{"id":94,"date":"2014-04-04T15:09:27","date_gmt":"2014-04-04T15:09:27","guid":{"rendered":"http:\/\/sussexnrggrp.wordpress.com\/?p=94"},"modified":"2015-06-09T11:02:42","modified_gmt":"2015-06-09T11:02:42","slug":"energy-surplus-the-economy-blind-spot","status":"publish","type":"post","link":"https:\/\/blogs.sussex.ac.uk\/sussexenergygroup\/2014\/04\/04\/energy-surplus-the-economy-blind-spot\/","title":{"rendered":"Energy surplus: the economy blind spot?"},"content":{"rendered":"

\"North<\/a><\/p>\n

The special importance of energy has tended to be ignored or downplayed by conventional economists although it has recently become a political hot potato in the UK and elsewhere. What is also largely ignored is the importance of a large energy surplus to the health and strength of an economy that in turn impacts on our general standard of living.<\/p>\n

Energy surplus is a simple concept \u2013 it\u2019s the calculation of net energy output. In other words: the energy generated less the energy expended required in order to acquire it.\u00a0 Energy inputs include the energy embodied in operating equipment and buildings and the energy consumed by them. If you are into metrics the calculation to compare different energy supply technologies is the ratio of energy output to the energy inputs. This is called the energy return on energy invested; EROI or EROEI.<\/p>\n

Many countries have long enjoyed the large energy surplus provided by fossil fuels. This has enabled economies to diversify and become ever more sophisticated since the levels of energy surplus have been greatly in excess of that needed to satisfy basic human needs. In order to maintain such an economy, and therefore standard of living, then that large energy surplus needs to be maintained. This is achieved either by sources that produce a large energy surplus or considerable amounts of sources with a lower energy surplus.<\/p>\n

There are signs however that the large energy surplus that has been enjoyed in the past may be on the decline. This is mostly driven by a decline in the EROI for oil and gas. Global production of oil and gas was 30:1 in the 1990s but in 2006 this had fallen to 18:1 (Gagnon, Hall, & Brinker, 2009). And with oil and gas still making up the majority of our global primary energy supply, 52.8% in 2011 \u2013 virtually unchanged since 1973 (IEA, 2013), this decline is important.<\/p>\n

It\u2019s fairly easy to understand that no life form can survive for long while energy inputs exceed the energy output. What appears to be harder to realise is that trends in energy surplus also have serious implications for the economy.<\/p>\n

A decline in energy surplus occurs for the following reasons:<\/p>\n