Five Ways to Compute ERoEI

(from http://dematerialism.net/Mark-II-Economy.html)

On Sheet 4 of both spreadsheets* five different ERoEIs for each political economy and for two levels of conservation are tabulated below and to the right of DN68:

The five types of ERoEI are as follows:

1.     The energy invested (EI^o) is the direct energy overhead of the energy sector.

2.     EI¹ includes, in addition to the direct energy overhead, the indirect energy costs associated with the energy overhead of the manufacturing and transportation portions of the overhead of the energy sector but not the overhead due to commerce.
3.     EI² includes, in addition, the overhead due to the activities of commerce in connection with the sale of energy.

4.     EI³ includes, in addition, the consumption of energy associated with that portion of the salaries paid to the energy sector in excess of what they would have been if no one earned more than the workers do.  This is thought to account for over-consumption associated with profit taking in connection with the sale of energy.

5.     EI⁴ includes, in addition, the consumption of energy by the workers in the energy sector and the pro-rata shares of the energy expenses of the workers and managers in other sectors insofar as they support the energy sector.

The four political economies are as follows:

1.     The Base Case (BC) is a steady-state idealization of an American-style market economy.

2.     The No-Managers Case (NM) is a steady-state idealization of an American-style market economy with managers, presumably chosen by the workers from among themselves, who get paid the same as workers, which reduces energy consumption.  The expression No-Managers, then, is not particularly well-chosen.  I suppose this is an idealization of market communism.

3.     The No-Commerce Case (NC) is a planned economy that has a negligible energy  overhead but that has a commissar class which enjoys the same privileges as managers do in a market economy.  Perhaps it is an idealized Soviet economy.

4.     The No-Commerce-No-Managers Case (NCNM) has a give-away economy with no energy overhead and with the same income for everyone whether they work or not.  It is most like the natural economy advocated in On the Preservation of Species, “Energy in a Natural Economy”, “On the Conservation-within-Capitalism Scenario”, and “The Demise of Business as Usual” all of which are hyperlinked to http://www.dematerialism.net/.


The two levels of conservation are as follows with the second level split:

1.     Conservation Level 1 is no conservation at all or rather only such conservation measures as have been implemented in the US American economy at the present time.

2.     Conservation Level 2 is any conservation factor, ψ, less than 1.0 in the linear relations that adjust the levels of consumption of the four commodities between their values in the Base Case, which represents the US economy at the present time, and a fraction φ_i of the present value where φ_A = 0.2, φ_R = 0.3, φ_M = 0.1, and φ_T = 0.1; and that adjusts the energy overhead for each of the four sectors C, A, M, and, T between their values for the Base Case and a fraction ξ_i of the present value where ξ_C = 0.5, ξ_A = 0.1, ξ_M = 0.5, ξ_T = 0.1.

2a.     With an ERoEI^o = 21 for a fossil-fuel economy, the conservation factor ψ is reduced until the energy budget in the Base Case has been reduced to Pimentel’s value for Maximum Renewables.

2b.     With an ERoEI^o = 3 for a renewable-energy economy, the conservation factor has been reduced until the energy budget for the No-Commerce-No-Managers (NCNM) Case corresponding to the Natural Economy has been reduced to Maximum Renewables.

The final ERoEI calculations are done on Sheet 4 in the block spanned by DN48 and DR66.  The principal computations are in Columns GM through IV, the end of the spreadsheet.

*
http://dematerialism.net/Mark-II-Economy.xls  The fractions of gross income to each sector retained for salaries are equal.
http://dematerialism.net/Mark-II-Economy-CSP.xls   Constant sector population:  The percentage of the population associated with each sector remains constant throughout all computations.