Energy sector outlook (2)

Another driver of the down escalator is that the net energy (EROI, or energy returned on energy invested), of nearly all fossil fuel production is falling. Dr. Cutler Cleveland at Boston University has observed that the net energy of oil and gas extraction in the U.S. has decreased from 100:1 in the 1930s; to 30:1 in the 1970s; to roughly 11:1 as of 2000.Simply put: As the quality of the remaining fossil fuels declines, and they become more difficult to extract, it takes more energy to continue producing energy. This begs the question: What EROI must the replacements have to compensate for oil depletion? Vail presented several models attempting to answer it.

In his optimistic scenario, assuming a 5% rate of net energy decline and an EROI of 20 for the renewables, the "renewables gap" was filled in year 3.
In his pessimistic scenario, assuming a 10% rate of net energy decline and an EROI of 4 for the renewables, the gap wasn't filled until year 7.

For a sense of how reasonable those assumptions are, we must turn to the academic literature - since no business or government agency has yet shown any particular interest in EROI studies (much to my dismay). Studies assembled by David Murphy put the average EROI of wind at 18 (Kubiszewski, Cleveland, and Endres, 2009); solar at 6.8 (Battisti and Corrado, 2005), and nuclear at 5 to 15 (Lenzen, 2008; Hall, 2008). No data is available for geothermal or marine energy. All the biofuels are under 2, making them non-solutions if the minimum EROI for a society is indeed 3 (Hall, Balogh and Murphy, 2009).

[A quick aside: The huge range of the nuclear estimate is one indication of how difficult it is to accurately assess the costs of nuclear, which is part of the reason I still haven't written the article I know many of you are hoping to see some day. I'm working on it, and still looking for current research with appropriately inclusive boundaries and updated numbers. Nearly everyone is still using cost estimates that predate the commodities bull run, not even realizing how it distorts their analysis. So far, I have found nothing to change my outlook that the nuclear share of global supply will stay roughly the same for several decades.]I am not aware of any studies on the EROI of biomass not made into liquid fuels.
For example, methane digesters using waste, landfill gas, and so on. . . but its sources and uses are so varied that if the numbers were available, they probably wouldn't be very useful. While such applications are generally good, they're not very scalable: They work where they work, and don't where they don't. Theorem of Renewables SubstitutionWhere EROI analysis leaves us is unclear; it needs more research and a great deal more data.
There are some useful clues in it, though.

First, we know that biofuels - at least the ones we have today - won't help much, other than providing an alternate source of liquid fuels while we're making the transition to electric.

Second, we know that solar tends toward Vail's pessimistic scenario, and wind fits the bill for his optimistic scenario.But here's the rub: The lowest EROI source, biofuels, is the easiest to do, with the vigorous support of a huge lobby and Energy Secretary Chu himself. Rooftop solar is the next-easiest to do. . . but making up the lost BTUs takes longer, due to its moderate EROI. And the source with the highest EROI, wind, is the hardest. (I explained why solar is easier here.)

Therefore I propose the following, slightly snarky Theorem of Renewables Substitution: The easier it is to produce a source of renewable energy, the less it helps. The Winner: EfficiencyAll of these factors - the declining supply, the pressures of the developing world on demand, the renewables gap, and the theorem of renewables substitution - underscore how crucial efficiency is to addressing the energy crisis.They also underscore how profitable the entire energy sector will be for many years to come.With supply maxed out, and demand at the mercy of a developing world, the name of the game now is doing more with less. More efficient vehicles and appliances, building insulation, co-generation. . . and all the other ways to eliminate waste.I know it doesn't have the sex appeal of oh, say, space based solar power. . . but it's where the real gains will be made.
Until next time,ChrisChris Nelder is a self-taught energy expert who has intensively studied peak oil for five years, and written hundreds of articles on politics, peak oil and energy in general.