Weekend reflections

Weekend Reflections is on again. Please comment on any topic of interest (civilised discussion and no coarse language, please). Feel free to put in contributions more lengthy than for the Monday Message Board or standard comments.

24 thoughts on “Weekend reflections

  1. In the thread “Hair Shirts” I postulated that energy is different from other resources. JQ said this:

    “This is begging the question – that is, assuming what you are supposed to be proving. Of course energy is essential but so are water, air, labour, land, information, mineral resources and so on. All of these are in finite supply, and supply and demand for all them is driven by economic forces. There is nothing special about energy.”

    And I said I will have a think about.

    So is Energy special?

    After thinking about I decided yes that energy is special and economics does not create energy in any sense of the word it only exploits existing reserves and needs a particular combination of circumstances to exploit those reserves of which economics is only one small part.

    So lets go back to the Romans. JQ linked to evidence that Romans burned coal and yes they might of however they lacked the key thing – power converters. Romans did not invent the absolutely critical power converters that convert heat energy from coal into mechanical energy to run things. They used gravitational energy converters which were hydro power schemes, fantastic in their complexity, to run their mills and factories. So the Roman empire collapsed from many causes without exploiting the billions of tons of coal underneath their feet that could have propelled their society to the same heights as we have. They had a huge economic system and I am sure the price of energy went extremely high however it did not create energy in that economic system.

    Lets turn to our society. We are now reaching the limits of fossil fuels. Our society has grown so large that it is in danger of exceeding even the fantastic power return of all the fossil fuels that we can turn into energy. To go to the next level, if that is our destiny, we need a more energy. Oil is running out and coal will follow in a hundred years or so. Nuclear power, the way we use it at present, will last a few hundred years and leave millions of tons of dangerous waste for others to clean up. Some say the future is fusion energy. So if the price of energy becomes high enough then we will create energy from fusion. However there is one huge problem. What if we can’t? What if no combination of present materials and knowledge can be combined to form a working fusion reactor? In the middle ages people then combined knowledge, economics, materials and an energy resource to produce energy from coal. At that time all such elements existed and the result was fossil fuel energy. So now we are trying to combine economics, knowledge, materials and a resource to make fusion energy converters however 2 vital things are missing. Knowledge and materials. We do not know how to build a working fusion reactor despite 50 years of trying and even if we did the materials to build it do not exist yet.

    To my mind energy is at the root of the tree. It is true that there are many factors such as materials that are in economics however energy is embodied in each one. If you want to build a house you have to assemble the labour and the materials however each of these has an energy component that is often overlooked. How does the labour get to the workplace? How do the materials get to the workplace? In ancient times transport was a major factor as land transport was difficult and slow that is until modern times where fossil fuels and innovation made it cheap and easy. JQ said “Of course energy is essential but so are water, air, labour, land, information, mineral resources and so on” But neglected to mention that you cannot have any of the others without energy. Water has to be pumped using energy, labour has to be fed and transported using energy, land has to be cleared using energy, information has to be obtained using energy, mineral resources have to be mined using energy. Energy is at the root of all those other resources. Before you say it minerals and the minerals to get us fossil fuels in the forst place were mined with energy before fossil fuels. They used solar energy in the form of animals, water power and human labour to get the coal. It has been a bootstrap affair to get where we are now however energy is at the root of all of it.

    Now as to economics creating energy. Yes the price will drive people to innovate and exploit previously unused resources however that is glorifying the role of economics. There are many other factors such as innovation, political conditions and that the resource exists. Economics did not create fossil fuel power for the Romans. That was left to the peculiar combination of a suitable resource of easily accessible coal, innovative thinkers in an innovative society, sufficiently advanced materials to make the power converters out of and an incentive to do so. The incentive was mining deeper mineral seams and what was needed was a sufficiently powerful pump to pump water to allow this.

    Saying that economics creates energy is a gross simplification that leads to dangerous conclusions. When we are confronted by the energy crisis we have now, this thinking leads to the conclusion that we do not have to worry about it as when the price rises high enough another energy source will be created by the magic of the free market completely ignoring the multitude of other factors that leads to the exploitation of a new energy source. Renewable energy, no matter what the price, is not a suitable resource for our society the way it is now. It is too diffuse and at present is not easily able to be converted into forms that our present society uses. That is not to say that it is impossible, we can change our society to make renewable energy suitable. We would have to make major changes to transport and the way we use energy to enable this.

    Societies in the past and now are very resistant to change. Most have collapsed rather than change the way they do things. We are looking for a new energy resource that will allow us to proceed the way we are now with no changes and are expecting the magic of economics to deliver it. Our global economy built on fossil fuels, will collapse in its present form, if a new energy source with the same or better energy return is not discovered. The alternative is to change to a lower energy society based on renewable energy.

  2. Thank god for ender’s editing. Agree with the last para and the enormity of the problem that many are depending on the ‘market’ to fix. On re-thinking the rest of the post, maybe there is a need to pose this problem in lengthy historical context to ensure the gravitas is appropriately there.

  3. I agree that energy is special, but to think of it as special to economics is probably incorrect. Economics is the allocation of resources and in that sense energy really is just another resource.

    The way I look at it is that energy is special to technology. Every technology on the planet is critically dependent on the amounts of energy available and its form. When you get a major change in the form or availability of energy it drives even bigger changes in technology. For example the availabity of oil made cars and planes possible. Energy is a fundamentally limiting factor that there is simply no way around. Many technologies are impossible without more of it.

    All this is obviously of huge significance to economics, but its also of huge significance to pretty much everything in society. I take it your point is that our entire civilisation is defined and fundamentally limited by what form of energy we are able to exploit. In that sense our sources of energy are absolutely fundamental to the type of civilisation we live in and truly significant changes in society can only be accomplished with better forms of energy.

    I also see your point about fusion power. If we don’t find the next energy source we are fundamentally limited in what we can do.

  4. In my view, the fundamental problem with energy is also technology, the technology of substitution. Economic theory says that if a resource becomes too scare or too expensive it will be substituted for another, but that assumes we can find a substitute for fossil fuels, particularly oil.

    There are already obvious substitutes for coal and gas for electricity generation, namely nuclear and renewables, but there is no substitute for oil for transportation. The only way forward is to electrify transportation and massively increase our electricty generation capacity, both of which are both projects of a monumental scale that we show no sign of making a start on.

    I can’t see our civilisation making this transition without massive economic and social upheaval.

  5. chrisl,

    Perhaps you could have given a more balanced representation of his views. From the article you linked to:

    “Despite so little power being generated by his new turbine, Mr Large [the fellow in question] remains enthusiastic about the potential for power production by micro-generators. “I’m undaunted,â€? he said. “I feel like I’ve been sold a pup but it’s not a bad experience — it’s a learning experience. Maybe I was a little bit ambitious.”

  6. Could someone please explain to me why, in all this talk about climate change, nobody has bothered to discuss the potential impact of crop failures as a result of climate change. Surely, this is far more likely to be of more immediate impact than the price of oil or the cost of conversions to alternatives. Indonesia is currently tendering for 500,000 T of rice imports as a result of the recent flooding. The annual wheat harvest in Australia is beginning to jump around radically from year to year. My understanding is that global food reserves can be measured in months rather than years. How many droughts or floods will it take to cause a global crisis? What are the odds on this occurring in the next 5 years, 10 years, 50 years?
    While your at it – perhaps you could also explain how we are gong to repair the damage done by the draw down of aquifers and rivers etc?
    Finally let me say that JQ has it arse about when he talks about ‘hair shirts’ – us greenies are afraid of the collapse that you economists can’t seem to see coming. We don’t welcome it!

  7. chrisl, wind turbines rarely work well in micro-generation situations (e.g. attached to urban houses) they are much better suited to large scale centralised electricity generation that supplements base-load power from nukes, coal or gas. Solar PV on rooftops works much better on urban houses, especially if you have a north-facing roof.

    BTW, I never said substituting fossil fuels for electricity generation was going to be easy, but at least we have some idea what technologies and resources we can use. In contrast, there is no obvious replacement for oil on the horizon.

  8. swio Perhaps he will remain enthusiastic and try solar next time.
    What it demonstrates is that for all the talk of carbon free energy – wind ,solar,methane, even nuclear there is wishful thinking and then there is reality.

  9. chrisl, transitioning our civilisation to carbon free energy is certainly possible, but IMO it won’t be easy. It will require more than a modest emissions trading between the power utilities. It will require an effort the likes of which we haven’t seen since World War II … but instead of the factories churning out guns, tanks and planes, they’ll be building electric vehicles, solar panels and wind turbines.

  10. Previous examples of wishful thinking:

    A bit ironic decrying wishful thinking on a medium that actually was wishful thinking during our lifetimes. I can see your point though. Some things are a step too far. I mean there are people talking about sending a man to the moon. That’s clearly ridiculous 🙂

    Some things really are impossible, but you can usually tell that when they require breaking the laws of physics. The rest is just waiting for a bit of human ingenuity and will power. There doesn’t seem to be anything in numbers on renewables that requires the second law of thermodynamics to be set aside.

  11. Swio If it costs 13,000 pounds to make 9 pence worth of electricity then it is not physics laws you need to worry about, but economic laws.

  12. chrisl – “Swio If it costs 13,000 pounds to make 9 pence worth of electricity then it is not physics laws you need to worry about, but economic laws.”

    You cannot characterise wind power from one poorly sited wind turbine. Properly sited wind turbines give really high returns. If this person had put a thermal coal plant in his house and then not been able to buy coal for it would this mean that thermal coal is inefficient and not worthwhile?

  13. I’ve done a little poking around in this area. Considered as a technical problem, there are lots of substitutes for coal and oil; the issues really are more economic than technical.

    But looking at them in technical terms, the “costs” are whatever flows from the scarcity of the materials and of the resources needed to convert them. That is, you can “easily” make synthetic petrol from coal – or even from renewable feedstocks – but the plant needed takes time to set up as well as other resources which flow through as opportunity costs. That’s why it wasn’t enough for Second World War Germany.

    On the other hand, you can make less perfect substitutes more easily (in the sense of using simpler materials and equipment, put together more quickly and not needing the same economies of scale). These are often more “expensive” in terms of their feedstocks, of course. Ethanol and biobutanol are examples of these. And I suspect there are intermediate possibilities too.

  14. Considered as a technical problem, there are lots of substitutes for coal and oil; the issues really are more economic than technical

    Nonsense. The problems are fundamental with virtually all alternatives to oil. Either the net energy returned is near zero or negative (most biofuels) or there are serious implications for greenhouse gas emissions (coal-to-liquids, tar sands, oil shale etc).

    There are some biofuels that show promise, sugarcane ethanol, cellulosic ethanol and biodiesel, but even these run into problems if you want to scale up production to a level that would replace crude oil. We may be able to grow our own fuel, but there may not be any forests left and we may not be able to feed ourselves.

  15. At present you can solar power a house for around $20,000, but without approximately doubling the cost for storage batteries, that doesn’t generate power at night. I know because a mate has done it. Now my all electric house uses about $2000 in power a year at present. Even with a gilt edged security, mortgage interest rate of 8%, that means an annual interest cost of $1600 to go solar for the average household. That is before depreciation of their solar asset and before any maintenance costs or insurance(Sydney hail storms anyone?). If solar saved me half my power bill, blind freddy can see the sums don’t stack up. You probably need a trebling of the cost of power to really do that and although my household can afford it, most couldn’t, without some serious tradeoffs. How they manage that with some similar nasty rises in transport fuel costs is anyone’s guess. Still we have the experts’ promise that it will only be 1-3% of their lifestyle.

  16. “When crude oil surged past US$70 a barrel in mid-2006, Southeast Asian governments were forced to confront an inconvenient truth that might almost have come from the hand of former US vice president Al Gore: income levels could not be sustained unless new energy sources were found, and quickly.

    The World Bank has calculated that oil-import dependency trimmed as much as 1% off the region’s gross domestic product last year, as higher production costs eroded export earnings, boosted freight overheads and inflated food prices.”


    Hmmm…..one percent already eh?

  17. Carbonsink, you weren’t paying attention (plus, you have bought into some erroneous “facts”).

    As a technical issue, you can easily – in the sense I was using above – get all sorts of substitute fuels; it’s just that they aren’t economic, as of here and now – but that’s not a technical problem per se, even if technical improvements would help.

    If you do insist on using coal or other fossil fuels to make synthetic petrol, yes, you don’t gain anything in the emissions area. However, you do gain in the area of not running out of fuel (Hitler’s problem), and as it happens you are under no technical obligation to use fossil feedstock. The fact that you don’t have a lot of cheap renewable feedstock lying around is an economic problem, not a technical one.

    As for the erroneous “facts” you have bought into – it is simply not the case that biofuels have low or negative energy outputs in terms of their inputs. You only get that if you wilfully and obtusely make the biofuels using the same methods involved now, ones that build in copious use of cheap energy inputs – inputs that are not cheap when you need to get them from non-fossil feedstocks.

    For instance, it is arrant nonsense to claim – as I have seen claimed elsewhere – that you need more energy input to make ethanol than it provides, basing that on the energy needs of current fertiliser use. You simply don’t need to get the feedstock that way.

    As it happens, the simplest all round approach to making feedstock with no outside energy inputs is, to set aside a proportion of land for nitrogen fixing, and to use its harvest for gas producers to drive agricultural power equipment.

    This creates the economic problem that there isn’t enough land to go around for all uses including the existing ones, but the technical problem of low or negative energy returns goes away as soon as you don’t use current outside-energy-intensive farming methods. The trade off is the land use, but as I said, that falls under the heading of an economic problem.

  18. At present you can solar power a house for around $20,000, but without approximately doubling the cost for storage batteries…

    You don’t need batteries for grid-interactive system, but yes you’re basically correct. A rooftop PV system is really only something rich greenies can afford at the moment. Most studies of solar PV I’ve read suggest a 20-25 year payback period which is about the lifetime of the solar panels. Solar hotwater on the other hand is much more economically viable, much lower up front costs (~$4000) and much shorter payback period (4-5 years). Given that heating water accounts for ~30 per cent of household energy use it is already a worthwhile investment and would be more so with appropriate carrots and sticks.

  19. This creates the economic problem that there isn’t enough land to go around for all uses including the existing ones

    Well, you may call that an economic problem, but I would call the fact that the planet isn’t big enough as pretty fundamental.

    For instance, it is arrant nonsense to claim – as I have seen claimed elsewhere – that you need more energy input to make ethanol than it provides

    Sugarcane ethanol definitely has a positive return (studies in Brazil suggest anywhere between 3.1 and 10.2) but corn ethanol is a completely different matter. Everything I’ve read suggests the return is somewhere between slightly negative and slightly positive. Cellulosic ethanol shows some promise (potential EROEI of around 6.0) but it hasn’t been proven on a commercial scale, and many doubt that it ever will. Biodiesel from soybeans has an EROEI of around 3, but as I understand it it would require a lot more cropland than corn, sugarcane or switchgrass for cellulosic ethanol.

    It is true that we don’t have to use the cheap (fossil fuel) inputs we use today to grow biofuels, but that means the land would be much less productive, making the task of replacing crude oil even more unlikely. So its a catch 22.

    I cannot see biofuels ever providing more than few per cent of our transportation fuel needs can you? Besides, there is a much more efficient way (than growing plants) of capturing solar energy for transporation, and that’s solar PV and solar thermal.

  20. Corn ethanol does not inherently involve poor or negative energy returns – unless you keep growing it and processing it the old way. For Christ’s sake, in the early days of the American Civil War farmers were outright burning it, they had so much surplus (because their access to markets had been cut off).

    As I said before, you only get those damned stupid results if you do damned stupid things, like persist in applying formerly cheap energy inputs. But that is not how it was done until very recently, so there is no technical problem there.

    As for calling this area a fundamental and thinking you have said something constructive, no. Carbonsink, you are like the proverbial person with the hammer to whom everything looked like a nail.

    Of course these are very real and highly fundamental problems – only, if you go looking for solutions in the technical area, you are looking in the wrong place. Economics is the field you use to cope with scarce resources. You are using the wrong toolkit – that’s all I’ve been trying to say, I’m not trying to belittle the problem.

    Actually, biofuels can provide a very high percentage of transportation needs – once you bear in mind that not all biofuels and available techniques are simple analogues of what we do now, and that there are more ways to skin a cat than to transport everything in the same patterns. You are doing the equivalent of a 19th century futurist wondering how steam horses would fit in carriage shafts, and how to clean up the solid residue from the streets.

    It’s about time for a Kondratiev cycle, I think.

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