Gross Inefficiencies
While our lifestyles are now under severe threat, for every $100 we spend on transport, energy and/or communications, we waste roughly $80 in the form of waste heat. On the whole, our systems are less than 20% energy efficient. We are literally burning our money, and worse, we are allowing others to burn it for us. Things have to change…
Peak Oil: Global yearly supplies of conventional oil peaked in 2005. Supplies of all forms of oil (conventional or not) and natural gas are expected to peak around 2011.
After this, supplies are expected to decline by 2% to 3% per year. More importantly, yearly hydrocarbon supplies (oil and gas) per head of global population, peaked 28 years ago in 1979 at around 8 barrels (bbl)/head/year. Supplies are now at around 7 bbl/head/year and decreasing.
Discoveries have been in sharp decline since the 1960s. Global reserves are declining while global demand is fast increasing. High prices, high price volatility, and frequent random supply disruptions are considered unavoidable within less than 5 years (IEA July 2007 Report). Fossil hydrocarbons are now too precious to burn. Things have to change…
Energy Return on Energy Investment - EROI.
A basic accounting concept applied to how much energy it costs to get energy. What matters is to earn more than you spend. 30 years ago one unit of energy (e.g. 1 barrel of oil equivalent) invested in oil and gas production (e.g. in producing and using wells, tankers, refineries, petrol stations, etc.) was returning 60 units. Now 1 unit returns less than 20, i.e. EROI = 20. In about 10 years time EROI is expected to be down to 1, i.e. the net energy left for all our economic activities falls down to zero. Things have to change…
Climate Change
It is now globally accepted as a longer-term danger that requires immediate action. Australia and New Zealand are among the top global climate change polluters. The biggest culprit? The misuse of fossil fuels. However, climate change is not the most severe or immediate threat. EROI from oil and gas fast declining towards 1 within the next 10 years is the most serious threat; bringing chaos to transport and power supplies with the obvious dire consequences on the way we live.
Things have to change…
A Fast Changing Business Environment
The present fast decline of EROI from hydrocarbons is a direct consequence of Peak Oil. As demand for fossil fuel expanded the easiest to exploit resources were tapped into first, then the more difficult ones were exploited requiring ever-greater amounts of energy.
Once the Peak is reached, as is happening now, the remaining resources are those requiring considerably more energy to extract, process, and distribute. Suddenly EROI begins to plummet towards 1 and net energy to zero. At this point everything grinds to a halt.
