"System change is now inevitable. Either because we do something about it, or because we will be hit by climate change. '...

"We need to develop economic models that are fit for purpose. The current economic frameworks, the ones that dominate our governments, these frameworks... the current economic frameworks, the neoclassical, the market frameworks, can deal with small changes. It can tell you the difference, if a sock company puts up the price of socks, what the demand for socks will be. It cannot tell you about the sorts of system level changes we are talking about here. We would not use an understanding of laminar flow in fluid dynamics to understand turbulent flow. So why is it we are using marginal economics, small incremental change economics, to understand system level changes?"

Thursday, March 13, 2008

Energy is unbelievably cheap

A hundred dollars a barrel. A barrel! Energy is unbelievably cheap.

That's about six million BTUs. One point seven megawatt hours. With that $100 barrel you can power your laptop for two years. You can ship hundreds of pounds of bananas from Guatemala. You can microwave a hundred and two thousand cups of tea to steaming warmth. You can power the digital clock on your microwave for seven million years!

It's not that energy is too expensive. It's that it's too cheap. It's made us ridiculously lazy.

As a consequence of our laziness and our wealth, our demand for energy is inelastic.

It's a consequence of the cheapness of energy that poor people in America need cars. In the past, we had to house them in little hovels behind the rich people's houses, which was bad for morale (among the rich people especially). For this marginal gain and others like it we clog the highways and twist the world's culture and politics into knots. We can manage that only because energy is so cheap, and the transition is only a problem as it becomes slightly less cheap.

Once it settles down to a realistic true cost, probably three to five times what it costs today, we can all do just fine, assuming we stop making the wrong choices at every turn.

John Mashey, on John Fleck's blog, comes up with a link to the efficiency of big trucks. We see an estimate of how many ton-miles of cargo you can carry on a gallon of fuel in a big rig. The answer is about 200. So how much does it cost to carry a tomato from California to Maine?

It's about 3000 miles. It's about 1/4000 of a ton. So its about 3/4 of a ton mile. OK, make it a nice big juicy tomato. It's a ton-mile. So that costs about 1/200 of a gallon of fuel, or about a penny and a half.

Suppose the price of fuel triples. Your tomato will cost almost an extra nickel. Big deal.

This idea that we need to shop for locally grown vegetables for energy reasons is simply innumerate.

Energy is very very very cheap, and once it is only very, very cheap (one less very) it will still be not a big environmental impact or cost to move a tomato across the continent. You are going to expend about as much energy cooking the tomato sauce as you did shipping the tomato.

Suppose you drive twenty miles round trip to the farmer's market to pick up a half dozen locally grown tomatos. That's 2 pounds of tomatos and one gallon of gas, or about 50 cents per tomato. Your per-mile efficiency was 30,000 times less than the truck's delivery was. In this realistic scenario you spent thirty times as much energy buying locally as I did walking or biking to the supermarket for an agribusiness tomato.

We may yet ruin our civilization out of rank stupidity, but the scenario where it will be so dramatically more expensive or more damaging to the environment to have a long distance tomato that we'll have to give up on out-of-season tomatoes isn't even worth worrying about. You might want to live closer to the market, though.

Energy's real cost is not about money but about how we organize ourselves and our lives. How we grow the tomato counts and how we ship it ocuts for more than where we grow it and how far we ship it, though the latter is more visible. The unintended and obscured activities swamp the intended and obvious ones.

The big comeuppance comes when the auxiliary costs of all the various pokes and prods to the biosphere actually start interacting in a major way.

Not to minimize the effect on poor people here and abroad who have to stretch to get the energy they need, but peak oil is way, way, way overrated as a threat to the western way of life. The shifts we face will be costly, but not overwhelming, unless we persist in being stupid and ignorant about them.

Meanwhile, do your arithmetic. Buy global but walk to the market.

Update 4/15: This from comments to an interesting article on the Oil Drum site:

a US gallon Gasoline = 115,000 Btu
1000 Btu = 0.293 kWh
therefore a US gallon = 115 x 0.293 kWh = 33 kwh

Assume, at best, in an 8 hour working day you could get 100w continuous useful work from a man, ~0.8 kWh?

As a check, a normal man should consume ~ 2,500 kilocalories per day? (1 kilowatt hour = 859.6 kilocalories, so about a third converted to useful work seems reasonable?)

Therefore a US gallon contains the same amount of useful energy as 33/0.8 = 41 days or ~330 hours of human (slave?) labor!

In a barrel there would be 42 x 330 ~ 13,800 hours of manual labor.
13,800 hours of manual labor at $20 per hour is $267,600 per barrel.

So oil at $100/bbl is still quite a bargain.


gravityloss said...

A good post. Money is a good way to make people to automatically pay attention to relevant things.

The last mile dominates the food energy usage, IF you drive a car to a supermarket like many people do. That's because the car is so heavy compared to the products.

This is a known thing. Most people (not me) want to go to supermarkets because they have more choice than local small stores. That's especially true if you are a vegetarian by the way (which I'm not) - kinda ironic.

Oh, by the way, over here in Finland, there's two choices for tomatoes in the winter: state-subsidized artificial light and heat greenhouse ones or ones flown from Spain. I think the ones flown from Spain have actually less energy cost. And they have quite a lot.
Of course the least energy cost would be to eat storable vegetables during the winter. Most people probably wouldn't even mind - it's just that the food culture is such that people don't pay any attention.

Oh, I think about 30-40% of US deficit is coming from oil actually. Expensive oil makes the dollar go down. Does Texas still produce more oil than it uses?

Michael Tobis said...

Your question about whether Texas is a net exporter of crude oil is interesting in principle. We certainly produce a lot and consume a lot. I don't know.

In practice, Texas is certainly a net exporter of refined petroleum products anyway, so we get a net benefit from other people's troubles, as long as our refining infrastructure holds up anyway.

It will be an interesting irony, and an interesting illustration of how tightly coupled everything is, if what eventually takes out that Texas advantage turns out to be anthropogenic sea level rise. Most of the oil refining and shipping infrastructure is on a very shallow coastal plain.

Dano said...

This post is why I read you, sir. But I must say:

This idea that we need to shop for locally grown vegetables is simply innumerate.

This presumes an economic argument. I'm not sure I've read a green argument that says "it's cheaper to buy local".

Nonetheless, Vonnegut said what you wrote, a bit differently:

"The good Earth - we could have saved it, but we were too damn cheap and lazy."



tidal said...

Hi Michael,

A good topic. And my guess is that if John Mashey appears in the comments, he will probably agree with you that "energy is unbelievably cheap" - we've mispriced its true cost. And he will probably disagree about the eventual magnitude of consequences of a repricing on the economy, at least somewhat.

I think this is a topic we should explore a great deal more, but I want to point out what I think is a potentially major boo-boo in your piece. I will use this quote to highlight it: "Suppose the price of fuel quadruples. Your tomato will cost almost an extra nickel. Big deal."

Well, if you consider just the transport cost, perhaps. But here is some useful context:

"The energy costs of common foodstuffs range widely, due to different modes of production (such as intensity of fertilization and pesticide applications, use of rain-fed or irrigated cropping, or manual or mechanized harvesting) and the intensities of subsequent processing. The typical costs of harvested staples are around 0.1toe/t* (*ton of oil equivalent per ton) for wheat, corn and temperate fruit, and at least 0.25 toe/t for rice. Produce grown in large greenhouses is most energy intensive: peppers and tomatoes costs as much as 1 toe/t. Modern fishing has a similarly high fuel cost per kilogram of catch. These rates can be translated into interesting output/input ratios: harvested wheat contains nearly four times as much energy as was used to produce it, but the energy consumed in growing greenhouse tomatoes can be up to fifty times higher than their energy content.

These ratios show the degree to which modern agriculture has become dependent on external energy subsidies: as Howard Odum put it in 1971, we now eat potatoes partly made of oil. But they cannot simplistically be interpreted as indicators of energy efficiency; we do not eat tomatoes just for their energy, but for their taste, and vitamin C and lycopene content, and we cannot (unlike some bacteria) eat diesel fuel. Moreover, in all affluent countries, food's total energy cost is dominated by processing, packaging, long-distance transport (often with cooling or refrigeration), retail, shopping trips, refrigeration, cooking and washing of dishes - at least doubling, and in many cases tripling or quadrupling, the energy costs of agricultural production."
(Smil, Energy, 2006. pg. 152)

This is the thing with energy - and particularly with energy from oil... It is so interwoven in the fabric of the economy... I don't think that 3-to-5-fold increase in energy prices, which you suggest, would be anything near as benign as you suggest... Yes, you go after the low-hanging "fruit" first in terms of walking or cycling to shop instead of driving, but that only barely begins to touch the energetics involved even in your simple tomato example.

I have recommended Smil's new 2008 text before on this general topic, and will do so again here. Energy in Nature and Society: General Energetics of Complex Systems.

But a great topic and post and I hope we get some good discussion.

Michael Tobis said...

Tidal, it may indeed be that most of the rest of the cost of the agribusiness tomato is due to energy inputs into the process of growing it. If that is the case we will need to find other ways of growing tomatoes.

In no case, though, does it matter how many miles the tomato travelled, only the quantity of fuel used ion its transport. Large vehicles are hugely more efficient than small vehicles on this basis, which is an economy of scale, like it or not.

I think Dano's comment is similar.

The issue I raise is only about energy impact of transportation.

It's a misplaced concern. Not as misplaced as the idea of unplugging microwaves to save on the energy of their clock displays, but misplaced nonetheless.

John Mashey said...

thanx for the earlier recommendation on Smil, I got a couple of his earlier books and have been reading.

I did do an earlier post, but it seems to have disappeared. I won't try to reproduce it, but basically:

1) Reasonable overall point, transport costs via big transport are fairly low.

2) However, MT's analysis omitted things like the long cold-chain that it takes to get California tomatoes to Maine, i.e., refrigerated trucks, cold-storage depots, etc. One way or another, refrigeration adds energy costs, although it still is unlikely to be huge. Of course, being located in CA, fresh fruit & vegetables are handy ... as long as there is water...

3) MT's analysis on the buy side seemed skewed to over-emphasize the point:

maybe somebody drives 20 miles to buy a few tomatoes. I don't know who, though. Of people who commute, I'd guess a lot rarely make a special trip for groceries, but combine it with other shopping, or more likely, stop on the way home from work. In the latter case, the incremental transport cost is ~0.

Speaking as an old farmboy:

- most of what most farmers sell isn't bought at the farm, unless they just happen to have property on a busy road. (a)

- farmers deliver fresh produce to (b) regular markets (c) farmer's markets (d) restaurants, and if they have any sense at all, they follow a sensible route and make a bunch of deliveries. Such trucks are actually quite susceptible to being made PHEV, and people are doing that.

Put another way, *long distance* transport will need to keep using fossil fuels for a long time. Short-distance can and will go electric, with costs depending on how the electricity is supplied.

In our case:
a) There is a big farm with its own market, about 4 miles down the road that we naturally travel 3-4 times/week. We just stop and see what they have. *Their* cold-chain isn't much, and doesn't need to be.

b) There are several regular markets within 6 miles, located in places we have to visit for other reasons, that offer at least some local produce, delivered as noted.

c) And also within 6 miles, there is a farmers' market once a week.

d) And there are some restaurants that get some truly wonderful fresh food this way. For anyone in the SF Bay Area, I'd recommend trying Jesse Cool's places, The Flea Street Cafe (serious meal) or ZCool (lighter), http://www.cooleatz.com/ .

Of course, my wife likes to grow tomatoes, which is the other alternative :-)

Of course, most of this is about taste, rather than cost.

Since we're on food, I'd also recommend "The Omnivore's Dilemma".

Dano said...

Pollan's book after The Omnivore's Dilemma may be even more disturbing wrt what we eat today vs what our genes are set up for.

Nonetheless, I do miss CA produce, having since lived in WA and now CO. I've built a cold frame with an automatic ventilator and I'll have produce soon, which is a big deal around here. Point being that localvores eating fresh in a good deal of the country is problematic at best.

But food miles should be counted. Carbon footprints are huge in our industrial ag economy, and we can do a lot better.



Simon Donner said...

Terrific post. Another way of this is that buying local only makes sense if the local way of producing the food is more efficient. A point ethicist Peter Singer likes to make is that may take less energy to grow rain-fed crops in Bangladesh and ship them to California than to grow those crops in the Central Valley where they are irrigated with water pumped from the Colorado.

The most efficient approach would be to buy environmentally suitable local food. Problem is we have a taste for the more exotic foods rather than that which is best suited to the environment in which we live. Otherwise, we Vancouverites would subsist on moss and seaweed.

John Mashey said...

(Sitting a bit North East of Simon's Vancouver, near Lake Okanagan, which has nice fruit and even some decent (Canadian!!) wines... so there's hope.

At any point in time, there's a tradeoff between local and remote, including the transport cost. It's worth reading:


Over time tradeoffs change.

Dano said...

A point ethicist Peter Singer likes to make is that may take less energy to grow rain-fed crops in Bangladesh and ship them to California than to grow those crops in the Central Valley where they are irrigated with water pumped from the Colorado.

The Central Valley uses no water from the Colorado, but this raises an interesting discussion (CVP and SWP are from the SierNev, not Colorado basin - fish screens and ESA).

The old farmers of the 1800s-1930s drained all the wetlands from the Great Central Valley, reengineered the topography, and eliminated both the steppe and the wetlands. This had the effect of eliminating most of the habitat for migrating birds along the Pacific Flyway.

Today, rice paddies replace the wetlands, and relict spots of upland steppe are being replaced by organic farmers (sorry MT) along the downhills from the Blue Oak zone in the Valley.

What does this mean? Farmers find that birds are a boon to their crops, and allowing geese to spend an extra week or two eating stubble and pooping is better economically for their rice. Oh, and the silica in the air no longer lodges in the lungs of residents of the east side of the valley (replaced by PM2.5 from auto exhaust, but still). Seminative habitat (natives don't like to come back in disturbed soil) harbors migrating non-waterfowl.

Farmers learn to use what they have, and can adapt to old ways that make sure we don't eat oil. And there's benefits. But as MT says, we have to be able to walk or bike to the store to make it count (yes, yes, shipping counts too). Our land use patterns don't allow most people to travel to the store via non-motorized transportation. Eliminating fossil fool-based fertilizer and pesticide will get us a long way toward sustainability. We'll figger out our own way to transport ourselves around when gas is $10.00/gal, as we need to eat and need material.



Michael Tobis said...

John, interesting, but note the article predates the plunge in the US dollar by what, 25%, which I guess dominates energy as a trade disruptor.

Dano, thanks for your thoughts. I don't object to organic; it serves many purposes as you say.

The question is whether the world's population is small enough to treat universal organic practices as a realistic goal. I doubt it, though I myself haven't seen the arguments either way in detail. I'm still looking in case someone has some recommendations.

As for $10 gasoline, it's still cheap enough that many people will continue to use it intensively. It won't go over $10 pre-tax because somewhere in there coal or bio fuels cut in (let's hope its the latter) or better still we switch to grid-powered vehicles.

Dano said...

The question is whether the world's population is small enough to treat universal organic practices as a realistic goal. I doubt it, though I myself haven't seen the arguments either way in detail. I'm still looking in case someone has some recommendations.

I don't think, Michael, the population is small enough for all organic. I suspect in the recent past I may have come across as implying such. Nonetheless, 1-2B sure. But the population isn't small enough to not exhaust all ecosystem services either at present consumption.

The issue is about interim goals, soft landings and how do we switch an important sector away from fossil fool without major disruption. Organic fits that bill nicely.



tidal said...

A bit of non-sequitor, but some interesting examples of how "cheap" energy is at $100/bbl in slides 13, 14 here.
Vicks Nyquil: $4121/bbl, $98/gallon
Right Guard Deodorant: $2403/bbl, $57/gallon
Pert Shampoo: $1509/bbl, $36/gallon

Ah, the invisible hand in action...

John Mashey said...

Here's a useful relevant article:

Speaking as an old farmboy, I can't imagine the US being able to return to a 100% local organic setup. For one thing, too many calories are efficiently grown in the US where people aren't, in great farmland. We are necessarily more long-distance transport dependent than, say France.

We eat a lot of local stuff because it's really tasty, and because we have luxury of living in CA.

As for $10 gas, for sure, it will still get used extensively, but it takes time to cost-effectively change infrastructure, and EROI is headed down for a while.
I think I've mentioned Charlie Hall here before, but if you haven't seen http://scitizen.com/screens/blogPage/viewBlog/sw_viewBlog.php?idTheme=14&idContribution=1305
it's worth reading, as are some of the presentations in Charlie's home page.

My main objection to the original article wasn't to the fact that long-distance bulk transit was cheap, it was the way that the local part was skewed.

In any case, local travel is the piece we can (and must) electrify as fast as we can, whereas longer-distance is harder.

Fossil fuels are like capital.
Building windmills or solar or hyroelectric dams, from an EROI view, are like investing part of your capital to produce a long-tem return. At first, though, you are negative, which is why, for instance, a lot of people don't spend money on better insulation or even put in CFLs. A lot of third-world farmers are poor because they simply don't have capital to invest in things that would help in the long run.

Humans have gotten a one-time giant windfall in fossil fuels, like a one-time inheritance, which can be split amongst investing in assets that will have long-term returns or not.

I continue to recommend the following two articles, which make way more sense to me than a lot of economics that seems to have gotten unattached from land & energy.



So, the bottom line is: if energy is free, or at least underpriced (which both of these articles effectively think), then it makes absolute sense to grow food where it is best grown, build products where they are best built, and then ship them around.

We used to every generation being richer than the previous, and standard economics expects several % growth in world GDP, based on experience of the last 100 years ... in which we got:
a) Efficiency gains
b) More and more use of fossil fuels

Well, there's a lot more a), but b) : oil, gas, and then coal all peak, and if we burn too much unsequestered coal... bad.

EliRabett said...

Once expressed to me as "don't underestimate the bandwidth of an 18 wheeler thundering down the interstate filled with tapes."

asynchronous13 said...

You're overall premise, that energy is cheap, is fair. But there are major flaws in your analysis. I'll enumerate two of the most obvious flaws:

1) You compare independent energy costs:
A) energy required from farm to store, and
B) energy required from store to home.

Whether the juicy tomato arrives at the store from a cross-country truck, or a hippie on a bike from the local farm co-op, the energy cost that the end consumer uses does not change.

2) You compare a fraction to a whole. You make the assumption that the cross-country truck is full of tomatoes, and calculate the fraction of energy used for one tomato (which is fair). Next, you attribute the whole cost of the trip to the farmer's market to the tomato! Obviously, the cost attributed to the tomatoes should be divided among the entire quantity of groceries purchased.

You successfully made the point that bicycling to the store uses less energy than does driving to the store. However, your commentary makes no useful analysis of long-distance vs local farm delivery.

(why am i replying to a year old post? no idea)

Michael Tobis said...

No, I attributed a sixth of the carbon for the trip to the tomato. Its an extreme case but not hopelessly unrealistic.

And I compared the two independent quantities to demonstrate that one was potentially so much larger than the other, that the attention in the problem is consistently misallocated.

Like ordering a whooping crane sausage pizza and having anxiety about the price of the mozarella, it is simply wrongheaded.