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Net Energy

To capture and use energy requires energy. Net energy expresses how much energy is actually gained when energy costs are taken into account.

The importance of net energy is unfortunately little understood by main stream economics, as the main stream economist is often paid not to understand things but also because this need of energy to capture energy is fairly unique among commodities (stuff), which the main stream economist is familiar with. Understanding this difference with other stuff is a good way to understand net energy.

For instance, in order chop down wood, very little wood is consumed compared to the logs brought to market. To mine for iron, very little steel is consumed in the process. To grow coffee, the growers drink relatively little (or none at all as they can’t afford it on some "farms").

However, if we imagine ancient miners whose tools would wear very quickly, or a lumberjack so strong that every time he hits a tree with his axe the handle breaks, or coffee growers who drink a lot of coffee, then very quickly we must consider net production. If more metal is consumed in wearing tools then a miner can produce, or more wood consumed than our lumberjack can produce, or our coffee growers drink more than they grow, then these activities cannot possibly be profitable no matter what the price of metals or wood. If our lumberjack breaks more than a tree of axe handles to cut down a tree, the activity is clearly pointless. Though for mining, wood and coffee (and essentially any commodity) we have to imagine particular circumstances where there would be no net production, for energy it is an entirely different matter. For though there’s no physical reason wood has to be consumed to cut down trees, or coffee has to be consumed to grow coffee (and so the economist can simply assume net production will always be positive and all that matters is supply and demand), all activity in the universe requires energy and so too capturing energy. Since capturing energy requires energy (pumping oil, building damns, transporting energy around etc.) we must play close attention to how much energy we are in fact consuming to extract energy.

Why we must pay close attention is because net-energy will depend on many factors, which may be different from place to place and from time to time. The same energy practice can have a lower net energy in one place rather than another, and can decrease over time even in the same place. When our ancestors started agriculture they encountered this phenomenon repeatedly throughout: in clearing a new area of old growth forest, the soil is of excellent quality and so everything grows extremely well, but without trees the soil exposed to wind and rain and so erodes away year by year until eventually the land cannot grow enough plants to feed the farmers on it, there’s no net energy, and so the land must be abandoned. The net energy over time will depend on the plants being grown, the farming practices, the initial soil quality, rate of erosion etc.

Net energy is thus not so well suited for the over-abstractions [1]; we cannot say "farming has a net energy of X" or "oil a net energy or Y", we can only say "this farm has a net energy of X, for the time being", "this oil well has a net energy Y, until now", or "these farms, over this time, on average have a net energy of Z".

The concept of net energy does not provide an illusion that all is well. Though everyone alive is the result of positive net energy, various energy systems could be in terminal net-energy decline. Under terminal net-energy decline, if nothing is done eventually there’s only enough energy to maintain the system as it is and no extra energy to do anything else (called industrial subsistence in the first chapter). Since we might not experience any real problems until our net energy turns negative, it is easy to miss the signs and presume normality will continue. Most importantly, as soon as net-energy is negative the system fails rather quickly, if a community of farmers can’t produce more than they eat they will starve rather quickly (but up to that point, which could be the result of a long erosion process, life could be very comfortable).

Net energy of Industry

To illustrate net energy, all the examples above were fairly local. A traditional farmer will live, grow, and eat on the same piece of land and so it’s fairly easy to calculate net-energy: we need only know the energy in the food grown compared to the energy in the food eaten. If the farmer grows twice as much food as is eaten on the farm, then the net energy of the farm is 2 to 1.

Industry on the other hand is today completely globalized, and it is often unclear what a process depends on, and so it is very difficult to calculate net energy. Complex machines may require parts to build and maintain from all over the world, clearly both the fabrication and transportation of these parts takes energy which we must add to the energy the machine actually consumes to run. This we can define as "face-value-net-energy" and it can usually be calculated with some precision. However, underneath this face-value-net-energy is all the infrastructure that allowed these parts to be made and transported and all the people that are involved at every level, including trainers and politicians, and all the energy consumed to create the context in which the actual transformation of material into parts can take place.

Whereas face-value-net-energy is easy to identify, the systemic-net-energy is extremely difficult to identify. What systemic-net-energy means however is that whereas a local traditional farmers can survive by growing just as much food as is eaten, net-energy of 1:1 (though in practice there must be good years to compensate the bad years), industrial energy processes must have much higher net energy not only to maintain the entire industrial infrastructure but also to provide some benefit. Whereas in growing as much food as is eaten the grower lives, a machine that extracts as much energy as it consumes doesn’t benefit anyone. For instance, an oil pump that pumps just enough oil out of the ground to power the pump, can technically function, but is of no use to anyone.

So, to support the entire industrial system much more energy is required from the industrial energy sources then the face-value-net-energy of the energy devices themselves. There is scant research on how much net energy, but estimates seem to range from 3-5 as a minimum (meaning all energy is spent on the energy system, and virtually no other social activity not-related to energy can exist).

This net-energy requirement

Energy Return on Investment

Another important concept is Energy Return on Investment (EROI). Though EROI will include the energy invested, as in net-energy, it can also cover over inputs such as water and material. Though net-energy governs whether an energy strategy can physically function to begin with, EROI can cover other costs, both human, material and environmental. For instance, do we want to invest 2 barrels of fresh water or ecological stability in general water for a barrel of oil.

So, whereas net-energy is a straightforward calculation when all the variables are known, EROI may differ depending on how much value we attach to fresh water, the ecosystem of an entire river network, or the lives and health of coal miners. So depending on whether and how much we value fresh water, ecosystems, or the lives of coal miners, we can end up with very different EROI’s for a given energy practice.


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