What is the Minimum EROI that a Sustainable Society Must Have?

TLDR

Economic production relies on depleting fossil fuels, and concerns that market signals may not adequately guide the energy future have intensified since the 2005–2008 oil price surge and 2008 collapse. This paper applies EROI analysis to assess fuels and estimate the minimum EROI a society must achieve to sustain economic activity and social function. The authors review EROI theory in natural and economic realms and calculate a preliminary estimate of the minimum societal EROI, examining the consequences when that threshold is approached. They find a Law of Minimum EROI, estimating a 3:1 ratio at mine‑mouth/farm‑gate for oil and corn ethanol, indicating that biofuels with lower EROI must be subsidized by fossil fuels.

Abstract

Economic production and, more generally, most global societies, are overwhelmingly dependant upon depleting supplies of fossil fuels. There is considerable concern amongst resource scientists, if not most economists, as to whether market signals or cost benefit analysis based on today’s prices are sufficient to guide our decisions about our energy future. These suspicions and concerns were escalated during the oil price increase from 2005 – 2008 and the subsequent but probably related market collapse of 2008. We believe that Energy Return On Investment (EROI) analysis provides a useful approach for examining disadvantages and advantages of different fuels and also offers the possibility to look into the future in ways that markets seem unable to do. The goal of this paper is to review the application of EROI theory to both natural and economic realms, and to assess preliminarily the minimum EROI that a society must attain from its energy exploitation to support continued economic activity and social function. In doing so we calculate herein a basic first attempt at the minimum EROI for current society and some of the consequences when that minimum is approached. The theory of the minimum EROI discussed here, which describes the somewhat obvious but nonetheless important idea that for any being or system to survive or grow it must gain substantially more energy than it uses in obtaining that energy, may be especially important. Thus any particular being or system must abide by a “Law of Minimum EROI”, which we calculate for both oil and corn-based ethanol as about 3:1 at the mine-mouth/farm-gate. Since most biofuels have EROI’s of less than 3:1 they must be subsidized by fossil fuels to be useful.