The Effect of Political Economy on Total Energy Budget and EROI

Table of Contents

 

Chart 1

Experiment 4

Chart 1

Chart 1a and 1b are found on their own worksheets.  Chart 1a is from Mark-II-Economy.xls and Chart 1b is from Mark-II-Economy-CSP.xls.  The tables of values from which the charts are derived are found on Sheet 4 below and to the right of Cell DN121.  The scaling factors have been removed from the values in the table for this presentation.

 

 

 

And, for the constant-sector-population spreadsheet:

 

 

 

 

These drawings illustrate the reductions in energy consumption that can be expected with the specified changes in political economy.  Thus,

E_BC > E_NM > E_NC > E_NCNM;

but, a little more is needed to justify this essay by making the case for political change sufficiently compelling.

Let us characterize the worst-case scenario corresponding to each model political economy with an asterisk and the best-case idealization with an unembellished symbol since the cases in the model are the best-case idealizations.  It is the responsibility of the thought experimenter to make certain that the worst-case scenario does not violate the fundamental premise of the political economy in question except for the behavior of sociopaths.  This establishes an upper limit for the difference in energy consumption between the worst-case scenario and the ideal case.

The Base Case (BC) is a steady-state idealization of an American-style market economy that is guaranteed to be less wasteful than the real economy because there is no financial or monetary system with banks and stock exchanges and so on, and there is no government and military sector.  Thus, E_BC* >  E_BC.  Similar considerations permit us to write E_NM* > E_NM, E_NC* > E_NC, and E_NCNM* > E_NCNM.

But, the energy costs of commerce are “the elephant in the living room” as discussed and analyzed arithmetically in “Energy in a Natural Economy” and, more deeply, in “On the Conservation-within-Capitalism Scenario” which was summarized in “The Demise of Business as Usual”; therefore, any economy that has dispensed with commerce is certain to have a lower energy budget than even an ideal market economy that has banished inequalities in income and wealth, and E_NM > E_NC*.  Moreover, an idea that is central to Dematerialism is the following:  If the core aspects of two economic systems are the same, the system that does not tolerate the profit motive will be much more efficient than the system in which inequality of income and wealth is permitted.  Therefore, if we forego the possibility of validating Dematerialism with this result, as that would lead to circular reasoning, we may assume that E_BC > E_NM* and E_NC > E_NCNM*.  So, for identical standards of living,

E_BC* > E_BC > E_NM* > E_NM > E_NC* > E_NC > E_NCNM* > E_NCNM .               Principal Relation

Practically, the entire book On the Preservation of Species is devoted to reasons why dispensing with the profit motive will have felicitous effects.  The Principal Relation is the most important result of this paper.  It compels one to consider political change in the wake of Peak Oil.  Since the reader is aware of the vital nature of our need to reduce our energy budget in the wake of Peak Oil, the purpose of the exercise should now be abundantly clear, however see the list of four educational goals under To the Reader in the Introduction.

On both spreadsheets, EROI⁴ improves as the energy efficiency improves.  What is surprising is the differences between the equal-fractions case and the constant-sector-population case.  The differences in total energy budget can be normalized, but the EROIs cannot.  Clearly, the disposition of human resources is an important economic variable.  I would like to explore this further in the future. 

Experiment 4

In Experiment 4,  the energy budgets of the Base Case economy, which corresponds to capitalism, are compared to the energy budgets of No-Managers-No-Commerce economy, which represents a natural economy for two levels of conservation with the second level split to achieve two different goals as follows:

1.         Conservation Level 1 is no conservation at all or rather only such conservation measures as have been implemented in the US American economy at the present time.

2.         Conservation Level 2 is any conservation factor, ψ, less than 1.0 in the linear relations that adjust the levels of consumption of the four commodities between their values in the Base Case, which represents the US economy at the present time, and a fraction φ_i of the present value where φ_A = 0.50, φ_R = 0.33, φ_M = 0.33, and φ_T = 0.10; and that adjusts the energy overhead corresponding to the delivery of agricultural units, residential units, manufacturing units, transportation units, and commercial units between their values for the Base Case and a fraction ξ_i of the present value where ξ_A = 0.10, ξ_R = 0.33, ξ_M = 0.25, ξ_T = 0.01, and ξ_C = 0.40.

2a.       With an EROI^o = 21 for a fossil-fuel economy, the conservation factor ψ is reduced until the energy budget in the Base Case has been reduced to Pimentel’s value for Maximum Renewables. 

2b.       With an EROI^o = 3 for a renewable-energy economy, the conservation factor has been reduced until the energy budget for the No-Commerce-No-Managers (NCNM) Case corresponding to the Natural Economy has been reduced to Maximum Renewables.

This calculation is done with the aid of macros on the portion of Sheet1 reproduced below.  The original values of η_i for the Base Case with EROI^o = 21 and no conservation are stored for the duration of the computation in CQ36:CQ39;  the current value of ψ is in CQ40; the current values for the η_i with the current value of ψ are in CR36:CR39; the next computed next guess for ψ is in CR40.  The macro ConvergeConservation repeatedly pastes CR40 into CQ40 until the current value of E over Maximum Renewables equals 1.0, after which the balance equations are no longer converged.  Converge the balance equations with <CS>O or <CS>Z depending upon the case and repeat the ConvergeConservation step until no further change can be effected by repeating the two steps.

 

 

The procedure described above is carried out for the Base Case with fossil fuels and for the No-Commerce-No-Managers Case for renewable energy at two points in a rather lengthy procedure complicated by the necessity to have a converged solution of the Base Case for fossil fuels and no conservation to determine Maximum Renewables as 0.457 times the Base Case energy and to seek the solution of NCNM only after first establishing the production figures for the Base Case with the same values of EROI^o and ψ.  The final values for E/E_MR for the no-conservation cases and for ψ and E/E_MR for the two conservation cases are tabulated below in a replicated portion of Sheet 4.

 

 

As the reader can read in the table or determine independently for himself, in the no-conservation case only the Natural Economy has a value for E/EMR lower than 1.0 and that can be achieved only with fossil fuels.  The switch to renewables will require conservation even for the most efficient political economy.  With the conservation factor, ψ, at 0.522300, the total energy budget for the capitalist economy as represented by the Base Case is just equal to Pimentel's figure for Maximum Renewables whereas the Natural Economy as represented by the No-Commerce-No-Managers Case has an energy budget of 38.884% of that modest figure, an energy budget that could be met by private local efforts.   With the switch to renewables reducing the basic EROI to 3.0, the Natural economy is at Maximum Renewables with ψ = 0.662664; but, the capitalist economy is still consuming 207.69% of Maximum Renewables.

These results can be repeated for http://www.dematerialism.net/Mark-II-Economy-CSP.xls; however, the explanation would be the same and the results, shown below, not much different.  The energy budget, E, for the Base Case is different in the two cases; but, in either case it is taken to be the current US American energy budget of about 100 quads.  The variables in the Mark II Economy are dimensionless ratios.

Here are the tables for constant sector populations:

 

 

 

 

Probably, I should make an inspiring speech here to convince the reader to work for political change either nationally or locally; but, I believe I shall let the results speak for themselves.

Thomas L. Wayburn

Houston, Texas

October 17, 2006