EROEI and Civilization's Forced Decline

EROEI (Energy Return on Energy Invested) is possibly the most important ratio to modern human existence. This measure is foundational to our civilization, yet understood by few.

EROEI and Civilization's Forced Decline
Photo by NASA / Unsplash

EROEI (Energy Return on Energy Invested) is possibly the most important ratio to modern human existence. This measure is foundational to our civilization, yet understood by few.

EROEI is why we're able to support 8 billion humans, why atmospheric CO2 is 425ppm and also why human civilization will eventually collapse.

It's an essential metric that explains why we have computers, retirement funds and air travel. It's essential to our progress as a species. This has been true since the dawn of agriculture and is even more so in a post-industrialized world.

To help broaden understanding of this deceivingly simply measure, I'm writing the following primer on EROEI.

What is EROEI?

EROEI is a metric used to evaluate the efficiency of energy production systems. It measures the amount of energy obtained from a particular source compared to the amount of energy invested to harness that energy. The formula used is:

Rethinking Growth Part Two - Pure Advantage

Example of EROEI: Solar Panels

Consider a solar panel system:

  1. Energy Invested: This includes the energy used in manufacturing the solar panels, transporting them, installing them, and maintaining them over their lifespan.
  2. Energy Produced: This is the energy the solar panels generate during their operational lifetime.

If a solar panel system uses 1,000 units of energy for its entire process (from manufacturing to operation) and generates 10,000 units of energy in its lifetime, the EROEI would be 10. This means that for every unit of energy invested, ten units of energy are returned.

EROEI in Agriculture: An Example of Caloric Return Versus Energy Investment

Agriculture provides another example of EROEI by examining the ratio of calories gained from food production against the energy expended to grow, fertilize, harvest, and transport the food.

Growing crops has always been about getting more from the land than you put in. Simply speaking, if a person expends 1000 calories farming he must yield more than 1000 calories of food to make it worthwhile. This remains true today, except instead of manpower (or animal power) agricultural EROEI also incorporates the use of fossil fuels.

Here’s a breakdown of energy investments in agriculture:

  • Mechanization: Tractors, combines, and other machinery used for planting, tending, and harvesting crops consume substantial amounts of diesel fuel.
  • Fertilization: The production of synthetic fertilizers is energy-intensive, predominantly reliant on natural gas as both a feedstock and an energy source.
  • Pesticides: Similar to fertilizers, pesticide production involves significant energy use in the synthesis of chemicals.
  • Irrigation: Pumping water for irrigation can be highly energy-consuming, especially in arid regions or where water needs to be transported over long distances.
  • Transportation: The energy costs of transporting food from farms to processing centers and then to markets contribute notably to the total energy expenditure.

The EROEI for agriculture can be dramatically low when considering the input of all these energy sources against the caloric output of the crops produced. For instance, some high-input crops like corn, especially when used for ethanol production, have an EROEI of less than 1. It takes more energy to produce the crop than the energy contained within it.

EROEI in Summary

Generally, EROEI is a crucial indicator for assessing the sustainability and viability of various energy sources. High EROEI values suggest that less energy is consumed in producing energy, which is beneficial for energy sustainability. Conversely, a low EROEI indicates that considerable energy is required for production, which might not be sustainable in the long run.

Higher EROEI values can lead to lower costs for energy production, as less energy (and potentially fewer resources) is required per unit of energy produced. Energy sources with high EROEI are generally less intensive on resource usage and can lead to reduced environmental degradation. Understanding EROEI helps governments and organizations make informed decisions about where to invest in energy infrastructure, balancing between immediate energy needs and long-term sustainability.

The EROEI for oil and other fossil fuels has changed significantly over time, generally declining as easily accessible reserves are depleted and extraction becomes more challenging.

Early 20th Century: During the early days of oil extraction, particularly in regions like Texas and the Middle East, oil was plentiful and easy to extract. The EROEI was extremely high, often estimated to be as high as 100:1. This means that for every unit of energy invested in extraction, 100 units of energy were produced.

Mid to Late 20th Century: As the easiest-to-reach oil fields began to deplete, the industry moved towards more challenging fields, such as offshore drilling and more geologically complex areas. This required more advanced and energy-intensive technology, causing the EROEI to decrease. By the 1970s and 1980s, the EROEI for oil had fallen to about 30:1.

21st Century: The trend of declining EROEI continues with the expansion into even more energy-intensive extraction methods like tar sands and shale oil, which have much lower EROEI values, often between 5:1 and 20:1 depending on the technology and location.

EROEI for Other Fossil Fuels

  • Coal: Historically, coal has maintained a relatively high EROEI because it is abundant and requires less technology-intensive methods for extraction. However, as with oil, the best and easiest-to-mine coal seams are being depleted, leading to a gradual decline in EROEI.
  • Natural Gas: The EROEI for natural gas has also declined, particularly with the shift towards unconventional sources like shale gas, which require hydraulic fracturing (fracking) that is more energy-intensive than traditional gas extraction methods.

Implications of Changing EROEI

The declining EROEI of fossil fuels has several significant implications. As more energy (and money) is required to extract the same amount of energy, the cost of energy production increases, impacting everything from production costs to consumer prices.

More energy-intensive extraction methods often have greater environmental impacts, including higher emissions of greenhouse gases and greater disruption of local ecosystems.

The EROEI varies significantly across different methods of oil extraction. Each method's EROEI depends on the complexity of the extraction process, the location of the reserves, and the technology used. Here’s an overview comparing the EROEI of various oil extraction methods:

Conventional Oil Wells

Conventional oil wells tap into underground reservoirs where oil is relatively easy to extract using standard drilling techniques.

Historically, conventional drilling had an EROEI of around 20:1 to 100:1, but modern estimates for new wells are often around 10:1 to 20:1. This decline reflects the depletion of the most accessible reserves.

Offshore Oil Drilling

Offshore drilling involves extracting oil from beneath the ocean floor. This method typically requires more advanced technology and greater capital investment than land-based drilling.

The EROEI for offshore oil varies widely depending on the depth and location of the fields. It can range from about 15:1 to as low as 7:1 for deep-water or remote locations.

Oil Sands Mining

Oil sands, also known as tar sands, are a mixture of sand, water, clay, and bitumen. The bitumen can be mined and processed to produce oil.

Oil sands have a significantly lower EROEI due to the intensive energy required to extract and process the bitumen. The EROEI typically ranges from about 3:1 to 5:1.

Hydraulic Fracturing (Fracking)

Fracking involves injecting liquid at high pressure into subterranean rocks, boreholes, etc., so as to force open existing fissures and extract oil or gas.

The EROEI for fracking can vary widely, typically between 5:1 and 20:1. This range is influenced by the rock formation, depth, and the amount of fracturing required to release oil or gas.

Impact of Declining EROEI on Oil Prices and the Economy

As the EROEI declines, more energy (and consequently more money) is required to extract the same amount of oil. This increase in production costs can lead to higher prices for the end product. When oil producers face higher costs to extract oil, these costs are often passed on to consumers in the form of higher prices.

Lower EROEI can also lead to greater sensitivity to changes in supply and demand. For example, if an energy-intensive oil extraction method becomes marginally less profitable due to a small dip in oil prices, it might lead to significant reductions in production, which in turn can lead to price spikes.

Oil is a fundamental input in nearly every industry. Higher oil prices can increase production costs across various sectors, leading to higher consumer prices, reduced consumer spending, and potentially slower economic growth. This can also impact economic stability, as sudden changes in oil prices can lead to economic shocks.

Declining EROEI may prompt shifts in investment strategies within the energy sector. More resources might be allocated to researching and developing more efficient extraction technologies or alternative energy sources. While this can stimulate innovation and the growth of renewable energy sectors, it may also mean less investment in traditional oil and gas industries, affecting jobs and economies dependent on these sectors.

Governments might need to revise energy policies to adapt to the realities of lower EROEI. This could include increased subsidies for renewable energy, incentives for energy conservation measures, or investments in new technologies that can improve the EROEI of existing resources.

Countries heavily dependent on imported oil might face increased energy insecurity as declining EROEI makes global oil supplies more expensive and less reliable. This could lead to increased geopolitical tensions over energy resources.

Finally, the environmental impact of pursuing lower EROEI resources can be significant, often involving more disruptive, more environmentally damaging extraction techniques. This can spur more aggressive environmental regulations, which might further increase production costs or limit access to certain resources.

There have been instances where oil extraction projects have been shut down or not pursued further due to insufficient EROEI, making them economically unfeasible. This is often the case in regions where oil is either too deep, the reservoirs are too complex, or the oil is too viscous, requiring more energy-intensive extraction methods. For example, some oil sands projects in Canada have been deferred or cancelled. High costs of extraction, coupled with low oil prices, can render these projects economically unviable, especially since oil sands typically have a low EROEI.

EROEI Impacts on Geopolitics

The EROEI of energy extraction also varies by geography. Regions that will likely maintain a comparatively high EROEI the longest are those with large reserves of conventional oil that is relatively easy to extract. These include:

  1. Middle East: Countries like Saudi Arabia, the UAE, and Kuwait have large reserves of conventional oil that are accessible at lower depths and pressures, maintaining higher EROEI ratios.
  2. Russia: Certain regions in Russia, particularly Western Siberia, have large reserves of conventional oil that are not as deep or challenging to extract as those in other parts of the world.

As EROEI continues to decline, some regions may find it economically or environmentally untenable to continue production. Oil fields in the North Sea are maturing, and many smaller fields are becoming uneconomical as the EROEI declines due to the increasing difficulty of extraction and maintenance of aging infrastructure.

Despite having some of the world's largest oil reserves, the heavy oil of the Orinoco Belt is costly and energy-intensive to process. Political and economic factors also exacerbate the decline in feasibility. Some shale oil and gas fields also face declines in production due to falling EROEI, especially if oil prices do not justify the high costs of fracking and horizontal drilling technologies.

The variation in EROEI across different regions significantly impacts global geopolitics and the balance of power. Regions with higher EROEI for their energy resources can produce oil more economically and efficiently, which often translates into greater economic stability, wealth, and geopolitical influence.

The Middle East, notably countries like Saudi Arabia, Kuwait, and the UAE, continues to have some of the highest EROEI oil reserves in the world. These countries can produce oil at lower costs, allowing them to maintain production even when global oil prices are low, giving them a competitive edge over producers with lower EROEI.

High EROEI enables these countries to wield significant influence in global oil markets and international bodies like OPEC. Their ability to adjust production levels can affect global oil prices and, by extension, the economies of other nations.

The revenue from high EROEI oil supports domestic stability and allows for substantial investment in infrastructure, social programs, and international investments, further extending their global influence.

Russia’s large reserves of conventional oil, particularly in regions like Western Siberia, also confer significant advantages. Russia is one of the world's largest exporters of oil and natural gas, which are critical to many European countries, providing leverage over these regions. Revenue from high EROEI resources bolsters Russia's economy and finances its military, reinforcing its role as a major global power.

Russia uses its energy exports strategically in its diplomatic relations, influencing other nations through its role as a key energy supplier.

The U.S. experienced a shift in its geopolitical stance as domestic conventional oil production peaked in the 1970s. After the peak, the U.S. became more dependent on foreign oil, which influenced its foreign policy, particularly in the Middle East and other oil-rich regions.

The recent boom in shale oil and gas production through fracking has temporarily boosted the U.S.'s EROEI for oil and gas, reducing its dependence on Middle Eastern oil and altering its geopolitical strategies.

Achieving greater energy independence has been a strategic goal, influencing U.S. military and political engagements abroad.

As regions like the Middle East and Russia maintain or enhance their geopolitical power, others may experience shifts in influence. For example, countries heavily dependent on importing energy might find their geopolitical leverage diminishing.

China's Role in the Shift of Economic and Military Power

China, as one of the world's largest oil importers and an emerging global superpower, plays a significant role in the ongoing transition of economic and military power from the West to the East. This transition is characterized by China's strategic maneuvers to secure energy resources, foster alliances, and extend its influence globally.

Given its massive industrial base and the absence of sufficient domestic energy resources to meet its needs, China has aggressively pursued strategies to secure oil and other energy sources. China imports oil from a variety of regions, including the Middle East, Russia, Africa, and Latin America, reducing its vulnerability to disruptions in any single source. Moreover, China has been building up its strategic petroleum reserves to cushion against global oil price fluctuations and ensure energy security.

China has been particularly adept at forming alliances that can help solidify its power on the global stage, often through economic, military, and energy-related partnerships.

Russia is a crucial energy partner for China, supplying oil and natural gas through pipelines that reduce China's reliance on sea routes, which can be more easily disrupted. The Power of Siberia pipeline, for example, is a landmark project that directly transports natural gas from Russia to China.

Shared interests have led to greater military cooperation between China and Russia. China and Russia conduct joint military exercises and have agreements in place for the development and procurement of military technologies. This collaboration enhances the strategic capabilities of both nations against perceived Western hegemony.

Beyond energy, China and Russia have strengthened their economic ties through trade, investments, and cooperation on various infrastructure projects, including those linked to China’s Belt and Road Initiative (BRI).

As China builds alliances and extends its influence, the economic and military power balance shifts more toward the East. By providing an alternative to Western economic models and military alliances, China positions itself as a leader among developing and non-Western countries. China also seeks greater roles in international bodies, proposing reforms to global financial and political institutions to reflect the changing dynamics of global power.

Societal Benefits of High EROEI

High EROEI over the past century was a cornerstone of modern economic growth and societal advancement. The availability of high EROEI energy sources, primarily fossil fuels such as oil, coal, and natural gas, fueled industrialization, technological innovation, and a dramatic improvement in living standards.

Here are several key societal benefits that have been facilitated by high EROEI:

  • Increased Productivity: High EROEI energy sources have enabled mass production and industrial processes that are highly energy-intensive, driving economic growth and increasing productivity across sectors.
  • Infrastructure Development: The energy surplus from high EROEI sources has supported large-scale infrastructure projects, such as highways, bridges, rail networks, and airports, which are critical for economic development.
  • Technological Diversification: The availability of abundant and cheap energy has allowed societies to invest in a broad range of technological innovations, from the electrification of cities to the development of telecommunications and information technology.
  • Research and Development: Surplus energy has also funded extensive research and development activities, leading to breakthroughs in medicine, engineering, and other sciences.
  • Healthcare: Economic surpluses from high EROEI have enabled the establishment and expansion of healthcare systems, contributing to increased life expectancy and better health outcomes. Innovations in medical technology, many of which are energy-intensive, have also been made possible by this surplus.
  • Social Programs: High EROEI has generated wealth that governments have used to fund various social programs, including welfare, unemployment benefits, and social security. These programs have played essential roles in reducing poverty and providing a safety net for the vulnerable.
  • Education Systems: Surplus energy has supported the expansion of public education systems, increasing literacy and educational attainment, which are critical for socio-economic development.
  • Cultural Exchanges and Globalization: The ability to travel extensively and communicate globally has been another benefit of high EROEI, leading to greater cultural exchanges and the globalization of media, arts, and literature.

The high relative return on energy has enabled humanity to apply energy resources to a vast range of technologies and societal programs that have dramatically improved human lives. However, our standard of living has come at the cost of environmental devastation.

Implications of Declining EROEI on Society

While there is regional variation, a global decline in average EROEI will reverse the gains made during the past couple centuries. As the efficiency of energy production decreases, the implications touch almost every aspect of modern society, from economic structures to technological advancements and social programs.

  • Increased Energy Costs: As it becomes more energy-intensive to extract and produce the same amount of energy, the cost of energy will increase. This can lead to higher operational costs across industries, impacting everything from manufacturing to transportation.
  • Reduced Economic Surplus: Higher energy costs can consume a larger portion of household and government budgets, reducing the amount of money available for discretionary spending and investment in public services.
  • Potential Cuts to Welfare: If governments face tighter budgets due to increased energy costs and reduced economic growth, social programs such as healthcare, education, and social security may experience budget cuts or reduced expansions.
  • Strain on Healthcare Systems: Energy-intensive healthcare systems might face operational challenges or increased costs, potentially impacting the quality and accessibility of medical care.
  • Reduced Investment in Innovation: With more resources needed to meet basic energy demands, there could be fewer resources available for research and development in non-energy sectors. This could slow technological innovation across various fields.
  • Industrial Retraction: Industries that rely heavily on cheap energy might downscale or become less competitive globally, especially those in developed countries that are used to low energy costs.
  • Education Funding: Educational institutions could face budget constraints if public funding is diverted to address more immediate energy-related economic issues. This could affect the quality and breadth of educational services.
  • Cultural and Scientific Exchanges: Reduced funding for cultural and scientific programs could limit international exchanges and cooperation, impacting global understanding and collaboration.
  • Compounded Environmental Impact: Lower EROEI often means that more environmental degradation is associated with each unit of energy produced, compounding issues like pollution and habitat destruction.

Mitigating the Effects of Declining EROEI

A world with rising input costs and declining economic surpluses would eventually be forced to scale down. However, civilization will make every attempt to maintain today's standard of living, first by using alternative sources of energy and increasing energy efficiency.

Solar and wind power are rapidly becoming more cost-effective. While solar and wind may replace a portion of current energy needs, it is unreasonable to expect a 1:1 substitution. The sheer volume of resources required to replace the energy provided by dense and consistent fossil fuels is unfathomable, and likely a temporary solution at best. The lifespan of renewables is limited. While many inputs are recyclable, it's unlikely humanity can scale these energy sources to the level required to power modern civilization.

Hydro and geothermal power are other alternatives considered, but are geography dependent. Again, these are no substitutes for the high EROEI of the fossil fuels on which modern civilization was built.

This perhaps explains why "renewables" have yet to make a large dent as a share of total energy consumed.

4. Energy Sources

It is far more likely that a shrinking EROEI will force society to make do with less, both in engineering terms and lifestyle changes.

Systems that use energy - transportation, buildings, industry - will seek to maintain the birth-to-death EROEI ratio by offsetting higher per unit input costs with lower input volume. More broadly, investment in the energy grid could reduce wastage and optimize use.

While these efforts may mitigate a declining EROEI to a degree, due to the investment required it's far more likely the burden will be on individuals.

Direct rationing is generally seen as a last resort, but incentivizing reduced consumption through economic means (like higher prices during peak times or tax incentives for lower consumption) is a likely first step. However, energy rationing - with it's unintended consequences - would eventually become more overt.

Also, societal shifts toward less energy-intensive lifestyles could be enforced, including greater reliance on public transportation, remote work to reduce commuting, and urban planning that minimizes energy use.

As mitigation effects weaken, a growing portion of societal efforts and economic resources will be redirected towards obtaining energy - whether watts, horsepower or calories. In some respects, we'll all become "energy farmers", diverting human ingenuity from other economic activity. Shortages would become widespread and human progress - as measured by technological development - would end.

EROEI Wall, Meet Civilization's Head

Life, consumption and energy use on a finite planet cannot grow in perpetuity. Although this is simple logic, multi-generational experience only knows the growth bestowed upon humanity by high EROEI fossil fuels.

What comes after high EROEI energy sources are gone is unimaginable. For if we could collectively imagine it, we would have voluntarily scaled down our resource use long ago.

Industrial and geopolitical competition (and game theory) drove us to do the opposite. Instead of conserving the precious gift provided by high EROEI energy sources, we raced to spend it all, destroying our planet in the process.

Even as EROEI fades, today we consume more energy than ever before. Instead of a managed reduction of energy use - and as a corollary, consumption - we will experience a forced decline. As Guy McPherson says, "Nature Bats Last".

Today we stand between the head-on collision of declining EROEI and biosphere collapse. The added existential threat of AI couldn't have come at a worse time. Humanity is already sliding down the de-growth path with our eyes closed. Slow decline or precipitous drop, nobody knows.

The reality of de-growth will not be equitable. Those with power will fight to maintain their standard of living, through economic, political or violent means.

We're already experiencing it.

Wealth inequality has already widened significantly as global EROEI peaked years ago. The spoils of aggregate wealth creation are concentrated in the hands of the few. This will not get better.

Most remain happily deceived, but as our fate comes into focus humanity's desperation will intensify.

Collapse 2050 Manifesto
Climate change. Economic collapse. AI takeover. Nuclear exchange. Class warfare. The risks are real. Things are getting worse and we all see the signs around us. Civilization is crumbling, yet nobody talks about it. How can you when only a small portion of the population is “collapse aware”. Nobody wants
If you got through this, thank you! It's a lot to digest. If you have any thoughts or resources to share, please do so in the comments.