Doug Weiss
We have long viewed our natural resources as being unlimited and, at the same time, we know that is not true. I have family photographs of my grandfather and uncles involved in cutting off the great virgin forests of Minnesota over just a few decades. Many of us remember the depletion of the vast iron ore deposits from northern Minnesota and the devastating effects this had on families and on the economy of the region. Based on these common experiences it would seem reasonable to assume that other natural resources are limited and should be managed and conserved. However, when it comes to oil and natural gas, we continue to extract and consume it as if it is an inexhaustible resource. This is an emotionally and politically charged topic and you and I are in the middle of a propaganda war between multi-national oil conglomerates and renewable (i.e. green) energy advocates. It is very difficult to get unbiased information on the total remaining oil reserves and how rapidly oil and gas is being depleted.
A few things are obvious. We know that there is a finite amount of oil and gas in the ground. American oil production peaked about 1975 and then sharply declined but rose again after 2010. So where is this newfound oil coming from? It’s coming from deep beneath the ocean floor, beneath layers of permafrost in the Alaskan wilderness and deep beneath the earth’s crust as we hydraulically fracture layers of shale (i.e. fracking). When these sources are depleted there may be no place left to find new oil reserves.
Further, the oil that is being extracted today is not the same quality of oil that was extracted in the past. Oil is evaluated in terms of net energy derived. Think of it as net income. Net energy is the amount of energy derived from the oil minus the energy required to extract, refine and transport it. In the 1930’s, the net energy of oil was about 100:1 (e.g. 100 units of energy gained for every unit of energy invested). At present it is about 20:1 to 30:1 for conventional crude oil but much less for fracked oil and tar sands oil (1.5:1 to 5:1). You might ask; “How can oil companies survive with such low net energy from these sources?” The answer is government subsidies, which is another way of saying our tax dollars. In 2017, the USA subsidized the oil industry to the tune of $650 billion (approximately 15.7% of our 2017 national budget).
So, as oil reserves decline and net energy derived from the remaining oil decreases, where do we look for the energy we use? Many of us hear about renewable energy sources including solar, wind, hydro, ocean wave energy, and geothermal, as an answer to our energy needs. However, we need to look at the net energy derived from each of these sources. With the exception of wind (8:1 to 20:1) and hydroelectric (20:1 to 40:1), other forms of renewable energy have net energy returns around 5:1 or less. Additionally, these “renewable” energy sources are not truly renewable in the sense that production of materials needed for the manufacture of solar and wind hardware requires mining and processing of conventional and rare earth metals and a large input of fossil fuels.
So we come back to the original question. Do you and I in rural Minnesota need to reduce our energy consumption? Given that oil is a finite resource, that net energy derived from our oil is decreasing, that gas and oil prices are low only because of government subsidies and that the net energy output of renewable sources is relatively low, our conclusion is yes, we do. Not something we like to hear, but remember, our grandparents got by on about 10% of the energy we use. Further, we in the USA represent 4.5% of the world’s population yet we consume 30% of the world’s resources.
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