In my last couple of posts I've been talking about things a government might do to ease our transition to a low energy economy, if it (the government) wasn't shackled by political realities.
As I've said before, this is a fantasy—I don't think it has much chance at all of actually happening as I am suggesting here. More likely we'll continue on as we are and end up making the transition to a lower energy use when we are forced to, the hard way, by falling flat on our faces.
For the purpose this series of posts, though, I'm indulging that fantasy. Energy is at the core of our current problems. Governments have an important role to play in our transition to a sustainable, lower energy society—particularly in the area of energy policy, deciding which energy sources we should use and what we should use them for. These days governments are supporting what might best be called “energy sprawl”, a frantic effort to keep up with the demand for energy by tapping into poorer and poorer sources of it as the high quality sources dry up. This requires ever more energy infrastructure, from oil wells to wind mills, which is why it’s called “sprawl”.
Those who are pursuing this policy are making several errors.
First that we simply must keep up with all the current and ever growing demands for energy. And because we must, we can. Of course, the facts don't support any such thing—reality simply doesn't care what happens to us. And all the people who think we can't go "back", can't change our lifestyle, are just having a failure of imagination. There is also a tendency to think that just because we descend to a lower level of energy use, we must regress to the level of social injustice that existed when last we used that amount of energy. This doesn't really follow at all—there is no reason that the gains we have made socially have to be lost just because we move to using less energy.
John Michael Greer spoke eloquently about the subject of technological regress in a blog post early in 2015, which I would strongly recommend reading.
Second, that since we use technology to access energy, technology will always allow us to access more energy. Technology doesn't actually create energy—it uses it, and more complex technology uses even more energy. Along with this goes the mistaken idea that when one resource runs out, we can simply switch over to another, without making any changes to the way we live. We are currently relying on some resources (primarily fossil fuels) for which there simply aren't any adequate substitutes.
Third, that just because an energy resource exists in large quantities it can solve our energy problems. The cheap, easily accessed fossil fuels are becoming depleted. When choosing which of the remaining energy resources to invest in, we need to consider the quality of the energy source, as well as the quantity of it that we can potentially access. The quality of an energy source is best summed up by its "EROEI", the energy returned on energy invested. I like this metric because it bypasses money and the often false valuation things are given when we put a price on them in terms of money. And let me make it clear that I am talking about things being priced too low, when they should be expensive.
It takes energy to access energy resources and to convert them into a useful form. Obviously, if you are getting less energy back than you are investing (EROEI<1), there is no point in going to the effort.
Less obviously, when the average EROEI of the energy sources a country is using falls to around 15, economic growth falters and “business as usual” (which is based on growth) begins to experience difficulties. As the average EROEI falls further, it becomes difficult to maintain the infrastructure that makes industrial civilization work and that infrastructure starts to crumble. This is just about exactly where we've been for the last few years.
I've recently been using the term "surplus energy" as a synonym for EROEI, but I see that this is causing some confusion. It might seem that if we can access large quantities of a low EROEI energy source, it would generate enough "energy surplus" to maintain economic growth. Actually, it doesn't work that way. Having large quantities of a low quality energy resource creates more problems than it solves. I'll look at that in more detail in the section on oil.
Another problem is that many of the energy sources we are pinning our hopes on today require the infrastructure of a high tech industrial civilization to make them work. And yet very few of them generate enough surplus energy to maintain that infrastructure. Down that road lies collapse.
Unfortunately, that is precisely the road we are currently headed down. There are several things governments should be doing about this.
First, change their focus from low EROEI resources that require a high tech infrastructure to those that can work without such high tech support.
Second, emphasize conservation and other ways to use less energy, rather than always concentrating on producing more energy.
Third, admit that some of the ways we are using energy aren't sustainable and will have to be abandoned and replaced with simpler, less energy hungry alternatives.
These ideas seem to exist in a blind spot that governments (and most everybody else) find it very difficult to seriously consider. But consider them we must if we are going to come up with a workable energy policy.
Let's take a close look at the available energy sources first.
You may wonder why we even need to discuss non-renewables here since they clearly don't constitute a long term solution to our energy needs. When you keep using something of which there is only a finite supply, eventually it runs out. To do this without any clear plan for coping with that eventuality is surely crazy. But that is pretty much what most governments are using for an energy policy today. And a closer look shows it's actually even worse than that.
Fossil fuels (coal, oil and natural gas) are our primary non-renewable energy sources, and they are absolutely vital to our growth based economy. First let's acknowledge that there are a lot of these fossil fuels left in the earth's crust: deep offshore oil, heavy oil, tight oil and gas (accessible via fracking), tar sands, oil shale, bituminous and brown coal and so forth. Divide the amount that's in the ground by the current yearly rate of use and it would seem that we have hundreds of years of supply left. If actually accessing these energy resources was as easy as doing this sort of calculation then we wouldn't have a problem. Unfortunately, it isn't.
Since energy companies are run as profit making businesses, they always harvest the easiest to access resources first. In other words, the resources with the highest EROEI&emdash;the "low handing fruit". It certainly makes sense to do it this way, but the result is that as time passes the easiest to access resources are depleted and we must turn to resources with lower EROEIs. In addition to being more expensive (in terms of both energy and money) the rate at which these resources can be made available is lower than that of the resources they are replacing, so it is hard to keep up with the existing demand.
Oil discoveries in the 1930s yielded EROEIs of around 100. By the 1970s, this had declined to 30, and today new discoveries are rarely better than 10. The EROEI of fracked oil from shale ranges from 1.5 to 4, and oil from tar sands ranges from 3 to 5.
The history of oil production and consumption over the last few years provides an excellent example of how resource depletion and falling EROEIs play out. Production of conventional oil peaked around 2005 and has decreased since then. The overall use of oil has stayed approximately level (a bumpy plateau) and the deficit has been made up using unconventional forms of oil, all with low EROEIs. The price of oil went up from less than $20 per barrel in 1999 to around $140 in 2008, back down to around $30 in 2009 after the economic crash of 2008, and then recovered to as high as $120.
Due to heroic measures by governments this didn't cause an outright economic crash as it did in 2008, but it certainly had a damaging effect on the world economy, restricting growth and finally reducing demand for oil until in late 2014 the price of oil fell to around $50 per barrel. This is less than the cost of production for all the new, unconventional oil sources and even some of the remaining conventional sources, leaving the oil industry in an unprofitable mess.
I first encountered the idea of Peak Oil around the turn of the century and have been following the energy and economic situation since then. Conventional economists and energy experts have gotten it wrong again and again, showing an almost total disregard for reality and zero willingness to change their ideas as the situation unfolds. Those who buy into the idea of peak oil have told us again and again that something was about to happen and something has indeed happened, though most often not exactly what they were predicting. But at least they are aware that something is going on, and have been willing to refine their ideas after the fact when they were wrong.
The trouble is that our modern industrial society is a complex and chaotic beast, difficult enough to understand in hindsight, largely impossible to predict in advance. So it is very hard to say where the price of oil is going to go. Because of declining demand, there is currently an excess of oil being pumped out of the ground. If that excess is continues, soon all the oil storage in the world will be full. When this happens demand will drop even further, at which point the price of oil will go down again. (For more on this, check out a recent post on the Our Finite World blog, by Gail Tverberg, especially near the top of the comments section).
At some point, dropping oil prices may actually stimulate the economy enough to increase demand and force the price back up again. Whether oil companies who have shut down part of their operations as not profitable will have trouble responding to increased demand is another question. Exactly when any of this will happen and how many cycles of it lie ahead of us, we just don't know.
The take away from all this is that oil, be it conventional or unconventional, has too low an EROEI to sustain a growing, high tech, globalized industrial economy. This doesn't always translate into high oil prices, but volatile oil prices do as much damage to the economy as excessively high prices would, especially on the supply side.
Conventional natural gas has an EROEI of around 10 and fracked natural gas from shale formations has an EROEI of 1.5 to 4.
Conventional natural gas peaked in North America shortly after the turn of the century, but fracking technology opened up a new supply. So effectively, in fact, that supply exceeded demand and the price of natural gas went down, well below the cost of gas produced by fracking. Over the last few years two things have been happening: fracking companies going ever deeper in debt, and fracked wells have been depleting quicker than almost anyone expected.
By the end of this decade the fracking boom will be over with both the wells and the lines of credit depleted. The price of natural gas, in North America, at least, will go back up and anyone who believed the hype about 100 years of cheap gas will be sorry indeed.
I have the dubious honour of living in one of the few areas in Southern Ontario which doesn't have gas service. There is a move afoot to extend a pipeline to give us a natural gas supply, at great cost of the municipal government. This is clearly an ill timed and ill advised investment.
The EROEI of coal, at the mine head, is between 70 and 80.
One hears that we have hundreds of years of coal left. But that's based on outdated estimates of resources. In fact, most of the high quality coal has been used up and we have turned to lower quality deposits. Coal will peak around 2025 according to the best estimates I have heard. It is clearly not a long term alternative to oil and gas.
Other things being equal, I think it would be reasonable to continue using fossil fuels. Especially where the EROEI is high, as in the case of coal, or the extraction process is reasonably low tech, as with the remaining conventional oil and gas. There is still a fair bit of that sort of resource left, and if we can slow that rate at which we are using it, it might last long enough to be of considerable help in the transition to lower energy use.
But all thing are not equal. Using fossil fuels involves burning them and releasing various pollutants, carbon dioxide (which causes climate change) among them, into the atmosphere. Pollution and climate change are not trivial problems and it seems that while fossil fuel supplies are declining there are sufficient quantities left to make our already serious climate problems a whole lot worse.
On this basis, governments should do everything they can to discourage the use of fossil fuels. I suspect that carbon taxes and carbon trading would likely be gamed to such an extent that they wouldn't achieve their intended goal. Carbon pricing, applied at the point of extraction, might be more effective. Better yet, governments could remove their support for the uses of fossil fuels, especially in the transportation sector. Withdraw that support and use should go down quite a lot.
Of course, this will also serve to increase the rate at which economic contraction proceeds, so governments must also be prepared to mitigate the negative effects of transition to a lower energy economy.
It may surprise many readers to see nuclear included in the section on non-renewable energy sources, but fissionable and even "fusionable" elements exist in finite quantities on this planet. Certainly in the case of fission power, if we were to build sufficient plants to replace the energy currently provided by fossil fuels, supplies of uranium would run out in a few decades. Thorium reactors and more advanced reactors which can reuse spent fuels thus far exist only on paper and are unlikely make it through a lengthy development process during the extended economic contraction we are facing.
In any case, the EROEI of current nuclear plants is in the range of around 5 to 15, too low to power the level of high tech industry needed to operate them. Like so many alternatives to fossil fuels, they have been subsidized (in the energy sense) by the surplus energy available from fossil fuels. One wonders how long this is likely to go on.
The other issue with fission power is what to do with the spent fuel. Currently we can't even agree on how to safely store the relatively innocuous low and medium level waste from the day to day operation of these plants. Safe storage of the spent fuel is a bigger, but certainly not insoluble, problem. It seems to me that we should come up with a solution before energy depletion and economic contraction renders us incapable of tackling the problem. But it seems to be such a political hot potato that it isn't being seriously addressed.
Nuclear fusion seems to hold great promise, but is also an immense engineering challenge. Funding is already being cut back on ITER, the most seriously promising attempt to develop a fusion reactor. And if we did develop a working fusion reactor, it's complexity would guarantee an even lower EROEI than fission reactors, so it doesn't look to me like a solution to the "energy problem".
If we did have fusion, with a high EROEI and the copious quantities of cheap energy that many people believe it would provide, then yes, we'd likely be able to overcome some of the limits we currently face. But eventually we'd run up against other limits we haven't even considered yet, such as what to do with the waste heat from all the energy hungry industrial processes fusion would make possible.
As long as we insist on using abundant, cheap energy to fuel growth, it will eventually get us in trouble—even if that energy is readily available (which it is not). This is actually a major point I've been trying to make in this set of posts: growth is not the answer to our problems, but their source. We need to figure out how to get along without growth. And actually to engage in some "degrowth" until we get to a sustainable level of impact on the biosphere.
So, I don't think governments should be building new fission plants. Let the existing ones operate until they reach the end of their lives and then have a plan in place and resources set aside for safely shutting them down and storing the spent fuel.
And, sad as it seems to me, spending a lot more money trying to develop fusion power probably just isn't a good idea.
Instead we need to get serious about working on renewable energy sources, be honest about their limitations and not delude ourselves about what can be done with them. I'll talk about that in my next post.