1 gallon of gas to convert oil to 6 gallons of gas.

    Tarsands: 1 gallon makes 3, plus massive amounts of water are needed, and massive amounts pollution and carbon dioxide are produced.

    The oil industry absolutely don’t want you to know what they’re doing, because it’s approaching insanity.

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