Biophysical Economics, Charles Hall, Collapse of Industrial Civilization, Economic Collapse, Economic Growth, Empire, Energy and the Wealth of Nations, Environmental Collapse, EROEI, Joseph Tainter, Neoclassical Economics, Peak Oil, The Elite 1%
The above video is a discussion with Dr. Charles Hall of the Dept. of the SUNY-Environmental and Forest Biology. He is the primary creator behind the concept of EROEI in the field of biophysical economics. He also cowrote the new book ”Energy and the Wealth of Nations“. I just heard about this book, but from the reviews I have read it appears to be essential reading for those concerned about a world faced with depleting energy sources and an economic system ill-suited to deal with this crisis.
Throughout the history of civilizations, economies have been based on energy inputs, whether by human slaves or oil energy slaves. The bits of paper and metal we receive for our work are only tokens representing muscle or brain output. Money is simply a token of energy exchange and has no intrinsic value of its own. Without the constant input of primary energy, a civilization’s economy ceases to function as it once did. The following comment by an engineer illustrates my point:
…Consider: A fit human being has a maximum productive energy output of about 100 watts. Such a person working for 10 hours provides 1000 watt-hours of energy, which is to say, 1 kWh. In other words, by working quite literally like a slave, a person can produce about 1kWh per day. For this we pay $0.05 to $0.25 in most parts of this country. Granted, that’s provided as electrical, not mechanical energy but my point is to illustrate the enormous gap between the energy intensity that was historically possible, and the energy intensity that we take for granted now. The extreme cheapness that makes this energy intensity possible is a product of the fact that we are using up a one-time endowment of fossilized sunlight. It is not something that can be duplicated with a renewable source.
Nor is it something that we can continue to obtain from fossil fuels for very much longer, even if we don’t care about climate change or ecosystem health. The cheapest of fuels, coal, comes with a set of fairly immediate externalized costs – if we pursue a coal-based energy system, those externalized costs will accumulate quickly enough to drag us down in fairly short order (through e.g. medical expenses). The current, temporary glut of cheap natural gas notwithstanding, other fossil fuels will not fill this need either. There may be “plenty” of oil at $100/bbl, but that abundance will not be sustained at a lower price point – again, a function of declining EROEI…
The less energy you get back from the energy you invested, the worse off you are. If a civilization is expending all its energy and resources and only getting enough fuel back to function at its current state, then it is just subsisting and cannot grow and expand in complexity. With a population that is constantly increasing, this means intractable unemployment, crumbling infrastructure, and social unrest. As Joseph Tainter has explained, a complex society such as ours gets to the point where more energy is required simply to maintain the infrastructure it’s come to depend on. Forget growing or replacing, but just maintaining the present infrastructure requires more energy than was originally spent to build it. To make matters worse, a corrupt government and myopic ruling elite don’t recognize the realities of biophysical economics. Indeed, our entire economic system operates in a make-believe world that tries to impose neoclassical theorems on finite natural systems. Just as Rome imploded from the inability to maintain its over-extended reach through its limited energy resources, so too will the U.S. repeat this mistake of depleting returns on supporting a far-flung empire built from cheap fossil fuels.