Toward a New Energy Surplus

A fascinating op-ed in Wednesday's New York Times put a clever new spin on the old "Limits to Growth" arguments of the 1970s, extending their application from raw materials to encompass innovation, particularly as it concerns our long-term energy supplies. The author, a social scientist, focused on the falling "energy return on investment" or EROI of oil and gas resources over the last several decades, as a key indicator of the shrinking energy surplus available to our society. This is important because energy surpluses generate economic surpluses. While this may sound overly abstract, compared to more practical discussions about competing alternative energy technologies and infrastructure, this debate is an important component--even a precursor--of an intelligent energy strategy.

There was a lively discussion about EROI in the comments area of this blog a few months ago, precipitated by some inaccurate comparisons of the ethanol and gasoline EROIs by biofuels advocates. The current 1.3:1 energy return for corn ethanol--with aspirations of 2:1 or better for future ethanol plants--compares poorly with the 15:1 return for oil cited by Dr. Homer-Dixon, though not quite so badly with the 4:1 return he gives for oil sands extraction. At that level, though, what counts is not which one is better, but whether either is sufficient to underpin a global economy of $44 trillion, and growing.

The problems Dr. Homer-Dixon highlighted are genuine and important, particularly in terms of the constraints that climate change imposes on our search for high-return alternatives to oil. Where I depart from his logic, however, is in his conclusion that we are running up against the limits of energy innovation. Our main challenge isn't one of energy availability, but of the ready means to convert the vast quantities of energy that surround us into useful work. The natural environment is brimming with energy, in the form of wind, sunlight, geothermal heat, and tides, all of which contain orders of magnitude more energy than our civilization's annual energy budget of 440 quadrillion BTUs. And that only counts what's available on the surface of the earth; the energy passing through the earth's orbit every year is vastly greater. There is abundant evidence of new innovation in tapping into these supplies.

Consider the prospect of space-based solar power (SSP), which unlike nuclear fusion (see Monday's posting) could be achieved in much less than 40 years. The biggest impediment to building it is the lack of a large-scale, low-cost space launch capability, something far in excess of the Shuttle fleet, or its anticipated successor. When you factor in the cost of creating the capability to construct and launch a structure many times larger than the International Space Station, and then assembling it in orbit in a couple of years, rather than a decade or more, and then attribute all of this to SSP, the EROI of the first few 5,000 MW solar power satellites (SPS) looks appallingly low--probably even negative. But we wouldn't create that capability just to build one or two SPSs; it only makes sense if we build a fleet of them. Nuclear power would have had a similar problem in its early days, before fielding 100 nuclear reactors in this country.

Whether you're looking at a long-term option like SSP or fusion, or a current alternative such as wind power, the basis of the EROI comparison ought to be at maturity, e.g. when wind is supplying 15% of US electricity, not at its initial, very low market penetration. In order to generate sustainable global economic growth far into the future, we must either have a solid slate of high-EROI energy sources lined up, or we must de-couple energy and GDP altogether. Although we may be on the downward slope of EROI for fossil fuels, we don't lack high-return options for their long-term replacement.