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In 2009, in the comments to this post on The Oil Drum we stumbled upon a mine of information on the operation of the Rossing uranium mine in Namibia. The data table provided numbers for the amount of energy used on site together with the amount of uranium mined. This provided an opportunity to calculate the energy return of the mining operation. Simply put ERoEI = energy contained in the U / the energy used to mine and refine it. There are some complexities but back then I calculated an ERoEI of 1200:1 The data has been updated and fresh calculations are presented below.

First a few words about Rossing. The mine is operated by Rio Tinto, one of the world’s largest mining companies. Discovered in 1928, operations began in 1976. According to Wikipedia Rossing is the 5th largest U mine in the world. The uranium ore is mined, milled and refined at Rossing and the energy numbers here reflect energy used to go from rock to yellow cake (U3O8 inset image up top).

Figure 1 Rossing mine.

Figure 2 Location map from Rio Tinto. Rossing is by Arandis (red dot)

The performance table provides data over 5 years:

Figure 3 Performance table from Rio Tinto.

My calculations are based on 2016.

The first important number to pick out is the energy use on site: 2,528,000 GJ [1]

The second is the uranium oxide produced: 1,850,000 kg [2]

The atomic mass of U = 238 and O = 16. U3O8 = 842 amu. U/U3O8 = 714/842 = 0.848

The third important number is uranium metal produced = 1,850,000 * 0.848 = 1,568,880 kg [3]

We can now calculate the fourth important number which is energy used to mine 1 kg = 2,528,000 GJ / 1,568,880 kg = 1,611 MJ/kg [4]

…click on the above link to read the rest of the article…

Will the World Economy Continue to “Roll Along” in 2018?

January 10, 2018

Will the World Economy Continue to “Roll Along” in 2018?

Once upon a time, we worried about oil and other energy. Now, a song from 1930 seems to be appropriate:

Today, we have a surplus of oil, which we are trying to use up. That never happened before, or did it? Well, actually, it did, back around 1930. As most of us remember, that was not a pleasant time. It was during the Great Depression.

Figure 1. US ending stocks of crude oil, excluding the Strategic Petroleum Reserve. Amounts will include crude oil in pipelines and in “tank farms,” awaiting processing. Businesses normally do not hold more crude oil than they need in the immediate future, because holding this excess inventory has a cost involved. Figure produced by EIA. Amounts through early 2016.

A surplus of a major energy commodity is a sign of economic illness; the economy is not balancing itself correctly. Energy supplies are available for use, but the economy is not adequately utilizing them. It is a sign that something is seriously wrong in the economy–perhaps too much wage disparity.

Figure 3. U. S. Income Shares of Top 10% and Top 1%, Wikipedia exhibit by Piketty and Saez.

If wages are relatively equal, it is possible for even the poorest citizens of the economy to be able to buy necessary goods and services. Things like food, homes, and transportation become affordable by all. It is easy for “Demand” and “Supply” to balance out, because a very large share of the population has wages that are adequate to buy the goods and services created by the economy.

…click on the above link to read the rest of the article…

WORLD’S LARGEST OIL COMPANIES: Deep Trouble As Profits Vaporize While Debts Skyrocket

October 17, 2017

WORLD’S LARGEST OIL COMPANIES: Deep Trouble As Profits Vaporize While Debts Skyrocket

The world’s largest oil companies are in serious trouble as their balance sheets deteriorate from higher costs, falling profits and skyrocketing debt. The glory days of the highly profitable global oil companies have come to an end. All that remains now is a mere shadow of the once mighty oil industry that will be forced to continue cannibalizing itself to produce the last bit of valuable oil.

I realize my extremely unfavorable opinion of the world’s oil industry runs counter to many mainstream energy analysts, however, their belief that business, as usual, will continue for decades, is entirely unfounded. Why? Because, they do not understand the ramifications of the Falling EROI – Energy Returned On Invested, and its impact on the global economy.

For example, Chevron was able to make considerable profits in 1997 when the oil price was $19 a barrel. However, the company suffered a loss in 2016 when the price was more than double at $44 last year. And, it’s even worse than that if we compare the company’s profit to total revenues. Chevron enjoyed a $3.2 billion net income profit on revenues of $42 billion in 1997 versus a $497 million loss on total sales of $114 billion in 2016. Even though Chevron’s revenues nearly tripled in twenty years, its profit was decimated by the falling EROI.

Unfortunately, energy analysts, who are clueless to the amount of destruction taking place in the U.S. and global oil industry by the falling EROI, continue to mislead a public that is totally unprepared for what is coming. To provide a more realistic view of the disintegrating energy industry, I will provide data from seven of the largest oil companies in the world.

The World’s Major Oil Companies Debt Explode Since The 2008 Financial Crisis

…click on the above link to read the rest of the article…

Energy and Authoritarianism

September 26, 2017

Energy and Authoritarianism

Could declining world energy result in a turn toward authoritarianism by governments around the world? As we will see, there is no simple answer that applies to all countries. However, pursuing the question leads us on an illuminating journey through the labyrinth of relations between energy, economics, and politics.

The International Energy Agency and the Energy Information Administration (part of the U.S. Department of Energy) anticipate an increase in world energy supplies lasting at least until the end of this century. However, these agencies essentially just match supply forecasts to anticipated demand, which they extrapolate from past economic growth and energy usage trends. Independent analysts have been questioning this approach for years, and warn that a decline in world energy supplies—mostly resulting from depletion of fossil fuels—may be fairly imminent, possibly set to commence within the next decade.

Even before the onset of decline in gross world energy production we are probably already beginning to see a fall in per capita energy, and also net energy—energy that is actually useful to society, after subtracting the energy that is used in energy-producing activities (the building of solar panels, the drilling of oil wells, and so on). The ratio of energy returned on energy invested (EROEI) for fossil energy production has tended to fall as high-quality deposits of oil, coal, and natural gas are depleted, and as society relies more on unconventional oil and gas that require more energy for extraction, and on coal that is more deeply buried or that is of lower energy content. Further, renewable energy sources, especially if paired with needed energy storage technologies, tend to have a lower (some say much lower) EROEI than fossil fuels offered during the glory days of world economic growth after World War II. And renewables require energy up front for their manufacture, producing a net energy benefit only later on.

…click on the above link to read the rest of the article…

The Dynamics of Depletion

June 27, 2017

The Dynamics of Depletion

Paul Klee Ghost of a Genius 1922The Automatic Earth has written many articles on the topic of EROEI (Energy Return on Energy Invested) through the years, there’s a whole chapter on it in the Automatic Earth Primer Guide 2017 that Nicole assembled recently, which contains 17 different articles.

Still, since EROEI is the most important energy issue there is at present, and not the price of oil or some new gas find or a set of windmills or solar panels or thorium, it can’t hurt to repeat it once again, in someone else’s words and from someone else’s angle. This one comes from Brian Davey on his site CredoEconomics, part of his book “Credo”.

It can’t hurt to repeat it because not nearly enough people understand that in the end everything, the survival of our world, our way of life, is all about the ‘quality’ of energy, about what we get in return when we drill and pump and build infrastructure, what remains when we subtract all the energy used to ‘generate’ energy, from (or at) the bottom line.

Anno 2017, our overall ‘net energy’ is nowhere near where it was for the first 100 years or so after we started using oil. And there’s no energy source that comes close to -conventional- oil (and gas) when it comes to what we are left with once our efforts are discounted, in calories or Joules.

The upshot of this is that even if we can ‘gain’ 10 times more than we put in, in energy terms, that won’t save our complex societies. To achieve that, we would need at least a 15:1 ratio, a number straight from our friend Charlie Hall, which is probably still quite optimistic. And we simply don’t have it. Not anymore.

…click on the above link to read the rest of the article…

Joseph Tainter: The Collapse Of Complex Societies

June 26, 2017

Joseph Tainter: The Collapse Of Complex Societies

What history predicts about our future prospects

By popular demand, we welcome Joseph Tainter, USU professor and author of The Collapse Of Complex Societies (free book download here).

Dr. Tainter sees many of the same unsustainable risks the PeakProsperity.com audience focuses on — an overleveraged economy, declining net energy per capita, and depleting key resources.

He argues that the sustainability or collapse of a society follows from the success or failure of its problem-solving institutions. His work shows that societies collapse when their investments in social complexity and their energy subsidies reach a point of diminishing marginal returns. From Tainter’s perspective, we are likely already past the tipping point towards collapse but just don’t know it yet:

Sustainability requires that people have the ability and the inclination to think broadly in terms of time and space. In other words, to think broadly in a geographical sense about the world around them, as well as the state of the world as a whole. And also, to think broadly in time in terms of the near and distant future and what resources will be available to our children and our grandchildren and our great grandchildren.

One of the major problems in sustainability and in this whole question of resources and collapse is that we did not evolve as a species to have this ability to think broadly in time and space. Instead, our ancestors who lived as hunter-gatherers never confronted any challenges that required them to think beyond their locality and the near term(…)

We have developed the most complex society humanity has ever known. And we have maintained it up to this point. I have argued that technological innovation and other kinds of innovation evolve like any other aspect of complexity. The investments in research and development grow increasingly complex and reach diminishing returns.

…click on the above link to read the rest of the article…

Go Long Chain Makers

March 3, 2017

Go Long Chain Makers

Leonardo da Vinci Head of a Woman 1470s This is turning into a very rewarding series, it opens up vistas I could never have dreamed of. First, in “Not Nearly Enough Growth To Keep Growing”, I posited that peak wealth for the west, and America in particular, was sometime in the early ’70s or late ’60s of the last century.

That led to longtime Automatic Earth reader Ken Latta, who’s old enough to have been alive to see it all, writing, in “When Was America’s Peak Wealth?”, that in his view peak wealth for America was earlier, more like late ’50s to early ’60s, a carefree period for which Detroit provided the design, and the Beach Boys the soundtrack.

And I know, for those who wrote to me about this, that there’s quite a bit of myopia involved in focusing on the US, or even the western world in general, when discussing these things. But at the same time, we’re all at our best when talking about our own experiences, something this thread has made abundantly clear. That said, I would absolutely love to get a view from other parts of the world, China, Latin America, Africa, Eastern Bloc, on the same topic. I just haven’t received any yet.

What I’ve absolutely adored is how -previously- anonymous Automatic Earth readers and commenters have felt the urge to share their life experiences because of what’s been written. This happened especially after Ken’s follow-up to his initial article, “Peak American Wealth – Revisited”, which saw many of his contemporaries, as well as younger readers after I ‘poked’ them, relate their views.

Then there was distinguished emeritus professor Charles A. Hall, who took offense with neither Ken nor I including energy as an explicit factor in determining wealth. Of course he was right. I have the creeping suspicion he often is.

…click on the above link to read the rest of the article…

Not Nearly Enough Growth To Keep Growing

February 18, 2017

Not Nearly Enough Growth To Keep Growing

Jackson Pollock Shooting Star 1947

It’s amusing to see how views start to converge, at the same time that it’s tiresome to see how long that takes. It’s a good thing that more and more people ‘discover’ how and why austerity, especially in Europe, is such a losing and damaging strategy. It’s just a shame that this happens only after the horses have left the barn and the cows have come home, been fed, bathed, put on lipstick and gone back out to pasture again. Along the same lines, it’s beneficial that the recognition that for a long time economic growth has not been what ‘we’ think it should be, is spreading.

But we lost so much time that we could have used to adapt to the consequences. The stronger parties in all this, the governments, companies, richer individuals, may be wrong, but they have no reason to correct their wrongs: the system appears to work fine for them. They actually make good money because all corrections, all policies and all efforts to hide the negative effects of the gross ‘mistakes’, honest or not, made in economic and political circles are geared towards making them ‘whole’.

The faith in the absurd notion of trickle down ‘economics’ allows them to siphon off future resources from the lower rungs of society, towards themselves in the present. It will take a while for the lower rungs to figure this out. The St. Louis Fed laid it out so clearly this week that I wrote to Nicole saying ‘We’ve been vindicated by the Fed itself.’ That is, the Automatic Earth has said for many years that the peak of our wealth was sometime in the 1970’s or even late 1960’s.

…click on the above link to read the rest of the article…

What is this ‘Crisis’ of Modernity?

January 29, 2017

What is this ‘Crisis’ of Modernity?

Workmen next to the screws of the RMS Titanic at Belfast shipyard, 1911The people at Conflicts Forum, which is directed by former British diplomat and MI6 ‘ranking figure’ Alastair Crooke, sent me an unpublished article by Alastair and asked if the Automatic Earth would publish it. Since I like his work and I (re-)published two of his articles last year already, ‘End of Growth’ Sparks Wide Discontent in October 2016 and Obstacles to Trump’s ‘Growth’ Plans in November 2016, I’m happy to.His arguments here are very close to much of what the Automatic Earth has been advocating for years, both when it comes to our financial crisis and to our energy crisis. Our Primerssection is full of articles on these issues written through the years. It’s a good thing other people pick up too on topics like EROEI, and understand you can’t run our modern, complex society on ‘net energy’ as low as what we get from any of our ‘new’ energy sources. It’s just not going to happen.

Here’s Alastair:

Alastair Crooke: We have an economic crisis – centred on the persistent elusiveness of real growth, rather than just monetised debt masquerading as ‘growth’ – and a political crisis, in which even ‘Davos man’, it seems, according to their own World Economic Forum polls,is anxious; losing his faith in ‘the system’ itself, and casting around for an explanation for what is occurring, or what exactly to do about it. Klaus Schwab, the founder of the WEF at Davos remarked before this year’s session, “People have become very emotionalized, this silent fear of what the new world will bring, we have populists here and we want to listen …”.

…click on the above link to read the rest of the article…

EROEI Calculations for Solar PV Are Misleading

December 21, 2016

EROEI Calculations for Solar PV Are Misleading

The Energy Returned on Energy Invested (EROEI) concept is very frequently used in energy studies. In fact, many readers seem to think, “Of course, EROEI is what we should be looking at when comparing different types of energy. What else is important?” Unfortunately, the closer to the discussions of researchers a person gets, the more problems a person discovers. People who work with EROEI regularly say, “EROEI is a tool, but it is a blunt tool. An EROEI of 100 is good compared to an EROEI of 10. For small differences, it is not so clear.”

Because of the idiosyncrasies of how EROEI works, different researchers using EROEI analyses come to very different conclusions. This issue has recently come up in two different solar PV analyses. One author used EROEI analysis to justify scaling up of solar PV. Another author published an article in Nature Communications that claims, “A break-even between the cumulative disadvantages and benefits of photovoltaics, for both energy use and greenhouse gas emissions, occurs between 1997 and 2018, depending on photovoltaic performance and model uncertainties.”

Other EROEI researchers with whom I correspond don’t agree with these conclusions. They recognize that in complex situations, EROEI analyses cannot cover everything. Somehow, the user needs to be informed enough to realize that these omissions result in biases. Researchers need to work around these biases when coming to conclusions. They themselves do it (or try to); why can’t everyone else?

The underlying problem with EROEI calculations is that EROEI is based on a very simple model. The model works passably well in simple situations, but it was not designed to handle the complexities of intermittent renewables, such as wind and solar PV. Indirect costs, and costs that are hard to measure, tend to get left out.

…click on the above link to read the rest of the article…

How Researchers Could Miss the Real Energy Story

October 27, 2016

How Researchers Could Miss the Real Energy Story

I have been telling a fairly different energy story from most energy researchers. How could I possibly be correct? What have other researchers been missing?

The “standard” approach is to start from the amount of resources that we have of a particular type, for example, oil in the ground, and see how far these resources will go. Growing development of technology seems to allow increasing amounts of these resources to be extracted. Thus, limits seem to be farther and farther in the distance, especially if a person starts out with an optimistic bias. It is easy to get this optimistic bias, with all research funds going in the direction of, “What can we do to solve our energy problems?”

Approaches for forecasting future supply problems that start from the amount of resources in the ground suffer from the problem that it is hard to draw a sharp line regarding when we will run into difficulties. It is clear that at some point, there will be a problem–EROEI (Energy Return on Energy Investment) will be too low–but exactly whenis hard to pinpoint. If a person starts from an optimistic viewpoint, it is easy to assume that as long as Energy Output is greater than Energy Input for a given process, that process must be helpful for solving our energy problem.

In fact, in my opinion, the story is very different. The very thing that should be saving us–technology–has side effects that bring the whole system down.

The only way we can keep adding technology is by adding more capital goods, more specialization, and more advanced education for selected members of society. The problem, as we should know from research regarding historical economies that have collapsed, is that more complexity ultimately leads to collapse because it leads to huge wage disparity. (See Tainter; Turchin and Nefedov.)

…click on the above link to read the rest of the article…

The Global Oil Supply: Implications for Biodiversity?

November 1, 2015

The Global Oil Supply: Implications for Biodiversity?

The following is an overview of my recent lecture to the Linnean Society of London, which is named in honour of Carl Linneus, who among many other accolades has been described as “The father of modern taxonomy”, and is also considered as one of the founders of modern ecology. It is the world’s oldest active society for the biological and environmental sciences, and the roll call of its Fellows includes such great names as Charles Darwin and Alfred Russel Wallace.

The lecture itself can be viewed here: https://vimeo.com/143163653

The link between the global oil supply and biodiversity is not directly causal; rather, the two are elements of a broader and more integrated picture. Of the energy used by humans on Earth, crude oil represents the lion’s share (33%), followed closely by coal (30%), with gas in third place at 24%. Traversing the gamut of energy sources, we find nuclear energy (4%) and hydro-power (7%), with renewable energy (wind and solar) entering the final furlong at just above 2% of total energy use, meaning that around 88% of our energy is furnished by the fossil fuels. 100 years ago, oil could be produced at an EROEI of 100, while this is now nearer to 17 as a global average, and falling, as unconventional oil sources increasingly make up for the decline in conventional production. So it’s becoming increasingly harder to maintain the oil flow into global civilization.

The Global Oil Supply.

We produce around 30 billion barrels of oil every year, which is absolutely staggering, and depending on exactly what you count as oil, this works out to 84 million barrels a day, or about 1,000 barrels every second. The major producers are Saudi Arabia and Russia, who between them produce around one quarter of the world’s oil supply….click on the above link to read the rest of the article…

The Boundaries and Future of Solution Space – Part 3

August 17, 2015

The Boundaries and Future of Solution Space – Part 3

Energy – Demand Collapse Followed by Supply Collapse

As we have noted many times, energy is the master resource, and has been the primary driver of an expansion dating back to the beginning of the industrial revolution. In fossil fuels humanity discovered the ‘holy grail’ of energy sources – highly concentrated, reasonably easy to obtain, transportable and processable into many useful forms. Without this discovery, it is unlikely that any human empire would have exceeded the scale and technological sophistication of Rome at its height, but with it we incrementally developed the capacity to reach for the stars along an exponential growth curve.

We increased production year after year, developed uses for our energy surplus, and then embedded layer upon successive layer of structural dependency on those uses within our societies. We were living in an era of a most unusual circumstance – energy surplus on an unprecedented scale. We have come to think this is normal as it has been our experience for our whole lives, and we therefore take it for granted, but it is a profoundly anomalous and temporary state of affairs.

We have arguably reached peak production, despite a great deal of propaganda to the contrary. We still rely on the giant oil fields discovered decades ago for the majority of the oil we use today, but these fields are reaching the end of their lives and new discoveries are very small in comparison. We are producing from previous finds on a grand scale, but failing to replace them, not through lack of effort, but from a fundamental lack of availability. Our dependence on oil in particular is tremendous, given that it underpins both the structure and function of industrial society in a myriad different ways.

…click on the above link to read the rest of the article…

Energy Economics – Crash Course Chapter 19 | Peak Prosperity

October 26, 2014

Energy Economics – Crash Course Chapter 19 | Peak Prosperity.

The central point to this latest video is this: as we’ve shown in previous chapters of the Crash Course, our global economy depends on continual growth to function. And not just any kind of growth; but exponential growth.

But in order to grow, it must receive an ever-increasing input supply of affordable energy and resources from the natural world. What I’m about to show you is a preponderance of data that indicates those inputs will just not be there in the volumes needed to supply the growth that the world economy is counting on.

In short, on top of all the debt and other economic messes we’ve made for ourselves, constraints from the natural world will increasingly place limits on economic growth in a way we haven’t had to deal with over the past century.

This is why I’m so confident in the claim that the next 20 years will be completely unlike the past 20.

So understanding the dynamics at play here is key to forecasting what the future will be like. Since energy is the master resource, that’s where we’re going to start.

…click on the above link to read the rest of the article…

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