Dr. Charles Hall: The Laws Of Nature Trump Economics

Dr. Charles Hall may not be a name you instantly recognize, but it should be.

Now a Professor Emeritus of the College of Environmental Science and Forestry, Dr. Hall is a rigorous researcher of energy, oil, biophysical economics -- and was a critical early pioneer in developing the key resource metric of Energy Returned On Energy Invested (EROEI).

Here's how Hall describes EROEI in layman's terms:

These energy investment ideas are everywhere in nature.

Certainly business people know about investments, but you've got to realize that anytime that you're investing, you investing not only money, you're investing energy. And, in fact, we consider money to be a lien on energy, a promissory note on energy.

So, if, for example, you buy in New York City a bagel for $1, that bagel cannot possibly get there without the use of a considerable amount of energy. And that energy is, for example, energy used in Louisiana to take natural gas and turn it into nitrogen fertilizer. And then it's put in a barge and barged up  the Mississippi River to Nebraska. And then a tractor spreads in on a field. And then it plows up the field and plants wheat seeds. And then later comes along and tills the soil and maybe takes care of the weeds or whatever and certainly harvests it. And then more energy is used to take the harvested wheat and grind it up and turn it into flour. And then they put it in a sack and put it on a railroad train and ship it to New York City. And there somebody boils a pot of water to cook the bagel. Oh, and they use electricity to mix the batter. And then you have a bagel.

That would not have taken place without the use of energy at every step.

And that same is true for everything that goes on in our economy. Everything that goes on in our economy requires energy for it to take place. And so we've examined that for a long, long time. Using the concept of energy return on investment and then later we've developed this into a whole approach called biophysical economics.

After a life's career of looking at the world through the lens of EROEI, Hall is very concerned that, as a global society, we are hurtling towards an energy crisis that will forcefully (and likely painfully) downshift our standard of living within the lifetime of the current generation. And yet, our current economic models remain blind to the possibility of resource limits -- so we are highly likely to be caught completely unprepared by this approaching crisis:

Economics is practiced in the United States as a social science. When I first looked into economics I was astonished that it's not consistent with the law of conservation of energy nor the second law of thermodynamics nor the laws of conservation of mass. All of those things do not enter into the basic economic models. In fact, the basic economic models, as far as I'm concerned, just make no sense if you have a background in the natural sciences(...)

I think that we're likely be really blindsided by the decline of oil and gas in near future. The people who have examined the long-term future of fossil fuel availability predict this well within a generation. We're probably going to be faced by severe restrictions in all of our fossil fuels – in oil, in gas, and even coal. We may live in interesting energy times(..)

It's just astonishing what I read in newspapers about people who don’t understand the importance of resources and the physical world in everything we do. Now, it is true, there has been a pretty health dose of examining climate and its relation to economics, and I think that's good. But
I think that's, at most, half the story because I think resource limitations are likely to be at least as important as climate change going into the future, and then we have to think about them at least as much as we have been doing with climate. We have to think about the resource issues much better than we have.

Somehow people think the resource issues have been resolved by the market, but that's not true at all, although, you know, I guess as long as the price of gasoline is fairly cheap, people don’t worry. They think the issue's been resolved. The issue has not been resolved at all. The Limits To Growth and everything associated with that – they're not been proven wrong. One might argue that their timing was not on the money, that things that are taking a little bit longer than was anticipated, but that doesn't mean that the chickens aren't coming home to roost. And I see them coming home rapidly and especially in the poorer countries of the world – they're just getting creamed by the interaction of population growth and resource limitations. And depletion of oil wells and depletion of soils and on and on and on. It's just a terrible situation for many countries.

Click the play button below to listen to Chris Martenson's February interview with Dr. Charles Hall (61m:23s).

 

TRANSCRIPT 

Chris: Welcome, everyone, to this Peak Prosperity podcast.  I am your host, Chris Martenson. Energy is everything. My background as a scientist from the biologically oriented field of neurotoxicology allows me to see this very clearly. All organisms grow into their available energy. You see that in how trees apportion their canopies and light gathering strategies. How predators and prey balance themselves out, and how yeast and bacteria exponentially exploit their culture media. Are humans really any different? No, we're not.

What we've done is take hundreds of millions of years of ancient sunlight and very rapidly converted that into extremely useful mechanical and food energy to drive our own population expansion in industrial growth given that between ten and twenty or more calories of fossil fuels are secretly hidden in each calorie of food that you or I eat. We really should have a crisp, clear plan for how and when we're going to either run out of, or self-wean from, fossil fuels. Now, as soon as you look into this topic with even a tiny bit of curiosity or rigor, all sorts of very tricky questions and worrisome complexities pop up. Now, one of the most critical and central of all questions concerns the energy that we get back from our energy extraction efforts.

Today, we're going to be talking with Dr. Charles Hall, Professor Emeritus of the College of Environmental Science and Forestry, and a critical early pioneer and rigorous researcher of energy, oil, biophysical economics, and especially energy returned on energy invested. His career has been so productive that his Curriculum vitae is 39 pages long. It's packed with publications, books and awards. I cannot overstate the importance of the body of work that Dr. Hall has bestowed to the world. Dr. Hall, I'm beyond excited to welcome you to the program today.

Dr. Hall: Well, that's pretty flattering, Chris. Thank you. I'm just a regular guy who likes to trout fish like you, but I was trained well. I would like to say that – I was trained well in my undergraduate days at Colgate, and especially by my Doctoral advisor, Howard Odem [PH]. So you can – that's one thing a teacher can tell you that you can take some rather ordinary play, and get a good advisor, and it can make a hell of a difference. And that certainly happened with me.

Chris: Well, fantastic. Since we've met, can I call you Charlie?

Dr. Hall: Sure, sure. Everybody does.

Chris: All right. Charlie, most of my listeners, they're already familiar with the idea that energy returned on energy invested, or EROEI, or Eroei, is important, but for everyone's benefit, familiar or not. Can you please explain EROEI and why it's important?

Dr. Hall: Sure. I might start by discussing, briefly, how the concept came about. I'm an ecologist. I was trained as an ecologist and as a natural scientist – physics, chemistry, geology, all that kind of stuff – and biology, of course. And I did my Ph.D. on the energetics of fish migration. I worked in a small stream in Duke Forest, North Carolina. I was at the University of North Carolina. And at that time, the idea was that fish had home ranges, and they didn’t move. And I put what they call weirs or fish traps into the streams and found that the fish were moving like crazy. So I came up with a process for looking at how much energy the fish used in their migration, and how much they or their descendants would gain from the process of migration. I later extended this to salmon moving out in the ocean and so forth.

What I found was that for every calorie or jewel, that the fish invested in migration there would be a return of at least about five calories or jewels from the process. In other words, it looked like a good energy investment. Now, [audio failure] study for this, but it got me thinking in terms of organisms investing energy into their life history processes and that's true. Everywhere you look, once you're a little bit trained to do so – for example, if you walk on a path in a pine forest and if you look at where the boughs of the tree are, you normally find that in the path or road that you're walking on, the boughs are much lower on the tree than on the other side. In other words, when a bough on a pine tree cannot pay for, through photosynthesis, it's cost of being there, the tree clips it off. And you can see this very clearly if you go out in almost any forest and especially in the evergreen forest it's very clear.

Now, the point is that these energy investment ideas are everywhere in nature. They're not just here, and they're not just there. And in my books, I give many other examples. Now, I was fundamentally an ecologist interested only in nature, but I had a really good undergraduate named Cutler Cleveland when I was a young professor, and we applied these ideas to looking for oil and gas. And I was astonished to find out that it would take, for the United States oil and gas industry, your energy return on energy investment was not that high and declining rather rapidly, even back then in 1980. We were even on the first page of The Wall Street Journal with this paper that we wrote that was published in Science.

And so this began my process of looking at the energy cost of all kinds of things, and the energy gain from that investment because that's what organisms do, or that's what humans do. Certainly, business people know about investments, but you've got to realize that anytime that you're investing, you investing not only money, you're investing energy. And, in fact, we consider money to be a lien on energy, a promissory note on energy. So, if, for example, you buy in New York City, a bagel for a dollar, what that has meant is that that bagel cannot possibly get there without the use of a considerable amount of energy. And that energy is, for example, energy is used in Louisiana to take natural gas and turn it into nitrogen fertilizer, and then it's put in a barge and barged up the Mississippi River to Nebraska, and then a tractor spreads in on a field, and then it plows up the field and plants wheat seeds and later comes along and kills the soil and maybe takes care of the weeds or whatever and certainly harvests it. And then more energy is used to take the harvested wheat and grind it up and turn it into flour. And then they put it in a sack and put it on a railroad train and ship it to New York City. And there somebody boils a pot of water to cook the bagel – oh, and they use electricity to mix the batter, and then they put the bagel into a pot of boiling water to cook it. And there you have a bagel.

Now, that would not have taken place without the use of energy at every step. And that same is true for everything that goes on in our economy. Everything that goes on in our economy requires energy for it to take place. And so we've examined that for a long, long time. Using the concept of energy return on investment for getting the fuels to start with and then later we've developed this into a whole approach to economics called biophysical economics, and I'll put in a plug for my new book, Energy and the Wealth of Nations; An Introduction to Biophysical Economics that's available from Springer. And it will be out almost as we speak. And all of these concepts are developing in excruciating detail there.

Chris: All right. So this idea that it's – it seems very basic; it seems really intuitive; it seems fairly obvious once it's laid out. This idea that you're spending more energy, whether you're a salmon or a potato farmer, then you are returning from that effort, you starve. You end up going bankrupt energetically at some point. So this idea of energy returned on energy invested seems exceedingly important and it seems completely obvious, and yet having read you bio and looked at your work and all of that, you’ve not found it an easy path, say, to get research funding to garner interest around this. Is that a fair way to characterize that?

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Those interested in learning more about Dr. Hall's work after listening to this podcast should consider purchasing his new book  more

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