The hidden reasons behind slow economic growth: Declining EROI, constrained net energy
It should seem obvious that it takes energy to get energy. And, when it takes more energy to get the energy we want, this usually spells higher prices since the energy inputs used cost more. Under such circumstances there is less energy left over for the rest of society to use, that is, for the non-energy gathering parts–the industrial, commercial and residential consumers of energy–than would otherwise be the case.
It shouldn’t be surprising then that as fossil fuels, which provide more than 80 percent of the power modern society uses, become more energy intensive to extract and refine, there is a growing drag on economic activity as more and more of the economy’s resources are devoted simply to getting the energy we want.
A more formal way of talking about this is Energy Return on Investment or EROI. The “energy return” is the energy we get for a particular “investment” of a unit of energy. The higher the EROI of an energy source, the cheaper it will be in both energy and financial terms–and the more energy that will be left over for the rest of society to use.
But we’ve seen a persistent decline in the EROI of U.S. oil and natural gas in the past century, a trend that is likely to be reflected elsewhere in the world as well. Here’s a summary from the abstract of a 2011 study:
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