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Everyone knows that when a potential employer makes a job offer, the salary or wage he or she proposes isn’t what you’ll be taking home. What you’ll take home is your net pay. The number the employer offers you is your gross pay, and that’s just what it says on your pay stub.
It’s not quite a perfect analogy with net energy versus gross energy. But it’s an everyday analogy that most people can understand. Net pay is what you have to pay your bills today. And, net energy is what society has in order to conduct its business (and its fun) on any given day. Net energy is what’s left after the energy sectors of the economy–oil and gas, coal, nuclear, hydroelectric, renewable energy industries, and farming which provides food for human and animal energy and crops for biofuels–expend the energy they must to extract energy from the environment and then sell the surplus to the rest of us.
We don’t often think of these sectors of the economy because for most people they are out of sight and therefore out of mind. And, until the last decade food and energy have been so consistently cheap in the last 60 years or so, that few people ever paused to ponder the fact that it takes energy to get energy. And, after all, cheap energy is an indication that it takes very little energy to extract huge amounts of energy from the environment. So, why worry about that?
However, as food and energy costs have risen dramatically in the last decade, the public and policymakers have begun to notice. What they don’t seem to understand is that this rise results from the fact that it is now taking significantly more energy (and therefore money) to extract the energy we desire, both from fossil fuels in the ground and farm crops on the land (yields of which are currently heavily dependent on fossil fuel inputs). An obvious symptom is that wealth is flowing into the energy-gathering sectors of the economy mentioned above. But, that means there is less wealth left for the other sectors of the economy where the vast majority of people work, at least in so-called developed countries.
Still, as costs to extract energy continue to rise for those in the energy-gathering sectors of the economy, even their profits and wages will ultimately get squeezed. Yes, everyone eventually suffers when society must use more and more energy just to get the energy it needs to allow the non-energy parts of the economy to function properly.
Since 86 percent of the energy consumed worldwide is derived from burning finite fossil fuels, we are faced with a serious dilemma. Eventually, the energy we get from these fuels will turn down–and not for the reason that most people think. The world continues to extract more gross energy in the form of oil, natural gas, and coal each year. And yet, it takes energy to find, extract, refine and deliver that energy to society. So, are we still getting more net energy from those fuels each year? No one knows the answer.
One thing is clear. Because fossil fuels are finite, one day their rate of extraction will peak and then begin an irreversible decline. When that will occur, no one can know. But, before that happens–perhaps many, many years before it happens–the net energy from fossil fuels will peak and then begin an irreversible decline.
There are clues, obvious clues, that we may be nearing a net energy peak, even as the energy companies tout new records of gross fossil fuel extraction. High prices and now shrinking profits are evident in the oil and gas industry. Executives in the linked article give many explanations for falling profits, but none of them have to do with the declining net energy from their extractive activities. And, if the executives understand the latter cause–and I’m not sure they do–announcing it would hardly boost oil company stock prices.
But the word is out now that high costs for developing new fossil fuel energy sources are finally biting into energy company profits despite continuing high prices for oil and rebounding prices for natural gas.
One way the companies are fighting the high cost of developing new resources is simply to cut back on investment. But, this could create a self-reinforcing cycle in which exploration and development cutbacks lead to supply reductions worldwide which lead to higher prices which lead to recession and thus lower demand–and finally to much lower prices which discourage exploration and development.
But, back to my answer to the question, “Are we still getting more net energy from those [fossil] fuels each year?” My answer was that nobody knows. It’s curious that in the information age no one has thought to examine this question very deeply except a few energy researchers who have been too ill-funded to gather and analyze extensive data on the subject. Charlie Hall and his students come to mind. They have gone to heroic lengths to obtain at least some data and analyze it in order to explore this question.
It is instructive that the premier energy statistics agency on the planet, the U.S. Energy Information Administration (upon which I rely heavily for accurate historical energy statistics), does not even have a category in its tables for net energy, nor any mention of it (in the sense I mean it) anywhere on its site that I can find.
The real peak then in fossil fuel energy will come not when the rate of extraction of oil or coal or natural gas peaks. As far as society is concerned, it will come when the net energy from these sources peaks and begins to decline. The fact that we won’t even be able to see this when it arrives means we’re headed for trouble already.
Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novelPrelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at email@example.com.
The state of California formally declared a drought emergency today due to a lack of winter rainfall and water reserves at only 20 percent of normal levels. This is the third year of dry conditions across California, which poses a threat to the state’s economy and environment.
In addition to concerns about having an adequate water supply for food production, Californians are worried about Gov. Brown’s plan to increase fracking as oil companies are gearing up to frack large reservoirs of unconventional shale oil in the Monterey Shale. Photo credit: National Oceanic and Atmospheric Administration
Last year was declared the driest year in recorded history in California and Gov. Jerry Brown recently described the state’s current condition as “a mega-drought.”
“The current historically dry weather is a bellwether of what is to come in California, with increasing periods of drought expected with climate change,” said Juliet Christian-Smith, climate scientist in the California office of the Union of Concerned Scientists. “Because increasing demand and drought are straining our water resources, we need to adopt policies that address both the causes and consequences of climate change.”
With the drought declaration in place, the state can ease certain environmental protections and create more flexibility within the system to allow for changes in water diversions based on critical needs. The declaration also raises public awareness about the urgent need to conserve water.
“The entire Southwest U.S. is gripped in an extended drought, including Southern California, all of which depends on flows from the Colorado River,” said Gary Wockner at Save the Colorado River Campaign. “If this is the ‘new normal’ of climate change, then we need to develop a likewise ‘new normal’ of water conservation and efficiency that also focuses on keeping our rivers—as well as our communities—healthy and thriving.”
This week, the U.S. Department of Agriculture (USDA) designated portions of 11 western and central states as primary natural disaster areas because of a drought, including 27 California counties. The disaster designation allows eligible farmers to qualify for low-interest emergency loans from the USDA.
In addition to concerns about having an adequate water supply for food production, Californians are worried about Gov. Brown’s plan to increase fracking as oil companies are gearing up to frack large reservoirs of unconventional shale oil in the Monterey Shale.
“The Governor’s drought declaration should be the final straw for fracking in the state. To frack for oil in California is to deny the facts of climate change, which tell us we have to leave this oil in the ground if we want a safe future,” said David Turnbull, campaigns director for Oil Change International and the BigOilBrown.orgcampaign. ”Our state cannot afford to waste more water digging up oil causing the very climate changes that will lead to more droughts like these in the future.”
Fracking wells generally consume between 2 and 10 million gallons of water in their lifetime. If every potential well in California identified by the U.S. Energy Information Agency were to be fracked, some 5 billion gallons of water would be required, according to Oil Change International.
“While Governor Brown cannot make it rain, he can prevent wasteful and harmful use of our water by placing an immediate moratorium on fracking and other extreme methods of oil and gas extraction,” said Adam Scow, Food & Water Watch California campaign director.