Wednesday, October 28, 2009
Energy Economics and EROI
A lower EROI means higher real energy costs, ceteris paribus. If it fell to 1 or below, production could only be sustained with inputs being cheaper than outputs. In so far as energy is conservable or substitutable, it will be as costs rise. In so far as it is not, its price will be fixed by its marginal productivity. The economy will survive, but it could be a very different economy from the one we have, one where long distant trade and travel declines, one where energy use becomes an active consideration rather than an afterthought. Technology will help ward off this future, more so in conservation than in production, but it would take a new industrial revolution to substantially reverse it. Possible, but not one you can predict, and a high risk strategy to rely on, as the industrial revolution may not have even occurred without lower real energy costs.