The Decline in Cheap Energy, Hidden fuel costs, EROI, energy return on investment
Many experts say that high-quality fossil fuels that are cheap to extract are dwindling, forcing the world to turn to energy sources that are more costly to produce. This situation is revealed by calculating EROI—the energy obtained per unit of energy spent to obtain it. Conventional oil has a much more favorable EROI than other sources of liquid fuel (chart at top right), but its score is declining steadily (graph below). Conventional sources of electricity also have high EROIs (chart at bottom right), which can pay off handsomely when used for transportation (chart at far right). “The age of cheap energy is over,” said Nobuo Tanaka in 2011, when he was the International Energy Agency's executive director.
Oil's Advantage Drops
A modern economy requires fuels that have an EROI of at least five. For decades oil from conventional deposits soared above that threshold, but it is now dropping. Substitute sources such as heavy oil (thicker petroleum composed of longer hydrocarbon molecules) are more energy-intensive to produce, so they have lower EROIs. But alternative fuels, such as diesel made from soybeans, offer some hope.
Mileage Return on Investment: Electricity Wins
Transportation fuels are not created equal. A car will go farthest on energy invested in generating electricity, then on conventional gasoline, followed by ethanol made from sugarcane. The miles traveled are based on the energy required to make each fuel, as well as its energy density (for example, ethanol's energy density is roughly 67 percent of gasoline's). For electric cars, this value does include electricity trans-mission, but not manufacturing batteries.