The coming collapse of China

Antius · 2017-10-08 21:18:54

Falling EROI of China's domestic fossil fuel production, will result in economic collapse of the country unless it swiftly transitions to other sources of energy. This could happen very soon, as the Chinese debt-GDP ratio is already one of the highest in the world. A global peak in oil production is now not very far away.

https://medium.com/insurge-intelligence … 33df2aeb6b

louis · 2017-10-09 00:55:37

Pigs will fly south for the summer. One thing we can be pretty much sure of is that China's economy won't collapse because they are moving into green energy - any more than Germany's has. A banking crisis, an investment crisis, huge financial corruption, a US trade embargo or an internal political crisis, perhaps but not EROI.

Antius wrote:

Falling EROI of China's domestic fossil fuel production, will result in economic collapse of the country unless it swiftly transitions to other sources of energy. This could happen very soon, as the Chinese debt-GDP ratio is already one of the highest in the world. A global peak in oil production is now not very far away.
https://medium.com/insurge-intelligence … 33df2aeb6b

Antius · 2017-10-09 01:16:22

louis wrote:

Pigs will fly south for the summer. One thing we can be pretty much sure of is that China's economy won't collapse because they are moving into green energy - any more than Germany's has. A banking crisis, an investment crisis, huge financial corruption, a US trade embargo or an internal political crisis, perhaps but not EROI.
Antius wrote:
Falling EROI of China's domestic fossil fuel production, will result in economic collapse of the country unless it swiftly transitions to other sources of energy. This could happen very soon, as the Chinese debt-GDP ratio is already one of the highest in the world. A global peak in oil production is now not very far away.
https://medium.com/insurge-intelligence … 33df2aeb6b

I don't see how Louis can profess to know that. Renewable energy is bleeding Germany dry:

http://fortune.com/2017/03/14/germany-r … rgy-solar/

It is scaling back it's feed-in tariff.

http://www.pes.eu.com/renewable-news/ge … ariff/234/

As of yet, it provides about a third of German electricity consumption and a much smaller proportion of other energy. And Germany's carbon dioxide emissions are rising!

https://www.technologyreview.com/s/6015 … enewables/

So far, some $4trillion have been poured into this white elephant with little to show. Global investments have tanked since the last financial crisis. What was the point of any of it? How much more money must be poured into this white elephant? When will the Green Gods be appeased?

http://euanmearns.com/worldwide-investm … ow-for-it/

Last edited by Antius (2017-10-09 01:25:16)

louis · 2017-10-09 10:02:53

You don't like green energy, that much is clear but Germany and Denmark both have very healthy economies, export industries and societies by any measure you may care to apply. The last thing anyone would accuse the Chinese of is being sentimental but they are investing hugely in green energy.

https://www.bloomberg.com/news/articles … f-official

They are adding about 40 plus Gws of capacity per annum. That is big.

Antius wrote:

louis wrote:
Pigs will fly south for the summer. One thing we can be pretty much sure of is that China's economy won't collapse because they are moving into green energy - any more than Germany's has. A banking crisis, an investment crisis, huge financial corruption, a US trade embargo or an internal political crisis, perhaps but not EROI.
Antius wrote:
Falling EROI of China's domestic fossil fuel production, will result in economic collapse of the country unless it swiftly transitions to other sources of energy. This could happen very soon, as the Chinese debt-GDP ratio is already one of the highest in the world. A global peak in oil production is now not very far away.
https://medium.com/insurge-intelligence … 33df2aeb6b
I don't see how Louis can profess to know that. Renewable energy is bleeding Germany dry:
http://fortune.com/2017/03/14/germany-r … rgy-solar/
It is scaling back it's feed-in tariff.
http://www.pes.eu.com/renewable-news/ge … ariff/234/
As of yet, it provides about a third of German electricity consumption and a much smaller proportion of other energy. And Germany's carbon dioxide emissions are rising!
https://www.technologyreview.com/s/6015 … enewables/
So far, some $4trillion have been poured into this white elephant with little to show. Global investments have tanked since the last financial crisis. What was the point of any of it? How much more money must be poured into this white elephant? When will the Green Gods be appeased?
http://euanmearns.com/worldwide-investm … ow-for-it/

elderflower · 2017-10-09 14:05:17

China is in desperate need of non-polluting energy sources. Most of its power comes from coal and it's road
traffic is increasing enormously. The pollution in it's cities is costing China's government and industry vast sums. I've seen both Beijing and Nanjing during minor pollution episodes. The Chinese plain is prone to strong atmospheric inversions which trap the pollutants.
China would be looking for cleaner solutions regardless of global warming.

louis · 2017-10-09 15:47:21

Yes, they don't care about global warming - it is a two edged policy: to clean up the cities (thus keeping the middle classes politically quiet) and provide cheap energy. I think the PV power in China is probably a lot cheaper than in some other parts of the world.

elderflower wrote:

China is in desperate need of non-polluting energy sources. Most of its power comes from coal and it's road
traffic is increasing enormously. The pollution in it's cities is costing China's government and industry vast sums. I've seen both Beijing and Nanjing during minor pollution episodes. The Chinese plain is prone to strong atmospheric inversions which trap the pollutants.
China would be looking for cleaner solutions regardless of global warming.

JoshNH4H · 2017-10-10 18:29:29

I've seen the EROI argument floating around on this forum before, but I think it misses a lot of important points and overstates the level of certainty we have about a whole lot of numbers. Before I launch into why, however, I will sum up my understanding of the argument:

EROI (Energy Return on Investment) is a figure of merit for all energy sources. You can calculate the EROI of any given power system by dividing its total energy output by the energy input required to create and operate said system
Any system with an EROI below 1 is actually a net energy sink
EROI is the most critical figure for determining whether an energy source is good or not (even more important than, say, $ per gigajoule)
Roughly speaking, the EROI of various energy sources is generally cited as follows:
- Nuclear: Very high (50-100)
- Fossil Fuels: Moderate to High (10-50, depending on type and source quality)
- Traditional hydropower: Moderate (Roughly 10)
- Most non-emitting renewables (wind, solar, tidal): Low to moderate (1-10)
- Biofuels, including Ethanol: Low (0-3)
- Farming for food using human or animal power: ???
Antius has also claimed that the appropriate way to compare EROI is to include reductions for storage requirements to completely level out power variations for variable energy sources
Taken together, proponents of this theory will often argue that an EROI below some number (most often 7) will inevitably result in societal collapse because the energy source can no longer sustain the society based upon it. They often cite it as a kind of metafactor in various historical societal collapses, including ancient Rome.

I don't want to get sucked into a debate on climate change or energy policy per se, but I don't think it's possible to talk about this argument entirely in isolation. It is most often employed as a rejoinder to renewable energy, sometimes by people who favor nuclear energy but just as often by people who deny the science of climate change and global warming in their entirety. We all come to the table with our own biases (especially on this forum, which has an impressively diverse mix of political views) so I think it's important to air them openly. As far as I'm concerned, climate change is real, and caused primarily by human emissions of CO2 and other greenhouse gases. I believe that nuclear fission is the best power source available to us, but also that given real safety concerns with nuclear (low-probability, high-cost) and the exaggeration of those concerns in the public's mind that renewable sources like solar and wind can be adequate, emission-free substitutes for fossil fuels.

Having said that, I have lots of problems with the EROI argument being made in this thread and elsewhere.

My first problem with it is that the EROI measure is not as neat or as easy to determine as the argument makes it seem.

EROI is the ratio of outputs to inputs. Each has its own problems and is difficult to measure in its own way. All energy is not created equal. Some sources produce heat, which is then converted to electricity. Which do you use? If you're looking for heat (which sometimes you are) they're the same, but if you need electricity (oftentimes you do) heat is much less valuable--roughly by a factor of 2.5-10, depending on the quality of the heat and the application (less efficient in some engines and at smaller scale).

This problem gets even more tricky when you start talking about storage. Some sources, like nuclear and coal, required plants to be in continual operation. Others, like natural gas and traditional hydro, can generate more and less energy as needed. Still others, like solar and wind, are variable and generate energy according to local environmental conditions. Demand for energy is never zero, but it does rise and fall throughout the day and throughout the year. Coal and nuclear are generally not able to ramp production up and down quickly enough, while the variations in solar and wind are far greater than (and often not correlated with) the cyclic variations in human power demand.

How do you count the value of energy produced by a nuclear plant at night, in excess of demand (this energy is often simply wasted)? How do you count the value of solar energy required to be stored in batteries for use at night? Do you count transmission losses?

I don't think there's any objective way to do this, especially not for a given energy source in isolation, but the choices you make can be hugely influential in determining the value for energy output that you end up with.

On the input side, just to start, you have all of these problems. Oil extraction often requires burning petroleum. Some amount of methane gas is usually just burned off. Does this count as an input, or is it removed from the equation altogether.

Do transportation costs count? Is the EROI for coal different in Wyoming and California (Wyoming produces a lot of coal and California doesn't, so it has to be transported). Coal is used to smelt Iron ore in steel production. Steel is used in basically everything. How do you count that?

It gets even trickier when you look at labor. When talking about labor, please consider that this paradigm is applied to societies that existed before the age of powered machines, when human and animal power were the only kinds available.

People consume energy in all sorts of ways. They eat. The heat their homes. They use electricity. They use transportation. They purchase and dispose of items that require energy to produce.

Labor is unquestionably an input for all energy sources. In the case of traditional farming, it's the only input. But how do you measure the energy input? People are not efficient. It's much less efficient to feed someone barley and have them turn a crank 8 hours a day than to burn the barley in a furnace and use it to power a steam engine.

It gets even worse when you consider that the energy inputs to labor are dependent on the standard of living in a given country. In that accounting, it is genuinely possible for the same solar panel built in India to have a higher EROI than if it were built in Germany.

So, EROI is dependent on standard of living but (according to the proponents of this theory) the standard of living is dependent on EROI.

For any energy source, there is a reasonable set of assumptions that shows it to have anything from a high EROI to being a net energy consumer.

Now on top of all the uncertainty inherent to the EROI measure, it's almost impossible to measure it for various times in history. Anyone who claims EROI in the Roman Empire was 8 in 300 CE and 6 in 400 CE is lying either to you or themselves. There's no way the evidence to support that exists, and anyway energy serves a fundamentally different purpose in today's society than it did in ancient times.

JoshNH4H · 2017-10-10 18:31:44

I propose a couple different, simpler figures of merit for the cost of energy, ones with intuitively obvious applications to the real world: Dollars per gigajoule of the primary energy source and portion of GDP devoted to energy production.

SpaceNut · 2017-10-10 22:20:45

When the employee wage plus energy costs are more than what the exported item will be sold for then China will have a problem....

Terraformer · 2017-10-11 04:12:24

Roughly speaking, the EROI of various energy sources is generally cited as follows:
Nuclear: Very high (50-100)
Fossil Fuels: Moderate to High (10-50, depending on type and source quality)
Traditional hydropower: Moderate (Roughly 10)
Most non-emitting renewables (wind, solar, tidal): Low to moderate (1-10)
Biofuels, including Ethanol: Low (0-3)
Farming for food using human or animal power: ???

I'm fairly certain hydropower has the highest EROEI - that's a major reason for why it's the cheapest source of electricity. I grabbed this off wikipedia’s article for EROEI:

Food production at the moment has takes 10 times as much energy (from fossil fuels) to grow than we get in food, but food production using human and animal labout necessarily has an EROEI greater than 1.

JoshNH4H · 2017-10-11 07:35:46

Antius provided this graphic, which gives somewhat different values:

He also referenced this site, which contains the following (it looks like it was scanned from a book):

Each source gives different values.

Antius · 2017-10-11 15:46:22

Excellent post Josh. I don't disagree on any particular point. One way of assessing the EROI when heat is involved, would be to convert the heat into exergy equivalent. The exergy equivalent of electricity is close to 1, whereas for heat, it can estimated using the Carnot equation.

Here is a link to the EROI study that generated the chart: https://festkoerper-kernphysik.de/Weiss … eprint.pdf

louis · 2017-10-11 17:08:59

EROI is somewhere between economics and voodoo, in terms of its relation to provable facts.

Take the figures cited for nuclear power. When I've looked into that before, it appears as though analysts don't count the energy required to keep the workers in nuclear power stations (plus also the safety inspectors etc) alive as part of the energy input. Why not? This is a cheat because of course nuclear, unlike some other energy forms is quite labour intensive, surprisingly so for such an advanced technology. And is the energy input required for decommissioning included? Because we are down to pay about £75 billion in the UK for decommissioning our existing plants.

You have to ask how can nuclear have such a wonderful EROI but be so unbelievably expensive. It doesn't make sense.

As for something like oil and gas, do they include the energy that goes into building the ports you have to build to receive the fuel loads if your country doesn't produce oil or gas - and then the onward transmission by road and rail? If not, why not?

This paper gives an EROI of 9-10 for solar.

http://www.sciencedirect.com/science/ar … 1516307066

Personally I think it is best to look at levelised price comparisons, excluding subsidies, rather than chasing EROI down rabbit holes.

JoshNH4H · 2017-10-12 08:43:00

As far as general use I do like exergy but it's not a universally valid metric because sometimes you actually want low-quality energy. As rare as this is I'm mostly with louis on this one, unsubsidized production prices (probably also accounting for environmental damage and human health effects) are the best metric by which to evaluate energy sources. EROI is baked into that since energy consumption is included in production costs.

Antius · 2017-10-12 09:34:23

JoshNH4H wrote:

As far as general use I do like exergy but it's not a universally valid metric because sometimes you actually want low-quality energy. As rare as this is I'm mostly with louis on this one, unsubsidized production prices (probably also accounting for environmental damage and human health effects) are the best metric by which to evaluate energy sources. EROI is baked into that since energy consumption is included in production costs.

To a degree. I think the problem with EROI is that there is no clear cut off as to where one should set the boundaries of the analysis. The EROI (and rate of return EROI) will inevitably influence the price of energy from a source. However, prices are influenced by economy of scale. It is not clear how this is factored into EROI. Low economy of scale and poorly developed build processes is why some new nuclear projects appear relatively expensive.

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The coming collapse of China

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