Net Energy

Net energy is the gross energy coming from a particular energy source minus the energy that was consumed to make that source available for use. This is a broad definition that applies to fossil fuels, nuclear and hydro power, alternative fuels, wind and solar power – in short, to all industrial sources of energy. Understanding net energy is as essential to evaluating the future of an energy source as understanding net profit is essential to evaluating a business plan.

Now, you would think that the Energy Information Administration (EIA), the section of the U. S. Department of Energy charged with making information on energy available to the public, would have a lot of analysis of net energy. In fact, they have none.

In their glossary, net energy is defined in a narrow sense for electricity as, “Net electricity consumption:  Consumption of electricity computed as generation, plus imports, minus exports, minus transmission and distribution losses.” There are similarly specialized definitions for electrical generation.

The EIA’s Annual Energy Review and similar publications have detailed statistics on gross energy produced and consumed, but they completely ignore net energy in the broad sense. The Annual Energy Review or sections of it can be downloaded free at the link above. Despite its lack of net energy analysis, it is packed with facts and charts, and is excellent reference material for anyone wanting to understand energy and society.

Defining and measuring net energy has been left to academics outside the Department of Energy. Professor Charles Hall, of the State University of New York in Syracuse, is probably the most prominent of these. A number of studies by colleagues of Professor Hall are available for free from The Oil Drum. Those articles, and the references they contain, provide all the material needed for an extensive course of study.

Energy is critical to an industrial society. If there is anyone who still clings to the notion that ours is somehow a “post-industrial” society, just observe how well the post-industrial part works when a storm brings down the local electrical grid, or when pipeline breaks and other interruptions to fuel transfers spike the price of fuels or make them unavailable entirely. We are no more post-industrial than we are post-agricultural. We depend on energy as we depend on food. In fact, as the article “The Oil We Eat” makes clear, food in our society also depends on energy.

Ours is an industrial society, both locally and globally. Our industrial society runs on net energy. This may strike you as an extreme sort of statement. It’s true, even if it is not obvious.

It is obvious that our cars don’t run without gasoline. Trucks and trains and planes and ships do not run without their fuel. Coal-fired electrical plants have to have coal to generate electricity. Nuclear plants need nuclear fuel, and so on. But here, it seems we are talking about having gross energy available, not net energy. A short thought experiment will highlight the importance of net energy.

Imagine an industrial society that has only one source of energy for its power equipment. Let’s say that source is coal. This society is easy to imagine, because it approximately describes the United States and Europe from 1850 to 1900. Coal powered ships, trains, Edison’s early generating plants, and even steam engine cars. Coal powered steel mills, other factories, and the first tractors that were replacing draft animals on farms.

We’ll say that only 10% of the coal that was mined was used in the mines and in transporting shipments of coal to the other places where it was used. It does not matter if this percentage is accurate or not. This is just an illustration, not an analysis of history.

One way of describing 10% of the coal being used in mining and distribution would be to say that the net energy of mined coal was 90%. That is, 90% of the energy in mined coal was available to the society to do useful things other than getting coal out of the ground and delivering it to the marketplace.

Another way of describing the same situation would be to say that the ratio of energy returned over energy invested (abbreviated EROEI, or sometimes shortened as EROI) is 10. That is, 100 units of coal is produced by investing 10 units in mining and distribution, for a ratio of 10 to 1, or simply 10.

Now we have to veer away from historical development to isolate the effect of net energy. The real society grew both economically and in population, but we are going to imagine the same population for decades, and no new inventions or improvements in the ways coal was used. However, we will imagine that the easiest coal was mined first, and that coal mined decades later was either significantly deeper in the earth or, if the old mines had played out entirely, was coming from new mines much more distant from population centers where coal was used.

Deeper means miners spending more time traveling to the coal face and less time mining. Deeper means more work to lift the coal to the surface; more power for the elevators. Deeper also means more ground water in the mines, and more work to lift it higher so the mining can go on. We are going to need more miners to produce the same amount of coal, and we are going to burn more coal to power the mining mechanisms.

More distant mines means rails need to be laid. Making the rails takes more coal. Moving the mined coal farther means using more steam engines to move it and burning more coal.

It looks as though the net energy of coal mined a few decades after our starting point has declined to something like 75%. Originally, 90 out of 100 units of coal were available for work other than producing coal. If we mine exactly the same amount of coal, only 75 out of 100 units are now available for everything besides coal mining. To keep all the other trains and ships moving, we are now going to have to mine 120 units of coal.

Before, 100 units x 90% = 90 units for the rest of society. Now, 120 units x 75% = 90 units for the rest of society. If it is just not possible to mine those 20 additional units of coal, then the rest of society just has to get along without some of the things it used to do using coal. We can see that our imagined industrial society runs on the net energy of its energy source, and the thought experiment has served its purpose.

Of course, the real world is much more complex. The population is growing. Extraction operations can become more efficient at the same time it becomes necessary to go after more difficult deposits of coal and oil and natural gas. The ways we use energy can become more or less efficient. To some extent, one energy source can be substituted for another. It’s easier and cheaper to drill an oil well a few hundred feet deep in Saudi Arabia than miles deep in the Gulf of Mexico. There is a lot of variation that makes it difficult to figure out the net energy of a given energy source, let alone the average net energy of all of our energy sources.

Fossil fuels – coal, oil and natural gas – provide about 84% of all the energy we use in the United States. The short story is, over time, the net energy available from oil and coal and natural gas has declined. The average net energy available to us declines even as the population grows and even as the gross quantity of fossil fuels grows.

Here’s an illuminating comment on the subject by Richard Heinberg, taken from an Oil Drum article.

“The US currently produces over a billion tons of coal per year, with quantities increasing annually. This is well over double the amount produced in 1960. However, due to a decline in the average amount of energy contained in each ton of coal produced (i.e., declining resource quality), the total amount of energy flowing into the US economy from coal is now falling, having peaked in 1998. This decline in energy content per unit of weight (also known as “heating value”) amounts to more than 30 percent since 1955. It can partly be explained by the depletion of anthracite reserves and the nation’s increasing reliance on sub-bituminous coal and even lignite, a trend that began in the 1970s. But resource quality is declining even within each coal class.”

Here is an interesting fact taken from the EIA’s ‘Energy Perspectives‘ publication:  Gross energy consumption per person in the United States peaked at 359 Billion BTUs per year in 1978-1979. In 2009, it was down to 309 Billion BTUs per person per year.

What has declining per capita energy meant for the ordinary person? Real wages peaked in the early 1970s, and are now down to something like 85% of their peak, or lower if you use a more honest measure of inflation than official figures from the government. It is not possible to prove real wage declines have been caused by declining energy per capita. However, when the two long-term trends move in parallel, we can reasonably suspect a connection.

We have declining net energy from fossil fuels. We have declining gross energy per capita for all sources of energy. With global peak oil we have declining gross energy from the single largest source. It should be no surprise that continued growth of the economy, which has been based on continued availability of plentiful and cheap energy, is no longer likely. It is no wonder that the global economy is failing to provide prosperity, security or employment.

The basics of net energy are best illustrated with a graph illustrating the net energy cliff. The following is a public domain image from :

Art Myatt, Jan 20, 2011

crayon page divider

Here are two views of the big picture – energy consumption in the US economy:

US Fuel Consumption pie chart


Energy flow chart - what source is used where