Sunday, May 15, 2016

Epiconomics 102 : The Sunlight Economy

"It is green capitalism, we admit, but the gene expression for capitalism must and will change."

The adoption of The Paris Agreement by 195 countries on December 12, 2015 marks the end of the era of fossil fuels. There is no way to meet the targets laid out in this agreement without keeping 90 percent or more of remaining coal, oil and gas in the ground. The final text still has some serious gaps, and the timetable will have to speed up, but the treaty draws a red line on atmospheric CO2 we cannot cross. As science, economics and law come into alignment, a solar-powered economy is barrelling at us with unstoppable force.

Nafeez Ahmed, a former Guardian writer who now blogs the System Shift column for VICE’s Motherboard recently pondered the Energy Returned on Energy Invested (EROEI) problem with renewables and came up with something that might form the basis for smoothing the transition.

First, you have to get a sense of the scale of the driving force behind this change. Ahmed observed that since the crash in oil prices (underlying causes here) and the Paris Agreement, more than 65% of the world’s oil companies have declared bankruptcy. The Economist puts the default at $2.5 trillion. The real number is probably much higher. Following Paris, Goldman Sachs surveyed over $1 trillion in stranded assets out in the fracking fields that will never be booked. Carbon Tracker puts the likely cash that will be thrown down bad wells by the still standing 35% of fossil industry dinosaurs — and never-to-be recouped — at $2.2 trillion.

In our book, The Paris Agreement, we described why the fossil shakeout is likely to liberate huge cashflows into renewable energy, but with one giant caveat. There is significantly lower net energy (EROEI) in renewables than the fossils provided in their heyday. That augurs economic contraction no matter how you slice it.

Degrowth is already happening. Carbon Tracker identified Peabody Coal as one of those energy giants unable to pass a 2C stress test. Peabody scoffed. Six months later, Peabody went bankrupt.  There are now more solar installers than coal miners in the US and the gap widens each month.

Mark Harrington, an oil industry consultant, tells his clients now the cascading debt defaults will shake the global economy by late 2016 or early 2017 and could make the 2007-8 financial crash look like a cakewalk. Utilities are the new housing bubble.

The EROEI on Texas Spindletops was 100 to 1. The net energy produced from Canadian tar sands or Bakkan shale is less than you can get from green firewood, maybe 3 to 1. Oil rig count in the Bakkan as of this morning: zero. Lost investment exploring and drilling there? billions.

Nafeez Ahmed says:
The imperative to transition away from fossil fuels is, therefore, both geophysical and environmental. On the one hand, by mid-century, fossil fuels and nuclear power will become obsolete as a viable source of energy due to their increasingly high costs and low quality. On the other, even before then, to maintain what scientists describe as a ‘safe operating space’ for human survival, we cannot permit the planet to warm a further 2C without risking disastrous climate impacts.

Staying below 2C, the study finds, will require renewable energy to supply more than 50 percent of total global energy by 2028, “a 37-fold increase in the annual rate of supplying renewable energy in only 13 years.”

Let us leave aside the 2C discussion for now. Two degrees is in the bank and 5 degrees is what we have a slim chance of averting, assuming we can muster the collective will to plant enough trees, make soil, and stop dumping carbon into the atmosphere. Whether 4 degrees, which is likely to be reached by about mid-century, give or take 10 years, is survivable by mammals such as ourselves remains an open question. The odds do not favor our collectively recognizing the risk in time, all of us must acknowledge.

Those odds get even longer once President Trump, taking advice from the Koch brothers, Dick Cheney and Mitch "Black Lungs Matter" McConnell, appoints an Energy Task Force sometime in the first hundred days. Within a few months, Congress will attempt to bend energy economics around their political gravity well. They will superincentivize coal, nuclear and fracked gas and raise even more impossible hurdles for solar power, responsible biomass waste conversion and energy efficiency. Chances then of humans surviving another century: nil.

Trump's tweet has now been retweeted 27,761 times.

Last year the G7 set the goal of decarbonization by end of century, which, like Trump, is a formula for Near Term Human Extinction. At the Paris gathering 195 countries agreed to bounce the date to 2050, with a proviso that it could even accelerate more if needed. More will be needed.

The Bright Shining Hope

Analysts like Stanford’s Tony Seba say that solar power has doubled every year for the last 20 years and costs of photovoltaic power have dropped 22% with each doubling. If you believe these numbers, eight more doublings — by 2030 — and solar power will provide 100% of the world’s electricity at a fraction of today’s prices with significant reductions of carbon emissions. But there is a hitch.

The EROEI of solar power is not improving as quickly as the price. Energy efficiency, especially the embodied energy of components like turbine towers and rooftop arrays and the mined minerals for crystal manufacture, is substantially less than the concentrated caloric punch of oil and coal. Fossil sunlight is to sunlight as crack cocaine is to coca leaves.

And a decarbonated SMART is not your daddy’s muscle car.

That is not to say a civil society living on sunlight can’t still be very nice, and nicer, in fact, than the dirtier industrial civilization, especially if you only have a generation or two left before you go extinct to enjoy it.

All of this revolution could be accomplished, and paid for, simply by a small epigenetic hack in the DNA of central banks. They need to express the gene that prints money. As Ellen Brown explains:
"The combination of fiat money and Globalization creates a unique moment in history where the governments of the developed economies can print money on an aggressive scale without causing inflation. They should take advantage of this once-in-history opportunity . . . ."

Don't panic, and it might be a good idea to follow Ford Prefect's example of carrying a towel, in the unlikely event that the planet is suddenly demolished by a Vogon constructor fleet to make way for a hyperspace bypass.

Despite the paucity of intelligence in the throne room of the Empire, there is, however, a faint glimmer of light coming from a corner of the dungeon, should we peer farther. Ahmed latches on to Eric Toensmeier’s new book, The Carbon Farming Solution, that quotes a Rodale Institute study:
Simply put, recent data from farming systems and pasture trials around the globe show that we could sequester more than 100 percent of current annual CO2 emissions with a switch to widely available and inexpensive organic management practices, which we term ‘regenerative organic agriculture’… These practices work to maximize carbon fixation while minimizing the loss of that carbon once returned to the soil, reversing the greenhouse effect.
As we described in our books, The Biochar Solution and The Paris Agreement, it is possible to unleash the healing powers of the natural world -- not by tampering further but by discerning and moving with its flows the way indigenious peoples did for eons -- that doesn't just halt climate change but restores it to the pre-industrial. By using a permaculture cascade — regenerative cropping to food, feed and fiber; to protein and probiotic extracts (from waste byproducts); to biofuels (from waste byproducts); to biochar and biofertilizers (from waste byproducts); to probiotic animal supplements and industrial applications like fuel cells (from biochar) — bioeconomics can transform a dying planet into a garden world. But, again, there is a hitch.

Ahmed says:
According to a 2011 report by the National Academy of Sciences, the scientific consensus shows conservatively that for every degree of warming, we will see the following impacts: 5-15 percent reductions in crop yields; 3-10 percent increases in rainfall in some regions contributing to flooding; 5-10 percent decreases in stream-flow in some river basins, including the Arkansas and the Rio Grande, contributing to scarcity of potable water; 200-400 percent increases in the area burned by wildfire in the US; 15 percent decreases in annual average Arctic sea ice, with 25 percent decreases in the yearly minimum extent in September.

The challenge climate change poses to bioeconomics is where epigenetic agents come in. There is a permaculture army waiting in the wings. We have been training and drilling for 30 years. Cue marching entrance, stage left, with George M. Cohan’s arrangement of Yankee Doodle Dandy.

This will require more than Busby Berkeley. First, as we described here last week, we will need a change of the command switches that express civilization’s genes. This is unlikely to come from Hillary Clinton, central banks, the G7 or the International Monetary Fund — just witness the debacle at Doha in April.  It will more likely arise spontaneously from the grass roots, led by regenerative farmers, treehuggers and degrarians, but funded — massively — by institutional investors in search of safe havens from petrocollapse and failing confidence in a stale, counterproductive paradigm.

It is green capitalism, we admit, but the gene expression for capitalism must and will change.

"If you think about it, economic growth could happen through dematerialization," says Jack Buffington, a researcher at the Royal Institute of Technology in Stockholm and author of Progress, Technology and Seven Billion People: A Solution to Save Capitalism and The Recycling Myth: Disruptive Innovation to Improve the Environment.
"Think about all the different things your smart phone can do that 20 years ago you had a computer, you had a telephone. you had an alarm clock.... So, I think there is a way to transform things through the use of materials to dematerialize while at the same time leading to economic growth. Even if you tried to stop innovation you won't. What we have to push for is a model that between the environment and the economy is complementary, so we achieve goals of improving people's lives at the same time as improving the environment."
A bioeconomy is coming. Fast. There are demonstrations of it, large and small, popping up all over the world. The DNA for the global financial marketplace — our social customs for nations, currency systems and trade — has not changed. What is being transformed is the histone that occupies the space between the helices and flips the switches to turn expressions on and off. Who are the radical free agent proteins that are moving in to transform the histone?

You are.


Jan Lundberg said...

"Fossil sunlight is to sunlight as crack cocaine is to coca leaves." - Great writing!
"funded — massively — by institutional investors in search of safe havens from petrocollapse and failing confidence in a stale, counterproductive paradigm." - that's what I thought, and then Sanders comes along with grassroots funding and outfundraises Shillary via donations averaging 27 bucks.
"improving people's lives" - it's debatable whether smart phones and their toxic entropy really had this overall effect.
"the fossil shakeout is likely to liberate huge cashflows into renewable energy, but with one giant caveat. There is significantly lower net energy (EROEI) in renewables than the fossils provided in their heyday. That augurs economic contraction no matter how you slice it." - I see two wrinkles here. (1) By the time even the "smart money" wakes up to collapse of the dominant paradigm, the available funding for renewable energy and regenerative systems (or whatever) will be a lot lower than today. But the proportion will be much greater for the good clean stuff; we already see fossil fuels investment crashing. (2) We have to question what energy is really involved in complex, traditional systems that regenerate. For example, sail transport that benefits from human power has the arm-muscle-energy fed by fish caught in the sea, etc. So, lower net energy from the hoisting of sails compared to (cost-externalized, subsidized, filthy) petroleum should be questioned.

John Weber said...

All the things in our world have an industrial history. Behind the computer, the T-shirt, the vacuum cleaner is an industrial infrastructure fired by energy (fossil fuels mainly). Each component of our car or refrigerator has an industrial history. Mainly unseen and out of mind, this global industrial infrastructure touches every aspect of our lives. It pervades our daily living from the articles it produces, to its effect on the economy and employment, as well as its effects on the environment.
The whole picture needs to be included not just the installed devices. I am not a supporter of fossil fuels or nuclear. I am concerned about continuing business as usual and its devastation of the earth and humanities future.
Solar and wind energy collecting devices and their auxiliary equipment have an industrial history. They are an extension of the fossil fuel supply system and the global industrial infrastructure. It is important to understand the industrial infrastructure and the environmental results for the components of the solar energy collecting devices so we don’t designate them with false labels such as green, renewable or sustainable.
This is a challenge to ‘business as usual’. If we teach people that these solar devices are the future of energy without teaching the whole system, we mislead, misinform and create false hopes and beliefs. They are not made with magic wands.
These videos are primarily concerning solar energy collecting devices. These videos and charts are provided by the various industries themselves. I have posted both charts and videos for the solar cells, modules, aluminum from ore, aluminum from recycling, aluminum extrusion, inverters, batteries and copper.
Please note each piece of machinery you see in each of the videos has its own industrial interconnection and history.
This is about wind:
Is this more elitist technology for the few. It seems to me all this promotion of solar and wind energy collecting devices are either envisioned as worldwide or it is simply more imperial colonizing of countries with resources and no power. Then think of the resources and energy required to meet global need for the global population.

palloy said...

Everyone should be very careful when discussing ERoEI, because it is only a single number derived from the Life Cycle Energy Budget of the particular technology. Since you have to have the energy budget before you can have the ERoEI, it is more instructive to work with the energy budget itself.

Since the energy budget is data spread out over a time period, it is possible to look at what happens to the industry as a whole as the industry scales up. PV for example has almost all the EI occurring before the ER starts, and the ER trickles in over the Lifetime. For any technology with an ERoEI > 1, it looks like a sound proposition, but when the timing is taken into account, ER - EI is negative at the beginning (the energy pay-back period) and some other energy source is required to subsidise the PV, presumably FFs.

If you scale up PV too rapidly, too many of the panels are in their energy subsidy phase, and the industry as a whole in energy subsidy. When the FFs are being phased out, either enforced by Peak Fossils or because of climate change decisions, there must come a point where there is not enough FF energy to subsidise the manufacture (EI) of more PV. This is the Energy Barrier.

If we had started the serious transition to PV earlier, while there were still plenty of FFs to spare for the PV's energy subsidy, it would have been completed by now, but we didn't. Now hitting the Energy Barrier is guaranteed.

To get a better handle on this you need to map out, year by year, what FFs you intend burning, and what PV you intend building, and what energy consumption you expect people to need. My own attempts at this, which requires putting real numbers in for what are only predictions, invokes a storm of protest over the numbers chosen. So I leave it up to you to choose your own numbers and satisfy yourself that the Energy Barrier is going to stop us at some point, with the renewable transition only partly completed.

Only then we can get on with working out what to do about it - not much I my opinion.

John Weber said...

Palloy - you did not even address the underwriting of these PV devices by the fossil fuel supply system and the global industrial infrastructure ( see above post with videos)
As for ERoEI:
A paper recently published in Energy Policy by Ferrucio Ferroni and Robert J. Hopkirk and titled Energy Return on Energy Invested (ERoEI) for photovoltaic solar systems in regions of moderate insolation. They used a similar methodology thart Charles Hall and Pedro Prieto used in their study for 4 GW in Spain. That is, they considered not only the usual energy inputs for modules and its components and/or some immediate accesories to them, but also some societal sine qua non energy input expenses for solar systems and concludes that in these regions (countries like Germany and Switzerland), the EROI is 0.85:1.

Scientific studies show it takes years to payback the energy used in solar electric devices. EROI (Energy Returned on Energy Invested) says it takes energy – mining, drilling, refining, transporting, installing, maintenance, and replacement parts – to make the devices necessary to capture solar energy.
Spain’s Photovoltaic Revolution: The Energy Return on Investment by Prieto, Pedro A., Hall, Charles 2013.
and B o o k R e v i e w : E n e r g y i n A u s t r a l i a - P e a k O i l , S o l a r P o w e r , a n d A s i a’ s E c o n o m i c G r o w t h by G r a h a m P a l m e r

Spain’s Photovoltaic Revolution presents the first complete energy analysis of a large-scale, real-world deployment of photovoltaic (PV) collection systems representing 3.5 GW of installed, grid-connected solar plants in Spain. Prieto and Hall conclude that the EROI of solar photovoltaic is only 2.45, very low despite Spain’s ideal sunny climate. Germany’s EROI is probably 20 to 33% less (1.6 to 2), due to less sunlight and efficient rooftop installations.

“Solar advocates can learn from this analysis . . . “ Not looking at the reality of EROI “is not good science and leads to wasted money and energy that could have been better spent preparing more wisely for declining fossil fuels in the future.”

This study does not detail the environmental destructive mining, toxic chemicals or air and water pollution necessary to get the materials for manufacturing and installing solar devices. It is the sun not the devices that is renewable, green and sustainable.

Ob1Kn00b said...

the "(underlying causes here)" doesn't appear to point anywhere... plus, 65% of oil companies?!




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