EROEI for dummies

I meet little Prosper carrying fire wood on his head in Butare, Rwanda. I try to ask him, the mother and the two other children if it is for the household or for sale, but fail to communicate. My assumption in this case is that it is for sale. Most poor people in the work use fire wood for their cooking. When population grows people, mostly women and children, have to go further and further to collect it. This image is a simple way to understand the concept of Energy Return on Energy Invested (EROEI) and why it matters for us and the economy.

There is little work to cut down a tree in your backyard to use for fire wood.  As fewer and fewer trees remain in your courtyard, you have to walk to collect firewood, and you may gradually have to use twigs and bushes instead of logs as trees grow scarcer and scarcer. So you end up spending more and more energy on getting a lower and lower quality of energy for the family supper.   

The first fossil fuels were easily available and there were little efforts needed to bring it up, in a similar way as the first trees in the backyard. The Energy Return on Energy Invested (EROEI) was something like 100. That is it took one liter of oil to extract 100 liters of oil. Many oil sources now yield just 10 or 20 liters for each liter used. The net effect is that we have to increase the total energy use just to keep the net energy delivered to society on the same level.

EROEI is the ratio of the amount of usable energy acquired from a particular energy resource to the amount of energy expended to obtain that energy resource. When the EROEI of a resource is less than or equal to one, that energy source becomes an "energy sink", and can no longer be used as a primary source of energy. (Wikipedia)

EROEI is often showed with a diagram like this[i]:


What we see is that when EROEI approached 5 there is a dramatic increase in the amount of energy that has to be used to produce energy. In its early days, oil frequently yielded an EROEI in excess of 100:1, meaning that 1% or less of the energy contained in a barrel of oil had to be used to deliver that barrel of oil. Not a bad bargain. Oil production today more typically has an EROEI around 20:1, while tar sands and oil shale tend to be about 5:1 and 3:1, respectively. Perhaps the effect is better seen by re-writing the graph assuming that we want a constant supply of energy (set at 100 in the graph).

 Here we see very well the extreme effects of an EROEI going below 5. If we want to get energy corresponding to 100 barrels of oil from a process that has an EROEI at 3, like shale oil, we have to produce 150 barrels as energy corresponding to 50 barrels will be used in the production process. Some of the biofuels are have an EROEI under 2, which is a rather meaningless exercise, especially considering the huge environmental impact of their production. Solar energy from photovoltaic element are in the range of 3:1-10:1. Wind energy perhaps in the range of 15:1

This has big economic effects. As Richard Heinberg writes in End of Growth

“As EROEI declines over time, an ever-larger proportion of society’s energy and resources need to be diverted towards the energy production sector.” 

I will come back to this very soon in another post.

And it also has huge environmental effect. For instance, if the US is going to build its energy supply around shale oil and tar sand the gross energy use will increase tremendously, and also its emissions of green house gases.

EROEI is mostly discussed in the phase of energy production, i.e. at the well or mine head. Another aspect of EROEI is also to consider the whole system. For instance, for solar systems, one can calculate the EROEI directly in the panel, but one should include the storage and distribution systems that are an integral part of the system. Finally, one should look at the EROEI all the way to consumption. So if the EROEI of petrol at the pump is 10:1, the EROEI of the use of petrol in the car is only 3:1, as only a smaller part of the fuel is converted into the movement of the car (Garden Earth).

There are many other aspects of relevance when discussing energy systems, for example, the quality of the source and how it can be used. For solar and wind energy there are also big problems associated with intermittence and storage.

For a rather recent EROEI update, read A Review of the Past and Current State of EROI Data Ajay K. Gupta  and Charles A.S. Hall.

For related post on this blog

Energy squeeze, Is it a trap, a cliff or just a simple adjustment?
Burning food?
It takes more energy to eat than to farm
Energy and Agriculture
There will be no nuclear power without oil
our energy debt

 

 

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[i] Mearns, E. In The global energy crises and its role in the pending collapse of the global economy, Royal Society of Chemists, Aberdeen, Scotland, October 29th, 2008; Aberdeen, Scotland, 2008

The changing climate for cimate change....

"The global energy map is changing, with potentially far-reaching consequences for energy markets and trade. It is being redrawn by the resurgence in oil and gas production in the United States and could be further reshaped by a retreat from nuclear power in some countries, continued rapid growth in the use of wind and solar technologies and by the
global spread of unconventional gas production. "

This "rapid growth in renewables sound promising, BUT

"Coal has met nearly half of the rise in global energy demand over the last decade, growing faster even than total renewables."

"Natural gas is the only fossil fuel for which global demand grows in all scenarios, showing
that it fares well under different policy conditions"

"Growth in oil consumption in emerging economies, particularly for transport in China,
India and the Middle East, more than outweighs reduced demand in the OECD, pushing
oil use steadily higher."

"The transport sector already accounts for over half of global oil consumption, and this share increases as the number of passenger cars doubles to 1.7 billion and demand for road freight rises quickly. The latter is responsible for almost 40% of the increase in global oil demand"

Some of the conclusions in the latest World Energy Outlook

So oil increases slightly, coal increases a lot and natural gas increases.
It seems like climate change is forgotten...Or rather that actions against climate change are forgotten.

Why oil price and grain price follow each other

This is a sad hoax, for industrial man no longer eats potatoes made from solar energy; now he eats potatoes partly made of oil.

(Howard T. Odum, Environment, Power, and Society, 1971)

Farming uses energy in many different forms: diesel for tractors and pumps; electricity for pumps, fans and indoor machinery such as milking machines, etc. Fertilizers represent a big energy use. Energy represents 90% of the production costs for nitrogen fertilizers, 30% for phosphorus fertilizers and 15% for potassium fertilizers. For production in the United States, energy costs represented 22–27% of the production costs for wheat, maize and cotton and 14% of the production costs for soybeans[1] (US CRS 2004). These figures do not include embedded costs in buildings, machinery, etc., so the actual share of the costs is substantially higher. In Argentina, energy costs were calculated to 43% of production costs in 2006 (Baltzer et al. 2008). In a situation with rising energy prices, agriculture prices will follow suit. This could also be seen in the case of food prices and in the case of the oil price hike in 2007–2008.[2] Increased energy prices influence food prices:

• by making the production more expensive;
• by making biofuel more interesting to produce and, therefore, reducing the production of food, leading to higher prices;
• through increased transport costs that directly reflect on food prices; and
• through reduced competition in the food sector (increased transport costs means that the pressure of global competition is reduced).

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[1]            Can be grown without nitrogen fertilizers as they bring about natural nitrogen fixation.

[2]            Other factors too were driving this, but increased oil price doubtless was one if not the main driver. 

(Extract from Garden Earth)

Homo Petroleum

One sad fact with the internet is that it is so easy to find out if someone already "said it" or "thought it". Working with my latest manuscript, I had the idea to name our species after the dominating energy source used for the three main phases of development.
The hunting and gathering man - Homo something (yet to figure out - my Greek was never that good).
The farming man - Homo agricola
The industrial man - Homo petroleum 
The last thing recognizing the fundamental role oil (or fossil fuel in general) plays for our so called modern society. We often believe it is human ingenuity or technology or even "the market economy" that has made the modern world possible. But trust me, fossil fuel is the most prominent factor....

And of course I searched for Homo petroleum on the net and found that some other clever person already used the expression.


Discovering Homo Petroleum by Pouly


(original version in french)

Agriculture: How cheap energy (and capitalism) increased the gaps between rich and poor

And how increasing energy prices will shift things to the better....

The simple agriculture equation has always been that one has to get substantially more energy out of the food than one has put into the production of it. As long as in-energy is human labour it is an iron law that can only be skipped for shorter periods. The agriculture worker should not only feed herself or himself but also other family members who are too young, too old or too sick to work, as well as some few others that supply services. Finally, in almost all society there have been rulers that have taken a great share of the production. In pure agrarian societies, around 80 percent of the population is engaged in farming.

250 billion energy slaves

One can contrast the energy embedded in human labour with the external energy sources we have conquered, to give us an idea how important the deployment of external energy sources are. If we make a back-of-the-envelope-calculation we see that the 7.71 tons of oil equivalents (toes)[1] of energy the American uses (the average Senegalese 0.25), corresponds to the food consumption of 400 people. They are the “energy slaves” (in the form of fossil fuel) working for him or her. Another way of looking at it, and also to put in an economic perspective, is that a barrel of oil represents the energy of 25,000 hours of human toil, i.e. 14 persons working a year with normal labour standards. Even with an oil price of many hundred dollars per barrel, it is very cheap compared to human labour (Rundgren 2011). 

According to FAO, 6,000 MJ of fossil energy (corresponding to a barrel of oil) is used to produce one ton of maize in industrial farming, while for the production of maize with traditional methods in Mexico only 180 MJ (corresponding to 4.8 litre of oil) is used. This calculation includes energy for synthetic fertilizers, irrigation and machinery, but not "shadow energy", i.e. energy used for making machinery, transporting products to and from the farm, and for construction of farm buildings. The energy return on energy input is below 1 (i.e. there is more energy consumed than produced) for modern rice farming and just above 1 for modern maize farming, while traditional production of rice and maize give a return of 60 to 70 times on energy used (FAO 2000).

The total energy harvested per hectare can increase substantially with increased use of ancillary energy. This energy can come in the form of better (and timelier) soil preparation, irrigation, (chemical) fertilizers etc. The ratio between energy return and energy input, i.e. efficiency in use of energy, seems to be fairly constant to a certain level after which it rapidly deteriorates. In industrial farming systems we have since long passed this level. Harvested energy per labour unit increases dramatically with increased input of energy with a factor of between ten and hundred, allowing the most advanced agriculture systems to have one farmer per hundred persons. Here we see no similar threshold or limit as for energy efficiency per hectare (Bayliss-Smith 1982).

Why the oil price and the grain price will follow each other

Farming uses energy in many different forms: diesel for tractors and pumps; electricity for pumps; fans and in-door machinery such as milking machines. Fertilizers represent a big energy use. Energy represents 90 percent of the production costs for nitrogen fertilizers, 30 percent for phosphorus fertilizers and 15 percent for potassium fertilizers. For production in the USA energy costs represented between 22% and 27% of the production costs for wheat, maize and cotton and 14% of the production costs for soy beans[2] (US CRS 2004). These figures do not include embedded costs in buildings, machinery etc. so the actual share of the costs is substantially higher. In Argentina, energy costs were calculated to account for 43% of production costs in 2006 (Baltzer et al 2008). In a situation with rising energy prices, agriculture prices will follow suit. This could also be seen in the food price – and oil price hike 2007-2008[3]. Increased energy prices influence food prices in four different ways:

-       by making the production more expensive

-       by making biofuel more interesting to produce and therefore reduce the production of food, leading to higher prices

-       increased transport costs which directly reflect on food prices

-       reduced competition in the food sector, i.e. increased transport costs means that the pressure of global competition is reduced (Rundgren 2011).

Many people are still totally dependent on firewood for their supplies of energy, Solomon Island 2010.

It takes more energy to eat than to farm

The increase of energy use in agriculture was particularly rapid in the period between the Second World War and the first oil price chock 1973; while labour force was reduced to half between 1952 and 1972 in England, energy use tripled (Bayliss-Smith 1982). In the USA energy use decreased from mid 1970s to mid 1980s as a response to increased oil prices, thereafter it has stabilized (Hendricksson 1994).

Looking at the whole food chain however, energy use has constantly increased. Use of energy along the food chain for food purchases by or for U.S. households increased between 1997 and 2002 at more than six times the rate of increase in total domestic energy use. As a share of the national energy budget, food-related energy use grew from 12.2 percent in 1997 to 14.4 percent in 2002. (US CRS 2004). In pre-industrial and semi-industrial agriculture systems, most of the food is sold, eaten and prepared close to where it is produced, but the modern food chains are highly centralized and globalized. And it is just getting worse and worse. In industrial countries between 10 and 15 times more energy is used in the food system than what is contained in the food we end up eating (Hendricksson 1994).  

A big part of the energy consumption is caused by the consumers buying, storing and preparing food. In Sweden 1997, agriculture production represented 15-19 percent, processing 17-20 percent; distribution and retail 20-29 percent and consumption 38-45 percent of the total energy use in the food chain. 7-11 percent of the total energy is consumed by the much discussed transports, and here it is in particular the final stretch that counts. A person driving a car 5 kilometres for shopping uses a lot more energy per food unit than a ship with meat or soy from another continent. Also in some developing countries, consumption takes the lion's share of energy use; in this case, it is mainly cooking over an open fire that takes energy. 1,500 kWh (corresponding to a bit more than a cubic meter of firewood) is used per capita for cooking[4], which is somewhere between half and one third of what is used per capita for cooking in Sweden or the USA (Uhlin 1997). Cooking represents more than a fifth of the total energy consumption in Africa and Asia[5] and in some countries, cooking represent up to over 90% of household energy consumption (IEA 2006). The use of energy for cooking is more than the total energy in the food. So while farming in developing countries and traditional systems is energy efficient, cooking is not.

Increasing energy prices will revert some of the developments that were made possible by cheap fossil fuel. It poses a challenge for society, but also an opportunity to steer into a path of true sustainability. It will lead us towards more sustainable agriculture methods, such as organic farming and more localised food production webs. In general, in a world with rapidly increasing human population and a simultaneous depletion of natural resources, the obsession with replacing human labour with oil and other nature resources makes little sense. That those changes also will serve to mitigate climate change is just another argument in favour of such a shift in our societies' metabolism.  Notably, to abolish the use of external energy and rely solely on manual labour is not the desired situation, it is rather about finding a new balance that works on a global scale and is sustainable. Renewable energy, such as bio-energy, windmills and watermills have since thousands of years already been used in farming. They can be enhanced and solar energy and biogas can be added to the mix. But it is not likely that renewable energy will allow such wasteful systems that we have today. For example,  with very cheap energy it pays to use that energy to bind atmospheric nitrogen instead of using natural nitrogen fixation. With electricity prices of solar energy, or by they use of biogas it is cheaper to use natural nitrogen fixation than using chemical fertilizers. 

Unequal energy access and the unequal terms of trade

Commercialisation is promoted as the recipe for development for the almost half a billion smallholders in the world. Peasant farming is built on a rather high degree of autonomy and it regenerates most of its needed resources, such as labour, capital, soil fertility and pest control, within the farming system. By nature, peasants resist commercialisation because they want to minimize risk and dependency (v.d. Ploeg 2009). If all the forces of coercion are brought to play and farmers try to commercialise their production, most farmers will simply not survive in this struggle for modernisation. If they did, there would be enormous over-production. European farms had difficulties to cope with competition from North America especially after the introduction of steamship transport. The response was to introduce protectionist measures. Still the pressure of competition was a lot lower for them than it is for poor farmers in developing countries today. In addition, because of the productivity gains in developed countries, agricultural prices dropped with some 60 percent in the period 1960 to 2000 (Dorward et al 2002). As the productivity, and energy use, of the poorest farmers remained much the same, it is obvious that they lose out. At current prices, it would require one life of labour for a manual farmer to acquire a pair of oxen and small animal drawn equipment, and ten generations of labour to buy a small tractor (Mazoyer and Roudart 2006). The productivity gap has widened over the last decades, both relatively and in absolute numbers. 

Table 1 Agricultural labour productivity, dollar per man-year

	1990-1992	2001-2003	Agriculture as share of GDP
Low income countries	315	363	20%
Middle income countries	530	708	9%
High income countries	14,997	24,438	2%
France	22,234	39,220	2%
United Kingdom	22,506	25,876	1%
USA	20,797	36,216	1%
Brazil	1,507	2,790	5%
India	332	381	4%
China	254	368	12%
Malawi	72	130	36%

Source: World Bank 2007

To believe that low resourced smallholder farmers would be able to compete on staple food in free world markets - with energy access being the main factor of competitive advantage - is simply very far from reality. In reality, we instead see how country after country become net food importers. Cheap energy could be seen as their way out of the situation, but the reality is quite different: it is cheap energy that has pressed down the prices of agriculture products - and thereby the market value of their labour to a dollar per day; it is cheap energy that has allowed the gaps to increase to unprecedented heights because the rich could always use more cheap energy than the poor, and the gap between those relying on their own labour and those relying on use on fossil fuel has just increased. Energy scarcity, higher energy prices will result in less global competition and higher food prices. While being painful for many societies and for net food buyers in the short run, is still better for the smallholder farmers in developing countries than the opposite. Policy-makers should better grab this opportunity for a turn of agriculture development, instead of promoting continued or increased external input dependency (fertilizers, GMOs, credits) and continued global competition in a market where the big players are all on steroids in the form of cheap oil.

References

Baltzer, Kenneth; Hansen, Henrik; Lind, Kim Martin 2008, A Note on the Causes and Consequences of the Rapidly Increasing International Food Prices, Institute of Food and Resource Economics, University of Copenhagen

Bayliss-Smith, T. P. 1982, The Ecology of Agricultural Systems, Cambridge University Press

Dorward, Andrew, Jonathon Kydd, Jamie Morrison and Ian Urey, A Policy Agenda for Pro-Poor Agriculteal Growth, Imperial College at Wye, accessed at http://www.sarpn.org.za/wssd/agriculture/policy_agenda/Policy_Agenda_long.pdf

FAO 2000, The Energy and Agriculture Nexus

FAO 2007, The State of Food and Agriculture

Hendrickson, John 1994, Energy Use in the U.S. Food System: A Summary of Existing Research and Analysis, Center for Integrated Agricultural Systems

Hoffmann, Ulrich, 2011, Assuring food security in developing countries under the challenges of climate change: key trade and development issues of a fundamental transformation of agriculture, UNCTAD discussion paper 201, February 2011

IEA 2006, World Energy Outlook, OECD/IEA

IEA 2008, Key Energy Statistics 2008, International Energy Agency

Mazoyer, Marcel & Roudart, Laurance 2006, A History of World Agriculture: From the Neolithic Age to Current Crisis, transl. James H. Membrez, Monthly Review Press

McDonald's 2008, Vårt Miljöengagemang

Ploeg, Jan Douwe van der, 2009, The New Peasantries: struggles for autonomy and sustainability in the era of empire and globalization.

Rundgren, Gunnar, 2011, Garden Earth - From hunter and gatherer to capitalism - and thereafter, forthcoming

Uhlin, Hans Erik 1997, Energiflöden i livsmedelskedjan, Naturvårdsverket

US CRS 2004, Energy Use in Agriculture: Background and Issues, 19 november 2004, US Congressional Research Services

USA Today 2008, http://www.usatoday.com/news/nation/2008–03–10-drugs-tap-water_N.htm, 16 March 2009

WHO 2006, Fuel for Life: Household Energy and Health, World Health Organisation

World Bank 2007, World Development Report 2008

(article written for the UNCTAD Trade and Environment review-forthcoming)

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[1]       a toe is a common unit for energy and express the amount of energy released when a ton of oil is burnt. 1 toe = 42 GJ = 11 MWh = 10 Gcal.

[2]       Who can be grown without nitrogen fertilizers as they have natural nitrogen fixation.

[3]       There were also other factors driving this, such as biofuels, increased meat consumption and speculation. Increased oil price was doubtless one main driver.

[4]       As an interesting comparison, McDonald's Sweden states that they use 1 kWh per meal (McDonald's 2008).

[5]       The introduction of energy-saving stoves or the use of other fuels that are easier to regulate should be a prioritized measure. It is not only about conservation of forest and saving energy; soot and smoke indoors is a health hazard and one of the bigger killers. Between 1.5 million (WHO 2006) and 4 million (Pimentel et al 1998) people are killed by this every year.

Beyond Petroleum - a joke

BP President Carl-Henric Svanberg made a blitz visit to Malmö today where oil spills were on the agenda.He sad he was sorry for the big blow-out in the Mexican Gulf last year, but confirmed that BP will continue with deep sea drilling of oil.

He said:

We are not doing this by choice. We are doing it out of necessity. We estimate that by 203o the world will be consuming some 40 percent more energy than today. And the world will continue to be largely dependent on fossil fuel. (recording from the Swedish Radio P1)

I look for some more information at the BP website and find the 2030 energy outlook report
There we can read:

At the global level, the most fundamental relationship in energy economics remains robust – more people with more income means that the production and consumption of energy will rise....Energy consumption per capita to 2030 is likely to grow at about the same rate as in 1970- 90 (0.7% p.a.).....The fuel mix changes relatively slowly, due to long asset lifetimes, but gas and non-fossil fuels gain share at the expense of coal and oil.....Strong growth in non-OECD energy consumption, especially of coal, translates into continued growth of global CO2 emissions. The growth of global CO2 emissions from energy averages 1.2% p.a over the next twenty years (compared to 1.9% p.a. 1990-2010), leaving emissions in 2030 27% higher than today.

The web site says that "The outlook highlights the central role markets and well-designed policy can play to meet the dual challenge of solving the energy needs of billions of people who aspire to better lifestyles, and doing so in a way that is sustainable and secure. "

I think the whole thing just shows what a gap there is between what needs to be done and what BP is planning for. And that the re-branding of BP from British Petroleum to Beyond Petroleum was just green-washing.

200 billion slaves

A human needs around 2500 kcal per day (2.9 kWh, most of it, around 80 percent is used just to stay, alive, think, sleep etc, so around 600 Wh are used for work as a power output. But let’s say that a person who is really doing physical work – which this is about anyway – generates some 800 Wh per day. On a yearly basis a person consumes some 1.16 MWh in the form of food.

Let us contrast this against how much other energy we have put to use in this modern world. The Swede use 5.65 toe (toe is ton oil equivalents, i.e. the energy in one metric tonne of oil), the American 7.71, the Britton 3.8 and the Senegalese use 0.20. Let’s look at the Swede: 5.65 toe corresponds to 65.7 MWh which means that we use ”external energy” corresponding to the energy of 57 human beings. But that is brut. If we look at hour conversion rate we said that we use only 20 percent of the food energy for actual work, so then we would use more than 250 peoples’ power. On the other hand, the external energy also has a lot of conversion losses. If we assume them to be 40 percent (this is now a bit of ”back of the envelope calculation) we are down to 100 energy slaves as I would call them. If we look at the global average energy use it is about one third of the Swede’s which means that there are about 200 billion energy slaves working for us all year round. It is not surprising that we can produce a lot more things than our savage ancestors. And it is not surprising that we also can make much greater mess than they could by using those forces in the wrong way!

Another way to look at the same condition, but adding an economic perspective is that one barrel of oil corresponds to 25 000 man-hours of work (around 12 man-years). The cost to actually produce this barrel is some few dollars per barrel. One can see that even with a price of 200 dollars per barrel that is a very cheap price to get 12 man-years of work done. Of course the barrel of oil is not as intelligent as the 12 humans and its use is thus a bit more limited…