by Chris Harries
The bottom line is…
It’s not hard to get a strong debate going about energy choices. Most Tasmanian citizens have a personal preference for various choices such as wind, wave, geothermal, nuclear etc, and most people have a position on the ones they don’t particularly like. 
Then there are keen enthusiasts out there who believe they have the ultimate solution to our energy future, and these people often disagree bitterly with each other.
So, who are we to believe? How do we make rational choices?
In this article I am going to try to do the impossible, introduce some rationality to our energy choices. At the end of the day, alternatives have to be realistic, not based on romantic whims or wishful thinking. The sums have to stack up.
So here is a short guide to what matters most – real energy. That is: what is the net energy return you will get from any energy resource? And how do energy choices compare? And is it actually possible to replace oil?
Why you need to know about EROEI
At this point we need to introduce a fundamental concept. It’s called the EROEI. This stands for ‘Energy Return on Energy Invested’. It’s a big mouthful, I know, but you are going to hear this term a lot in the near future so this may be as good a place as any to become familiar with it.
Firstly, let’s go back a few steps. Our present world economy was built on cheap oil, discovered mostly during the last 100 years. Although it is non-renewable, there’s lots of oil in the ground and under our sea beds. About 8 trillion barrels of it. Some of it is very easy to get. This is called ‘sweet crude’ – when a drill is sunk, up gushes the sweet crude oil. It has a sweet taste and is a fairly thin liquid that can be easily converted into all sorts of fuels and plastics and other products.
So, this is our starting point. Our present world economy – the one that provides us with nearly everything we now rely upon – was built on this foundation, this amazing product, this low-cost energy resource that was really easy to get and turn into thousands of different products, right down to the shirts on our backs! So amazing, that in the early bonanza days it used to take just one unit of energy to produce 100 units. One barrel of oil to produce one hundred barrels – what a bargain!
Our big problem now is that there’s nothing like sweet crude and there’s nothing to replace it with.
Staying with oil for a moment, after an oil well is tapped and the easy-to-get stuff stops gushing out, what’s left behind is called ‘heavy crude’. This is a thick, viscous substance that permeates the rock structures way down below. It is much harder and more costly to get out, because they have to do costly things like pump in millions of litres of water or gas to try to force the oil to the surface. Or turn tar into liquids, like they are doing on a grand scale in Canada.
What’s more, it takes a lot more energy to convert heavy crude into usable products. The upshot of all this is that the net energy return (EROEI) from older oil wells is nothing like 100 to 1. The ratio for most of oil wells is now less than 30 to 1, and dropping fast. The chart below shows this in graphic form.
(Estimating EROEI is a rather complicated job and analysts come up with differing figures. When looking at this chart it is best to focus on the shorter dark green bars, because these include all the add-on energy inputs required to refine and so forth.)
As you can see that amazing product that has provided our world, with all its extensive transport infrastructure and long distance food production, is shrinking so rapidly that it can no longer be sustained.
The situation is actually even worse. Whilst easy-to-get energy is getting harder and harder to find, energy demand is still growing quite sharply. We have a looming energy emergency. So the race is on to find alternatives…. well, the best possible substitutes, anyway.
How do the alternatives stack up?
The chart below shows the EROEI for a variety of alternative energy supplies. Again, it’s best to focus on the shorter dark green bars, because these include real factors that shouldn’t be ignored – such as decommissioning when the energy plant is retired, and so forth.
Notice that nothing compares with sweet crude – with its magnificant EROEI of 100 to 1. In each case much more effort – and also environmental disturbance – has to take place in order to get less energy than we are used to getting. (In some cases, like the US corn-to-ethanol program, the net energy return is actually negative – more energy is used to make the product than is recovered from the process. Turning coal into liquid fuels is much the same.)
In general, an EROEI has to be at least 3 to 1 in order for the process to be economically viable. You will notice that many of our choices sit barely above that threshold. Note also that in order to sustain the sort of society that we have requires an estimated EROEI of energy supply 12 to 1.
Now, before weighing up these alternatives and getting too evengelical about any one of them, there are other complicating factors to consider too:
Environmental costs: We have to consider that each energy source has its own set of environmental problems (e.g. climate pollution…nuclear wastes… birds killed by wind turbines… natural ecosystems drowned by dams), and these are difficult to assess with hard numbers. In other words, there is always a price to pay. You can click here for a broad summary. But more on this further below.
Amount of energy that’s potentially available from each resource: Some energy resources are potentially immense, such as the amount that can (theoretically) be obtained from nuclear fusion or solar power. By contrast, many of the world’s best hydro-electric sites have already been developed – more remote schemes in difficult terrain have a lower EROEI than that shown in the chart. The same applies to very difficult-to-get oil resources sitting kilometres under the ocean bed.
Cost of energy produced: Having a viable EROEI is not enough to make an energy resource economically viable or competitive. Nuclear power, for instance (once dubbed as so cheap that it wouldn’t need to be metered) has a nice positive EROEI but has been beset with so many safety and other concerns that the unit cost of production to date has been barely competitive, even when subsidised by government.
Using up precious oil supplies to produce alternative energy: To substantially replace much of the coal and oil that is now being used up would require the construction of tens of thousands of wind farms, nuclear power stations and geothermal plants, all of which require energy to manufacture and construct. And where does that energy mostly come from? You guessed it, oil and coal. Catch 22. The very act of trying to meet growing energy demand with alternative energy would gobble up much of the cheap oil energy that is still yet available. In this way, a policy to aggressively expand renewables to their maximum extent can actually worsen climate change and the peak oil problem. (This is known as ‘energy cannibalism’.)
Electricity is not the same as energy: This last one is the biggest bogey of all. The world’s immediate energy crisis is to do with oil shortages and spiralling costs of petroleum products – the stuff that is used every day to power jet airliners and cars and freight ships and to produce fertilizers and clothing and building products. You will notice that most of the energy options in the above chart are electricity products. You can’t fly a jet liner on electricity.
Now, in theory it may eventually be possible to use electricity to produce transport fuels (hydrogen) but the wholesale conversion of the world’s infrastructure and transport fleets to a different energy regime 
would take at least twenty years (and, even then, the EROEI of doing that may well be negative, and therefore not worth doing). Too little, too late.
In short, there’s no silver bullet. Nothing can go near to replacing cheap oil. The scale of the problem is so phenomenal that in order to make up for oil depletion, a huge 1 Gigawatt nuclear power plant would need to be built every single day for the next 30 years, and even then the product (electricity) would not match need (liquid fuel).
To be useful at all any energy supply has to be of a quality and availability to match real needs and this is a very complex business and the subject of many heated debates – too much to deal with here. (If you want to explore this more I have put some EROEI references at the foot of this article.)
But wait… there’s much more to the EROEI story!
We haven’t finished yet. So far I have only talked about energy supply choices, and how difficult it is to choose between them, and how none of them can really do what cheap oil has done for us.
Now let’s turn to our energy uses? How does the EROEI of these stack up?
Basically the same concept can be applied. If you invest in an item, like an energy-efficient shower head, then it is very easy to calculate the amount of energy used to produce that item and compare that figure with the amount of energy that you may save by using it. In the case of a shower head, the EROEI can be greater than 300 to 1.
The chart on the right shows the EROEI of ceiling insulation – to use just one example. Over its service life, ceiling insulation in a heated Tasmanian home will deliver vastly more energy saving than what is used to manufacture it. (Note that the 200 figure is understated, in reality the EROEI may be much greater, depending on the individual circumstance where the product is installed.)
The first thing that will jump out at you is the remarkable EROEI of energy saving technologies as compared to the EROEI of producing energy in the first place (from whatever source).
The second thing that will jump out at you is the absurdity of investing tens of thousands of dollars on supplying energy, for very low net return, without first dealing with energy wastage – the ‘low hanging fruit’.
For instance, I could choose to install solar pv panels on my roof at a whopping cost of about $10,000 (heavily subsidised by government). After two decades that product will generate an eightfold net energy return to my household – once production and installation energy inputs are taken into account – and it will take twenty years to pay for itself. By comparison, I could install an energy efficient shower head at a cost of just $30 and that product will deliver a 300 fold net energy return to my household and it will pay for itself within just six months.
The shower head wins hands down. In fact, such contrasts are so dramatic, it would have been far more cost and energy efficient for the federal government to offer efficient shower heads to all Australian households than to expend considerably more taxpayer money subsidising solar panels for a relatively small number of middle class roofs.
(The above chart compares two hot water investments. In the case of solar, the payback period would be 20 years but is partially reduced via government rebates and incentives).
A second example: the net energy return (EROEI) of a solar hot water system is ten times higher than that of a solar photovoltaic system (off grid) and five times higher than a photovoltaic system connected to grid. Yet householders blindly make many such decisions every day, sometime at great cost, without the benefit of EROEI analysis.
So, what does EROEI tell us?
EROEI analysis provides us with an absolute bottom line and also a way of comparing real energy choices.
The bottom line is as follows:
1. There’s no silver bullet. Trying to maintain a society that is dependent on huge and growing volumes of cheap energy is an utterly futile challenge. 
Our society’s energy thirst can’t be satiated, not from any combination of known energy sources. Seen from this perspective, our national obsession with energy supply choices (wind, versus nuclear, versus geothermal, etc) can be seen to be unhealthy, divisive and misdirected.
2. Knee jerk attempts to fill the ‘cheap oil’ gap with other energy supplies is worse than futile, it has the effect of giving out a signal of false hope, and thus prevents society from making the more substantial cultural and behavioural changes that we have to make in order to move toward true sustainability.
3. Hard nosed decisions do need to be made about the best mix of energy supplies that can supply the needs of a sustainable society into the long term future, but the absolute priority of government and citizens alike should be directed at 1) deep cultural changes – like the design of our cities and our consumer habits – and 2) energy saving choices, because these deliver a much better energy and financial return at much less cost and much less environmental damage – and much less raging controversy – than the various supply options offer.
4. Government energy policies should be built around rational energy analysis, with a focus on energy descent policies, not around futile attempts to maintain business-as-usual.
What about householders who wish to make sensible energy decisions?
Unfortunately not enough research has been done at this stage to supply a nice list of EROEI values for all of the hundreds of energy supply and energy saving choices that are available. The EROEIs may vary from approximately 1,000 to 1 for insulation lagging on an exposed hot water pipe to much more marginal choices, such as double glazing or electric cars.
If anybody out there can find a comprehensive list that compares the typical net energy returns on various domestic energy choices we would be very grateful: please just send us an email.
Meanwhile, Sustainable Living Tasmania is one organisation that has been championing a ‘best bang for bucks’ approach for a long time and can provide advice on the most worthy and cost-effective ways to make your home and lifestyle much more sustainable and comfortable.
Further Reading
[The background data in this article was derived from a number of sources including the pioneering work by C.J. Cleveland, H.T. Odum, Nate Hagens, Dr Charles Hall, Tom Konrad and Gail Tverberg. The numbers are illustrative, recognising that EROEI figures vary from researcher to researcher.]
Amid continuing media headlines that the US is experiencing an energy bonanza and will soon rival Saudi Arabia in production of hydrocarbons, it is somewhat disturbing how many people are reading those pointed headlines at face value, some even questioning whether oil depletion is a problem after all. 
