Energy or Minerals?

The key to understanding your future lies in understanding a few simple
energy laws and the relationship between energy and the economy.

A mineral is a mineral no matter how much energy is required to mine it. But
by definition, energy "sources" must produce more energy than they consume,
otherwise they are called "sinks".

We mine our minerals and fossil fuels from the Earth's crust. The deeper we
dig, the greater the minimum energy requirements. Of course, the most
concentrated and most accessible fuels and minerals are mined first;
thereafter, more and more energy is required to mine and refine poorer and
poorer quality resources. New technologies can, on a short-term basis,
decrease energy costs, but neither technology nor “prices” can repeal the
laws of thermodynamics:

* The hematite ore of the Mesabi Range in Minnesota contained 60 percent
iron. But now it is depleted and society must use lower-quality taconite ore
that has an iron content of about 25 percent.

* The average energy content of a pound of coal dug in the US has dropped 14
percent since 1955.

* In the 1950s, oil producers discovered about fifty barrels of oil for
every barrel invested in drilling and pumping. Today, the figure is only
about five for one. Sometime around 2005, that figure will become one for
one. Under that latter scenario, even if the price of oil reaches $500 a
barrel, it wouldn't be logical to look for new oil in the US because it
would consume more energy than it would recover.

Decreasing net energy sets up a positive feedback loop: since oil is used
directly or indirectly in everything, as the energy costs of oil increase,
the energy costs of everything else increase too – including other forms of
energy. For example, oil provides about 50% of the fuel used in coal
extraction.

The University of Wisconsin's Professor Detwyler has created a wonderful
graph that clearly illustrates the net energy principle and shows why the
"down" side of the oil production curve will be much steeper than the "up"
side. See Detwyler's graph at
http://www.uwsp.edu/acaddept/geog/courses/geog100/Petrol-ShrinkNetE.htm

A good analogy is a car with a twenty-gallon tank, but the nearest gas
station is twenty-five gallons away. You can't fill your tank with trips to
the gas station because you burn more than you can bring back -- it's
physically impossible for you to cover your overhead (the size of your
bankroll and the price of the gas are irrelevant). You might as well plant
flowers in your car because it's "out of gas" -- forever.

It's the same with the American economy: If America must spend more-than-one
unit of energy to produce enough goods and services to buy one unit of
energy, it's physically impossible to cover its overhead (again, money is
irrelevant). At that point, America's economic machine is "out of gas" --
forever.

Jay