Saturday, June 06, 2015

Energy and the Economy: From Slavery to Oil to Fusion

In today's society it is common to think of slavery in the context of human rights. This context is a very modern development and is not entirely helpful when understanding the issue of slavery throughout history. Slavery has been an economic force for a majority of mankind's history, and it has not always been associated with kidnapping or racism. Societies in the past have allowed slavery as a matter of debt repayment or criminal sentencing. Of course, as with any economic asset, when legal means are not sufficient to satisfy demand, other means are employed. The point is that throughout history, the needs of human economies in relation to labor have been supplied in a large part through slavery.
Another modern conception that clouds our view of pre-industrial economies is that of energy. Energy in pre-industrial economies was resourced from human and natural sources. That is to say, they burned combustible materials like wood or oil but these fuel sources were very small in comparison to modern fuel sources. The majority of pre-industrial energy needs were met through human labor.
The result is that pre-industrial slavery was an essential component of a growing local, regional, and even global economy. The end of slavery in the US involved a Civil War that pitted an industrialized, free North against a much more agrarian, slave-owning South, with the industrialized North winning, of course. The backs of slaves were no match for the industrial might of the Union.
The advent of the steam engine and the exploitation of fossil fuel energy in industrial processes made human labor too expensive for the kinds of basic manual labor slaves were used for.
Fast forward to today. Our society has become ever more energy intensive. See this video of an Olympic cyclist, unable to provide enough cycling power to even fully toast a piece of bread. Toasting a piece of bread requires 2 minutes at 700 watts, or .0233kWh. The average cost of 1 kWh in the US is 12 cents. So then the Olympic cyclist couldn't provide sustained energy to equal two-tenths of a cent of electric power. Now consider your 1500 watt microwave that runs for 5 minutes to heat your frozen dinner. Or my "ultra-efficient" heat pump that pulls about 2600 watts to heat or cool my house for hours on end. Modern man takes the enormity of our power consumption for granted. And you can see why machines are better than slaves.
The very existence of "jobs" in modern society is a consequence of the deployment of ultra-intense energy sources making basic human labor relatively expensive. The rise of industry and the development of manufacturing as a driver of economic growth meant that human employment was now best deployed in the operation, care, and maintenance of industrial processes. Such jobs require more than energy, they require thought and computation.
Enter the computer age. Much of the operation, care, and maintenance of industrial processes is now performed by computers which, if they are not capable of semi-intelligent decision making, are at least capable of operating logically within a set of predefined parameters. This made a whole new set of human labor relatively expensive. Now, human employment is best deployed in the operation, care, and maintenance of computers, networks, and their peripherals.
Rather than pontificate on what the next step in this evolution will be (it has been done a lot already), I find it more important to consider that our economic system, and the human civilizations and cultures that now depend on modern society, are like an airplane. It's great as long as you have fuel. The question of what fuel we can use for energy and what impact it will have on our economy and environment is THE defining issue of our time. Don't let low oil prices distract you...they are representative of market forces and NOT supply. We are heading towards peak oil, and market forces will have no power to stop the calamity once the world realizes Saudi Arabia has hit and passed peak production. If that doesn't mean much to you, consider the fact that if we burn the fossil fuels all the optimists think we have, our civilization stands to be shattered by geological and meteorological phenomena resulting from all of heat that released carbon dioxide traps in our atmosphere. To ignore both of these impending dangers is insane.
What is one to do, though? Cheap energy of the intense kind like we have in fossil fuels is directly related to the economic well-being and growth of the world. But let's take a moment and clarify what we mean by "cheap". If a $4 billion dollar investment yields an amount of energy to fuel the entire world as current economic levels of activity for 10 years, that's cheap. It's one of the arguments to be made for harvesting Helium-3 from the Moon and bringing it to Earth for easy fusion power. Sure, it takes a lot of money to get it here, but the energy production (theoretically) would more than justify the price.
We need to take this concept into a little more technical territory. The concept is return on investment, or specifically energy returned on energy invested (EROEI). If I spend 5 units of energy extracting 5 units of energy, that's an EROEI of 1. If I get 10 units of energy for my 5 units of effort, that's an EROEI of 2.
Cheap energy, defined ECONOMICALLY, is energy that has a high EROEI. The EROEI of all world oil sources has come down from near 100 at the beginning of the oil age to around 30 in 1995 to 18 in 2006. Regardless of the prices at the pump, oil is getting more expensive in economic terms. This is due to decreasing resources and the subsequent shift towards lower quality sources (off-shore, shale, tar sands). Our society is paying an ever higher price for energy; where it is not being reflected in higher prices it is being reflected in diversion of investment assets from the economy as a whole towards energy requirements.
So now we can consider the standard of living issue regarding energy. The political backlash against carbon pricing and controls is rooted in the adverse economic effects of making the exploitation of fossil fuels more costly. On the high end, it's about corporate bigwigs protecting profits. On the low end, it's about the average Joe who doesn't want to lose their job or pay more for fuel or other goods. It seems everybody has a stock in delaying carbon pricing and controls.
But here's the rub... collapse of today's "cheap oil" paradigm is already occurring through an EROEI that is going ever lower. Do we as a society want to ride this train down the hill pretending we can fix it until we realize it's game over? Or do we as a society want to preempt what is coming?
Solar and wind are waiting near the bottom of the hill with EROEIs of 10 and 18, respectively. They aren't the answer because they bring down the combined EROEI of our energy base instead of raising it. This is why the intense deployment of renewables is always accompanied by government subsidies and increased electric rates. We're at something like 5% of our electric generation from these sources, nationally. I'd hate to imagine my electric bill if they were a majority! We have a term for this issue in Information Technology: scalability. The economic scalability of renewables is horrible, unfortunately. (Geothermal is also low EROEI, and nobody wants nuclear anymore.)
The solution? Fusion.
OK back to reality. No seriously, fusion is THE answer. But since it is not going to happen on a wide scale within our lifetimes, we need another strategy. And it is this:
WE NEED TO TAKE STEPS TO REDUCE OUR ECONOMIC ACTIVITY BEFORE ENERGY SUPPLY ISSUES FORCES US TO, RESULTING IN SUDDEN, SEVERE ECONOMIC HARDSHIP.
And the perfect catalyst for this activity is concern over climate change, because the only way to mitigate climate change is to reduce the use of fossil fuels by making it more expensive, usually through market disincentives, taxes, and regulation.
Action on climate change will result in higher prices and greater unemployment as EROEI drops even further. But again, it is expected, it is a controlled descent. It's called LANDING THE PLANE BEFORE YOU RUN OUT OF GAS. Nobody wants to stop flying but there is no other choice unless you WANT to crash.
The hopeful upside is that somewhere along this controlled descent, we'll perfect fusion, or make solar PV cheap AND ultra-efficient, or find some other breakthrough. And it will allow us to fly our civilization higher again. In the meantime, we will have made a meaningful effort towards limiting climate change.
I hope I am alive when that energy breakthrough hits. Our society will take off to a whole new level. All the old 1950s/60s optimism about the progress of mankind and the awesomeness of the future? Of mankind's continual and rapid progress? The optimism that was shattered in the energy crises of the 1970s? It will come back. Because it's all about energy. It always was. With an energy source with a high enough EROEI, you can provide fresh water for the world by desalinating the oceans. You can run machines to actively pull CO2 from the air. Things we can't do right now because the energy cost is too high will suddenly become possible. It will be called the fusion/solar/whatever revolution and it will be spoken in the same breath with the Industrial Revolution.

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