Searching For A Miracle
‘Net Energy’ Limits & the Fate of lndustrial Society
by Richard Heinberg
The Post Carbon Institute, September 2009
From the Editor: Since 2003 we have included in The Wheel of the Year articles examining the developing global production maximum of liquid petroleum, commonly referred to as “Peak Oil.” Other articles printed in this calendar have examined the relationship between petroleum, food production and global population, as well as industrial resource depletion in general. These are complex issues that fundamentally question our global industrial economy’s
ability to continue to grow, or even to sustain its current level of development.
Richard Heinburg is a leading author on these subjects, and with his report “Searching for a Miracle” he presents the complex issues of present energy sources, and future alternatives, in a lucid and technically thorough manner. We excerpt here the report’s overview and chapter on “Net Energy.” I highly recommend reading the complete report, available at www.postcarbon.org/ report/44377-searching-for-a-miracle — Orren Whiddon
THIS REPORT IS INTENDED as a non-technical examination of a basic question: Can any combination of known energy sources successfully supply society’s energy needs at least up to the year 2100? In the end, we are left with the disturbing conclusion that all known energy sources are subject to strict limits of one kind or another. Conventional energy sources such as oil, gas, coal, and nuclear are either at or nearing the limits of their ability to grow in annual supply, and will dwindle as the decades proceed— but in any case they are unacceptably hazardous to the environment. And contrary to the hopes of many, there is no clear practical scenario by which we can replace the energy from today’s conventional sources with sufficient energy from alternative sources to sustain industrial society at its present scale of operations. To achieve such a transition would require (1) a vast fi nancial investment beyond society’s practical abilities, (2) a very long time—too long in practical terms—for build-out, and (3) signifi cant sacrifices in terms of energy quality and reliability.
Perhaps the most significant limit to future energy supplies is the “net energy” factor—the requirement that energy systems yield more energy than is invested in their construction and operation. ere is a strong likelihood that future energy systems, both conventional and alternative, will have higher
energy input costs than those that powered industrial societies during the last century. We will come back to this point repeatedly. The report explores some of the presently proposed energy transition scenarios, showing why, up to this time, most are overly optimistic, as they do not address all of the relevant limiting factors to the expansion of alternative energy sources. Finally, it shows why energy conservation (using less energy, and also less resource materials) combined with humane, gradual population decline must become primary strategies for achieving sustainability.
The world’s current energy regime is unsustainable. This is the recent, explicit conclusion of the International Energy Agency1, and it is also the substance of a wide and growing public consensus ranging across the political spectrum. One broad segment of this consensus is concerned about the climate and the other environmental impacts of society’s reliance on fossil fuels. The other is mainly troubled by questions regarding the security of future supplies of these fuels—which, as they deplete, are increasingly concentrated in only a few countries. To say that our current energy regime is unsustainable means that it cannot continue and must therefore be replaced with something else. However, replacing the energy infrastructure of modern industrial societies will be no trivial matter. Decades have been spent building the current oil-coal-gas infrastructure, and trillions of dollars invested. Moreover, if the transition from current energy sources to alternatives is wrongly managed, the consequences could be severe: there is an undeniable connection between percapita levels of energy consumption and economic well-being. A failure to supply sufficient energy, or energy of sufficient quality, could undermine the future welfare of humanity, while a failure to quickly make the transition away from fossil fuels could imperil the Earth’s vital ecosystems.
Nonetheless, it remains a commonly held assumption that alternative energy sources capable of substituting for conventional fossil fuels are readily available—whether fossil (tar sands or oil shale), nuclear, or a long list of renewables—and ready to come on-line in a bigger way. All that is necessary, according to this view, is to invest sufficiently in them, and life will go on essentially as it is.
But is this really the case? Each energy source has highly specifi c characteristics. In fact, it has been the characteristics of our present energy sources (principally oil, coal, and natural gas) that have enabled the building of a modern society with high mobility, large population, and high economic growth rates. Can alternative energy sources perpetuate this kind of society?
Alas, we think not.
While it is possible to point to innumerable successful alternative energy production installations within modern societies (ranging from small homescale photovoltaic systems to large “farms” of three megawatt wind turbines), it is not possible to point to more than a very few examples of an entire modern industrial nation obtaining the bulk of its energy from sources other than oil, coal, and natural gas. One such rare example is Sweden, which gets most of its energy from nuclear and hydropower. Another is Iceland, which benefits from unusually large domestic geothermal resources, not found in most other countries. Even in these two cases, the situation is more complex than it appears.
The construction of the infrastructure for these power plants mostly relied on fossil fuels for the mining of the ores and raw materials, materials processing, transportation, manufacturing of components, the mining of uranium, construction energy, and so on. Thus for most of the world, a meaningful energy transition is still more theory than reality. But if current primary energy sources are unsustainable, this implies a daunting problem. The transition to alternative sources must occur, or the world will lack sufficient energy to maintain basic services for its 6.8 billion people (and counting). Thus it is vitally important that energy alternatives be evaluated thoroughly according to relevant criteria, and that a staged plan be formulated and funded for a systemic societal transition away from oil, coal, and natural gas and toward the alternative energy sources deemed most fully capable of supplying the kind of economic benefi tswe have been accustomed to from conventional fossil fuels.
By now, it is possible to assemble a bookshelf filled with reports from nonprofit environmental organizations and books from energy analysts, dating from the early 1970s to the present, all attempting to illuminate alternative energy transition pathways for the United States and the world as a whole. These plans and proposals vary in breadth and quality, and especially in their success at clearly identifying the factors that are limiting specific alternative energy sources from being able to adequately replace conventional fossil fuels.
It is a central purpose of this document to systematically review key limiting factors that are often left out of such analyses. We will begin that process in the next section. Following that, we will go further into depth on one key criterion: net energy, or energy returned on energy invested (EROEI). This measure focuses on the key question: All things considered, how much more energy does a system produce than is required to develop and operate that system? What is the ratio of energy in versus energy out? Some energy “sources” can be shown to produce little or no net energy. Others are only minimally positive.
Unfortunately, as we shall see in more detail below, research on EROEI continues to suff er from lack of standard measurement practices, and its use and implications remain widely misunderstood. Nevertheless, for the purposes of large-scale and long-range planning, net energy may be the most vital criterion for evaluating energy sources, as it so clearly reveals the tradeoffs involved in any shift to new energy sources.
This report is not intended to serve as a final authoritative, comprehensive analysis of available energy options, nor as a plan for a nation-wide or global transition from fossil fuels to alternatives. While such analyses and plans are needed, they will require institutional resources and ongoing reassessment to be of value. The goal here is simply to identify and explain the primary criteria that should be used in such analyses and plans, with special emphasis on net energy, and to offer a cursory evaluation of currently available energy sources, using those criteria. This will provide a general, preliminary sense of whether alternative sources are up to the job of replacing fossil fuels; and if they are not, we can begin to explore what might be the fall-back strategy of governments and the other responsible institutions of modern society.
As we will see, the fundamental disturbing conclusion of the report is that there is little likelihood that either conventional fossil fuels or alternative energy sources can reliably be counted on to provide the amount and quality of energy that will be needed to sustain economic growth—or even current levels of economic activity—during the remainder of the current century.
This preliminary conclusion in turn suggests that a sensible transition energy plan will have to emphasize energy conservation above all. It also raises questions about the sustainability of growth per se, both in terms of human population numbers and economic activity.
THE TENTH CRITERION:
“NET ENERGY” (EROEI)
AS ALREADY MENTIONED, net energy refers to the ratio of the amount of energy produced to the amount of energy expended to produce it. Some energy must always be invested in order to obtain any new supplies of energy, regardless of the nature of the energy resource or the technology used to obtain it. Society relies on the net energy surplus gained from energy-harvesting efforts in order to operate all of its manufacturing, distribution, and maintenance systems.
Put slightly differently, net energy means the amount of useful energy that’s left over after the amount of energy invested to drill, pipe, refi ne, or build infrastructure (including solar panels, wind turbines, dams, nuclear reactors, or drilling rigs) has been subtracted from the total amount of energy produced from a given source. If ten units of energy are “invested” to develop additional energy sources, then one hopes for 20 units or 50 or 100 units to result. “Energy out” must exceed “energy in,” by as much as possible. Net energy is what’s left over that can be employed to actually do further work. It can be thought of as the “profit” from the investment of energy resources in seeking new energy.
RETURNS ON INVESTMENTS (EROEI)
The net energy concept bears an obvious resemblance to a concept familiar to every economist or businessperson—return on investment, or ROI. Every investor knows that it takes money to make money; every business manager is keenly aware of the importance of maintaining a positive ROI; and every venture capitalist appreciates the potential profi tability of a venture with a high ROI. Maintaining a positive energy return on energy invested(EROEI) is just as important for energy producers, and for society as a whole. (Some writers, wishing to avoid redundancy, prefer the simpler EROI; but since there is a strong likelihood for some readers to assume this means energy returned on money invested, we prefer the longer and more awkward term). The EROEI ratio is typically expressed as production per single unit of input, so 1 serves as the denominator of the ratio (e.g., 10/1 or 10:1). Sometimes the denominator is simply assumed, so it may be noted that the EROEI of the energy source is 10— meaning, once again, that ten units of energy are yielded for every one invested in the production process. An EROEI of less than 1—for example, .5 (which might also be written as .5/1 or .5:1) would indicate that the energy being yielded from a particular source is only half as much as the amount of energy being invested in the production process. As we will see, very low net energy returns may be expected for some recently touted new energy sources like cellulosic ethanol. And as we will also see, the net energy of formerly highly productive sources such as oil, and natural gas, which used to be more than 100:1, have steadily declined to a fraction of that ratio today.
Sometimes energy return on investment (EROEI) is discussed in terms of “energy payback time”—i.e., the amount of time required before an energy-producing system (such as an array of solar panels) will need to operate in order to produce as much energy as was expended to build and install the system. This formulation makes sense for systems (such as PV panels) that require little or nothing in the way of ongoing operational and maintenance costs once the system itself is in place.
REPLACEMENT OF HUMAN ENERGY
If we think of net energy not just as it impacts a particular energy production process, but as it impacts society as a whole, the subject takes on added importance.
When the net energy produced is a large fraction of total energy produced (for example, a net energy ratio of 100:1), this means that the great majority of the total energy produced can be used for purposes other than producing more energy. A relatively small portion of societal eff ort needs to be dedicated to energy production, and most of society’s eff orts can be directed toward activities that support a range of specialized occupations not associated with energy production. This is the situation we have become accustomed to as the result of having a century of access to cheap, abundant fossil fuels— all of which off ered relatively high energy-return ratios for most of the 20th century.
On the other hand, if the net energy produced is a small fraction of total energy produced (for example a ratio of 10:1 or less), this means that a relatively large portion of available energy must be dedicated to further energy production, and only a small portion of society’s available energy can be directed toward other goals. is principle applies regardless of the type of energy the society relies on—whether fossil energy or wind energy or energy in the form of food crops.
For example, in a society where energy (in the form of food calories) is acquired principally through labor-intensive agriculture— which yields a low and variable energy “profi t”—most of the population must be involved in farming in order to provide enough energy profit to maintain a small hierarchy of full-time managers, merchants, artists, government officials, soldiers, beggars, etc., who make up the rest of the society and who spend energy rather than producing it.
HEYDAY FOR FOSSIL FUELS
In the early decades of the fossil fuel era (the late 19th century through most of the 20th century), the quantities of both total energy and net energy that were liberated by mining and drilling for these fuels was unprecedented. It was this sudden abundance of cheap energy that enabled the growth of industrialization, specialization, urbanization, and globalization, which have dominated the past two centuries.
In that era it took only a trivial amount of effort in exploration, drilling, or mining to obtain an enormous energy return on energy invested (EROEI). At that time, the energy industry understandably followed the best-fi rst or “low-hanging fruit” policy for exploration and extraction. us the coal, oil, and gas that were highest in quality and easiest to access tended to be found and extracted preferentially. But with every passing decade the net energy (as compared to total energy) derived from fossil fuel extraction has declined as energy producers have had to prospect in more inconvenient places and to rely on lower-grade resources.
In the early days of the U.S. oil industry, for example, a 100-to-one energy profit ratio was common, while it is now estimated that current U.S. exploration efforts are declining to an average one-to-one (break-even) energy payback rate10. In addition, as we will see in some detail later in this report, currently advocated alternatives to conventional fossil fuels generally have a much lower EROEI than coal, oil, or gas did in their respective heydays. For example, industrial ethanol production from corn is now estimated to have at best a 1.8:1 positive net energy balance11; it is therefore nearly useless as a primary energy source. (It is worth noting parenthetically that the calculation cited for ethanol may actually overstate the net energy gain of industrial ethanol because it includes the energy value of a production byproduct—distillers dried grains with solubles (DDGS), which can be fed to cattle—in the “energy out” column; but if the focus of the analysis is simply to assess the amount of energy used to produce one unit of corn ethanol, and the value of DDGS is thus disregarded, the EROEI is even lower, at 1.1, according to the same study.)
HOW EROEI SHAPES SOCIETY
As mentioned earlier, if the net energy profit available to society declines, a higher percentage of society’s resources will have to be devoted directly to obtaining energy, thus increasing its cost. is means that less energy will be available for all of the activities that energy makes possible.
Net energy can be thought of in terms of the number of people in society that are required to engage in energy production, including food production. If energy returned exactly equals energy invested (EROEI = 1:1), then everyone must be involved in energy production activities and no one can be available to
take care of society’s other needs.
In pre-industrial societies, most of the energy collected was in the form of food energy, and most of the energy expended was in the form of muscle power (in the U.S., as recently as 1850, over 65 percent of all work being done was muscle-powered, versus less than 1 percent today, as fuel-fed machines do nearly all work). Nevertheless, exactly the same net-energy principle applied to these food-based energy systems as applies to our modern economy dominated by fuels, electricity, and machines.
That is, people were harvesting energy from their environment (primarily in the form of food crops rather than fossil fuels), and that process itself required the investment of energy (primarily through the exertion of muscle power); success depended on the ability to produce more energy than was invested. When most people were involved in energy production through growing or gathering food, societies were simpler by several measurable criteria: there were fewer specialized full-time occupations and fewer kinds of tools in use.
Archaeologist Lynn White once estimated that huntergatherer societies operated on a ten-to-one net energy basis (EROEI = 10:1).12 In other words, for every unit of eff ort that early humans expended in hunting or wild plant gathering, they obtained an average of ten units of food energy in return. They used the surplus energy for all of the social activities (reproduction, child rearing, storytelling, and so on) that made life sustainable and rewarding.
Since hunter-gatherer societies are the simplest human groups in terms of technology and degree of social organization, 10:1 should probably be regarded as the minimum sustained average societal EROEI required for the maintenance of human existence (though groups of humans have no doubt survived for occasional periods, up to several years in duration, on much lower EROEI).
The higher complexity of early agrarian societies was funded not so much by increased EROEI as by higher levels of energy investment in the form of labor (farmers typically work more than hunters and gatherers) together with the introduction of food storage, slavery, animal domestication, and certain key tools such as the plow and the yoke. However, the transition to industrial society, which entails much greater levels of complexity, could only have been possible with both the higher total energy inputs, and the much higher EROEI, aff orded by fossil fuels.
EROEI LIMITS ENERGY OPTIONS
Both renewable and non-renewable sources of energy are subject to the net energy principle. Fossil fuels become useless as energy sources when the energy required to extract them equals or exceeds the energy that can be derived from burning them. This fact puts a physical limit to the portion of resources of coal, oil, or gas that should be categorized as reserves, since net energy will decline to the break-even point long before otherwise extractable fossil energy reserves are exhausted.
Therefore, the need for society to fi nd replacements for fossil fuels may be more urgent than is generally recognized. Even though large amounts of fossil fuels remain to be extracted, the transition to alternative energy sources must be negotiated while there is still suffi cient net energy available to continue powering society while at the same time providing energy for the transition process itself.
Net energy may have a direct effect on our ability to maintain industrial society at its present level. If the net energy for all combined energy sources declines, increasing constraints will be felt on economic growth, but also upon new adaptive strategies to deal with the current climate and energy crises. For example, any kind of adaptive energy transition will demand substantial new investments for the construction of more energy efficient buildings and/or public transport infrastructure. However, such requirements will come at the same time that substantially more investment will be needed in energy production systems. Societies may simply be unable to adequately fund both sets of needs simultaneously. Noticeable symptoms of strain would include rising costs of bare necessities and a reduction in job opportunities in fields not associated with basic production. Supplying the energy required simply to maintain existing infrastructure, or to maintain aspects of that infrastructure deemed essential, would become increasingly challenging.
EROEI: DISTINCT FROM EFFICIENCY
The EROEI of energy production processes should not be confused with the efficiency of energy conversion processes, i.e., the conversion of energy from fossil fuel sources, or wind, etc., into usable electricity or useful work. Energy conversion is always less than 100 percent effi cient—some energy is invariably wasted in the process (energy cannot be destroyed, but it can easily be dissipated so as to become useless for human purposes)—but conversion processes are nevertheless crucial in using energy. For example, in an energy system with many source inputs, common energy carriers are extremely helpful. Electricity is currently the dominant energy carrier, and serves this function well. It would be difficult for consumers to make practical use of coal, nuclear energy, and hydropower without electricity. But conversion of the original source energy of fossil fuels, uranium, or flowing water into electricity entails an energy cost. It is the objective of engineers to reduce that energy cost so as to make the conversion as efficient as possible. But if the energy source has desirable characteristics, even a relatively high conversion cost, in terms of “lost” energy, may be easily borne. Many coal power plants now in operation in the U.S. have an energy conversion effi ciency of only 35 percent. Similarly, some engines and motors are more effi cient than others in terms of their ability to turn energy into work.
EROEI analysis does not focus on conversion efficiency per se, but instead takes into account all reasonable costs on the “energy invested” side of the ledger for energy production (such as the energy required for mining or drilling, and for the building of infrastructure), and then weighs that total against the amount of energy being delivered to accomplish work.
Because this report is a layperson’s guide, we cannot address in any depth the technical process of calculating net energy.
NET ENERGY EVALUATION: IMPRECISE BUT ESSENTIAL FOR PLANNING
The use of net energy or EROEI as a criterion for evaluating energy sources has been criticized on several counts. The primary criticism centers on the difficulty in establishing system boundaries that are agreeable to all interested parties, and that can easily be translated from analyzing one energy source to
another. Moreover, the EROEI of some energy sources (such as wind, solar, and geothermal) may vary greatly according to the location of the resources versus their ultimate markets. Advances in the effi ciency of supporting technology can also affect net energy. All of these factors make it diffi cult to calculate figures that can reliably be used in energy planning.
This difficulty only increases as the examination of energy production processes becomes more detailed: Does the office staff of a drilling company actually need to drive to the office to produce oil? Does the kind of car matter? Is the energy spent filing tax returns actually necessary to the manufacture of solar panels? While such energy costs are usually not included in EROEI analysis, some might argue that all such ancillary costs should be factored in, to get more of a full picture of the tradeoffs.
Yet despite challenges in precisely accounting for the energy used in order to produce energy, net energy factors act as a real constraint in human society, regardless of whether we ignore them or pay close attention to them, because EROEI will determine if an energy source is able successfully to support
a society of a certain size and level of complexity. Which alternative technologies have suffi ciently high net energy ratios to help sustain industrial society as we have known it for the past century? Do any? Or does a combination of alternatives? Even though there is dispute as to exact fi gures, in situations where EROEI can be determined to be very low we can conclude that the energy source in question cannot be relied upon as a primary source to support an industrial economy.
Many criticisms of net energy analysis boil down to an insistence that other factors that limit the efficacy of energy sources should also be considered. We agree. For example, EROEI does not account for limits to non-energy inputs in energy production (such as water, soil, or the minerals and metals needed to produce equipment); it does not account for undesirable nonenergy outputs of the energy production process—most notably, greenhouse gases; it does not account for energy quality (the fact, for example, that electricity is an inherently more versatile and useful energy delivery medium than the muscle power of horses); and it does not refl ect the scalability of the energy source (recall the example of landfill gas above).
Energy returns could be calculated to include the use of non-energy inputs—e.g., Energy Return on Water Invested, or Energy Return on Land Invested. As net energy declines, the energy return from the investment of non-energy inputs is also likely to decline, perhaps even faster. For example, when fuel is derived from tar sands rather than from conventional oil fields, more land and water are needed as inputs; there is an equivalent situation when substituting biofuels for gasoline. Once society enters a single-digit average EROEI era, i.e., less than 10:1 energy output vs. input, a higher percentage of energy and non-energy resources (water, labor, land, and so on) will have to be devoted to energy production. is is relevant to the discussion of biofuels and similar low energy-gain technologies. At first consideration, they may seem better than fossil fuels since they are produced from renewable sources, but they use non-renewable energy inputs that have a declining net yield (as higher-quality resources are depleted). They may require large amounts of land, water, and fertilizer; and they often entail environmental damage (as fossil fuels themselves do). All proposed new sources of energy should be evaluated in a framework that considers these other factors (energy return on water, land, labor, etc.) as well as net energy. Or, conceivably, a new multi-faceted EROEI could be devised.
In any case, while net energy is not the only important criterion for assessing a potential energy source, this is not a valid reason to ignore it. EROEI is a necessary—though not a complete—basis for evaluating energy sources. It is one of five criteria that we believe should be regarded as having make-or-break status. The other critical criteria, already discussed in Part I. above, are: renewability, environmental impact, size of the resource, and the need for ancillary resources and materials. If a potential energy source cannot score well with all five of these criteria, it cannot realistically be considered as a future primary energy source. Stated the other way around, a potential primary energy source can be disqualified by doing very poorly with regard to just one of these fi ve criteria.