Book Review: Energy Return on Investment by Charles A. S. Hall
ENERGY RETURN ON INVESTMENT: A Unifying Principle for Biology, Economics, and Sustainability
In Energy Return on Investment, systems ecologist Charles A. S. Hall argues that to truly understand most investments, one must view them in terms of energy. This is perhaps most obvious when considering the physical survival of wild animals and human hunter-gatherers. In both these instances, the food obtained through foraging or hunting must yield more energy than was required to procure it, or starvation ensues. Another way of understanding this is by applying the concept of energy return on investment (EROI). As with the more familiar metric of return on investment (ROI), EROI is a ratio of profit–in this case, energy profit–to resources expended. It is calculated by dividing the amount of energy obtained in the course of a given activity by the resources that went into recovering that energy. A positive EROI is one above the break-even point, whereas a negative EROI is one that fails to break even.
This principle extends beyond the individual sphere to encompass entire human societies. Like the lone animal or hunter-gatherer of the previous example, a civilization must maintain a positive energy balance to survive. Most ultimately fail to do so, as evidenced by the long line of failed past civilizations. Consider the ancient Easter Islanders, whose downfall was described so well in geographer Jared Diamond’s 2005 book Collapse: How Societies Choose to Fail or Succeed. Diamond recounts how the Easter Islanders relied heavily on fish, and to catch the fish they needed wooden boats. They were depleting their wood supply faster than it could regenerate, and eventually their efforts to obtain more wood no longer yielded positive energy returns in the form of food. Now fast forward to our time and reflect on what’s happened with the EROI of our primary energy source. The oil that powers modernity once came out of the ground easily, but it now requires herculean investments of both money and energy (think offshore drilling, hydraulic fracturing and horizontal drilling) to obtain.
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