Congratulations to Carey King

I first came across Carey King when, out of the blue, he invited me to a special session of the annual meeting of the American Association for the Advancement of Science (the largest and most prestigious US scientific meeting) where he was developing a special session on energy return on investment (EROI). At that meeting and since, I have found Carey to be a refreshing new colleague, extremely intelligent, very knowledgeable about many diverse aspects of energy and other things, able to take criticism and to dish it out, and very ambitious, which is mostly a good thing. He is becoming a leader in thinking about EROI and its implications, and I am delighted to see him honored by Environmental Research Letters.

This is important because in the US, there is little insight about energy or, especially, its potential physical limitations except when gas prices increase. There is also little awareness of the very strong historical connection in both the US and the world between increased affluence and increased use of energy, especially petroleum. It is not understood by all that many of the economic problems we have now (such as the budgetary problems faced by most of our State governments, pension plans and universities) have substantial origin in the fact that oil and other energy production no longer increase reliably year after year, as they once did (Murphy and Hall 2011). Many economists have argued in the past that energy is not important because it constituted only 5 per cent or so of GDP, or because they believe that market forces and innovations will substitute for any shortage (e.g. Barnett and Morse 1963, Passell et al 1972, Solow 1974, Denison 1989). One problem with that view is that if you remove that five per cent the economy comes to a dead stop, as Cuba found out in 1989 when Russia removed its oil subsidy. Additionally if that five per cent goes up to 10 or 15 per cent, as it did in the early 1980s, and again in 2008, recession steps in (Murphy and Hall 2011). In fact, the US economy and our energy use increased almost lockstep from 1900 until 1984 (Cleveland et al 1984). The economy has grown more rapidly than energy use since 1984. Most economists think that this is due to our cleverness at increasing efficiency, but Robert Kaufmann (2004) and others find that instead most of the increase has been due to, essentially, the outsourcing of our heavy industry (think steel imported from Korea or Brazil, petroleum refined in Trinidad etc). An additional issue is that there is considerable evidence (e.g. Shadow Government Statistics) that the official US government inflation corrections have been deliberately underestimated since about 1985. If this is true then GDP growth has been exaggerated and there has been little or no increase in efficiency. Thus our gain in actual national energy efficiency is probably much less than most economists believe, and may be close to zero.

Obviously some few of us think a great deal about energy, and for those who are willing to undertake some personal research (for example on the ASPO (aspo-usa.com) or The Oil Drum (www.theoildrum.com) websites), there is much to be concerned about. First on the list of concerns is 'peak oil'; the concept that there comes a time over the life cycle of the extraction of a non-renewable resource when there will be maximum production. This concept, derived by geologist M K Hubbert in the 1950s, assumes that this peak will occur when roughly 50 per cent of the resource has been exploited. Hubbert famously predicted in 1955 that this would occur for the United States in 1970. Initially he was derided by most in the oil industry, but in fact peak oil for the US did occur in 1970, just as he had predicted. Oil production has declined essentially every year since then. 'Peak oil' has now occurred for something like three quarters of all oil producing nations, although not yet for most of the largest producers.

Second on my list of energy concerns is declining EROI. EROI is a term I had developed in the early 1980s based on the net energy concepts of Howard Odum (Odum 1973, Hall 1972). It is simply the ratio of the energy returned from an energy extraction process divided by the energy to get that energy. The concept had a certain amount of traction in the 1980s (Hall and Cleveland 1981, Cleveland et al 1984) but as gasoline prices fell and memories of the 'energy crises' of the 1970s faded, interest in energy matters also declined. A few of us 'energy nuts' kept plugging away at trying to get better numbers (Hall and Klitgaard 2011).

In contrast to most people and certainly most economists, Carey King is someone who has thought about energy, peak oil and EROI a lot, and in very sophisticated ways. Early in his career Carey deduced that EROI appeared to be having a new day because of, for example, questions about the EROI of corn-based ethanol for transportation fuels and because of the declining productivity and profitability of many Texas and other oil fields. For many, including Carey and myself, it made no sense to trade one Joule of fossil energy to run tractors, make fertilizers, distill mash and so on to generate about one Joule of corn-based ethanol, which the US is doing on a vast, federally-subsidized scale. Carey has had some quite original ideas about coming up with a shortcut to deriving a proxy measurement for EROI, which is quite difficult to calculate, and about the importance of EROI for financial issues. For example Carey has found that the inflation-adjusted prices of oil and coal are basically predicable over the last century from the EROI at that time (King 2010). He has also worked with others at attempting to get at a more comprehensive EROI that would include the energy cost of supporting all of the money spent developing the resource, including the energy associated with giving meaning to laborers' pay checks and the energy associated with financial services. We do not yet understand the importance of these more comprehensive EROIs but we do understand that our usual methods of including only energy used directly (e.g. to run a pump) or indirectly (e.g. to manufacture the steel forms used) greatly underestimates the total amount of energy needed to produce energy.

In conclusion, Carey King appears to be one of the real rising energy stars as energy becomes again much more important. He is very bright, original and is a very hard worker. I look forward to much exciting, innovative and important work from his endeavors.

References

Barnett H and Morse C 1963 Scarcity and Growth: The Economics of Natural Resource Availability (Baltimore, MD: Johns Hopkins Press)

Cleveland C J, Costanza R, Hall C A S and Kaufmann R 1984 Energy and the United States economy: a biophysical perspective Science 225 890–7

Denison E F 1989 Estimates of Productivity Change by Industry, an Evaluation and an Alternative (Washington, DC: The Brookings Institution)

Hall C A S 1972 Migration and metabolism in a temperate stream ecosystem Ecology 53 585–604

Hall C A S and Cleveland C J 1981 Petroleum drilling and production in the United States: yield per effort and net energy analysis Science 211 576–9

Hall C A S and Klitgaard K 2011 Energy and the Wealth of Nations: Understanding the Biophysical Economy (New York: Springer)

Kaufmann R 2004 The mechanisms for autonomous energy efficiency increases: a cointegration analysis of the US Energy/GDP Ratio The Energy Journal 25 63–86

King C W 2010 Energy intensity ratios as net energy measures of United States energy production and expenditures Environ. Res. Lett. 5 044006

Murphy D J and Hall C A S 2011 Energy return on investment, peak oil, and the end of economic growth in 'Ecological Economics Reviews' ed Robert Costanza, Karin Limburg and Ida Kubiszewski Ann. N.Y. Acad. Sci. 1219 52–72

Solow R M 1974 The economics of resources or the resources of economics American Economic Review 66 1–14

Odum H T 1973 Environment, Power and Society (New York: Wiley Interscience)

Passell P, Roberts M and Ross L 1972 Review of 'Limits to Growth' New York Times Book Review 2 April 1972