Turning Trees Into Enemies. The New War on Forests

The San Marco Square in Florence in 2017. You can see the ancient trees of the square being cut as part of a plan that involved the removal of several hundred trees in the whole city. The action was accompanied by a propaganda campaign against trees that looked curiously similar to that used to justify the invasion of Iraq, in 2003. "Trees are a threat to citizens,", "There is no alternative," "Killer Trees," and the like.

The war on trees seems to be starting. I don't know about what's happening where you live, but here, in Italy, we see it clearly, accompanied by all the propaganda tricks normally used to start wars. So, we have seen a string of accusations in the media against "killer trees," supposed to be a danger for the citizens because they can fall on them or on their beloved shiny cars. The image on the right, here shows the first page of an Italian newspaper in 2014 informing us there are "50,000 killer trees" in Rome. Truly an invading army to be fought with the appropriate weaponry in the form of chainsaws.

One century ago, city administrations were proud of planting trees, today they are proud of cutting them. What happened that changed their attitude so much is hard to say. Maybe it is the general degradation of the ecosystem that has turned trees into monsters, but that doesn't explain how administrations are starting also a war on forests - surely not threatening citizens or their cars. In a previous post, I commented on a recent piece of legislation in Italy that forces land owners to cut their woods even if they don't want to. From the comments I received to that post and from what I can read on the Web, I think I can say that the war on trees is not just an Italian phenomenon, it is worldwide.

I interpreted this war as the result of the diminishing returns of our energy sources - mainly fossil fuels. The returns of an energy source, as you may know, can be expressed in terms of EROI (energy return on energy invested). It is the ratio of result to effort. Extracting oil, for instance, implies digging a well, using pumps, and many more things which have an energy cost. The energy obtained from oil need be much larger than the energy spent on oil, otherwise the whole effort would be useless. And, historically, it has been the case. At the height of the oil age, an oil well in the US provided perhaps 50 times the energy spent to extract the oil. But not anymore: it is the harsh law of the EROI: it declines with time. The consequence is a well-known law in economics: diminishing returns on investments.

What's happening worldwide is that the EROI of fossil fuels has been going down. It was expected: it is a result of the gradual depletion of the resources. Obviously people will look first for the best resources, then progressively move to less good ones. This has consequences: the worldwide search for oil and other fuels leads to conflicts for what's left - the invasion of Iraq in 2003 is a good example. But even the Iraqi oil is subjected to the harsh law of EROI. The result is that some energy resources which, once, looked old and outfashioned, now start looking good again. Wood, for instance.

And here is the reason for the war on trees. As all wars, it is a war on resources. And, as it is normal in our times, before going to war, you demonize your enemies - hence the "killer trees." It is also traditional to state that wars are done in the name of lofty and noble principles, in this case in the name of ecology, since wood is said to be a "carbon neutral" energy resource and therefore cutting trees somehow fights global warming.

Alas, no. Wood burning is NOT carbon neutral. It is true that the CO2 generated by burning biomass will eventually become biomass again, but it takes time. A recent study estimates that it takes several decades, even a century, for the CO2 generated by burning trees to be reabsorbed from the atmosphere in the form of new trees. And that assumes that the forest reforms while, in practice, forest razing is often an irreversible phenomenon, at least on the century time scale. According to some recent studies, the Sahara may be a human-made desert.

So, the harsh law of the EROI holds also for wood. If the current rush to wood cutting continues, the best resources will soon be exhausted and cutters will move to more expensive ones. At some moment, the cycle that's leading from fossils to wood will repeat itself: after wood, what? How about burning furniture?

The road to the Seneca Cliff is paved with evil intentions. A new cycle of destruction of the world's forests may be starting

The oldest stories of human lore have to do with cutting trees and with the disasters that followed as a consequence. Above, legendary Sumerian heroes Gilgamesh and Enkidu kill the guardian of the trees, Huwawa (image source). Several thousand years afterward, we don't seem to have learned much about how to manage our natural resources.

I expected this to happen, perhaps not so soon and not in this form, but it had to come. With the era of cheap fossil fuels coming to a close, what's left as low-cost fuel is wood and that had to be the target of the next wave of exploitation.

Naively, I was thinking that the rush for wood would have taken the form of desperate people moving toward the mountains with axes and chainsaws, but no, in Italy it is coming in a much more destructive way. It is a government decree approved on Dec 1st, 2017 which allows local administrations to cut woods, even against the will of the owners of the land. It is the start of a new wave of deforestation in Italy, probably an example that the rest of the world may follow in the near future.

It is a long story that goes back to the roots of Italian history. Already in Roman times, deforestation was a major problem, believed to have generated the marshes still present in Italy in modern times. During the Middle Ages, woods returned. Sometimes, the regional governments took good care of the forests (as, for instance, in Tuscany) but a new cycle of deforestation came with the political unification of Italy, in 1861. At that time, the Piedmontese government treated the newly acquired lands as spoils of war, razing down ancient forests without any regrets. The story is reported in a novelized form by the British writer Ouida, in "A village commune." (1881).

Gradually, with fossil fuels becoming more and more important -  first coal, then oil and gas - trees ceased to be the crucial economic resource they had been before. In the 1920s the Italian government engaged in a serious reforesting policy whose effects are still visible nowadays. After the end of the war, in 1945, the Italian economic system prospered mainly on industry. For the local administrations, the main source of revenue was concrete and that led to the paving of large areas with buildings of all kinds, but the woods in their mountains were left more or less in peace. With agricultural land left abandoned, in many places woods advanced and covered new areas.

Then, there came the 21st century and with it the increasing costs of fossil fuels. Prices have been going up and down, generating occasional screams of "centuries of abundance." But, by now, nobody sane in their mind can miss the fact that the old times of cheap fuels will not come back. One consequence has been the diffusion of pellet-fueled stoves in Italy, often done in the name of "saving the environment." (figure on the right, source) Theoretically, wood pellets are a renewable fuel - but only theoretically. If they are consumed faster than trees can regrow, they are not. And the appetite of Italy for pellets is insatiable: Italians consume 40% of all the pellet burned in Europe while Italy produces only about 10% of the wood it burns.

With the housing market stagnating, someone was bound to realize that the only remaining source of profit from the land would come from turning forests into pellets. The consequence is the just approved evil piece of legislation. All in the name of the universally agreed concept that a tree is worth something only after it is felled, the new law gives to local administrations the power to cut everything, when they want, as they want. Let me leave the description of this disaster to my friend and colleague Jacopo Simonetta, writing in a recent post in "apocalottimismo".

[The law] says that if the landlords refuse to cut the woods they own, the local administrators can occupy - even without the landlord's agreement - the land and leave the "productive recovery" (that is the cutting of the trees) to companies or cooperatives of their choice (which means, "the friends of their friends"). And not just that. The companies which obtain the grant to cut the trees will provide economic compensation to the city administration in a form that the administration will define. For example, new streets, new parking lots, new street lighting, or anything the mayor will deem necessary for his or her electoral campaign. Or in the form of money, this time to the regional government, in order to "cash in" something - as people say.

It is easy to see here the hidden hand of the pellet industry, but there is - or at least there will be - much more. Anyone who has a minimum knowledge of how the administrations of small towns in Italy work can understand how this law is a formidable incentive for every administration to install a gang of local notables who will organize squads of henchmen financed with the cutting of other people's woods. And those who, like me, have 40 years of experience in these matters know that the line that separate a squad from a Fascist squad  (a "squadraccia") is thin and it tends to become thinner and thinner as the power of the state fades away. 

From my personal experience, I can completely confirm Simonetta's analysis. Even in the theoretically civilized Tuscany, the local administrations have little or no resources to enforce the law outside urbanized areas. What had saved the woods, so far, is that at least the national laws were rather strict in protecting trees and that provided at least a veneer of protection. Now, the central government has abandoned even the pretense of governing the territory, leaving it all in the hands of the local bosses. It is normal, the collapse of civilizations comes first and foremost with the collapse of the central authority.

You may wonder whether anyone in Italy is speaking against such a horrible law; shouldn't the government protect people's property, including woods? In practice, just a few of the usual suspects have been protesting: environmental associations, a few experts, university professors, and the like - all people without any real power in the Italian society. From everybody else, especially at the political level, the silence has been deafening.

It is understandable: fighting this law implies going against an unholy alliance of 1) local politicians looking for funds for their re-election, 2) people living in the countryside, desperate for a revenue of some kind, of any kind, 3) the pellet industry, seeing a good market developing, and 4) city dwellers who want to warm their homes. And if you are thinking of defending a forest you believe should not be destroyed, you don't need to live in places where mafia rules to understand that "they" know where your children go to school.

In the end, it is all the result of the harsh law of EROI the energy return on energy invested. Humans exploit first the resources which give them the best yield (high EROI) and, in the recent history, these resources have been fossil fuels. Then, they move to progressively lower EROI resources. Now, it is the turn of woods in Italy, but it is not limited to Italy. Most civilization of the past fell together with a wave of deforestation that destroyed their last resources. Ours is not different, why should it be?

But a battle is surely going to be lost only if one refuses to fight it. So, if you want to give your contribution to this probably unvinnable battle to help the Italian woods, you can sign this petition. And, who knows? It might do something.

As a final consideration, you surely noted that I mentioned the Fascist government as having protected the trees in Italy. Surely, it did that better than the democratic governments which preceded and followed it. You may also know about the case of Japan: during the Edo period, the Japanese government enacted draconian laws to protect the Japanese forests: the unauthorized cutting of a single tree could be punished with death. 

Does that mean that we need an authoritarian government to keep alive the world's forests (and with them, humankind)? Perhaps, but the problem is more complex than that. An authoritarian government is expensive - it needs a police, an army, a bureaucracy, a propaganda system, and more - all things which need resources to be maintained. In times of collapse, an authoritarian government cannot survive better than a democratic one. Right now, we are clearly moving towards more and more authoritarian forms of government, but that doesn't seem to be leading to a better management of the ecosystem. Rather, these governments seem to be more adept at sponsoring the plunder of whatever is left.

What is needed for keeping the ecosystem alive is a stable economic system, which is exactly what we don't have and we won't have in the foreseeable future. So, it looks like we have to go through collapse. Then we'll re-emerge, perhaps, wiser than before. In the meantime, we have to put up with the limits of human nature.

The Energy Transition: Too Little, Too Late

The idea of the energy transition ("energiewende" in German) originated in the 1980s and gained legislative support in Germany in 2010. The idea is good and also technically feasible. But it requires sacrifices and, at present, sacrifices are politically unthinkable since most people don't realize how critical the situation really is. What we are doing for the transition seems to be is too little and too late. 

So, how are we doing with the energy transition? Can we eliminate fossil fuels from the world's energy system? Can we do it before it is too late to avoid the disasters that climate change and resource depletion will bring to us if we continue with business as usual?

The debate is ongoing and it sometimes it goes out of control as in the case of the controversy between the group of Professor Jacobsen at and that of Professor Clack which even generated a lawsuit for slander. In general, the debate is based on qualitative considerations: on one side we see plenty of naive optimism ("let's go solar, rah, rah!"), on the other, we have pure statements of disbelief ("renewables will never be able to do this or to do that.").

But science is based on quantitative evaluations and we have plenty of data that should permit us to do better than play the game of the clash of absolutes. This is what we did, myself and my coworker Sgouris Sgouridis, in a paper that was recently published on "Biophysical Economics and Resource Quality," titled "In Support of a Physics-Based Energy Transition Planning: Sowing Our Future Energy Needs"

In our paper, we started from the Jacobson/Clack controversy and we tried to use physical considerations (not subjected to the vagaries of markets) to examine how fast we can grow renewable energy. That's constrained by several factors but, as a first consideration by the fact that we need to invest energy now in order to get energy in the future.

This is why we refer to "sowing" in the title of the paper: every farmer knows that one needs to save some of the current harvest as seed for the future one - enough for eating in the future, but not so much that one would starve. In the case of energy, it is the same. We need to invest some fossil energy for the future harvest of renewable energy, but not so much that society would collapse (it is the "Sower's Strategy").

So, we propose an approximate, but physics-based, criterion for the possible speed of growth of renewable energy production. The model provides results similar to a more detailed one that we published earlier on. Let me cite from our recent paper:

These questions can be discussed in terms of the concept of “energy yield” or “energy return” and, in particular, from the “Energy Payback Time” (EPBT), a measurement of the time necessary for a new plant to return an amount of energy equal to the amount invested for its construction. EPBT can be expressed as the ratio of the energy invested in the manufacturing of the plant divided by the yearly energy generated. From this definition, we can derive a measurement of the energy investment necessary in order to obtain a certain yearly production of energy. We perform this calculations in the reasonable assumption of a transition period T that is less than or equal to the lifetime of the renewable energy installations; in this way, we do not need to take into account plant replacement. For equal intervals of time, the energy invested is Einv(t)= Etarget (for t= T) × (EPBT/T). If we set “Etarget” as the current global production per year and we assume that we want to maintain it constant throughout the transition, then EPBT/T is the ratio of the needed yearly investments to the current yearly production. <..>

If, hypothetically, the EPBT were larger than T, the transition would be physically impossible since it would require more energy than the amount that could be produced. Instead, for T=30 years, EPBT values over ca. 5 years would require investing more than 15% of the overall energy production every year, hence making the transition extremely difficult, although not completely impossible. Conversely, values of the EPBT close to or under 1 year would make the transition relatively facile. For instance, an EPBT=1 year implies that about 3% of the world’s energy production would have to be set aside for the transition. Seen in this light, the current values of the EPBT for the most diffuse renewable energy technologies are promising. <...>

These considerations can be compared to the current situation. The nameplate renewable energy capacity that was installed in 2016 was 161 GWp (IRENA 2017). With an average capacity factor that we can assume to be roughly 0.2, it corresponds to an average power generation of 32 GW. In this case, for renewable technologies with EPBT= 3 years, the energy invested is about 100 GW, or about 0.8% of the world’s average primary power consumption, 12 TW (IEA 2016). According to these estimates, the current level of energy investments in new renewable energy is not sufficient to attain the transition within the assumed climatic and energetic constraints. <..>

With these calculations, we show that physical factors provide fundamental insight on the challenge that humankind faces: the energy transition will be neither easy nor impossible, but it will require a substantially larger rate of energy investment than the currently allocated one.  

In short, a transition that could maintain the "BAU" (business as usual) is technically feasible and physically possible if we were willing to increase of a factor of 5 (at the very least) our investments in it. Unfortunately, the trend is going in the opposite direction. The global investments in renewable energy seem to have levelled off and In 2016 were approximately at the same level as they were in 2010. Too little, too late.

Can we hope for some miracle that would increase the efficiency of clean energy technologies by a factor of 5 in a short time? Unlikely, to say the least. That's true also for the often idolized nuclear energy which is not more efficient than renewables in terms of EPBT and even more unlikely to go through rapid and revolutionary technological improvements.

So, basically, we are not making it. We are consciously choosing to go down the Seneca Cliff, even though we wouldn't need to. It is maddening to think that we are failing at the challenge not because the transition is technologically unfeasible or unaffordable, but because the transition is politically inconceivable. Increasing investments in renewable energy requires sacrifices and this is a no-no in our world.

So, what's going to happen? The fact that we won't attain the transition doesn't mean returning to Middle Ages or even to Olduvai, but that in the future not everyone, and not even a majority of people, will have as much energy as we are used to having today. The sacrifices we refuse to make now will have to be made, and much larger, in the future.

Note: our paper on "Biophysical Economics and Resource Quality" will be freely downloadable until Dec 31, 2017. After that date, ask me for a copy (ugo.bardi(geewhiz)unifi.it)

Thermodynamic model of oil depletion sparks controversy

This is a post by François-Xavier Chevallerau, a Brussels-based public policy professional who is in the process of setting up a new international think tank to support the emergence and promotion of biophysical economics in the public debate and the policy conversation. Here, he comments on the "Hill's Report" that was also discussed in a previous post on "Cassandra's Legacy." 

Guest post by François-Xavier Chevallerau

A report on the world’s oil depletion problem published several years ago by an obscure association of anonymous consulting engineers and professional project managers is suddenly coming under fierce criticism. 
 
In December 2013, an ‘association of consulting engineers and professional project managers’ calling themselves ‘The Hill’s Group‘ published a report titled ‘Depletion: A determination for the world’s petroleum reserve’. Depletion, as is well known, is the inevitable consequence of non-renewable resource extraction, and determining how this depletion will affect petroleum production has been a key focus of energy analysts and researchers for a long time.

Arriving at an estimate for the remaining extractable petroleum reserve is usually attempted by adding together the quantity of petroleum believed to be present in each field, a method which is error-prone and imprecise. The Hill’s Group’s study proposed an alternative model of oil extraction and depletion, rooted in thermodynamics – i.e. the branch of physical science that deals with the relations between all forms of energy. This model, called ‘ETP’ (Total Production Energy), is allegedly derived from the fundamental physical properties of petroleum, the first and second laws of thermodynamics, and the production history of petroleum.

The methodology used by The Hill’s Group is based on ‘exergy analysis’. Exergy in thermodynamics means ‘the maximum amount of work that can be extracted from a system’. The system being considered, in this case, is a unit of petroleum. The Hill’s Group’s study calculates the maximum amount of work that can be extracted from a unit of petroleum, using the physical properties of the crude oil in question, equations derived from studies of the First and Second Laws of thermodynamics, and the cumulative production history of petroleum. It then uses these these values to construct a mathematical model that it claims can predict the status of the world’s petroleum reserve with a much smaller margin of error than can be provided by the quantity measurement approach.

Optimistic estimates place the world’s total petroleum reserve at 4,300 billion barrels. Of that quantity the model proposed by The Hill’s Group predicts that it will only be possible to extract 1,760.5 billion barrels, or 40.9% of the total reserve. Its model suggests that petroleum’s ability to supply the energy needed to sustain its own production process is declining, that petroleum depletion is further advanced than generally assumed and that oil production will decline or even collapse much faster than commonly anticipated.

From its ETP model the Hill’s Group also derives a petroleum cost curve, which it says maps the price of petroleum since 1960 with a correlation coefficient of 0.965, making it the most accurate oil pricing model ever developed. It also says that the price of oil depends, in addition to production costs, on the amount that the end consumer can afford to pay for it, and derives from its ETP model a Maximum Consumer Price curve, representing the maximum price that the end consumer can pay over time for petroleum. It is based on the observation that the price of a unit of petroleum can not exceed the value of the economic activity that the energy it supplies to the end consumer can generate. According to the Hill’s Group, its model shows that 2012 was the energy half way point for petroleum production, i.e. it was the year when one half of the energy content of the petroleum extracted was required to produce the petroleum and its products. From then on, it says, the price of oil can only be pulled down along the descending Maximum Consumer Price curve, which it says is curtailed at $11.76/ barrel in 2020. At this point petroleum will no longer be acting as a significant energy source for the economy, and its only function will be as an energy carrier for other sources. In other words, the oil industry as we know it will disintegrate, with a myriad of negative consequences for the world economy.



The Hill’s Group’s original report was published over three years ago, and a second version was published in March 2015. It gained significant popularity and was favorably commented on many blogs and websites. All this however seems to have change, and the Hill’s Group’s ETP model is now coming under fierce criticism from various sources:

‘SK’, a professor emeritus in the department of Mechanical and Aeronautical Engineering at a Major U.S. University, delivered a strong critique of the ETP oil extraction model at peakoilbarrel.com. The fact that The Hill’s Group said that a threshold for oil markets was passed in 2012 and that oil prices would tend to go down shortly after seems to give the report a superficial credibility. But according to SK the thermodynamic analysis is incorrect and therefore any calculations and graphs based on this analysis must also be unreliable.

Spanish physicist Antonio Turiel published on his website an analysis of the theoretical basis of the ETP model (in Spanish). Applying the principles of thermodynamics to evaluate the limits of the oil’s capacity to deliver net energy to society makes sense, he says, provided it is done in a proper way. The ETP model, however, is according to him based on an incorrect use of thermodynamic theory, erroneous deductions, definitions that do not make sense from a physics point of view, deficient data processing, and ignorance of the interactions between oil production and the economy as well as other energy sources. Given these important shortcomings, he says, the ETP model cannot be used for a serious discussion of oil depletion, at least not until it is fundamentally revised and rebuilt.

Another Spanish physicist, Carlos de Castro from the University of Valladolid, also published a scathing critique of the Hill’s Group’s report (in Spanish). The physical, technological and economic foundations of the report are erroneous, he says. The Hill’s Group in fact focuses on the loss of thermal energy involved in the oil extraction process (oil moving from a high temperature reservoir to ambient temperature outside), which he says has nothing to do with the energy cost of the oil procurement process for human societies. What matters to society, he says, is not oil’s thermal energy but its chemical energy – even if this chemical energy may then be used to generate heat. The ETP model, he concludes, is not an adequate model to assess the net energy derived form petroleum extraction and its evolution.

Prof. Ugo Bardi from the University of Florence is also taking aim with the Hill’s Group’s work in a recent blog post. The Hill’s Group’s report, he says, is badly flawed. While it is true that the oil industry is in trouble, the calculations by the Hill’s group are, at best, irrelevant and probably simply plain wrong. The problem of diminishing energy returns of oil production is real, Bardi says, but the way to study it is based on the ‘life cycle analysis’ (LCA) of the process. This method takes into account entropy indirectly, in terms of heat losses, without attempting the impossible task of calculating it from textbook thermodynamic principles. By means of this method, we can understand that oil production still provides a reasonable energy return on investment (EROI). It is anyway erroneous, says Bardi, to draw conclusions regarding the economy from net energy analysis. The economy is a complex adaptative system that evolves in ways that cannot be understood in terms of mere energy return considerations.

This controversy surrounding the Hill’s Group’s report reveals some inconvenient truths that the ‘peak oil’ community now has to face. The Group’s work was widely embraced and disseminated in this community, with no or limited critical scrutiny. It indeed has an aura of scientific accuracy that comes from its use of basic thermodynamic principles and of the concept of entropy, correctly understood as the force behind the depletion problem. But behind the thermodynamic terminology, it proposes a series of assumptions, not always explicit, and of complex mathematical calculations that nobody until recently had apparently taken the time to review. As pointed out by Antonio Turiel, the Hill’s Group’s work would probably not have passed a proper peer review process in its current form.

Yet the report was widely accepted and commented in the ‘peak oil’ community. According to Ugo Bardi, this episode shows that “a report that claims to be based on thermodynamics and uses resounding words such as ‘entropy’ plays into the human tendency of believing what one wants to believe“. As many in the ‘peak oil’ community want to believe in imminent collapse and disaster, works like the Hill’s Group’s report that are perceived as providing a serious scientific basis to catastrophism are widely embraced. If the scientific basis is revealed to be not as sound as initially thought, as seems to be the case for the Hill’s Group’s work, then its embrace and dissemination can only be detrimental to the peak oil community and undermine its credibility.

Energy researchers and analysts should probably be particularly cautious and vigilant when using the concept of ‘entropy’. As pointed out by Ugo Bardi, “entropy is an important concept, but it must be correctly understood to be useful. It is no good to use it as an excuse to pander unbridled catastrophism.” The problem being, of course, that entropy cannot be correctly understood so easily. As famous scientist John von Neumann (1903-1957) once advised a colleague: “You should call it entropy (…) nobody knows what entropy really is, so in a debate you will always have the advantage.“

FXC

Another failure of scientific peer-review: a wrong paper on the energy return of photovoltaic energy

Theoretically, whatever is published in a scientific journal should go through a rigorous review process that ensures that it is correct and reliable. Unfortunately, it doesn't work that way.

If you follow the debate on renewable energy, you know how important is the question of the energy return (or EROEI) of the various sources. An EROEI lower than one would make the source - PV, wind, or whatever, an energy sink, not a source. And this is exactly what Ferruccio Ferroni and Richard Hopkirk have been claimed with a paper recently published in "Energy Policy" that arrives to results that are completely different than to those of all the other studies on the subject.

The paper by Ferroni and Hopkirk is simply wrong. You can read below a complete demolition of their arguments performed by Maury Markowitz. But, no matter how wrong is the paper - and it is wrong - this story raises some disturbing points about how scientific information is validated and diffused.


1. Any paper, no matter how bad, poorly conceived, and ultimately totally wrong, can be published in a scientific journal if the authors are persistent enough and try many times. Eventually, they will find a combination of editors and reviewers sufficiently incompetent, sloppy, or biased that they will accept it.

2. There is no way to correct the mistakes of a wrong paper once it is published. The journal will retract it only if it is possible to prove that the authors are guilty of evident fraud or plagiarism. But "simple" mistakes, things such as wrong citations, misinterpreted data, inappropriate data treatment and the like are rarely sufficient to force retraction.

3. The only way to protest against a wrong paper is to ask to the journal to publish a rebuttal. They will do that with the same degree of willingness that you feel about having a tooth pulled, but they will do that, asking also to the authors of the original paper to write a counter-rebuttal. The whole task is long, painful, and ultimately useless as it may end up giving more visibility to the initial paper.

4. Mark Twain is reported to have said that "A Lie Can Travel Halfway Around the World While the Truth Is Putting On Its Shoes". That's exactly what happens when a wrong paper sees the light in a scientific journal. It will spread fast with the people who are seeking for whatever can help them with their confirmation bias. And the rebuttals will be considered as proof of the conspiracy by the PTBs to suppress the Truth.


That's exactly what's happening with the F&H paper, gleefully paraded around as proof that photovoltaic energy is a scam and a waste of money. A rebuttal to the paper is in preparation by a group of scientists, but it will arrive late and will do little to correct the wrong information already diffused on the Web. The problem is that this information affects choices that will determine our future: we can't afford to base them on wrong studies that somehow managed to get published.

So, how did we find ourselves into this mess? Who created a scientific review system that has no quality standards, no independent quality control, no audits, no nothing? I have no idea, but it is clear that the system badly needs a serious reform.


Here is the demolition of the Ferroni and Hopkirk paper, reproduced from Markowits's blog

__________________________________________________________________

From Energy Matters by Maury Markowitz

Another PV ERoEI debacle May 17, 2016

Posted by Maury Markowitz in balonium, solar.
Tags: bolognium, solar power trackback

Your face should have this expression when you read Ferroni and Hopkirk’s paper.

A recent report by Ferroni and Hopkirk explores the energy balance of solar power, and concludes that using PV is energy negative. That is, building PV requires more energy than the panel will produce over its lifetime.
 
Claims like these pop up from time to time, and normally end up being based on definitional tricks on the part of the authors. This example is no different in that respect, but in this case they also add a liberal dose of bad data.
 
The paper is so filled with errors and omissions that’s it’s almost breathtaking. Once again, dear reader, it’s time for the deep dive.

The sincerest flattery

While googling myself (I can’t remember my URL any more than you can) I found to my delight that the name of this blog has been taken up by a pair of bloggers from Aberdeen. How I never came across this previously is something of a mystery; I guess the web is deeper than one would imagine.
 
In any event, a May 9 post by one of the authors pointed me to the paper that is the topic of the rest of this article. After stating that the topic of ERoEI is new to the blog, he goes on to note that when he came across this paper, “the findings are so stunning that I felt compelled to write this post immediately.”
 
When I come across a study in the renewables field with findings that are “stunning”, I normally hold it at arm’s length until I can run the numbers myself. That’s because the field is utterly filled with bogus information from thinly disguised coal company shills to the nuclear true believers. 

Don’t get me wrong, there’s just as much BS going the other way, from the usual suspects to the space heads, which is all the more reason to be super-skeptical. While Mr. Mearns does make some comments about the validity of certain inputs in theoretical terms, in the end, he quotes the bottom line:

Solar panels will produce only 0.83 times the amount of energy they take to produce… If correct, that means more energy is used to make the PV panels than will ever be recovered from them during their 25 year lifetime.

That’s a big “if correct.”
 
And guess what, it’s not correct.

Start bad…

So let’s get into the meat of it. The paper starts with the authors having examined 28 other papers on the topic and found they had a wide variability of Cumulative Energy Demand (CED), the amount of energy used by a product over its lifetime. They conclude that “the authors … were not following the same criteria in determining the boundaries of the PV system.”

Now getting the CED is important, because the overall energy balance, ERoEI,i s basically energy out divided by energy in. So you’re going to need to have a good value for that CED, and there’re all over the map. So their solution is to define an entirely new version – yay!
 
But now they change gears, and work on the other side of the equation, the total energy produced. 

And they attempt to do this in per-square-meter terms.
 
Now stop right there.
 
The industry, and I mean the entire power industry here, not just the renewables industry, measures everything in either per-watt or per-kilowatt-hour terms. That’s because the physical mechanisms of the generators differ wildly, but a watt is a watt, so when you convert to those terms you have a real apples-to-apples comparison.
 
Consider an example; if I tell you a hydro dam cost $2/Watt and a new wind turbine costs $1.50/W,well, there you have it. Now what if I told you that the dam cost $2 per square meter and the turbine $10? Well, does that area include the reservoir? Does the turbine include all the area around it, or just the actual footprint on the ground? See the problem? Area is tough to pin down. Dollars are not.

So why would the authors pick such an odd unit? I can’t say for sure, but in the abstract they mention something about how “solar radiation exhibits a rather low power density”. Well, sure, and that’s important why? Apparently it’s not, because it only figures in very peripherally in the calculations, and has no effect on the bottom line.
Whatever, let’s get to the numbers at hand:

The data are available in the Swiss annual energy statistics … and show an average value of 400 kW ht/m2 yr (suffix “t” means “thermal”) for the last 10 years. This is an indication of the rather low effective level of the insolation in Switzerland. … The uptake from the incoming solar radiation is converted into electrical energy by the photovoltaic effect. The conversion process is subject to the Shockley-Queisser Limit, which indicates for the silicon technology a maximum theoretical energy conversion ef- ficiency of 31%. Since the maximum measured efficiency under standard test conditions (vertical irradiation and temperature below 25 °C) is lower, at approximately 20%, the yearly energy return derived by this first method in the form of electricity gen- erated, amounts to only 80 kW he/m2 yr.

Ok, if you don’t really know much about solar power, you might not immediately see the problem with this statement. What they’re doing is a double conversion – they’re not calculating the amount of energy produced by a PV panel, they’re taking the amount of heat collected by a thermal panel, then applying a formula to convert that to expected electrical power production.

 

But that conversion is totally wrong. The Shockley-Queisser Limit doesn’t work on thermal energy, it works on the original solar energy. And no, the thermal energy is not a good proxy for the original solar energy. The main contribution to the losses in PV, the SQ limit, is wavelength, which doesn’t come into play in thermal collectors at all. And the main contributor to losses in thermal collectors is ambient temperature, which has a minor effect on PV.
 
The two are just not the same, you can’t do that.
 
But more to the point, why would they do that? Because the same source they quote for the thermal value publishes actual electrical output figures as well, which they then go on to quote:

According to the official Swiss energy statistics (Swiss Federal Office of Energy, 2015), an average for the last 10 years of 106 kWhe/m2 yr is obtained for relatively new modules.

This number is 30% higher than their calculation based on thermal, a discrepancy they don’t even try to explain.
 
Beyond that, any number that is “an average for the last 10 years” is, by definition, not talking about “relatively new modules”. Ten years ago the average panel was about 160 Watts and cost about $5.00/Wp. Today they’re around 280 Watts and cost about $0.45/Wp. The vast majority of the world’s PV was installed in the last three years, so any calculation based on data older than that is just plain wrong.

 

And even this number, 106, is significantly lower than 

I would expect given that Switzerland has fairly average insolation for mid-latitude Europe. So what’s up with that?
 
Well when I checked the cited source I found that no such number is actually reported. One can only find total output numbers and then work back from there, but the authors fail to give their calculation. And those totals  -wait for it- go back over a decade, so we’re right back to that problem again.
 
Which is all the more funny when you consider that such data is trivially available on the ‘net. Anyone who wants do to do this calculation should do what we all do; use NREL’s PVWatts. It has highly accurate weather data going back 30 years taken only from first-class sensors.
 
I typed in Zurich for the location, and selected the TMY3 data set. For the system size, I considered a typical modern 280 Watt panel at 1.6 m², or 175 W/m², and typed 0.175 into the System Size. I also changed the tilt from 20, which is good for California, to 30, which is good for Zurich. And here it is:


 
They said 106. We’re at the very first number in the paper, and they’re already off by a factor of 60% from what the industry standard tool suggests.No attempt is made to explain this, except for dismissive comments about industry calculators.

 …get worse…

Now the authors turn their attention to expected lifetime of the panels, which is needed in order to calculate the overall lifetime energy production. They do so in a rather convoluted fashion, starting by considering the amount of panels recycled in Germany:

This was 7637 t. A module of 1 m2 weighs 16 kg and 1 kWp peak rating needs 9 m2 and consequently, scaling this up, a 1 MWp module will weigh approximately 144 t.

Hmmm. A SolarWorld 280, a typical modern panel, masses 17.9 kg. That’s 17.9/1.6 = 11.2 kg/m². I really have no idea where they got their value, and they don’t include any sort of reference. A 1 MWp system using these panels would require 1 million / 280 ~= 3570 panels, or 3570 x 17.9 = 63,903 kg = 64 t. So now we’re at calculation number two, and we find they’re off by another factor of two.
 
The paper goes on to use these numbers to suggest a real lifetime is about 17 years. Now the problem is that if older panels are heavier, then the number on a per-kg basis is automatically skewed towards older panels again. Or to put it another way, if you had 10 panels from each year since 1990 and scrapped one from each year, when measured by weight it would seem that more older panels are dying.
 
And once again I’m left scratching my head why they would use this convoluted magic, when one can find real values in seconds. In fact, one of the most quoted examples is right up the road from them on the LEEE-TISO buildings. The vast majority of these panels, apparently the first grid-tie system in the world, are still running fine after almost 35 years now. They calculate the losses at 0.2 to 0.5% a year, which corresponds to a panel lifetime on the order of 60 years.

…a little more…

They then ignore their previous calculations, and use a 25 year lifetime. So apparently all of that was for nothing! And that brings us to this:

Experience has shown that, on average, efficiency and hence performance de- gradations of around 1% per year of operation must be expected (Jordan and Kurtz, 2012).

Now we go from bad to terrible. They claim this 1% number comes from a paper by Jordan and Kurtz. Well that paper is available online, and actually states the measured rate varies widely, from 0.23% to as much as 2%. And the mode among that data is between 0.4 and 0.5%, which you can see on page 4 of the paper.
 
So if the paper they quote says it is 0.5%, how do they get 1% from the same report? Because they chose the figure on the right of page 4, which includes low-quality data. And what is the difference between the two? Well, the low-quality data is:

very sensitive to several sources of error that could skew the results. Soiling, maintaining calibration and cleanliness of irradiance sensors, module baseline data (nameplate vs. flash test), and not appropriately accounting for LID are just a few major sources of data errors.

In other words, the high-quality data is based on controlled measurements, where they account for these effects and report only the actual panel degradation. In contrast, the low-quality data does not account for these issues, so it includes all sorts of external environmental effects. They fail to mention any of this, they knowingly use the bad data.

They also fail to mention that while the 1% value was indeed used by the industry in the past, they number the industry now uses is 0.5%. And that’s because a number of long-period studies demonstrated 1% was too high. In particular, a NREL study found that panels made before 2000 had a degradation rate of 0.5%, and those after 2000 fell to 0.4%. That indicates the sorts of improvement processes that continue to this day. And, of course, they have the LEEE-TISO numbers, which strongly agree with both of the sources quoted above.
Ferroni and Hopkirk then claim:

There are also other, external factors, which can reduce PV module lifetime, for instance the site, the weather and indeed climatic conditions. These aspects do not appear to have been treated in the scientific literature in connection with photovoltaic energy usage.

Oh come on! They actually talk about these factors in the paper they’re quoting! These sorts of effects are also considered in every tool that predicts output, including PVWatts. And what, do they think their weather would be any different than the LEEE-TISO install down the road from them? Ugh.

…which brings us to…

Ok so now all of this feeds into this equation:

What this does is add up all the yearly power production figures over the lifetime of the panel to produce the total energy output of the panel. And using their figures they get 2203 kWhe/m².

Ok, just for funzies, let’s run the exact same equation,but we’ll use NREL’s 30-year climatic data, and the industry-standard 0.5% degradation. That gets you 3795 kWhe/m². Almost double.
And I need to point out that I’m using industry standard numbers, and in one case, from the same paper they quote. Their result is lower simply because they have selected worst-case-scenarios for all of these numbers. Normally one would indicate this with error bars or using the mode or mean values, like I’m doing here, but they haven’t done that. They just say these numbers are correct. They aren’t.

So, now, the other side of the equation

Ok, so the authors have now developed a number for the total output of the panel, now it’s time to consider the total energy input. And that starts like this:

The average weight of a photovoltaic module is 16 kg/m2

As I noted earlier, the SolarWorld example I linked to above is 17.9 kg for 1.6 m², or 11 kg/m². I assure you this is typical, but feel free to Google “solar panel weight” if you don’t believe me. And then they go on to state:

and the weight of the support system, inverter and the balance of the system is at least 25 kg/m2

25 kg for every square meter? I’ve installed a number of crazy systems, and I can assure you, we never came even close to that. Invariably the heaviest part was the panel.

So let’s check on their sources. Well, first of all they don’t actually quote the original source for those numbers, they quote a University of Toronto thesis from 2009 where you’ll find that:

Support structures for PV panels are made from aluminum or steel, with the majority of systems using steel.

The majority use steel? Uhh, no. And the 25 kg/m² figure in there? It comes from two even earlier papers from 2007. And when I looked there, the one that did have the 25 figure was quoting that from the other, which didn’t have that number in it. I really have no idea where it comes from.

There’s only so much time we can spend on that madness. So let’s just use the power of the internet to find modern values. Check out page 6 of this fairly modern product guide to mountings, which puts the total weight of mounts and panels at 16 kg/m². If we use the modern figure of 11 kg/m² for the panel, that puts the weight of the support structure at 5 kg/m². That same guide also includes values up to 50 kg/m², but that’s for ballast on flat roofs, which are concrete blocks, not steel. This is not used on sloped roofs or ground mounts, but as it might represent as much as 15% of the market, you can factor that in as you wish.

Ok, let’s keep going.

16 kg (module) + 25 kg (balance of plant) + 3.5 kg (significant chemicals) = 44.5 kg/m2

Ok, let’s use our numbers from real sources instead: 11 + 5 + 3.5 = 19.5 kg/m²
Which brings us to:

Since the total lifetime energy return is 2203 kW he/m2, we obtain a material flow of 20.2 g per kWhe

Maybe. Or maybe it’s 19,500 / 3795 = 5.1 g/kWh? Once again, using numbers from the industry I get a number four times “better” than they do.

Now why is this important? Because that number is basically how you calculate the energy needed to make the panel and rest of the system. So much weight of steel takes so much energy to make, and so forth. So if you reduce that by four, you’re almost reducing the CED by four, right off the bat.

Show me da money!

So now the authors move onto the “use of capital.” The basic idea here is that money embodies energy, in a way. Basically everything requires energy to build and ship to you, so if you spend $1 on something, some of that is paying for that energy. So, on average, you can say that a dollar of capital has a certain average energy content, which for convenience, we’ll express in kWh.

So if we’re going to start down that road, we need to have some sort of value for how much capital we need. Here’s the relevant part:

The actual capital cost for a sample group of fully installed PV units, 2/3 roof-mounted and 1/3 free-field-mounted, in Switzerland lies at or above 1000 CHF/m2 with large cost variations of up to 30%, due principally to the uncertainty in the price develop- ments of PV modules. The NREL (National Renewable Energy Laboratory of the U.S. DOE) reports capital cost for fully installed PV units in the lower end of the price range given above. The 1000 CHF/m2 cost, translated into specific cost for installed peak power is 6000 CHF/kWp and is a result of personal experience of the authors.

Ok ok, let’s take this bit by bit. First they have a 2/3 roof and 1/3 field split. They don’t provide a source,of course. I’ve never seen numbers anything like this, and it is trivially easy to find industry values that show the opposite.

For instance, even in Germany where the majority of installs were residential, they represent only 35% of the total buildout. In the US, where the split used to be about 50/50, utility installations now far outnumber residential. Now I mention this because utility installs are ground-mount, so according to these recent sources, the total installed base should be at least the opposite of what they use in this paper.

And this is important, because the capital cost of the system is roughly double for roof mounts, especially residential. That’s because you’re installing far less panels per job, so setup and administration is a lot more on a percentage basis. And for that reason, utility scale installs are dwarfing residential these days, a move that continues to accelerate every year.

Which brings us to the second number, the actual capex value they will use from here on in. That number is 1000 CHF/m2, but that translates into 6000 CHF/kWp based on the “personal experience of the authors”?!

Really. In a peer reviewed paper, we’re being told just to take their word for it. Wow.

Well they can’t be bothered to cite their numbers, but I’ll cite mine. I will refer to the most comprehensive and up-to-date industry-measured values one can easily get, the yearly Lazard LCoE report. And that number, averaged across the western world, is found on page 11, and it is $1500/kWp for utility and $3500/kWp for residential.

Using the modern 1/3rd residential, 2/3rds commercial split, that gives us (3.5*.33)+(1.5*.66) = $2145/kWp average. Now to make a kWp of panel using those SolarWorlds, we need 1000 / 280 = 3.57 panels, and since each panel is 1.6 m², we need 3.57 x 1.6 = 5.7 m², so on a per-m² basis that’s $2145 / 5.7m² = $376 / m².

That’s less than 1/3rd the number they’re quoting, although they do so out of thin air. Even this number overestimates the contribution of residential installs moving forward. I prefer to use the utility rate as more indicative of the real capex of PV; $1500 / 5.7m² = $263 / m².

Working in a coal mine

The paper then moves onto breaking out the various components of that cost and calculating the energy value of each one. They start with labour. After quoting four year old figures, they say:

Based upon the authors’ experiences for typical local labour costs per square meter of PV module are: project management (10% of capital cost), installation (506 CHF per m2), operation for 25 years, including insurance (1.67% of capital cost per year for 25 years) and decommissioning (30% of installation). The total labour costs amount to 1175 CHF/m2.

Now in case it’s not obvious, I want to point out that all of these measurements are based on the capital cost. So if your capital cost is off, this is too. And their capex is off by a factor of three to four. Because, once again, it’s just “the authors’ experiences”.

And to make my point, consider that value in the middle, the installation costs. They’ve already said that the total capex for the system is 1100 CHF / m², and here they say that installation labour is over 500 of that, roughly half.

Really? According to these numbers, published only months ago, all soft costs put together cost around 52% of the system price. And you’ll note that number puts all-in prices at 1300 Euro, basically identical to the Lazard number at $1500 US, and, once again, 1/4 the number Ferroni and Hopkirk create out of thin air.

So for the moment, lets ignore their made-up numbers and use these industry standard ones. They calculate 505 kWhe/m² based on 1175 CHF/m² of labour. Using these figures we see that all the soft costs are 52% of 1300 Euro per kWp, or 748 CHF/kWp, or 209 kWhe/m².

But what’s another factor of two between frenemies?

And finally, in section 5.5.3, the duo calculate the energy value of the capital itself. Basically the idea here is that if you have to borrow the money (or you can flip that to opportunity cost, same thing) then you could express that in terms of panels you could have bought with that interest (so to speak). You can think of that as “lost energy” in a way…

• Using their rate of 1100 CHF/m², they get a value of 420.
• Using the industry rate above, 1300 Euro/kWp, that gets us around 120.

Show me da money (again)!

Which brings us, finally, to their totals in Table 4:

Now let’s do the exact same thing using the numbers we’ve calculated:

CED	1300
Integration	349
Labour	209
Faulty equipment	90
Capital	120
Total	2068

So basically, just considering the known-good, widely-available capex number, we’ve reduced the “energy investment” by 22%.

All of this goes back to the original claim. They claim that the ERoEI is 2203/2664 = 83%. But a whole lot of that is made up by the cost of capital, based on a bogus number. By changing that one number to the one actually measured in the field, we get 2203/2068 = ERoEI 1.06.

And if we instead insert NREL’s number for the insolation, and use the industry standard degradation, it becomes 3795/2203 = ERoEI 1.7. That’s better than fracked oil in the US.

And we haven’t even touched that CED number, which, as you can see above, is based on some rather odd numbers about system weights.

That’s not all folks…

Now we come to the issue of recycling. In the calculations in the paper, the authors consider the panels to have a 30% decommissioning fee, which is added in the labour term.

But they totally ignore the salvage value of the panels. Panels are basically glass, aluminum, some silver and some copper. People pay for these things, which is precisely why the Europeans have a recycling program for panels.

Given an average 50% energy recovery for recycling, we can reduce the CED of a 2nd generation panel to 650. Running the same calculation gets us 1419, so 2203/1419 = 1.55, or 3795/1419 = 2.7.

And if you do consider the recycling as a potential revenue stream, then the labour line is reduced by some portion of that 30%, which brings the denominator to 1340. And that gives 2203/1340 = 1.64 or 3795/1340 = 2.83.

So in the end

Consider this: the calculation they use in their paper would produce different results if the interest rate changes, the FX rate between the Yuan and Swiss Franc changes, or the price of installations continues its astonishing downward fall.

So, what exactly is this figure measuring?


It’s certainly not measuring anything like the “embedded energy content” of the panels. That wouldn’t change just because someone types a number into a Bloomberg terminal. Yet that’s precisely what happens using their calculation.
 
And finally, I need to point out the glaring fact that the authors don’t run the same calculation on any other power source. Given that sources like nuclear are far more capital intensive than PV (which is why no one is building them) their calculation of “ERoEI” is worse.

 This paper is just plain bogus. The entire methodology is based on numbers that have no physical reality (money) and the authors deliberately cherry pick data to make those numbers “prove” their point, or just make up values out of the air. All of this is glaringly obvious, and is simply yet another example of the sorts of attacks renewables face at the hands of the true believers in the nuclear field.

Some reflections on the Twilight of the Oil Age - part I

  Note: this post by Louis Arnoux is qualitatively correct in identifying the diminishing energy return of extraction as an important factor affecting the world's economy. However, the analysis of the "Hill's Group" report on which Arnoux bases his conclusions has shown serious flaws in the treatment, as discussed in this post (Feb 26 2017)

 

Guest post by Louis Arnoux

This three-part post was inspired by Ugo’s recent post concerning “Will Renewables Ever ReplaceFossils?” and recent discussions within Ugo’s discussion group on how is it that “Economists still don't get it”?  It integrates also numerous discussion and exchanges I have had with colleagues and business partners over the last three years.

Introduction

Since at least the end of 2014 there has been increasing confusions about oil prices, whether so-called “Peak Oil” has already happened, or will happen in the future and when, matters of EROI (or EROEI) values for current energy sources and for alternatives, climate change and the phantasmatic 2^oC warming limit, and concerning the feasibility of shifting rapidly to renewables or sustainable sources of energy supply.  Overall, it matters a great deal whether a reasonable time horizon to act is say 50 years, i.e. in the main the troubles that we are contemplating are taking place way past 2050, or if we are already in deep trouble and the timeframe to try and extricate ourselves is some 10 years. Answering this kind of question requires paying close attention to system boundary definitions and scrutinising all matters taken for granted.

It took over 50 years for climatologists to be heard and for politicians to reach the Paris Agreement re climate change (CC) at the close of the COP21, late last year.  As you no doubt can gather from the title, I am of the view that we do not have 50 years to agonise about oil.  In the three sections of this post I will first briefly take stock of where we are oil wise; I will then consider how this situation calls upon us to do our utter best to extricate ourselves from the current prevailing confusion and think straight about our predicament; and in the third part I will offer a few considerations concerning the near term, the next ten years – how to approach it, what cannot work and what may work, and the urgency to act, without delay.

Part II

Part III

Part 1 – Alice looking down the end of the barrel

In his recent post, Ugo contrasted the views of the Doomstead Diner's readers  with that of energy experts regarding the feasibility of replacing fossil fuels within a reasonable timeframe.  In my view, the Doomstead’s guests had a much better sense of the situation than the “experts” in Ugo’s survey.  To be blunt, along current prevailing lines we are not going to make it.  I am not just referring here to “business-as-usual” (BAU) parties holding for dear life onto fossil fuels and nukes.  I also include all current efforts at implementing alternatives and combating CC.  Here is why.   

The energy cost of system replacement

What a great number of energy technology specialists miss are the challenges of whole system replacement – moving from fossil-based to 100% sustainable over a given period of time.  Of course, the prior question concerns the necessity or otherwise of whole system replacement.  For those of us who have already concluded that this is an urgent necessity, if only due to CC, no need to discuss this matter here.  For those who maybe are not yet clear on this point, hopefully, the matter will become a lot clearer a few paragraphs down.

So coming back for now to whole system replacement, the first challenge most remain blind to is the huge energy cost of whole system replacement in terms of both the 1st principle of thermodynamics (i.e. how much net energy is required to develop and deploy a whole alternative system, while the old one has to be kept going and be progressively replaced) and also concerning the 2^nd principle (i.e. the waste heat involved in the whole system substitution process).  The implied issues are to figure out first how much total fossil primary energy is required by such a shift, in addition to what is required for ongoing BAU business and until such a time when any sustainable alternative has managed to become self-sustaining, and second to ascertain where this additional fossil energy may come from. 

The end of the Oil Age is now

If we had a whole century ahead of us to transition, it would be comparatively easy.  Unfortunately, we no longer have that leisure since the second key challenge is the remaining timeframe for whole system replacement.  What most people miss is that the rapid end of the Oil Age began in 2012 and will be over within some 10 years.  To the best of my knowledge, the most advanced material in this matter is the thermodynamic analysis of the oil industry taken as a whole system (OI) produced by The Hill's Group (THG) over the last two years or so (http://www.thehillsgroup.org). 

THG are seasoned US oil industry engineers led by B.W. Hill.  I find its analysis elegant and rock hard.  For example, one of its outputs concerns oil prices.  Over a 56 year time period, its correlation factor with historical data is 0.995.  In consequence, they began to warn in 2013 about the oil price crash that began late 2014 (see: http://www.thehillsgroup.org/depletion2_022.htm).  In what follows I rely on THG’s report and my own work.

Three figures summarise the situation we are in rather well, in my view.

Figure 1 – End Game

For purely thermodynamic reasons net energy delivered to the globalised industrial world (GIW) per barrel by the oil industry (OI) is rapidly trending to zero.  By net energy we mean here what the OI delivers to the GIW, essentially in the form of transport fuels, after the energy used by the OI for exploration, production, transport, refining and end products delivery have been deducted. 

However, things break down well before reaching “ground zero”; i.e. within 10 years the OI as we know it will have disintegrated. Actually, a number of analysts from entities like Deloitte or Chatham House, reading financial tealeaves, are progressively reaching the same kind of conclusions.[1]

The Oil Age is finishing now, not in a slow, smooth, long slide down from “Peak Oil”, but in a rapid fizzling out of net energy.  This is now combining with things like climate change and the global debt issues to generate what I call a “Perfect Storm” big enough to bring the GIW to its knees.

In an Alice world

At present, under the prevailing paradigm, there is no known way to exit from the Perfect Storm within the emerging time constraint (available time has shrunk by one order of magnitude, from 100 to 10 years).  This is where I think that Doomstead Diner's readers are guessing right.  Many readers are no doubt familiar with the so-called “Red Queen” effect illustrated in Figure 2 – to have to run fast to stay put, and even faster to be able to move forward.  The OI is fully caught in it.

Figure 2 – Stuck on a one track to nowhere

The top part of Figure 2 highlights that, due to declining net energy per barrel, the OI has to keep running faster and faster (i.e. pumping oil) to keep supplying the GIW with the net energy it requires.  What most people miss is that due to that same rapid decline of net energy/barrel towards nil, the OI can't keep “running” for much more than a few years – e.g. B.W. Hill considers that within 10 years the number of petrol stations in the US will have shrunk by 75%…  

What people also neglect, depicted in the bottom part of Figure 2, is what I call the inverse Red Queen effect (1/RQ).  Building an alternative whole system takes energy that to a large extent initially has to come from the present fossil-fuelled system.  If the shift takes place too rapidly, the net energy drain literally kills the existing BAU system.[2] The shorter the transition time the harder is the 1/RQ.  

I estimate the limit growth rate for the alternative whole system at 7% growth per year.  

In other words, current growth rates for solar and wind, well above 20% and in some cases over 60%, are not viable globally.  However, the kind of growth rates, in the order of 35%, that are required for a very short transition under the Perfect Storm time frame are even less viable – if “we” stick to the prevailing paradigm, that is.  As the last part of Figure 2 suggests, there is a way out by focusing on current huge energy waste, but presently this is the road not taken.

On the way to Olduvai

In my view, given that nearly everything within the GIW requires transport and that said transport is still about 94% dependent on oil-derived fuels, the rapid fizzling out of net energy from oil must be considered as the defining event of the 21^st century – it governs the operation of all other energy sources, as well as that of the entire GIW.  In this respect, the critical parameter to consider is not that absolute amount of oil mined (as even “peakoilers” do), such as Million barrels produced per year, but net energy from oil per head of global population, since when this gets too close to nil we must expect complete social breakdown, globally. 

The overall picture, as depicted ion Figure 3, is that of the “Mother of all Senecas” (to use Ugo’s expression).   It presents net energy from oil per head of global population.[3]  The Olduvai Gorge as a backdrop is a wink to Dr. Richard Duncan’s scenario (he used barrels of oil equivalent which was a mistake) and to stress the dire consequences if we do reach the “bottom of the Gorge” – a kind of “postmodern hunter-gatherer” fate.

Oil has been in use for thousands of year, in limited fashion at locations where it seeped naturally or where small well could be dug out by hand.  Oil sands began to be mined industrially in 1745 at Merkwiller-Pechelbronn in north east France (the birthplace of Schlumberger).  From such very modest beginnings to a peak in the early 1970s, the climb took over 220 years.  The fall back to nil will have taken about 50 years.

The amazing economic growth in the three post WWII decades was actually fuelled by a 321% growth in net energy/head.  The peak of 18GJ/head in around 1973, was actually in the order of some 40GJ/head for those who actually has access to oil at the time, i.e. the industrialised fraction of the global population.

Figure 3 – The “Mother of all Senecas”

In 2012 the OI began to use more energy per barrel in its own processes (from oil exploration to transport fuel deliveries at the petrol stations) than what it delivers net to the GIW.  We are now down below 4GJ/head and dropping fast.

This is what is now actually driving the oil prices: since 2014, through millions of trade transactions (functioning as the “invisible hand” of the markets), the reality is progressively filtering that the GIW can only afford oil prices in proportion to the amount of GDP growth that can be generated by a rapidly shrinking net energy delivered per barrel, which is no longer much.  Soon it will be nil. So oil prices are actually on a downtrend towards nil. 

To cope, the OI has been cannibalising itself since 2012.  This trend is accelerating but cannot continue for very long.  Even mainstream analysts have begun to recognise that the OI is no longer replenishing its reserves.  We have entered fire-sale times (as shown by the recent announcements by Saudi Arabia (whose main field, Ghawar, is probably over 90% depleted) to sell part of Aramco and make a rapid shift out of a near 100% dependence on oil and towards “solar”.

Given what Figure 1 to 3 depict, it should be obvious that resuming growth along BAU lines is no longer doable, that addressing CC as envisaged at the COP21 in Paris last year is not doable either, and that incurring ever more debt that can never be reimbursed is no longer a solution, not even short-term.  

Time to “pull up” and this requires a paradigm change capable of avoiding both the RQ and 1/RQ constraints.  After some 45 years of research, my colleagues and I think this is still doable.  Short of this, no, we are not going to make it, in terms of replacing fossil resources with renewable ones within the remaining timeframe, or in terms of the GIW’s survival.

Next: 

Part 2 – Enquiring into the appropriateness of the question

Part 3 – Standing slightly past the edge of the cliff

Bio: Dr Louis Arnoux is a scientist, engineer and entrepreneur committed to the development of sustainable ways of living and doing business.  His profile is available on Google+ at: https://plus.google.com/u/0/115895160299982053493/about/p/pub

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[1] See for example, Stevens, Paul, 2016, International Oil Companies: The Death of the Old Business Model, Energy, Research Paper, Energy, Environment and Resources, Chatham House; England, John W., 2016, Short of capital? Risk of underinvestment in oil and gas is amplified by competing cash priorities, Deloitte Center for Energy Solutions, Deloitte LLP.  The Bank of England recently commented: “The embattled crude oil and natural gas industry worldwide has slashed capital spending to a point below the minimum required levels to replace reserves — replacement of proved reserves in the past constituted about 80 percent of the industry’s spending; however, the industry has slashed its capital spending by a total of about 50 percent in 2015 and 2016. According to Deloitte’s new study {referred to above], this underinvestment will quickly deplete the future availability of reserves and production.”

[2] This effect is also referred to as “cannibalising”.  See for example, J. M. Pearce, 2009, Optimising Greenhouse Gas Mitigation Strategies to Suppress Energy Cannibalism, 2nd Climate Change Technology Conference, May 12-15, Hamilton, Ontario, Canada.  However, in the oil industry and more generally the mining industry, cannibalism usually refers to what companies do when there are reaching the end of exploitable reserves and cut down on maintenance, sell assets at a discount or acquires some from companies gone bankrupt, in order to try and survive a bit longer.  Presently there is much asset disposal going on in the Shale Oil and Gas patches, ditto among majors, Lukoil, BP, Shell, Chevron, etc….  Between spending cuts and assets disposal amounts involved are in the $1 to $2 trillions.

[3] This graph is based on THG’s net energy data, BP oil production data and UN demographic data.