Created Tuesday 27 March 2018
Actual Reality - Energy Curve (Earth Body) - Laws of Energetics
As this book is concerned mainly about the possibility of growth and the end of it, we will examine how energy, instead of money or capital, is the true driver of economic growth in the modern industrial world. This is contrary to what is assumed by the current dominant discipline of economics.
To understad energy behavior we have to understand Energetics. Energetics is a very broad discipline that covers energy transformation and flows at all scales, from the quantum level to the biosphere and the cosmos. For our purpose, which is to determine whether perpetual growth of the modern industrial world is possible or not, we need to examine only crucial energy characteristics.
Energy - The Universal Currency
The primary source of energy that is vital to us is the sun. Through a miraculous process called photosynthesis, the sun’s energy is captured as carbohydrates by plants. And over millennia it has shaped the stunning beauty and complexity of life manifested in our ecosystems. The accumulation and compression of these layers of life over eons have resulted in all the combustible fossil fuels that we take so much for granted. By fossil fuels we mean oil, coal and natural gas which form 87% of our total energy consumption.
We must remind ourselves that these fossil fuels are nothing but a humongous savings account of ancient sunlight that we are tapping into at a maddening pace – millions of times faster than it can be generated. In short, we have taken 150 million years of sunlight and burnt half of it in just 150 years.
This is equivalent to spending 500,000 times your monthly salary each month!
Hardly the kind of wisdom any course on economics would advocate. But then Economics was only considered with accounting for money. What we now have to learn is the deeper and more crucial kind of accounting called Energy Accounting. This is because energy is the true currency of the universe and not money. In this scale of energy needed, there is really no other source of energy worth mentioning that can match or fulfil the demands of our Modern Industrial World.
Corelation between Energy & Growth
Figure 1: Estimating world GDP, from one million B.C. to the present time (Source: J. Bradford DeLong, U.C. Berkeley. http://www.j-bradford-delong.net/)
The history of global GDP figures for the last 10,000 years reveal that the world per capita GDP was historically flat until we discovered fossil fuels in 1750. (Figure. 1) From then to today the per capita GDP has grown exponentially. Clearly energy was the driving factor. This is because fossil fuels embody over 500 million years of sunlight energy. This order of energy scale and density was never available to humans so cheaply. It allowed us to dig humongous resources at an increasing pace, transport them over huge distances and process them to create a plethora of inventions, devices and complex systems.
The Industrial Age and the exponential growth that resulted, are in fact, the effect of the availability of this dense, unique and cheap energy. Economics only tries to measure and regulate this growth. It does not cause it.
We will first look at the availability of the energy source (fossil fuels and in particular oil). Because 86% of the energy that runs Our Modern Industrial World comes from Fossil Fuels – Coal, Natural Gas and Oil. So Fossil Fuels are the most important component of our natural capital.
The Earth DOES NOT give us resources at a steady pace from the beginning to the end. The extraction rate of natural resources such as iron, copper, minerals, water, coal, natural gas, oil and innumerable others obeys the BELL CURVE.
It is ironic that no aspect of our education system makes us aware that the Resource Curve is governed by the geology of our planet. With passing time the Earth gives us most of its resources in a BELL SHAPED curve. Ironically, the peak of the bell curve is also the half-way point of depletion of any resource. In the case of oil, the peak is when we have extracted only half the oil from that well. From there, you can only get less. We cannot simply put a larger pump and change the pace of extraction to suit our will.
The BELL CURVE also know as Hubbert's Curve after the geologist King Hubbert, is our Reality Curve.
Peak Oil & Hubbert’s Curve
How do oil wells behave? In other words, how fast or how much oil do they give us over time?
The most common and false perception is that an oil well is like a huge underground tank from which we can extract oil at will (limited only by the size of the pump and the capacity of that well of course). This has been proved to be untrue.
Oil, being viscous, takes time to move through pores and crevices in the rock that contains it. Therefore, extracting and producing oil follows a distinct pattern.
The distinct and unchanging behavior of all oil wells was discovered by Marion King Hubbert, a geoscientist working at the Shell research lab in Houston, Texas, in the early 1950s.
Hubbert predicted that the rate of oil production resembles a Bell Curve as shown here.
Whether it be a single well…
Or a given geographical area…
Or the planet as a whole.
No longer could we assume that we could just pump out oil at whatever rate we wished. The oil well would decide it for us.
And the output was in the shape of the bell curve which I introduced you to at the beginning as the Reality Curve.
The key points of oil production in a Bell Curve pattern are:
- It does not matter how large the well is, it will always follow the shape of the bell curve.
- The maximum rate of extraction of oil or The Peak happens at the mid-way point, when you have taken out ONLY half of the oil from that well. And from there it only goes down.
- This is true for one well as much as for all the wells in production at a point of time.
Wow! Now this was an amazing game changer, both for the petroleum industry and for the industrial world at large. To start getting less and less oil starting at only the HALF-WAY point is a calamity. Especially because we believe in perpetual exponential growth, and that requires that we are able to draw more and more oil from the Earth at whatever speed we choose. This is impossible after the half-way point, as per Hubbert’s discovery.
Based on his discovery, he presented a paper at the 1956 meeting of the American Petroleum Institute in San Antonio, Texas, which predicted that the United States petroleum production would peak between the late 1960s and the early 1970s and then start a permanent decline. Meaning, the U.S. would thereafter produce less and less oil each year. And so growth of industry could only decline in the U.S. after that peak.
No wonder Hubbert met with such scathing criticism at first. He was mocked and ridiculed. To be proved right, Hubbert had a long and lonely wait from 1956 onwards. 9
In 1971, U.S. oil production peaked as predicted by him as per the graph above. Oil production peaked and began to decline regardless of surrealistic technological progress, extensive investment and U.S. tax policies that would hand over a trillion dollars to the American oil industry trying to keep it afloat. This brought about a new era in U.S. history, where expanding its search for oil outside its borders became paramount in order to maintain the country’s growth rate.
Hubbert became famous and celebrated. Hubbert’s Curve was no longer a theory. It was now a geological law!
But how did Hubbert Predict U.S. Peak Oil?
Hubbert was not a fortune teller. He was a scientist specializing in geology. He did a statistical analysis based on data regarding Discoveries vs. Production of Oil within the U.S.
From the data of oil wells within a region, he knew that the time between the discovery and production peaks would be approximately 40 years. And so, when he expanded this to the whole of the U.S. and noticed that the total U.S. oil discoveries had peaked in 1930, he was able to extrapolate and predict that the peak of oil production for petroleum in the U.S. would be about 40 years into the future, which would be in 1970.
He however had to wait a while till 1956 to verify the actual facts before he made the announcement. And indeed, U.S. oil production did peak around 1971 as shown in the diagram below.
Similarly, to predict when the total world oil production would peak, Hubbert had to wait a bit longer. This is because he had to wait for the peak of global oil discoveries to occur. And this happened in the 1960s. Based on that, in 1974 he projected that global oil production would peak 40 years later, between 1995 and 2000.
The peak, in fact, was delayed several years because of a political setback called the Arab Oil Embargo, when the oil producing countries of the Middle East withheld oil from the rest of the world for a couple of years. As a result, much less oil was consumed globally in the seventies. Nevertheless, world oil production did finally peak around 2005.
And ever since, we have been at the top of the curve at roughly 85 to 86 million barrels/day. This is the Global Peak of Oil production. No new areas are able to compensate the decreasing oil supply and there is unfortunately no escape from experiencing the impacts of Peak Oil.
Now that we are conversant with the quantitative availability of energy, we need to know how energy behaves It is very important to be scientifically aware of this Because it is not simply a matter of quantity of energy but also the peculiar behaviour of energy depending on the nature of the system for which it is going to be used. If we are not aware of this then we will be making false assumptions on what is possible.
Energy Returned on Energy Invested (ERoEI)
Growth in any system is only possible if it is able to acquire more energy than it consumes. Growth does not depend on the gross energy available to the system. This is analogous to net profit vs gross income in economics. In energetics this key principle is measured as Energy Returned on Energy Invested (ERoEI) or Net Energy. Both are basically a measure of how much energy goes into a system or process and what is the amount of usable energy it returns.
While ERoEI is expressed as a ratio, Net Energy is the actual difference of energy acquired to energy expended. I will use the terms ERoEI and Net Energy interchangeably because they essentially measure the same thing but in different ways.
To illustrate the importance of ERoEI, let us say we climb a tree by expending 10 units of energy to pick some apples that return us 30 units of energy when we eat them then we would say that ERoEI in this process is 30/10 which is 3. We gained 3 times more energy in doing this exercise so the exercise is energetically viable. The ERoEI has to be greater than 1 or it would not be worthwhile climbing the tree for apples.
From the Net Energy perspective in the apple-picking exercise it would be Energy Acquired (30) minus Energy Expended (10) which gives us a net of 20 units of surplus energy. Net Energy is important, not gross acquired energy. Just as profit is important in economics and not merely the gross sales.
In either example, as we go higher to get the apples, we reach a point where the energy we expend is equal to the energy the apples are giving us which means ERoEI is equal to 1 or Net energy is 0. Beyond this point ERoEI is less than 1 or the Net Energy turns negative. Then it does not matter how many apples are above that point as it is energetically unviable to get them. This could be visualised as an ‘energetic glass ceiling’ that defines the upper limit that cannot be breached in the long run.
Net Energy impact on Hubberts Curve
Source: Mansoor Khan Productions Pvt. Ltd, www.mansoorkhan.net
Beyond the diminishing quantities of oil, as defined by the bell curve, there is the factor of diminishing returns on energy from the energy sources. For an oil well this involves digging deeper and also resorting to progressively lower grade crude as the high grade sweet depletes, thereby reducing the Net Energy usable to society.
The Net Energy usable (light grey curve) falls off far more sharply than the Gross Energy extracted (dark grey curve) after the peak, as more and more of the oil extracted is now going towards extracting the oil itself. This poses an even greater challenge to the growth paradigm.
The Law of Minimum ERoEI
But all systems may not actually function at levels of ERoEI as low as 1. Some may become unviable at an ERoEI significantly greater than 1. This increases as the system becomes more complex. So what is the minimum ERoEI for a particular system to survive?
The law of the minimum ERoEI states that for any being or system to survive or grow it must gain substantially more energy than it uses in obtaining that energy. That amount depends on the complexity of the system.
Looking at the Earth as a system, the fundamental source of energy for the Earth is the Sun. It is our true energy income from the universe on a regular basis. This solar energy budget enters the upper atmosphere at approximately 1400 Watts per square meter (Hall, Balogh, Murphy (2009). Roughly half of that solar energy reaches the Earth’s surface and drives all Earth systems including living systems.
Sunlight’s main role is to run our water cycle: evaporate water from the Earth’s surface, water bodies and plant tissues (transpiration), elevate it and release it back on the Earth’s surface as rain, filling our rivers, lakes and estuaries and nurturing all forms of life.
Beyond this, the sun’s energy creates differential heating of the Earth’s surface, generating winds that cycle the evaporated water around the world, thereby maintaining habitable temperatures, powering photosynthesis and supporting complex ecosystems. This is the base energy on which our weather systems run to maintain much of the living planet.
At a macro level the complete ecological domain of our world operates within this actual income of solar energy where there are no energy bailouts or subsidies. Likewise, at a micro level every subsystem of the Earth (whether it be a local ecosystem, a forest, a grassland or a single organism) must conform to the exacting “law” of evolutionary energetics – the prime one being the Law of Minimum ERoEI. It must capture more energy than it uses to obtain that energy. The question is how much should the net gain be for survival for a particular system.
Let us start with the simplest system, an individual organism like a leopard that gets its energy from hunting and eating deer. In order to survive it has to account not only for the net energy it gains from a single hunt (towards stalking, chasing and capturing its prey) but also all the other energy costs of a leopards life style in between successful hunts such as daily biological and metabolic activities, reproduction, fostering off-spring, defending itself from other predators or enduring lean times before it gets its next prey. The sum of all these additional energy requirements have to be factored in the expended energy for the leopard to be able to survive in the long run. Thus the ERoEI it needs from individual hunts has to be suitably greater than 1. This intrinsic energetics requirement, as a result, has shaped a leopard’s physique and behaviour through evolution. And thus energy has a primary role in defining evolution itself.
In more complex systems such as a group of organisms – a herd or a human society – there are other incidental requirements of energy that would depend on several factors like size, complexity and environmental conditions of the society for the system to survive and grow. Therefore the ERoEI needed would be significantly greater than one for the system to survive. This defines the fundamental “Law of Minimum ERoEI” that determines the survival of any system.
The irony is that though the Law of Minimum ERoEI makes sense to even the layman as the defining factor for survival, it is not recognised in any of our conventional studies. Biology and evolutionary studies focus mostly on the fitness of an organism or species, which implies the ability of organisms to propel their genes into the future through natural selection. But they don’t acknowledge that, in fact, natural selection is largely determined by energetics, which is a far more essential consideration in determining what is fit and what is not. Consequently, energetics defines fitness that further defines adaptation and finally survival.
ERoEI and Net Energy in Human Societies
The same energetics principles explained above apply to human societies from the simplest tribes to the complex cities, and finally the collective modern industrial world. Seen through the lens of energetics we can explain much of human history and its events, which were essentially based on exploiting energy by developing the technologies to do so. Several other factors are indeed consequential like cultural differences, local conditions of ecology and resource availability etc. but it is primarily surplus energy that is the defining factor. A society’s level of complexity will be determined by the minimum ERoEI possible from available sources of energy (apart from sunlight) in that particular society.
In early hunter-gatherer societies, the lifestyle is mainly focused on obtaining food and surplus energy as directly from their environment as possible. Yet the !Kung hunter-gatherer lifestyle, though simple, also involves socializing, rearing children and story-telling. This increase in social complexity also demands a corresponding increase in minimum ERoEI requirement. Therefore the Net Energy they would need to survive would be higher than animal groups.
The next level of energy capture for human societies was from draft animals that were tamed to do work. This was basically an energy transfer of the sun’s energy that directly became food and then muscle power in the form of draft animals doing work for society, which could thereby increase its complexity.
Then came agriculture, a much bigger leap of energy capture. Agriculture allows a much more concentrated capture of dilute and distributed solar energy through photosynthesis to grow a few species of plants and animals that humans chose to eat. This amounts to usurping energy from the many diverse species and natural landscapes for human consumption, one direct impact of which was a surge in human population and a corresponding degradation of the environment.
Thus agriculture, allowed a far more complex society by providing a huge surplus quantity of energy. This permitted a segment of the population to engage in other activities apart from extracting energy from the environment. People could afford to indulge in arts, crafts and other cultural and architectural enterprises and could shape a culturally complex society.
In order to maintain complex growing societies, humans soon evolved technologies to harness energy from wind and water. This allowed the creation of even more complex systems such as towns, cities, bureaucracies, governments and fine arts. Furthermore, protecting surplus food and the related infrastructure resulted in armies which also became crucial to conquer surrounding regions to maintain the availability of sources of energy. This, in a nutshell, is the energetics perspective of civilization and its accelerating growth in size and complexity based on increasing energy capture.
Most ancient civilisations that built pyramids, ancient cities and monuments obviously had enjoyed a huge energy surplus in order for them to have reached that scale of size and complexity. But as archaeologist Joseph Tainter recounts, the general tendency of human civilisations is to go into over-shoot. This means they expand their systems and infrastructure in size and complexity till they eventually exceed the energy and resources available to society from their immediate surroundings (Tainter, 1988).
Modern industrial civilization is displaying very similar traits. The primary difference compared to pre-industrial civilisations is that it has tapped into the most concentrated form of stored, cheap energy ever to be available on this planet: fossil fuels. These we are burning at about 500,000 times the speed it takes to collect and form – a huge energetic deficit that we never account in our economic balance sheet. Yet it allows resource extraction, goods production and distribution at a global span and reflects in the mega cities, complex transport systems, sophisticated technology and extensive comfort that we enjoy and take for granted today.
Fossil fuels in fact shaped a new level of intensive agriculture that allowed the mass clearing of forests and other landscapes, as well as mechanised tilling and irrigation to dramatically increase food production for humans taking our population exponentially to 7 billion.
Seen through the lens of surplus energy we can now recognise exponential population growth as the main side-effect of surplus food grown with dense and cheap fossil fuel energy. Citing figures from an essay by Graham Zabel called “Peak People: The Interrelationship between Population Growth and Energy Resources”, we notice that the world population had only reached 800 million till the year 1750 because it was dependent on the bio-mass energy availability proportionate to the direct sunlight budget of energy. With the advent of coal the world population started rising exponentially to approximately 1.5 billion. Then with the advent of oil the combined energy availability of coal and oil took the world population to over 5 billion. And then with Natural gas entering the foray it has crossed 6 billion. And today it has crossed 7 billion. The conclusion is that the availability of cheap stored energy allows the population carrying capacity of a system to increase by allowing intensive industrial agricultural methods, transport and storage systems, fertilisers and pesticides. Only fossil fuels with their amazing density of cheap energy and their by-products could have made this kind of exponential growth of population possible.
This further created greater demand for energy and resources, causing undesirable ecological side-effects of soil depletion, mono-culture cultivation and threat to other species in a self-feeding loop that is proving itself to be a dampener to economic growth.
INSERT ENERGY PYRAMID HERE:
The pyramid above shows us how different aspects of a complex society become possible at different thresholds of surplus energy. The lowest stage is extraction of the energy, say oil. If the ERoEI for oil was 1.1:1 then we could only pump the oil out of the ground and do nothing much more with it.
At ERoEI of 1.2:1 the society could both extract it and refine it. If the oil was to be transported to another place, we would need a higher ERoEI. Hall and Klitgaard found that an ERoEI of at least 3:1 at the wellhead was necessary to build and maintain the truck and the roads and bridges required to use one unit (Hall, Klitgaard, 2011).
Moreover, they estimated that in order to deliver a product in that truck, such as grain, an ERoEI of roughly 5:1 is required to include the growing and processing of that grain.
If we include the workers involved in the oil field, the refinery, the truck driver and the farmer, it would require the support of their lifestyle and families and an ERoEI of approximately 7:1 or 8:1.
To include education for the children of these families an ERoEI value of about 10:1 would be required. Including other social privileges for the families and workers such as health care and higher education would then require an ERoEI value of perhaps 12:1 at the wellhead.
An ERoEI value of at least 14:1 is needed to provide for performing arts and other social amenities to these families and workers.
From this, we can extrapolate: in order to have a modern industrial civilization like ours with sophisticated technical infrastructure like telecommunications, internet, high speed transport and delivery systems plus complex social systems like hospitals, academic institutions etc. we need a much higher ERoEI from our primary sources of energy for the system to survive. Yet with passing time, the ERoEI of our primary energy source of fossil fuels actually decreases as we need to dig deeper and in more inaccessible environments to obtain them.
We will have to revisit this crucial idea of the law of minimum ERoEI for running a complex industrial world when we evaluate alternative energies as viable options. This will do in section 4 titled Alternative Energy.
The Net Energy Cliff
As net energy is the critical factor and not gross energy to determine the viability of a system we will study the pattern of net energy as it changes over time as the source of energy depletes.
INSERT NET ENERGY CLIFF HERE:
Above is a diagram of a concept called the “Net Energy cliff” that demonstrates the pattern of ERoEI available to society from various energy sources and over time. Energy sources at the left of the diagram have a higher ERoEI: the ratio of the energy gained (light grey) to the energy used (dark grey). As we move to the right for energy sources, this Net Energy available to society to do useful work decreases exponentially.
Historic oil & gas fields in the US in the early days of oil development in Texas, Oklahoma and Louisiana in the 1930s had an ERoEI of about 100:1. Such a high ERoEI allows a greater proportion of that fuel’s energy to be delivered to society (e.g. a fuel with an ERoEI of 100:1 – horizontal axis – will deliver 99% of the useful energy – vertical axis – from that fuel to society).
Conversely, lower ERoEI fuel delivers substantially less useful energy to society (e.g. a fuel with an ERoEI of 2:1 will deliver 50% of the energy from that fuel to society). As the reservoirs that were close to the soil’s surface depleted, we reached for the deeper oil and gas fields that had a decreasing ERoEI.
The world estimate for ERoEI was approximately 35:1 in the late 1990s. It declined to about 20:1 in the first half decade of the 2000s. Today it is estimated to be between 10:1 to as low as 6:1 in some areas. Renewable energies appear at the extreme right side of Figure 4, as their ERoEI is very low. This explains why renewable energies can never be the answer to run a complex modern industrial world and that too exponentially.
Apart from a steeply declining ERoEI, the availability of oil itself is dropping rapidly. Globally speaking, we now find one barrel for every four to five we consume. (Campbell, 2002). This creates a huge mismatch between our expectations of growth and the availability of energy needed to drive it. In the next section we will explore this mismatch and its effects on growth and therefore on classical economics.
We will go more into detail about Peak Oil Proof and Impacts of it in a later section.
But for now as we are mainly concerned about whether economic growth is indeed over or not and as we have revised the principles of Economics and Energetics let us see whether the two are matching or not. We move onto the next section called Economic Collapse.