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flinkexistenceMechanics

Oct 27, 2013 (3 years and 11 months ago)

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By: Jim
MacInnes
, P.E.


Re
-
Imagining our Economic System

MSU CCED Institute March 26, 2013


Biophysical Economics:

The Science Behind Economic Growth

Photo credit:








WHAT
IS REAL ECONOMIC WEALTH
?


Money
can be printed, and created with the stroke of a
pen… or
with a keystroke.



Money and even gold has little or no intrinsic value.

So
, while money is a ‘marker’ for economic wealth, it
is not
real
economic wealth.



In 1926 Nobel Laureate, Fredrick Soddy, wrote the book
Wealth,
Virtual
Wealth and Debt
, and argued that true economic wealth is:


1. the ability to control the flows of useful energy


2. embodied energy



The Biophysical Economy


Reprinted with
the permission of SUNY ESF Systems
Ecologist, Charles A. S. Hall


The Biophysical Economy


Reprinted with the permission of SUNY ESF
Systems Ecologist, Charles A. S. Hall

Energy Conservation and

the First Law of
Thermodynamics


Thermodynamics
is a natural law that deals with the relationship
between heat, work and energy



The
First Law of Thermodynamics is about conservation of energy.
Energy can be changed from one form to another, however, it
cannot be created or destroyed.




Total Energy of a System = Work done + Waste Heat




In its simplest form: Work = Force x Distance




If we want to make something, or transport people and/or freight
we must consume useful (concentrated) energy.



Entropy and the

Second Law of
Thermodynamics


Not
only must we consume energy to make things, but we
must also consume energy to keep them in good repair.



The second law of thermodynamics is often called Entropy,
and is an important law of nature that says everything
changes over time to a higher state of disorder.



Absent energy inputs, nature’s equilibrium is disorder.



In business, Entropy is accounted for as “depreciation
expense” and we must invest “CAPEX” to keep things
maintained.



Global Warming represents the entropy bill for our fossil fuel
powered industrial revolution.



“Weather
-
related
Events on the rise”


Reprinted from Traverse
City Record Eagle
November 18, 2012


Disasters with at least
$1 billion in damage for
the period 1980


2011



Energy return on


energy invested (EROI)





Energy returned to society (100 barrels of oil)




EROI

=
-------------------------------------------------------------------------

= 100





Energy required to (1 barrel of oil)


get that Energy

EROI and Net Energy diagram for building, operating and

decommissioning a power
-
generating project.



Reprinted with the permission of Ida
Kubiszewski

and Cutler J. Cleveland, The Encyclopedia of
Earth.




EROI of various electric power generators.


Reprinted with the permission of I da
Kubiszewski

and

Cutler J. Cleveland, The Encyclopedia of Earth.

-

EROI for other energy sources: oil and gas at 11

18 to 1; corn
-
based ethanol at 0.8

1.6 to 1; and, biodiesel at 1
-
3 to 1.



Reprinted with the permission of Charles A. S. Hall

Reprinted with the permission of Charles A. S. Hall






Reprinted with the permission of David Murphy and Charles A. S. Hall

Energy consumption used to do “Work” causes


economic growth, not the converse


Energy is a limiting factor for economic growth.


“Best First” principle (low hanging fruit) and


history of diminishing EROI


Where could we get more energy to
power economic growth?


Increase the energy available from fossil fuels,
nuclear, wind, solar, etc.



Conserve energy by not doing something and
redirect the energy savings to other more
productive uses.



Invest in Energy Efficiency where we can do the
same job using less which releases energy for
other more productive uses



Emerging, non
-
OECD, economies can afford to pay more

for an incremental barrel of oil (wealth) because it offers

more incremental benefit (utility)


VW’s aero car for China:

Gas tank:
1.7 gallons

Speed:
75 mph

Mileage:
258


mpg

Selling price:
US $600


-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
1850
1860
1870
1880
1890
1900
1910
1920
1930
1940
1950
1960
1970
1980
1990
2000
2010
Annual Rate
of Change (all

petroleum liquids
)

Rate of Change (all liquids)
Linear (Rate of Change (all liquids))

Rate of Change in Global


Petroleum production


The Evidence:

Declining Growth Rate of US GDP

-15%
-10%
-5%
0%
5%
10%
15%
20%
1935
1940
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
Annual percent change

Gross domestic product
Linear (Gross domestic product)





The market will demand a new energy infrastructure based on non
-
fossil fuel
solutions.


The construction of that new infrastructure requires
not just money,
but…energy.

And that’s the very commodity in short supply.


Are we willing, in the short term, to sacrifice additional FF energy
consumption to build a new renewable energy infrastructure


effectively
steepening the decline


in order to invest in a long
-
term energy plan
?





Reprinted with permission of UCSD Physics Prof. Tom Murphy


The Energy Trap