Energy—The Critical Resource - Economics and Ecology: United for a Sustainable World - page 26

sort), but after the mountain is strip-mined, it resembles more of a flat plain
that now is devoid of coal. And these examples refer merely to the extracting
process, or the obtaining of an energy source, and do not address the entropic
or environmental implications of the use or transformation ( not consumption )
of the energy in doing the work.
A major reason that the act of accumulating a concentration of potential
energy moves us toward a situation in which the systemic energy is dis-
sipated in the larger system is due to the simple fact that it takes energy to
exploit a potential energy source. And this leads to a second principle.
Principle 2—Counting Everything
Accounting for the expenditure of energy must be focused
on net energy and must include all direct and indirect costs.
Counting everything is a monumentally important, but often ignored, princi-
ple. Major miscalculations have occurred through failure to take the whole into
account. The total cost of the energy used to drive the economic system must
be accounted for and monitored in order to conserve biophysical sustainability
and thus the productivity capacity of the total environment for all generations.
For example, during the energy crisis of the 1970s, oil shale was touted as
a promising potential source. Huge deposits of oil-bearing rock formations,
largely around Grand Junction, Colorado, are present in the United States.
Unfortunately, these expectations ignored the realities of the net energy
required in the extraction of the oil.
Subsequent energy-based analysis of five proposed technologies for
extracting the oil revealed that only one even yielded a positive net energy—
and that was by 1 percent. It would have taken 99 barrels of oil as an energy
input to extract 100 barrels of final product. The other four technologies
required more energy in extraction than the energy to be obtained by the
process.
This episode reveals another common mistake in ignoring the reality of
net energy in favor of dollars. Some energy officials at the time contended
that the price of crude oil, then around $10 per barrel, was inadequate to
make oil shale “economically feasible,” but that feasibility would occur when
the price of oil reached $15 per barrel. Apparently, they were projecting the
cost of their required energy for extracting the oil at a constant level, even
while assuming their revenues for the same resource would rise. This bit of
irrationality ignores the fact that in pure economic parlance, their cost curves
would rise at 99 percent of the rate of their revenue curves. A net energy
analysis revealed that a more likely “economically feasible price” would be
in the neighborhood of $600 per barrel, the lion's share of which would obvi-
ously be to purchase energy. Needless to say, we have yet to exploit oil shale
as a source of energy.