Renewable Transition 2: EROEI Uncertainty

In the first part of this series, I discussed the practicality of a future transition from fossil fuels to renewable energy sources—specifically renewable sources of electricity such as solar and wind power. One little-discussed hurdle is the fact that, because we must invest energy in renewables up front, a rapid transition threatens to greatly impact near-term demand for energy resulting in unwanted economic and political effects. Another is that, because we will initially use fossil fuels to build our renewable infrastructure, the transition to renewables will result in a short-term increase in carbon emissions. The extent to which both of these impacts will be significant, even their potential to foreclose the possibility of such a transition, will turn on the net energy, or Energy Return on Energy Invested (EROEI), of available renewable energy technology.

As I alluded to last time, while there are many EROEI numbers floating about for solar, wind, etc., these numbers are far less accurate or verifiable than is, I believe, commonly assumed. I’ll argue that our measurements of EROEI are fundamentally flawed, at least for some purposes. Most EROEI studies serve as a tool to compare different technologies or to gauge advances in technology--a role for which they are generally well suited. However, when viewed from a complete systems perspective, current EROEI figures fail to provide an inclusive measurement. I’ll argue that, for purposes of planning a civilizational transition, a meaningful meansure must be inclusive of all energy inputs. Finally, I’ll propose a possible proxy-measurement to address the methodological issues surrounding EROEI.

“Conventional” EROEI vs. “systemic” EROEI measurements: I’ve been fairly candid with my critique of conventional EROEI measurements, even suggesting that many such measurements are more accurately characterized as marketing copy than empirical, verifiable measurements. This is perhaps a bit unfair--the core of my critique is that these conventional EROEI measurements, while valuable and perhaps even accurate for some purposes, are wholly inadequate to measure the systemic implications of a transition to these alternatives. Here, to assist this critique, I’ve divided EROEI measurements into two broad categories.

What I’m calling “conventional” EROEI measures use an artificial boundary to simplify their accounting by excluding energy that, while certainly an input, is several steps removed from the direct manufacture of the renewable. This includes standard input-output analysis, process analysis, and hybrids of these two. This type of EROEI estimate (as it must fairly be called) seems to have utility in two areas: 1) comparing the relative EROEI of similar renewables (for example, two different turbine designs), and 2) measuring the progress of design advances (for example, the effect of improving the design of one given type of turbine).

The second type of EROEI is what I’m calling “systemic” EROEI. While I think this terminology is self-explanatory, here I mean a complete system-wide measure of all outputs compared to all inputs. The value of such a measure is in determining the viability of such technologies to support human civilization as a whole, to sustain certain levels of growth (or contraction), etc.

The problem with calculating EROEI: Why the need for two sets of EROEI calculations? Why not just use one fundamentally “true” measurement methodology and call it a day? The answer is that measuring EROEI is far more challenging than is commonly presumed because of (among several reasons) the following question: how attenuated an energy input is necessarily included in our calculations? Certainly the electricity and natural gas used in a turbine manufacturing plant must be included. What about the energy used to build that plant? What about the energy used to build the machinery used to build that plant? What about the energy used to build the plant to build that machinery, ad infinitum? This is just the tip of the iceberg, but already you can see where this is going: we must draw an artificial boundary if we hope to actually count these energy inputs, but by so doing we necessarily exclude a portion of the actual energy inputs—inputs the significance of which are unknown and unknowable (because we can only know their significance by actually counting them—which brings us back to our initial problem). The outcome of these methodologies, while admittedly the result of actual counting of measurable inputs and outputs, remains but an estimate.

Are these excluded inputs inconsequential? Do we really need to count the energy used to harvest the grains used to feed the longshoreman that loaded the component ores on a dock in Asia as an energy input to the turbine parts that were produced from that ore? And what is the aggregate impact of these attenuated inputs? First, I suggest that we do not and cannot know, as argued above. See the figure below:

Figure 1: The different theories about the importance of "long-tail" inputs are compared above. In both cases (red and green lines), the total energy input is represented by the area under the curve. In the green line model (the view reflected by most current EROEI figures), the vast majority of energy input is accounted for in very proximate use (e.g., the energy consumed in the turbine assembly line, the energy used to transport the finished turbines, etc.). In the red line model (an inclusive view that I advance here), attenuated energy inputs are much more significant (e.g., the proportion of energy used to build the mining machinery to mine the ore for the metals used in the machine tools in the turbine assembly line). If, as I argue, the red line model is at all accurate, then the inability of current EROEI calculation methodologies is a fatal flaw, at least to the extent that we are looking for an inclusive number to answer systemic questions.

Only one empirical study, to my knowledge, has attempted to calculate an inclusive EROEI, and even that study assumes that, where 10% of our economy spent on energy is used to fuel the other 90%, that this other 90% is in no way a prerequisite to the energy production. See What is the Minimum EROI that a Sustainable Society Must Have? by C. Hall, et al. This study suggests that, where the initial "well-head" EROEI is 20:1, after the necessary supporting infrastructure of society is accounted for the EROEI drops to 3:1. This is a drop from "conventional" to "systemic" EROEI of nearly an order of magnitude.

This calculation of a truly inclusive, systemic EROEI for renewable energy sources stands at the very core of our society's ability to transition to renewable energy. Compare, for example, results of input-output vs. process-analysis EROEI figures from existing studies of wind EROEI at Meta-analysis of net energy return for wind power systems by Kubiszewski, et al. Two brief quotations are in order, first at pp. 2-3:

The choice about system boundaries is perhaps the most important decision made in net energy analysis, and, for that matter, in other analytical approaches as well. One of the most critical differences among the diverse studies is the number of stages in the life cycle of an energy system that are assessed and compared against the cumulative lifetime energy output of the system.

and at p.7:

Studies using the input-output analysis have an average EROI of 12 while those using process analysis an average EROI of 24. Process analysis . . . may be prone to the exclusion of certain indirect costs compared to the input-output analysis.

Input-output studies (which tend to be "more comprehensive," including more attenuated inputs, but certainly still only the “front” of the long-tail) averaged only 50% the EROEI figure of the process-analysis EROEI figures for similar technologies under roughly similar conditions. If inclusion of a small portion of this long-tail can reduce EROEI by as much as 50%, it is at least possible--I would argue likely--that inclusion of the full "long tail" will make “systemic” EROEI as much as an order of magnitude lower than “conventional” EROEI measures.

Ultimately, energy can neither be created nor destroyed. As a result, in any closed system, the energy flows within that system must come into unity. The more pertinent question here may be "what artificial boundary to draw when considering questions that affect human society as a whole?" I argue that, ultimately, we must draw the boundary at our planet, a system that, at least on human-relevant time scales, tends to operate in relative stasis given the continuous input of solar energy. As a result, EROEI of civilization must balance out to roughly 1:1 + the rate of growth of human society. While that may seem like a tautology at first, and is used by some to argue that "systemic" or "inclusive" EROEI measures such as those I suggest here are pointless, I think the reverse is true--while 0.8 or 1.2 may seem like minor differences, they fundamentally represent the difference between a shrinking global civilization (and quite possibly a declining foundation of ecological support and resiliency) or one that is growing.

We have been able to expand and grow our global civilization based, recently, on savings of "ancient sunlight" accumulated over geological time. We have empirical proof that the EROEI of these sources was significantly greater than 1 due to the sustained growth of human civilization. Now, any attempt to replace that vast inheritance with renewable technologies must address that same systemic question: when ALL the energy inputs are considered, will civilization have the energy to expand energy, maintain, or reduce the energy consumed per capita? The answer to that question will largely guide the future of humanity--as such it is critical for us to understand if the "systemic" EROEI of modern renewable energy technologies are actually, as I suggest, an order of magnitude lower than advertised.

As a quick thought exercise--and even if you only consider it a slight possibility that systemic EROEI is actually an order of magnitude lower than the numbers floating around--consider the impact on the transition from issues raised in the first post in this series (boot-strapping burden and carbon front-loading) . . .

I would also like to address one attempt to reconcile this problem: Howard Odum’s “emergy” concept. While I applaud his recognition of this problem, and his efforts to address it, “emergy” really doesn’t address the accounting impossibility highlighted above. While “emergy” recognizes the need to account for all energy inputs, it provides no methodology to get around the process of actually counting them, as we regress infinitely step-by-step back from the assembly line itself. As a result, “emergy” calculations must either draw an artificial boundary somewhere (resulting in the same long tail of unknown significance) or must resort to mere guesses about the inputs. (I recognize that Odum's "emergy" also addresses the cost of transformation between different energy qualities--this doesn't eliminate the problem caused by the "long tail" of energy inputs where such transformation must be considered, and where Odum presents no accounting theory or proxy measurement methodology to measure these inputs in aggregate.)

Price-Estimated EROEI: I have proposed that, in order to calculate “systemic” EROEI, we must use some sort of proxy-calculation that gets around the accounting impossibility highlighted above. While I’ve reviewed several options, the only one that seems workable is what I’ve called the price-estimated EROEI method.

In the price-estimated EROEI methodology, we attempt to use the price mechanism to account—by proxy—for this long tail of energy inputs. The basic calculation is quite simple: convert the financial cost to build and maintain the system into units of the same energy produced by the system and then compare to the amount of energy that the system will produce over its expected lifespan. I’ve gone through two applications of this methodology below. I’d like to be the first to recognize that there are very significant concerns with this methodology. Just to name a few: inaccuracy caused by the differing energy value of the input energy type actually used compared to the output energy type; price distortions caused by currency fluctuations, market inefficiencies, and market failures; the unaccounted for externalities of the actual inputs, especially fossil fuels, compared to the often fully internalized equivalent in the clean renewable energy produced.

While there are many legitimate criticisms of the price-estimated EROEI method (some listed above), one of the more frequent criticisms is, in my opinion, unfounded, and should be rebutted. Many people have suggested that the energy used, for example, to feed and house a person involved in the production of, say, wind turbines, shouldn’t be counted because that person would need to be housed and fed whether or not she was involved in turbine production. This critique is overly simplistic: the reason that this energy input must be counted is because of the concept of opportunity cost. If our wind turbine worker was not involved in that process, she could be involved in another energy-producing activity. Therefore, because she must give up these alternatives in order to work on wind turbines, this energy is accurately accounted as an input in wind-turbine production. Additionally, because price-estimated EROEI is an attempt to calculate the systemic EROEI, we must consider that, if this energy is not accounted for, we may be assuming that society can support a component worker that, in fact, cannot be supported and will be “cut” through population shrinkage (“die off”) and economic contraction.

Example price-estimated EROEI calculation for solar photovoltaics: LA Solar PV Installation: This 2009 installation is my example for price-estimated EROEI calculation. I think it's a good example (no example is perfect) for several reasons: at 1.2 MW, it's modest in size, but large enough to reap economies of scale; because it is installed on an existing roof space, there is no land cost associated with the installation (that, in some circumstances, could present acquisition costs or environmental compliance/impact statment costs not truly representative of net energy issues); because it is in California, where the average cost of electricity (and especially peaking "sunny day" electricity that solar provides) is higher, it will provide a more conservative estimate; because it is located in the downtown of a major metropolitan area it will not require significant transmission investment to provide a true measure, and is therefore also more conservative. Finally, there are good cost and output numbers available for the site. Basic data: 1.2 MW array installed 2009 in Los Angeles, cost $16.5 million up front (ignoring rebates/tax credits/incentives), projected financial return of $550,000 per year. At the rough California rate of $.15 per KWh, that's about 4 GWh per year (conservative). Price-Estimated-EROEI Calculation: The $16.5 million up-front is, at $0.09/KWh (here using national average, as there's no reason to think that manufacturers would use primarily California peaking power to build this system), an input of 183 GWh through installation (I'm ignoring the realtively small maintenance costs here, which will also make the figure more conservative). If we assume a life-span of 40 years, then the energy output of this system is 160 GWh. That's a price-estimated EROEI of 0.87:1.

Example price-estimated EROEI calculation for wind: I've had a more difficult time finding a recent wind project where clear data (on both cost and actual, as opposed to nameplate, output) is readily available. As a result, I've chosen a 2000 Danish offshore wind project at Middelgrunden. While up-front expenses may be higher off-shore (making the resulting EROEI here more accurate for offshore projects than on-shore), I think this is a relatively modern installation (2MW turbines). If readers have more current projects with full data, please provide in the comments--another point for investigation is whether the price-estimated-EROEI of solar and wind have been improving or if they are holding relatively stead. Basic data: Cost of $60 million, annual energy ouput 85 GWh. Price-Estimated-EROEI Calculation: At the US national average rate for electricity ($0.09/KWh), the $60 million up-front energy investment works out to 666 GWh. Using a life-span of 25 years (and assuming zero maintenance, grid, or storage investment, making the result artificially high), the energy output comes to 2125 GWH. That's a price-estimated-EROEI of 3.2:1.

Again, these are just representative samples, and I recognize the weaknesses and uncertainties with this model. However, I must ask two questions. First, if there are market or price inaccuracies internal to these calculations that make them inaccurate, how can they be explained? For example, if it’s inaccurate to use the price of a unit of energy outputted as the cost of energy input, why hasn’t the market addressed this? Second, recognizing these inaccuracies, how do we know whether this measure is more or less inaccurate than “conventional” EROEI measures? We cannot definitively characterize the uncertainties inherent in price-estimated EROEI, nor can we definitively characterize the significance of the unaccounted for energy in "long-tail" of conventional EROEI measurements, so we have little basis to say that one measure is more accurate than the other. We can only say with high confidence that “conventional” EROEI is some degree higher than an inclusive “systemic” EROEI—how much higher we do not know. But if the very high (40:1, 70:1, etc.) figures sometimes floated for the EROEI of renewables is accurate, how can we explain the inability to monetize this value?

This fundamental uncertainty does not render the discussion pointless. I think that we can say with confidence that existing EROEI measures do not answer one question that is critical to the continuation of civilization as we know it: do renewable energy systems like wind, solar, tidal, or geothermal power have sufficiently high EROEI to facilitate a transition away from fossil fuels? This leads us to the precautionary principle which, crudely summarized, states that where the potential impact is significant and we have insufficient confidence to choose between two future scenarios, prudence demands that we plan for the more pessimistic. This certainly seems to be the case here: the prospects for “transition” look starkly different at “systemic” EROEI values of 40:1 vs. 4:1. In this vein, and in the final post in this series, I will explore the significance of EROEI uncertainty and our path forward in light of this uncertainty.

I was trying to think about this a little. We can talk about net energy as a quantity. We can also do EROEI ratio calculations.

It may be easier to look at the quantity of net energy that is added to the system. Adding oil and natural gas allowed quite a large quantity of net energy to be added to the system. We can more or less look at this by country--with only a rough idea of say, how much energy China is adding to goods that the US purchases.

I think the question with wind and solar is how much net energy they are adding, over and above what goes into the system to produce them and deliver their services. I think you are on the right track, looking at the payback in monetary terms. In some ways, I think even financing cost need to be rolled into the analysis, if producing the wind and solar is dependent on the continuation of a large financing business, with all of its executives with high salaries. These executives purchase energy-related goods (airline tickets, big houses, and boats) with their salaries, even if their salaries do not look like they are energy-related.

To add a little more to my comment above, below is a graph of US per capita energy consumption that I found in a new book by Peter Tertzakian called The End of Energy Obesity. In this graph, Tertzakian has attempted to adjust for energy imported through "offshoring"-- for example, goods imported from China. The gray line is the unadjusted per-capita amount. Amounts are given in per capita barrel of oil equivalents.

It seems to me that what we are really interested in is something like this graph, but on a "net of energy expended to get the energy basis" to get the real trend in available net energy. One question in my mind is what adding wind and solar does to forward energy availability, net of energy expended.

But at the same time, we have a constraint as to how much gross energy is actually available world-wide, or to the US. If we spend a huge share of our gross energy availability in the next few years on building new wind and solar, this will leave us much less for other goods. So one really wants to be able to look at required energy expenditures for wind, solar and other energy goods compared to gross energy availability on a graph such as this. So we also need a gross analysis.

As John Howe pointed out recently, we cannot borrow energy (unless we have very good energy storage capability). So the issue is very much a calendar year energy availability and expenditure question.

There are some interesting comparisons to draw between US per-capita energy consumption and the effect of offshoring that energy consumption to China and the same effect with the energy required to produce renewable generation capacity. I've seen at least one study, though I don't have a link readily available, that showed higher EROEI for wind turbines manufactured in Brazil compared to Germany. One possible explanation (though the study didn't quanitfy this) is that the standard of living of workers, and the societal support infrastructure in general in Brazil is lower than in Germany, and therefore less energy was required as an input. This may be another fertile source for exploration of the extent of the "long tail" of energy inputs. It also emphasizes two important issues: 1) the link between standard of living and energy consumption, which will necessarily be "optimized" in energy descent, and 2) the disconnect between many "standard of living" measures and what (I argue) we should actually be seeking to optimze: happiness. Again, I don't have the link on hand, but I remember a study recently showing that people in Brazil are happier, in general, than people in Germany...

I think on some Brazilian studies, they also take into account that their electricity tends to be from hydropower and from burning bagasse, so is less hydrocarbon intense.

The study you are referring to is by Lenzen and Wachsmann
This should bypass any paywalls

The big differences were in the wind resources in Brazil( capacity factor higher) and the use of a higher quality energy( hydroelectric power)rather than coal used in Germany.
Since wind energy put out kWh it shows that it makes more sense to use kWh equivalent inputs, not MJ or BTU. Thus in Germany the kWh used by the factories not the MJ of coal used to produce the kWh.

The standard of living of Chinese or Brazilian workers is not a big issue, because these economies use similar energy /GDP as many of the states in the US. The difference is the much higher oil consumption in US, but not much of this is directly or indirectly ( by workers) used in wind turbine manufacturing( mainly steel and electricity consumption)

I have looked at the study you referenced before. To me, the numbers in Table 1 look very strange--possibly wrong--but perhaps there is something I don't understand.

The wind turbines used in Brazil and Germany are supposedly identical with capacity factors of 500 KW. This means that the maximum output of each of these turbines is 500,000 x 24 x 365 = 4,380,000 kWh. Dividing the numbers shown as annual output for Germany from Table 1 by this maximum capacity, we get the following capacity percentages for the five German turbines: 29.6%, 31.2%, 24.2%, 18.3%, and 20.1% . The average of these is 24.7%, which is quite a reasonable number, compared to other numbers one sees for German wind turbines. If we look at the annual out numbers for Brazil, dividing by the same base, we get 81.3%, 85.6%, 66.5%, 50.2%, 55.3%.

The numbers for Brazil seem absurdly high, but I can't see any reason to believe that these are the amounts for more than one wind turbine. When I look at the EROI numbers from a Meta-analysis by Ida Kubiszewski , Cutler J. Cleveland, Peter K. Endres (still in print) that depends on the Lenzen and Wachsmann study you reference, I see EROI indications in the 4 to 8 range for Germany and in the 20 to 40 range for Brazil.

Does anyone have any idea what is going on? Has anyone ever heard of a wind turbine producing at a level in excess of 80% of its capacity over the course of a year in a coastal area? How about producing over 50% in a year in an inland area? Am I reading this wrong?

The turbines were 500KW or 600KW depending on wind conditions. That gives the highest coastal site in Brazil a capacity factor of 70%(3,750,000/5,250,000)using 600KW value. A wind farm on the Shetlands operating for 5 years has had a capacity factor of 54%( higher some years). One large wind farm in Australia has 47% capacity factor
This really means the turbines should have been designed to give a higher maximum value( say 800KW). This doesn't mean more materials perhaps more powerful magnets. In actual fact a 800KW turbine of the same dimensions and height would probably produce more power than the 3,750,000 kWh/year since it must have been operating at 600KW for a significant part of the time.

You need to remember capacity factor is not fixed its built into the design and depends on the reliability of wind. A region with constant winds theoretically would have a 99% capacity factor, but for economic reasons low capacity factors are designed to give maximum power. Germany has low capacity factors because the feed-in -tariffs encourage over-building of turbine size, relative to tower and blade size.

I don't think overbuilding is a huge issue. Germany's result is not that different from the results of Norway, Denmark, and the US.

The numbers in the chart for Brazil are so different, I think they need to be reviewed. The turbines in question make up a disproportionate share of the results for the new meta-study that I mentioned above. Most countries publish total capacities and amount of electricity generated using that capacity. According to the Lenzen and Wachsman study, the Brazilian wind turbines in question comprised 81% of Brazil's wind power in 2001, so comparing to aggregate data would seem to be reasonable.

Does anyone know where one can get Brazil's total wind generation capacity and production?

Germany's capacity factor is about 19-24% while the US is 35%( that's only using data from turbines in operation for a year, remembering that >10GW capacity has been added in last 12 months to June 2009.) In Australia it's 36% with a similar financial regime as US but much lower prices than in Europe.

I am sure Brazil's wind capacity factor is now less than the 60% average of this study( using the 600KW value not 500KW).

Well, portuguese wikipedia says that Brazil by 2007 had an installed wind capacity of 247 MW. From those 150MW come from the Parque Eólico de Osósio, and 49,3MW come from the Parque Eólico de Rio do Fogo.

Parque Eólico de Osório has 75 towers that are 98 meters high, each with a generator model E-70/2000KW. Parque Eólico de Rio do Fogo has 62 towers of 800kW each.

It looks like those numbers are nominal. Parque Eólico de Osório has 34% utilization factor, and there is no utilization factor available for Rio do Fogo.

marcosdumay's post is further support for what I am saying.

Parque Eólico de Osório has the big modern generators with 2000KW capacity. These have only a utilization factor of 34%. This is further evidence that the Brazilian numbers used in the Lenzen and Wachsmann's study are absolute and complete nonsense.

If Lenzen and Wachsmann are going to suggest that such high numbers are possible, and these numbers are going to be repeated in megastudies, they ought to at least be backed up with evidence from elsewhere.

"This is further evidence that the Brazilian numbers used in the Lenzen and Wachsmann's study are absolute and complete nonsense."
Not at all, the 600KW turbines were designed to be optimal for Germany's lighter winds, and to make the country by country comparison they used similar designs.
The new turbines(2008 designs not 1998) are designed to optimize "economic returns". If those earlier turbines had been optimized for higher wind conditions they would also have had a capacity factor of 30-35%. I have calculated even higher EROEI using data from Vestas V90(3MW turbine). Larger turbines generally have higher EROEI( see Cleveland's post)

This example may be useful.

Hitlers general staff,meaning the corps of officers who created his war plans ,realized that Germany could not fight a long war of attrition and that thier only real hope of winning was to win fairly quickly,before they burned thru thier stock of essential materials.

They might have lost any way,but it certainly did not hurt our side that Germany ran critically short of many materials as the war progressed.

We may burn thru our stockpile of materials,in a broader sense,before we can transition to renewables.Certainly the high energy lifestyles you allude to are burning thru a lot of critical "war materials" that might make the difference between winning and losing the transition war.

I can see that PERHAPS even with an oil based economy up and running to build the factories that build the renewables that the renewables thus built MAY not generate enough energy to REBUILD and MAINTAIN our current physical infrastructure real property(house,city watersystem,hYdro plant) or personal(diesel tractor,city bus refrigerator electrical grid., WITHIN A TIME FRAME THAT CAN PREVENT COLLAPSE and teotwawki.

If we went on a war footing to build the renewable manufacturing base now before energy becomes REALLY SCARCE.....

I have always believed that collapse is possible but not necessarily a foregone conclusion.

All at once the odds of resource driven industrial collapse look a lot higher than they did yesterday.BUMMER!

Farmers used to be closer to rail haul; US had hundreds of agricultural corridor rail branches. Many are coming back in part due to the Ethanol fad. Still, lots of corn to haul on these rehabbed lines. But, more rail links needed! Someone interested in detailed railway mention, see todays Kunstler Blog, in box 18.

Enjoy the typos. Going thru the normal ways and means of putting together new rail plant and rehab of broken down lines, this oncoming emergency seems to require a different approach.

In Northern California, the Agricultural Branchline list includes Isleton, Placerville, Dunnigan, Knights Landing, and Capay Valley. At Colfax, there is still traces of the rail corridor to Grass Valley. Fruit and vegetables were important rail traffic, and still many 1000's of tons coming out on the corridors listed. On JHK's CF Nation (8-10) blog comments in box 18, the use of reconstituted railway logistics battalions is written.

The military railway unit approach can provide an apolitical mechanism for selection of priority corridor junctions, establish a staging facility, and "Sponsor" rehab of connected or nearby dormant branchline rail line. In Northern California, Placerville and Colfax could be two such locations. Placerville track is still intact up to the City Limits. Location at Placerville would anchor one end of the rail line, sit astride strategic highways 49, and TranSierra US 50. Repair and get the rail line running back down to Sacramento. CalTrans people, see the 1995 I-90/US50 Reno/Tahoe rail corridor Study

At Colfax, we have Interstate 80, and state route 174 to Grass Valley. And the old narrow-gauge NCNG. Another strategic transport node, and a fixer-upper food bearing rail corridor. With small but operating rail freight yard, and adjacent open real estate, the Colfax site could host a Rail Unit training site as well.

Chuckles reverberate, but at some point, is we is, or is we ain't moving closer to a place where collection and distribution of simple victuals and necessities of life may be in question? Invited reading: Christopher C. Swan's "ELECTRIC WATER" (New Society Press,2007). Renewable direct linked to local domestic/commercial and "Retail Railway".

One can make a case that highest and best use of renewable in transport is the railway mode. The case is already settled, proven in the USA transport mode mix of pre-WWII, when we enjoyed status as a lending not a borrowing nation. During that period, the military called railroads: "Second Dimension Surface Transport Logistics Platform".

As in Kunstler, suggest obtaining your locales' legacy rail maps from, if not at nearby library or historical archive. Also, see circa 1940's "Official Guide of the Railways", see your town or nearby communities in index at back and note railway serving. The modern term, shorter than military lingo: Parallel Bar Therapy"... Or, try this on your buddies at the Chamber of Commerce: Guarantor Of Societal And Commercial Cohesion! See you down the line

The following essays are offered to add some more perspective to this whole notion of systemic EROEI. Rather than a chain of inputs we need to envision the energy flowthrough of our economy as a web of relations in which, as energy flows, it is used to do work (at various efficiencies) and ultimately degraded to unrecoverable heat waste. This is a project I have been working on for several years -- developing a framework for thinking about how to measure and account for the actual work value of economic activity.

I think Jeff's sense that monetary estimates SHOULD approximate energy costs is correct. Furthermore, if we had a conversion formula that took quality into account, the current cost accounting systems in place could actually be used to gather the needed data. Combined with a network flow model of the economy, from farming and extractive industries through manufacturing and non-financial services, I think we could possibly capture a much better view of how much net energy available to do economic work (free energy in physic speak) we actually have (hence a way to budget future activities). This is vital since the early implications of the net energy out of most alternatives suggest that sans massive scaling (which might not be feasible today) we will never have the net energy needed to run the modern world, let alone allow developing nations to reach the developed world's level of consumption.

These essays are among several labeled Biophysical Economics in my blog.

General holistic view of energy flow and its relationship with the economy:

Introduction to the sustainability criterion for all renewable energy conversion systems:

Introduction of the need to base currency on an energy standard:

Introducing the notion of energy flows to support an individual from diffuse outer layers to more direct inputs in Our Energy Cocoon:

Introducing the energy web and flow through:


. Adding oil and natural gas allowed quite a large quantity of net energy to be added to the system.

Technically, the energy was taken out of the system years ago and stored.

I think the question with wind and solar is how much net energy they are adding,

The wind/solar energy is there, if we capture it or not. How 'valuable' that capture method/the result depends on the measure.

FRN is one accounting method.
So is EROEI.
So is eMergy.
So is using watts.

The main driver for the planet is the sun and the photons the Earth manages to capture. The closer one is to counting the photons - I'd say gives a better chance to compare equals.

The fundamental problem with EROEI is the logic. Energy is not concrete like dollars in dollars returned on dollars invested. Energy is an abstraction. It is a name we give to a group of different forms of energy. Energy is like grain and metal. It does not exist except in its various forms. Each form is very different having different characteristics like utility, price, renewability and availability.

No one in their right mind would propose we decide which grain to grow based on grain return on grain invested. Nor would any thinking person propose determining which metal to mine based on metal return on metal invested. Both are abstractions just like energy. Yet many people think energy is a special case where it can be done. It can not be done. The only time EROEI is remotely valid is when like input and like output are compared as in the oil industry where oil is the both the main energy input and output. This is somewhat analogous to $RO$I and can be valid if done carefully.

All other cross comparisons, addition, subtractions, multiplications and divisions using different forms energy are false. Things that are different can not be compared. Until EROEI promoters admit this they will forever be chasing their tails in an endless search for a solution that can not exist using EROEI as the determinate.

It is too bad that many "intellectuals" at prominent universities and government agencies have bought into the fallacious EROEI concept. They are holding back progress in dealing with the Peak Oil dilemma even as think they are helping the situation.

Actually grain return on grain invested (GROGI?) is what a large portion of human time has been invested in. This selection for larger root size (potatoes, yams, etc.) more kernal starch (maize, rice, and the lot) has given us all of our current cultivated plants.

Selection by man (termed artificial selection)is where qualities are chosen, no matter how slight they may appear in the parent generation, and are 'bred' by directed pairing, into offspring which on average over many generations accumulate the genes (and any other genes closely associated with the ones of interest) which increase that quality.

I'm not sure how this factors into your critique "x", but grain return on grain invested basically reduced the amount of energy humans had to invest (food burned to sustain them) in order to plant out and harvest a crop, and reduced the area of land to be cultivated; both nontrivial efficiency increases.

You have to understand the basis of his argument. He is a corn farmer, and unhappy with the low EROEI of corn ethanol. Thus, being unhappy with it, he says it isn't relevant. But it is relevant. He favors the use of natural gas to produce ethanol, suggesting that these forms of energy are not interchangeable. The fact that you can run cars on CNG simply nullifies that argument. Of course if he wants to argue that you can use coal to make corn ethanol, and that these fuels have different utilities - he is of course correct. But then we could have a different argument.

In fact, I just addressed an example today of why EROEI is relevant:

Fossil Fuels versus Biofuels: The Impact of EROEI

Here is the meat to illustrate the issue:

In a fossil fuel-based society, the energy return is currently somewhere around 10/1. Of 85 million barrels per day, 8.5 million of those barrel equivalents were used to produce the oil. For the sake of this exercise, let's assume that oil was used to make oil. That leaves us with a net of 76.5 million barrels with which to power the world.

Now, drop the energy return of that same society to a biofuel range of 1.3 to 1. Now, in order to net 76.5 million barrels of oil, we have to produce an additional 76.5/1.3, or 59 million barrels per day. In the fossil fuel society, it takes 85 million barrels of total production to sustain it. In the low energy return society that approximates today's biofuels, it takes 76.5 + 59, or 135.5 million barrels per day to sustain it. That means that if we tried to run the world on low energy return biofuels, an increase of 59% in total energy productivity is required just to net what we are running the world on today.

People who say energy return doesn't matter fail to grasp this point. Unless biofuels are able to substantially improve their energy return - or we have a huge reduction in consumption - a lot more resources are going to have to be devoted to the energy sector.

But as fossil fuels deplete, it would take a tremendous increase in energy productivity to run today's economy on biofuels. A much larger portion of society will be devoted to securing energy in such a situation.


A much larger portion of society will be devoted to securing energy in such a situation.

Here is a different take on that. Besides diminishing FF supplies and the uneven distribution thereof, a huge societal problem is the fact that productivity is too high with it. The "Consumer Economy" was created after World War I (and then accelerated after WWII) because we can do so much with so little. There were not enough needed jobs to go around, so we put people to work making trinkets and other things not needed before.

In a techno-utopia, we have high EROIE, automation, and "more leisure for artists everywhere", as Donald Fagan sang. It never works out that way. The excess masses are never satisfied, as not everybody gets a spandex jacket.


You have to understand the basis of his argument. He is a corn farmer, and unhappy with the low EROEI of corn ethanol. Thus, being unhappy with it, he says it isn't relevant. But it is relevant.

Perhaps a bit, but only because of subsidies. We wouldn't have to think about EROEI or try to calculate it otherwise - the economy would see to it that energy weren't produced irrationally.

Also, please note that low EROEI may be ok. For instance, a 1.1 return would be ok if there were no other significant costs or depletion issues involved. You would just loop the energy in the 1.1 system a number of times and siphon off an arbitrary amount of excess energy.

Robert,I agree with you but maybe not your analysis of x's mistake.

He is internally consistent within the box that confines his thinking,and his reasoning is thus sound enough from his pov.It's his understanding of the larger picture that is at fault.

Your comments in general visavis eroei cut right to the heart to the problems we will face in transitioning to a system of agriculture not dependent on fossil fuels.Most of the cornucopian ag sites are so far off base in this respect "it ain't funny".

A year in clover will definitely put a useful amount of nitrogen into the soil,but it takes a hell of a lot of energy to put it in,it changes the field from grain to pasture or hay,then it takes a lot more energy to take it out again.

Furthermore the clover often needs the first year just to get well established.

As Engineer Poet pointed out over on my blog, the real answer is much worse than what I calculated. You have to solve two equations here; Net Energy = Energy out - Energy in, but also EROEI = Energy out/Energy in. I forgot to plug the net energy equation in. Doing so changes the answer as follows:

Now, drop the energy return of that same society to a biofuel range of 1.3 to 1. We have to solve two equations here: Net Energy = Energy out - Energy in, and Energy return = Energy out/Energy in. Solving these two equations for a net of 76.5 million barrels of oil means we have to produce a total of 255 million barrels of oil equivalent. In the fossil fuel society, it takes 85 million barrels of total production to sustain it. In the low energy return society that approximates today's biofuels, it takes 255 million barrels per day to sustain it. That means that if we tried to run the world on low energy return biofuels, we would need to triple the overall energy output over what we produce today.

Shouldn't the total energy consumption be exactly double for an EROEI of 1? That would be less than what you and Poet are getting from an EROEI of 1.3.

For 76.5 million barrels energy investment is 76.5/EROEI = 76.5/1.3 = 58.8 million barrels. A total of 76.5 + 58.8 = 135.3

Net Energy = Energy out - Energy in
76.5 = 135.3 - 58.8

EROEI = Eout/Ein = 76.5/58.8 = 1.3

I see the total at 135.3 million barrels.

Another way, (1/EROEI + 1) * 76.5 = 135.3 for an EROEI of 1.3.

If EROEI is 1, (1/1 + 1) * 76.5 = 153, which is double.

No. In your equation above, Energy out = 135.3. So the correct EROEI using your numbers above is 135.3/58.8, or 2.3. You used net energy instead in your EROEI calculation.

An EROEI of 1 would mean zero net energy. In other words, put 1 BTU in and get 1 BTU out.

Ok, I was foggy on energy out. So for a net energy of unity it would trend like this,

EROI energy in energy out
1 1/4 4 5
1 1/3 3 4
1 1/2 2 3
2 1 2
3 1/2 1 1/2
4 1/3 1 1/3
5 1/4 1 1/4
6 1/5 1 1/5
7 1/6 1 1/6

There is some confusion over the definition of terms. It seems to me that most prefer that the 'ER' in ERoEI refers to all the energy returned, not that above what was put in. An ERoEI of 1:1 under this definition is a net energy of zero. Some have recommended calling this the 'Energy Return Ratio (ERR)' instead.. In any case, that's the definition Robert is using here, so that's why he's doing the math that way.

Jeff is using a different definition in the keypost, where the 'ER' is only the energy returned above what was put in, or the net energy as a ratio over the energy invested. This is similar to the definition of "return on investment" for financial investments.

For your first equation (76.5/EROEI) to be correct, you have to use the number for the second definition, or 0.3 instead of 1.3. Then you'll get the same result as Robert.

So if you expend 3000 calories to acquire 2999 I suppose you've become metabolically insolvent.

That's a cute way of saying you're a walking corpse. Perhaps not dead YET, but it won't take long.

The same would be true of a wind-powered America, of course.

I disagree: a windturbine can be considered an economic loss in dollars "the cost is 2 million, and I get only 100'000 back per year the next twenty years",
BUT a net win in clean energy for society (especially say compared to say bio fuel from food stuff). That is where "EROEI" or an "energy/environmental life cycle analysis" comes in.

Can you see, and agree to, that case where the concept is a strong guide to act (rather than looking at the dollars)?

Segeltamp,I agree ,there is more to be accounted for than just the cash return.Furthermore,if the wind farm gets built,the VALUE of the revenue stream ( MEASURED EITHER WAY,cash for the sale of electricity paid for with inflated money or the true increasing marginal value of every kilowatt hour in a world running short on energy) will probably soar like a kite.

A tank of diesel burnt now fetching a six packs in an f250 4x4 is burnt forever but that same tank burnt leveling the ground where a wind turbine will be built is an investmemt that might be last as long as an Egyptian pryramid.

My vote is full speed ahead on renewables,but with a sensible engineer in charge to make sure to the extent possible that sites are well chosen for real engineering reasons rather than politics.

If some engineer who does concept to production engineering would comment on this idea:

We might be better off spending every dollar we can on csp and pv in the deep sun belt and not a dime on the same in New Jersey-because that could speed up the day that the investment is paying a true return,no further subsidies needed,due to increased operating effifiency.

The manufacturing industry might build out faster,and the product get cheaper faster that way,measured over a span of a few years.

The rest of the country might earn a better environmental and cash return this way because after all co2 pays no attention to state lines and there is no extradiction process to return it to it's home state;and the less coal and natural gas burnt anywhere the cheaper the price everywhere,if the quantity is significant.

Although I think raising corn for ethanol is a well paved high road to hell,it might be that by substituting some ng and coal for crude that the net effect on prices,everything else held the same, might make the ethanol subsidy a net winner for the economy as a whole,as measured ONLY in terms of dollARS spent for crude,even though it will cause the prices paid for food to rise somewhat;or this scenario might be true only if the economy is humming and the price of oil is high and rising.I haven't seen any analysis dealing with this possibility.

Not an engineer, but as a Minnesotan, I'd be unhappy with this approach.

Keep in mind that during the summer we get more sun than parts of Florida. And that is exactly the time when there are sharp peaks in electricity use and our grid has to buy from out-of-state sources.

This brings up another point. I can't remember the technical term, but I've learned around here that it is the last barrel bought that sets the price. Presumably this is also true of watts. Can these issues be accurately figured into these EROEI figures, especially since price is being used as a proxy for energy?


I understand your point but you need ac for a few weeks whereas Arizona needs it just about every day-so the energy output is larger and the value higher.

Now since you live in an area much better suited to large scale wind,the production return on a wind farm in your area is probably much better than it would be here where I live in Va-and with your longer heating season you could make much better use of the juice driving ground source heat pumps than we could here in Virginia ,where the heating season is much shorter and it doesn't get as cold.

And if the heat pumps are hooked to a smart grid,and the crawl space or basement is well insulated and has nice thick walls of stone or concrete,or just a big pile of gravel to serve as a thermal reservoir,then one hell of a big chunk of the variability in output problem is easily solved.

So as my scenario works out-if it works out-your area gets the lions share of the wind investment.

Here in Va I would pay taxes to subsidize both Arizona and Minnesota and hope that I earn an indirect return via cheaper coal and ng and a better balance of payments,etc.

The word you have forgotten is "marginal barrel" and it is accepted that is is on average both the most expensive barrel to produce and the barrel that sets the price-which is one reason why reducing demand can pay a suprisingly large return in falling prices.

Of course my little mental exercise will remain mostly only a thought experiment,given the realities of politics.

But it sure as hell makes no sense to own snow skis in Florida or beach umbrellas in Minnesota,as neither item will get much use.And here in the western end of Va,I can get only a little use out of either one.I don't get to the beach very often and it has never snowed often enough to make it worthwhile to learn how to ski.

Yes, wind and the other systems you noted are being exploited, but not enough.

I guess another approach to the point I am trying (poorly) to make is the idea of resilience and back up systems. The more variety we have in our mix of sources,the less likely that they will all go down at once. I have heard that the reliability of solar and wind goes up dramatically when used together, so that, other than calm nights/cloudy days, you have guaranteed alternative juice all the time.

Certainly solar water heating has been used very successfully here.

Having said all this, I do think we should be thinking about rational rationing of our various vanishing resources. I just think it will need to be a bit more nuanced than "these guys get all of X and none of Y."

And yes, politics and "economics" (the super-rich and mega-corporations get whatever they want and the rest of us scramble for crumbs) will be the prime movers.

Even in MN, skiing is getting to be a rare treat. Last winter, we had a good snow cover, but before that it had been years since you could reliably ski anywhere near here unless the place made its own snow.

Oh, and this summer has been quite cool, but it has been common to have very humid weather well into the 90s starting in May and going into late September. Many businesses and new condos have now way to open windows, so they go straight from heating to ac.

I guess the warming must be moving along faster than I thought.I was aware that it can get hot and muggy up your way but not that the winters are so much milder recently.

We have the same thing going on here-we haven't had a good spell of old time cold weather,the kind that was common in my grandparents day but once every ten years or so for the last thirty or forty years.

Sageltramp, if it is an economic loss, then why would the "clean energy for society" be considered a "win" in "clean energy" or anything else? The economic loss points out that we would be better off NOT producing and NOT consuming that particular energy (which of course would be even cleaner).

You misread: what do you choose: 1) windturbine, gives 3 units energy and cost 2$ and give 0.1$ return per year or
2) for example biofuels facility, give only 1 energy unit and cost 2$ and give 0.15$ (!) return per year?

the manager chooses 2) but the engineer chooses 1) (more energy to do stuff with).

The difference is based on the fact that the consumer chooses liquid fuels and pays more for that,
because the consumer do not have the option (and dont know - not a perfect market...) to use the
more efficient electrical motor.

So EROEI calcs is simply a method to show what options would thermodynamically be a more efficient path (for soceity to prioritize),
then to look at dollars returned.

you see the point now?

(in the above I assume an alternative to use electricity for fuel exists - and also that the present society do not price energy to true costs (considering pollution, acquiring efforts, R&D efforts, infrastructure built...). I also assume that the problem of the commons will exist over the the next 50 years or so (i.e. no neocon total ownership and protection of everything foreseeable in the near future). reasonable?

You forget the market mechanism. If both are selling an interchangeable commodity, the situation you depict is a mathematical impossibility (in practice : can only exist due to government subsidies, which are inefficient). The price for their energy would equalize.

Now this is not true because there is no efficient method of turning excess electrical power into gasoline, or the reverse. So it is possible that this situation exists, because the commodities are not interchangeable.

So in the free market case, and given it's possible to make your car drive on electricity, you are able to substitute "units energy" and "return per year". Meaning, of course, that the biofuels facility in your hypothetical example is 150% more efficient than the wind turbine, given that no subsidies are involved.

With the real numbers it's worse : windturbines are still a net loss of energy, due to maintenance issues. Even without that they become EROI 1.1 or 1.3 or so. This is unsustainable economically, and such a model cannot exist in the real world for long (since it's a feedback loop, if the government were to subsidize it, the cost would rise rapidly until even the government can't pay for it anymore : capitalism is a "self-enforcing" algorithm : cheating (e.g. govt subsidy) will only damage the people involved in the cheating, it cannot result in a better end result).

Contrast this to the average nuclear plant, which has an EROI of 400:1. The sad truth is simple : civilization can (currently) run "sustainably" on nuclear power. It has zero hope of running on wind power.

Another way of putting it: a manager would (he must it is his job) for a 100$ more profit,
build facility A rather than B. EVEN if facility B produced 3x more ENERGY for society to use.

The choice of A or B would for the manager be based on assumptions of future interest rates and other economic considerations - rather than
on what society might need. Now if you are a politician - what should you encourage and regulate? that is where
the EROEI concept comes in.

Why would not the "economic considerations" capture what "society needs"?

If I were a politician, I would leave this to the market. If energy of a different quality gives more profit than a higher amount of energy, then this reflects what the society needs!

Well because doing that would never justify massive government interference in the market, also called communism, which just about everyone here seems to be pushing for.

I think your statement about energy and dollars is incorrect. If something is real it is rather energy than dollars. The fact you can hold a dollar banknote in your hand does not mean it is real. Money is an abstraction!!! Energy obeys nature laws of thermodynamics.

Euhm money is information. Or rather : prices are information. They are the only real reliable source of information on what society needs.

All that is said here are guesses from the ivory tower. Energy needs are a guess from the ivory tower. Oil output statistics, both in the past and certainly those of the future, are guesses from the ivory tower. Global warming is a guess from the ivory tower.

The price of energy, on the other hand, is real information. The best information that we as a society can give about the EROI of energy generation.

If you have a real EROI in energy, changing that into a great EROI in money is beyond trivial. One would be tempted to conclude that such can only mean that solar and wind do not have good enough EROI's (and therefore shouldn't be deployed, except perhaps for improving the technology, or perhaps (perhaps) to achieve a hint of energy independance : an emergency supply). It means that it would be a mistake, viewed both from energy EROI and money EROI to build either solar or wind generation.

People have used solar and wind power for centuries, if not millenia.

The base EROI is clearly positive, any $ROI problems people and companies may be finding with them now are purely implementation specific.

If the EROEI is positive for a particular implementation, then any failure to make a monetary profit is a failure of the business plan.

"If the EROEI is positive for a particular implementation, then any failure to make a monetary profit is a failure of the business plan."

Agreed, so why do these projects fail without the government forcing the outcome to be what they want it to be ? Why would any government want to be involved in this clearly booming-by-itself trade. Of course, in reality, it is shown that > 50% of all "green" revenue comes directly from government coffers. One can only wonder how much does so indirectly.

So why, if the EROI is so great, haven't these things boomed ? With a price advantage it won't take that long to beat the crap out of the oil companies.

Of course, the conclusion I would draw from this is that your basic assumption is incorrect : EROI for solar/wind/biofuels/... is not sufficient for a price advantage.

Of course, the conclusion I would draw from this is that your basic assumption is incorrect : EROI for solar/wind/biofuels/... is not sufficient for a price advantage.

The base EROI is clearly positive, any $ROI problems people and companies may be finding with them now are purely implementation specific.

I think you misunderstood me.

A positive EROEI is insufficient to make money off an energy tech. It is only the first necessary precondition.

Many other factors must align before you can make money from it or everyone would be doing it.

Agreed, so why do these projects fail without the government forcing the outcome to be what they want it to be ? ... Of course, in reality, it is shown that > 50% of all "green" revenue comes directly from government coffers.

Offer some evidence for these assertions, or they are nonsense.


"Energy is not concrete like dollars in dollars returned on dollars invested. Energy is an abstraction. It is a name we give to a group of different forms of energy. Energy is like grain and metal. It does not exist except in its various forms."

Statements like the above make it hard for me to believe that you even understand energy let alone the concepts of EROI or net energy!

"energy is not concrete." In fact, anything with matter, including the physical substance 'concrete', can also be described as energy. Therefore, concrete itself is energy. I do realize that you were using the word "concrete" in your example as a metaphor for something tangible, but I question you, how are dollars like concrete? The "value" of a dollar is certainly not concrete, see The Great Depression.

"It is a name we give to a group of different forms of energy."
Energy is a name we give to a group of different forms of energy? What does this mean?

"It does not exist except in its various forms"
Again - "energy does not exist except in its various forms" - i.e. its various forms found everywhere in everything...

"Energy is an abstraction....Energy is like grain and metal" - ??????

Everything is an abstraction, or a proxy for one.

Paper currency is a proxy for the abstract concept of "money", which is worth what everybody agrees it is.

Energy is a mathematical (abstract) concept that arises from our perception of the world. We can have a definition of it (work can be performed by it) and can observe that it is conserved (1st law). And we believe that the "amount of work" so described remains constant over the eons (in contrast to money). But it gets mushy after that. Concrete may be energy in a relativistic sense, but it doesn't do us much good in that way. Named sources like crude oil or coal are not forms of energy, but work can be performed by combustion with oxygen, having the resultant pressure drive a piston or turbine. Heat isn't really definable as energy unless you have a corresponding cold sink. Photons? Not unless you have something that can absorb them.

I agree with RR in that using natural gas to make ethanol to put in cars is a bad idea, but the judgment is not based solely on EROEI. For example, if having CNG tanks in cars was extremely undesirable because of safety concerns or space limitations (and if we had an unlimited amount of land), then gas-corn-EtOH still makes sense. In Alberta, gas is used to upgrade the "inferior" fuel in the tar sands because the product is more transportable than the natural gas. In a refinery, hydrogen (derived from natural gas) is use to crack heavy hydrocarbons. EROEI be damned.


No offense, but no matter (pun intended) how you slice or dice it, Energy is absolutely *NOT* an abstract mathematical concept!

Richard Feynmann: The Messenger Series: The Relation of Mathematics and Physics

I think he knows about the Feynman videos, and is thinking about the "conservation of energy" lecture, where Feynman says (spoiler alert) 'there are no blocks', hence his comparison to grain or metal.

If that's a video of Feynmann, then M$ Silverlight is not working on my computer (I just get the audio). I listened for awhile to something about Newtonian geometry and the sun, but got lost.

I grabbed Feynmann's Lecture Series. In Volume I, Chapter 4 (Conservation of Energy), he asks "what is energy?". The answer seems to be that it is something that exists in many forms, but in all cases is conserved through any physical process. He calls this mathematical principle an "abstract idea". Later, he says:

It is important to realize that in physics today, we have no knowledge of what energy is.

Yeah, my apologies as to the link, it is a Feynmann lecture.
I think you need to download software from this link to actually view the video.|0||6b89dded-3eb8-4fa4-bbcd-7c69fe78ed0c||

It is important to realize that in physics today, we have no knowledge of what energy is.

While he may have made that statement I believe he would also be the first to admit that energy itself is not an abstract mathematical concept.

BTW I spend a lot of time in the hot Florida sun and if I forget to put sunscreen on, the resulting sunburn that I get is most definitely not the result of any mathematical abstraction. :-)

When you dive out into the string universe and are building all matter out of vibrating strings is there anything besides energy? Or is that the jist of the "no matter" pun? I got about halfway through Greene once upon a time so my understanding is more than a little lacking.

As an aside but more in line with the EROEI subject addressed the local geothermal 'magnate' is trying to hook up with the outfits starting after our local natural gas, with intentions of harvesting the heat from the gas being brought up. Anyone know if this has been successfully done elsewhere?

I think if you go in through this link, you can see the video. (I had the same problem).
Very nice set of lectures. Too bad there isn't even more.

The problem with your claim is very simple. You're right of course, that money is an abstraction and that EROI is not an abstraction. However, there is another tiny little factor :

We KNOW the money EROI (for sure), and we also know that it is an approximation for energy EROI, especially if you let some time pass, and account for subsidies (and nothing else).

We GUESS the energy EROI, and you claim that we have any serious idea about how much it is, which is blatantly false. I will agree with you that it's too bad we don't know, but the fact is we don't know. The problem is accounting for how much food the secretary of the assistent low level secretary of the structural engineering firm is used in the construction of a wind turbine. It's trivial to see the answer cannot be 0. It's absurdly hard to find out how much it is, but if we simply use the price that company charges, we have a good idea about it, expressed in a single number.

This also makes it obvious that attempting to use our guessed values instead of the values that are self-correcting is like a game of russian roulette. The beauty of capitalism is that any disturbance of the market is a feedback loop : it means you make money out of nothing (by getting free money from taxes, aka subsidies, for example). This means more people will exploit this loophole. And more. And yet even more. And then the bubble pops : either the government goes broke, or you get inflation. And given how many people depend on the infrastructure you're talking about ... if you're wrong ... you don't get a second chance, and neither will many of those people.

Markets are inefficient and there is a significant time lag between the signal and the response.

This results in errors in pricing that are not self-correcting within a useful time frame, which means that even the price is just a guess.

EROEI is at least well measurable to the first remove and somewhat measurable to the second so can provide a check on pricing and in most cases can provide a solid go/no go signal for a particular implementation.

This of course, does not mean that EROEI is a perfect measure.

A high EROEI process that depends on rare (and therefore likely to be expensive) inputs is not likely to give me a significant ROI without a niche market that needs a power source with its characteristics.

O-kay then. Please show me where in your EROI calculation you are accounting for fossil fuel usage for getting the design engineers to work. Oh and why don't you show me you accounting for the breakfast that the guy who refills the coca cola machines in the building where the gearbox was designed ...

These sort of things, for everyone involved in the production, add up to quite a bit. And of course, measuring it is totally impractical. Except, of course, in the price of a wind turbine, where such are accounted for. So it seems only fair to demand you account for the same.

So now show me. I am sure you've got a better measure than the price. Of course a better measure means taking more things into account. Let's see.

I'm not taking those things into account, because they are not a direct part of the process.

Heck, most of them aren't even figured into the price. The design engineers make what they make, how they choose to spend that money is outside the company financial statements. If every worker and engineer at Westinghouse decided to bike to work next year it would have *zero* impact on the costs to the company or the prices of their generating equipment, yet by your argument their choice of how they get to work is a significant impactor on price and EROI.

Your visualization is inconsistent.

The fundamental problem with EROEI is the logic.

Nowhere in this analysis does Jeff consider ownership.

Ownership matters. A lot. EROEI can be negative if it shifts the gain from one group to the other more powerfoul group. So much for the logic. Powerfoul. What's our oil doing under Iraq's sand, for example.

Or, if Maine builds enough wind power to heat 200,000 Maine homes is that a good thing for Maine? Sucker; it's all going to Connecticut while Mainers freeze in the cold and dark and sabotage each other's trucks for a chance at a windmill repair job. That's 200.000 homes that could be heated from resources within Maine's ecological footprint that will not be, but where those benefits will be exported. If Matt Simmons profits and those profits remain feudalistically in Maine, maybe ok. But if they get traded and securitized and extracted, sorry, doesn't work for me.

Ownership matters. A lot. And in a world of declining resources, ownership - and the legitimacy to maintain that ownership - will matter a lot. Someone builds windmills and exports the power, the longhouse will throw them out. Maybe if they are lucky, adopting their children and wives.

cfm in Gray, ME

Interesting post thanks, jeffvail, I always find myself warming to those that reference Odum ;-)

Instead of trying to determine an intractable energy tail might an alternative approach be to book the differences between what is required to harvest alternative energy compared to FF energy? So effectively subtracting one long tail from the other, seeing what is left, and calcualting the impact of that difference on EROEI.

Just a thought

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I think to validate your reasoning, why not try it with a barrel of 70 dollar oil? We will build a plant of the same size as our solar facility 1.8 MW and will last only 10 years instead of 40 years to recoup a similar amount of energy. The cost of the plant today is about $1000/kwh, so 1.8 million dollars for a 1.8 MW plant and this will be a fixed cost and will last 10 years enough to return as much energy as the solar plant ($1,800,000/.09$/kwh=20,000 MWH). Then we have to calculate the amount of fuel necessary to generate that much energy. A barrel of oil has about 1.694 MWH worth of energy, so divide 160,000 MWH/(1.694MW X .3 conservative efficiency of the plant)and then multiply by the cost of oil divide by the constant for energy cost.09$/kwh = 244,872 MWH. Then divide the total energy the plant makes, 160000MWH, by fixed energy costs to make said plant, 20,000MWH which is negligible, and the energy costs of oil considering price, 244,872 MWH, is equal to .6:1 EROI. This means that solar energy and wind energy are actually better off then oil at today's price. I didn't think that this was the answer I would get, so I guess our civilization is in terminal decline unless my calculations are wrong, this is a seriously flawed method, or we switch to wind energy today. Changing the cost of the factory will do almost nothing, which leaves us with efficiency being underestimated and the break even points are as follows:
Efficiency____________Cost($) of oil at EROI of 1:1 (approx.)
With EROI of 1:1 for oil being $51 at 40 percent conversion of energy, which is what most plants have, then we are in trouble already. Then again I am speaking to the choir.

I think I rambled and missed stating the point of my own post, which is this: The EROEI estimates by this method are ridiculously low. Oil (negative EROEI) and natural gas (barely positive) using this method are worse then the other two methods debated with wind being 3 times better then the nonrenewable two. This means the economy would already have a huge incentive to switch and we haven't. I understand these different energies may not be fungible, however, until the method can accurately estimate oil and natural gas EROEI, then what is the point of even using it?

Further, if we think about how much of the economy doesn't go into feeding people and getting them to work and the two activities solely are for getting more oil/energy then we realize using end user pricing, ie $.09/kwh makes no sense at all. It doesn't add up to use .09 to determine wind and solar and then say it doesn't apply to calculating oil and NG EROEI. I used to think this method was great until you actually do the calculations. The method debunks itself when you do the proper comparison by using this method to all forms of energy.

What you especially missed in your post was the efficiency rating. Burning oil in large ovens is extremely efficient. We can literally build plants that are 99% efficient these days, and certainly a new oil burning plant would exceed 90% efficiency.

So oil only drops below EROI 1:1 at a price of $160 per barrel or so.

Of course once you figure in employees, administration, environmental compliance, delivery, ... the number drops again. But still. Burning oil is very efficient.

The mind boggles at the inaccuracies in this post.'s_theorem_(thermodynamics)

*sigh* why don't you read even the wikipedia page on

You will see that current "supercritical steam" designs normally exceed 60% efficiency, double what you've claimed in your parent post.

Thermal engines cannot exceed their Carnot Efficiency. The formula in the link I provided shows you how to calculate the maximum efficiency based on the temperature or the heat source and the heat sink.

Go ahead and figure out the heat source temperature required to produce a Carnot Efficiency of 99% (or even 90%) as you claimed in the post I responded to. The formula takes temperature in Kelvins, 230K is a favorable sink temperature.

Just to keep my thread going and be annoying, I thought what really we need to calculate is the whole economy and energy to get the constant. 14 trillion dollars (approx GDP) divided by 4 trillion kilowatt hours (Approx US energy usage) is 3.4 dollars per kilowatt. Now I do the math for the different energies using your numbers plus my numbers for gas:
oil = 81:1
wind = 125:1
solar = 32:1
NG = 58:1 (at 70 percent efficiency)

I think that this shows the true EROEI and that if you take the entire economy into account and opportunity cost/lost the numbers show a growing economy which makes sense for our oil world. I believe that these numbers actually make more sense and fit into the range of other methods of estimating. Further it makes sense to use some wind when it is truly cheaper but not as fungible as oil and NG.

EROEI, Eoutput/Einvested, is an incomplete measure of energy efficiency. It needs to revised to include the thermal efficiency of the process of turning the natural potential energy inputs of say ethanol into energy outputs. Both those numbers are 'hard' numbers.

This can be done by rearranging the equations

(Enatural potential +E invested) x TE(thermal efficiency)= Eoutput + Einvest


Eoutput/Einvested = EROEI

To Enaturalpotential/Eoutput, what I call an overall factor that is

'factor' = (1+1/EROEI)/TE - 1

Then you graph this function over various efficiency curves;

20% efficiency = .2 curve with an EROEI of 5 would equal a factor of ~6, which means

that the natural potential energy inputs must be >= 6 times the finished product per unit output. This is useful information.


If you look at this function you'll notice that the thermal efficiency of the energy conversion process is much more important than EROEI except at very low thermal efficiencies.

This suggests that a process that uses heat(80% TE) has a higher factor than one making electricity(30% TE) as the 'factor' requires more Enatural potential per unit of Eoutput.

It suggests that highly efficient fuels(60%) cells running on hydrogen(eroei<1) are more efficient than grid fed batteries in terms of the natural resources Enp or that car running on ethanol produced from heat(80%) than F/T fuels (65%), etc.

Maybe this analysis will stir some brain cells amid the EROEI groupthink here at TOD. :-)

A few more brain cells might be stirred if you actually linked to the image you intended to include.

That IS the image, jag-brain.

Sorry, I tried looking at the code for your comment. Even when I pasted the code for your link into my browser, it didn't work. Maybe you could try again.

I saw the image fine but I'll try again.



How do I include an image in my comment?

* First, you must upload your image to a web-accessible server. Several image hosting services, such as Photobucket and Flickr provide space for free.
* Then include the appropriate HTML code in your comment.
For example: img src="">.

Third times a charm?


I see it, does anyone else?

I think what you are saying is that you have to measure all of the energy losses from obtaining the fuel( EROI) to the transformation into end product either work or heat.
Electricity may have losses from generation ( ie from coal) but the losses say in an electric vehicle converting that energy into driving the wheels( and recovering momentum in braking) is a lot more efficient than using gasoline or ethanol.
Likewise heating with NG(95% efficient) is more efficient than heating(resistance heating) with electricity generated from NG(50% loss) but if that electricity is used in a heat pump(300% efficiency) the entire process can be more efficient.
On this basis wind and hydro electricity is the most efficiently used because losses are small at every step, so even if the EROI is say 10:1 that better than oil at 20:1 because of the losses to convert oil to mechanical work at the wheels of a car.

I hope the image finally came thru.

The curves clearly show that thermal electricity is very problematic, since thermal electricity has to come from fuels which must be extracted from the earth and that also effects solar PV(15%efficient) or concentrated solar(30% efficient); the EROEI in those cases go into the amount of area needs to be covered and required energy storage mechanisms--batteries and pumped hydro are 75% efficient so when the wind or hydro electricity is flowing ).
With wind we have a highly intermittent resource that requires thermal backup and/or storage. At best it only saves fossil fuel.

Hydro is just too small a resource and dams are more important as fresh water collectors first and power generators second.

I don't agree with your insistance that the entire process should be looked at because we are talking about energy production, not every possible use of energy. As far as heat pumps go, this is an illusion as they just move heat around and don't actually produce energy.

"As far as heat pumps go, this is an illusion as they just move heat around and don't actually produce energy."
That true, but that all we need to do when heating or cooling a house, move the heat either inside or outside.

In fact most of the energy we use is either moving heat around, or mechanical "work". So for driving 50 miles the important input is the energy investment used to create that final work, either drilling pumping, refining and transporting oil to use in an ICE vehicle or building wind generators or solar cells and transporting and storing that energy in batteries and using in an EV. The final "work" is the dame but the energy investment to get there may be different.


There's an extraneous '/' at the end of the tag before the '>'.

Edit: no, thats not it. I cut and paste from the page source and get a document not found. Maybe you're logged in to yahoo.

This article is about the Energy required to create the necessary renewable infrastructure but since mining metals has been said to be the "conversion of energy into metal" we must also consider the scope of metal supply to meet buildout demand (this is akin to Peak-Oils 'size of the tap' conundrum).

Lets consider Wind:

In the news recently China plans to seriously gear up their wind capacity to create "a Three Gorges Of The Air" (who thinks up these headlines?!) Anyway, a typical wind turbine has about 1 ton of Rare-Earth (Neodynium) magnets in it [needs verification] and China currently control 95% of the Worlds supply of these metals...

...and it has been estimated that by 2013ish (sounds about the time of a PO-induced Crunch no?) they will be using ALL of their own supply.

-So if we do meet a Peak-Oil induced energy crisis and have to make an all-out 'Hirschey Push' and China is using all the supply for its OWN wind-turbine build-out program exactly Where / How will the West be able to build-out their own (even given limitless funds or Energy)???

Of course we could ask China to build them and export them -good global manufactures as they are- but remember we are talking a Post-PO wake-up scenario here with all world Govts. scrambling for a solution...

There are a few non-Chinese potentiol suppliers but even IF they fully gear up they will not be able to provide the amounts required for many years even with massive moon-shot-like capital injections.

IMO, the Chinese have already 'woken up' to this problem and are stockpiling both metals and mining companies in order to secure supplies for darker days ahead and a possible transition -meanwhile the US and the West is spending its future earning (via increased debt / deficit financing) on trying to increase Consumption in the present...)



I believe your comments today contain more truth than all the pablum I've seen in the mainstream business press totaled over the last week.May be over the last month,come to think of it.

And in the process,they are getting rid of our dollars,as fast as they can w/o crashing the market and rendering thier dollar holdings worthless,and buying time for a general industrial build out that may eventually enable them to do as thet please-just as we do as we please today.

I may yet live to see a world with two super powers again.This time around it may be that it's our turn to implode.

...remember that Matt Simmons went to China (was it last year?)

As Noddy might say -I'm sure the Chinese have Big Ears...


You raise some very interesting points...

On the neodynium issue: I'd like to see verification of this amount, and also exploration of possible alternatives (and their impact on overall cost, performance, and EROEI) if/when neodynium becomes supply constrained. Assuming there are no acceptable alternatives, then this seems like a critical choke point in wind generation.

A similar issue is present with solar photovoltaics: many designs rely on significant amounts of rare earth elements of which our supply is insufficient to facilitate significant scale-up. This remains true with the much-touted thin film solar designs. What I don't know is just how critical these components are, and how easily they can be substituted by more readily available elements with only marginal decline in performance or incrase in cost?

I'm not aware of any similar issue with solar thermal, geothermal, wave, or wind, but I'd be interested to hear of any that exist...

If we have any 'experts' on PV or Turbine construction who read TOD I would very much like to hear their assesment of the amounts likely required during a 'mass-panic' scale-up. Have their industries considered where/how all this supply is going to be sourced in a potential net-energy downturn?

For example we might be at an inflexion point for the cost of PV -it was never cheap but given massive demand, poor scale up ability (due to limited supply of REEs, / Cheapness of Input Energy, etc.), now might be Peak-Cheapness even given all the progress on reducing costs...

-I have a vested interest in knowing as I'm wondering whether now might be a good time to stuff-away a couple of Ebay PV panels "just-in-case" (I've read output does not degrade with unused long-term storage if you are wondering...)


There is an interesting article on the state of PV at CNBC today:

And one on oil drilling leases:

I have a vested interest in knowing as I'm wondering whether now might be a good time to stuff-away a couple of Ebay PV panels "just-in-case" (I've read output does not degrade with unused long-term storage if you are wondering...
This makes as much sense as stuff away a PC or a mobile phone for the next 10 years. There is not going to be any long term real price rise you are paying for technology. Use the PV now and generate power, and bank the savings or use the power savings to buy more PV panels.

I'm not sure How you come to the conclusion that an item that embodies a huge amount of energy in it's construction will not rise in real price in an energy constrained world.
This is the very core of the problem we face...

If a solar panel takes 5 years to return the energy used in it's construction, what would be the smartest thing to do, keep it in the basement for 10 years or use if for 10 years and generate X2 as much energy? If energy prices rise X10 in 5 years you can still buy a new panel between 5 and 10 years using production, so have 2 panels(one new and one used) in 10 years time instead of the one unused.

Jeff,I know only what I read here about the availability of the lesser known metals,which were only rarely used for much until recently.

But in a thread a while back somebody who seemed to know his stuff said that the chinese control the supply not because there are no ores in other places but because they recover these elements as secondary products when refining something else.

I believe the article had to do with peak everything.

Here is one article on Nd supplies:

There is an active movement in Washington, DC, to reconsider the mining of strategic and critical metals within the US as a security issue for the armed services. This is on top of the realization on Wall Street, Bay Street, Washington, and Ottawa that there will be no development of wind generated energy without the guarantee of a large supply of neodymium.

Here is another by the same author, and one that you (Jeff) will like even more:

China and the future supply of rare earths. A geological and economic assessment

The point I am making is that western businessmen who base their long term supply requirements for rare earths not only on continued access to Chinese production of rare earths but on Chinese produced studies of resources and reserves as well as the idea that Chinese miners and refiners economically competitive with western operations are walking on thin ice.

Recent Chinese actions in the non-Chinese rare earth mining space make it even more likely that China itself needs rare earths from the outside. What does this mean for the future of technology based products in the west?

Which refers to this:

At this very moment Australia's parliament is grappling with reacting to a Chinese "private" company's offer to buy 51%, i.e., control, of Australia's largest and best rare earth mining development, ASX listed Lynas Corp, the huge Mt. Weld ore body of which is said to be ready for production.

Apparently Australia's other major rare earth mining company, ASX listed Arafura, has already been approved to sell 25% to a Chinese corporate investor with additional equity for the Chinese investor in negotiation.

Great links, thanks! In an interestingly related side-note, I've been a bit absent from responding to comments today because I unexpectedly had the chance to have lunch with and ask a question of the Secretary of Agriculture. I asked about rock phosphate supplies and related issues, and he made several interesting statements: 1) fertilizer components are part of a larger issue of agricultural resource depletion, 2) including peak oil, and that many nationas are currently at or past peak, 3) that we need to focus on improving or maintaing ag yields with lower fossil-fuel and fertilzier inputs, and 4) he made an interesting comment about a demonstration farm he just visited that uses bio-char in combination with a biomass plant to maintain soil fertility without traditional fertilizers. Overall I was very impressed with his grasp of the issues--that doesn't necessarily mean that all policies will point in the right direction, but understanding the terrain is the first step in formulating intelligent policies...

(Because of TOD and my general research for my own fund I should probably state as a disclaimer that I already own -and have made large profits in- Lynas, Thompson Creek, MolyMines, Avalon and Ivanhoe already this year.)

It became clear to me that Moly and REEs where going to form a choke point as you put it and the short sightedness of the investment community had hammered these shares down well below the long term -financed- value of their superb assets. That the Chinese are able to spot an opportunity too does not now appear in question...
The Lynas deal will go through in a matter of weeks (without it the whole mine and possibly company itself is kaput). If you are a gambling person now is the time to place your bets, REE mine or not REE mine -that is the question!

A similar issue is present with solar photovoltaics: many designs rely on significant amounts of rare earth elements of which our supply is insufficient to facilitate significant scale-up. This remains true with the much-touted thin film solar designs.

This is misleading. Rare earth elements are critical only to thin film technologies (which, btw, are less efficient than the traditional silicon cells.) The vast majority of PV installed uses silicon cells, which AFAIK require no element more rare than boron, which is not a rare earth element.

What I don't know is just how critical these components are...

AFAIK, not critical at all to silicon PV technologies.

Thin film has a lower efficiency of conversion of photons to electricity, but critically most proponents of solar tout the higher EROEI of thin-film. If thin film doesn't pan out (or is constrained due to rare earths issues), then solar likely won't be a major player in any transition...

If thin film doesn't pan out...

Well, your LA solar installation example is silicon, so let's take that as the conservative approach and forget thin film.

...then solar likely won't be a major player in any transition..

Your evidence for this, I take it, is the single study by C. Hall et al claiming an need of 3:1 ERoEI for "fuels" to be economical, plus your price-as-proxy method that calculates a less than 2:1 EEoEI for a silicon solar PV installation. (You seem to be using a different definition of EROEI from C. Hall. I'm correcting for that here by using their definition.)

I'm far from convinced that the price-as-proxy method is precise enough to write off the likelihood of solar contributing to a post-PO, transition, especially on the basis of one study on not-exactly-the-right-subject, and one example.

Incidentally, the C. Hall paper shows PV as above the minimum threshold for civilization. (see graph on pg. 36.) It would be interesting to know their decision for choosing an ERoEI for PV. Perhaps you know? I am in any case baffled that they show PV as such a small resource however. That is just clearly wrong, since the sunlight resource is the largest available by orders of magnitude, should we be capable of harvesting it.

PVs are very useful for certain applications. But I would venture to say that CSP would have a better return on investment. Bill Gross agrees:

The only way for solar NOT to be a major energy source in the future would be the rapid development of fusion power plants.

PVs are very useful for certain applications. But I would venture to say that CSP would have a better return on investment

I can't say if this is true. I do know that at least in one of the papers Jeff cited, the ERoEI of CSP is lower than PV (see here, last page). That doesn't bode well for it in my mind.

Another problem with CSP is that it (unlike PV) it really doesn't work when there are clouds. So the sites where it can be sensibly utilized are fewer, and there are greater costs to building transmission to markets. Also costs to buying land and such. I don't think CSP can scale up as high as PV, but that is just my intuition.

Have to take whatever comes from a CEO of a company with a grain of salt... Fox also incorrectly says it's the first solar thermal power plant in the US, which it isn't.

Also, CSP has to compete at utility level prices and PV on existing roofs doesn't.

Besides thinfilm PV does not have to be based on rare earth metals and works well on silicon:

By adding a 1.5um microcrystalline silicon bottom cell below the amorphous silicon top cell, the micromorph tandem module delivers up to 10% module efficiency at costs of less than $0.70 per Watt-peak with 100+ MWp (MegaWatt-peak) scale Fabs all by 2010.

When someone consistently plugs one company, I have to assume they may have a vested interest and take it with a grain of salt.

For what it's worth, if what you say is true about costs, it would cut perhaps $3 million off the cost of Jeff's LA example, which would increase his price-proxy ERoEI from 1.87 to somewhere over 2, I guess.

Any other estimates on the ERoEI of thin film silicon?

Just because I know of this company, doesn't mean I'm vested in it or that their modules do not exist.

You can actually buy their modules for instance from these companies:

And Oerlikon does have at least one competitor: Applied Materials (which appears to run a similar process):

Here are studies regarding energy pay back time of photovoltaic systems (but they might not include data from the companies mentioned above as their silicon-thinfilm-module-factories have only been around for a short time):

I do not believe China has "woken up". I believe they are trying to bring the rest of their population out of poverty before major civil unrest occurs. We are already seeing flare-ups happen, the most recent just a few months ago.

China controls 95% of the neodymium production, however, they only account for 30% of the world's reserves. The US accounts for 15%. There are currently 2 companies ready to mine neodymium in the US. One based in Idaho and MolyCorp in California. You can absolutely build wind turbines without neodymium, but they will be heavier, thus requiring more resources and money to build.

It seems that like most things, the world turned to China for their rare metals because that's where they can(currently) be obtained the cheapest.

I think what this little sideline discussion of REEs, Moly(bdenum), etc. availability points to is that the current globalised state of play could get very messy indeed in a post-peak resouce nationalised world... In fact one could say that Energy availabity is the lesser problem because most countries have high potential (via solar wind uranium hydro waves or whatever) it is the access to the resources and technologies that enable these natural energy flows to be tapped that may create the constraint going forward.

Keep in mind that wind turbines work fine with nothing up on that stick but the turbine and a water pump. No rare earths at all. Water turbines on the ground turn a simple old wire wound alternator putting juice on the grid. Added bonus- hydro storage, if you happen to have lake Superior handy, or some substitute, like a big hole in the ground.

And ditto for solar- solar thermal, that is. No rare earths needed at all. Nice, but not needed.

BTW, solar thermal can work on dim sun, same as ocean thermal, same lousy delta T drives either one.

Folks, we got a LOT of tools in our box. Should keep "em in mind.

I think you are right about the need to investigate the long tail. I hower have an intuition that you will find that the long tail is not nearly as thick as your red graph example suggests. I think a dollar-value of inputs approximation is really a wrong path to follow - and I do have a concept for a much better path to follow although to get to those indirect energy costs, but I don't have the time to go through the details of that in this comment.

I examplify my claim of a much more sharply falling tail than you fear by traditional polycrystalline silicon solar cells. They are regularaly portrayed as hugely energy and capital intensive to produce.

For solar cells the important steps in the production is

1) Mining sand -> relies on some heavy machinery to pick it up and transport it to a factory. Also you would need roads. The dollar costs of this neccessary step will likely be less then one percent. The energy consumed directly by the machines in this sand mining operation would probably consitute less than a percentage of the total energy consumed by the the next few steps in the valuechain. Counting the energy used to feed and house the workers here will not dent in the number as it will be dwarfed by the energy consumed by the machines. And if you also count the energy consumed to mine the steel in the machinery and the energy used to transform the raw steel into functional machine you will see that it will be dwarfed by the amount of energy that is directly consumed during the use of those machines.

2) Converting the sand into medium grade silocon - say 98% purity. This is where you really start to use energy. You might use some charcoal or wood as inputs to help the chemical reaction, and the structure of energy consumptionto provide those inputs will basically be quite similar to that of sand meaning that the direct use of fuel energy for machines will dwarf most other inputs. Of course this step also relies on building a factory and having it staffed. But its the energy consumed in the metallurgic process that stands out - over the lifetime of the factory - the energy consumed to build and dismantle the factory as well as to feed and house the staff will be dwarfed by the energy consumed by the metallurgic process. In the future it might be possible to get more of the inputs to this steps from recycling of old silicon solar cells.

3) Then purifing the medium grade silcon into solar grade silicon via silan gass into ingots or similar. This step is HUGELY energy intensive Here you will use maybe an ORDER OF MAGNITUDE more energy than in step two. Step three will absolutely dwarf both step one and two. Again the energy consumed directly in the process dwarfs energy needed to build and staff the factory.

4) Step 4 melt the pure silicon ingots and cool let it cool into regular block a controlled way. Silicon needs high temperatures to melt. But this step should be less energy intensive than step 3.

5) Slice the block by wire-sawing until you get very thin wafers. This step is also very energy intensive somewhere in the range of step 3.

6) Various surface treatments. The front of the cell needs chemical etching to absorb more sunlight - the backside needs to be covered with a conductor (typically aluminium is sprayed on). The surface is typically doped to produce the correct photovoltaic properties and further coating. The frontside also needs conductors to pick up the electron "holes" that are generated when the cell is in operation.In addition there will be some coating material on top of this to further increase the efficiency of the cell. This part of the process is complicated and expensive but is less energy and dollar intensive than the previous step. Here is a step that has more unclear indirect energy inputs as production and technology might vary a lot between different solar cell manufacturers. Afte r this step the cells are in principle able to generate electricity but are fragile and inconvenient to use.

7) The cells from previou are put into more robust and practical module with a frame and a glass frontcover and electrical wiring. Still its not labour intensive and still the we have accounted for already to make the cell will dwarf the energy consumed to create the other parts of the module and put it all togeather in the factory.

8) The cells are transported and installed at the customers building or solar farm. The installation costs are labour somewhat cost and labour intensive and but can vary hugely from the most cost efficient large scale solar farm to the very small home installation. But its fair to assume that a large portion of the energy expended here goes towards the installation staff. The solar cells are now ready to start to produce energy for the next 25-40 years, with or without local energy storage or grid connectedness.

As you saw throug theese steps there was a huge buildup in energy consumption from step 1 until its a peak at step 3 where it is followed by a couple of energy intensive steps until it falls again in the last couple of steps. Economy of scale in modern silicon PV-production makes energy expenditures for the factory infrastructure, the machinery involved in all the steps and the staff needed minor parts of the total energy expenditures.

When you account for everything I have described in theese 8 steps - I would be surpriced if you after a much expanded investigation of next indirect n-levels in the value chain this would amount to very significant findings of hidden energy costs. You have very sharp dropoffs early on - and even if other parts of the value chain have slower dropoff rates you have already gone to one or two orders of magnitude of importance.

A more interesting thing to look at is the composition of energy that goes into the verious steps. In norway almost all the energy consumed from step 2 until step 7 comes from hydro-electric renewable energy (Norway has something like 98% of the electricity from hydro-electric dams wich generates energy at extreemely high EROEI - 100/1 would not be unreasonable). The staffing at the production facilities are small (kept to a minimum) compared to the huge volumes of cells coming out of the Norwegian factories. Norwegian industrial labour is extreemly expensive though and would eat more energy intensive food and live generally more energy intensive lifestyles, but still it wouldn't make much of a difference.

I would challenge the author of this post to find me some LCA's on silicon solar cells that falsifies my general description of the energy expenditures being concentrated in the direct an knowable steps with a rapid falloff on steps further away from finished product than step 3 and would only be subject to minor adjustments if say the next 20 or 30 indirect steps in the valuechain where included.

Your comment seems contradictory.
What you are talking about is 'embodied energy' and then you start praising hydro to the skies.
Hydroelectric dams are built out of millions of tons of energy intensive reinforced concrete plus there's the loss of land behind the dam. I haven't figured out how many but it seems that on the basis of energy out you would have to go into centuries of operation to payback all the embodied energy that went into the construction.

Its not at all contradictory. I have been going through a list of steps that are directly involved in the production of solar cells - I also included some descriptions on how I figured the addition of indirect energy costs would affect this picture. I outlined a path to follow to sum of the ENERGY INVESTMENT in the EROEI equation.

I did not discuss the energy return in this comment because that is quite trivial. You can compute it by the amount of sun-hours at your location and put into the equation. What I was doing was to claim that the uncertainty associated with computing the energy invested might not be as big because it could be argued that the significant portion of the energy invested througout the entire valuechain of a producing and deploying a polycrystalline pv module is in direct knowable energy usage, and that unknown amount associated with indirect energy usage further away in the value chains would if investigated in many more steps (maybe 20-30) would reveal that contributions of aditional steps would very soon fall to insignificant close to zero levels. That is my point - and it would be in contrast with the red graph in this post wich suggest by that high contributions go on and so that indirect contributions eventually dwarfs the direct contributions, I claim the opposite, that direct and knowable energy investments dwarf the indirect ones. and that the graph that goes quickly towards zero in the case of silicon solar PV. (I also belive this to be the case for windpower)

And for hydro-electric EROEI of 100/1 is probably a gross understatement as table 1 on this link suggest:

there you can read that "energy payback ratio" for hydro-electric is estimated to be from 170 (low estimate) to 280 (high estimate)... That would mean that you from each unit expended to make the dam (including to produce the materials) you will get 200 units back. Hydro-electric dams are normally hugely profitable. Problem is that that most of the good locations are already used so you can't grow hydro-electric much.

The Hoover dam produces 400 Gwh per year of electricity.
It took 100 million cubic feet of concrete to build it and there is 28 kwh of embodied energy(96000 BTU) in a cubic foot of concrete so that's 2800 GWh of embedded energy or 7 years of the dam running.

But that's just concrete no steel, none of the construction, none of the land loss and water loss by evaporation. If the dam lasts 100 years which seems likely you would get an EROEI of 14.3 based on concrete only; 100 x400/2800=14.

Am I challenging your 170 to 280 figure?


Good points. And how do you figure in potential dangers to those downstream if a major earthquake takes out the damn, as nearly happened in China last year.

China has had big dam failures before.

See also the Grand Teton dam failure in the US. Dams can and do fail catastrophically--so far we've been lucky that there have been no major population centers downstream. Worst case scenario, look at what happens if Folsom Dam in California fails...

That sounds resonable for the hoover dam wich was a major undertaking, but a lot of hydro-electric is much easier than that. But still you must admit that compared to the lifespan of the hover dam, maybe a couple of hundred years, all that energy is going to be payd back many many times over putting it on par or better at EROEI than most fossile fules today.

That 100 million cu ft of concrete would have used 400,000 tonnes of coal( 6,600 kWh/tonne energy content). But each kWh of electricity generated by Hoover dam saves burning 0.5Kg of coal(0.5tonnes/MWh) so the coal used to make the concrete if used in a coal-fired power station would only generate 800,000 MWh or 800GWh. Thus a 2 year payback for concrete. Considering that Roman concrete aqueducts functioned for 2,000 years Hoover dam should go for at least 1,000 years with a bit of silt dredging.


Which Roman aquaducts have functioned for 2000 years?

Bravo Neil,

But that one doesn't carry water anymore and it built around 100 AD, hehe. It was reconstructed in 1400s after the Moors destroyed part of it in 1072, so continuous operation ?

The Aquaduct of Valens(368 AD) in Constantinople was operating thru most of the Ottoman times comes closest.

Good try!


I'm hoping to keep the water flowing in my aqua-duct till the day I die... ;o)


The Pont du Gard is not functional, but still largely standing. It is made of stacked stone without mortar.

A must see if you are in Provence.

I agree with you that the EROEI for hydro is very high. The import issue is that the energy has already been invested (years ago) we don't need to consider re-investing again in hydro if we want to build wind or solar energy, we can continue using it year after year to build up more renewable energy capacity. The "long tail" can't go back 50 years.

Canada and US still have only developed <20% of hydro potential. Alaska has 45GW( compared to 35 presently developed in US lower 48 states). Canada has projects waiting for electricity demand.

I haven't done the calculation either, but the ERoEI of hydro is generally considered to be about the same as wind, or better.

Hello MrMambo,

First, my thxs to Jeff Vail and other TOD comments. Anyhow, my 'wild & crazy' mind found this 'PV & Hydro' minithread to be fascinating in its potential ramifications WTSHTF.

If one could imagine PV panels to be like the migrating, plant-eating animals on the Serengeti:

When the seasonal rains finally return, the animals have already pre-positioned themselves in the grassy areas to green up first. This gives them the highest potential ERoEI and is where the calving begins to give their newborns the best shot at life.

If and WTSHTF: therefore, it would seem logical that the [SW] Southwest's hydro-electricity would be ordered to be directed almost entirely to PV & CSP manufacturing to make 'solar newborns' to be put to immediate & local grazing; generating juice in the SW's high amounts of daily sunshine for sale elsewhere.

The value of this stored hydro electro-juice and the importance of making as many of these PV newborns as SW-possible would necessitate the shutdown or removal of nearly all nonsense SW infrastructure: golf courses, decorative fountains, swimming pools, car washes, A/C suntan/nail/hair salons, shopping malls, Hollywood, fancy boat marinas, etc.

Of course, this drastic necessity of max-birthing SW PV/CSP means max-reducing the 'lion, cheetah, hyena, crocodile' predation upon the newborns. Thus, it would be beneficial to get all the Sun City retirees relocated elsewhere, plus any others in my Asphaltistan [me included?] who cannot show employment that is directly related to PV/CSP manufacturing, or its vital support services.

The same concept could be extended to Las Vegas, Tucson, ABQ, San Diego, LA, and other SW cities and towns. Vegas, for example, creates nothing of enduring value; it is a true A/C, electricity and water-gobbling specie of 'Gambling Lion':
Picture this MGM Hotel Lion eating vital resources. I bet this single, fake, gigantic lion eats more energy & resources daily than the aggregate sum of all the resources that real-world predators eat in a year! Imagine the many FF-powered trucks w/40ft trailers required daily to feed this lion booze, toilet paper, shrimp, lobster, crab, beef, chocolate, bananas, water, A/C, soap&shampoo, [condoms, edible underwear?]!!!
IMO, it would make sense to immediately tear a lot of this steel down to provide the PV/CSP support structures across miles of sun-blasted desert and the factories to build and maintain this PV/CSP buildout.

If a giant drought hits the SW: could things get so energy dire so fast that the Mil/Gov gathers up all solar panels located outside the Sunbelt to help continue birthing more PV/CSP where it can do the most good? Maybe, or maybe not? IMO, I think it would depend on how badly a black swan impacts us, but possibly WT's ELM might drive this Mil/Gov decision.

If the hydro->PV/CSP ERoEI is sufficiently high enough in a dire situation: would the Mil/Gov shutoff all Niagara Falls, NY juice users [just more predators]plus the Columbia River juicers [predators again] to make even more PV/CSP newborns, then have the PV/CSP migrate to the best parts of the Sunbelt's solar Serengeti?

Only when the sunny SW is PV/CSP saturated is when the Mil/Gov will start to allow these panels to migrate to less sunny areas. Shouldn't a logical person argue that this should have been the govt. policy since the first PV came into existence decades ago? Wouldn't also vastly simplify the ERoEI calculations?

Compare the above concept to bird & bat guano, which is nothing more than concentrated sunshine. We let the animals live where they can best reproduce plus highly concentrate their crap for us on sea-islands or inside caves, then we ship the high ERoEI O-NPK nutrients to our farmgates [or should I say: we used to].

Doesn't the same apply to our next generation of 'solar animals'? Put em where they can eat the best [collect max-sunshine], then ship the 'electro-crap' efficiently for the highest-overall ERoEI?

Some edits for clarification.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

interestingly put totoneila, but I will take you up on your mgm lion/predator energy bet. Awful lot of real tiny predators in this world, when you get to the larger ones, like ants (I know not all ants are predators but you follow my drift), their total worldwide mass is thought to be equal to that of humans give or take an order of magnitude, the smaller predators must have one heck of a total mass and a heck of an intake to maintain it.

Then purifing the medium grade silcon into solar grade silicon via silan gass into ingots or similar. This step is HUGELY energy intensive Here you will use maybe an ORDER OF MAGNITUDE more energy than in step two.

Actually with thinfilm silcon PV, silane is directly utilized to apply the silicon layer onto the solar module (glass-substrate). And this silicon layer has a thickness of only 0.002mm (more than 100 times thinner than crystalline cells). In addition: There's no wire sawing process required:

And thinfilm silicon PV is available now:

If one looks at EROEI in terms of monetary payback period, it seems like one almost reaches a corollary that one can compare different energy sources based on their unsubsidized production costs. If renewables tend to be higher cost than fossil fuels, this gives a tip-off that at least at this point, their EROEI is likely lower.

I don't know how well that would work. Human attention typically costs more than energy, and different energy sources have different costs. For a really useful comparison you would also have to burden fossil fuels with environmental cost of things like CO2 emissions.

Its all so complicated a calculation it makes my head hurt just thinking about it all -and under such conditions as may transpire Post-Peak I suspect that even the best informed Governments will fail to join the dots and end up making disasterous choices.

The UK -for example- seems destined to put all its eggs in one basket: a FIRE based Economy driven by Vlads Natural Gas. Can you think of a more risky basket to have all your eggs in?? Sigh.


Its all so complicated a calculation it makes my head hurt just thinking about it all -and under such conditions as may transpire Post-Peak I suspect that even the best informed Governments will fail to join the dots and end up making disasterous choices.

Certainly true, but if you leave the decisions to the market, simple price propagation will solve most of the math. The market typically optimizes itself without the need for experts to grasp the entire picture and know the details of the whole value chain.

Its all so complicated a calculation it makes my head hurt just thinking about it all -and under such conditions as may transpire Post-Peak I suspect that even the best informed Governments will fail to join the dots and end up making disasterous choices.

Certainly true, but if you leave the decisions to the market, simple price propagation will solve most of the math. The market typically optimizes itself without the need for experts to grasp the entire picture and know the details of the whole value chain.

I disagree. If you leave things to the market, why are subsidies and feed-in tariffs and other "distortions" needed to wean people off an unsustainable path? If people took a long, considered and unselfish enough view, they would be happy to pay the prices required for a transition. We would likely never have got into the current situation in the first place.

If you leave things to the market, why are subsidies and feed-in tariffs and other "distortions" needed to wean people off an unsustainable path?

Why do you need to wean people off the unsustainable path? When the road ends, the transition will come by itself, by way of increasing prices. Until then, arguably one of the best preparations is using the riches to get a high GDP and tech level so we have power enough to do the transition. Also, one of the up-sides with the current "waste" of fossil resources is that if peak oil truly sets in, demand destruction will destroy the waste first, providing time to do the transition.

Ah, even after the meltdowns of the last couple years, many people still seem to be enamored with the "magic of the market."

Pardon me if I am...disenchanted.

I don't see it as a meltdown. I see it as the market signaling that the oil situation is a no-go now. Why would you think that a market signal strong enough to move us away from oil wouldn't be traumatic?

It has been proved repeatedly by observation of reality that markets are not efficient. We are just waiting for the economists to catch up. If they are efficient, they seem to be rather short-termist, e.g. why the massive overpricing of houses in the run-up to the crash? Their intrinsic value can't have changed that much in a few weeks or months. Short term planning is not what is required for the energy supply.

It has been proved repeatedly by observation of reality that markets are not efficient.

I don't know if this is true. They are extremely efficent in allocating resources for maximum profit. What they are not is conservationist... they are limited by the tragedy of the commons: why should I use less gas if someone else is just going to use it?

Yes, they are short-termist, as you put it. That is why governments should step in. But don't forget that there is a reason they are short term: we don't know the future and we have incomplete information about the present. The classic energy example is ethanol.. just look how the gov't goofed that one up.

I think the best thing the gov't can do is set SIMPLE rules based on the target (reduce FF use). This is why a carbon tax is far better than cap and trade. Just look at EU gasoline use compared to US.

Well then, who is better than the market at picking winning tech, who is better at transition timing and who is better at organizing such transitions? You?

"Economists have an undeserved reputation for "religious faith" in markets. No one has done more than economists to dissect the innumerable ways that markets can fail. After all their investigations though, economists typically conclude that the man in the street - and the intellectual without economic training - underestimate how well markets work."

~Bryan Caplan in "The Myth of the Rational Voter"

Also, studies show that Spain loses on average 2.2 jobs elsewhere per "green job" created by government financing and intervention. Each such "green job" cost about $1 million.

Well then, who is better than the market at picking winning tech, who is better at transition timing and who is better at organizing such transitions? You?

Clearly the combination of government-funded and private sector research and development is superior to either a pure market or pure government approach. Which is why we are conversing on the internet using transistors, microprocessors, and internet protocol developed from just such public-private partnerships. Which is also why there are no functional examples of pure market or pure government economic systems on the planet, but a universal reliance on some combination.

Market and socialist purist ideologues can argue for the purity of their utopian schemes, but the real world keeps muddling by with ever-changing mixes of public and private sectors.

Government research which developed technologies such as compact fluorescents has had energy and economic return on investments which dwarves most private sector efforts. The short time horizon of corporations means that most long term and theoretical research and development will require government cooperation.

Clearly the combination of government-funded and private sector research and development is superior to either a pure market or pure government approach.

This is not clear to me, at least. Can you tell for sure how much effort corporations would have put into basic research, space programs and such if it didn't have to compete with government academics and government behemots such as NASA? To me, it seems government subsidies crowd out private enterprises, and this is true for research as well.

But we don't know, we can't test the pure-market approach for basic research, and since we have been digging ourselves a hole we will not climb out of very soon, let's continue spending taxpayer money in basic research. That's ok by me, really. But large scale deployment of tech - that is best left to the market. There can be no doubt whatsoever about that.

Also, studies show that Spain loses on average 2.2 jobs elsewhere per "green job" created by government financing and intervention. Each such "green job" cost about $1 million.

Actually it's just one study and it is wrong:

The report takes the amount of money that was spent to stimulate clean-energy independence in Spain, derives the number of jobs that were created as a result of this effort, generates a number of other jobs which could have been created with the same investment, and then reports the difference as a finding.

Yet even at the level of such simple reasoning the crowding out argument only holds in specific economic circumstances. One instance is when the economy’s real resources are being fully utilized, meaning that workers are fully employed and the existing productive capacity is being used to its fullest extent.


Moreover, crowding out will not necessarily occur when public investment supports the private sector. In this economy public investment in economic infrastructure raises private productivity. In other words, such spending actually increases the overall size of the economic pie.

we need to consider the number of jobs that would have been created if the same level of investment would have occurred elsewhere.
Suppose that the $2.4 billion in additional wind capacity had been directed toward conventional fossil fuels instead. Our analysis demonstrates that each $1 million investment in coal would create 7.7 jobs and each $1 million investment in natural gas and petroleum would generate 5.4 jobs.

Therefore, a $2.4 billion investment in coal would yield 18,500 jobs and the same investment in natural gas and petroleum about 13,000 jobs. That is, 13,500 to 19,000 fewer jobs than the same investment in wind capacity. There is a net employment gain by the shift toward wind power.

And according to a study from EON, wind power does reduce German electricity prices:,2147183

And Germany has created over 90'000 jobs in the wind industry and exports over 83% of its wind turbines.

If Germany hadn't indirectly created this industry, it wouldn't export these products in the first place and these 90'000 non-existent jobs would raise the current German unemployment number of 8.2% probably even higher.

Besides, German wind power does reduce Germany's dependence on fossil fuels, which are becoming increasingly expensive.

Prosperity is derived from doing more with less. I guess this is at the heart of the PO debate - the Olduvai stuff where we need to work more and more for the same energy return, and have less and less time for other stuff. Wind and especially PV is problematic in this sense. Higher costs mean more work in that particular area, yes, but it MUST crowd out stuff in other areas - be it leisure or production of toys or whatever.

So it's obvious that subsidies in energy skews the market toward less-than-optimal use of resources, doing less with more, and thus the energy sector will crowd out more of everything else.

In this economy public investment in economic infrastructure raises private productivity. In other words, such spending actually increases the overall size of the economic pie.

Yes, "in this economy" everything is partly regulated and partly subsidised, and thus, private investments may be hampered in different ways and government investments may be better than doing nothing. But deregulating and desubsidising would be even better.

And according to a study from EON, wind power does reduce German electricity prices.

Yes, of course, and agriculture subsidies reduce food prices, but it reduces the amount of money in peoples pockets even more. There are no free lunches and subsidies are wasteful.

And Germany has created over 90'000 jobs in the wind industry and exports over 83% of its wind turbines.

So that's 90,000 peoples productive capacities (partly) wasted.

If Germany hadn't indirectly created this industry, it wouldn't export these products in the first place and these 90'000 non-existent jobs would raise the current German unemployment number of 8.2% probably even higher.

No, since people would have more money, spend it and thus create more jobs elsewhere, with better productivity.

Besides, German wind power does reduce Germany's dependence on fossil fuels, which are becoming increasingly expensive.

Granted, this is positive, but it comes at a cost. And Spain's PV subsidies are just crazy.

Gail,i agree that if subsidies are off the table money ought to predict the value of renewables versus fossil fuels in regard to eroei fairly well.

Now if we can find out the approximate electrical consumption of a pv cell plant and its annual production,we can very easily see if the theoritical case is made that solar cells are a good use of energy,either hydro or fossil.

All that would be necessary is to compute the lifetime out put of the years output of cells,in a manner of speaking,to a years approximate energy inputs,given the energy inputs are calculated as as a fraction of the lifetime output of the hydro facility.

(Maybe I'm deluded but I personally expect most hydro facilities to last hundreds of years with some extensive maintainence of course.Siltation may destroy a reservoirs storage capacity by it doesen't stop water from going thru the turbines when the river is flowing.)

Of course a correction factor or two will be needed,to allow for the cost of distribution losses,etc.

I will guess a reasonably accurate answer could be derived in terms of dollars,and that the dollars would track reasonably well if the same thing is repeated in kilowatt hours.

"All that would be necessary is to compute the lifetime out put of the years output of cells,in a manner of speaking,to a years approximate energy inputs,given the energy inputs are calculated as as a fraction of the lifetime output of the hydro facility."

That is the core of the EROEI calculation only simplified a bit. It will produce an overestimate of the EREI since the indirect energy costs are not properly counted. But one would probably find that although the indirect costs add up to be important, the bulk of energy consumed will be inn the direct energy usage in the PV-cell-production plants. It will be a sharp dropoff curve (like the green one, and not the red one feared by the author)

There are several advantages to usung money-it facilitates easy trade,and it facilitates easy comparision of costs in a complicated economy.The farther out on the tail a cost is located,yhe smaller a part of the whole.Therefore it seems to me that the further out on the tail,the more reasonable to go with a money estimate.

I don't advocate using this approach for heavy engineering,but it's ridiculous to add the workers commute energy into the calculation of the eroei ff a dam-its such a small part that just letting the labor/subcontractor /contractor/market solve it in cash should be a perfectly adequate solution.

And if a quick look estimating everything as cash gives a not too unfavorable /favorable result ,then it's probably worth a serious investigation.

If the cash picture looks really bad,the most likely thing is to consider the opportunity cost principle and look at other possible renewables investments.

I may be in over my head here,but I think this approach injects a little common sense into a debate often dominated by emotion and deal cutting such as the auto bailout.

The problem with that is the cost of power from long payback investments like solar, nuclear and hydro are very sensitive to interest charges. Another is the different energy intensities of industries. For example Gagnon, Hall and Brinker showed the oil and Gas industry is 20MJ/$spent compared to the world average of 6MJ/$GDP. In the US some states have <5MJ/$GDP( CA, NY) but others, 16-18MJ/$GDP( LO, ALASKA; high oil industry states). So a wind turbine factory in CA may use less energy in manufacturing every $ worth of turbines but also the employees less when they spend their pay cheques because CA has higher energy efficiency standards, generates more power from hydro, wind, nuclear.

at least at this point

I think this is key. Economies of scale.

Electricity as an output, being almost the equivalent of work, is worth roughly three times (thermal basis in/out) whatever fossil fuel was used in construction. Many anslysts have used some type of correction factor to compensate for the quality of electricity.

Agreed--when the elecricity produced is needed in that form, in that amount, and at that exact time. However, when you need to convert a fossil-fuel infrastrcutre to one that can accept electricity as an input; when you need to overbuild and diversify electrical generation (and connect it with transmission) to address timing of demand; or when you need portability of stored energy (via a battery, and all the energy input that entails), the advantage of electricity begins to diminish rapidly. These timing issues are especially true of most renewables (as opposed to, say, gas-fired generation).

For these reasons, I think (as I argued, I think, in the first post of this series) that, at least in the near term, the costs of converting to an electricity-centric infrastructure will at least offset the efficiency gains of direct electricity generation.

If all we needed to do was transition current electrical demand to renewables, the picture would be better (though, I think, still not good). However, since what we really need to do is transition our liquid fuel demand to electricity, the above issues are of great concern.

Jeff, once again you are confusing the issue of quantity (do we need to replace all of our current electrical demand, let alone FF demand on top of that?), with the issues of whether renewable technologies in themselves have an ERoEI that makes them worthwhile to install at any rate of build-out.

Who says we need electric cars, or lots of electricity at night, in order to maintain civilization?

I don't argue this, and it's my fault for not making sure the context of this series, as expressed in part 1, carried over into this post: my intent is to consider our ability to transition to the "Viridian Vision" of the future--the commonly held belief that we'll be able to transition to renewables to essentially maintain our current economic modes indefinitely. Renewables like solar and wind will make sense to install, in my opinion, regardless of the systemic EROEI. The pertinent question, at least as I'm framing this series, is whether it is possible to maintain the status quo in light of peaking production of fossil fuels.

And once again, I have to respond that I think the that the Viridian Vision is an arbitrary standard. The pertinent questions in my mind are whether renewables are worth investing in at all (in any sense of the word). That is, does a given renewable technology have an ERoEI sufficient to make it worthwhile for society to use it, at any quantity.

I'll agree that the "Viridian Vision" is an arbitrary standard. I do think that, as arbitrary as it may be, it's important from a policy standpoint because it is what, in my opinion, most Americans assume the future holds, and therefore guides the majority policy choices. I also agree that there is value in determining whether renewables are worth investing in at all (in my mind, an unqualified "yes"), but here the question is looking at the macro-level choices for civilization: can we transition to some society based on renewables that is fundamentally structured as our current system, or must we begin a general scale-down and restructuring? That last question, I think, cannot be answered without looking to a systemic EROEI measurement...

Glad to see your thinking on renewables clarified. For once, I think we are in complete agreement on something. I certainly concur that expecting renewables to rescue the current system is not something to bet the farm on.

I also think I agree with you.

But I would add that it is unlikely that the current civilization will look like the one in a hundred years even if oil wasn't peaking. For one, technology changes things. But also there are other issues like sprawl, habitat destruction, soil, water, and global warming that necesitate change anyway.

My point: I wouldn't expect civilization to stay the same no matter what.

I also think that a less-car intense modern civilization is pretty utopic anyway. I certainly wouldn't have a problem with more dense urban living and even a slightly less reliable electrical grid (given time to prepare).

I must agree with jagged here... We are talking about a transition into a renewable/sustainable paradigm. It's not given that we have to have billions of electric cars running around. It could well be more rail-transportation where electricity would go directly into the usage without the need for batteries or pumped air storage. Maybe fluctuations in energy inputs from renewables could be balanced by a smart grid to further reduce the need for storage. Maybe an infrastructure of HVDC cables (wich loosed only 3% per 1000 km) wuld help balance supply demand between larger regions.

And when you consider the cost in energy and materials you must compare it to the cost of maintaining the current paradigm of fossile fules and personal automobiles, and truck transportation, wich will be less economical and les environmentally acceptable as resource depletion and climate change becomes more important.

If the transition is supposed to take decades, you would have had to replace a lot of the infrastructure anyway. How many people here drive 30 year old cars?

I think Jeff has created something from the figment of his imagination. He has created the scary red graph with its long tail, wich I personally think is deeply flawed and would fall streight to the ground if you actually did a proper Life Cycle Assesment (LCA) on say solar or wind where you included many more steps than what is common today. Jeffs arguement is that the arbitraraly created system boundry is set at a place where you ommitt most of the energy investment, and he fears that there is a monstrous amount of energy investment contained in the long tail. I challenge Jeff to substantiate that claim. Get someone to go 10-15 value chain steps out and see what sort of difference those extra steps brings. I will be very surpriced if you get more a tenth of a percentage extra energy to add to the total at step 15, and so many steps away will cause small contributions from basically all of the global economy, you will find that you gain you will probably find that adding further steps don't make a dent in the total.

I don't sit on such an indepth LCA on solar PV to prove my point, but Jeff has not produced one either. So I think he is just doing fancyfull speculation of something he belives would be a huge problem but wich probably is not. It would be a huge problem if a figment of someones imagination prevented us from taking action to convert to the sustainable paradigm when that figment in fact was totally untrue.

I totally disagree that money could meassure EROEI. The market price of oil is partly made up of supply/demand issues, partly political non-marked deals - typically involving OPEC/China/Russia. EROEI vary greatly from field to field. Compare cannadian oil-sands with Sauidi desert oil. If you buy oil that originally come from oilsands or that originally comes from easy sweet crude field in Saudi-Arabia you basically pay the same per barrel. Hydro-electric can be dead-cheap to produce but will command the same price per kwh on the european powergrid as something produced by wind, coal, nuclear or natural gass.

The EROEI varies hugely between the sources but the price is basically the same when its on the grid.

And look at the fluctuation in the price of say oil and natural gass.. Last year we saw 140+ dollar oil... it went down to the 30 level not long after... did that in any way what so ever give that oil a much better EROEI? No way. It still took about 1 unit of energy to get 10 units back in the oil-sector both at high and low price.

I would really advice you all to cut the crap about dollars being a good indicator of EROEI. If you are serious about trying to find out the REAL EROEI of different energy sources, well then follow the transactions of all the sub-supliers and find direct energy usage in each step until you find no significant contributions by adding an N-th step. Then you will see the if the curve is more like the green or more like the red graph. Hire some top of the notch LCA-professionals to add the hundreds of thousands of nodes that might be involved and try to compute the energy-contribution by valuechain-step graph to say level 15. Market price will tell you nothing. Production costs will tell you more.. but really.. market prices on most things fluctuate vildly in the current economic climate, so no one in their right mind should base a calculation of energy on that.

...which leads nicely to part 3 of this series, which will address what we do inlight of the uncertainty surrounding systemic EROEI values.

The EROEI varies hugely between the sources but the price is basically the same when its on the grid.

Sure, but if EROEI is really bad at the marginal production, then the price must be high.

Last year we saw 140+ dollar oil... it went down to the 30 level not long after... did that in any way what so ever give that oil a much better EROEI? No way.

Actually, it did, on the marginal. On the marginal, the worst EROEI projects were scrapped or put on hold.

Price doesn't say much of EROEI, but price does capture what needs to be captured to optimize production.

We had a wonderful electric street railway system in the USA in 1920. The trillions of dollars needed to replace the automobile fleet would probably be more than enough to build a new rail system, plus we will extend the life of fossil fuels long enough to transition to something else. An electric street railway system is the only thing we have enough time and money to do.

If you read The Rise and Fall of Infrastructures you will get an idea of how long it takes make a transition. Electric street railways took 25 years. Renewable energy, wind and solar, will probably take 50 years. We should already be halfway transitioned to whatever the new energy and transportation systems will be.

Electric street railway systems will last longer than cars and highways, windmills and PV. The St. Charles Streetcar Line in New Orleans operates 85 year old streetcars on a right of way that was a mule pulled railway in 1836. The present electric streetcar line has operated since 1893. This is on some of the poorest quality soil (in engineering terms) that I can imagine. The New Orleans streets are so washboarded that it is hard to drive over 25 mph, but this doesn't seem to affect the railway.

Jeff, the use of money as the medium to measure EROI makes an assumption that the currencies incorporate the contributions of nature. The "science" of economics has just been marginalized in the current economic collapse, primarily due to the failure of economic theory to respond with appropriate model runs in the face of peak oil. So using price-estimates incorporates horribly faulty assumptions about your base measuring tool. Emergy does incorporate the contributions of nature by reducing everything to the smallest unit of thermodynamic measurement, the solar joule.

Wide boundary EROI measurement is essential. If you don't draw wide boundaries, you cannot apply the results to the entire system. Those who failed to see the current global economic collapse, for example, were only looking at narrow boundaries to the problems, in isolation. They saw the problem of a US housing bubble, and did not expand the problem to it's systemic connections. Housing prices are connected to a country's debt, and they are connected to unemployment, and they are connected to fossil fuel availability. Those who failed to see the current economic crisis failed to see the linkages and the wider boundaries.

Drawing narrow boundaries promotes cornucopian thinking, comforts the masses, and delays essential policy-decisions. Anyone who thinks that solar PV can get an EROI of 20 is delusional?

I agree, qualitatively, with Figure 1.

What about the energy used to build the plant to build that machinery, ad infinitum?

I don't see how it is, literally, ad infinitum. Can you explain? I do mean to ask how you can mean literally ad infinitum. With no infinities, the maths is quite different.

While “emergy” recognizes the need to account for all energy inputs, it provides no methodology to get around the process of actually counting them, as we regress infinitely step-by-step back from the assembly line itself.

And again, use of the word infinite. I don't understand how you can mean, literally, infinity. Surely the further back in the chain you go, the lower is the contribution of the previous step?

I don't see how you can do EROEI without also counting net energy. EROEI is a dimensionless ratio. Net energy has the units of energy, and tells you how much you have to spend after EROEI considerations.

Price-Estimated EROEI:

At this point you lose me. It's going to take a lot of empirical evidence to get me to go along with the idea that we can use some sort of pseudo-economical idea to solve the problem of accounting for EROEI.

Another dimension of EROEI is temporal. Our ancestors also used energy, as did theirs. should that energy also be counted in current energy generation? If you do that the energy return on energy investment is likely approaching zero, no?

we must draw an artificial boundary if we hope to actually count these energy inputs, but by so doing we necessarily exclude a portion of the actual energy inputs—inputs the significance of which are unknown and unknowable (because we can only know their significance by actually counting them—which brings us back to our initial problem)

I would dispute both the terms "artificial" and the phrase "significance of which are unknown and unknowable" in this argument. See next quote and response, and also my last paragraph below.

Do we really need to count the energy used to harvest the grains used to feed the longshoreman that loaded the component ores on a dock in Asia as an energy input to the turbine parts that were produced from that ore?

Well, it depends largely on what type of equipment that Asian longshoreman is using, and whether or not his muscle energy is a significant part of the energy required to load the ore, or whether the energy comes from another source, such as FF or renewables. The difference between these two scenarios is certainly knowable enough that one can calculate the difference it would make on an ERoEI calculation. In other words, one can say "If the ore is loaded by a single operator of a modern crane, then the food he eats is not significant. OTOH, if the ore is loaded by 100 men with shovels, then the food they eat must be part of a useful ERoEI estimate." At least in the case of the crane, power requirements are fairly "knowable".

Now, any attempt to replace that vast inheritance with renewable technologies must address that same systemic question: when ALL the energy inputs are considered, will civilization have the energy to expand energy, maintain, or reduce the energy consumed per capita?

(Typo in there. Should be "...expand, maintain, or reduce...)
I would just note that this is rather a separate question from whether a given renewable technology has a high enough ERoEI to be worthwhile to produce. Suppose solar PV has a high enough ERoEI to sustain and grow its own production, but not a high enough ERoEI to sustain growth that matches FF depletion. In that case, civilization will end up reducing energy consumption per capita until such time as FFs are essentially gone, at which point consumption might begin to grow again indefinitely.

For example, if it’s inaccurate to use the price of a unit of energy outputted as the cost of energy input, why hasn’t the market addressed this?

Perhaps because of electricity rate regulation. Electricity rates are hardly the best example of the free-market in action.


There is another approach to this whole issue (besides price-as-proxy), which you haven't discussed, which deserves consideration. That is to gather the information on what is minimally required to produce a renewable product (say, solar panels), in terms of mineral inputs, manufacturing energy, and transportation energy required to move mineral inputs from their nearest locations (including possible recycling locations) to an ideal manufacturing site. IOW, the approach would be to create a strategic plan for a production system capable of sustaining itself on renewables, and confirm or deny with calculations if it is feasible to build a renewable infrastructure which would have a positive ERoEI once in place. Such an approach would not only be a more direct way of answering whether it is possible to "transition", but in doing the study one would identify along the way the strategy needed for deployment of renewables.

I like the "another approach" that you raise at the bottom of your comment. I think that something like this should be considered--however, it would be an enormous effort to build-out a real-world exemplar of an "optimal" system, especially where optimal systems depend on 1) massive scale or centralization, and 2) interconnection with multiple other industries to smooth business cycles, demand cycles, etc. Also, while there are certainly pitfalls and inefficiencies in a notionally "free-market" economic structure, there are similar pitfalls in a command economy (or, here, a command-designed subset of that economy). I'm not convinced that, with something as complex a system as you suggest, it will be possible to command-design a system that is more efficient than the market system, even with all its efficiencies. Might be better to use such a study to identify the most inefficient parts of the market process and attempt pinpoint reforms.

I disagree, though, with your distinction between the 100 longshorment using shovels and the 1 longshoreman using a crane. While, admittedly, in your example there is a 100:1 difference between the food (energy) used in system A and the food (energy) used in system B, this is deceptive. In fact, it's a good analogy for this overarching EROEI problem: the one crane operator is vastly more efficient (in terms of food input) than the 100 longshoremen. However, the crane operator depends on a much larger network of people (who also consume food and other inputs of energy) to build the crane (and mine the metals, ad infinitum), maintain the crane, fuel the crane, etc. How does this "long tail" compare to the 100 guys using a shovel and eating food (energy)? I don't know, but this is a perfect example of the kind of short-cuts that we can't take when making a systemic calculation...

Surely the test of the "long tail" in the case of the longshoremen is what is the cheapest option in $/ton unloading. If the 100 longshoremen receive $2000 (as salary) and the one using a crane costs $1000($20 salary and $980 fuel and amortization cost of the crane) the the extra $1000 is going to be spent in the economy buying gasoline, using electricity and goods and services using energy. Once the crane is paid off, the "long tail" dissipates, ( see my posting below) . You don't keep counting embedded energy in infrastructure for ever, just the maintenance costs.

I'm glad you like the "another approach". Call it the "designed renewable economy" approach. The key word there, however, was not "optimal" but "minimal." That is, what is the minimum it would take for a community of whatever sort to manufacturer, say, PV panels (or wind turbines), and by doing so generate an energy surplus to be dedicated to useful work and more PV panels. The point is not (really) to create a plan for the purpose of implementing it in the real world, but to imagine if you could bootstrap the system starting from scratch. The utility of this approach is that by considering a minimal, contained system, you are limiting the uncertainties presented by trying to use contemporary real-world numbers that come out of a globalized economy and are difficult to trace "ad infinitum". You could be deliberately conservative, rather than 'optimal', with the numbers in your design. What would be interesting would be to see where an ERoEI number from such an approach falls compared to the other approaches you've covered. I might do this study if I knew how to access the numbers needed, but I don't, at the moment.

Point taken on the 100 longshoreman...

I don't know how to approach such a study, either, but I do think it would be a very interesting and valuable task. One of my favorite parts of writing posts is that I invariably learn the most from the comments (often, after defending my viewpoint as best I can, by realizing where my arguments fall short), and that I'm left with more questions (such as this one) than answers...

Please see my comment below. The easiest way to get this more accurate measure is to establish the $ output of manufacturing vs the energy input of manufacturing. These are relatively easy numbers to obtain. This approach then takes into account the tail associated with equipment required to build equipment etc.. It does not deal with personal energy requirement of the people involved but this could be added in if you think this is significant.

I read your comment below with interest, see my response there...

I still think that using present-day figures from a globalized fossil fuel economy has unknown potential to mislead us about what a renewable economy of the future, perhaps not globalized, would require. You're offering a way to improve on the accuracy of the price-as-proxy method, which seems valuable. I still think my proposed approach is categorically different. The problem, I think, with accounting for the present day 'long tail' is that the shape of that long tail may not necessarily stay the same into the future, when it will really matter. My approach seeks to avoid that problem. I have no idea what kind of numbers it would produce.

Agreed. As the real cost of energy increases the degree to which we waste it during the course of any manufacturing process will change.

I have often wondered why rail travel is so much more expensive than flying, when conventional EROEI calculations show flying to be much more energy intensive. Jeff's 'systemic EROEI' concept could account for it. 'Implied infrastructure' is another way of thinking about these things.

For one thing, airlines pay no tax at all on jet fuel, one of many hidden (to most) subsidies that allows this unsustainable industry to survive $70+/bbl oil.

Instead of looking at passenger cost look at the difference in moving freight by air vs rail. The connection to energy cost is more apparent that way.

I would question the entire premise of your comment. Rail might be more expense than air travel IF you pay for a sleeper compartment on a long haul Amtrak route, but if you ride coach the costs are more comparable (not counting the cost in discomfort to your spine). Certainly on shorter journeys trains are usually quite competitive compared to planes, often there is no flight option at all. Leaving aside the US, in other parts of the world rail travel is routinely cheaper than taking a flight.

I was rather hoping my comment would stir up a hornet's nest, but only three responses. I am not lobbying for the air travel industry, but I don't think my comment is either naive or trivial. I've never travelled by rail in the US, but believe me,in the UK and Europe, rail travel is generally considerably more expensive. We know that, due to binding international agreements, aviation fuel is not taxed, but it's also true that rail travel is subsidised in most European countries - some more than others. The UK is the most expensive, and the least subsidised.

We have recently completed the high speed rail link from London to Folkestone so that Eurostar passengers can go to Paris via the Channel tunnel very quickly. The embodied costs in materials, energy and manpower to build this 70 mile piece of track have been HUGE. Let alone what the tunnel cost in the first place - huge debts are outstanding from 20 years ago. The maintenance costs are constant and high. What interests me is the relationship between real costs, prices charged, and what you include in the cost, whether it's the amount of money or the energy embedded in the infrastucture or the train drivers lunch. Money and energy are closely tied, even though in the world as it is, ie capitalism/market economies, the relationship is not transparent or consistent.

And if we're talking about carrying bulky freight by train, bear in mind all the trucks that have to drive to the station, load/unload, and then deliver the goods to their final destination. You have to include them in your equation - which is alas why most freight goes by road.

It is all very complicated, n'est ce pas?

No hornets' nest to stir up there.

Passenger rail can be more expensive than air for a lot of reasons.
Among those is that it isn't always more expensive than air travel, air's main advantage is on long hops where time factors make more of a difference on costs than efficiency factors. Take the cheap fuel away and that advantage pops up a lot less frequently.

On cargo the equation is simple: if fuel costs for truck shipping outweigh the infrastructure expenses for rail, more goods travel by rail. You don't see 100 truck lineups of coal bins going over the road because it is cheaper to build a rail spur to the power plant than it is to ship coal over the road.

Not at all complicated.

believe me,in the UK and Europe, rail travel is generally considerably more expensive

Sorry, but I don't really believe you. As I said before, on longer trips (Britain to Germany), you're probably correct, but on shorter haul trips I don't think so. I just checked Deutsche Bahn's website and you can get weekend fares good across Germany for as little as 27 Euros.

Just factor in all the trips you can make by train in Europe that you can't make by plane (unless you hire a private one), and the reality of it sinks in.

The Chunnel is not a fair example, should probably not be considered here. For one thing, you can't take your car on a plane across the Channel.

Nowadays in the US, massive numbers of truck trailers are driven to the "station" and simply put on flat cars. No loading/unloading at the intermodal yard is necessary. You say that "most freight goes by road", but that's belied by the fact that much of that road freight spends time on a train. (I'm not even sure that it's correct flat-out; comparing ton-miles of rail freight vs. road freight might show otherwise.)

You have presented the issues of EROEI but I think your method of using the price of energy or capital cost has a major error: Energy at the point of consumption only accounts for 10% of US GDP(6MJ/$GDP). The cost of any energy source has a major input of labor costs. Those workers building wind turbines or making steel don't spend 100% of their paychecks on energy, just 10%, so you have to use the 6MJ/$GDP as the value to multiply, not 60MJ/$spent on energy.

The problem with measuring the "long tail" is that you double count in two ways:
1) Hall et al include infrastructure of the transport system(manufacturing cars, insurance, roads,refineries) to derive the EROEI of 3:1 for oil. If you include that same infrastructure for transporting components for wind turbines you are double counting.
2) Investments in factories and steel mills were made many years ago, we don't have to make new energy investments only energy to repair or replace. If you include the energy spent in previous years on this infrastructure you also have to include all of the capital assets built in those years(nuclear reactors, dams, wind turbines, refineries).

At most all of the long tails for all of the energy infrastructure built in one year can not be larger than the total energy used in the economy, in fact it must be considerably less than this because most activities use energy without any attempt to create energy.

Jeff: Read this centence three times and think about it!

"At most all of the long tails for all of the energy infrastructure built in one year can not be larger than the total energy used in the economy, in fact it must be considerably less than this because most activities use energy without any attempt to create energy."

Neil made a very intelligent point about the economy here!

1) Not all of the economy goes to pay energy producers.
2) And of all the money payed to energy producers some of it goes to profits.
3) If you count all the monetary costs of energy production only a fraction of that is used to pay for energy directly or indirectly.

Exept from corn ethanol and a few other sources of energy energy sources are REAL energy sources - and have positive EROEI.
Modern solar PV production claim EROEI of more than 20. That could very well be an overestimate. But I challenge anyone to provide evidence that it is below 5 for the best producers say Renewable Energy Corporation (say Modern wind turbines pay back their energy in months. I just don't belive the EROEI provides an argument against renawbles or against the chances of civilisation, quite the contrary.

To be honest, I think it's a simplistic view of our economic system to suggest that we must constrain our analysis to the current year (more boundary issues!). Here's why: today's economic activity and production is largely based on the utilization of infrastructure and capital goods that were produced in the past. This legacy system was built on, by general consensus, higher-EROEI energy. As a result, the long-tail for all current energy infrastructure quite certainly *can* be more than all the energy produced this year. This "bootstrap" effect is one of the key reasons why we'll see a lag in the impact of EROEI decline, but it will be no less real.

As for "Modern wind turbines pay back their energy in months," I think that's fairly plainly wrong. Unless by months you mean 60+. Assuming you use "months" to mean less than one year, I have to disagree. The price-estimated methodology shows this to be plainly wrong. If there are inaccuracies in this method, that still doesn't explain why wind isn't more financially attractive--if wind could deliver more energy than the TOTAL used in its production ("long tail") in less than a year, after adjusting for the quality of that energy (variability and timing) and accounting for the transmission infrastructure, then one could structure wind-based funds that would offer exceptional returns, and there would be nearly limitless capital available for wind farms. This isn't the case, and one must ask "why?"

There are two issues;
"The price-estimated methodology shows this to be plainly wrong."
Wind farm costs are about $2,000,000/MW capacity. Part of those costs are the high return on investment of wind manufacturers such as Vestas, GE. When you have a growth rate of 30-50% per year an back-orders profits and prices rise. Vestas and GE( and many parts suppliers) are re-investing some of those profits into building new capacity. We can count that infrastructure in this year( as a cost) or it can be part of a future wind farm's "long tail" but it should not be counted twice.
A wind farm does not return $2,000,000 worth of electricity in 12 months(2,600MW/year) but it did not use $2,000,000 worth of electricity to build. We can estimate the amount of electricity equivalent as 0.6kWh/$GDP; 6MJ (if using FF conversion 10.8MJ required to generate 1kWH) OR directly measure life cycle costs as Vestas has done to report on CO2 impacts(800MWh/MW)and labor about 400MWh/MW. Using either method 1600MW or 1200MW energy investment gives a payback of 5-7 months.
the second issue;
"If there are inaccuracies in this method, that still doesn't explain why wind isn't more financially attractive--"
Wind is financially attractive, when it is selling power at $45/MWh and including $20 value tax credit. Wind farms are financed by risk capital returning 9-13% per year and 15 year financing at 6% and completely amortizing costs. The only cheaper power is from coal -fired and hydro built 40-50 years ago and fully paid off. half of the cost of power is the retail distribution which will only become cheaper if a lot more off-peak is used( ie smart meters, EV re-charging) so that the same infrastructure is used more efficiently.

If you accept that hydro generally has a high EROEI do you also accept that it also takes years to pay off the $ investment even if the energy investment is paid back quickly. If hydro power received X ten higher price than cost then the payback would be 1-2 years not the 35 years that is used in financing the building new hydro in Canada today.

"Wind is financially attractive, when it is selling power at $45/MWh".

Which will you invest your future in?
The Windmill manufacturer or the utility producing and selling the power? Both rely on the consumer, as do coal fired or nuclear power stations.
Nothing is free. If the service or item can't be paid for, what happens to the utility, manufacturer, wholesaler or retailer.

Passenger liners went out of business why, tram lines were ripped up why, passenger trains discontinued why, bus lines out of business why, ice deliveries went out of business why, GM out of business why...............
Eventually the airline business will crack because they will have to charge more than the market will bear.

If you cannot profitably sell your product you are dead.
I won't be investing my future in an electricity utility nor a windmill manufacturer, they need numerous well heeled consumers and they are and will be, a dying breed.

there are 3 types of investments, the wind turbine manufacturer( not many wind mill manufacturers), the wind farm operator and the utility that distributes power to the retail and commercial customers. The last is the safest but most regulated. The other two have different types of risks.

That fixed me up.
You must be a genius.

Written by jeffvail:
1.2 MW array installed 2009 in Los Angeles, cost $16.5 million up front... projected financial return of $550,000 per year. At the rough California rate of $.15 per KWh, that's about 4 GWh per year (conservative).

The article states, "The 1.2 megawatt array is made up of 6,720 individual solar panels...," and looking at the photo, one panel contains 66 PV cells in a 6x11 grid. These panels look like they are rated for 200 W to 210 W. 200 W/panel * 6,720 panels = 1.3 MW which is close to their stated power of 1.2 MW making me think you are calculating with rated PV power not actual power delivered to the load. Since these PV panels look like they are mounted horizontally in a fixed direction, they are not pointing in an optimal direction for Los Angeles which is located at ~33 degrees north latitude. Union Station tends to have fog or overcast during morning hours further reducing power output.

Taking these factors into consideration I estimate the energy output of this installation over 40 years to be:

clear days: 65%
Integration factor: 6 hr/day * cos(33 degrees)(bad pointing direction) = ~5 hr/day
efficiency of grid-tied inverter: 85%

200 W/panel * 6,720 panels * .85 * .65 * 5 hr/day * 365.24 days/yr * 40 yr = 54 GW·hr
or an average power of 1.4 GW·hr/yr,
or a lifetime cost of $16.5 million/54 GW·hr = $.31 / kW·hr

My off-grid PV system with the additional cost of batteries and more than half of the PV panels purchased 20 years ago at ~$10 / (rated watt) but installed by myself (thus no addition to the cost) will probably be less than $.25/kW·hr over 40 years.

$16.5 million / 6,720 panels = $2,455 / panel which is massively overpriced because 200 W PV panels sell individually at retail for less than half this price. Unless I made a mistake in my calculations, the Union Station PV project looks like massive government waste to me.

Price based ERoI does not take into account massive overbilling by installers which is happening in California. It also fails to account for the initial capital needed to due research, development and buildout which is reflected in an initial high price for PV systems. Calculating price based ERoI from such elevated costs skews the results toward low ERoI. PV's are only beginning to benefit from cost reductions due to mass production.

Written by jeffvail:
(here using national average, as there's no reason to think that manufacturers would use primarily California peaking power to build this system)

If the PV panels were manufactured and installed during normal business hours, then they used electricity during peak demand during the day.

As I have expressed in several previous posts, I am quite dubious about the real value of trying to develop EROEI numbers using an all-encompassing boundary that includes energy inputs several orders removed from the energy inputs associated with direct manufacturing and operation of renewal systems such as wind or solar. Once one gets past the second or third level once removed, that it gets into an allocation game that gets further and further removed from reality to the point of becoming downright silly. I maintain that once you get past a certain point, trying to capture these nth order inputs decreases rather than increases the level of confidence.

I think Jeff brought up the subject of 'opportunity costs' in the example of whether to include things like the energy input related to worker food, housing, and transportation associated with say the construction and operation of a wind turbine.

I personally think this is a misapplication of that concept. To me, the true test of whether inclusion of those worker-related energy inputs are valid is simple: if the wind turbine weren't built, would those worker-related energy expenditures go away? The answer, of course, is NO, and that is why it is incorrect to include them. The individual worker in our example still has to eat and have housing whether he is building a wind turbine, flipping burgers, or writing legal briefs. So those inputs wash out. As to worker transportation, there is no reason to assume that a worker doing wind turbines is going require any more work-related transportation that the burger-flipper or the lawyer. So that also washes out.

Then we have the subject of substitution, which I don't think has been addressed. In general, as economic priorities shift so does the manner in which resources are allocated. For example, during WW II the US made a massive restructuring of its industry to produce war materiel rather than consumer goods. Thus, to a large extent the resources required for the production of war materiel was not added to that required for the production of consumer goods but rather substituted for it. When Chrysler ceased manufacturing automobiles and started making tanks, a ton of steel going into a tank roughly represented a ton of steel not going into a car.

So, I hope it's clear where I'm going with this. If a ton of steel going into a wind turbine substitutes for a ton of steel that would have gone into Hummers, oil well piping, or offshore oil rigs, than not all of the energy input associated with the wind turbine represents a net increase in steel-related energy expenditure. In other words, if such a substitution is made, then the steel industry is not consuming more energy by virtue of the existence of the wind turbine. The wind turbine is not draining more energy from the system, but just causing a shift in where the same amount of energy is spent.

I think this point is completely ignored by people attempting to do these complex EROEI exercises. I welcome any comments, pro or con.

I disagree with you joule. But we will still end up with the same conclusion, that those extra factors or those unknowns might not be all that significant. My point is related to the economy of scale of industrial operations. That even if you include the energy spent by the workers it would still be insignificant because the wage-part of producing solar cells or wind turbine is dwarfed by the pay for machinery, electricity and materials. I also think that the energy expended in the NT level isnt real or shouldn't be counted, but that it is highly unlikely that the indirect energy costs would hide the bulk of energy, but rather that the bulk of energy can be accounted for in the few first steps. (That the green curve is closer to the truth).

Here is something to think about if you assume that most companies in the economy easilly have 10 subsuppliers with 1000 employees or more.

N = 0) Say 1000 people are employed in the solar cell plant who only produce solar cells.
N = 1) Say that the plant has 10 sub-suppliers each with a 1000 employees. People count = 1000 + 10*1000 = 11 000
N = 2) Say that each of the suppliers to the suppliers has 1000 employess. People Count = 11 000 + 100*1000 = 111 000
N = 3) Another similar step People Count = 111 000 + 1000*1000 = more than a million
N = 4) More than 10 million people
N = 5) More than 100 million people
N = 6) More than a billion people
N = 7) More than 10 Billion people
N = 8) More than 100 Billion people

You find out that this little company after a few steps activate hundreds of billions of people that not even fit on this planet that you would have to feed and provide energy for in order to support that little PV-cell production facility. But that concept is totally blind to the fact that most companies only buy a small fraction of the output of most of its subsuppliers and that this quickly produces a sharp falloff in contribution from each of those workers further away. The same should be true for all other inputs too.

Another curiosity: And for each of your suppliers in either step - you could possibly be a supplier to them wich would cause some of their energy usages to originate from energy produced by your PV-products.

MrMambo -

Well, I do think that we both basically agree that things can rapidly get very strange once you get past the first several steps back from the initial direct energy inputs.

The problem you discuss regarding how to deal with multiple suppliers is exactly what I'm talking about when I say it rapidly degenerates into an allocation game that gets increasingly artificial and arbitrary.

I guess we mostly agree. But I refuse to say that because a worker in the renewable energy industry would have existed anyway and probably would have had some other work, then the effects of labour shouldn't be counted. You wouldn't have said that for a kwh of energy spent and argued that it shouldn't count because it would anyways have been spent by someone else if it wasn't spent on that solar cell or that windturbine. The point I'm trying to make is that you should count what matters and be satisfied when you cannot really add to your sum of costs by adding a new level in the supply chain to monitor. Also for infrastructure its not unreasonable to add in contributions from what has already been built, just remember that there you should use an ALLOCATION of just a small portion of that infrastructure that can be linked with the production process you are investigating... Say an old bridge is being used in the transportation of raw materials..

Maybe that bridge has been there for 50 years and wich is expected to last 50 more and that each day 2500 trucks and 5000 passenger cars pass over that bridge, now if the truck carrying raw materials every other week to your production facility only has a microscipic share in the cost of material and energy used for that particular piece of the infrastructure. If you go on like that for all the infrastructure in the global supply chain that you are also using then it might add something to the total, but because the infrastructure is typically shared by an anormous amount of people and functions its you only allocate a very very tiny portion of the cost of that infrastructure to you particular production - may it be solar or wind. The cost is there but it won't take the EREI of polycrystalline PV from 20 down to 2... I don't buy that. I really need some credible empirical data compiled in a credible way for me to start beliving that.

Until then I see something that is not just pure unfounded doomer-porn speculation then I see Jeffvails scary red graph as fundamentally flawed and very counterproductive in an enlightened debate over energy alternatives in a transition towards a sustainable paradigm. However I think it could be very productive to follow the value chains a great many steps to find out wich graph is true and wich is false for a particular energy production technology.

"if the wind turbine weren't built, would those worker-related energy expenditures go away?"

This is the perfect way to illustrate the difference between "conventional" and "systemic" EROEI. I agree with you 100% from the "conventional EROEI" perspective. If we're only comparing two technologies, or measuring the rate of progress, then those measures are fine--and accounting for things like worker-related energy may even lead to inaccuracies. However, if we're looking at the ability of society as a whole to support the current human population at the current level of energy consumption per capita, then we must consider these worker-related energy expenditures. Why? Because if civilization's "systemic" EROEI declines enough, then those worker-related energy expenditure will actually go away--i.e. die off, collapse, or economic contraction in one form or another...

Jeff -

So, are you saying that if this fictional worker we've used as an example does not get a job working on wind turbines, then in your conceptual model you are going to kill him off? Because that's the only way that his working on wind turbines (as opposed to constructing high-rise office towers or teaching in a college) makes any difference in the amount of energy he himself consumes in eating, living, and working.

You can't get around the fact that the worker already exists. Let us say that he is you. You already consume a certain amount of energy in eating, living, and working. One day you see an ad in the paper for a position involving constructing wind turbines. You apply for the job and get it. As far as your personal energy expenditure is concerned, has anything changed at all? The only way it does is if we kill you off.

(Which to me seems like a pretty extreme thing to do just for the sake of getting the numbers you want out of an EROEI analysis!)


First of all, as someone who spent half of last week working physically for 10 hrs a day, and the other half not doing so at all, I can assure you that the amount of energy (food) needed to do certain types of work is meaningfully different from that of other types of work. (And if it were not for the power tools I had at my disposal, the food I needed would have been greater, and the company's need for workers would have been greater...that's a tangent, though.)

Secondly...suppose this fictional worker is leaving a farming job for the job constructing turbines. Suppose also that the energy per worker from the wind turbine is insufficient to replace the energy he put into the farm job. His community's farming output will decline.

Unless the energy from the wind turbines is high enough to replace the worker's muscle energy lost on the farm, and then some, the turbine worker will be superfluous to his community's energy/food production. Either everyone will eat less, or there will be fewer people.

So yes, the food he eats absolutely fits in the ERoEI equation. (Whether it is a significant factor in that equation is a different question.)

I'd be very very surprised if it was more than double, and still quite surprised if it was more than 1.5 times for any two jobs.

In fact googling shows that a 1.5m tall sedentry male requires at the least 1800 Joules while a 1.8m tall male who is very active (i.e. serious athletic training) requires at most 3700 J. So this difference is about double, but it is the absolute maximum differnce we could expect, while in reality someone applying for a manual job is likely to do a similar kind of work already, therefore resulting in a much smaller difference.

here's where I got it from

Also given that such a small percentage of the population actually works on a farm, it is highly unlikely that most workers in wind energy construction will be seconded from farmland duties.

The intake for physical activity was the minor point, but your numbers confirm what I said. Numbers of workers required is also issue, and a more significant one.

Also given that such a small percentage of the population actually works on a farm, it is highly unlikely that most workers in wind energy construction will be seconded from farmland duties.

The only reason that a small percentage of (developed countries') populations work on farms is because so much fossil fuel energy is available to farmers these days. If farm output is to be maintained in a post-peak oil world, that energy will have to be replaced from something else, like wind energy. So whether or not the worker contributes more to farm output by building turbines or by working directly on the farm is precisely what will be at issue. I think it highly likely that individuals will face stark choices in a few decades regarding whether to work on these energy projects or to go directly into agricultural work. So I think your comment is basically just wrong.

Not saying that we would kill off those workers who can't get a job in a turbine plant (though some movie-driven future scenarios may suggest otherwise!). Rather, just that if civilization as a whole cannot produce sufficient surplus energy to sustain the marginal worker (or, as is far more likely the case, the marginal energy consumption of that worker), then this will be reduced over time. While this is most likely to take the form of demand destruction, actual die off isn't entirely unlikely.

actual die off isn't entirely unlikely
that seems the understatement of the day
if push really comes to shove the margins will contract,
the meaning of marginal will be all too evident

I think you are correct on this point. At least the workers would not be contributing to GDP and therefore less would be available to consume including energy.
What is more import though is that if energy becomes more expensive, more resources ( labor capital) would be diverted from non-energy generating activities such as watching NASCAR races or making movies or flying on holidays. That will also free up some energy, so if we are comparing ANY energy creating activity it will produce more energy than any non-energy creating activity.

Im traveling (actually giving a talk in Boston on EROI in am) so must be brief.

The issue of boundaries has been discussed for 30+ years. A colleague and I came up with a matrix that might make EROI analyses more commensurate here.

Another issue is timing - high EROI tech that has backweighted energy flows will not appear as promising vis-a-vis the market. Secondly, EROI does not account for depreciation, so marginal flows may have their energy costs paid for long ago (I think you mentioned this Jeff in your bootstrap article a few years ago). That is why European countries are stepping in via state owned energy companies to procure renewables -providing energy flows for their citizens is more important in long run than dollars - ironically, would Spain and Portugal have experienced massive renewable build out if it weren't for climate change policies?

Another (obvious) issue is quality. A BTU does not equal a BTU - each socio-cultural system comes to depend on certain types of energy quality that built infrastructure runs on. Electricity and liquid fuels will soon flip in their scarcity value (right now electricity is more expensive). So your 'systemic EROI' will really gravitate towards what % of the current socioeconomic system is based on what type of energy and what the total energy gain is from all types of energy comprising it. I agree this has been missing - but dollars fail even more miserably...

Another major issue is using $ of % of GDP to arrive at an answer. This is dangerous because we don't really know how far abstract/fiat assets have departed from real assets - e.g. GDP might be grossly overstated.

Finally there are non-energy inputs, which irrespective of EROI, we should be maximizing the return on the most limiting input - arguably this is liquid fuels but could just as easily be water, land, soil, etc.

I agree with those who point out it is energy gain, of specifically the type and quality we have become accustomed to that is relevant metric. I too have been critical of EROI, but it is step in right direction (as compared with squeezing blood from a stone to get the consumer spending again so the abstract economic numbers look good again)

Thanks Jeff for continuing to push the thinking on this concept - obviously it is very confusing otherwise it would have been laid to rest/put into practice long ago (it was actually made into law in the 70s but then fell by wayside). Akin to futures being an inaccurate measure of scarcity due to commodity pricing at marginal unit, EROI/biophyscial analysis probably will remain an academic oddity until we hit a real resource crisis - then it will dawn on people that resources can only be created with penstrokes so long as people believe in the paper.

Your point concerning depreciation and marginal flows needs to be emphasized more often.

A worn out wind turbine can be replaced on the existing tower more than likely w/o building or replacing roads or transmission lines or engaging in long and costly debates about site selection etc.

I don't think it is even possible today to place a value on any large and energy /labor /resource intensive infrastructure built now,dating that value thirty or forty years into the future.

A worn out existing wind farm that can be refurbished in 2050 might be worth eighty or ninety percent of the price of a new wind farm or twenty percent.

Anybody who thinks he knows for sure what things are going to cost a few decades down the road is delusional.

But I will hazard a guess that even scrap steel will be a very valuable commodity.

I will hazard another guess that skilled labor and engineering talent will be less valuable,down the road,than they are now,as measured against energy intensive commodities.

This leads to the conclusion that rebuilding/overhauling old infrastructure will be an increasingly attractive option versus building new.

from Brazil


Sorry to come into this so late being on the west coast and (ahem...) actually being involved in the engineering of energy systems all day (atta-boy Scotty!)

You have eloquently provided an empirical proof of the not too modestly named Taylor's Maxim, which I have shared with Charles. At first it seems like a novelty until one ventures into an essay like the one just written. I may be over reaching the depth, but it could be analogous to Einstein's Special Relativity (may I repeat it is a very loose analogue!!). That is, let's first understand E=mc^2 and then get on with the business of designing nuclear reactors.

Taylor's Maxim is:
In any given universal system the EROI is less than one. EROI<1

The Corollary is:
For any thermodynamic meaningful analysis, the order of EROI analysis must be established.

Ok, you are all allowed to chime in with a collective "Duh!" That's just thermodynamics. The purpose of the Maxim is not to further refine thermodynamics, but to establish a theoretical and rhetorical boundary for EROI debate. That is, if you analyze EROI far enough, you will always come out with less than one, so stop the nonsense!!

The corollary could be interpreted as how far do we dilute the system analysis to set the boundaries of EROI analysis. The point about opportunity cost is well taken and it could be taken to a spiritual level. If the wind turbine worker was not making wind turbines, then what is their purpose of existence. For the sake of sanity and deterministic discussion we try not to go down these avenues, but we will eventually.

The capacity of the human mind is to extend the boundaries of the EROI analysis to galactic extents, which reflects the nature of consciousness. For the sake of scientific and engineering analysis we must reject the upward boundary of the Taylor Maxim, but focus on relevant domains.

So what is are the domain boundaries Herr Professor? Can we arbitrarily establish boundaries based upon a signal to noise ratio type significance? If systemic energy inputs S/N ratio > 90 dB, they are not included. Its a reasonable scientific process. And, if we analyze enough EROI systems, will all the energy inputs and outputs be accounted for? There again we run up against Maxim.

So why the focus on the abstracts and larger arguments? Perhaps, like previously mentioned with the nuclear metaphor, we need to understand the true nature of the problem before we set out to fix it.

Maybe I'm not understanding, but if you take the human factor out of it, then yes, ERoEI is nonsense.

But if we clarify that ERoEI is Energy Returned to humans over Energy Invested by humans, then sensibility is restored, and it doesn't seem that your comments have much bearing on the discussion over this post. Taylor's Maxim no longer applies, because the system is not universal. But where to draw the boundaries is no less confusing than it was before.

When Aeldric and myself wrote our post on the Trouble with Energy several months ago we also had to wrestle with the issues you have addressed here. At the time we recognised that there was a real need for some more rigorous standards required for the evaluation of EROEI if there was to be any meaning behind comparisons between technologies etc.. In the end we developed our own standard for the evaluation.

While I agree with your basic tenet that the "conventional" EROEI calculations are not really representative of the full society energy costs required to facilitate a transition, I think you have gone to the other extreme in the "systemic" method you have proposed. The assumption that all of the value of a particular generation installation can be converted into equivalent MWHrs is just not correct:
- At least a proportion of our current energy consumption comes from renewable sources and so need not be considered in any energy cost associated with transition.
- The bulk of the costs associated with building a major infrastructure project are not spent on energy inputs. In fact the bulk of societies output is not spent on energy (yet).

I know this line of thought will, if taken to the end, lead back to a "conventional" approach. There is however a middle ground that provides a more accurate measure. You simply take the value of a nations manufactured output and the equivalent energy consumption of the manufacturing industry. From this you can establish a MWHr input/$production. You can then apply this to the construction cost of the particular project. In our work I took this even further by differentiating between Construction MWHr/$ and Manufacture MWhr/$.

The above methodology takes into account the full tail of the cost of building the plant to build the plant to build the plant etc.. I think using this methodology you will get figures much more closely aligned to the true marginal (energy)cost of build renewable plant.

Cool. So what would you calculate the energy input to be in the case of, say, that $16.5 million solar installation in LA?

My comments here are the same as when Jeff first provided his EROEI Short #1 article just about 2 years ago here.

My comments, briefly summarized here, were that if any good or service can be measured, it can be taxed. This fact also applies to energy and to the energy content of any other good or service.

So energy consumption can easily be taxed, and by extension the quantity of energy used in any product can be explicitly determined by the energy tax burden carried with it.

And if you make that tax a refundable tax, it is only the ultimate consumer who pays the tax.

To those who might claim that more taxes would be a drag on the economy, I suggested making the energy tax revenue-neutral, so that any increases in government revenues stemming from an increase in energy taxes should be offset by decreasing all non-productive taxes, such as income tax, capital gains taxes, property tax, capital taxes, ie. any tax that is not consumption-related or a true user-fee.

Among the advantages of such a system would be that the most energy-efficient producer (and its customers) would be rewarded with a lower energy tax on its products, and of course the least energy-efficient producer (and its customers) would be penalized.

Again, I admit this proposal is very sketchy and as I am no expert on either taxation or EROEI, I invite comments from others.


just found your post while I had a Google Alert on about emergy. Worked on emergy concept (and simulator: Emergy Simulator open source project back in 2004).
I would like to thank you to re-draw the wall picture of different energy accounting methodologies in such a clear way, not forgetting about the Emergy concept.

The main issue with Emergy IMHO was its misuse, a bit like you say about EROEI, people (including among the 'emergy community') tend to rely on very low accurate emergy data without questioning it and more importantly, failing to pay enough attentions to the consequences of what you call "the "long tail" of energy inputs where such transformation must be considered".

Actually, I think you should have a look to the older "Systems Ecology An Introduction" Odum Book (if I remember well). I think the "emergy algrebra" (and its 'non conservative property' ) is described in details there with enough rigor. The real theoretical issue (aside from wide misuseunfortunately) really is the "long tail" modelling issue (but yes there is a rigorous algebra described here I think).

I should say I have a take about that. I think that methodology could still be useful. Indeed, in LCA or other trendies "sustainable" indicators to feed the shiny sustainability reports of the same usual bastard venture companies, there are a lot of norms to define what you should account for and how, there are even a proliferation of business developing in this theoretical dark hole.

Well, I believe a college of experts could define, sector by sector (and only for those controlled more by what seems raw energy rather than information (eg computer industry not included for instance because impact is to information sensitive)), what should be the boundaries and up to which level of aggretion we should define processes. Then, just like there are judge who appreciate if one respect or not a law, there could be a college of judges appreciating how well a given real model fits the up to date 'best practises'.

Then one could hope that yes errors are been done, but between two alternative X and Y of a similar sector, then error is about the same and could be neglectfulness in regard to the indicator gap.

In a word, I think would could benefit from a 'normalized' rigorous (non over simplificated) emergy theory much like we normalize the current "candid " methodologies. We would gain because we would account for more things with more meaningful, canonical concepts.

Actually, what I would have liked to study, was a "statistical error theory", that would tell, according to the specific emergy algebra what are the relative error margin at each system node. Then, if we admit, a bit like a Monte Carlos Simulation with parameter distribution, like for the climate change prediction, and by injecting this in the "Emergy algrebra" appropriately, I believe we could really compare two models (or tell we can't compare them on the contrary because it fails in the error margin), admitting the same uncertainty parameters for the similar inputs.

Far from "exact science", but I think that if we applied this to energy intensive activities, it could be far beyond the current "candid" methodologies as you say.

What do you think about that?

I had plan for that (Monte Carlo Emergy Algebra) with Emergy Simulator, but:
- I've been disappointed by 'Emlergy' people, because I think the majority of them was just in the Odum inheritance, benefiting from its subvention system rather than competent rigorous people. Only really a few one had your rigor, and I should say I thought that a camp of the "cumulative exergy people" was actually doing the same "emergy algebra" in the rigorous way, but don't calling them 'emergy', like to avoid being regarded as controversial (Odum probably was also really not as smart at its end than it was at the time he wrote "Systems Ecology An Introduction" which is literally a science masterpiece for its time).
- Emergy Simulator had to be rewritten in a better way (I was quite a code beginner at that time)
- I had to sustain myself, so had to leave ecology hippie stuff for a short term sustainable job (at least I work with computer science for who I want I think, so not too much sold either).

The good part finally is that now I'm in the open source world and I should say THIS IS A PLACE WERE SYSTEM ECOLOGY ENERGY RULES TEND TO APPY. Yup, how much 'information' feedback a program integrator will decide to feedback to a code editor, what is the information loss between the code produced by some editor and its audience (eg entry barrier, learning curves), does an editor try to make to much money from some code thus enabling a niche for a competitive fork are very much things that could be modeled using such a system ecology language I believe.

I have quite a wide engineering background and I should say unfortunately the leading industries never required (may be until recent waste valorization) such a systemic ecology theory. That's why I believe systemic electrical circuit engineering for instance is so much more developed than emergy algebra or cumulative exergy algebra (call it the way you like). I believe, with the current 'community optimization economy' such as open source software industry starting to gain traction over cheap oil dad industries, may be our society will finally fund the theoretical and technical advances we need for such an accurate global energy modeling. Hell we live at the Internet area. Why wouldn't there be a huge collegiality evaluated world emergy/exergy base for common flows (I mean accurate) and perfectible models, say with the same level of effort, collegiality and evolution you see for instance in Linux or other large open source systems. We have gmaps, satellite indicators for everything, anything that is sold or crried from one place to an other is being tracked on computers, there should be ways to aggregate those data with some rigor in an open system that would cycle toward more accuracy. Why woudln't we build a Google of energy flows of our society?


Raphaël Valyi

I always think that surely any money or energy spent on renewable technology is energy and money that can't be spent on rubbish (like cars, flights, consumer goods) - so always a good thing.

This is surely the reverse of the argument evoked by people saying that energy saving/efficiency doesn't yield as good results as expected because then people go and buy other (damaging) stuff.

Rather than worry about the precise EROEI why not compare the EROEI of say, solar panels, with a new car under the scrappage scheme - that is a more interesting and realistic debate given where we are right now with relative spending levels (money or energy). We aren't spending all our energy on transition technologies by any means. If you estimate the pathetically small fraction of overall energy spend RIGHT NOW that goes into transition technologies then worrying about the relative levels of EROEI of the renewable technology is surely somewhat premature? Why not compare overall spend of energy on automobiles or tvs, or aircon units etc. vs overall spend on renewables...

Also, discussing detailed and pessimistic EROEI fuels arguments by the "lets do nothing lobby" to carry on as usual and say "maybe renewables aren't worth investing in, lets sit on our hands some more first while we do some more analysis". Meanwhile the energy we do have ticks away into unnecessary and unrelated goods and products... looks at the "price estimated eroie theory". My first thought when I looked into this several years ago was that we were building too many energy costs into our calculation, however the more indepth analysis you look at, the more you start to understand that the entirety of GDP is explained by the energy subsidy (ie the excess or free energy produced in your eroie calculation) which I tried to allude to in a piece I recently published.

Jeff, Thanks very much for this. This is the first balanced approach from others I've seen advocating an approach consistent with the general systems view I've been advocating. The basics, as I see it, are that every kind of through-put system (physical economy) works off an energy gradient in nature, and is built around a network of energy producing and energy consuming processes. The system grows from small beginnings using self-investment, creating a product that builds the process, and either stabilizes before crossing its survivability limits,... or not.

How our economic system allocates energy sources and uses is with money, comparing the productivity of the physical energy use for delivering the cultural values people want. Our economic system is full of competitive resource allocation processes, the market & investments choices, using money as the record keeping device. This global allocation process has a rather miraculous effect, a rather uniform global economic productivity of energy $166/Mbtu (see discussion below). It displays the whole world economy to be smoothly working as a whole.

The basic principle for systems that work as a whole is that, the whole system is composed of all its participating parts and each part needs the whole system to operate. Some more ways to understand this are on my research notes page for understanding the embodied energy of money and using it to measure the system boundary of economic impacts of individual consumer choices. The principle is is also illustrated by the high degree of connectivity in the network of money connections. If you trace where money goes, I think (omitting the analysis here) every money choice is only 3 degrees of separation from any other... because any money choice connects to thousands of others and so in three steps any choice links to billions of others.

So my simple method for using the embodied energy of money for EROI calculations, say to get a systemic EROI for solar panels or a wind farm, as Jeff did, is:
EROI = (Energy produced)/(6000btu/$*(operating costs + amortized investment & retirement costs)+ Energy use)

The general principle is to start with the most inclusive generality, and then move to studying the particulars. The first graph below shows how both the developed and undeveloped world have about the same energy intensity of GDP, as btu/$GDP. The following curve shows the inverse, $GDP/btu, or whole system economic energy productivity.

As a whole, the earth’s economies now consume about 6000btu/$GDP(2008$). The graph above is from a DOE historical report with units in 1995$. Note that the energy intensity of the economies of rich and poor have the same general scale and rate of decline.

The second graph shows the IEA TPES and PPP world data (which generally agrees with the DOE figures) and shows the longest detailed history available for world energy use from all purchased fuel sources. The lower curve is the amount of GDP the economies make using a unit of energy, or whole system energy productivity. It is now ~$167/Mbtu. The scale of the curve is adjusted to equal the energy use at the first data point to show their steady divergence.

The DOE report (DOE report indicates that the reduction of GDP carbon intensity is following close to the same curve as energy productivity. The main points are a) our impacts from producing and using energy are growing exponentially, b) energy productivity is increasing much more slowly than energy use, and c) these trends are very regular, the world over.

This mystified me at first, until I realized that the main means of price competition between businesses is efficiency. Efficiency has not been neglected in the slightest, ever, but is one of the main growth resources for both individual businesses and investors, and always has been. What the shape of the curves really shows is the way our global learning process for how to use energy is progressing. One can add that this divergence itself is inherently not sustainable. To measure any one country’s, or technology's or business product's physical contribution to this one has to then compare their economic use of the rest of the world economic system, and compare the energy producing and the energy consumingfunctions of the system that they use. My approach looks like:

The simpler form in pp4 above may be all you ever need, but for economic analysis you need a bit more. The diagram is arranged in a circle of complementary processes, each serving the needs of others to drive the whole system. With natural resources at the left, tapped by an energy producing business, the energy is made available for the energy consuming sectors of society, that then provide the other resources and knowhow to run the energy extraction business. That's doing what all natural systems do, using a self-investment cycle to devote some of the products of the system to build and maintain all its parts. There are some more notes on this in Simple Systemic EROI. Please credit as due.

In the network of production and consumption systems, different forms of energy will be liked with different kinds of energy uses, and the pairings rise and fall together as they generate more or less value for the whole system. What I think has been happening in response to each of our systemic energy crisis (the 70's crisis, the present one, and the series of ones coming) is a kind of "economic destruction" that some think is always "creative" in its end effect, and some others would not. Whether good or bad, each wave of systemic destruction seems to be done by the system as a whole shedding it's lowest EROI and highest SROI sectors, disinvesting whole networks of technology, organization, infrastructure and people at once.

Thanks for the fascinating comment on energy systems and money. I think they key to what you're saying is that "the whole system is composed of all its participating parts and each part needs the whole system to operate." I get the impression that many (most) people think that the energy sector, or energy expenditures, can somehow be carved out from the rest of the economy and isolated for study (and for measuring EROEI). I've tried a variety of ways of explaining why I disagree with this, but most people continue to assume that this isn't the case--I think that the result is fundamentally skewing our analysis of energy and EROEI. I also appreciated your graphs showing a divergence in consumption and productivity--these are things that we talk about often, but it's been difficult to nail them down.

Your conclusion--that we experience a form of creative destruction when we go through periods of demand destruction--also rings true. I intuitively sense that we're now approaching the limit of our growth-based, hierarchal/centralized economic system to reconstitute itself after each of these cycles--in part because of fundamental structural limitations, in part because of accelleration of these cycles, and in part because of ecological limitations that we're only now hitting on a global scale (such that "Empire" can't just reconstitute in a different region, as has happened in past versions of collapse). I haven't yet figured out how to approach this in a more rigorous way than saying "I sense that this is happening," but it seems that we're looking at a paradigm shift in economic structure going forward for the simple reason that the assumptions on which our system is built are increasingly invalid, and will only become moreso as we pass peak oil and peak energy. I no longer think that efficiency or conservation gains can bolster the giant bubble that is our civilization's economic structure. However, I don't think this leads (necessarily) to a "Mad Max" style appocalypse. As one reader pointed out in comments, civilization is always evolving. Here, I think we're about to see more than gradual evolution, but a bifurcation point where we see the fundamental assumptions (hierarchy, centrazlization as means to efficiency) of our economic system fade away and be replaced by something that has always existed (network/rhizome/call it what you will) but that wasn't viable on a grand scale so long as there were sufficient energy surpluses to prop up the legacy system... I'll be writing more about this shift in my "Diagonal Economy" series at my blog, which (depending on how it progresses) may eventually transition to a story at TOD.


Yes, that’s the basic picture. As I point out a little more completely in the comment linked below(1) one of the main things overlooked in failing to see a system as the joint behavior of all its parts is that relieving the bottlenecks for one part (say the energy sector) may multiply the pressures on all others not being considered.

Yes, the periods of "creative destruction" as one form of production replaces another, leaving lots of people hanging, are clearly going to be harder and harder to recover from whatever one thinks of them otherwise. That was what I concluded based simply on the manageability of change of ever greater complexity on ever larger scales in my first conceptual paper on the subject in 1978(2). The discussion on TheOilDrum about EROI has made it clear, I think, that the economic cost of running into ever more expensive energy sources will also make recovering from periodic economic collapses progressively harder to recover from. This would be "simple arithmetic" if we had any cultural understand of how relieving one part, "oiling the squeaky wheel" as it were, multiplies strains on every other part as you push whole systems to their breaking points.

1)defining the "big crunch":
2)The Infinite Society

I would also like to address one attempt to reconcile this problem: Howard Odum’s “emergy” concept. While I applaud his recognition of this problem, and his efforts to address it, “emergy” really doesn’t address the accounting impossibility highlighted above.

I also don't like the eMergy "value" associated with "thinking" - yes a whole lot of think-power went into making a PV cell. But once the 1st one on an assembly line is noodled out - the next one is just rote - and therefor has less "think'n" associated with it.

Not to mention - the 'we value this with X energy associated with the level of society/thinking it took to come up with this' is rather arbratry.

Emergy simulator

While I could try to invoke Howard Odum (A technocrat) - I shall invoke a far more powerful Spirit - M. King Hubbert! (the TOD masses tremble at his name, a few fall to their knees and one smart ass in the back yells out Abiotic oil)

Technocracy - watts as money

Does Dr. Hubbert have a recommendation for the overhaul of our culture and an alternative to money? When I spoke to him by telephone in about 1970 he confirmed that he did.

His suggestion was that income in units of energy could be used.


Jeff, using money to get a rough idea of ERoEI is probably the best way. Cost accounting is used to account for all the costs of producing a product. It counts labor, overhead, depreciation, supplies, energy etc, every cost incurred by the business including military and other government services via taxes. It does fail however to account for "freebies" like the services of the air to absorb gaseous wastes. And to the extent any business gets exempted from taxes via loopholes or cheating the cost of government services is not represented well. But it does a better job than most energy based ERoEI's because it incorporates the cost of human energy and it incorporates secondary, tertiary etc costs as each business that sells supplies does their own cost accounting and has included all of their costs in the the pricing of the products they sell.

As I have noted before, when we produce something with a machine we count the energy to power that machine, but when we produce something with a human machine we think we don't have to count it. Thus if we refuse to count human energy costs, the ERoEI of Brazilian ethanol would go down if we used machines to harvest the cane and the ERoEI of corn ethanol would go up if we used humans instead of machines to harvest the corn.

If we are to account for energy we do need to count the calories to feed the human worker, the energy to transport them to work, the energy to house them and the energy to raise a child to replace them when they wear out. Of course what we pay first world humans pays for much more than that so accounting in this way becomes tricky.

And when all is said and done, we have to face the fact that without oil, using only alternatives we probably will never make another solar panel or wind mill since to my knowledge we have never made one using nothing but electricity for all necessary functions including mining and transportation of raw materials. Thus it is not worth using our remaining oil to switch to alternatives but rather should be used to breed mules and donkeys and recreate a lifestyle much farther down the path we are headed. Of course I will get lots of criticism for saying this and our governments will never do it, thus it seems certain we are doomed to crash sooner and harder. Oh well

"without oil, using only alternatives we probably will never make another solar panel or wind mill since to my knowledge we have never made one using nothing but electricity for all necessary functions including mining and transportation of raw materials"

Just because we use some oil now to produce solar or wind power( and its a very small amount) doesn't mean we can not manufacture these without any crude oil. For starters nearly all of the oil used today in manufacturing these devices can be replaced by electricity, and we have small amounts of bio-diesel available to replace what cannot be replaced by electricity.

If mules an donkeys are the solution why do you have to use our remaining oil to switch surely they can be raised without oil. We can have wind turbines to provide electric light and transport for the masses and donkeys for transport and donkey fat candles for the doomers.

Neil, how many electric 18 wheelers are planned? How do you get raw materials to your factories with only electric. Last time i looked the range of an electric CAR on one charge was about 100 miles. Electric trains can be used but you still have to move the product from the train station to the factory.

Donkeys and mules are self replicating, but we need donkey carts and plows and traces - our first round of equipment will be best made using oil because we also need to build up forges, and non fossil fuel powered wood mills.

We will baby step down from complex to less complex and it will be worse than if we giant stepped down.

PS you can eat a donkey in dire straits, you cannot eat a solar panel.

"how many electric 18 wheelers are planned?"
This illustrates oil based thinking. How long have we been using 18 wheelers? and how did we move goods to and from rail sidings before 18 wheeler long haul trucks?
Short haul electric trucks have been developed, no reason to think they would not be able to transport goods within cities.
"Last time i looked the range of an electric CAR on one charge was about 100 miles." That must have been before the Tesla Roadster went on sale(>200 mile range).

"our first round of equipment will be best made using oil because we also need to build up forges, and non fossil fuel powered wood mills."
Not much oil is used for steel production and the US recycles 78% ( some using electric arc furnaces) so no reason that steel and wind turbines ( 85%steel) will not be around for a long time after oil is too expensive to burn in passenger cars and trucks.

"We will baby step down from complex to less complex " Less complex doesn't mean less energy, it may mean less technology but we have that already.

"PS you can eat a donkey in dire straits, you cannot eat a solar panel."
Like I said, reading by electric light is a lot more pleasant that using an animal fat candle( speaking from personnel experience), and solar panels can also re-charge electric tractors and carts. Electricity is just so useful that any civilization will always retain electricity. We may stop eating meat and killing animals.

Electric trains can be used but you still have to move the product from the train station to the factory.

Nonsense. Rail spurs can be built to factories. Most sizable factories anywhere that receive bulk raw material commodities receive it by rail.

Industrial sections of American cities used to be crisscrossed by veritable spiderwebs of rail connections for consumer level goods as well as bulk commodities. We've gone backwards in our adaptability by tearing up or paving over most of this infrastructure, but the obstacles to rebuilding it and once again shipping industrial goods this way are not of a technological nature.

Well stupid me. Of course railway spurs to each and every factory necessary for the parts and materials to make solar and wind and electric cars and the factories to make the new rail lines etc. Lets see unless I am being stupid again this requires replacing all the rail lines in America and any other country from which we get parts or raw materials and building rail spurs to factories that may or may not be ideally suited for getting a rail line. We better hurry up before the oil runs out...and as Jeff previously wrote how do we get the oil dedicated to this instead of current use. While one can make up scenarios in one's mind in which an all electric world is feasible (which I doubt) the reality on the ground is that what is needed to make that happen is not happening and will not happen in time and thus when the oil runs out for all effective purposes no more solar panels or wind mills will be made.

While self replicating, each donkey pair I believe has about 1 offspring a year. To increase the herd to sustainable levels that we will need we should start now. We will neither build the electric rail lines nor will we breed the draft animals we are going to need. Too bad for us.

Lets see unless I am being stupid again this requires replacing all the rail lines in America...

I don't know about stupid, but your certainly still exaggerating. It doesn't mean "replacing' any existing rail, or building many new main lines, just spurs to industries. In many cases old track or right-of-way to industries still exists, and just needs to be refurbished. (And btw, every car factory in the country already has a rail connection.)

As for the rest, you can just admit that you overstepped in your argument, and say it doesn't affect your main point. You don't need to rant at me about subjects I haven't commented on. If you look at the rest of my posts you'll see that I'm by no means dogmatic about the probability of an electric future, especially cars.

the reality on the ground is that what is needed to make that happen is not happening and will not happen in time

Agreed about the "not happening" but the "will not happen" part is a matter of what you decide to do about it. No use complaining, start breeding draft animals, if that's what you believe in.

OK we are talking about switching to electric rail lines are we not. Can the existing rail lines be made into electric rail lines? Everything I have seen requires a third rail or overhead lines. Is there some way to make the two rail system operate on electric?

Jaggedben, I may have answered my own question. This article says "A £1bn plan to electrify the main rail route between London and Swansea has been announced by the government."
Rough distance in miles from London to Swansea is 157 miles

There are approximately 233000 miles of railroad track in the United States ...

Therefore it would take $1484 billion pounds or about $890 billion dollars to electrify our rail system. Adding spurs and converting or building new trains. So given the trillions we are printing for the banks rescue we should be able to print enough money to do this. But as Jeff Vail previously wrote it is not really the money, but instead the oil that we have to concern ourselves with. Since we haven't already converted all our other industries that would be involved in the project to electric we would have to use more oil. Can we get the extra oil without shorting some other usage in this country, ie can we get it without rationing. I think not.

PS re breeding donkeys which I approve of, I will start that project when you start electrifying the rails. What I am saying is that this discussion was about what the country should do and you choose to personalize it regarding donkeys while not personalizing it regarding electric rail lines. If I was younger, yes I would breed donkeys and mules and goats. But the discussion was about what we as a country should do. If I breed a herd of 10 donkeys from 2 in my likely remaining years it would not make a difference for this country. However, if our country and world tries to baby step down the energy slope it makes a difference for all. It looks like we will barely attempt that. I use Marta (Metro Atlanta Transit, electric rail lines, bus lines, some natural gas busses) whenever I have to go to Atlanta. It is a very well run, safe transit system. I love it. They say it is loosing money and are thinking about cutting back services. So it goes at the end of the first global civilization. Too bad for us.

"One little-discussed hurdle is the fact that, because we must invest energy in renewables up front, a rapid transition threatens to greatly impact near-term demand for energy resulting in unwanted economic and political effects. Another is that, because we will initially use fossil fuels to build our renewable infrastructure, the transition to renewables will result in a short-term increase in carbon emissions."

Laundry-list of assumptions here. Idealizations: "we must invest energy in renewables".

There will be no boom in 'renewables', since oil depletion will make them all uneconomic, if the manmade financial-collapse doesn't do it first.