* To establish feasibility, it is necessary to include some items in the energy invested term that are normally not thought of as investments. For example, the cost of sequestering such carbon dioxide as will be produced by the energy technology under investigation should be added to the energy invested term because feasibility requires that our society be sustainable (until astronomical events intervene). In this thought experiment, the support of an alternative energy technology would be the sole concern of every citizen.

Monday, April 21, 2014

A Discussion of Planned Economies that Began on the Google Group America 2.0


1.  What I mean by a planned economy

I'm afraid I should not have referred to my version of a natural economy as a "planned economy".  Perhaps, the term "decentralized privately planned economy" almost tells the story, except what I mean by "privately" is a little odd.  I believe I have constructed a sort of syndicalism.  Regrettably, though, I have not looked at the definition of every type of non-market economy. The only role for government in this sort of natural economy is to administer the rule that each consumer use no more than 1/Nth of the total sustainable dividend of the economy (measured in emergy units) where N is the number of consumers and reproduce himself only, pass on his reproductive rights to another, or not reproduce. 

Ethan Nagler at America 2.0 wrote:


Just read up a little on the "calculation problem" defined by the Austrian
economists. As far as I understand it, their argument is not dependent on
their flawed conceptions of human nature.

It's impossible for a small number of people, no matter how intelligent, to
calculate, without price, the wants/needs/desires of millions of people
across vast distances. That's why planned economies always end up in
famine. Until you can prove that you have an algorithm for calculating
everyone's needs 100% of the time, then any other arguments for a planned
economy are futile, in my opinion.

My answer:  

I believe the Austrian economists are right; but, their result does not apply to my version of the natural economy:  


A Natural Political Economy

In Chapter 5 of On the Preservation of Species, Wayburn describes a society that has abandoned materialism, that is, a society in which Dematerialism has already taken place.  This might be tested in an intentional community despite the obstacles presented by the materialistic society in which it is embedded or throughout which it is distributed.  The community would have the following features:
1.      A give-away economy with no monetary system[1].  Each economic actor[2] notifies directly the enterprises that supply his genuine needs, which, in turn, tell him when the item or items can be picked up or will be delivered depending upon which mode has the lower emergy costs.  Clearly, delivery syndicates will need to minimize emergy by solving optimization problems – possibly of combinatorial complexity – by computer, if computers are available in the wake of Peak Oil.  Otherwise, emergy consumption is not likely to be minimized, although it may be acceptably low.  Being too poor to afford a computer for each economic actor is another case of the poor communities getting poorer; but, even in the worst case, it will not be accompanied by the rich getting richer to exacerbate the situation.  These enterprises also report the emergy values of the item or items to each economic actor and to a public servant if the community deems this necessary until people have learned the lesson of minimizing their consumption.  Thus, the economy is consumer-planned subject only to the consumer's responsibility (a) to use no more than 1/Nth of the total sustainable dividend of the economy (measured in emergy units) where N is the number of consumers and (b) to reproduce himself only, to pass on his reproductive rights to another, or not to reproduce.  Life can be made discouragingly difficult for cheaters.
2.      Local economic enterprises owned by workers in the sense of custodianship.  Decisions are made by direct vote – one worker, one vote.  It is important that worker ownership not extend beyond the premises of the plant where the work is done.  Decentralization not incorporation.  Each enterprise integrates the plans of its consumers into a total economic plan for the enterprise and notifies its suppliers accordingly.  This must be achieved with negligible energy costs, probably with a computer.  The economic actor might organize his or her personal emergy budget well in advance, also with a computer.
3.      Public servants chosen quasi-randomly, somewhat as jurors are chosen, for limited terms that cannot be followed by another such appointment.  Recall is by direct vote of all members of the community whom I call citizens for lack of a better term.  The term fractal government denotes a system of small communities wherein every citizen belongs to a local parliament that is tied in a loose federation with other such communities in similar parliaments that are tied in loose federations to other parliaments of parliaments.  This is similar to fractal structures, except that a loose federation of the world can have only a finite number of sub-levels, as does every representation of a fractal in the real world.  Among a very small number of public servants are the members of local communities who sit in the parliaments that determine public policy for the community’s eco-region, which randomly selects members of itself who make policy for a collection of eco-regions.  And so on.  Every one of these “members of parliament” is subject to immediate recall by the direct vote of the body that chose him or her.  Thus, the only permanent members of the government are the people themselves who share political power at the community level in the sense of one-person-one-vote.  Naturally, some people will have more influence than others if they are widely respected; but, they cannot convert this influence to greater wealth.  Ultimately, this arrangement should evolve into no government at all.
  
Figure 1.  Fractal

Figure 2.  Fractal Political Structure




4.      The Fundamental Principle of Neighborliness in dealing with neighboring communities, so that the dependence of economic well-being on geography is minimized.  (Wealth flows always from richer communities to poorer communities or not at all.)
5.      Defense by citizen militias if necessary.  The decision to bear arms is up to the citizens.
6.      It is recognized that the federal government is likely to suppress any effort to form an intentional community (or reform an existing community) along egalitarian lines,  i. e., with a Natural Economy, unless collapse has already commenced, in which case the federal government will no longer be able to function because the most powerful people in government will have given up in despair and will be trying to save themselves - at least Dmitry Orlov has made a good case for this in “Closing the Collapse Gap”, which compares the collapse of the Soviet Empire with the very likely collapse of the United States American Empire.
Wayburn writes, “I regret very much employing the expression ‘natural economy’ because, if you google ‘natural economy’, you get 136,000 hits, and most of them do not agree with my definition.  My paper ‘Energy in a Natural Economy’ doesn't show up until the second page.  Fortunately, the first google hit is from the article in the Wikipedia where we read, ‘Natural economy refers to a type of economy in which money is not used in the transfer of resources among people’ and ‘German economists have invented the term Naturalwirtschaft, natural economy, to describe the period prior to the invention of money.’  The definition by Karl Marx is included too, which argues against a modern capitalist interpretation – as does the article under discussion.”
There is a slightly better description in Energy in a Natural Economy, which is listed in the hyperlinked table of contents at http://dematerialism.net/demise.htm#NaturalEconomy.  It just begins to describe the Earth as a Garden as I envision it in a post-industrial, decentralized, eco-community with a steady-state economy in the wake of Peak Oil.  Such an economy should not be based on buying and selling; and, although people might still compete for importance or the recognition of their own importance by the rest of the community, they would not compete for status.  I take “status” to refer to resource dominance or the acquisition of power over other people the purpose of which is to increase personal wealth.  One could convert fame to personal wealth too, but that needn’t be the case.  I take “importance” and “recognition” to refer to the sort of fame and influence over people that most of us would like – perhaps even seek, but we do not want them for the money.  I picture a community where one can compete in a hierarchy of personal importance but not in one of personal wealth or power.  This accounts for so-called human nature, which may or may not be universal and immutable.
In a Natural Economy good citizens are trying to minimize their personal consumption.  They might even take personal pride in doing so.  Ultimately, they might welcome the animal kingdom back into the Garden, which will have become much more hospitable to nearly every species.  Some readers might find The Parable of the Shipwrecked Brothers illuminating.
The Earth as a Garden should have a number of easily-identified necessary characteristics:
1.         As in Erewhon, Samuel Butler’s version of Utopia, the manufacture of energy intensive inventions of the Twentieth and Twenty-First Centuries should not be permitted.  This does not apply to energy-saving inventions that replace inventions of earlier centuries and are immune to Jevons Paradox.  This follows from Item A of Addendum 2 of “On Capitalism”.  “Every technological ‘improvement’ results in the exchange of one set of nuisances for another.”
2.         Banking, finance, fiduciary instruments of every sort including stocks, bonds, options, and money, in short monetary systems themselves, must be rigorously excluded.  Otherwise, the economy will grow and will not be sustainable as shown in Items B and D.
3.         The necessity of reasonable equality in wealth in a steady-state economy follows from Item C.
Note 1.          In case a monetary system is required – perhaps just to determine what an equal share is – I have written a regrettably long document despite my best attempt at brevity:  See http://dematerialism.net/cc3.htm .
Note 2.         An economic actor is a member of a community who makes decisions regarding consumption for herself and any dependents.



2.  Answers to the question: Can you name a planned economy that was not a dismal failure?

          a.  Can you name one successful economy of any description?
         
          b.  Even discounting the complaints about the limited amount of consumer goods and the handling of the criminal class, that is, private profiteers, probably, planned economies have not done well; however, …

                   i.   there have not been very many,
                   ii.  most of them tried to solve the economic calculation problem mentioned by Ethan Nagler,
                   iii.  almost none of them attempted to achieve equality in a straightforward way,
                   iv.  none of them were pure democracies in the sense of Aristotle,
                   v.  none of them had a rational monetary system, that is, a method for determining economic equality,
                   vi.  none of them embraced degrowth,
                   vii.  not every form of planned economy has been tried.                                     



3.  The advisability – if  not necessity - of devising an economy without markets.  By referring to Bureau of Labor Statistics data from a time when the United States produced everything it needed domestically, I determined an upper bound on the fraction of energy that cannot be saved by eliminating markets.  See “Energy in a Natural economy”.  This thesis is strongly supported by “On the Conservation-within-Capitalism Scenario” and “Energy in a Mark II Economy”.

4.   What I expect from serious people who wish to make the best of a very bad situation:  Don’t waste your time arguing that a planned economy won’t work; get busy devising economies that will work.

5.  Schumacher’s famous list (and diagram)

Many people believe that communism is pure totalitarianism and capitalism is pure freedom and that we must choose one or the other.  The notion is sweeping the world that, since planned economies have failed, market economies represent the only hope and, indeed, the only possibility.  These are very dangerous beliefs as far as the preservation of Earth’s remaining species is concerned.  It rules out every idea that has a chance to work and makes the extinction of life on earth very likely.  No one will escape to outer space for a number of reasons chiefly related to those who won’t have that option.
If, following E. F. Schumacher [1], the famous economist, we make strict binary choices between (i) freedom and totalitarianism, (ii) market economy and planned economy, (iii) private ownership and collective or state ownership, we get, not two only, but 2 to the 3rd power or 8 pure political-economic systems.  I reject totalitarianism on humanistic, utilitarian, and aesthetic grounds and I have already shown why I reject market economies.  This leaves two pure systems: freedom-planning-private and freedom-planning-state.

Table 12-1.  Schumacher’s Chart
FREEDOM
MARKET ECONOMY
PRIVATE  OWNERSHIP
TOTALITARIANISM
MARKET ECONOMY
PRIVATE  OWNERSHIP
FREEDOM
PLANNING
PRIVATE OWNERSHIP
TOTALITARIANISM
PLANNING
PRIVATE  OWNERSHIP
FREEDOM
MARKET  ECONOMY
STATE  OWNERSHIP
TOTALITARIANISM
MARKET  ECONOMY
STATE  OWNERSHIP
FREEDOM
PLANNING
STATE  OWNERSHIP
TOTALITARIANISM
PLANNING
STATE  OWNERSHIP

I believe we are in a position, now, to reject state ownership because it leads to the concentration of power into the hands of a large, inefficient, corrupt, and tyrannical bureaucracy that appropriates an unfair portion of the wealth to itself, which, in turn, demoralizes everyone else.  The last thing a bureaucracy has in mind is to “wither away”.  I believe that the means of producing goods and providing services, including services we normally think of as government services, should be owned by the people as private individuals – but in the sense of custodianship.  Workers would own the enterprises for which they work.  One worker – one share; one share – one vote.  This sort of combination of private and collective ownership differs from ordinary ownership in that it cannot be transferred by sale; moreover, it must be forfeited by individuals who voluntarily abandon the enterprise.  Due to these and other complications we shall refer to capital as generalized private property.  [Note in proof:  As of October 3, 1993, it appears that Russia is headed toward totalitarianism, a market economy, and private ownership.]


Now, in 2014, I might want to alter the above slightly; but, I think I’ll let it stand.

Thursday, March 20, 2014

Special Characteristics [of a monetary system] Needed to Avoid Economic Collapse

This has appeared as part of two previous posts; but, it probably deserves a post of its own.

Our crisis has a physical component and an imaginary component. The physical
component comes from limitations in the quantities of land, water,
consumable energy, and the environment itself. The ecological footprint of
the human race exceeds the carrying capacity of Earth. The imaginary
component is instability in the monetary system caused by excessive debt and
excessive monetary inequality. To ameliorate the physical crisis we must
eliminate the imaginary one. I do not mean that indebtedness, poverty, and
wealth are imaginary; but, rather, that we can eliminate all three with the
application of our imaginations without affecting the physical universe.
Stabilizing our population and reducing our ecological footprint will
ultimately have a desirable effect upon the universe.

Regardless of what the people want, the owners of the country want to retain
their positions of power, privilege, and wealth. Naturally, they despise the
idea of government control of the economy and the means of production;
however, when a crisis arises that they cannot handle, they readily accede
to crisis socialism to save them. During World War II, without adopting
socialism completely, they allowed rationing, wage and price control, and
management of vital industries by government employees even if they were
paid only one dollar per year.

To respond appropriately to resource and environmental limits, we need to
establish crisis socialism. However, to eliminate debt, we need to repudiate
the US dollar; and, to eliminate inequality, we need to pay everyone the
same even if no work can be found for them to replace the inessential work
from which they were furloughed to reduce our consumption of fossil fuels
and our ecological footprint. After all, the requirement that every citizen
does useful work to get paid and the requirement that the pay should be
commensurate with the value of the work are completely imaginary. The idea
that everyone should be allowed to get as much money as he can is completely
wrong. (One of the reasons Dematerialism is right and everything else is
wrong is that any society in which it is possible for one person to acquire
more wealth than another is doomed.)

Wealth sharing is necessary and philosophically correct.

The first characteristic of the natural political economy as envisioned by this author was stated as follows in http://dematerialism.wikispaces.com/:  (Note that Proviso (b) (below) ensures that wealth sharing does not lead to population growth.) 

1. A give-away economy with no monetary system. Each economic actor¹ notifies directly the enterprises that supply his genuine needs, which, in turn, tell him when the item or items can be picked up or will be delivered depending upon which mode has the lower emergy costs. Clearly, delivery syndicates will need to minimize emergy by solving optimization problems – possibly of combinatorial complexity – by computer, if computers are available in the wake of Peak Oil. Otherwise, emergy consumption is not likely to be minimized, although it may be acceptably low. Being too poor to afford a computer for each economic actor is another case of the poor communities getting poorer; but, even in the worst case, it will not be accompanied by the rich getting richer to exacerbate the situation. These enterprises also report the emergy values of the item or items to each economic actor and to a public servant if the community deems this necessary until people have learned the lesson of minimizing their consumption. Thus, the economy is consumer-planned subject only to the consumer's responsibility (a) to use no more than 1/Nth of the total sustainable dividend of the economy (measured in emergy units) where N is the number of consumers and (b) to reproduce himself only, to pass on his reproductive rights to another, or not to reproduce. Life can be made discouragingly difficult for cheaters.

Nearly every progressive visionary includes some proivision in his plan for those in society who are unable to care for themselves.  Normally, though, this type of charity assumes that those who cannot do better for themselves deserve no more than the minimum stipend, which is assumed to permit bare survival.  Two comments on this follow:

1.  In the post-Peak Oil world, the minimum for survival is likely to to be the maximum possible equal share or very close to it.  (If there should not be enough survival shares to go around, we expect that those who are not capable will be the first to perish.)

2.  Although the world has evolved into a place where certain types of creatures are better adapted to survive and/or thrive, this is an artifact of evolution and not inherently fair or moral.  If the class of people who are most capable of doing so impose their will upon the others, this is not a moral choice and may not be defended philosophically.  To assume otherwise, requires the world to have evolved under the direction of a divine (moral) intelligence, which is nonsense.

Monday, March 3, 2014

Letter to Pedro A. Prieto for the Energy Resources Yahoo Group (including Denis Frith and Kermit Schlansker)

Hello Pedro,  (attention Denis and Kermit)

You wrote: “One of the most striking discoveries of this study was to realize that about 2/3 of the energy inputs were due to factors other than those usually considered in the conventional EROI or EPBT analyses that we gave for good at about 8-9:1”.

I want to be absolutely certain that “two-thirds of the energy inputs [measured in BTUs rather than counted like items in a list] were due to factors other than those usually considered in the conventional EROI or EPBT analyses” [that amount to about one-eighth or one-ninth of the total energy produced by the solar installation under investigation]. 

Perhaps, I had better mention to you the criticism of EROI (ERoEI) by Denis Frith in this forum.   I am interested in what your response might have been.  I know I have been critical of you and Charlie in the past; but, I have been defending all of us in an on-going debate with Denis who completely denies the usefulness of net energy measurements.  Here is my draft of a post I will try to finish speedily because of the late hour:

Denis again makes himself useful with the following comment:  (By the way, Kermit, notice that our on-going “debate” does have useful consequences.) 

As usual, Tom has an unfounded belief in recycling of materials. He does not take into account the fact that when the time comes to replace the system the supply of materials will be greatly depleted. He claims that it would not be a problem for a thousand years! He, of course, ignores the impact of friction because it spoils his delusion. He again says I am wrong yet he quotes ERoEI* >1 after saying if First Solar can capture the solar energy without hurting wild life. That is a provision not included in ERoEI*. [italics mine]  He leaves out consideration of other practical factors such as the fertile soil that is not longer able to be used for food production.

So now we have had another rant of Tom with his fallacious comments. I still look forward to sound comments from some one.

Denis

[Note added to this blog:  Notice that Denis begs the question routinely.  I don't think he knows this is a logical fallacy.]

----- Original Message -----
From: twayburn@att.net
Sent: 02/25/14 03:55 AM
To: energyresources@yahoogroups.com
Subject: Re: [energyresources] Solar Fall-out

I, too, think that First Solar should find a way to capture solar energy without hurting wildlife; but, if they had already managed to do this; and, if they had a process with ERoEI* <http://eroei.blogspot.com/> greater than 1.0, then Denis's comment would be wrong and extremely harmful. If ERoEI* were greater than 1.0, First Solar would have found a way to rebuild their installation repeatedly with only a very small stockpile of materials that could be replenished with part of the net energy returned. They could take care of Denis's other objections as well. Of course, they would begin operations with a large deficit because much of the energy cost of building the installation must be paid before a single BTU is returned; therefore, the problems would be at the beginning - not during maintenance or when it comes time to replace the aging installation. The materials of construction do not disappear with age except in such small amounts as to be unimportant for the first thousand years. They must find someone who will lend them energy to get started with. This initial loan could be paid back with interest.

Tom Wayburn, BS chemical engineering, MS mathematics, PhD chemical engineering


I need to state specifically how ERoEI* takes care of wildlife.  From http://eroei.blogspot.com/ :   

An energy technology is sustainable if and only if ERoEI* (E-R-O-E-I star) is no less than 1.0.  An entire society is sustainable if and only if the compound ERoEI* of its entire mix of energy technologies is no less than 1.0.   Early on, recognizing that a community can persist for quite a long time if most of the characteristics of ERoEI* are satisfied, we considered quasi-sustainability; that is, during a transition period between fossil fuels and renewable energy, we must tolerate some slight environmental destruction and diminution of our storehouses of essential natural resources because of the large proportion of the energy investment for most renewable energy technologies that must be paid before any energy is returned.

I think it might be useful to define "feasibility" as something different from sustainability.  For example, we might say that a renewable energy is feasible if no more characteristics of ERoEI* are relaxed than are consistent with the community standards and laws of the land currently.


Early on, I defined sustainability in terms of the phase space for the Earth: “When all is sustainable, the phase-space trajectory of the environment will be required to be periodic and close to the expected natural trajectory, that is, the trajectory we might expect without human influence. Moreover, the steady state of our population and our economy must be matched by the steady state of our storehouses of natural resources” [by which I mean the “natural resources that the process uses”.]   The requirement of periodicity is perhaps inappropriate.

However, the second of the three notes that precedes the thought experiment by which the principal energy inputs are defined [http://eroei.net/eroeistar.htm] states:

·        The price of energy should reflect the cost of preventing or repairing any changes to the environment that diminish the quality of life of mankind and other species or that compromise the sustainability of the relevant ecosystems including the magnitude of the storehouses of natural resources.  The quality of life depends upon aesthetics as well as pure material circumstances.

I have no idea what would make this clearer.


The methodology I favor accounts for most externalities by adding the computed energy cost of preventing undesirable and ensuring desirable outcomes.  For example, the incremental energy cost of building a solar installation so that animals in its environment are not harmed is added to the EI (energy-invested) term.  Since ERoEI pertains to the delivery of energy when and where it is wanted, the ratio for a location remote from the energy production facility under investigation has its EI incremented by the cost of the infrastructure necessary to so deliver it; and, if the delivery of the energy is delayed, the cost of delivering the most suitable substitute energy product is added to the EI term (while taking appropriate credit for it in the ER term).

Best regards to you and Charlie – I am counting on you.

P.S.  I have not discussed at least two of Denis's objections.  (If you can get past his insults and his habit of begging the question - in this case by referring to my comments as "fallaceous", which would be the conclusion of a valid argument to determine which of us is correct rather than the beginning of a new argument, Denis's objections are useful.)  


1.  Preserving and using soil nutrients:  Suppose the installation  is to be installed on a concrete pad.   The preparations for the foundation of the pad should include shoveling the soil to appropriate garden spots in and among the portions of the plant site borrowed by the technology.  This is consistent with multiple uses of the site for solar power, a garden, and a wildlife refuge.  

2.  Friction does not generally remove much material but whatever is removed can be filtered from used lubricants before the lubricants themselves are recycled.  This is a stationary solar collector; therefore, the recycling is particularly easy, as the cooperation of consumers is unnecessary except with respect to that part of the delivery mechanism that enters the user's space.  One way in which technological progress could manifest itself in a steady-state or shrinking economy is by permitting each successive generation of solar collection equipment to harvest the same net energy with less massive equipment thus reducing the amount that needs to be recovered somewhat, say from 99% to only 95%, provided the losses are not otherwise harmful.  Remember, unlike energy efficiency which is bounded away from 100% by the hard Carnot limit, material recovery can be as close to 100% as we are willing to expend the energy for. 

As in all the previous cases, even if the process does not realize sustainability, ERoEI* should be computed as though it did; that is, by adding the computed cost of doing these things to the energy-invested term.

Sunday, November 24, 2013

Approximation of ERoEI for nuclear energy in the US


The problem of estimating the ERoEI of nuclear energy has arisen once again.  In 2005, I read the MIT report and the University of Chicago report and, as part of a much larger project, wrote as follows:

Commentary Continued: The Nuclear Option

The positive characteristics of nuclear are easy to dwell upon if one is an exponent of growth such as John McCarthy http://www-formal.stanford.edu/jmc/index.html or the late Julian Simonhttp://www.freedomsnest.com/simjul.html.  On the other hand, they are likely to be ignored by Soft Energy zealots.
A Renewable Energy Resource
Regardless of the finiteness of uranium resources, nuclear energy must be considered renewable because of the existence of fast breeder reactors and the likelihood that their technological limitations will disappear over the coming decades.  Therefore, nuclear power should be admitted to the competition with wind, solar, biomass, and other sustainable technologies.  If there is some reason why nuclear energy is not sustainable, it has yet to be demonstrated.  (What is not sustainable is growth itself – not nuclear energy.)
The Hydrogen Economy
Suppose that we agree that the hydrogen economy means hydrogen from nuclear power installations (NPIs).  Suppose that we agree that the hydrogen economy means hydrogen from nuclear power installations (NPIs).  [However, see [http://www.phoenixprojectpac.us/user/Phoenix%20Project%20for%20America%20PAC.pdf] for a non-nuclear approach to the hydrogen economy.]  In their article “Large-Scale Production of Hydrogen by Nuclear Energy for the Hydrogen Economy” [http://web.gat.com/pubs-ext/MISCONF03/A24265.pdf], K.R. Schultz, L.C. Brown, G.E. Besenbruch, and C.J. Hamilton suggest that hydrogen can be produced with a 50% efficiency by thermal splitting of water using a Sulfur-Iodine cycle in conjunction with the Modular Helium Reactor (H2-MHR).  The efficiency of the H2-MHR bypasses the objections to using electricity as an intermediate step as discussed by Ulf Bossel, Baldur Eliasson and Gordon Taylor [http://www.oilcrash.com/articles/h2_eco.htm].  Other drawbacks of  hydrogen have been addressed by Graham Cowan in his interesting paper Boron: A Better Energy Carrier than Hydrogen?  [http://www.eagle.ca/~gcowan/Paper_for_11th_CHC.html]
Also, associated with the hydrogen economy and whatever residual industrial tasks cannot be converted to electrical power are the huge changes in our technological and industrial infrastructure associated with conversion to the use of  hydrogen for fuel.  This will involve energetically costly re-tooling for the production of different types of industrial equipment.  Although the period of amortization can be prolonged, ultimately such costs must be charged to the energy invested in nuclear energy.
The cost of liquefying hydrogen might be paid in part at least by using hydrogen to facilitate transmission of electricity through ‘high-temperature’ superconducting transmission lines that might run through the middle of liquid hydrogen pipelines.  I do not know if this is feasible nor do I have a reference for it as I have no idea if it exists outside of my own imagination.  However, I have noticed that the fractional losses of electric power listed in the reference case from Annual Energy Outlook 2005 (Early Release) (AEO2005), published by the Energy Information Administration of the US Department of Energy (DOE), are rather large so that the potential savings, at least, are documented.  (See Appendix A of AEO2005Full.pdf.)  [Note.  The term ‘high-temperature’ means that, while the temperature is still cryogenic, it is well above absolute zero.]
Energy Returned over Energy Invested (ER/EI)
If the Energy Returned by NPIs is less than the Energy Invested, nuclear energy is infeasible.  Therefore, the frequently discussed ER/EI analysis is crucial to this discussion.  Probably, the ER/EI ratio for nuclear power is less than comparable ratios for fossil fuels, which is a drawback insofar as market penetration is concerned; however, so long as it exceeds 1.0 the introduction of nuclear energy is feasible.  There are a number of factors, however, that point to the possibility that ERoEI is less than 1.0.  In particular, elsewhere in this section, a number of requirements of  NPIs are mentioned that might be easy to overlook in an analysis of ER/EI.
The identification and quantification of every component, both direct and indirect, of the energy invested in nuclear power is not a simple thing to do.  In particular, if any such study of Energy Invested includes the ancillary business expenses, including the expense of doing the very study in question, I have not seen it.  But, in the American economy, for example, the energy consumed by commerce is 22% of the total energy budget.  This is corroborated by employment statistics.  (See [http://stats.bls.gov/oes/home.htm].)
Computation of Energy Invested by multiplying the sum of capital and operating costs by the ratio of Total National Energy Budget over Gross National Product (E/GDP) tabulated by the DOE provides an approximation to the correct value that does not omit the energy consumed by commerce.  (See “Energy Flow in a Mark II Economy” [Mark-II-Economy.html].)  Using cost data from the Shultz et al. study [http://web.gat.com/pubs-ext/MISCONF03/A24265.pdf], the University of Chicago Study [http://www.nuclear.gov/reports/NuclIndustryStudy.pdf], and the MIT study [http://web.mit.edu/nuclearpower/], I computed an ER/EI ratio of 4.63.
However, it is not clear that all ancillary costs have been included, e.g., desalination of sea water, remediation of environmental change, etc.  A pro-rata share of the costs of providing and maintaining railways to carry heavy equipment, fuel, and waste, highways to transport workers, conduits to transmit electric current, pipelines to transport hydrogen, and easements through which electrical power lines and hydrogen pipelines can be run must be charged to the plant.  Some locations for NPIs are unsuitable for this necessary infrastructure, and, therefore, unsuitable for NPIs.
At the start of this exercise, I considered the notion that I might be able to determine the feasibility of nuclear by looking at the energy balance for France.  (http://www.eia.doe.gov/emeu/world/country/cntry_FR.htmlFrance produces about three quarters of her electricity from nuclear, but France has to import about half of its energy.  Is it possible that nuclear power consumes more energy than it produces?  Despite the inclination to prove the affirmative, I have not been able to determine the answer to this question by looking at the available data.  In fact, France seems to be doing rather well insofar as energy is concerned; and, therefore, is much less of a problem for the rest of the world than is the United States.
Finally, and we shall have to await a more thorough discussion of this topic, the author wonders if the cost of restoring the land and the water employed by NPIs to its pre-nuclear condition should be charged to the Energy Invested even if  there is no possibility that the land will ever be used for any other purpose than nuclear power into the foreseeable future.  Clearly, decommissioning costs must be included, but does decommissioning include restoring the land to its original condition as a beautiful, natural, wildlife habitat?  Quite frankly, I believe that it does.
Money
Although the capital costs of NPIs are sufficiently high that market penetration under the standard short-sighted micro-economic model might be prohibitively difficult, as a fraction of the projected Gross Domestic Product they are quite manageable by a society that possesses the political will to manage them as we shall see in the sequel.  The final irony might be that a capitalist-style market economy can be maintained under a centrally-planned socialist energy economy and only under such an economy.
Many people believe that the United States economy is in such bad shape, principally because of the trade deficit and the national debt, that it could not possibly support the massive spending necessary to install a hydrogen economy.  If the government continues to run a deficit, the public costs of such a project might very well multiply that deficit by a large factor.  While this may be true, it does not necessarily represent the prohibition of the Apollo Plan, so long as American workers are willing to accept government debt in the form of fiat money as payment of wages.  This study shows that capital costs are well within the capabilities of the US economy.  The results are presented as the final two computations done on the spreadsheet explained in the body of this report.
Unfortunately, nuclear facilities are operated sometimes for the personal profit of their owners, managers, and other stakeholders who might be inclined to place their personal interests ahead of other considerations such as good engineering practice and safety.  Mere prudence dictates that we be suspicious of enterprises run for profit.  Since it will require huge investments by the federal government to penetrate a market economy with current nuclear technology, the federal government might just as well own and operate whichever nuclear plants it chooses to subsidize.  The Apollo Plan amounts to some sort of Socialism; hopefully, it will not be Corporate Socialism, i.e., Fascism.  Thus, the evils of the profit motive can be avoided, but only by compromising Capitalism.  However, as critics of Socialism will be quick to attest, this does not necessarily protect society from incompetence.
Water
Nuclear Power Installations (NPIs) need fresh water.  Many experts believe that we are even closer to Peak Water than we are to Peak Oil if we are not past both.  Since some experts disagree, this must be regarded as an open question.  If fresh water is used as cooling water, it must be returned to the environment at the original temperature with all contaminants removed and all nutrients restored.  If fresh water is split to produce hydrogen, it may end up as atmospheric water only part of which will return to Earth as fresh water, in which case the losses in our fresh water supply will have to be replaced somehow.  If some of our NPIs are used to desalinate sea water, the energy expended must be subtracted from the Energy Returned in computing ERoEI.
As an example of water use by an existing nuclear power facility, nuclear Plant Hatch in Georgia withdraws an average of 57 million gallons per day from the Altamaha River and actually "consumes" 33 million gallons per day, lost primarily as water vapor, according to the U.S. Nuclear Regulatory Commission (http://www.cleanenergy.org/programs/water.cfm).  Plant Hatch, consisting of two 924 MWe reactors each with a capacity factor of 0.8453, consumes water at the rate of 3.2903 x 1011 kgs/emquad.  Thus, if every NPI in the year 2100 used water at the rate Hatch Plant did in 2000, we would need 1.1442 x 1015 kgs of water per year to satisfy the modest economic growth assumed in my Reference Case for the Conservation-within-Capitalism Scenario.  According to http://www.american.edu/TED/water.htm, we have about 3 x 1015 kilograms of renewable fresh water total.  Thus, power plants would use more than one-third of all of our renewable fresh water.  According to http://oldfraser.lexi.net/publications/critical_issues/1999/env_indic/resource_use.html, the US has 2.5 trillion cubic meters of water or 2.5 x 1015 kgs, which corroborates the previous estimate.  Also, see http://www.worldwater.org/table1.html.
Some of the energy produced can be used to desalinate sea water for reactors on our East, West, and South coasts where the population is dense and fresh water dear.  Moreover, energy from ocean waves can be used to assist desalination.  [http://www.malibuwater.com/OceanWaveEnergy.html]  Let us compute a lower bound for the energy cost of desalination of sea water to make the case against nuclear as conservative as possible.  According to Allan R. Hoffman (GlobalWater.htm), “energy requirements, exclusive of energy required for pre-treatment, brine disposal, and water transport, are: reverse osmosis: 4.7 – 5.7 kWh/m3and multi-stage flash: 23 – 27 kWh/m3”.  To establish a minimum, I shall use 4.7 kWh/m3 to obtain

i.e., an increase in Energy Invested of 1.6% of the Energy Returned, which should not present a problem.  However, if the higher value for multi-stage flash were the best one could do, the costs would soar to nearly 9% of the Energy Returned.  If the ratio of Energy Returned to Energy Invested (ERoEI) were 5.0, the energy costs would increase by 44.9% and the ERoEI would be reduced to 3.45, which would certainly be an unwelcome surcharge on nuclear power.  In addition to the costs of pre-treatment, brine disposal, and transport, the cost of desalinating water to be split into hydrogen and oxygen would have to be borne.  The cost of transport might be considerable if sea water were needed in Minneapolis, say, but the scarcity of fresh water is most acute in places much closer to the ocean.  The calculation of these additional costs shall be postponed to some future study.
Land
The final limitation upon economic growth is the area of the surface of Earth.  NPIs require a smaller fraction of Earth’s surface per unit of power generated than any of the competing technologies, namely, wind, solar, and biomass – despite the fact that solar and wind power installations can coexist with other land uses.  Even if every other obstacle to growth were removed, ultimately we should run out of space – unless some means of miniaturizing NPIs, for example, should be discovered such that the rate of increase of power density could keep pace with growth.  (If emquads per square meter increases at the same rate as emquads, we would be able to produce the energy budget of the future in the space we use now.)  Even in the unlikely event that NPIs could be stacked, a limit would be reached after which they could be stacked no further without the expenditure of more energy than an NPI can produce during its lifetime.  Also, there are limits to power density that, if none other could be found, would be set by the atomic nature of matter – although, admittedly, if the concentration of the space per unit of power were limited by atomic considerations alone, growth might continue for a very long time.  Probably, though, by the time the individual Earthling could wear an NPI strapped to his wrist like Dick Tracy wore a radio, we shall no longer be living on Earth, a situation to be deplored for other reasons as stated previously.
To return, for a moment, to more realistic considerations, the land needed for NPIs includes not just the plant sites and infrastructure for transportation and power transmission but also the space occupied by facilities for mining and enrichment, fabrication, maintenance, recycle, hydrogen compression and liquefaction, waste management, sea water desalination, fresh water remediation, and the ubiquitous office buildings that seem to be a necessary part of every enterprise engaged in the pursuit of profit.  Engineers and scientists will need workplaces; and, if I am not mistaken, the greater the complexity of our energy economy the greater the superstructure of command and control, which, in the case of nuclear, must be multiply redundant.  Moreover, many areas on the face of the Earth are not suitable for NPIs, namely, the tops of mountains, earthquake zones, crowded cities (perhaps), and, if we wish to observe the ethical treatment of animals, wildernesses, swamps, prairies, etc. – in short, any place where humans have not yet evicted animals from their natural habitats, which, for all practical purposes, amounts to saying that future nuclear installations may be placed nowhere.  Finally, it must be decided whether the space occupied by outmoded and obsolete facilities can be reused for new facilities or if it must be restored to the pristine condition in which Nature bequeathed it to us.  If the latter, the energetic costs will very likely overwhelm the Energy Returned in the ratio (or difference) represented by ERoEI, which brings me to the next point:
Danger
Quite obviously, while operating as designed, nuclear power plants do not contribute directly to Global Climate Change nor air and water pollution regardless of the effect of their ancillary facilities, e.g., mining, etc.  When nuclear facilities are operated properly, the dangers are rather minimal; nevertheless, nuclear radiation is extremely dangerous.  In addition to radiation poisoning, nuclear plants have a non-zero, but very small, probability of exploding; but, if there are many of them, the probability of explosion increases accordingly.  Admittedly, there is no physical reason why the problems associated with pollution, radiation, explosions, waste, and decommissioning cannot be solved, however they must be solved; and, to the extent that they have not yet been solved, they represent impediments to the introduction of nuclear power and the hydrogen economy, which brings us to the next topic.
Complexity
Nuclear power is the key to a much larger and complicated economy with much greater opportunities for unanticipated environmental catastrophes both because it makes a larger economy possible and because it makes a more complicated economy necessary to supply an energy budget that is growing exponentially.  Now, the economy is sufficiently complicated in 2005 that the average person must necessarily depend upon the opinions of experts to determine which public policies are in his best interests and which are not.  Moreover, experts disagree.  The average man or woman is held hostage to the complexity of the economy, and this situation is not conducive to democracy.  Soon enough, under a scenario of modest growth, this situation will be exacerbated many times over.  The interests of ordinary private individuals will be taken out of their own hands almost completely.  Presumably, a technocracy is better than a plutocracy (unless technocrats become plutocrats); but, in either case, it represents social degeneration – not progress.
[snip]


As one can see, this was written before - but just before - I began to consider ERoEI by drawing my control surface around an entire community, a community living in an Autonomous Alternative Energy District as in http://dematerialism.net/remarks.htm.  However, without repeating the earlier computation, one can take new data such as (1) the Energy Information Agency's cost per kilowatt-hour (electrical) of electricity from nuclear energy of $0.108 in 2013 from http://en.wikipedia.org/wiki/Economics_of_nuclear_power_plants; (2) the Gross Domestic Product of the United States in 2012, which is close enough to 2013 for our purposes, of 16.25 Trillion US Dollars; and (3) the Total Energy Budget of the US, which was 95.14 quads.  Thus, since most components of the energy investment contribute a corresponding component to the monetary cost, we can compute an upper bound for the ERoEI of  0.54.   Wow!  I must have made a mistake.   I haven't got time for Microsoft's equation editor; so, I had better scan a pencil calculation and include it as a jpeg.  I will place this on-line in case Google doesn't print equations or figures.  See http://eroei.net/nuclear.htm .  The actual ERoEI* must be less than this because society does not require some of the measures that would have to be taken to achieve genuine sustainability; however, the technology is infeasible as it is.


Alexander Carpenter is rather skeptical about this computation because the levelized cost represents the amount that nuclear energy would have to sold for to just break even.  I believe that the break-even price includes all obligatory payments to investors and lenders.  We don't care if the industry makes a profit or not; but, if it does make a profit, the additional energy consumption of those who earn it must be charged to the technology.  This is accounted for by the price.  The energy associated with every single component of the price including the taxes collected must be reflected appropriately in the energy investment term.
This, then, is a slightly edited version of my reply to him on the America 2.0 forum:

Rather than re-send the post I sent earlier tonight from the wrong email account, I would like to ask Alexander to take a moment to read this carefully.  Obviously, he has a great deal to contribute to this discussion; but, I am not interested in ROI.  I may not understand what GDP means nowadays; so, I will tell you what I think it means with the hope of being corrected if I am behind the times: GDP is supposed to be the sum total of  all goods and services purveyed and purchased domestically during a given year.  It is the flow of money through the economy as in Odum's famous diagram, which was first rendered when the US GDP was only 1.4 trillion USD/year.




Next, I need to be sure what the levelized cost is and how it is intended to be used.  I think that's where Alexander got the idea that I am after ROI.  I think I should use the average price to the consumer regardless of sector because this is how much money enters the economy when one kilowatt-hour of electricty is sold regardless of origin.  This was 0.1045 USD according to http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_6_a which is assumed to be a reliable source of raw historical data.  In my experience, these bureaus are staffed by serious, competent people who would rather not be pushed around by unscrupulous businessmen.  I don't think these people are much influenced by political pressure, which is exerted much farther downstream in the dissemination of data.  Are they not tenured?  I have had serious discussions with the people who supply my data and they have had a lot to teach me.  In addition, they seem to be pleased to show the general public how useful they are. It doesn't matter to us if the average price to the consumer is affected by subsidies; however, since it does not reflect things like environmental reparations that should be done but are not done, the figure I come up with delineates feasibility rather than sustainability as I defined these terms at http://eroei.blogspot.com/ in the post of August 14th, 2013.  Finally, I believe we are in agreement on the total energy budget, E.  The ratio of E to GDP is the quantity of energy flow through the economy counter-current to one USD of monetary flow. The new value of ERoEI is higher, then, by the ratio of levelized cost to the average price to the consumer or 0.108/0.1045 X 5.4 =  5.6.  This result is subject to the determination that 1 KWH(e) is really 1 KWH and not a third of a kilowatt-hour, the electric energy generated by the expenditure of 1 KWH of fuel at the conventional power plant.  I would like some input on that question.

To make absolutely clear what I mean by this technique, I illustrated it for the Mark II economy in http://dematerialism.net/Mark-II-Economy.html where it is crystal clear how each term was computed and, therefore, what it means.

Tom Wayburn, Houston, Texas



Sunday, October 20, 2013

My Websites, Blogs, and Wikis Relevant to Net Energy and ERoEI


http://eroei.blogspot.com/   This is where I say the most important things about sustainability – against all odds and in the face of strong opposition.   Sometimes my frustration shows.
http://sustainabilitymath.blogspot.com/   This has a few documents that are found elsewhere.  This was my protest regarding the people who grabbed http://sustainability.blogspot.com/
http://dematerialism.net/   This was my principal website for many years and has most of my earlier work only some of which is worth reading.
http://dematerialism.blogspot.com/   This is where I write down anything new that occurs to me, including new ways to explain the parts that few people understand.
http://dematerialism.wikispaces.com   This was a practice shot to get into the Wikipedia.  I now have a better idea of what to say.  After all, dematerialism is a limiting case.  It is on the boundary of the space of all possible political and economic systems.  It should be in the Wikipedia.
http://eroei.net/  This stuff can be found elsewhere.  Someday, I’ll make it a “quick start” guide to dematerialism.
This was excised from http://tomwayburn.net/ - a list of links to my interests on the web.  It is so little accessed that I can afford to put private messages on it, which shows one useful side of obscurity.

Sunday, August 25, 2013

Gail the Actuary almost gets it right.

 Gail the Actuary almost gets it right.
In the entry of July 11th, I commented on Gail Tverberg’s list of monetary problems that arise in connection with energy technologies.  The EROI that was already too low was computed using the methodology employed by Charles Hall.  (In his recent collaboration with Pedro Prieto, Hall added many (but not all) of the items to the energy investments necessary to determine sustainability, quasi-sustainability, or feasibility as defined in my post of August 14th.)  I include part of Gail’s article and my comments below.  

In my earlier comment, I neglected to mention that, if the monetary deficits are known, there is no reason not to convert money to energy according to the methodology mentioned in the comment and get a better estimate of ERoEI.  In case, Pedro’s methods were employed, one must be careful not to double count the energy consumed by employees to maintain their standards of living.


Now, Pedro said that he accounted for the employees; but, he did not promise that he counted the total increase in the world energy budget due to the employees being paid at all.  The energy invested term should be increased not only by the entire energy budgets of the employees but also by the increase in the energy budgets of everyone who receives any of that money when it is spent.  There are multiplication factors to aid the analyst in doing this. 
  
Indeed, the list items are of different types.  If the project is never built because funds of one type or another are not available, we can treat the item either as a hypothetical energy investment expense or a barrier.  It is not fair to charge different rents for necessary plots of ground to different instances of the same technology; therefore, land should be given a separate account and charged at the rate of insolation or wind area number or merely counted toward Maximum Renewables as I did in http://dematerialism.net/CwC.html . 

Private profit is an energy expense.   The analyst must compute the difference in the world energy budget as he did for wages.   If sustainability is under investigation, the energy costs of pollution must be reckoned as in the post of December 8th, 2012.  Otherwise, the best one can do is to determine feasibility. 

In any and every case, Gail’s conclusion is probably still correct, namely, that ERoEI is less than 1.0 and more research in energy technology must be supported.  This represents an energy burden that must be borne by the entire energy sector.


 Gail Tverberg’s List 

 Primary problems

 1.   Funds are not available to pay for fossil-fuel subsidies for renewable energy projects.
 2.   Wages consistent with financial solvency and private profit are too low.
 3.   Energy production companies, especially heavily front-loaded renewable energy production such as photovoltaic solar energy installations, need to borrow money that the credit system can no longer supply.
 4.   There are insufficient financial returns to pay taxes desperately needed by governments.

 Secondary problems 

1.  Private profit from energy production is seen as inadequate by corporations.2.  Rent cannot be paid for land used in energy production. This cost might be highest in bio-fuel operations, but it belongs to every process that harvests sunlight in real time.
3.  Insufficient funds are available to prevent pollution and mitigate its effects.  These costs are never paid unless mandated by law - if then.
4.  Energy production companies do not pay to prevent mineral depletion and degradation of soil or even try to nor do they pay fines for failure.
5.  Energy producers do not account for limitations in so-called free energy.  For example, there ought to be a cost premium charged to the process for using limited coastal or off-shore wind power sites.


Gail Tverberg, the actuary, in the article posted by Jay
Hanson, wrote, "Commenters frequently remark that such-and-such an energy source has an
Energy Return on Energy Invested <http://en.wikipedia
<http://en.wikipedia.org/wiki/Energy_returned_on_energy_invested>
.org/wiki/Energy_returned_on_energy_invested> (EROI) ratio of greater than
5:1, so must be a helpful addition to our current energy supply. My finding
that the overall energy return is already too low seems to run counter to
this belief. In this post, I will try to explain why this difference occurs.
Part of the difference is that I am looking at what our current economy
requires, not some theoretical low-level economy. Also, I don't think that
it is really feasible to create a new economic system, based on lower EROI
resources, because today's renewables are fossil-fuel based, and initially
tend to add to fossil fuel use."

It is true that alternative energy installations that employ photovoltaic
cells, for example, incur heavy energy investment expense before any energy
at all is returned. In a US-type market economy, the fossil-fuel debt that
must be incurred early in the life cycle of such an installation might never
be repaid. That is because, in a market economy, significant energy
investment expense is required just to operate the market [1]. This expense
is never recorded in conventional approaches to ERoEI analysis such as
Charlie Hall's methodology which has received widespread attention.
Moreover, the energy costs of private profit, borrowing money, paying taxes,
paying adequate wages to employees and other economic actors who make
part-time contributions to producing energy such as the energy employee's
health-care providers, auto mechanics, tax accountants, and other indirect
energy expenses at all levels, including, for instance, the appropriate
pro-rata share of the energy executive's insurance company's actuary, are
not counted. Thus, Gail - or anyone else - has no idea if EROI = 5 is
adequate or not.

In ERoEI* (pronounced "E R o E I star") as described at
http://dematerialism.net/eroeistar.htm and on my blog at
http://eroei.blogspot.com/ all of these and every other facet of energy
technology that influences sustainability and whether or not the technology
will actually be employed is considered; so, when the analysis is complete,
the analyst knows that an ERoEI* greater than 1.0 is adequate with as much
certainty as went into the collection of his raw data.


In "Energy in a Mark II <http://dematerialism.net/Mark-II-Economy.html>
Economy" I analyzed the meaning of the ratio of Total Energy Budget over
Gross Domestic Product for an entire economy, some form of which the DOE
records for every nation and every year. It might be interesting to obtain
similar ratios for each individual sector including the government and
finance sector to aid in converting Gail's monetary expenses into
appropriate energy expenses. If nothing else, we could then determine if
Gail's threshold figure of 5.0 make any sense at all.


[1] In "Energy in a Mark II
<http://dematerialism.net/Mark-II-Economy.html> Economy" I employed the
figure of 22% of the total energy budget that the US Department of Energy
(DOE) charges directly to commerce. Of course, some portion of the energy
consumed by transportation and manufacturing should be charged to commerce
and finance as well. Moreover, if an entrepreneur extracts a large profit
from his - usually subsidized - renewable energy business and builds an
overly large house, additional energy costs should be charged to the energy
installation. This amounts to some fraction of the energy charged by the
DOE to the residential sector. In "Energy in a Natural Economy
<http://dematerialism.net/ne.htm> " I found a rough estimate of the energy
overhead of the US market economy by looking at Bureau of Labor Statistics
data.



Tom Wayburn, Houston, Texas


P.S. In the entry of July 11th of http://eroei.blogspot.com/ I wrote the
following paragraph in connection with establishing a reasonably sane
monetary system partly in response to Gail Tverberg's list (see below):



Special Characteristics [of a monetary system] Needed to Avoid Economic
Collapse

Our crisis has a physical component and an imaginary component. The physical
component comes from limitations in the quantities of land, water,
consumable energy, and the environment itself. The ecological footprint of
the human race exceeds the carrying capacity of Earth. The imaginary
component is instability in the monetary system caused by excessive debt and
excessive monetary inequality. To ameliorate the physical crisis we must
eliminate the imaginary one. I do not mean that indebtedness, poverty, and
wealth are imaginary; but, rather, that we can eliminate all three with the
application of our imaginations without affecting the physical universe.
Stabilizing our population and reducing our ecological footprint will
ultimately have a desirable effect upon the universe.

Regardless of what the people want, the owners of the country want to retain
their positions of power, privilege, and wealth. Naturally, they despise the
idea of government control of the economy and the means of production;
however, when a crisis arises that they cannot handle, they readily accede
to crisis socialism to save them. During World War II, without adopting
socialism completely, they allowed rationing, wage and price control, and
management of vital industries by government employees even if they were
paid only one dollar per year.

To respond appropriately to resource and environmental limits, we need to
establish crisis socialism. However, to eliminate debt, we need to repudiate
the US dollar; and, to eliminate inequality, we need to pay everyone the
same even if no work can be found for them to replace the inessential work
from which they were furloughed to reduce our consumption of fossil fuels
and our ecological footprint. After all, the requirement that every citizen
does useful work to get paid and the requirement that the pay should be
commensurate with the value of the work are completely imaginary. The idea
that everyone should be allowed to get as much money as he can is completely
wrong. (One of the reasons Dematerialism is right and everything else is
wrong is that any society in which it is possible for one person to acquire
more wealth than another is doomed.)



*Adequate Return for All Elements Required for Energy Investment*


In order to extract oil or create biofuels, or to make any other type of
energy investment, at least four distinct elements described in Figure
1: (1) adequate payback on energy invested, (2) sufficient wages for
humans, (3) sufficient credit availability and (4) sufficient funds for
government services. If any of these is lacking, the whole system has a
tendency to seize up.

EROI analyses tend to look primarily at the first item on the list,
comparing "energy available to society" as the result of a given process
to "energy required for extraction" (all in units of energy). While this
comparison can be helpful for some purposes, it seems to me that we
should also be looking at whether the*dollars collected*at the
end-product level are sufficient to provide*an adequate financial return
to meet the financial needs of all four areas*simultaneously.

My list of the four distinct elements necessary to enable energy
extraction and to keep the economy functioning is really an abbreviated
list. Clearly one needs other items, such as profits for businesses. In
a sense, the whole world economy is an energy delivery system. This is
why it is important to understand what the system needs to function
properly.

More here

http://www.theoildr <http://www.theoildrum.com/node/10052> um.com/node/10052

http://www.theoildr <http://www.theoildrum.com/node/10052> um.com/node/10052