Minnesotans For Sustainability©
Sustainable: A society that balances the environment, other life forms, and human interactions over an indefinite time period.
Energetic Limits to Growth
Net-energy analysis became a public controversy in 1974 when two stories made the news. In the first, Business Week reported that Howard Odum had developed a “New Math for Figuring Energy Costs.” Among other results, this new math indicated that stripper oil well operations were energy sinks rather than energy sources. According to this analysis, these operations could be profitable only when cheap, regulated oil was used to produce deregulated oil. The other net-energy story of 1974 was the study of Chapman and Mortimer asserting that a rapidly growing nuclear program would lead to an increased use of oil rather than to the desired substitution (see Net-Energy Analysis by Daniel T. Spreng, Oak Ridge Assoc. Univ. & Praeger, 1988).
As we know from physics, to accomplish a certain amount of work requires a minimum energy input. For example, lifting 15 kg of rock 5 meters out of the ground requires 735 joules of energy just to overcome gravity – and the higher the lift, the greater the minimum energy requirements. Combustion engines that actually do work – so-called “heat engines” – also consume a great deal of energy. The efficiency of heat engines is limited by thermodynamic principles discovered over 150 years ago by N. L. S. Carnot. Thus, a typical auto, bulldozer, truck, or power plant wastes more than 50 percent of the energy contained in its fuel.
One seldom thinks about the energy that is utilized in systems that supply energy – such as oil-fired power plants. But energy is also utilized when exploring for fuel, building the machinery to mine the fuel, mining the fuel, building and operating the power plants, building power lines to transmit the energy, decommissioning the plants, and so on. The difference between the total energy input (i.e., the energy value of the sought after energy) minus all of the energy utilized to run an energy supply system equals the "net energy" (in other words, the net amount of energy actually available to society to do useful work).
We mine our minerals and fossil fuels from the Earth's crust. The deeper we dig, the greater the minimum energy requirements. Of course, the most concentrated and most accessible fuels and minerals are mined first; thereafter, more and more energy is required to mine and refine poorer and poorer quality resources. New technologies can, on a short-term basis, decrease energy costs, but neither technology nor “prices” can repeal the laws of thermodynamics:
Decreasing net energy sets up a positive feedback loop: since oil is used
directly or indirectly in everything, as the energy costs of oil increase, the
energy costs of everything else increase too
including other forms of energy. For example, oil provides about 50% of the
fuel used in coal extraction.
One of the most important characteristics of energy is its “quality”. Fuels come in varying qualities. For example, coal contains more energy per pound than wood, which makes coal more efficient to store and transport than wood. Oil has a higher energy content per unit weight and burns at a higher temperature than coal; it is easier to transport, and can be used in internal combustion engines. A diesel locomotive wastes only one-fifth the energy of a coal-powered steam engine to pull the same train. Oil’s many advantages provide 1.3 to 2.45 times more economic value per kilocalorie than coal.
Oil is the highest quality
energy we use, making up about 38 percent of the world energy supply. No other
energy source equals oil’s intrinsic qualities of relative ease of extraction,
transportability, versatility and cost.
Unfortunately, forecasts about the abundance of oil are warped by inconsistent definitions of “reserves”. In truth, every year for the past two decades the industry has pumped more oil than it has discovered, and production will soon be unable to keep up with rising demand. Almost 50 years ago, the geologist M. King Hubbert developed a method for projecting future oil production. Hubbert found that when approximately one half the Estimated Ultimately Recoverable (EUR) oil had been produced in an oil basin, production “peaks” and then declines towards zero. He calculated that oil production in the lower-48 states would peak about 1970. His prediction has proved to be remarkably accurate. Both total and peak yields have risen slightly compared to Hubbert's original estimate, but the timing of the peak and the generally declining production trend are correct.
For the last 50 years,
many geologists and oil companies have published estimates of the total amount
of crude oil that will ultimately be recovered from the Earth over all time.
Remarkably, these assessments of EUR oil have varied little over the past half
 and global oil
production is now expected to peak around 2005.
Although economists are trained to treat energy just like any other resource when it comes to “supply and demand”, it is manifestly not like any other resource. Net energy is the pre-condition for all other resources. The coming peak in global oil production signals the end of the consumer economy because nothing can replace conventional oil.
Economists frequently cite Canada's Athabasca oil sands as a handy replacement for conventional oil. But oil sands and tar shale are very energy-intensive, environmentally destructive, and not all that large anyway. For example, back-of-the-envelope calculations show that the Athabasca oil sands could supply less than three years' worth of oil for the global economy. Three hundred billion barrels of oil (AEUB) gushing out of a pipe would only last 12 years at present World consumption of 70 million barrels a day. Oil sands would last just three years if we super-optimistically assume 25 percent net energy for the digging, etc. over the entire resource. “The mining operation involves stripping off the overburden; separating the bitumen with steam, hot water and caustic soda, and then diluting it with naphtha. After centrifuging, liquid bitumen at 80°C is produced, which is then upgraded in a coking process and subjected to other treatments, eventually yielding a light gravity, low sulphur, synthetic oil.” (The Coming Oil Crisis, p. 121, Campbell, 1997)
How about natural gas? Unlike oil, natural gas can not easily be shipped by sea. It must be liquefied prior to shipment, then shipped in specially designed refrigerated ships destined for specially equipped ports, and then regasified for distribution – at an estimated 15 to 30 percent energy loss. Moreover, natural gas cannot be easily stored like oil or coal. Global natural gas production is expected to "peak" sometime between 2010  and 2020. Hopes of exploiting the ice-like methane hydrates from the ocean floor also appear doomed because the solid is unable to migrate and accumulate in commercial volumes. Today’s euphoria over methane hydrates reminds me of that which surrounded oil shale and tar sands a couple of decades ago. With regard to coal, U.S. coal production rose to a record high of 1,118 million short tons in 1998. U.S. coal, however, is expected to become an energy "sink" – not worth digging out of the ground – by 2040.
What about nuclear energy? The fraction of energy produced by conventional nuclear plants can not be significantly increased because of a shortage of fuel. Moreover, all but one of the new "fast breeder" reactors have been abandoned because they are "too costly and of doubtful value".
expansion of solar
energy systems is limited by the
availability of land.
Estimates are that about 20 percent of U.S. land area (about 450
million acres) would be required to support a solar energy system that would
supply less than one-half (37 quads) of our current energy consumption (80
The automobile industry is planning to put fuel-cell-powered automobiles on the road by 2004. But the new cars won’t be on the road for long because these fuel cells use hydrogen via methanol that is made from fossil fuel. Hydrogen is not a “source” of energy – it’s an energy “carrier” (like electricity). About 95 percent of the hydrogen used in the U.S. market is produced by a chemical process known as “steam methane reforming”. A carbon-based feedstock (usually natural gas or coal) is combined with steam under high pressure and temperature to produce hydrogen at about a 35 percent energy loss. Methanol is usually produced from natural gas or coal at a 32 to 44 percent net energy loss. In the U.S., oil production "peaked" in 1970 and is declining towards zero. Scenarios for widespread use of hydrogen are therefore likely to include steam reforming of gasified coal or biomass. But the coal will be gone in 40 years and there just isn't enough land for biomass!
Energy companies are in business to make money – not energy. For example, economic subsidies allow ethanol companies to waste energy while making a profit. Specifically, about 71% more energy is used to produce a gallon of ethanol than the energy contained in a gallon of ethanol. Obviously, alternative energy technologies that require energy subsidies are only viable as long as we don't need them!
the standpoint of achieving society’s goal of a long-term solution to our
energy problems, profit is simply the wrong objective for energy companies.
Even without direct and indirect subsidies of $650 billion a year 
it's conceivable that energy companies could make money – but lose energy – by
burning one $10-barrel of oil today in order to pump one-half of
a $50-barrel tomorrow. The price of oil is expected to rise
sharply – and permanently – when global oil production peaks in less than ten
"Energy" is defined as the capacity of a physical system to do work. Over a hundred years ago, scientists pointed out that energy – not money – is the true source of the capitalist's wealth:
It is, in fact, the fate of all kinds of energy of position to be ultimately converted into energy of motion. The former may be compared to money in a bank, or capital, the latter to money which we are in the act of spending ... If we pursue the analogy a step further, we shall see that the great capitalist is respected because he has the disposal of a great quantity of energy; and that whether he be nobleman or sovereign, or a general in command, he is powerful only from having something which enables him to make use of the services of others. When a man of wealth pays a labouring man to work for him, he is in truth converting so much of his energy of position into actual energy...The world of mechanism is not a manufactory, in which energy is created, but rather a mart, into which we may bring energy of one kind and change or barter it for an equivalent of another kind, that suits us better - but if we come with nothing in hand, with nothing we will most assuredly return. [Balfour Stewart, 1883] 
Economists frequently point to “prices” and make claims about the real world. This or that is “better off” they say, and go on their way. But the price of a thing does not reveal its quantity or its quality, particularly in the energy business. At best, the relationship between prices and natural resources is nonlinear. A good analogy for the oil market is the float in a carburetor: as the engine demands more gas, the float falls and allows more gas to flow in from the tank. But the float has no information concerning the amount of gas left in the tank until the fuel line is unable to keep up with demand. So it is with the market. As the demand for oil increases, the increase in price signals oil companies to pump more oil out of the ground – which lowers prices again. But the oil market has no information about the amount of oil left in the ground until production is unable to keep up with demand. In October 1980, Julian Simon challenged Paul Ehrlich and colleagues to a $1,000 bet that in ten years the price of any raw material they selected would fall (measured in constant 1980 dollars). In October 1991, Ehrlich paid up. The prices of the five minerals chosen (copper, chrome, nickel, tin and tungsten) had dropped substantially. Obviously, though, prices did not reflect the fact that ten years’ worth of minerals had been taken out of the ground! One concludes that prices give no warning of approaching resource exhaustion.
How much is $10 worth of
oil? It depends upon when and where you bought it. What's the net energy of
$10 worth of oil? If oil costs $10 a barrel, how much is left in the ground?
Who knows? Prices simply measure states of mind.
Imagine having a motor scooter with a five-gallon tank, but the nearest gas station is six gallons away. You can not fill your tank with trips to the gas station because you burn more than you can bring back – it’s impossible for you to cover your overhead (the size of your bankroll and the price of the gas are irrelevant). You might as well put your scooter up on blocks because you are "out of gas" – forever. It's the same with the American economy: if we must spend more-than-one unit of energy to produce enough goods and services to buy one unit of energy, it will be impossible for us to cover our overhead. At that point, America’s economic machine is “out of gas” – forever.
I’ll conclude with an observation of Cosmologist Fred
Hoyle who stated, “It has been often said that, if the human species fails to
make a go of it here on Earth, some other species will take over the running.
In the sense of developing intelligence this is not correct. We have, or soon
will have, exhausted the necessary physical prerequisites so far as this
planet is concerned. With coal gone, oil gone, high-grade metallic ore gone,
no species however competent can make the long climb from primitive conditions
to high-level technology. This is a one-shot affair. If we fail, this
planetary system fails so far as intelligence is concerned. The same will be
true of other planetary systems. On each of them there will be one chance, and
one chance only.”
 p. 23,
The Limits to
Growth, Meadows et al.; Universe, 1972.
Anecdotes about the Club of Rome have become "urban legends".
An urban legend is a good story that appears mysteriously and spreads
spontaneously in varying forms, contains elements of humor or horror (the
horror often "punishes" someone who flouts society's conventions), and is
usually false. Even authors of peer-review scientific
articles [ e.g., Cook and Sheath in Nature & Resources, 33(1):
29 (1997) ] have been seduced by these good stories. If
one actually reads the material, & finds that none of the COR's
so-called "predictions" have failed. See:
> http://dieoff.org/page169.htm >.