Energy Analysis 
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Book Reviews  > Energy Analysis
Anyone who believes that exponential growth can go on forever in a finite world is either a madman or an economist.    
Kenneth E. Boulding 
Energy Systems and Sustainability. Godfrey Boyle, Bob Everett, and Janet Ramage- This book, written for a course at the Open University in Great Britain, discusses in considerable detail  traditional non-renewable energy sources (coal, oil, natural gas and nuclear fission). They discuss energy technology,  detailed usage patterns, and environmental impacts. The sustainability portion of the book focuses on reducing the environmental impacts of fossil fuel use, particularly greenhouse gas emissions. They include a brief section on oil depletion, including Jean Laherrere's prediction of  the future production of conventional oil, non-conventional oil and natural gas. They seem clueless about the economic consequences of these predictions, however. They assume that exponential economic growth will continue throughout the century and presumably beyond. The book has a lot of valuable information, although being a textbook, it is a bit pricey.    
Renewable Energy: Power for a Sustainable Future. Godfrey Boyle, Bob Everett, and Janet Ramage - This book is a companion volume to 'Energy Systems and Sustainability' discussed above. A wide variety of renewable energy technologies are discussed in considerable detail. The technologies include hydroelectric, wind, photovoltaics, tidal, wave, solar thermal, daylighting, biomass, and geothermal. They discuss environmental impact an economics of the various alternative sources. Their economic analysis use standard discounting techniques in which it is assumed that the stock mark will go up 10% a year forever, so that return on capital investment must beat this rate of return to be worthwhile. Such analysis illustrates how assumptions of everlasting growth work to discourage the implementation of renewable energy technology. Again there is no economic urgency in their discussion of renewable energy, since they do not see a near term limit to growth.  
Energy at the Crossroads. Vaclav Smil - Vlaclav Smil is a professor at the University of Manitoba who has been engaged in interdisciplinary energy studies for forty years. This book contains a lot of useful information, particularly in its chapter on renewable energy sources where Smil presents a good discussion of the strengths and weaknesses (which are substantial) of the various alternative energy sources. However, Smil's dismissal fossil fuel depletion as a matter of  economic concern is longwinded and (in my view) not particularly believable. Apparently Smil is operating under the theory that the longer the list of  reasons given why an unpleasant reality may not come to pass, the higher the probability that one of them is true. The crossroads referred to in the title is the impact of energy use on the biosphere, and not to any economic impact of declining supplies of high quality fossil fuel. 
Energy and Resource Quality, Charles A.S. Hall, Cutler J. Cleveland, and Robert Kaufmann  - This book covers a lot of the same ground as 'Energy Systems and Sustainability', which is briefly reviewed above, but from a substantially different perspective. This is an interesting and complex book. The authors have a background in ecology and they recognize that physical limits will prevent economic growth from continuing indefinitely.  They particularly focus on the fact that petroleum is a finite resource and that its potential replacements may not support the level of economic growth to which we have grown accustomed. They also realize that the quality of other natural resources may degrade as well, placing further barriers in the way of continued economic growth. They attempt to quantify the economic quality of different energy sources as well as other natural resources using a technique called net energy analysis. This attempt is more successful in the case of non-energy resources (where the energy consumed per unit of output is identified as a  measure of economic quality) than it is for the case of energy production where a parameter called Energy Return On Investment  (EROI) is used as a measure of quality. As I have explained in my essay on energy quality EROI is not a good parameter for characterizing the relative quality of different energy sources. Nevertheless this book contains a lot of interesting information, and its emphasis on the fact that physical laws place important constraints on humanity's economic enterprises is extremely important. 
Beyond Oil, The Threat to Food and Fuel in the Coming Decades, John Gever, Robert Kaufmann, David Skole, Charles Vorosmarty - One of the authors of this book (Robert Kaufmann) was also an author of Energy and Resource Quality, reviewed above.  A number of the plots relating U.S. energy use to economic output appear in both books. Both books reach the rather surprising conclusion (at least it is surprising to me) that there is linear relation between energy use and economic output which is constant across different industries and across decades of technolgical development. That is to say that if you expend one unit of energy in the manufacturing process, you produce (on average) k units of economic output, where k is constant, independent of the industry you are working in or the level of technology that you are using. In spite of the impressive correlation plots that they authors present, I have difficulty accepting this idea. The problem is that the authors' quantitative measurement of economic ouput is dollars (that is GNP). Dollars may be a good measurement for brute force economic expansion where population and production facilities at a given of level of technology increase together. However, manufacturing efficiency improvements lower costs and prices, so that the use value obtained per dollar spent for finished goods from the advancing industry increases. In this case  it does not seem intuitive that dollars are a good measurement of economic output before and after a given technology improvement. Conceivably such effects could be normalized by some appropriate technique, but in neither of these books do the authors write a single sentence about how GNP has been normalized across decades of economic development.  
Even if you do not accept the hypothesis of a universal linear relationship between manufacturing energy consumption and economic output this book still contains interesting information about the relationship between energy used for food production in the US. The authors use Hubbert style analysis to project the availability of oil and natural gas supplies until the year 2030 and then combine these projections with data about the U.S. agricultural use of energy and land to project the future percentage of energy use in the food production sector of the United States economy. They conclude that if the agricultural energy use patterns (and population growth) up to 1985 (the year the book was published) continue then agricultural prouction per capita will either have to decline signifcantly or agriculture will have to steal a significant amount of energy from the rest of the economy.     
Renewable Energy Policy, Paul Komor - This book is based on the assumption that the growth economy will continue into the indefinite future (This assumption is not explicitly stated, but when one talks of the 'cost of capital'  and the assumed discount rates on capital investments as if this were the eternal and unchanging language of economic activity, then the assumption of exponential growth is implicitly being made.) and that energy storage is irrelevant until renewable penetration in to the electric generation mix exceeds 20%.  Within this framework of assumptions, Kormor examines the history of various efforts on the part of the United States and western Europe to promote renewable energy electric generation capacity. Within the limits of its relatively narrow purpose the book is well written and informative. If you belive that the growth economy can be maintained for another decade or two then, this book is relevant to developing strategies for building up renewable energy capacity during that time period. However, if you are concerned with resolving the conflict between human economic desires and the finite resource base of the earth this book will not be of any aid. 
Beyond Oil and Gas: The Methanol Economy - George A. Olah, Alain Goeppert, G.K. Surya Prakash - The authors of this book (among whom is included the Nobel prize winning chemist George Olah) propose using methanol synthesized from electrolytic hydrogen and carbon dioxide to replace the duel roles of fossil fuels a sources of transportation fuels and chemical feedstocks for various important synthetic materials. From a purely technical point of view this book is well written and informative. In addition to methanol synthesis and usage, the book covers a broad array of energy topics, including the origins and uses of fossil fuels, fossil fuel depletion, the impact of CO2 emissions on global climate, nuclear energy, renewable energy, and the promise and limitations of hydrogen as an energy carrier.      
The weak point of the book, in my opinion, is its failure to deal in a serious way with the economics of methanol production. The ultimate material sources of fossil fuels are atmospheric carbon dioxide and water, and there is no question that, from a purely technical point of view, we can transform these compounds into the same array of products that are currently derived from fossil fuels. The question is whether the costs of producing of these products is low enough to support the constantly increasing levels of economic production and consumption required to keep the economy 'healthy' until everybody middleclass person alive today has lived a long and successful life (Who cares what happens after that?). Olah and his colleagues fail to convince me that the answer to this question is 'yes'. Electrolytic hydrogen is expensive. Currently the only economical source of the large quantities of CO2 required if synthesized methanol is to replace petroleum products is coal. The authors admit this fact. Their short term proposal is to recycle the CO2 emissions from coal fired power plants into synthetic methanol. They offer no analysis of the probable cost of such synthesis. In the longer term even coal will disappear, and so Olah and his colleagues suggest they we can directly extract CO2 from the atmosphere using large area collectors filled with chemical sorbates. They admit that such a process for collecting CO2 is not currently economically practical, but assert that it will become so in the future. In this longer term future the primary source of electricity for producing hydrogen will be nuclear fission. The author's strongly promote increasing the world's nuclear energy capacity because they conclude (quite correctly, I believe) that renewable electricity sources cannot support the same levels of per capita economic consumption currently enjoyed by the world's richest nations. In spite of the undoubted advantages of methanol relative to hydrogen (easier transport and storage, and the possibility of being absorbed into the the current transportation infrastructure with relatively minor changes) I do not find this vision of an unending economic cornucopia powered by atmospheric CO2 and water to be convincing. 
This is not to say that methanol snythesis may not play a signficantly increased economic role in the future. But no purely technological fix can save us from our problems if we do not come to terms with the finite nature of the earth's resources and adjust our economic and social system accordingly.
The real science of political economy, which has yet to be distinguished from the bastard science, as medicine from witchcraft, and astronomy from astrology, is that which teaches nations to desire and labor for the things that lead to life; and which teaches them to scorn and destroy the things which lead to destruction. 
John Ruskin
Roger Brown