Gail Tverberg: Why peak coal, oil, and natural gas will all happen at the same time

The world’s coal resources are clearly huge. How could China, or the world in total, reach peak coal in a timeframe that makes a difference?

If we look at China’s coal production and consumption in BP’s 2016 Statistical Review of World Energy (SRWE), this is what we see:

Figure 1. China's production and consumption of coal based on BP 2016 SRWE.

Figure 1. China’s production and consumption of coal based on BP 2016 SRWE.

Figure 2 shows that the quantities of other fuels are increasing in a pattern similar to past patterns. None of them is large enough to make a real difference in offsetting the loss of coal consumption. Renewables (really “other renewables”) include wind, solar, geothermal, and wood burned to produce electricity. This category is still tiny in comparison to coal.

Figure 2. China's energy consumption by fuel, based on BP 2016 SRWE.

Figure 2. China’s energy consumption by fuel, based on BP 2016 SRWE.

Why would a country selectively decide to slow down the growth of the fuel that has made its current “boom” possible? Coal is generally cheaper than other fuels. The fact that China has a lot of low-cost coal, and can use it together with its cheap labor, has allowed China to manufacture goods very inexpensively, and thus be very competitive in world markets.

In my view, China really had no choice regarding the cutback in back coal production–market forces were pushing for less production of goods, and this was playing out as lower commodity prices of many types, including coal, oil, and natural gas, plus many types of metals.

China is mostly self-sufficient in coal production, but it is a major importer of natural gas and oil. Lower oil and natural gas prices made imported fuels of these types more affordable, and thus encouraged more importing of these products. At the same time, lower coal prices made many of China’s mines unprofitable, leading to a need to cut back on production. Thus we see the rather bizarre result: consumption of the cheapest energy product (coal) is falling first. We will discuss this issue more later.

China’s Overall Historical Production of Energy Products

With the pattern of energy consumption shown in Figure 2, growth in China’s total fuel consumption has slowed, as shown in Figure 3.

Figure 3. China energy consumption by fuel, based on BP 2016 SRWE.

Figure 3. China energy consumption by fuel, based on BP 2016 SRWE.

The indicated increases in total fuel consumption in Figure 3 are as follows: 8.1% in 2011; 4.0% in 2012; 3.9% in 2013; 2.3% in 2014; 1.5% in 2015.

Unless there is a huge shift to a service economy, we would expect China’s GDP to decrease rather rapidly as well, perhaps staying 1% or 2% higher than the growth in fuel consumption. Such a relationship would suggest that China’s reported GDP for 2014 and 2015 may be overstated.

The Problem of Low Coal Prices

Most of us don’t pay attention to coal prices around the world, but according to BP data, coal prices have been following a similar pattern to those of oil and natural gas.

Figure 4. Coal prices since 1999 based on BP 2016 SRWE data.

Figure 4. Coal prices since 1999 based on BP 2016 SRWE data.

Oil prices tend to cluster more closely than those of coal and natural gas because there is more of a world market for oil than for the other fuels. Coal and natural gas have relatively high delivery costs, making it more expensive to trade these products internationally.

Figure 5. World oil prices since 1999 for various oil types, based on BP 2016 SRWE. (Prices not adjusted for inflation.)

Figure 5. World oil prices since 1999 for various oil types, based on BP 2016 SRWE. (Prices not adjusted for inflation.)

Figure 6. Historical prices for several types of natural gas, from BP 2016 SRWE.

Figure 6. Historical prices for several types of natural gas, from BP 2016 SRWE

The one place where natural gas prices failed to follow the same pattern as oil and coal prices was in the United States. After 2008, shale producers extracted more natural gas for the US market than it could easily absorb. This overproduction, together with a lack of export capacity, led to falling US prices. By 2014 and 2015, prices were falling everywhere for oil, coal and natural gas.

Why Prices of Fossil Fuels Move Together

The reason why prices of fossil fuels tend to move together is because commodity prices reflect “demand” at a given time. This demand is determined by a combination of wage levels and debt levels. When wage levels are high and debt levels are increasing, consumers can afford more goods, such as new homes and new cars. Building these new homes and cars takes many different kinds of materials, so commodity prices of many kinds tend to rise together, to encourage production of these diverse materials.

Why Fossil Fuel Prices Don’t Necessarily Rise Indefinitely

Rising fossil fuel prices depend on rising demand. Wages are not really rising fast enough to increase fossil fuel prices to the levels shown in Figures 4, 5, and 6, so the world has had to depend on rising debt levels to fill the gap. Unfortunately, there are diminishing returns to adding debt. We can witness the poor impact that Japan’s rising debt level has had on raising its GDP.

Adding more debt is like using an elastic rubber band to increase the world output of goods and services. Adding debt works for a while, as the relatively elastic economy responds to growing debt. At some point, however, the amount of debt required becomes too high relative to the benefit obtained. The system tends to “snap back,” and prices fall for many commodities at the same time. This seems to be what happened recently in late 2008, and what has happened again recently. The challenge is to restore world economic growth, since it is really robust world economic growth that allows commodity prices to rise to high levels.

Some Historical Perspective on Rising Energy Prices and Rising Debt

In “normal” times, a small increase in demand will increase production of fossil fuels by several percentage points–generally enough to handle the rising demand. Prices can then fall back again and there is no long-term rise in prices. This situation occurred for quite a long time prior to about 1970.

After about 1970, we found that it became more difficult to raise production levels of energy products, without permanently raising prices. US oil production began to decline in 1970. This started an energy crisis that has been simmering beneath the surface for 45 years. Various workarounds for our energy shortage problem were tried, such as adding nuclear, drilling for oil in new areas such as the North Sea, and building more energy efficient cars. Another approach used was reducing interest rates, to make high-priced homes, cars and factories more affordable.

By the late 1990s, even these workarounds were no longer providing the benefit needed. Another idea was tried: encourage more international trade. This would allow the world access to untapped energy sources, including coal, in the less developed parts of the world, such as China and India.

This too, worked for a while, but resource depletion tended to continue to raise the cost of energy extraction. Also, the competition with low-cost labor in India, China, and other countries tended to hold down the wages of the less-educated workers in the developed countries. Higher prices at the same time that wages for some of the workers were depressed is, of course, a bad mismatch.

One way of “fixing” the problem was with cheaper debt, and more debt, so that consumers could buy homes and cars with lower incomes. This fix of more debt stopped working in 2008, as repayment on “subprime” debt faltered, and all fossil fuel prices collapsed.

Figure 7. World Oil Supply (production including biofuels, natural gas liquids) and Brent monthly average spot prices, based on EIA data.

Figure 7. World Oil Supply (production including biofuels, natural gas liquids) and Brent monthly average spot prices, based on EIA data.

To “re-inflate” the world economy, world leaders began to try to add even more debt. They did this by fixing interest rates even lower, starting in late 2008, using a program called Quantitative Easing (QE). This program was successful in raising commodity prices again, although its effect seemed to diminish with time. China’s huge growth in debt during this period helped as well.

Energy prices turned downward again in mid-2014, when the United States discontinued its QE program, and China (under new leadership), decided not to continue increasing debt as quickly as before. The result was a second sharp drop in commodity prices, without a corresponding drop in the cost of producing these fossil fuels. This shift was devastating from the point of view of energy supply producers.

Impact of Lower Prices on China’s Coal Producers

China has a lot of coal resources, but not all of these resources can be produced cheaply. Generally, the least expensive resources tend to be produced first. When prices are high, it may look like deeper, thinner seams can be extracted, in addition to the easier and cheaper to extract seams, but this is never certain. At some point, prices may fall and thus issue a “stop mining” instruction.

When coal prices drop, producers are likely to encounter debt problems, as loans related to coal operations become due. The reason why this happens is because loans taken out when coal prices were high are likely to reflect an optimistic view of how much can be extracted. Once prices drop, operators discover that they have committed themselves to paying back more in loans than their coal mines can actually produce. This seems to be happening now.

What Are the Implications for Future World Coal Production?

If we look at a chart showing world consumption of energy products by fuel, we see that world coal production has turned down in a similar manner to the downturn in Chinese coal production.

Figure 8. World energy consumption by fuel, separately by major groupings.

Figure 8. World energy consumption by fuel, separately by major groupings.

There are many large areas of the world that seem to be beyond their peak in coal production, including the United States, the Eurozone, the Former Soviet Union, and Canada. Note that the United States’ coal production “peaked” in 1998. This added to pressures for globalization.

Figure 9. Areas where coal production has peaked, based on BP 2016 SRWE.

Figure 9. Areas where coal production has peaked, based on BP 2016 SRWE. FSU means “Former Soviet Union.”

If we consider the rest of the world excluding the areas shown separately in Figure 9 as the “Non-Peaking Portion of the World,” we find that China’s current coal production far exceeds that of the Non-Peaking portion of world production.

Figure 9. Coal production in China compared to world production minus production shown in Figure 8.

Figure 10. Coal production in China compared to world production minus production shown in Figure 8.

Figure 10 indicates that even the non-peaking portion of the world is showing a downturn in production in 2015, no doubt relating to current low prices.

Another issue is that India’s coal production now falls far short of its consumption. Thus, India is becoming a major coal importer. In 2015, India’s consumption of coal slightly exceeded that of the United States, making it the second largest consumer of coal after China, and the largest coal importer. If China should decide to increase its coal consumption by adding imports, it would need to compete with India for supplies.

Figure 14. India's production and consumption of coal, based on BP 2016 SRWE.

Figure 11. India’s production and consumption of coal, based on BP 2016 SRWE.

India’s hope for continued economic growth is also tied to coal, even though it doesn’t produce enough itself. India’s use of natural gas is declining, because its own locally-produced natural gas supplies are declining, and imports are expensive.

Figure 11. India's energy consumption by fuel based on BP 2016 SRWE.

Figure 12. India’s energy consumption by fuel based on BP 2016 SRWE.

Imported coal is more expensive than locally produced coal, because of the transportation costs involved. Thus, adding an increasing portion of imported coal will eventually make India’s products less price competitive. India started from a lower wage level than China, so perhaps it can temporarily withstand a somewhat higher average coal price. At some point, however, it will reach limits on how much of its mix can be imported, before workers cannot afford its products made with this high-priced coal.

As noted above, India and China will be competing for the same exports, if they both expect to grow using imported coal. We can modify Figure 9 to show what the size pool producing imports might now look like, if the countries needing imports is “China + India,” and the part with perhaps extra coal to export is the Non-Peaking Areas from Figure 9, less India.

Figure 12. Coal production for China plus India, compared to production from non-peaking group used in Figure 9, minus India. Based on BP 2016 SRWE.

Figure 12. Coal production for China plus India, compared to production from non-peaking group used in Figure 9, minus India. Based on BP 2016 SRWE.

This comparison shows an even a worse mismatch between the peaking areas, and the current production of areas that might raise their supply.

Is Future Coal Production a Function of Resources Available, or of Prices?

Future coal production is clearly a function of both the amount of resources available and future prices. If there are no resources available, it is pretty clear that no resources can be extracted.

What most researchers have not understood is that future prices are important as well. We can’t expect that prices will rise indefinitely, because low-paid workers, especially, find themselves in a squeeze. They find homes and cars increasingly unaffordable, unless the government can somehow manipulate interest rates down to never heard of levels. Because of this lack of understanding of the role of prices, most of today’s models don’t considered the possibility that price levels may cut back production, at what seems to be an early date relative to the amount of resources in the ground.

Part of the confusion comes the view economists have regarding prices, innovation, and substitution. Economists seem to be firmly convinced that prices will always rise to fix the problem of future shortages, but their models do not seem to take into account the major role that energy plays in the economy, and the lack of available substitutes. Certainly, the history of energy prices does not support this claim.

If I am correct in saying that prices cannot rise indefinitely, then all three of the fossil fuels are likely to peak, more or less simultaneously, when prices can no longer stay high enough to enable extraction. The downslope after the peak will be based on financial outcomes, such as the bankruptcies of coal operators, not on the exhaustion of reserves or resources in the ground. This dynamic can be expected to produce a much sharper downturn than modeled by the Hubbert Curve.

If analysts consider the possibility that prices will never again rise very high for very long, they realize such a low-price scenario would be a catastrophe. That is why we hear very little about this possibility.


It appears likely that China’s coal production has “peaked” and has begun to decline. This is especially likely if energy prices stay low, or never rise very high for very long.

If I am correct about energy prices not rising high enough in the future, all fossil fuels may reach peak production more or less simultaneously in the not too distant future. Widespread debt defaults seem likely if this happens.

If we are, in fact, reaching peak coal, even before peak oil, this is disconcerting for those who believe that the Hubbert Model is the only way of viewing the world. Maybe we are expecting too much from the model; maybe we need a model that considers prices, and how prices depend on wages and rising debt. Falling energy prices are especially bad for the system; they seem to lead to debt defaults.

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Off Road vehicles and equipment need diesel fueled engines for power, mobility, and efficiency

[ I’ve written many articles on why trucks are not likely to ever run on batteries or overhead catenary wires (and why a 100% renewable electric grid is probably not possible). Nor can trucks run on biofuels, liquefied coal, natural gas, or hydrogen.  This is covered in my book “When trucks stop running”. I also explain why oil is difficult to replace (an overview can be found in post “Energy Overview. Oil is butter-fried-steak wrapped in bacon. Alternative Energy is lettuce“).  Also see 1) Decline, Transportation, Trucks and under the Energy menu, there are many posts on batteries, biofuels, coal, electric grid, energy storage, hydrogen, natural gas, solar, and wind.

This post is mainly about off-road vehicles, especially trucks, which are essential for infrastructure, which is just as critical as on-road trucks are for maintaining supply chains, which would stop if roads and bridges weren’t repaired by off-road trucks. 

This post is also about how amazing diesel engines are.  If you’re a die-hard optimist, I hope you’ll at least come away with how daunting it would be to replace diesel engines with anything else.  And don’t forget how short on time we are to do this — 90% of our oil, conventional oil, peaked world-wide in 2005. 

Off-road trucks and equipment present an even larger challenge than on-road trucks to converting to another propulsion mode.  We can’t electrify them by stringing overhead wires across 300 million acres of farmland, along thousands of miles of transmission lines, tens of thousands of miles of logging roads, or most construction and mining sites, which can also be far from the electric grid, or where there isn’t enough power in that part of the grid. Nor could you add overhead wires over all the nations the U.S. military would like to invade with tanks. 

Batteries won’t work.  They are too heavy for on-road trucks, and off-road vehicles usually weigh and require even more power.  The reason diesel fuel is so essential is that it is 100 to 500 times more energy dense than batteries by weight or volume, and large off-road trucks need enormous amounts of power to move across rough terrain while also performing some other high-powered task.

It’s also hard to replace off road trucks because they’re so specialized, with nearly each of them custom-made for a specific purpose. This lack of mass production makes it harder to transfer technology because it costs a great deal more to custom-build.

Alice Friedemann  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report ]

DTF. June 2003. Diesel-Powered Machines and Equipment: Essential Uses, Economic Importance and Environmental Performance. Diesel Technology Forum. 39 pages.


The diesel engine is the backbone of the global economy because it is the most efficient internal combustion engine – producing more power and using less fuel than other engines.

Of course, an electric motor can be very powerful, but as discussed above, trucks are too heavy to be powered by batteries, off-road can’t be electrified with millions of miles of catenary wires, and on-road catenary is so expensive the number of miles would be limited as well.

The off-road industries that rely on diesel must have a source of heavy-duty mechanical power that is mobile or portable. Other sources of industrial power, such as the electricity grid and steam boilers, are simply not adaptable to mobile applications or are not portable to remote locations. Only internal combustion engines can meet this demand for efficient mobile/ portable heavy-duty power.

Diesel engines have many applications and engine types, making technology transfer difficult and expensive

Non-road diesel engines serve so many different functions that they require a wide range of engine types, sizes, designs, and configurations, from 10 to 100,000 horsepower. This specialization makes technology and emission improvement transfers much harder. Most on-road trucks are custom built as well.

Diesel engines offer more power

Diesels produce more drive force at lower engine speeds. This superior drive force is the result of the diesel engine combustion process, known as “compression ignition.” Compression ignition produces superior combustion force in the cylinder, which in turn provides more power or “torque.

High torque and power at low speeds is particularly critical in non-road applications. Tractors, bulldozers and backhoes must have enough power to both lift, push, pull, and dump as well as propel very heavy machines across rough surfaces and steep terrain.

Diesel engines have better energy efficiency

Although diesel engines and spark-ignition gasoline engines have equivalent power output characteristics, diesel engines will consume 25 to 35% less fuel doing the same work because of the greater efficiency of compression ignition and the higher energy content of diesel fuel (11% more than gasline, 67% more than LNG, and 250% more than CNG at 3600 psi).  This is important for off road vehicles so that they don’t have to refuel often, especially in remote locations.

Diesel efficiency: combustion cycle and fuel energy density

Diesel’s compression ignition process results in greater thermal efficiency – more of the fuel’s chemical energy is harnessed as mechanical energy. Diesel holds this advantage over any spark-ignited engine, including gasoline, CNG, LNG, and propane (“LPG”). Like gasoline engines, these other spark ignition engines are less fuel-efficient because they burn fuel at lower temperatures under lower compression.

Diesel’s combustion cycle is also more efficient than a spark ignition engine’s because it does not rely on a throttle plate to control power which increases “pumping losses,” reducing efficiency. At lower power the throttle plate in a spark ignition engine’s air intake is partially or completely closed, creating a vacuum in the intake manifold. The cylinders must pump against the vacuum to draw air. Considerable work is wasted by the engine just to draw in air for combustion at low/closed throttle positions.  A gasoline engine is at its highest efficiency at high power with open throttle even though most of its life is spent at low throttle.  A diesel engine has no throttle plate. The power output is controlled by the amount of fuel injected and pumping losses are therefore much lower.

Natural gas is not a good substitute

The low energy density of natural gas can be partially made up for by using larger fuel tanks, but the added weight of the tanks lowers fuel economy, and the size of the tanks may be entirely impractical in many types of non-road equipment.

Diesel engines essential for very large applications 

Spark ignition engines cannot substitute for diesel engines used in applications requiring very high power output at low speeds, because most spark ignition engines cannot perform above 400 horsepower, and run much hotter, requiring more cooling than diesel.  This is one of the reasons spark ignition engines can’t be as large as diesel engines, which causes “detonation” or “knock,” from the spontaneous ignition of fuel in the cylinder at high cylinder temperatures.

The fact that diesels produce less wasted heat makes them more suitable for very large applications, like ocean-going ships, railroad locomotives and earthmovers. One of the biggest issues in designing large engines is the need to provide cooling systems to prevent overheating. This is a major challenge when dealing with the heat produced in very large combustion chambers. Because diesels waste less energy as heat, they place less demand on cooling systems than spark ignition engines. This permits diesels to be scaled up to very large sizes — diesel engines in some applications have cylinders as large as three feet in diameter.

Durability and Reliability

Diesel engines are legendary for their durability and reliability. Diesels can go far more miles than gas engines before rebuilding is necessary, and also are easier to rebuild. Heavy-duty off-road truck engines usually last for 20 to 30 years, and rail locomotives even longer – often more than 50 years.

Fuel Safety

Diesel fuels are less volatile and safer to store and handle than gasoline. It also ignites at a much higher temperature than gasoline or natural gas, making it less likely to ignite if spilled or released in an accident. Diesel is also safer because it doesn’t require pressurized vessels like CNG. High pressure greatly increases the risk of leaks during loading, unloading and storage.


Off-road applications of diesel engines


Farms and ranches use diesel to power 66% of all agricultural equipment — almost $19 billion worth of tractors, combines, irrigation pumps and other farm equipment.     Back in 1945, it took 25 million people, 17.5% of the population to farm America’s roughly 300 million acres of farmland.   By 1997, America had fewer than two million farms and less than a million individuals who identified farming as their principal occupation. The average size of a farm had grown from 195 to 487 acres. The number of tractors grew by 3.9 million—an average of about 2 per farm, and 700,000 farms had either three tractors, and another 300,000 farms had four or more tractors.   In 1983, the last year for which this data is available, each tractor averaged 66 horsepower. By 1997 a million of the 3.9 million tractors had a power output of more than 100 horsepower.

Examples of agricultural diesel vehicles & equipment:

  • Tractors: wheel tractor-scrapers, rotary cutters, skid steer loaders, loaders, sprayers, utility tractors, row crop tractors
  • Balers: Bale handlers, round/square balers, choppers, mowers, forage harvesters, shredders, windrowers
  • Planters & Seeders: air seeder, drills, unit planter
  • Other diesel equipment: Hoes, plows, generators, milking machines, grinders, cotton pickers/strippers, combines, irrigation sets/pumpes, swather, tillers

Forestry equipment :

  • Log handling (log loaders, knuckleboom loader, track harvester)
  • Skidders (wheel and track)
  • Fellers/Bunchers: track feller bunchers, wheel feller, bunchers felling heads, cut-to-length, harvesters and forwarders
  • Firefighting & bulldozers, backhoes are key tools in suppression and fighting of forest fires


Nearly 100% of off-road construction equipment —$17 billion worth — is diesel-powered.

The latest economic census data show that almost 656,000 entities were engaged in construction in 1997, employing 5.7 million people, purchasing $241 billion in materials, components, supplies and fuels.  Much of the diesel-powered equipment used in construction is classified as “off-road.”  Over 440,000 diesel-powered off-road equipment was produced in the U.S. between 1991 and 1995. 10

Examples of diesel construction applications:

General Construction

  • Dozers: Rubber-Tired Dozers, Wheel Dozers, Telehandlers, Landfill Compactors, Pipelayers
  • Loaders: Rubber-Tired Loaders, Skid Steer Loaders, Track-Type Loaders, Track Loaders, Multi-Terrain Loaders, Wheel Loaders, Backhoe Loaders, Integrated Toolcarriers
  • Excavation: Wheel Material Handlers, Excavators, Backhoes, Mass Excavators, Demolition Excavators, Wheel Excavators, Front Shovels

Road Construction

  • Pavers/Paving Equipment: Cold Planers, Asphalt Paving Equipment, Pneumatic Compactors,
  • Compactors: Asphalt Compactors, Vibratory Soil Compactors, Motor Graders
  • Other: Road Reclaimers, Soil Stabilizers

Other applications

Bores/Drill Rigs, Cement Mixers, Off-Highway Trucks, Off-Highway Tractors, Scrapers, Trenchers, Plate Compactors, Concrete/Industrial Saws, Signal Boards, Generator Sets, Crushing Equipment, Welders


Diesel power accounts for 72% of the power used in mining.  The bituminous coal and lignite surface mining segment of the industry relies on off-road trucks and heavy earth-moving equipment powered. The oil and gas production segment of the industry requires diesel power for 85% of its drilling operations and more than half of its support operations. 13  The largest rubber-tired, diesel-powered equipment is to be found in mining—off-road trucks with engines of over 2,500 horsepower, capable of hauling over 300 tons per load [my note: tar sand trucks carry even more than this now].

Mining equipment examples:

  • Underground Mining Equipment: Articulated trucks, load haul dump trucks
  • Heavy earth-moving equipment: Dozers, loaders, excavators
  • Other: off-road trucks, generators, pressure washers, cranes, forklifts

Freight Transport

One of the economic sectors most heavily reliant on diesel engines is non-road freight transportation. Diesel power moves about 94% of the nation’s freight ton-miles.17  While much of this freight is moved by diesel-powered highway trucks, non-road modes of transportation are also critical to freight transport. In these non-road modes, which include railroads, marine shipping, and intermodal movements, diesel is the exclusive or dominant source of power.

Marine Freight Transport.  The engines that power bulk carriers and container ships are the largest diesel engines made. They can generate over 130,000 horsepower, have as many as 18 cylinders, and stand three to four stories high. 22   According to the U.S. Army Corps of Engineers, there are over 5,000 towboats in the U.S. towboat fleet. These towboats range between 1,800 and 10,500 horsepower, and generate a total of 9.4 million horsepower. 26

Public Safety & Homeland Security: When primary power systems fail, emergency back-up diesel generators are the only source that can provide immediate, reliable and full strength power.  Construction equipment is required to assure safe operation of the nation’s utilities, install public drinking water and sewer systems as well as fiber optic and telecommunications cables. And when disaster strikes, this same equipment plays a vital role in rescue, recovery and clean-up efforts, helping to rescue trapped victims, and remove debris after hurricanes, tornadoes, ice storms and other natural disasters.

Military: Diesel engines propel a wide variety of weapons systems and power auxiliary equipment used by the military such as generators, compressors, pumps and cranes.  The diesel engine’s superior fuel economy means that equipment can travel farther than other fuels. Since the military must transport large amounts of fuel, this greater fuel efficiency cuts logistical support costs and extends the military’s striking range. Diesel’s fuel relative safety reduces the risk of explosion if vehicles and equipment are hit during combat. If need be diesel engines can burn a wider range of fuels than gasoline engines.

Military diesel equipment examples:

U.S. Navy

  • Most of the amphibious force vessels: Vehicles transporting troops, equipment, material to mission sites
  • Auxiliary ships: combat support vessels
  • Military Sealift Command: All oilers and fleet ocean tugs, 50% of dry cargo ships, combat stores, etc.
  • Navy Sealift Force: Tanker and Roll-on Roll-off ships

U.S. Coast Guard

  • All high-endurance cutters are also powered by diesel engines; all non-high endurance cutters are propelled solely by diesel
  • Ice-breakers propelled by diesel-electric systems

U.S. Army and Marines

  • Most armor and self-propelled artillery are diesel powered, with a wide range of uses and functions: M2/M3 Bradley armored personnel carriers, ambulances, mortar carriers, anti-aircraft gun carriers, missile launchers
  • Tank destroyers, self-propelled guns and howitzers: M901, M109, M110
  • Amphibious assault vehicles: LFTP7A1
  • Almost all military vehicles and logistics systems: prime movers, heavy-equipment transporters, special attack vehicles, Humvees”


Off-road truck vehicles and equipment have diesel engines ranging from 10 to 3,000 Horsepower. On-highway diesel engines (i.e. class 8 long-haul trucks) typically range from 120 to 600 HP. Train locomotives use 6,000 horsepower.

Each off-road equipment application presents different mechanical and duty cycle demands on the diesel engine. This diversity of mechanical demands in turn requires a correspondingly wide range of different engine designs and configurations to power each different type of equipment. The operating requirements of off-road equipment subject these engines to a much more strenuous and varying set of demands and duty cycles than on-highway equipment. Most off-road equipment relies on their engines both to propel the vehicle and to operate attachments like buckets, blades and shovels. Off-road vehicle propulsion requires an engine capable of maintaining traction and maneuverability over a broad range of terrain profiles and physical conditions. Most off-road construction, mining and farming equipment also use engine-driven hydraulic pumps to power the attachments that do the lifting, pushing, drilling, pumping, loading and dumping that the equipment is designed to accomplish. These additional accessories create additional unique power demands on the engine that are not found in on-highway engines, where power is primarily used for propulsion.

Off-road engines are also subject to higher-temperature operating environments than on-highway engines. Unlike on-highway trucks, most off-road equipment runs at very low vehicle speeds. As a result, off-road engines must operate without the benefit of “ram air” for cooling. Ram air is the airflow over the engine and cooling system created by the forward motion of the vehicle itself, which for highway vehicles can be in excess of 65 miles per hour. Off-road vehicles are relatively stationary and rarely exceed 10 miles an hour during work operations. The lack of ram air, combined with the additional accessory loads, require off-road engine makers to install more elaborate cooling systems, which typically consume between 10-20 percent of total engine power output. 31

Because the same off-road engine model is frequently used in a variety of equipment applications, off-road engines also require a great deal of versatility within the same design. For example, a portable electric power generator may use the same engine as a front-end loader. But the two pieces of equipment will require the engine to perform over very different operating ranges and cycles. The engine in the electric power generator enjoys long periods of operation at constant speeds and steady loads, whereas that same engine installed in a front-end loader would be typically subjected to a much more challenging and variable duty cycle featuring frequent alterations between high engine speeds and loads, and periods of low-speed idling between tasks.


1 Willard W. Pullcrabek, Engineering Fundamentals of the Internal Combustion Engine, Prentice Hall, 1997. The temperature in the exhaust system of a typical compression ignition engine will average between 200° and 500°C, whereas the temperature in the exhaust system of a typical spark ignition engine will average 400° to 600° C, and will rise to about 900°C at maximum power. A full list of references can be found at the end of this report.

2 “Gross Domestic Product by Industry for 1999-2001,” Robert J. McCahill and Brian C. Moyer, at

3 “Diesel Technology and the American Economy,” Charles River Associates, p. 55 (October 2000).

4 Statistical Abstract of the United States, 1999 edition, Table 738. 5 USDA, Economic Research Service, Natural Resources and Environment Division, Agricultural Resources and Environmental Indicators, “Production Inputs,” 1995, pp. 135–136. The data in this report include electricity in addition to liquid fuels. However, data on electricity use in agriculture ceased to be available after 1991. The data reported above are for liquid fuels—gasoline, diesel, and LP gas.

6 U.S. Department of Agriculture, 1997 Census of Agriculture, “Farm and Ranch Irrigation Survey.”

7 “Diesel Technology and the American Economy,” Charles River Associates, p. 55 (October 2000).

8 “Diesel Technology and the American Economy,” Charles River Associates, p. 27-28 (October 2000).

9 “Gross Domestic Product by Industry for 1999-2001,” Robert J. McCahill and Brian C. Moyer, at http://

10 U.S. EPA, Final Regulatory Impact Analysis: Control of Emissions from Non-road Diesel Engines.

11 ICF Kaiser Consulting Group, “Off-Road Vehicle and Equipment: GHG Emissions and Mitigation Measures,” Table 8, p.18.

12 “Diesel Technology and the American Economy,” Charles River Associates, p. 55 (October 2000).

13 “Diesel Technology and the American Economy,” Charles River Associates, p. 31 (October 2000).

14 “Diesel Technology and the American Economy,” Charles River Associates, p. 28 (October 2000).

15 “Gross Domestic Product by Industry for 1999-2001,” Robert J. McCahill and Brian C. Moyer, at http://

16 Calculation by CRA from 1997 Economic Census, Mining by Subsector.

17 “Diesel Technology and the American Economy,” Charles River Associates, p. 8 (October 2000). This figure includes freight transportation by trucks.

18 “Diesel Technology and the American Economy,” Charles River Associates, p. 12 (October 2000). Census statistics for 2002 are currently being prepared by the U.S. Census Bureau.

19 “The North American Railroad Industry,” Association of American Railroads, at AboutTheIndustry/AboutTheIndustry.asp.

20 “Economic Impact of U.S. Freight Railroads,” Association of American Railroads, at ViewContent.asp?Content_ID=296.

21 “Gross Domestic Product by Industry for 1999-2001,” Robert J. McCahill and Brian C. Moyer, at http://

22 2002 Diesel and Gas Turbine Catalog

23 “Diesel Technology and the American Economy,” Charles River Associates, p. 16 (October 2000).

24 U.S. DOT, Maritime Trade and Transportation ’99, Table 1-16.

25 U.S. Maritime Administration, MARAD ’98, p. 39.

26 U.S. Army Corps of Engineers, Waterborne Transportation Lines of the United States, Calendar Year 1998, Vol. 1, Table 1.

27 Sierra Research, Inc., “Technical Support for Development of Airport Ground Support Equipment Emissions Reductions,” Prepared for Office of Mobile Sources, USEPA, Contract No. 68-C7-0051, December 31, 1998.

28 See, 40 C.F.R. Part 89 (Off-road); 40 C.F.R. Part 92 (Locomotives); 40 C.F.R. Part 94 (Commercial and Recreational Marine)

29 Engine Manufacturer’s Association’s Supplemental Comments on EPA NPRM For Motor Vehicle and Engine Compliance Program Fees (Docket No. A-2001-09), dated January 14, 2003

30 An extensive sampling of the diversity of diesel applications can be found in the U.S. EPA, “Final Regulatory Impact Analysis: Control of Emissions from Nonroad Diesel Engines,” EPA420-R-98-016, p.4, August 1998.

31 U.S. Department of Energy, Off-Highway Vehicle Technology Roadmap, December, 2001 (DOE/EE-0261) pp 30-31.

32 The only diesels not subject to federal emissions standards would be certain vehicles and engines manufactured pursuant to military vehicle regulatory exemptions.

33 EPA established emission standards for diesel locomotives that took effect in 2000. 63 Fed. Reg. 18978 (April 16, 1998) (codified at 40 C.F.R. pt. 92). Standards for large (>37 kW) marine engines will take effect in 2004. 64 Fed. Reg. 73300 (Dec. 29, 1999) (commercial marine); 67 Fed. Reg. 68242 (Nov. 8, 2002) (recreational marine) (to be codified at 40 C.F.R. pt. 94).

34 40 C.F.R. § 89.112, Table 1 (2001) (values in g/kW-hr have been converted to g/bhp-hr);U.S. EPA, “Final Regulatory Impact Analysis: Control of Emissions from Nonroad Diesel Engines,” EPA420-R-98-016, pp. 5-7, August 1998.

35 59 Fed. Reg. 31306 (June 17, 1994); 63 Fed. Reg. 56968 (Oct. 23, 1998).

36 30 C.F.R. pts. 7, 36, 56, 57, 70, and 75.

37 October 30, 2002, letter from EPA, Office of Policy Economics, and Innovation to Small Entity Representatives, Section B Description of Rulemaking.

38 The Diesel Technology Forum maintains a searchable database containing project-specific details of various diesel retrofit programs across the country. See

39 “Retrofitting Emission Controls on Diesel-Powered Vehicles,” Manufacturers of Emission Controls Association, March 2002, available at:

40 “Retrofitting Emission Controls on Diesel-Powered Vehicles,” Manufacturers of Emission Controls Association, March 2002, available at:

41 “Retrofitting Emission Controls on Diesel-Powered Vehicles,” Manufacturers of Emission Controls Association, March 2002, available at:

42 “Retrofitting Emission Controls on Diesel-Powered Vehicles,” Manufacturers of Emission Controls Association, March 2002, available at:

43 “Retrofitting Emission Controls on Diesel-Powered Vehicles,” Manufacturers of Emission Controls Association, March 2002, available at:

44 Alex Kasprak, Massachusetts Turnpike Authority, et al., “Emission Reduction Retrofit Program for Construction Equipment of the Central Artery/Tunnel Project,” Paper No. 206, Presented at the 94th Annual Conference of the Air and Waste Management Association, Orlando, Florida (June 2001).


46 Edward Kunce and Steven Lipman, Massachusetts Department of Environmental Protection, “Massachusetts Diesel Retrofit Program (MDRP),” Presented at the Innovative Technology/Aftermarket Retrofit Program Workshop, Houston, Texas (September 2000).

47 Alex Kasprak, Massachusetts Turnpike Authority, et al., “Emission Reduction Retrofit Program for Construction Equipment of the Central Artery/Tunnel Project,” Paper No. 206, Presented at the 94th Annual Conference of the Air and Waste Management Association, Orlando, Florida (June 2001).

48 Edward Kunce and Steven Lipman, Massachusetts Department of Environmental Protection, “Massachusetts Diesel Retrofit Program (MDRP),” Presented at the Innovative Technology/Aftermarket Retrofit Program Workshop, Houston, Texas (September 2000)

Posted in Fuel Efficiency, Infrastructure, Transportation, Trucks | Tagged , , | 2 Comments

Why studies come up with different Energy Returned on Invest (EROI) results: can it be fixed?

[ There are many issues with biofuels beyond their trivial to negative energy return on investment (EROI). In Peak Soil I point out that current industrial farming techniques are destroying topsoil about 15 times faster than pre-fossil fuel economies — Iowa has some of the best topsoil in the world, but in the past century, half of it’s been lost, from an average of 18 to 10 inches deep (Pate 2004 May Rains Cause Severe Erosion in Iowa) and it’s hard to grow food in less than 6 inches of soil. In the past it took an average of 1500 years to deplete topsoil enough to cause a society to collapse (Montgomery 2007 Dirt: The Erosion of Civilizations).  The Ogallala and Califiornia aquifers are also getting permanently depleted.

Alice Friedemann  author of “When Trucks Stop Running: Energy and the Future of Transportation, 2015, Springer]

Hall, C.A.S., Dale, B.E., Pimentel, D. 2011. Seeking to Understand the Reasons for Different Energy Return on Investment (EROI) Estimates for Biofuels. Sustainability 3:2413-2432.

Excerpts from this 20 page paper follow  (see the original here)

Abstract: The authors of this paper have been involved in a contentious discussion of the EROI of biomass-based ethanol. This contention has undermined, in the minds of some, the utility of EROI for assessing fuels. This paper seeks to understand the reasons for the divergent results.


We are in a time of profound transition in how the world will be fueled and fed. The fossil energy resources (petroleum, coal and natural gas) that have powered the world’s economy since the initiation of the industrial revolution are increasingly problematic in terms of their price (and price volatility), security of supply, declining energy return on investment (EROI) and environmental impacts [1]. These issues are well known and will not be discussed further here.

There is a less well known, but very important, positive correlation between the amount of energy that a society has at its disposal and the wealth of that society. Richer societies invariably have more energy available to them than do poorer societies [2-5] Energy consumption is a key factor associated with the greater wealth of richer societies, which makes sense if economic production is thought of as a work process, with more economic production requiring more energy. Billions of people have no access to modern energy services and they are almost invariably poor in economic terms. If fossil fuels are increasingly problematic in cost, availability and environmental impacts, what energy resources, if any, are available to help lift these billions of humankind from their poverty?

Biofuels (liquid fuels made from plant matter) might be affordable alternatives to petroleum with a low carbon footprint and therefore appear to some investigators attractive as a petroleum alternative.

One downside is that this organic matter might have other good functions, such as maintaining soil fertility or forest biodiversity.

The only large scale petroleum alternatives currently available for liquid transportation fuels are biofuels, principally ethanol made from cane sugar or corn starch, and smaller amounts of biodiesel produced from oilseeds. At present corn-based ethanol provides for about 10% by volume of US motor “gasoline” [5], although this is clearly for gross energy and not net energy. The sustainable resource base could be expanded considerably if we were able to use cellulosic biomass as a feedstock (e.g., some portion of crop residues (although coauthor Pimentel believes that no portion of crop residues should be harvested [6], woody materials, grasses and herbaceous crops) in addition to starch and sugar feedstocks.

However, biofuels are controversial. Their environmental impacts, cost, potential scale and EROI have all been questioned. If we are to make informed and rational choices between our alternatives to petroleum, these questions must be addressed and resolved.

This article focuses on the EROI for biofuels. The different results derived from different investigators (including, perhaps especially, ourselves) have caused some prominent analysts to disparage EROI as not being useful because of the highly divergent results of different investigators [7,8.  We emphasize here corn ethanol, for which most of the EROI analyses have been done, and cellulosic ethanol, a possibly promising new alternative to petroleum gasoline. Indeed the controversy about EROI for corn-based ethanol, usually formulated as whether or not corn-based ethanol makes a positive energy gain relative to the fossil fuels used to produce them, is probably the issue by which most scientists and policy makers have encountered EROI.

It is important that we determine whether it is possible to get reliable estimates of EROI for a given fuel. The corn-based ethanol industry is mature and we can derive reasonable empirical results. A number of corn ethanol EROI (or “net energy”) studies have been performed) which are reported in metastudies by Farrell et al. [7], Hammerschlag (2005, [9]) and Chavas (2008, [10]). From among these studies, a large difference in values can be found by comparing the results of Kim and Dale [11], who give an EROI for corn-based ethanol of 1.73:1 and Pimentel and Patzek [12] (who give a value of 0.82:1).

[ My comment Although 1.73 is a positive EROI, it is not nearly enough!  Other researchers estimate that an EROI of 7, 11, or 12 to 14 might be needed to maintain civilization at its current level:

  • Charles Hall, one of the founders of EROI methodology, initially thought an EROI of 3 was enough to run modern civilization, which is like investing $1 and getting $3 back. But after decades of research, Hall concluded an EROI of 12 to 14 might be needed as illustrated in the figure below (Lambert, Jessica G., Hall Charles A. S. et al. 2014. Energy, EROI and quality of life. Energy Policy 64:153–167).
  • Murphy (2013) found that society needed at least an EROI of 11. So much net energy is provided by any energy resource with an EROI of 11 or higher, that the difference between an EROI of 11 and 100 makes little difference. But once you go below 11, there is such a large, exponential difference in the net energy provided to society by an EROI of 10 versus 5, that the net energy available to civilization appears to fall off a cliff when EROI dips below 10 (Mearns 2008).
  • Weissbach (2013) found that it is not economic to build an electricity generating power source with an EROI of less than 7. ] 

In this paper we seek the reasons for these large differences, and explore whether they are due to the measured, verifiable process-related energy consumption for individual processes or instead primarily on boundary and/or other philosophical assumptions or, perhaps, something else. If the reason is the former then indeed there may be some basis for the criticisms leveled at EROI methodology, if the second then these issues are readily accommodated within the EROI protocol format put forth in this issue by Murphy et al. [13].

Procedural/Supply Chain Issues

We use the term supply chain to refer to issues pertaining to the derivation of energy costs, measured per unit input, per unit product or per ha, associated with the various inputs to the production processes. For example if we know that to grow 60 kg (approximately 1 MJ) of maize requires, on average, about one kg of fertilizer, there are various studies that have been done that can give a fairly unambiguous and limited range of energy values associated with that production (Table 1). Similarly it is possible to derive straightforward estimates of the energy to run a tractor pulling a standard plow for one hour, and to derive the hours required per ha. It becomes more difficult to derive other factors that are not based on simple physical variables; for example, the energy that was used to make and maintain the tractor used, and even the building in which the tractor was produced. But while we do not have look up tables for the energy to make a kg or a unit of a certain tractor, we do have various estimates of energy used per dollar of product in various machinery production facilities, often gathered, when it is possible, from national aggregate statistics. Then that has to be prorated over the useful life of the tractor. We include some of these estimates and their ranges in Table 1 also.

Table 1. Energy Costs Per Physical Unit or Per Dollar of Input to Agriculture or Biorefining











Table 1. Energy Costs Per Physical Unit or Per Dollar of Input to Agriculture or Biorefining

Philosophical and Boundary Issues

A second issue relating to different energy costs among different authors pertains to boundaries and philosophies of inclusion/exclusion. It is nearly universally accepted that one should include direct (on site) energy use and basic indirect (e.g., energy used to make equipment used on site) energy inputs. However, the agreement tends to evaporate when considering whether or not to include other possible energy terms, for example; allocation to coproducts, energy for labor or finance and so on. We do not believe that there is a single acceptable boundary although one should undertake a standard assessment for fuel alone and then clearly specify procedures for each additional analysis). However, comparative studies must use the same boundaries if they are to provide useful results. This issue is addressed in the protocol paper by Murphy et al. [13] in this volume. Good arguments for including all components associated with expenditures are found in [14]. If the different published EROIs for biofuel are due principally to such philosophical issues then this would not undermine the value of EROI as a key metric for analyzing energy systems, or at least not very much. In fact the different approaches can be viewed as a means of gaining greater flexibility and hence utility for EROI by specifying the conditions of the process under consideration, especially if a standard procedure is also done [13]. In addition the different investigations highlight the importance of clearly defining the assumptions made during the EROI analysis and how allocations are handled for multiproduct energy systems.

Quality Adjustment Issues

Not all energy is of the same quality, for example liquid fuels are normally thought of as higher quality than solid fuels (hence we transform corn to alcohol). Electricity is higher quality than fossil fuels, hence we burn some three heat units of fossil fuel to generate one heat unit of electricity. Gasoline has higher energy density than alcohol and so on. We believe that these are the three main reasons that contribute to differences among different estimates of the EROI of the same fuel. The main objective of this paper is to take two very different estimates of EROI and dissect the reasons for the differences.


Our methods are very simple. We examine the importance of each of the above three factors quantitatively in Kim and Dale [11] and Pimentel and Patzek [12] by comparing each energy-related component in tabular form. Our main activity was to list energy consuming operations and to convert units, for example from Pimentel and Patzek’s kilocalories to megajoules (MJ, multiply kilocalories by 4.186/1000). In all cases energy operations were given in, or converted to, estimates of MJ/L of alcohol generated.

The second main procedure was to examine the importance of the allocation (or not) of energy costs to co-products. The energy costs of producing corn ethanol can be partially offset by allocating the energy used to various products and by-products, such as the dry distillers grains (DDG) made from dry-milling of corn. From about 10 kg of corn feedstock, about 3.3 kg of DDG with 27% protein content can be harvested [15]. This DDG is suitable for feeding cattle that are ruminants, but has only limited value for feeding hogs and chickens. In practice, this DDG is generally used as a substitute for soybean meal that contains 49% protein [15]. This allocation issue is somewhat complex. Soybean production for livestock feed requires less energy per kg than does corn production, because little nitrogen fertilizer is needed for the production of the soybean. However considerable energy is required to remove oil from soybeans and thereby produce the soybean meal that is actually fed to animals. In practice 2.1 kg of soybean protein provides the equivalent nutrient value of 3.3 kg of DDG.

In the system expansion approach used in Kim and Dale [11], the system boundaries were expanded to include corn dry milling, corn wet milling, and soybean crushing systems. Simultaneous linear equations representing the displacement scenarios for co-products of each system were solved as recommended by the International Standards Organization [16]. The underlying assumption is that coproducts that deliver an equivalent function (DDG as an animal feed, in this case) from different product systems displace each other. The fraction of energy allocated to co-products (26%) was then estimated through system expansion. Pimentel and Patzek [12], in contrast, assume that 7% of the overall energy inputs will be allocated to co-products. Consequently, we examined the effect of allocating zero, 7% (coauthor Pimentel’s value) or 26% of the energy used (coauthor Dale’s value) to produce ethanol to DDG (see the Results section).

Results. Since the methods and the results for the corn based ethanol EROI and the cellulosic ethanol EROI are quite different we give first the results for corn-based ethanol, then we include additional methods and new results for cellulosic ethanol.

Results for Corn-Based Ethanol.   The two procedures gave a very different EROI for corn based ethanol, 1.73:1 from Kim and Dale [11] and 0.82:1 from Pimentel and Patzek [12]. Obviously Kim and Dale estimate that a positive energy balance can be generated by turning inputs into ethanol. Pimentel and Patzek [12] conclude that investing fossil energy to make ethanol from corn is senseless because the process of generating ethanol consumes more energy than is derived from the product ethanol.

The principal reason for the large difference between the EROIs derived from these two papers was the difference in the allocation approaches used for coproducts. Kim and Dale used the “system expansion” approach to estimate that only 74% of the total energy costs should be allocated to generating the ethanol and the remainder to the co-product, the protein rich DDG. In brief, the system expansion allocation employed by Kim and Dale assigned the energy “cost” of producing soy bean meal, the major commodity with which DDG competes in the market, to DDG. About a half (approximately, depending on assumption used) of the difference between the EROI given in the Pimentel and Patzek and the Kim and Dale papers was due to co-product allocation issues (i.e., philosophical and boundary issues). About a third was due to differences in estimates of the energy intensity of the inputs (i.e., supply chain issues), and about 15% was due to the greater inclusivity of costs by Pimentel and Patzek. These results are considered in greater detail next.

Supply Chain Issues: Energy per Unit Inputs.  Table 1 gives the energy intensities per unit used in their analyses by the two sets of authors. The inputs are listed side by side in Table 1 so that they can be compared easily. The per unit values used in making subsequent calculations are almost universally within 10 or at most 20% of one another (Table 1). The values used by Pimentel and Patzek tend to be often, but not always, higher than those of Kim and Dale. For example, the former give diesel fuel as 42.6 and the latter 47.5 MJ/L. Since Pimentel and Patzek include the energy required to refine the fuels, which is about 10% of the output value [17], and Kim and Dale do not, this seems to be the reason for the difference.

Exceptions to the general similarities are the energy costs per ton of potassium fertilizer, which differ by 30%, and transport energy which differ by 70%. Neither of these energy inputs is especially large, so we do not think that differing per unit energy costs are likely to contribute in any important way to the final results with the exception of items included by one study but not the other.

Energy Cost Entity Units Kim & Dale. Since there was no consistent pattern of one or the other authors using higher or lower estimates the energy input estimates tend to “come out in the wash”. The estimates of the total energy used to generate a liter of ethanol differ more because of the inclusion or not of different costs.

Pimentel and Patzek include more categories of inputs and hence estimate the total energy input to generating a liter of ethanol as 28.1 MJ, while Kim and Dale estimate 16. 7 MJ, which is 59% of Pimentel and Patzek’s value. If one assigns additional energy costs (based on Pimentel and Patzek’s numbers) for the factors used by Pimentel and Patzek but not by Kim and Dale the latter’s energy costs would be 19.5 MG/L, 69% of the former’s value.

Sensitivity Analysis.  Both Kim and Dale [11] and Pimentel and Patzek [12] allocate some energy costs to coproducts. For the Kim and Dale this is 26% (about 445 kcal or 1. 86 MJ) per liter, while for Pimentel and Patzel it is 7% (about 120 kcal or 0.5 MJ) per liter. In the case of Pimentel and Patzek factoring this credit for a non-fuel source in the production of ethanol reduces the negative energy balance from 46% to 39% (See tables). For Kim and Dale it increases the positive value by about 18%. Some scientists, such as Shapouri et al. [18], would give an even larger credit for DDG of 4, 400 kcal (18.4 MJ) / kg and thereby further increase the positive value of EROI relative to Kim and Dale. Shapouri’s values are based on surveys of operating corn ethanol plants.

Procedural/Metric Issues: Total Energy Costs. The estimated total energy costs to generate ethanol from corn derived by Kim and Dale are about 16.6 MJ/L, and about 28.1 MJ/L as derived by Pimentel and Patzek. Thus Pimentel and Patzek’s estimates are about 170% of those of Kim and Dale (2005). About 2.65 MJ/L of the 11.6 MJ/L difference between the two estimates, or 23%, is due to what might be considered boundary (or perhaps more accurately inclusionary) issues (i.e. Pimentel and Patzek include more categories, such as the energy cost of seeds), and the rest due to the frequently somewhat higher estimates of energy costs at each step by Pimentel and Patzek. For most of the items the estimates of energy costs are similar, again within 10-20%, although usually higher in Pimentel and Patzek’s work. The largest differences are for fuels used in the field for production and for fertilizer plus herbicides/pesticides. The difference of energy used for fuels is mostly Pimentel and Patzek’s inclusion of the energy cost of refining in the cost of oil. Fertilizer energy inputs are also a significant source of difference, with Kim and Dale estimating fertilizer energy inputs at about 1.4 MJ/L ethanol less than Pimentel and Patzek, or about 8% (0.93/11.6) of the difference in total energy inputs between the two sets of authors.

Allocation Issues. Pimentel agrees with Dale that it may be appropriate under some circumstances to include adjustments for co-products. For example the energy and dollar costs of producing corn ethanol can be partially offset by allocating some of the energy used to generate by-products, like the DDG made from dry-milling of corn.

Estimating EROI for Cellulosic Ethanol.  Due to the inherent problems with corn ethanol, including as both Dale and Pimentel acknowledge its low or negative EROI and hence low profitability if and as subsidies are removed, there is a growing interest in using cellulosic biomass from non-food biological material to produce ethanol. However, such cellulosic biomass materials have fewer carbohydrates and more complex matrices of lignin and hemicellulose, thus complicating the ethanol conversion processes. In terms of biomass energy produced per hectare (not liquid fuel), switchgrass and willow are more productive and, of importance here, more efficient than corn in terms of fossil energy inputs versus biomass energy output [12]. The problem is that they are also more difficult to turn into liquid fuel. This analysis focuses on the potential of cellulosic biomass to serve as a liquid fuel.

Willow for cellulose: Heller et al. 2003 (Bruce Dale) Heller’s study used strict life cycle analysis methodologies to evaluate the environmental and energetic performance of willow biomass crop production in the state of New York for electricity generation. The base case analysis was founded on field data from establishment of a 65 hectare willow plantation in western NY under current (as of 2000) silvicultural practices in that state. Overall the system produced 55 units of biomass energy output (raw wood) per unit of fossil energy input over a 23 year lifetime of the willow plantation, or an EROI of 55:1 at the farm gate. As with the Schmer et al. study described above, fertilizer nitrogen and diesel fuel for farm operations were the largest single energy inputs for willow production according to Heller et al. (37% and 46%, respectively of total direct energy inputs, see Figure 3 of their paper) for willow production. EROI for liquid fuel production was not calculated by Heller et al.

Estimates of Energy Costs of Processing Cellulosic Biomass (Bruce Dale). Cellulosic biomass consists of three major components, cellulose, hemicellulose and lignin, in a roughly 40:30:20 mass ratio, depending on the species, plus a host of other components such as ash, protein, etc. Cellulose and hemicellulose are structural carbohydrates composed of sugars that can be fermented to ethanol, at least potentially. The lignin is a complex aromatic polymer and cannot be fermented using current technology. In practice, not all the sugars in cellulose and hemicellulose are fermented. So at the end of the fermentation the residual material contains the lignin plus the residual carbohydrates that were not successfully fermented. It is often assumed that this residual material will be burned to provide all the electricity and steam required to run the processing facility.

In contrast, Pimentel and Patzek believe that at this time the technology to generate cellulosic ethanol at a commercial scale is quite unproven, and even speculative. They assume that if the cellulosic ethanol technology can be made to scale (which they think is very speculative) then all the energy needed for distillation steam will have to come from fossil fuels [25].

[ My note: it is now June 2016 and Commercial scale cellulosic ethanol is still not happening – why?  ]

Bruce Dale bases his EROI estimates for cellulosic ethanol from switchgrass on the work of Schmer et al., who, in addition to estimates of the energy used in the field to grow switchgrass, used modeling to explore the crop conversion (biorefining) portion of the system. Schmer’s calculations were based on models for the biorefinery and the overall system derived by the Energy and Resources Group Biofuel Analysis Meta-Model (EBAMM, University of California-Berkeley). EBAMM assumes that all energy used by the biorefinery will come from residual biomass (i.e., that portion not converted to ethanol). This residue is burned to produced electricity and to generate steam to run the biorefinery, i.e., to distill the alcohol from the mash. EBAMM also estimates an electricity export of 4.79 MJ/L of ethanol produced in the biorefinery. Thus Schmer estimates that the overall energy output is 21.2 MJ/L of ethanol plus (3 (a factor for the quality of electricity) × 4.79 equals 14.4) MJ of electricity for a total of 35.8 MJ/L of ethanol. To check the EBAMM model, Dale used the Schmer data to calculate the energy used for the agricultural system and the Laser et al. [26] modeling information (see Figure 1 in the Laser paper) to describe the conversion (biorefinery) part of the system. Assuming the only energy input to the biorefinery is the energy contained in the biomass, he multiplied the EROI of the agricultural system by the overall thermal energy efficiency of the biorefinery (correcting for electricity quality) and then subtracted the energy costs of biomass transport to the biorefinery to get the system EROI.

Figure 1 from the Laser et al. paper provides an estimate of 43.3% overall thermal efficiency of conversion of feedstock cellulosic biomass (39.5% ethanol and 3.8% surplus electricity) for mature cellulosic ethanol based on biochemical conversion to ethanol combined with electricity generation. (In effect, this means that 43.3 MJ of useful energy products are derived from 100 MJ of feedstock energy delivered to the biorefinery.) Transport energy was estimated from the Heller et al paper as 0.1 kJ per MJ of delivered biomass over a 96 km average transport distance. Using these data, an EROI for cellulosic ethanol from switchgrass is estimated to be 18.1:1, similar to the value of 17.8:1 calculated in Table 3.

There is obviously a substantial difference in the EROI of cellulosic biofuels between Pimentel and Patzek (0.78:1) and Dale (this work) (17.8:1). There are various reasons for this difference. Most importantly, Pimentel and Patzek use 25.5 MJ/L of energy derived from fossil or other outside fuel sources to distill the ethanol from the fermentation residue while Dale assumes that this energy can be derived from the fermentation residue itself. This accounts for 90% (25.5/27.7) of the difference in energy costs and correspondingly most of the difference in the EROIs. The second largest difference is that Dale estimates that there will be 4.79 MJ/L of surplus electricity derived from the process. This is based on the assumption that the residual biomass will be enough to not only distill the ethanol but also to generate some residual electricity. This electricity is weighted by a factor of three representing its quality. Thus Dale’s overall energy output is 21.2 MJ/L of ethanol plus 14.4 MJ of electricity for a total of 35.6 MJ/L of ethanol. These data for energy inputs and outputs for switchgrass ethanol are summarized in Table 3. Table 3. Comparing Different EROI Calculations for Switchgrass.

Discussion: Cellulosic Ethanol

Pimentel believes that since cellulosic biomass, like straw and wood, clearly have very few of the simple starches found in corn, this means that 2 to 3 times more cellulosic material must be produced and processed to obtain a similar amount of cellulosic ethanol as corn (Patzek [27]). Dale responds that corn grain has about 80% carbohydrate (starch), and it is the starch that is converted to ethanol. Switchgrass has about 70% carbohydrate (almost all cellulose and hemicellulose, but very little starch), and these are the carbohydrates that are converted to ethanol. Dale believes that it is incorrect to assert that 2 to 3 times more cellulosic material must be processed to make a similar amount of ethanol.

Current ethanol yields from corn grain are about 2.7 gallons per bushel, or approximately 470 L per MG dry grain. Depending on the species used for biomass and conversion technology, current ethanol yields from cellulosic biomass are about 240–350 L per dry MG of biomass ([28-30], with a rough upper limit at about 400 L per dry MG as the technology improves. The upper limit of the current ethanol yield range quoted above (350 L/MG) was obtained by DDCE, LLC (DuPont Danisco Cellulosic Ethanol, LLC) at their 250, 000 gallon per year cellulosic ethanol demonstration plant in Vonore, Tennessee [30].

At the yields obtained by DDCE, LLC Dale estimates that it takes about 1.3 tons of cellulosic biomass to provide the same amount of ethanol as a ton of grain, not 2 to 3 times as much, as Pimentel suggests and that eventually it may take only about 10% more cellulosic biomass to provide the same amount of ethanol. Actually, since the residual (unfermented) biomass will be burned to produce electricity, for the sake of a higher EROI we may not want to push the ethanol yield any higher than it is right now.

The 3 to 1 multiplier for the quality of the electricity generated from the biomass residual above that required for distillation will push the EROI higher than it would be if more of the carbohydrate were converted to ethanol. The key seems to be getting the right balance of ethanol and electricity to meet our society’s needs for both liquid fuels and electricity at sufficiently high EROI.

Potential Scale of Cellulosic Ethanol Industry

While David Pimentel certainly hopes that the proposal to convert cellulosic biomass into liquid fuel will achieve the goal of generating a significant amount of net energy, he is not optimistic that even if this were possible it could make a sufficient difference. Green plants collect and convert less than 0.1% of the incident sunlight into plant matter [12,31,32]. In the United States all green plants collectively produce biomass equivalent to about 53 exajoules of energy per year from sunlight, only about half of our total fossil energy use. Hence even if we were able to use all agricultural, forest , grassland and aquatic plants, with no production of food or fiber, at an impossible 100% efficiency this would be barely enough energy to displace oil.

Bruce Dale responds that the biofuel industry is not trying to replace all energy used in the United States, but only a portion of our liquid fuel, most of which is currently derived from petroleum. He does agree that a high EROI by itself is not sufficient to give us a useful alternative to petroleum— scale also matters. The latest Department of Energy study indicates that around 1.3 billion metric tons of cellulosic biomass can be sustainably produced each year in the U.S.  2011 . This much biomass is equivalent to about 20 exajoules (or 20 quadrillion BTUs, or 20 × 10 to the 15th power BTUs), roughly 20% of total U.S. energy consumption). Even if only half of the energy content of biomass can be converted to liquid fuel that would still give us a lot of energy. Relatively simple agricultural changes such as double cropping (growing a winter annual grass following corn) could increase the amount of biofuel produced still further [33] as could increasing the yield of energy crops such as switchgrass and willow. David Pimentel believes that the DOE claim that 1.3 billion tons of cellulosic biomass can be harvested sustainably cannot possibly be true based on data that he and his graduate students have gathered. This would mean harvesting 72% of total U.S. biomass production per year including all food, grass, and forests. Food crops and grass alone total 92%.

Estimates of Energy Cost of Cellulosic Feedstock Production (Schmer vs. Sampson). While David Pimentel believes that Schmer’s data on costs and gains of switchgrass production are generally

believable, he points out that there have been several criticisms of that report [21,22,31,32]. Pimentel prefers the assessment of Roger Samson who has more than 15 years of field experience with switchgrass and has a business producing pelletized switchgrass. Samson et al. [21] report that they were able to produce nearly 15 kcal of switchgrass output per 1 kcal of fossil energy input . The main problem David Pimentel has with Schmer et al.’s report is their statement that “Switchgrass produced 540% more renewable energy than nonrenewable energy consumed”. They achieve this projection by using an extraordinary high estimated yield of ethanol from switchgrass processing of 0.38 L/kg (or 380 L per ton). This is the same yield of ethanol produced from 1 kg of corn grain, a much more fermentable feedstock. Pimentel believes that no one else in the world has achieved even a small portion of the return reported by Schmer et al. from switchgrass. Bruce Dale responds that, on the contrary, the current yield of ethanol from corn grain is about 0.47 L/kg of dry corn grain and that many laboratories and commercial operations have already gotten yields approaching 0.35 L/kg of cellulosic biomass, as referenced above. Coauthor Hall wishes to remain neutral in this and other discussions but believe that his coauthors are setting up some very researchable questions for a more mature biofuels industry.

David Pimentel and his collaborator Tad Patzek give several additional arguments about the, in their view, inadvisability of large scale production of fuel from switchgrass in addition to their calculation that it was likely to have an EROI of less than one for one. Patzek in 2010 reported that even if the entire total 140 million hectares of U.S. cropland were planted to switchgrass and converted to ethanol, the gross yield would be only 20% of U.S. gasoline consumption. Also, Smith [34] reported that the cost of producing a liter of ethanol from cellulosic feedstock is ¢54/L ($3.09/gal). Bruce Dale responds that the values of switchgrass productivity and ethanol yield assumed by Patzek are unjustifiably low, since we are already able to produce about 10% (by volume) of our gasoline consumption from about one third of our corn grain, which is about one sixth of the total mass of corn grain and corn residue produced on about 36 million hectares of cropland. Bruce Dale agrees that the Sampson and Schmer data are not that different in terms of the farm level operations. Sampson’s data gives an EROI of about 23:1 for solid biomass delivered to the farm gate while the corresponding farm gate EROI for Schmer is about 38:1. (Interestingly, the Heller et al. data give an EROI of 55:1 at the farm gate, but that is for wood from trees.) These differences can be reasonably attributed to the different yields and agronomic practices employed in the Sampson study (eastern Canada) versus the Schmer study (midwestern US). As with Schmer, Sampson shows that the energy inputs from the fertilizer and the harvesting operations represent the greatest farm level energy inputs, 58% and 29%, respectively, of the overall energy required to grow, harvest and transport switchgrass to the fuel production facility.

Where Dale and Pimentel disagree strongly is on the ethanol yield from switchgrass. Dale notes that, in fact, DDCE and other firms have already achieved ethanol yields similar to or greater than those used by Schmer. Dale notes that over 100 years ago the Germans developed a wood to ethanol process based on sulfuric acid that achieved about 0.21 L/kg. During World War II, the US used this process to produce cellulosic ethanol for conversion to butadiene to produce synthetic rubber. The Vulcan Copper and Supply Company was contracted to construct and operate a plant to convert sawdust into ethanol. This plant achieved an ethanol yield of about 0.21 L/kg over several years but was not profitable in an era of cheap oil and was closed after the war [35]. Bruce Dale notes that there are a number of smaller (e.g., Mascoma, Gevo, KL Energy, Coskata) and larger (e.g., Shell, BP, DuPont, Chevron, ConocoPhillips) firms that are actively developing cellulosic ethanol and other biofuels from different materials including corn stover, wheat straw, mixed hardwood chips, sugar cane bagasse, etc. [36]. Although process data are generally confidential, these firms are working to increase these yields and seem to be making real progress. Some of them are already operating large demonstration plants. For example, DDCE, a cellulosic ethanol firm owned by DuPont, publicly states that they are achieving 85 gallons per ton (350 L per dry MG or 0.35 L/kg) at their demonstration plant in Vonore, Tennessee [30].

Large Differences in Distillation Energy. Finally, there is a clear difference in opinion on whether or not we will be able to use residuals for fuel for distillation, and this is the main reason that the EROI estimates are so different. Of course because the technology is barely operational at a commercial scale we cannot check which assumption is correct. Coauthor Dale believes that many different estimates by the National Renewable Energy Laboratory (NREL) and others have shown that more than enough energy is contained in the biomass to run the biorefinery and even have enough left over to export surplus electricity [26,37,38]. The NREL calculations in particular have been extensively vetted by industry and the latest NREL report is coauthored by six practicing engineers from the Harris Group, a large, diversified engineering services and design firm [39]. Also, if the residuals are not burned to provide process heat and electricity, they will have to be disposed of in some way, probably by landfilling. It does not seem reasonable to suppose that industry will not use the ready source of fuel available but will instead opt to pay for its disposal. Furthermore, the Kraft pulp and paper industry is powered largely by its biomass residuals and newer sugar cane to sugar-ethanol-electricity system is completely powered by its residue, sugar cane bagasse, while exporting surplus electricity [40]. Both of these are highly developed, well-established industries. So we have the example of two very large scale industries that show that it is indeed possible to use biomass residuals to provide most or all of the energy needed for biofuel production, presumably including cellulosic biomass.

Pimentel, on the other hand, believes that only some of the residual can be burned. Much of the lignin cannot be extracted and burned. According to the website Lignoworks [41] “Most schemes propose to use the separated lignin as a fuel to run the plant. However, a process that converts all of the input biomass to fuel is unlikely to be economically feasible”. Further support for the statement that only a small portion of the lignin can supply energy comes from specialists in paper production in Alabama [42]. They stated that separating the lignin from the water was too costly in terms of both energy and dollars. What they do is spray the water-lignin mixture into the boilers. They claim only a little net energy from this. The same would be true for cellulosic ethanol production.

Coauthor David Pimentel further states that “There is no evidence that the suggested potential improvements in cellulosic ethanol are possible. Examine the multi-billion dollars that have been spent for the past 5 years with no result.” [43,44]). He also believes that the GREET model is very optimistic, and generates high yield estimates that have not been verified in the field.

Conclusions and Summary

An important objective of this paper has been realized. The coauthors agree that the EROI concept is valuable and can provide important insights about the desirability of particular energy systems. The reasons for the published differences between coauthors Dale and Pimentel with regard to corn ethanol’s EROI have been dissected and are shown to be primarily due to allocation issues, not to inherent problems with the underlying concept of EROI.

These results highlight the importance of performing EROI using transparent methodologies and allocation approaches, clearly defined system boundaries, and using the best data possible.

Lack of crucial data for operating cellulosic ethanol systems makes these EROI calculations inherently more speculative than those for corn ethanol. However, farm level EROI’s are relatively high for cellulosic biomass production (ranging from 10:1 to about 50:1 in this analysis). Therefore it is the efficiency of energy conversion in the biorefinery, in particular the practicality of using residual biomass to power the biorefinery, which will determine whether cellulosic ethanol systems can reach the very attractive EROIs that seem possible.


The first author greatly appreciates the good will of the second and third author to attempt to deal with their differences in an open and friendly manner through a joint publication. It was not easy for anyone.

References and Notes

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Murphy & Hall 2011 Adjusting the economy to the new energy realities of the second half of the age of oil

[ Below are excerpts from this 5 page paper, slightly rearranged, go here to see all of the text, figures, and tables.   Alice Friedemann  author of “When Trucks Stop Running: Energy and the Future of Transportation, 2015, Springer]

Murphy, D.J., Hall, C.A.S.  2011. Adjusting the economy to the new energy realities of the second half of the age of oil. Ecol. Model. doi:10.1016/j.ecolmodel.2011.06.022

fig 8 peak era model of the economy

Fig 8 Peak era model of the economy

Is Growth still Possible?

Due to the depletion of conventional, and hence cheap, crude oil supplies (i.e. peak oil), increasing the supply of oil in the future would require exploiting lower quality resources (i.e. expensive),and thus will most likely occur only at high prices. This situation creates a system of feedbacks where economic growth, which requires more oil, would require high oil prices that will undermine that economic growth. We conclude that the economic growth of the past 40 years is unlikely to continue unless there is some remarkable change in how we manage our economy.

Numerous theories have been posited over the past century that have attempted to explain business cycles, or to generate some means of accelerating a return to rapid growth during slow or non-growth times. Many offer a unique explanation for the causes of and solutions to recessions. They include ideas based on: Keynesian Theory, the Monetarist Model, the Rational Expectations Model, Real Business Cycle Models, Neo- Keynesian models, etc. (Knoop, 2010).

Yet, for all the differences amongst these theories, they all share one implicit assumption: that there will be a return to a growing economy, i.e. growing GDP. Historically, there has been no reason to question this assumption as GDP, incomes, and most other measures of economic growth have in fact grown steadily over the past century.

But if we are entering the era of peak oil, then for the first time in history we may be asked to grow the economy while simultaneously decreasing oil consumption, something that has yet to occur in the U.S. for 100 years.

Oil more than any other energy source is vital to today’s economies because of its ubiquitous application as nearly the only transportation fuel, as a portable and flexible carrier and as feedstocks for manufacturing and industrial production.

Historically, spikes in the price of oil have been the primary cause of most recessions. On the other hand, expansionary periods tend to be associated with the opposite oil signature: prolonged periods of relatively low oil prices that increase aggregate demand and lower marginal production costs, all leading to, or at least associated with, economic growth.

By extension, for the economy to sustain real growth over time there must be an increase in the flow of net energy (and materials) through the economy. Quite simply economic production is a work process and work requires energy. This logic is an extension of the laws of thermodynamics, which state that: (1) energy cannot be created nor destroyed, and (2) energy is degraded during any work process so that the initial inventory of energy can do less work as time passes. As Daly and Farley (2003) describe, the first law places a theoretical limit on the supply of goods and services that the economy can provide, and the second law sets a limit on the practical availability of matter and energy. In other words, the laws of thermodynamics state that to produce goods and services, energy must be used, and once this energy is used it is degraded to a point where it can no longer be reused to power the same process again. Thus to increase production over time, i.e. to grow the economy, we must either increase the energy supply or increase the efficiency with which we use our source energy. This is called the energy-based theory of economic growth, which was advanced significantly by the work of Nicolas Georgescu-Roegen (GeorgescuRoegen, 1971), amongst many others (Costanza, 1980; Cleveland et al., 1984; Ayres, 1999; Hall et al., 2001; Daly and Farley, 2003; Ayres and Ware, 2005; Hall and Day, 2009).

An energy-based theory of economic growth

This energy-based theory of economic growth is supported by data: the consumption of every major energy source has increased with GDP since the mid-1800s at nearly the rate that the economy has expanded (Fig. 1). Throughout this growth period, however, there have been numerous oscillations between periods of growth and recessions.

Fig 1 energy production and GDP for the world from 1830 to 2000


Fig. 1. Energy production and GDP for the world from 1830 to 2000.

Cleveland et al. (2000) analyzed the causal relation between energy consumption and economic growth and their results indicate that, when they adjusted the data for quality and accounted for substitution, energy consumption caused economic growth. Other subsequent analyses that adjusted for energy quality support the hypothesis that energy consumption causes economic growth, not the converse (Stern, 1993, 2000).

In sum, our analysis indicates that about 50% of the changes in economic growth over the past 40 years are explained, at least in the statistical sense, by the changes in oil consumption alone. In addition, the work by Cleveland et al. (2000) indicates that changes in oil consumption cause changes in economic growth. These two points support the idea that energy consumption, and oil consumption in particular, is of the utmost importance for economic growth. Yet changes in oil consumption are rarely used by neoclassical economists as a means of explaining economic growth. For example, Knoop (2010) describes the 1973 recession in terms of high oil prices, high unemployment and inflation, yet omits mentioning that oil consumption declined 4% during the first year and 2% during the second year. Later in the same description, Knoop (2010) claims that the emergence from this recession in 1975 was due to a decrease in both the price of oil and inflation, and an increase in money supply. To be sure, these factors contributed to the economic expansion in 1975, but what is omitted, again, is the simple fact that lower oil prices led to increased oil consumption and hence greater physical economic output. Oil is treated by economists as a commodity, but in fact it is a more fundamental factor of production than either capital or labor (Hall et al., 2001).

Thus we present the hypothesis that higher oil prices and lower oil consumption are both precursors to, and indicative of, recessions. Likewise, economic growth requires lower oil prices and simultaneously an increasing oil supply. The data support these hypotheses: the inflation-adjusted price of oil averaged across all expansionary years from 1970 to 2008 was $37 per barrel compared to $58 per barrel averaged across recessionary years, whereas oil consumption grew by 2% on average per year during expansionary years compared to decreasing by 3% per year during recessionary years (Figs. 2 and 4). Although this analysis of recessions and expansions may seem like simple economics, i.e. high prices lead to low demand and low prices lead to high demand, the exact mechanism connecting energy, economic growth, and business cycles is rather more complicated. Hall et al. (2009) and Murphy and Hall (2010) report that when energy prices increase, expenditures are re-allocated from areas that had previously added to GDP, mainly discretionary consumption, towards simply paying for the more expensive energy. In this way, higher energy prices lead to recessions by diverting money from the economy towards energy only. The data show that recessions occur when petroleum expenditures as a percent of GDP climb above a threshold of roughly 5.5% (Fig 5).

  1. [Every] time the U.S. economy emerged from a recession over the past 40 years, there was always an increase in the use of oil while a low oil price was maintained.
  2. Oil is a finite resource.

In light of these two realities, the following two questions become particularly germane: What are the implications for economic growth if (1) oil supplies are unable to increase with demand, or (2) oil supplies increase, but at an increased price?

There is a clear trend in the literature on energy return on (energy) invested (EROI) of global oil production towards lower EROIs. Gagnon et al. (2009) report that the EROI  for global oil extraction declined from about 36:1 in the 1990s to18:1 in 2006. This  downward trend results from at least two factors: first, increasingly supplies of oil are  originating from sources that are inherently more energy-intensive to produce simply  because firms have developed cheaper resources before expensive ones. For example, in  the early 1990s fewer than 10% of oil discoveries were located in deep water areas. By  2005 the number jumped to greater than 50%.

Enhanced oil recovery techniques are being implemented increasingly in the world’s largest conventional oil fields. For example, nitrogen injection was initiated in the once supergiant Cantarell field in Mexico in 2000, which boosted production for four years, but since 2004 production from the field has declined precipitously. Although enhanced oil recovery techniques increase production in the short term, they also increase significantly the energy inputs to production, offsetting much of the energy gain for society.

Roughly 60% of the oil discoveries in 2005 were in deep water locations (Fig. 6). Based on estimates from Cambridge Energy Research Associates (CERA, 2008), the cost of developing that oil is between $60 and $85 per barrel, depending on the specific deep water province. Oil prices therefore, at a minimum, must exceed roughly $60 per barrel to support the development of even the best deep water resources. But the average price of oil during recessionary periods has been $57/bbl, so it seems that increasing oil production in the future will require oil prices that are associated with recessionary periods.

All of this data indicates that an expensive oil future is necessary if we are to expand our total use of oil. In other words, growing the economy will require oil prices that will discourage that very growth.  Indeed, it may be difficult to produce the remaining oil resources at prices the economy can afford, and, as a consequence, the economic growth witnessed by the U.S. and globe over the past 40 years may be a thing of the past.

EROI and the price of fuels

EROI is a ratio comparing the energy produced by an extraction process to that used to produce that energy (Murphy and Hall, 2010). As such it can be used as a proxy to estimate generally whether the cost of production of a particular resource will be high or low, and it also is probably a good determinant of the monetary costs of various energy resources. For example, the oil sands have an EROI of roughly 3:1, whereas the production of conventional U.S. crude oil has an average EROI of about 12:1 and Saudi crude probably much higher

The production costs for oil sands are roughly $85 per barrel compared to roughly $40 for average global oil and perhaps $20 (or less) per barrel for Saudi Arabian conventional crude (CERA, 2008). As we can see from this data there is an inverse relation between EROI and price, indicating that low EROI resources are generally more expensive to develop whereas high EROI resources are on average relatively inexpensive to develop (Fig. 7). As oil production continues, we can expect to move further towards the upper right of Fig. 7. In summary, relatively low EROI appears to translate directly into higher oil prices.

It is important to emphasize that these models assume that society will continue to pursue business-as-usual economic growth, i.e. the models assume that business persons will continue to assume that oil demand will continue to increase indefinitely in the future (whether or not they understand the role of the oil).

For the economy of the U.S. and any other growth-based economy, the prospects for future, oil-based economic growth are bleak. Taken together, it seems clear that the economic growth of the past 40 years will not continue for the next 40 years.


The main conclusions to draw from this discussion are:

  • Over the past 40 years, economic growth has required increasing oil consumption.
  • The supply of high EROI oil cannot increase much beyond current levels for a prolonged period of time.
  • The average global EROI of oil production will almost certainly continue to decline as we search for new sources of oil in the only places we have left: deep water, arctic and other hostile environments.
  • Increasing oil supply in the future will require a higher oil price because mostly only low EROI, high cost resources remain to be discovered or exploited, but these higher costs are likely to cause economic contraction.
  • Using oil-based economic growth as a solution to recessions is untenable in the long-term, as both the gross and net supplies of oil has or will begin, at some point, an irreversible decline.

Due to the depletion of high EROI oil the economic model for the peak era, i.e. roughly 1970-2020, is much different from the  pre-peak model, and can be described by the following feedbacks ( Fig. 8): (1) economic growth increases oil demand, (2) higher oil demand increases oil production from lower EROI resources, (3) increasing extraction costs leads to higher oil prices, (4) higher oil prices stall economic growth or cause economic contractions, (5) economic contraction leads to lower oil demand, and (6) lower oil demand leads to lower oil prices which spur another short bout of economic growth until this cycle repeats itself.

This system of insidious feedbacks is aptly described as a growth paradox: maintaining business as usual economic growth will require the production of new sources of oil, yet the only sources of oil remaining require high oil prices, thus hampering economic growth. This growth paradox leads to a highly volatile economy that oscillates frequently between expansion and contraction periods, and as a result, there may be numerous peaks in oil production. Campbell (2009) has referred to this as an undulating plateau. In terms of business cycles, the main difference between the pre and peak era models is that business cycles appear as oscillations around an increasing trend in the pre-peak model while during the peak-era model they appear as oscillations around a flat trend. It is important to emphasize that these models assume that society will continue to pursue business-as-usual economic growth, i.e. the models assume that businesspersons will continue to assume that oil demand will continue to increase indefinitely in the future (whether or not they understand the role of the oil).

But what if economic growth was no longer the goal? What if society began to emphasize energy conservation over energy consumption? Unlike oil supply, oil demand is not governed by depletion, and incentivizing populations to make incremental changes that decrease oil consumption can completely alter the relation between oil and the economy that was described in the aforementioned model. Decreasing oil consumption in the U.S. by even 10% would release millions of barrels of oil onto the global oil markets each day.

For the economy of the U.S. and any other growth-based economy, the prospects for future, oil-based economic growth are bleak. Taken together, it seems clear that the economic growth of the past 40 years will not continue for the next 40 years unless there is some remarkable change in how we manage our economy.


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Posted in Charles A. S. Hall, EROEI Energy Returned on Energy Invested, How Much Left | Tagged , , | 2 Comments

Chemical industrial farming is unsustainable. Why poison ourselves when pesticides don’t save more of our crops than in the past?

Pesticides, herbicides, and insecticides destroy soil, ecosystems, and a third of the crop is still lost to pests, just as in the many millennia of farming before chemicals.

[ This is a book review of Dyer’s “Chasing the Red Queen”, and I have added additional information and  conclusions.  This book is not technical and could be read by both high school and undergraduate students as an introduction to soil ecosystems and the damage done by agricultural chemicals, and the science of why this is ultimately not sustainable.

Alice Friedemann  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report ]

Dyer, A. 2014. Chasing the Red Queen. The evolutionary race between Agricultural pests and poisons. Island Press.

We hear a lot about how we’re running out of antibiotics.  But we are also doomed to run out of pesticides, because insects inevitably develop resistance, whether toxic chemicals are sprayed directly or genetically engineered into the plants.

Worse yet, weeds, insects, and fungus develop resistance in just 5 years on average, which has caused the chemicals to grow increasingly lethal over the past 60 years.  And it takes on average eight to ten years to identify, test, and develop a new pesticide, though that isn’t long enough to discover the long-term toxicity to humans and other organisms.

And this devil’s bargain hasn’t even provided most of the gains in crop yields, which is due to natural-gas and phosphate fertilizers plus soil-crushing tractors and harvesters that can do the work of millions of men and horses quickly on farms that grow only one crop on thousands of acres.

Yet before pesticides, farmers lost a third of their crops to pests, after pesticides, farmers still lose a third of their crops.

Even without pesticides, industrial agriculture is doomed to fail from extremely high rates of soil erosion and soil compaction at rates that far exceed losses in the past, since soil couldn’t wash or blow away as easily on small farms that grew many crops.

But pest killing chemicals are surely accelerating the day of reckoning sooner rather than later. Enormous amounts of toxic chemicals are dumped on land every year — over 1 billion pounds are used in the United State (US) every year and 5.6 billion pounds globally (Alavanja 2009).

This destroys the very ecosystems that used to help plants fight off pests, and is a major factor biodiversity loss and extinction.

Evidence also points to pesticides playing a key role in the loss of bees and their pollination services.  Although paleo-diet fanatics won’t mind eating mostly meat when fruit, vegetable, and nut crops are gone, they will not be so happy about having to eat more carbohydrates. Wheat and other grains will still be around, since they are wind-pollinated.

Agricultural chemicals render land lifeless and toxic to beneficial creatures, also killing the food chain above — fish, amphibians, birds, and humans (from cancer, chronic disease, and suicide).

Surely a day is coming when pesticides stop working, resulting in massive famines.  But who is there to speak for the grandchildren? And those that do speak for them are mowed down by the logic of libertarian capitalism, which only cares about profits today. Given that a political party is now in power in the U.S. that wants to get rid of the protections the Environmental Protection Agency (EPA) and other agencies provide, may make matters worse if agricultural chemicals are allowed to be more toxic, long-lasting, and released earlier, before being fully tested for health effects.

Meanwhile chemical and genetic engineering companies are making a fortune, because the farmers have to pay full price, since the pests develop resistance long before a product is old enough to be made generically.  Except for glyphosate, but weeds have developed resistance. Predictably.

In fact, the inevitability of resistance has been known for nearly seven decades. In 1951, as the world began using synthetic chemicals, Dr. Reginald Painter at Kansas State University published “Insect Resistance in Crop Plants”.  He made a case that it would be better to understand how a crop plant fought off insects, since it was inevitable that insects would develop genetic or behavioral resistance.  At best, chemicals might be used as an emergency control measure.

Farmers will say that we simply must carry on like this, there’s no other choice.  But that’s simply not true.

Consider the corn rootworm, that costs farmers about $2 billion a year in lost crops despite spending hundreds of millions on chemicals and the hundreds of millions of dollars chemical companies spend developing new chemicals.

To lower the chances of corn pests developing resistance, corn crops were rotated with soybeans. Predictably, a few mutated to eat soybeans plus changed their behavior.  They used to only lay eggs on nearby corn plants, now they disperse to lay eggs on soybean crops as well.  Worse yet, corn is more profitable than soy and many farmers began growing continuous corn.  Already the corn rootworm is developing resistance to the latest and greatest chemicals.

But the corn rootworm is not causing devastation in Europe, because farms are smaller and most farmers rotate not just soy, but wheat, alfalfa, sorghum and oats with corn (Nordhaus 2017).

Before planting, farmers try to get rid of pests that survived the winter and apply fumigants to kill fungi and nematodes, and pre-emergent chemicals to reduce weed seeds from emerging.  Even farmers practicing no-till farming douse the land with herbicides by using GMO herbicide-resistant crops.  Then over the course of crop growth, farmers may apply several rounds of additional pesticides to control different pests. For example, cotton growers apply chemicals from 12 to 30 times before harvest.

Currently, the potential harm is only assessed for 2 to 3 years before a permit is issued, even though the damage might occur up to 20 years later.

Although these chemicals appear to be just like antibiotics, that isn’t entirely true.  We develop some immunity to a disease after antibiotics help us recover, but a plant is still vulnerable to the pests and weeds with the genetics or behavior to survive and chemical assault.

Although there are thousands of chemical toxins, what matters is how they kill, their method of action (MOA).  For herbicides there are only 29 MOAs, for insecticides, just 28.  So if a pest develops resistance to one chemical within an MOA, it will be resistant to all of the thousands of chemicals within that MOA.

The demand for chemicals has also grown due the high level of bioinvasive species.  It takes a while to find native pests and make sure they won’t do more harm than good.  In the 1950s there were just three main corn pests. By 1978 there were 40, and they vary regionally. For example, California has 30 arthropods and over 14 fungal diseases to cope with.

When I was learning how to grow food organically back in the 90s, I remember how outraged organic farmers were that Monsanto was going to genetically engineer plants to have the Bt bacteria in them.  This is because the only insecticide organic farmers can use is Bt bacteria, because it is found in the soil. It’s natural. Organic farmers have been careful to spray only in emergencies so that insects didn’t develop resistance to their only remedy.  Since 1996, GMO plants have been engineered to have Bt in them, and predictably, insects have developed resistance.  For example, in 2015, 81% of all corn was planted with genetically engineered Bt.  But corn earworms have developed resistance, especially in North Carolina and Georgia, setting the stage for damage across the nation.  Five other insects have developed resistance to Bt as well.

GMO plants were also going to reduce pesticide use.  They did for a while, but not for long.  Chemical use has increased 7% to 202,000 tons a year in the past 10 years.

Resistance can come in other ways than mutations. Behavior can change. Cockroach bait is laced with glucose, so cockroaches that developed glucose-aversion now no longer take the bait.

It is worth repeating that chemicals and other practices are ruining the long-term viability of agriculture. Here is how author Dyer explains it:

“Ultimately the practice of modern farming is not sustainable” because “the damage to the soil and natural ecosystems is so great that farming becomes dependent not on the land but on the artificial inputs into the process, such as fertilizers and pesticides.  In many ways, our battle against the diverse array of pest species is a battle against the health of the system itself.  As we kill pest species, we also kill related species that may be beneficial. We kill predators that could assist our efforts. We reduce the ecosystem’s ability to recover due to reduced diversity, and we interfere with the organisms that affect the biogeochemical processes that maintain the soils in which the plants grow.

Soil is a complex, multifaceted living thing that is far more than the sum of the sand, silt, clay, fungi, microbes, nematodes, and other invertebrates. All biotic components interact as an ecosystem within the soil and at the surface, and in relation to the larger components such as herbivores that move across the land. Organisms grow and dig through the soil, aerate it, reorganize it, and add and subtract organic material.  Mature soil is structured and layered and, very importantly, it remains in place.  Plowing of the soil turns everything upside down.  What was hidden from light is exposed.  What was kept at a constant temperature is now varying with the day and night and seasons.  What cannot tolerate drying conditions at the surface is likely killed.  And very sensitive and delicate structures within the soil are disrupted and destroyed.

Conventional tillage disrupts the entire soil ecosystem. Tractors and farm equipment are large and heavy; they compact the soil, which removes air space and water-holding capacity. Wind and water erosion remove the smallest soil particles, which typically hold most of the micronutrients needed by plants.  Synthetic fertilizers are added to supplement the loss of oil nutrients but often are relatively toxic to many soil organisms.  And chemicals such as pre-emergents, fumigants, herbicides, insecticides, acaricides, fungicides, and defoliants eventually kill all but the most tolerant or resistant soil organisms.  It does not take long to reduce a native, living, dynamic soil to a relatively lifeless collection of inorganic particles with little of the natural structure and function of undisturbed soil”.

When I told my husband all the reasons we use agricultural chemicals and the harm done, my husband got angry and said “Farmers aren’t stupid, that can’t be right!”

I think there are a number of reasons why farmers don’t go back to sustainable organic farming.

First, there is far too much money to be made in the chemical herbicide, pesticide, and insecticide industry to stop this juggernaut.  After reading Lessig’s book “Republic, Lost”, one of the best, if not the best book on campaign finance reform, I despair of campaign financing ever happening.  So chemical lobbyists will continue to donate enough money to politicians to maintain the status quo.  Plus the chemical industry has infiltrated regulatory agencies via the revolving door for decades and is now in a position to assassinate the EPA, with newly appointed Scott Pruitt, who would like to get rid of the EPA.

Second, about half of farmers are hired guns.  They don’t own the land and care about passing it on in good health to their children.  They rent the land, and their goal, and the owner’s goal is for them to make as much profit as possible.

Third, renters and farmers both would lose money, maybe go out of business in the years it would take to convert an industrial monoculture farm to multiple crops rotated, or an organic farm.

Fourth, it takes time to learn to farm organically properly.  So even if the farmer survives financially, mistakes will be made.  Hopefully made up for by the higher price of organic food, but as wealth grows increasingly more unevenly distributed, and the risk of another economic crash grows (not to mention lack of reforms, being in more debt now than 2008, etc).

Fifth, industrial farming is what is taught at most universities.  There are only a handful of universities that offer programs in organic agriculture.

Sixth, subsidies favor large farmers, who are also the only farmers who have the money to profit from economies of scale, and buy their own giant tractors to farm a thousand acres of monoculture crops.  Industrial farming has driven 5 million farmers off the land who couldn’t compete with the profits made by larger farms in the area.

But farmers will have to go organic whether they like it or not

It’s hard to say whether this will happen because we’ve run out of pesticides, whether from resistance or a financial crash reducing new chemical research, or whether peak oil, peak coal, and peak natural gas will cause the decline of chemical farming.  Agriculture uses about 15 to 20% of fossil fuel energy, from natural gas fertilizer, oil-based chemicals, farm vehicle and equipment fuel,  the agricultural cold chain, distribution, packaging, refrigeration, and cooking to name a few of the uses.

At some point of fossil decline, there won’t be enough fuel or pesticides to continue business as usual.

Farmers will be forced to go organic at some point.  Wouldn’t it be easier to start the transition now?

Although steam engines could replace diesel and gasoline engines, steam engines are far less efficient, and biomass doesn’t grow quickly enough to be renewable for a steam engine economy.  By the civil war, vast regions of the U.S. east of the Mississippi were deforested for steam locomotives, factory steam engines, river boats, and for heating, cooking, and construction.

Nor can we return to muscle power to the extent we once did, because cars allowed us to build on top of land that used to graze horses.

What about electrifying farming?

It is unlikely we can electrify tractors – the weight of the battery needed would be about as much as the weight of the tractor, and further compact the soil.  Diesel is 500 times as energy dense pound for pound as a led acid battery, and 100 times as energy dense as lithium batteries.  Batteries also weigh a lot because half the weight of a battery is its management system, which uses half of the battery energy to keep the batteries from exploding or getting too hot or cold.

Nor can we string an overhead catenary wire system across hundreds of millions of acres of cropland.

What to do

We already know what to do.  There are hundreds, if not thousands of books and journal articles on how to convert an industrial farm to an organic one, such as:

  • Use pesticides less often, and only when absolutely necessary with integrated pest management guidelines to slow resistance down from 5 years to 8 years
  • Stop monoculture, or rotating just two crops, because insects can develop resistance.
  • Surround farms with wild land to increase biodiversity and provide more niches for birds, insects, and other natural predators of crop pests.
  • Restore the natural fertility of soil with manure, crop resides, compost, and cover crops.
  • Improve crop biodiversity and pest resistance by growing more varieties of corn, wheat, potatoes
  • Educate farmers like Ray Archuleta at the natural resources conservation service. He’s been teaching classes on how to restore soils in as little as two to three years.
  • Before fossil fuels, 90% of the population were farmers.  Provide meaningful jobs by breaking up large farms into smaller ones that grow many crops

And for some pests, like the green aphid, which has grown so resistant to so many chemicals that farmers are running out of options, a healthy ecosystem approach may be the only thing left to try.


Alavanja, M. 2009. Pesticides Use and Exposure Extensive Worldwide. Rev Environmental Health.

Benbrook, C. M. 2015. Trends in glyphosate herbicide use in the United States and globally. Environmental sciences Europe.

Nordhaus, H. March 2017. Cornboy vs. the billion-dollar bug. Technology to defeat the corn rootworm, scientists worry, will work only briefly against an inventive foe. Scientific American


Posted in Agriculture, Agriculture, Biodiversity Loss, Chemicals, Overshoot, Pesticides, Soil | Tagged , , , , , , , | Comments Off on Chemical industrial farming is unsustainable. Why poison ourselves when pesticides don’t save more of our crops than in the past?

U.S. House hearing on how to get Central Asian oil before Russia and China do, 2006

[ Make no mistake: one of the main focuses of the U.S. government is to keep crude oil flowing, because without oil, civilization as we know it collapses. This is because the transportation that matters most – heavy-duty diesel-engine trucks (tractors, harvesters, 18-wheelers, cranes, construction, logging, etc), rail, and ships, don’t run on electricity.  They run on oil. This hearing focuses on Central Asia.  As Zeno Baran, director at the Center for Eurasian Policy at the Hudson Institute notes:  “On the United States energy interests in Central Asia, I think we see Central Asia energy infrastructure and resources once again becoming a source of competition for great powers”.  

Alice Friedemann  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report ]

House 109-219. July 25, 2006. Assessing energy and security issues in Central Asia. House of Representatives.   86 pages.

Ms. ROS-LEHTINEN. The developments in Central Asia are of a tremendous significance to United States energy and security interests in the region. Since gaining their independence from the Soviet Union in 1991, United States focus on Central Asia has increased dramatically, as indicated by American efforts to protect the sovereignty, freedom and democracy of these newly independent states.

Unfortunately, the region’s ability to profit from their energy resources in the past has been limited by Russia’s monopoly over transporting Central Asia’s oil and gas. By continuing to support diversification of pipelines, we will ensure a free flow of energy supplies to Western consumers and expand Central Asia’s economy through investment and development. We will ask our witnesses today to describe the range of U.S. energy concerns and energy interests in the region, in themselves, and their relationship to broader U.S. strategic objectives and needs.

Russia and China have intensified their efforts to isolate the United States politically, militarily and economically from Central Asia. Moscow and Beijing were successful in convincing the Uzbek leadership that the United States sought to overthrow their government. This resulted in the closing of an American military base in Uzbekistan last year. Though unsuccessful, similar efforts were made by Russia and China to pressure Kyrgyzstan to close a strategic United States air base in its country that is currently being used in the counter-terrorism efforts in Afghanistan.

If we allow ourselves to be marginalized by Moscow and Beijing, we could lose our influence in the region and could fail in achieving our immediate security goals and protecting our energy interests in Central Asia.

Gary Ackerman of New York.  As energy demand continues to increase globally, the strategic importance of Central Asia will become clearer than it is today. In truth, the development of the former Soviet republics into more important energy exporters is probably the only region that has received much attention, inadequate as it may be.

To understand why Central Asia hasn’t been on the radar screen in Washington political circles, I think we should recall the glib promises that were made about the abundance of Iraqi oil that were promised in a post-Saddam utopia. There is no way to deny that our misadventure in Iraq has distracted our Government from a host of issues that have not gone away, while our attention has been fixed on the bloody train wreck that amounts to Bush Administration policy in Iraq.

While Washington has been distracted, Iran and China have made greater inroads in Central Asia, seeking commercial and security agreements that ensure the flow of petroleum and natural gas to be used or refined and resold. Russia, too, has been active in trying to establish by commerce the dominance it used to enjoy by force. Russia’s appetite for control of petroleum resources in the region is barely concealed. The reality is that most Central Asia petroleum—after transit through Russia—is on its way to the West, and in light of the winter cutoff of Ukraine, this fact should give us some pause for thought. Moreover, the regimes that have emerged since the end of the Soviet Union are, broadly speaking, friendly kleptocracies. Every one of them has adopted a government model built around what is politely referred to as a ‘‘strongman,’’ a position commonly known as a dictator.

Mr. CARNAHAN.  Issues related to energy and security have become increasingly intertwined in recent years. Though we need to decrease our dependence on foreign oil, we must also make certain that investments in U.S. energy resources are protected throughout the world. Moreover, we need a firm hand to ensure that Iran does not further infiltrate Central Asia, which would have a direct impact on United States and international security.

STEVEN R. MANN, Principal deputy assistant secretary, BUREAU OF SOUTH & CENTRAL ASIAN AFFAIRS, U.S. DEPARTMENT OF STATE. This discussion of engaging Central Asian countries on energy cooperation is very timely as the world confronts tight oil markets and as we consider ways to deepen energy security nationally and globally. This hearing’s focus on Central Asia is particularly appropriate given the inauguration of the Baku-Tbilisi-Ceyhan pipeline on July 13.

U.S. policy for the development of oil and gas reserves in Central Asia is predicated on the use of best commercial standards and transparency to ensure that energy resources are developed efficiently and for the benefit of the countries concerned. In line with this, we have pursued a policy of encouraging multiple pipelines to afford the countries of the region options for export of their oil and gas. The completion of the Caspian Pipeline Consortium (CPC) pipeline from Kazakhstan to Novorossiisk on the Black Sea in Russia and the inauguration of the Baku-TbilisiCeyhan (BTC) pipeline from Azerbaijan to Turkey are signal successes of this policy. We all can be especially proud of the role that American firms have played in these endeavors. BTC in particular represents a new environmental, social, and design benchmark for energy transport worldwide. The construction of the South Caucasus Pipeline will bring Azerbaijani natural gas to European markets and, ultimately, Turkmen and Kazakhstani gas may cross the Caspian and share this route.

In line with these promising developments, the United States welcomes the June 16 signing by Azerbaijan and Kazakhstan of an agreement to facilitate access of Kazakhstani oil to the BTC pipeline. Such an agreement provides Kazakhstan additional capacity to export the large volumes of crude that will need to reach markets starting in 2009–10, when the Kashagan field is slated to come on stream.

U.S. firms are among the biggest investors in Central Asia’s energy sector, and this is a welcome development in many ways. Major U.S. oil and gas firms such as Chevron, ConocoPhillips, and ExxonMobil have extensive investments in the Tengiz, Karachaganak, and Kashagan fields. In addition, U.S. oil services companies and equipment providers such as Parker Drilling, McDermott, and Baker Hughes Services International have found promising opportunities. When speaking of oil and gas development, we must keep in mind that regionally Kazakhstan and Turkmenistan hold the largest reserves. Kyrgyzstan and Tajikistan have significant hydroelectric resources, but little oil and gas. Uzbekistan is largely closed to Western companies and has more limited potential.

The extent of Turkmenistan’s gas reserves remains unclear, and Turkmenistan is completely dependent on the Russian pipeline system to bring its gas to market. A proposed trans-Caspian pipeline foundered in 2000 when the parties could not reach an acceptable commercial agreement, and little has changed since then.

With the completion of the first phase of the East-West Energy Corridor, we must now press on with the second phase of supporting new energy routes out of Central Asia.

Countries bordering the Caspian Sea—Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan—are significant oil and gas suppliers to world markets, and their importance is growing. The countries of the north Caspian have reached delimitation agreements, but Iran and Turkmenistan have not yet joined these agreements, among other reasons, because of Iranian insistence on its claim to one-fifth of the Sea. Lack of agreement has impeded exploration and development of hydrocarbon resources in disputed waters, and there remains the potential for conflict in the southern Caspian where promising offshore deposits of oil and gas remain to be developed.

Kazakhstan—Energy.   Given the scope of the energy supply and demand challenges we face today and in years ahead, Kazakhstan can play a very helpful role in addressing the world’s energy needs. Kazakhstan and the entire North Caspian region have tremendous resources. At Tengiz, Kashagan, and other fields, nearly 30 billion barrels of reserves are proven; there is potential for up to 100 billion barrels. Natural gas reserves generally range from 65–70 trillion cubic feet, and could be as high as 100 trillion cubic feet. We strongly support the work of U.S. energy companies and their international partners, who are now focused on ramping up production and improving transportation to markets. U.S. energy companies were among the first non-CIS foreign investors in Kazakhstan; we expect American companies to be active in the region for many years to come.

Overall, Kazakhstan produced about 1.29 million barrels of oil per day (b/d) in 2005, and exported, through CPC and other routes, about one million b/d. The Kazakhstani Government expects production to increase to about 3 million b/d by 2015, especially as the huge Kashagan field comes into production. Moreover, Kazakhstan has expanded production of natural gas in recent years, and expects to reach 570 billion cubic feet this year. A lack of export infrastructure—plus a focus on oil—has limited gas production in Kazakhstan; previously, gas had been flared or re-injected into oil wells to maintain production pressure.

The United States and Kazakhstan enjoy a vigorous strategic partnership with a constant stream of high-level visitors. Energy Secretary Bodman met with President Nazarbayev and Energy Minister Izmukhambetov in March,Vice President Cheney met with President Nazarbayev in May, Secretary Rice saw Foreign Minister Tokayev on July 6.  We have made progress on enabling countries in Central Asia to bring their energy resources to world markets. Much remains to be done, however, and continued robust U.S. engagement is required to push forward the next phase of energy development

LANA EKIMOFF, DIRECTOR, Office of Russian & Eurasian Affairs, U.S. Department of Energy.

I will focus on the opportunity that Central Asia presents for enhancing energy security by adding supply and diversity to world markets.  Data on oil and gas reserves for the Central Asia-Caspian region vary widely. The EIA indicates proven oil reserves are between 17 and 50 billion barrels [my note: the world burns 30 billion barrels a year]. The regions natural gas production is expected to nearly double from 14 bcf per day in 2005 to 24 bcf in 2010.

The countries in this region run the gamut on energy wealth. Azerbaijan, Kyrgyzstan, Turkmenistan and Uzbekistan are endowed with oil and gas resources. Tajikistan and Kyrgyzstan are resource-poor except for hydropower. These countries provide 2 million barrels of oil per day to the global market and are expected to add 4 million barrels by 2010. Their gas production is expected to increase by 60 percent in 2010. However, the full resource potential of this region is still unknown, and reserve figures vary widely. Better data will become available as more exploration takes place.

Developing resources in this region is not without obstacles. There is a lack of export outlets, and we have supported the development of new transit projects.

Our goal is to promote regional partnerships among producing and transit countries. It is important that the countries take responsibility for encouraging the development of new, commercially viable export routes and find ways together, and with commercial entities, to create a win-win situation. We also consistently support the creation of sound legal, fiscal and regulatory policies that will encourage investment in the energy sector.

The Department of Energy maintains ongoing dialogues with officials from Kazakhstan and Azerbaijan. Energy Secretary Bodman recently visited Kazakhstan, where he met with President Nazerbayev and the energy minister. He and Deputy Secretary Sell recently met separately with Azerbaijani President Aliyev in Washington and Istanbul. Their discussions focus on advancing our energy cooperation and recognizing the important role it plays in the global energy market.

The Department has formal dialogues with both countries. As these bilateral dialogues have matured, we have changed the focus from oil and gas issues and expanded our cooperation to a broad range of technologies—energy efficiency, renewable power, nuclear power and environmental concerns. It is important that these countries understand that we are not just interested in their oil and gas contribution to global markets, but also share a common goal of building an energy sector in these countries that is diversified, cost-effective and secure to support their growing economies.

What are our next steps? We will continue to work with countries in the region to facilitate the development of commercially viable oil and gas export infrastructure. We will encourage more surveys to better understand the resource potential in the region, which will help attract investment. We support the full involvement of Kazakhstan and the BTC pipeline, now that Azerbaijan and Kazakhstan have completed an intergovernmental agreement and they begin negotiations on host government agreements with the companies.

We also plan to hold formal energy dialogues this fall in Kazakhstan and Azerbaijan to broaden and deepen our energy cooperation.

Ms. BERKLEY. This is a part of the world that, until recently, I knew so little about and now realize how strategically important it is to our country and, I believe, security in many very sensitive parts of the world. I have also come recently to appreciate how vast their oil and gas reserves are, and how extraordinarily important that is to our economic well-being and security needs. Can you give me some idea of where we fit into this? What would their natural inclination be as a region? Would they gravitate toward Muslim countries? Would they be more interested in coming into the American orb and being stronger allies of ours? Are these issues being determined by their governments on pure economic basis? Are they factoring in other security needs, religious needs? Give me some idea of what is happening there and what is the best-case scenario for the United States and how we can go about achieving that scenario. Because, lately, we are not doing well achieving any best-case scenario anywhere in the world.

Ambassador MANN. Kazakhstan is a good friend of the United States. Overall, there is a powerful Soviet imprint. The countries were Soviet republics for 70 years. Russian, in those years, was the language of the educated, the language of the elites. There is a powerful Soviet legacy, also an infrastructure, not just in oil and gas pipelines, but the rail routes, the air routes, telecommunications, so much of it still links through Moscow and the Russian heartland. That is a fact that just exists in Central Asia. Now, what the countries have said to us in so many ways is: we have greater opportunities now. We want not merely to be a part of the USSR as we were, we want to link to the global economy. The United States, in so many ways, has done this; not to create a sphere of our own, we reject that approach. But what we believe very strongly in is working with the governments and the people to strengthen their independence, strengthen their decision-making autonomy, strengthening their sovereignty and assisting in a process of stable development. One of the other aspects of this Soviet legacy was a forced atheism on the countries that had been Muslim for so many centuries. What we have now in Central Asia, fundamentally, are secular governments. So I think that is what they are left with after those Soviet years.

Ms. ROS-LEHTINEN. What goes on in Kazakhstan stays. Let me ask you about your thoughts on continued military assistance in Kazakhstan and Azerbaijan. Do you believe that it is a priority to help these two countries strengthen their capabilities so that they can independently defend the Caspian Sea energy platforms and interest? In my last question, I wanted to ask you about Iranian influence. You had talked about how close geographically these countries are. To what extent do you believe that the embrace of the Iranian regime in Shanghai implies a degree of legitimacy for and a Russian and Chinese acceptance of Tehran’s current policy? So, Iranian influence and also the United States military assistance to Kazakhstan and Azerbaijan.

Ambassador MANN. In each of those two countries, I think we have a good program of military cooperation and training; and a good part of that is strengthened at precisely that issue you have identified, Caspian security. It is not Central Asia per se, but I will say that I know it is a concern for Azerbaijan, which, in the summer of 2001, had oil field workers chased off of the Alov deposit by an Iranian gunboat. So it is a lively concern for the Azerbaijanis.

ZENYO BARAN, Director, Center for Eurasian Policy, Hudson Institute. On the United States energy interests in Central Asia, I think we see Central Asia energy infrastructure and resources once again becoming a source of competition for great powers. In this new rush, the two most important regional players are China and Russia. Energy-hungry China is actively working to reach long-term oil and gas agreements, and has billions of dollars to spend in order to obtain them. Russia is also spending considerable sums in the region in order to ensure it can maintain its monopoly over Caspian gas transportation to Western markets.

The U.S., however, is missing in action. In the 1990s, the United States had a very successful Caspian energy policy and identified the region as an important non-OPEC source of oil. The United States policy also correctly identified the direct transportation of Central Asian gas to new markets, rather than via the Russian monopoly Gazprom network or through a potential Iranian pipeline, as the best strategy for the region’s energy transportation future. To this end, the United States has already supported several non-Russian and non-Iranian oil and gas pipelines from the Caspian Sea, one of which, as we just heard, the Baku-Tbilisi-Ceyhan oil pipeline, was just recently inaugurated. Securing the East-West flow of Caspian gas has been much more difficult and, so far, efforts have not been successful.

Russia clearly won the first round of Central Asian gas competition. While the United States backed a trans-Caspian gas pipeline to transport Turkmen gas via an undersea pipeline to Azerbaijan and, from there, via Georgia, Turkey and onwards to European markets, Russia was able to finalize a gas pipeline agreement with Turkey to send its gas via Turkey via the Blue Stream gas pipeline underneath the Black Sea.

In part, because of the authoritarian rule of Turkmen President Niyazov until recently, the United States had abandoned its Central Asian gas strategy. The standard arguments were that the U.S. should not engage in energy dialogue with Niyazov until and unless he made improvements to the democracy of the human rights situation in the country. Given that he is not likely to do so, it was deemed best to wait him out and begin energy talks with his successor, no matter how far in the future. This policy was clearly not working. In fact, while the United States waited, we see the Chinese and the Russians have moved in to fill the vacuum. More recently, the trans-Caspian gas pipeline idea was revived by the United States Administration, but this time starting with Kazakhstan.

According to the new strategy, Turkmen gas will be added only later if at all. The logic is that there is already plenty of flared gas in Kazakhstan that could be transported to Western markets. Given Kazakhstan’s pragmatic energy development policy and demonstrated interest in the East-West corridor, this option seems to be a good way forward. Yet, this too may not materialize unless the United States is seriously committed to changing the energy dynamics in Eurasia, which ultimately means confrontation with Russia’s regional energy strategy. To come up with a coherent and pragmatic strategy, it is necessary to look at the broader Eurasian energy picture, specifically at the activities and plans of Gazprom.

While many have wanted to turn a blind eye to the possibility that United States and Russia may not have a win-win option in Central Asian energy, it is clear that Russia is playing it all.

For the United States to ensure its energy and security interests in Central Asia a new framework is needed. In the short term the U.S. will not have much influence in the democratic reform process in the region. The carrots the United States and EU can offer the Central Asians will simply not be attractive enough for them to bite, while the sticks the West can use will not be painful to induce change. We need to recognize also that

There is no win-win strategy possible with Russia and Central Asia regarding energy given the Kremlin’s use of energy as a political weapon and Gazprom’s need to obtain as much of the Central Asian gas as it can to keep Russian domestic gas prices low and to provide uninterrupted gas supply to its European consumers. The United States has two options, it can either give up, which is not advisable, or it can become directly engaged at the top levels on this issue.,

Anti-American developments.   These sentiments are a by-product of two factors, first, competition for energy resources with China and Russia, competition with Russia over the construction of new pipelines, and second, the perceived American promotion of democratic revolutions throughout the region. While its partners all have shared security concerns about the so-called three evils of separatism, terrorism and radicalism, it is of course ironic that Russia and China seem to disregard the longer term impact of their anti-American stand in Central Asia. By opposing the U.S. the way they do, they are effectively bolstering the position of the Islamists.

STEVEN BLANK, PH.D., Research Professor of National Security Affairs,  U.S. ARMY War college.

Today American interests in Central Asia, a region of growing strategic importance, are under attack from three sources: Russia, China, the authoritarian misrule of the Central Asian rulers themselves in many cases, and thirdly from the resurgence of the Taliban in Afghanistan.  Victory in Afghanistan there is the only option for us. If we lose then we will be facing another terrorist upsurge like we did 5, 7 years ago which will threaten all of Central Asia.

Because the security of Central Asia has become connected to the vital security interests of the United States, our presence in Central Asia in all of its dimensions, economic, military, political and so on, is regarded by Moscow and Beijing and to a lesser degree Tehran as a threat to their vital interests and they have spared no effort to try to oust us from Central Asia.

Russia, as has been noted here, has attempted to create a gas monopoly. They failed to create an oil pipeline monopoly, but the gas monopoly is vital to Russian politics in general.

At the same time the Russians have their own military bloc, the CSTO, which I alluded to, and they are also trying to exclude us from the Caspian by creating what they call a CASFOR, a naval force under Russian domination that would exclude non-littoral states from any participation in the defense of the area, defense of world platforms, counter-proliferation and counter-smuggling operations.

We need a broader economic policy than simply ensuring energy access. While we have been successful in energy access with regard to oil in Kazakhstan, we have failed with gas.

Secretary Rice’s initiative with regard to linking up South Asian and Central Asian electricity networks is a commendable example of what needs to be done, but it needs to be thought of in terms of a comprehensive economic policy involving not just the United States Government but the EU and international financial institutions. Similarly, military assistance and training through the Partnership for Peace and getting our allies’ support in Afghanistan, and the situation in Afghanistan is quite critical at the moment, is also an essential aspect of policy because if we fail in Afghanistan we put the whole of Central Asia at risk.

In conclusion I would say that we are facing a coordinated attack on our policies in energy with regard to democratization, with regard to defense and security in Central Asia from Moscow, Beijing and to a lesser degree Tehran, as well as from the Taliban in Afghanistan and their supporters, and also facing obstacles due to the authoritarian misrule or fragility of several, if not all, of the Central Asian Governments.

This makes the obstacles to our policy quite considerable in their extent and scope, but because of the fact that Central Asia is so important strategically and in energy terms, it is essential that we find and devise policy mechanisms and frameworks which will enable us to overcome those challenges in the near and long-term future.

Since 9/11/2001 a second vital interest for the United States has appeared, namely defense of the United States and of Europe from Islamic terrorism personified by Bin Laden and expressed by the Taliban and their allies. Consequently victory in Afghanistan is an unconditional vital interest which must be achieved just as much if not more than as in Iraq. The other important interests of the United States apply first of all to what might be called an open door or equal access for U.S. firms in regard to energy exploration, refining, and marketing. To the extent that these states’ large energy holdings are restricted to Russia due to the dearth of pipelines or oil and gas, they will not be able to exercise effective economic or foreign policy independence.

Today all these interests are under attack and the U.S. policy in Central Asia is embattled and under siege. Moscow and Beijing, as well as to a lesser degree Tehran, view our political and strategic presence in Central Asia with unfeigned alarm. Despite their protestations of support for the U.S. war on terrorism, in fact they wish to exclude us from the area and fear that we mean to stay there militarily as well as in all other ways indefinitely.

Russia has also waged a stubborn campaign to prevent Central Asian states from affiliating either with the U.S. or Western militaries. It seeks to gain exclusive control of the entire Caspian Sea and be the sole or supreme military power there while states like Kazakhstan and Azerbaijan rely upon Western, and especially American assistance to help them develop forces that could protect their coastlines, exploration rigs, and territories, from terrorists, proliferation operations, and contraband of all sorts. Second, Russia has formed the Collective Security Treaty Organization (CSTO) to prevent local states from aligning with NATO or getting too involved with its Partnership for Peace (PfP) program. Another purpose of the CSTO is to create legal-political grounds for permanently stationing Russian forces and bases in Kyrgyzstan, Tajikistan, and possibly Uzbekistan ostensibly to defend these regimes against terrorism. And the CSTO, under Russian leadership is constantly seeking to augment the scope of its missions in Central Asia in order to cement a Russian dominated security equation there. So in reality these forces are there to defend Russian interests and/or keep the current authoritarian regimes in power. Despite Russia’s relative military weakness and unbroken military decline in 1991–2000, Russia now has bases in 12 of the former Soviet republics and the expansion of its capability to project power into these areas if not beyond is one of the leading drives of current Russian military policy. Similarly another key drive of Russian military policy is the effort to develop, sustain, and project the land, sea (Caspian), and air capabilities needed to prevent local governments from either receiving U.S. weapons and assistance or allowing U.S. military bases in their territories. For example this program is the driving force behind Russia’s proposals for a Caspian Sea Force (CASFOR). The practical outcome of so exclusive a force made up only of littoral states would be to confirm the littoral states as dependencies of Russia, put Iran in a subordinate position in the Caspian, and exclude foreign military or energy presence there.

Simultaneously, Moscow and Beijing have also waged an unrelenting campaign beginning in 2002 to impose limits on the duration and scope of America’s presence in Central Asian bases and more generally in the region. They succeeded in Uzbekistan thanks to our misconceived policies there and are constantly bringing enormous pressure on Kyrgyzstan to force us out of the base at Manas. Probably the combination of our deep pockets, high-level intervention by Secretaries Rice and Rumsfeld, and renewed fighting in Afghanistan has allowed us to stay at Manas on condition of paying ever higher rents for its use. Russia has also sought to forestall these states from buying Western equipment by selling them Russian weapons at subsidized prices. And in return for their debts it has sought to restore the Soviet defense industrial complex by buying equity in strategic defense firms located there. Russia and China have also engaged in training programs for Central Asian officers.

Most significantly Moscow and Beijing have utilized the Shanghai Cooperation Organization (SCO) as a platform for a collective security operation in Central Asia, sponsoring both bilateral and multilateral Russian and Chinese exercises with local regimes and with each other on an annual and expanding basis since 2003. The SCO’s utility to Moscow and Beijing does not end here. While there are significant differences between Russia and China and among the other members and observers (India, Pakistan, Iran, Mongolia) as to what the SCO’s primary purpose and function ought to be, i.e. whether its main function should be promotion of trade and economic development; or to be a provider of hard security and another energy forum that Russia would dominate; or to be a genuine basis for regional cooperation as Kazakhstan and the smaller states would prefer, it clearly has been envisioned by Beijing and Moscow as a basis for attempting to unite Central Asian governments in an anti-American regional security organization. There are also divisions among the members as to whether its membership should expand to include the new observer states of Iran, Pakistan, India, and Mongolia. Nevertheless, Beijing openly and consistently proclaims the SCO to be a model for what it is trying to do in regard to Asian security in Southeast Asia and beyond, i.e. replace the U.S.-led alliance system in Asia with one of its own creation that is attuned to its rather than to our and our allies’ stated values and interests. Therefore we should take this organization and its development seriously as a template for China’s and Russia’s, if not Iran’s broader foreign policy objectives.

Thus U.S. policies in regard to security, energy access, and democratization are all under attack in Central Asia from the local dictators, Presidents Putin, and Hu Jintao, and their governments. Adding to the difficulties are the facts that we face a resurgent Taliban, backed up with enormous drug revenues, Pakistani support, and an inconsistent international effort to rebuild Afghanistan while its government remains weak and unsure of itself. As a result, we have lost the base at Karshi Khanabad, face constant pressure in Kyrgyzstan and elsewhere, and are fighting a revived and strengthened Taliban under conditions that are in many ways less favorable than in 2001.

The State Department emphasizes democracy as its main priority.   While such statements make powerful rhetoric; in Central Asia, according to expert observers, they are empty and irrelevant. Moreover, they contribute to the undermining of our security objectives because they feed the belief that we are seeking to unseat reigning rulers, and second, since they believe that the only real opposition is Islamic terrorists, our position fuels their belief that we neither understand the region nor their interests. If democratization is our first priority here than we have given the region over to Russia and China for we have convinced local leaders that these aforementioned beliefs of theirs are correct whatever the real truth might be.

Our utter lack of a viable information policy that is tailored to this region’s mores, cultures, and special needs, has reinforced all those previous negative feelings while also leaving the Russians and Chinese to operate with total freedom in support of retrogressive rulers or corrupt dictators.

We have failed to foresee what might happen in states that are so misgoverned that violence is likely, either through economic distress, or through a succession crisis. Thus our reactions have been uncoordinated and haphazard with resulting negative consequences for U.S. policy that we can all see today. Uzbekistan and Turkmenistan are likely to be failed states when the present rulers leave the scene and in Uzbekistan we have already seen, as has the Uzbek government, that it is vulnerable to both violent incitement and to outbreaks of pubic violence.

NATO’s continuing dilatoriness about sending troops to Afghanistan and giving them sufficiently robust rules of engagement has slowed our ability to counter the Taliban resurgence, especially as we are reducing the number of troops there. Since it appears that more troops might be needed, this is again a wrong sign. Eighth, we have failed to press the international community sufficiently strongly to make good its pledges to Afghanistan, without which reconstruction there will be greatly prolonged if it even is successful.

The State Department’s office of Reconstruction and Stabilization, under Ambassador Herbst, must be directed, if it not already doing so, to begin planning for contingencies having to do with the real possibility of state failure in Central Asia, particularly Uzbekistan and Turkmenistan. If and when that occurs it will usher in violent responses to that condition of state failure. And we cannot allow this chaos to go on in uncontrolled fashion or to abdicate our real interests in the region. Adequate forecasting, and rapid response policies, not only military ones either, must be thought through and implemented so that we are ready to move here on a moment’s notice if necessary.

ARIEL COHEN, PH.D., SENIOR RESEARCH FELLOW, HERITAGE FOUNDATION.  In the last 5 years real and present danger to U.S. national security, especially Islamist terrorism and threats to energy supply, have affected United States policy in Central Asia.  What is needed in Central Asia is a policy that allows the United States to continue to diversify its energy supplies, station its military forces in close proximity to most immediate threats, Afghanistan,

The aim of this testimony is to outline Central Asia’s strategic importance, particularly in terms of energy security, and to assess how our energy issues fit into wider United States strategic interests in the region.

The hydrocarbon reserves are concentrated in the Caspian region. As such, a discussion of Central Asian hydrocarbon resources would be incomplete without including Azerbaijan, which has considerable oil and gas resources in its own right and is central to non-Russian energy transit from Central Asia to points west.

The bulk of Central Asian Caspian hydrocarbons are located in Kazakhstan, Azerbaijan, and to a lesser degree Uzbekistan with a lot of gas in Turkmenistan. Both Tajikistan and the Kyrgyz Republic have limited reserves of oil and gas, but in amounts that thus far have not warranted much attention from foreign investors.

The outlook for Western investment in Central Asia is mixed. Especially the gas sector, investment was low. The leaders of the biggest gas producing countries are not friendly to the United States and their investment climates can be characterized as abysmal.

The Central Asian national gas sector has seen very little outside investments until recently and Russia continues to benefit from the bulk of gas exports from Central Asia as it buys Central Asian gas at prices as low as one-quarter to one-third of market prices in Europe, then resells at market rates. To put things in perspective, it must be noted that Caspian Sea production levels even in their peak will be much smaller than the OPEC, Organization of Petroleum Exporting Countries, combined output. Production levels are expected to reach 4 million barrels a day in 2015 compared to 45 million barrel a day for OPEC countries in that year. Clearly Central Asia is not the largest source of oil and gas nor it’s most successful.

Despite all these difficulties, investors and governments are rushing to lay claim to hydrocarbon reserves of Central Asia.

Geopolitical location is a keen concern as Central Asia continues to evolve as a highly important strategic area, especially for Russia, United States, China, Iran and India. Political instability in other major oil and gas production locations is very much in the news, the Middle East, Venezuela, where President Hugo Chavez just visited Belarus and is signing a $1 billion arms agreement with Russia, including the sale of sophisticated Soho 30 fighter bombers and building of a Kalashnikov machine gun factory in Venezuela.

All these factors of instability are fueling the drive to claim a share of Central Asian resources.

The role of the United States focusing on numerous factors that I mentioned before is also preventing the United States from being a hegemonistic power in the region. The more we are involved, the more Russia and China and Iran are resisting our presence there.

Even if the U.S. has the capacity to limit the presence of other large powers in the region, to do so would be an error, just as it was a mistake for the United States to support an oil and steel embargo on Japan in the 1930s, triggering its southern expansion of the Pacific. The U.S. and other great powers share the goals of stability, economic development and preventive religious radicalization of terrorism.

The United States does not want to openly antagonize China, Russia or India over their involvement in Central Asia but is likely to derive benefits from regional cooperation with them in the region.

Mr. COHEN. If Iran joins SCO or, even without that, if Iran and Russia get together to create what they call a gas OPEC, that will be a step in the wrong direction because they will be controlling together massive production capacity. I do not remember off the top the top of my head after Russia, which is number one, which one is number two in terms of reserves. Either Qatar or Iran. It is Iran. So if you think about a number one and number two producers of gas getting together, it is like Russia and Saudi Arabia getting together. That says it all. In terms of Iran being part of SCO, I think also it is going to be geopolitically a step in a wrong direction, directly affecting American interests if you take Russia and China and Iran to the west, to the east, and to the south because it will be a step to creating a geopolitical bloc essentially aimed at the United States. So we need to fight that.


Posted in Energy Dependence | Comments Off on U.S. House hearing on how to get Central Asian oil before Russia and China do, 2006

The electromagnetic pulse EMP Threat. May 13, 2005 House of Representatives hearing

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Some notable statements from the hearing:

George Baker, Professor Emeritus, James Madison University:

  • I’ve been to some EMP meetings in Britain, where they actually are protecting their grid. I heard a member of Parliament say it’s 3 days to total anarchy once you lose the electricity.
  • “The long-term term effects without the electric power grid, we’re talking about certainly within a year, you would lose at least half the American population. I have seen estimates as high as 90% of the American population would be at risk over a projected 1-year period”.
  • “Although EMP does not affect every system, widespread failure of limited numbers of systems will cause large-scale cascading failures of critical infrastructure systems and system networks because of the interdependencies among the failed subsystems and the interlinked electrical/electronic systems not directly affected by the EMP”

PETER VINCENT PRY, Executive Director, Task force on National and Homeland Security:

  • What we must understand about the threat is that it is not merely theoretical, it is a real [asymmetrical] threat. The military doctrines of Russia, China, North Korea and Iran call for a Blitzkrieg combining nuclear weapons, cyber-attack, and physical sabotage.  Failed states like Iran or North Korea [or terrorists] could theoretically defeat and destroy a highly advanced society like our own [in such an asymmetric attack].
  • “There are 2,000 extra high voltage transformers that are basically the technological foundation of our electronic civilization. They are vulnerable to EMP. They should be protected. We don’t even make them in this country anymore”.

Mike Caruso, Director of Government and Specialty Business Development ETS-Lindgren.

“It is my sincere belief that we, as a nation will someday, in the not too distant future, face an EMP attack.  I have lectured and given workshops in both South Korea and Israel where they are certain that they will face an EMP attack and they are taking very active steps towards protection. I urge you to consider and pass legislation to address the EMP threat that I believe has been overlooked for far too long”.

Alice Friedemann  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report ]

House 114-42. May 13, 2015. The EMP Threat:  the state of preparedness against the threat of an electromagnetic pulse (EMP) event.  House of Representatives. 94 pages.

Ron DeSantis, Florida, Chariman subcommittee on National Security. The state of preparedness against the threat of an electromagnetic pulse is the subject of today’s hearing. An electromagnetic pulse could be created through an attack from a missile, nuclear weapon, radio frequency weapon, or geomagnetic storm caused by the sun. Fallout from an EMP event, either man-made or natural, could be extremely significant ranging from the loss of electrical power for months, which would deplete energy sources of power such as emergency batteries and backup generators have cascading consequences for supplying basic necessities such as food and water, and result in loss of life.

The electrical grid is necessary to support critical infrastructure, supply and distribution of food, water, and fuel, communications, transportation, financial transactions and emergency and government services. Significant damage to the electrical grid during an EMP event would quickly and significantly degrade the supply of these basic necessities.

EMPs can also be caused by solar storms, also referred to as geomagnetic disturbances, which are basically an everyday occurrence, they just doesn’t always hit the Earth. Two significant storms that did enter the earth’s atmosphere occurred in 1859 and 1921, respectively. Given the limited use of electricity in the mid-19th and early 20th centuries, the impact on society was relatively minimal. Today however, society depends heavily on a variety of technologies that are vulnerable to the effects of intense solar storms.

Scientists predict that these storms impact the Earth once every 100 to 150 years. So it’s not a question of if, but a question of when.

The occurrence today on an event like the 1921 storm could result in large scale and prolonged blackouts affecting more than 100 million people. The National Academy of Sciences estimates the cost of damage from the most extreme solar weather at $1 to $2 trillion with a recovery time of 4 to 10 years. The cost from even short-term blackouts are significant.

In July of 1977, a blackout in New York that lasted only one day resulted in widespread looting and the breakdown of law through many New York neighborhoods. The blackout cost approximately $346 million and nearly 3,000 people were arrested during a 26-hour period. In August of 2003, more than 200 power plants shut down as a result of the electricity cut off caused by cascading failure. The blackout affected Ohio, New York, Maryland, Pennsylvania, Michigan and parts of Canada. Although relatively short in duration, the blackout’s economic cost was between $7 billion and $10 billion due to food spoilage, lost production, overtime wages and other related costs.

The Department of Defense recently decided to move the North American Aerospace Defense Command, NORAD back inside Cheyenne Mountain in Colorado because the mountain is EMP hardened and would allow the military to sustain communications and homeland defense operations despite an EMP event.

Not only is the Federal Government still operating under sequestration, but unfortunately, Congress recently passed a budget blueprint that contemplates cutting non-defense spending, including our Homeland Security budget that could be helpful on this issue by nearly $500 billion below sequestration level spending caps.

While government officials, scientists and other experts may disagree on the imminence of Electromagnetic Pulse event, the EMP Commission established by Congress in 2001 to assess the threat of an EMP attack reported that our national electric grid and other U.S. Critical infrastructure could be significantly disrupted by a sudden and high-intensity energy field burst. Now as the chairman noted, this could be large in scale and produced by nuclear explosion, it could also be created through the use of batteries, reactive chemicals and other nonnuclear devices, or be the product of a natural magnetic storm.

Dr. George Baker, Professor Emeritus at James Madison University and CEO of BAYCOR.  I see three reasons why we are not making progress at present on these. The first is there are many misconceptions about EMP and GMD threats.

  • Only major nuclear powers, such as Russia and China with high- yield thermonuclear devices could effectively execute an EMP attack. In fact, low yield devices obtained by emerging nuclear powers such as North Korea and Iran can produce catastrophic EMP effects.
  • A nuclear EMP attack would burn out every exposed electronic system. In fact, based on government tests, we know that smaller self-contained, self-powered systems such as vehicles, handheld radios, disconnected portable generators are often not affected.
  • EMP effects on critical infrastructure will be limited to non-severe, nuisance-type effects. In fact, wide area failure of just a few systems, could cause cascading infrastructure collapse, in highly interconnected networks. One example is the 2003 electric blackout of the northeast was precipitated by a single high-voltage line touching a tree, and then proceeded to cascade to the entire northeast.

So, when you extend this concept to a wide area of failures and infrastructure networks, including the Internet, you can see that EMP is an existential threat that we must take very seriously.

A recent cost study by the Foundation for Resilient Society shows that significant EMP protection could be achieved for an investment in the range of $10 to $30 billion.

But we aren’t making progress because the stakeholders are in a state of denial. Concerns about cost makes stakeholders, the government and the private sector reluctant to admit EMP vulnerabilities. Actions to date have been limited and ineffective. An example is the joint effort of the Federal Energy Regulatory Commission, that is, FERC, and the North American Electric Reliability Corporation, that is NERC, to set reliability standards for wide area electromagnetic impacts on the electric grid.

The NERC-developed and FERC-approved standards that we have exclude nuclear EMP, despite the opportunity to protect against both GMD and EMP using the same equipment. NERC standards rely on operational procedures that require no physical protection of the electric grid. The largest measured storms are a factor of 10 higher than their benchmark for protection. A sceptic might suspect that NERC’s main objective was to avert liability rather than to protect the American public.

Another reason we aren’t making progress is there is no one in charge. There’s no single point of responsibility to develop and implement a national protection plan. When I ask NERC officials about EMP protection, they informed me we don’t do EMP, that’s DOD’s responsibility. The Department of Defense tells me, EMP protection for civilian infrastructure is DHS’s responsibility. And then when I talk to DHS, I get answers that the protection should be done by the Department of Energy, since they are the infrastructure’s sector-specific agency. So we have EMP and GMD protection as finger-pointing exercises at present.

PETER VINCENT PRY, Executive Director, Taskforce on National and Homeland Security.

Also see Pry’s full testimony here: The EMP Commission estimates a nationwide blackout lasting one year could kill up to 9 of 10 Americans through starvation, disease, and societal collapse

What we must understand about the threat is that it is not merely theoretical, it is a real threat. In the military doctrines of Russia, China, North Korea and Iran, they plan to make a nuclear EMP attack against the United States. We have seen North Korea and Iran exercise this, including by launching ballistic missiles off of a freighter at sea, which would enable the possibility of an anonymous EMP attack.

During the nuclear crisis we had with North Korea in 2013, it was the worst nuclear crisis we ever had with Kim Jong Un was threatening to make nuclear missile strikes against the United States in the aftermath of their third illegal nuclear test.  In the midst of that crisis North Korea orbited a satellite over the south pole that passed over the territory of the United States on the optimum trajectory and altitude to both evade our national missile defenses, and, had that been a nuclear warhead, to place an EMP field over all 48 contiguous United States that would have had catastrophic consequences. That was the KSM 3 satellite; that satellite stills passes over us, it’s still in orbit and passes over us with regularity.

Another thing that must be understood is that EMP is part of their military doctrine that they consider a revolution in military affairs, a combined arms operation with cyber-attacks, physical sabotage, nonnuclear EMP weapons, and nuclear EMP weapons all used together and coordinated in a new Blitzkrieg, except one that’s waged in cyberspace to basically bring a civilization down to its knees so that a failed state like an Iran or North Korea could theoretically defeat and destroy a highly advanced society like our own.

This would be unprecedented in history where you would have a situation where a state like Iran or North Korea or even a sub national actor like a terrorist group if they could get hold of that one nuclear bomb and do it in combination with cyber-attacks and physical sabotage to crash our critical infrastructures, especially the electric grid and basically destroy our civilization. But they write about it; they exercise it; they are serious about it. And we actually see this being practiced in real life in some countries back in June of last year while ISIS was sweeping over northern Iraq, al Qaeda and the Arabian Peninsula blacked out the entire electric grid in the state of Yemen, put 18 cities and 24 million people into the dark.

That is the first time in history that a terrorist group has blacked out a whole country. And it so destabilized Yemen that look what happened to them. They have gone from being a U.S. ally, so now we have lost one of our most important allies in the Middle East already to this kind of an attack.

On January 25, 2016 a terrorist group blacked out 80% of the grid in Pakistan. We don’t know what they are up to, but Pakistan is a nuclear weapons State. So the idea that 80% of the grid could be blocked out in Pakistan for purposes unknown is extremely disturbing.   Was it an attempt to get their hands on nuclear weapons in Pakistan?

About a week before the Washington blackout happened, 80 percent of Turkey was put into blackout by a cyber-attack by Iran. These were not EMP attacks, but they are experiments of the doctrine to combine all these things and we have seen in the case of North Korea and Iran experiments with the nuclear EMP option as well.

The greatest progress we made in this country was when the EMP Commission was around and, you know, with the absence of the Commission, well we have seen that no progress has been made.

And last, the NERC/FERC relationship, I completely agree with Dr. Baker. It’s extremely dysfunctional, it doesn’t work. It needs to be reformed. I’m not sure that you can actually reform those institutions. I would actually advocate abolishing both FERC and NERC and starting with something else, a different kind of institution, something similar to the Nuclear Regulatory Commission that has real regulatory power, and that understands that its stakeholder, its customer is not the electric power industry first, but it’s the American people first. And the responsibility is first not to the profits of the utilities, but it’s to America’s national security.

George Baker, Professor Emeritus, James Madison University, CEO of Baycor.

I’ve been to some EMP meetings in Britain, where they actually are protecting their grid. I heard a member of Parliament say it’s 3 days to total anarchy once you lose the electricity.

Although EMP does not affect every system, widespread failure of limited numbers of systems will cause large-scale cascading failures of critical infrastructure systems and system networks because of the interdependencies among the failed subsystems and the interlinked electrical/electronic systems not directly affected by the EMP.

The electric grid is the foundation for all other infrastructures. DHS has listed 16 critical infrastructure sectors, and the one sector that drives everything else is the electric power. The other thing about the electric power, it is the most critical infrastructure, and yet the most vulnerable to EMP because you measure EMP in volts per meter, so the longer the line, the larger the voltage it will be induced on the line. So it is ironic that our most critical infrastructure is also the most vulnerable, and that’s why we have to be so serious about protecting the grid. But without the electric grid, basic life services: The ability to pump drinking water, the ability to heat and cool our homes

I’ve been to some EMP meetings in Britain, where they actually are protecting their grid. I heard a member of Parliament say it’s 3 days to total anarchy once you lose the electricity.

Although EMP does not affect every system, widespread failure of limited numbers of systems will cause large-scale cascading failures of critical infrastructure systems and system networks because of the interdependencies among the failed subsystems and the interlinked electrical/electronic systems not directly affected by the EMP.

Moreover, for many systems, especially computer controlled machinery and unmanned systems, upset is tantamount to permanent damage ¡V and may cause permanent damage including structural damage in some cases, to systems due to interruption of control. Examples include:

  • Upset of generator controls in electric power plants
  • Upset of robotic machine process controllers in manufacturing plants
  • Lockup (and need for reboot) of long-haul communication repeaters
  • Upset of remote pipeline pressure control SCADA system


Mr. DESANTIS. And in terms of the some of the casualties, because people have surmised  that if terrorists can get their hands on a nuclear device, detonate an American city, obviously that would be very devastating. And someone said, yes it would be, but their best bet to do the most damage would be to try to launch it over the country and explode it and create an EMP. And the casualty estimates I’ve seen are really, really high if they were able to cripple our entire electrical grid. Is that your understanding that you are talking about potentially millions of people?

Mr. BAKER. That’s my understanding. The long-term term effects without the electric power grid, we’re talking about certainly within a year, you would lose at least half the American population. I have seen estimates as high as 90 percent of the American population would be at risk over a projected 1-year period.


Mike Caruso, Director of Government and Specialty Business Development ETS-Lindgren.

It is my sincere belief that we, as a nation will someday, in the not too distant future, face an EMP attack.

I have lectured and given workshops in both South Korea and Israel where they are certain that they will face an EMP attack and they are taking very active steps towards protection. I urge you to consider and pass legislation to address the EMP threat that I believe has been overlooked for far too long.

In addition to critical infrastructure, I’ve hardened military and government facilities for 32 years.  What’s required to harden a facility is to create a 6-sided electromagnetic shield around the equipment that’s intended to be protected. The six-sided metal shield has to be constructed so it basically has no openings in it except those that are absolutely necessary to have. And all of those openings are technically considered to be points of entry. So you start out by building a six-sided metal box with no openings, and then you start adding openings for things like the electrical power, communications and air exchanges and cooling systems. And all of those points of entries are handled in a very, very special and particular way in order to ensure that you are attenuating any EMP signal that might be broadcast in the atmosphere, but also any signals that are being brought in, conducted on the electrical lines or communication lines. A surge protector on steroids.

Eighteen states have ongoing initiatives to require electric utilities to address the protection of the electrical grid from the dangers of an EMP or a solar storm. Electromagnetic energy from an EMP can disrupt Supervisory Control and Data Acquisition (SCADA) systems on which the electrical grid relies. The States currently taking a proactive stand are: Alaska, Arizona, Florida, Kentucky, Maine, New Hampshire, New York, North Carolina, Colorado, Indiana, Louisiana, New Mexico Oklahoma, South Carolina, Texas, Utah, Virginia and Washington. I have recently testified at the Texas State House in support of Bills introduced by State Representative Tan Parker, State Representative Tony Tinderholt and State Senator Bob Hall. Texas is aggressively pursuing passage of EMP Legislation including a State appropriation to get Critical Infrastructure Segments started in the evaluation process. To my knowledge, there are only three Electric Utilities in the U.S. that have taken steps in hardening their Operational Control Centers and Substation Control Buildings. I am prohibited by non-disclosure agreements, from directly identifying their names or locations. However, I can discuss the hardening process and costs of a recently completed facility.


Mr. DESANTIS. What percentage of the electrical grid is prepared for an EMP threat?

Mr. CARUSO. Currently, there’s only one control center in the entire country that I’m aware of that is protected.


Stephen F. Lynch, Massachusetts. What we’re saying here is that because of the interconnectivity of our society today, the great reliance and connectivity to the Internet, so much of every aspect of our lives is wired now, that that fact will actually amplify the impact of a EMP event. Is that basically what you’re saying, Mr. Baker?

Mr. BAKER. That’s right.  The only substantive response to the EMP recommendations has been within the Department of Defense, where they are actually providing an annual report to Congress on the steps they are taking to meet the EMP Commission recommendations. But as far as the civilian infrastructure, I’m not aware of any progress.


Mr. PRY.  There are 2,000 extra high voltage transformers that are basically the technological foundation of our electronic civilization. They are vulnerable to EMP. They should be protected. We don’t even make them in this country anymore.  The Commission had a rather long list of recommendations, basically a plan that could be implemented to protect the civilian critical infrastructure at affordable cost. It’s not hard to do, the technology isn’t the problem, the money isn’t the problem, it doesn’t cost that much to do it, it’s the politics that has been the problem. As George Baker has said, nobody has responsibility for doing this, those you would think would have responsibility,  such as the Department of Defense, for example. When you talk about it, DOD will say they have no jurisdiction over the civilian critical infrastructure, or that it could be caused by a geomagnetic storm and that’s not their department’s responsibility.  It’s a foreign threats, so that’s the Department of Homeland Security’s job. But DHS will say it is a nuclear weapon, that’s the DOD’s job. In the end, nobody has been in charge.

And then, where it counts the most, there is a very dysfunctional relationship between the NERC, the North American Electric Liability Corporation that represents the 3,000 utilities that is supposed to partner with U.S. FERC in providing for grid security. But the political reality is that that relationship is dysfunctional and it has not resulted in not only in increasing our security where EMP is concerned, but even against tree branch problems, for instance. It took NERC a decade to come up with a vegetation management plan to better manage tree branches so that we won’t have a repeat of the great Northeast Blackout of 2003. They are falling down on job on very pedestrian threats, let alone cyber threats and EMP attacks and the like. It’s just the system isn’t working, and that needs to be fixed by somebody.

CYNTHIA M.  LUMMIS, Wyoming, Chairman of the subcommittee on the Interior.   Dr. Pry [you say] the relationship between NERC and FERC is dysfunctional. You mention the possibility of doing away with both. So if you were dictator for a day, and you could do exactly that, either combine NERC and FERC or do away with them and replace them with something else that would solve the dysfunction you’ve identified, as well as address this electromagnetic pulse issue responsibly, what would that look like?

Mr. PRY. That would look like the kind of relationship that the Federal Aviation Administration has with the airline industry. What I think isn’t understood is that the electric power industry is the only critical infrastructure that still operates basically in something that’s close to a 19th century regulatory environment. The Federal Aviation Administration has the power and has independent inspectors. If they find metal fatigue in the wings of an airline, they can ground that whole fleet and order the airline industry to not fly those planes until they are fixed. When there is a disaster and an airplane crashes, the industry doesn’t get to investigate and figure out what went wrong, not by themselves. It’s the Federal Aviation Administration that drags those things into a hangar. And why do we do that? Because we want an objective actor whose first priority is public safety, because hundreds of lives are at stake when airplanes fly and so we don’t take lightly the lives of the American people when it comes to that. If we go to the Food and Drug Administration or any other industry, I would like that same kind of regulatory relationship with the electric power industry.

Let me describe to you a little bit about what the current regulatory environment is like, because it’s not really what we would consider a regulatory environment. The U.S. FERC does not have the power to tell NERC — the industry — what they shall do to protect the grid. It can order them to come up with a plan and then NERC can take as much time as it likes to come up with a proposed plan. And then if the U.S. FERC has objections that plan, the whole plan has to be scrapped, and the process starts all over again.

That’s why it took 10 years to get a plan for vegetation management so we wouldn’t have a repeat of the great Northeast Blackout of 2003. Industry takes its time dragging its feet and can use the process to escape doing what it’s supposed to do. NERC is supposed to partner with the U.S. FERC in providing for the security of the American people, but it doesn’t.

And I don’t think combining them or keeping the same will work.  There are some good people in these institutions, where George and I have served on NERC’s Geomagnetic Disturbance Task Force.  But while we were there, we saw them engage in junk science, dishonest practices in terms of the science to try to mislead people. In my written testimony, I describe a very disturbing example of where the NERC came up with a hollow standard for the natural EMP created by the sun.  They were dragged, kicking and screaming and resisted for years said that the threat from the sun does not affect the electric grid, which was completely untrue. Eventually they were forced to come up with a standard, but the standard is so low that it doesn’t provide any real protection.


BRENDA L. LAWRENCE, MICHIGAN.  This issue is one of great importance to me and to our country. The congressional EMP Commission issued a report in 2008 identifying 16 segments of our infrastructure that could suffer severe damage if not protected. Today, 7 years later, the testimony continues to echo those concerns. Has anything changed since this last report regarding the protection of the grid?

Mr. CARUSO. I don’t believe anything significant has changed.   I have worked with several financial institutions, including insurance companies. I’ve worked with electric utilities and have done some work counseling, the gas and electric industry as well, but other than that, nothing real significant has happened. My recommendation really falls in line with those of Dr. Pry and Dr. Baker in that someone needs to be in charge, and especially as it’s related to the 16 critical infrastructure segments in terms of providing real protection, and at least addressing the issue to ask the question what if, what happens if we lose the electrical power?  I like to use the example of the waste treatment systems. You would not only lose the electrical power, but the control systems that control the wastewater filtration and pumping stations throughout an area. If that goes down in a major city, you have 2 or 3 days before the city is just on its knees.


JODY B. HICE, GEORGIA. Dr. Pry, what Federal agency do you believe is best suited to lead a preparedness effort for this? Is it Homeland Security? Is it Energy?

Mr. PRY. I think the Department of Homeland Security, that it naturally falls under their jurisdiction because they’re supposed to be responsible for critical infrastructure protection in the first place.  Since DHS and the Department of Defense are also supposed to have a cooperative relationship when it comes to providing for homeland security, DHS should have the lead, but there’s a lot of expertise in the Department of Defense. And the Department of Defense is also dependent on the civilian critical infrastructure.


TED LIEU, CALIFORNIA.  Let’s say an EMP device was exploded over the U.S. What is the geographic area that it would affect? Is it the size of D.C.? Of Maryland? Of Virginia? Smaller? Larger?

Mr. BAKER. A low-yield weapon, if it’s detonated at the optimum altitude would affect a circle with a diameter of 1,200 miles.

Mr. LIEU. And then, based on the way our electrical power grid is constructed in the U.S., could you take power from another part of the country and route it through the affected area?

Mr. BAKER. That would depend upon the size of the circular diameter. It would be difficult to do that because you’re looking at areas that are crossing, you know, State boundaries and the boundaries of the different power companies.  It could be difficult. And we don’t have grid control centers in most cases that span that large of an area.


Mr. LIEU.  To harden the United States to a place you think is sufficient, are we talking about $50 million, $50 billion, $500 billion?

Mr. PRY. It depends on how much protection you want to buy.  It’s sort of like asking how much will it cost to buy fire protection for my house. Some plans are very inexpensive. It can be as simple as buying a smoke alarm which would cost you very little. Others might want to put a fire extinguisher in every room and put a sprinkler system in, which is going to cost a lot.

John Kappenman, who was on our commission, had a plan, that would cost $200 million that would protect the 200 most important extra-high-voltage transformers, the ones that service the major metropolitan areas.   John wouldn’t say this was adequate, but would give you a fighting chance of saving millions of people from starving to death, because the transformers would be saved.

The EMP Commission had a more ambitious plan that cost about $2 billion to protect all of the transformers and generators.  It was a much better plan and would give you much greater resiliency and confidence in being able to recover society quickly from an EMP.

George Baker had an even better plan that went beyond that.

It sort of depends on how much do you want to put into prevention. Just like in protecting your house, you can spend more money to protect your house and be safer, or you can decide to spend less money and be less safe.


Mr. DUNCAN. I’m glad to hear that some States are taking individual initiatives. I hope that keeps growing.

Mr. PRY. But it is harder to do when NERC claims they’ve adopted a GMD standard and not to worry about it, they’re on top of the problem, which they also say about cyber and things like that, which is not true. And that takes away the incentive for States to protect themselves when NERC convinces them that they are already solving the problem. And I’d like to make one last statement, because you asked if are we getting more vulnerable. We are getting more vulnerable all the time because of the advance of technology.  Just as our semiconductor technology gets better and faster and runs on lower voltages, it becomes more and more vulnerable to the EMP effect, which is why we’re so vulnerable now.

Back in 1962, Starfish Prime test, when that happened, the vacuum tube technology of the day was 1 million times less vulnerable to EMP. Still, the lights went out in Hawaii even though they were 1 million times less vulnerable. About every 10 years we have a 10-fold increase in the capabilities of our semiconductor technology. That makes us 10-fold more vulnerable to EMP. So this problem is getting worse and worse. It’s not just standing still while we do nothing.


Mr. DUNCAN.  We over sensationalize a lot of these threats because of a 24-hour news cycle and because so many people in companies make money off of threats that are exaggerated. But, in my opinion, this is one that’s not being exaggerated and that we need to do a little bit more. And I appreciate what you all are trying to do.


Mike Caruso. In 2014, ETS-Lindgren was part of a multi-disciplinary team that successfully completed construction of the first large, private-sector SCADA facility in the United States that includes EMP protection. The building is a new-construction, 2-Story 105,000 square foot concrete tilt-up building with:

  • 44,000 square feet of EMP protected space
  • Emergency generators and cooling systems protected
  • Approximately 40 to 60 occupants in the protected space „h Approximately $50MM building construction cost (building only)
  • Total project cost approximately $100MM (including equipment)
  • Approximate EMP Protection cost $8MM (including additional subcontract costs)
  • EMP protection was1-year on-site (concurrent with general construction)
  • Average additional ¡§total project costs¡¨ of 8% ($182.00/sqft)
  • 2 million homes and businesses served
  • 5,000 square-mile service area
  • Less than $1.00 per year per customer (spread over 5-years)
  • Performance certified by Little Mountain Test Facility (U.S. Air Force, Hill AFB)

While the optimum scenario is to include EMP protection in a new building, retrofitting existing buildings for EMP protection is somewhat more complicated and costly, but certainly achievable. I recently led a five-man team in an evaluation of two control centers (primary and back-up) for an electric utility in a major U.S. City. I am prohibited, by non-disclosure agreements, from directly identifying their names or locations. As you might imagine, existing facilities have legacy equipment and systems that were never intended to be EMP protected. This condition makes these facilities tremendously vulnerable to EMP. The existing interconnecting wiring, conduits and mechanical systems provide excellent pathways to conduct the EMP directly to the critical equipment. Therefore, a comprehensive evaluation of the facility must first be conducted to identify the “must have” functionality and equipment in the case of an EMP event. As an example, in this case, it was determined that the large system display board did not have to remain operational because the individual operators would be able to see their sector status on their individual monitors. Therefore it was only necessary to address the protection of the individual stations and a cost savings could be realized. The most critical equipment must be grouped and isolated in individual interconnected enclosures to accommodate functionality. In addition, the existing back-up power systems, cooling systems and communication systems that support the critical equipment must be protected. In some cases this will involve creating new dedicated support systems due to the complexity of the existing systems.

The estimated Rough Order of Magnitude (ROM) costs for retrofitting an existing facility of a similar size as the previously discussed new-building is:

  • 44,000 square feet of EMP protected space
  • Emergency generators and cooling systems protected
  • Approximately 40 to 60 occupants in the protected space
  • Approximately $10MM building construction cost (building only)
  • Total project cost approximately $26MM (including equipment)
  • Approximate EMP Protection cost $16MM (including additional subcontract costs)
  • EMP protection 18 to 24 months on-site (concurrent with general construction)
  • Average additional “total project costs” ($364.00/sq ft)
  • 2 million homes and businesses served
  • 5,000 square-mile service area
  • Less than $2.00 per year per customer (spread over 5-years)

While, in my opinion, EMP protection of electric utilities is the primary concern, due to the survival dependency we have on electrical power, all other segments of our nation’s critical infrastructure must be addressed. Some proactive forward thinking electric utilities have either instituted EMP protection programs or have at least begun to consider implementing protection. However, critical infrastructure segments such as; financial, waste water, drinking water, transportation, food distribution, healthcare and emergency services have not.


George Baker, Professor Emeritus, James Madison University, CEO of Baycor

The costs to protect roughly the transmission and distribution system and half of the U.S. generation capacity are provided in the table below:

Resilient Societies Cost Projections

  • Electric Generation Plants $23,0000M
  • Electricity Transmission & Distribution $2,300M
  • Electric Grid Control Centers $1,390.M
  • Telecommunications $1,480M
  • Natural Gas System $640M
  • Railroads $1,380M
  • Blackstart Plant Resiliency $80M

TOTAL $30,270M

Using the $30,270 bottom line EMP and GMD protection cost estimate and a levelized annual revenue requirement of 20% ($6B), assuming there are ~150 million rate payers in the United States, the estimated annual cost per rate payer would be $3.30 per month. There are strong arguments for protecting selected subsets of the grid. For example, a top priority to ensure situational awareness following a GMD or EMP event would be to protect major grid control centers. Estimates to protect these are in the $1.4 billion ballpark. If a Phase 1 EMP/GMD program operated in 2016-2020 at a five year cost of $1.4 billion, or $280 million per year, and all the extra costs were passed through to retail customers, the extra cost would be approximately $0.16 per electric customer per month.

We also might put priority on ensuring the survivability of major grid components that would take months to replace –or years if large numbers suffer damage. A primary example would be high voltage transformers which are known to irreparably fail during major solar storms and are thus also vulnerable to failure during an EMP event. Protection of these large transformers would save valuable time in restoring the grid and the life-support services it enables. The unit cost for HV transformer protection is estimated to be $350,000. The total number of susceptible units range from 300 – 3000 (further assessment is required to establish an exact number.) Doing the math, the protected cost for protecting 3000 of these longest replacement lead-time components of the grid is $ 1 billion – a small fraction of the value of losses (Lloyds of London estimates are in the trillions of dollars2 for GMD alone) and long-term recovery costs should they fail.

Stakeholder Reluctance.

Concern about costs and liabilities makes stakeholders in government and the private sector reluctant to admit vulnerabilities. A major impediment to action on protecting the grid against GMD and EMP effects has been that government and industry are (understandably) swayed by the familiar, the convenient, and the bottom line. Like it or not, familiarity and profitability are the touchstones of acceptability – strategic advantage goes to the convenient. Thus, the tendency exists to downplay the likelihood of EMP and GMD and their associated consequences. The prevalent misconceptions (factor 1) have also contributed to stakeholders’ ability to downplay the seriousness of EMP and GMD effects to avoid action.

In cases where stakeholders have decided to take action to improve infrastructure survivability, the actions have been limited and ineffective. A primary case in point is the NERC effort to set reliability standards for wide-area electromagnetic effects. Responding to FERC’s inquiries for protection standards, the NERC formed a GMD task force. When several task force participants asked why EMP could not be part of the task force deliberations, NERC leadership explained that EMP was a national defense concern and therefore not their responsibility – rather that DoD should take the lead.

The standards ultimately developed by NERC include a set of operational procedures requiring no physical protection of the electric grid and a scientifically-flawed benchmark GMD threat description that enables most U.S. utilities to avert installing physical protection based on their own paper modeling studies. The benchmark GMD threat description is based on solar storm statistics over the last 25 years during which there were no “Carrington Class” 100-year solar superstorms. The Carrington-class storm GMD levels are an order of magnitude higher than the largest storms in the NERC 25 year data window. NERC’s benchmark event is admissible only if we assume that all eleven-year solar cycles are the same, an assumption known to be incorrect. A skeptic might suspect that the NERC standard’s main objective was to avert liability rather than protect the public from serious GMD consequences.

The outcome of the NERC operational procedures standard, now approved by FERC, is that the public will not be protected from EMP and the industry will deal with GMD effects using operational work-around procedures such as shedding load and spinning up reserve generation capacity. The operational procedure-based solutions that have been offered by NERC in their recently adopted EOP-010-01-1 standard are ineffective for a number of reasons. A non-exhaustive list of ten pitfalls accompanying reliance on operational procedures to protect the electric power grid follows.

  1. GMD operating procedures are based on the premise that operators can and will prevent large-scale grid collapse by shedding load. Due to insurance rules, grid operators will be reluctant to shed load to customers, even though load-shedding procedures reduce the probability of grid collapse and damage to EHV transformers. Utility companies know that if customer electric power is lost due to geomagnetic disturbance (GMD), they will not be liable for losses; but if customer power is lost due to intentional human action to deenergize the grid or portions of it, power companies can be held liable. (Reference the Lloyds of London report on GMD effects and liabilities and statements by insurance company representatives at 2012 Electric Infrastructure Security Summit at UK Parliament).
  1. The 15-45 minute warning time earlier provided by the Advanced Composition Explorer (ACE) satellite and now supported by the Deep Space Climate Observatory (DSCOVR) successor will be inadequate for grid operators to confer while executing required operational procedures. Participants in the 2011 National Defense University-Johns Hopkins University GMD response exercise indicated that they would be hard-pressed even to get all the players to the table within such a short time interval. And, once hit, the grid would fail quickly. We note that, in 1989, during a moderate solar storm GMD, the electric power grid of the entire Province of Quebec went dark in 92 seconds. The August 2003 Northeast Blackout evolved much more slowly (1:31pm – 4:10pm) with much more time available to take action. Nonetheless, even with a span of hours available, power companies were unable to react fast enough to prevent grid collapse.
  1. Grid operators will not have adequate information on the state of the grid to implement correct operational procedures. Because most of the grid is not monitored for Geomagnetically Induced Currents (GIC), operators will be “flying blind” with respect to the state of the grid. Operators will not know which portions need remedial action and what actions will be optimal. Information gaps will exist as in August 2003 – where operators were unaware of the initiating tree contact. Sensors needed to monitor GMD/EMP stressors on critical grid components were not required by NERC standards and have not been installed. And this lack of visibility has led and will lead to errors in executing operational procedures.
  2. There is no control center with large enough visibility to control operational procedure response on a national scale. Lack of information on neighboring interconnections impairs proper procedural response. A national control/coordination center does not exist. And in the Eastern Interconnection, there is no single authority over the nine American regional Reliability Coordinators. Because the geographic coverage of solar storm GMD and nuclear EMP can be continental in scale, super-regional control visibility and authority are necessary. At this point, only the federal government, using Presidential authority, can fulfill this role.
  1. Operational procedures have not been adequate to address the much simpler causes of previous large-scale blackouts. For instance, operational procedures proved ineffective in preventing the 2003 Northeast blackout that was precipitated by a single failure point – tree contact with a transmission line. Recent grid models indicate that GMD and EMP will cause hundreds to thousands of failure points. The complexity and rapidity of grid failure during a Carrington-class event will overwhelm the ability of electric utilities to respond and to prevent grid failure using any suite of operational procedures, no matter how wellconceived and practiced. During Hurricane Sandy, grid physical damage outstripped the effectiveness of procedural protection efforts. Physical damage to grid components will be a factor in GMD/EMP events as well.
  1. Unforeseen grid equipment malfunctions have greatly impaired grid operators’ ability to respond during major blackouts in the past. Operational procedures during the 2003 Northeast blackout were greatly impaired by computer control system malfunctions and software problems. Critical grid state monitoring, logging and alarm equipment failed. The control area’s SCADA and emergency management systems malfunctioned. The shut-down of hundreds of generators over multiple states was unanticipated as was the failure of tens of transmission lines. Confusion and inoperative control systems led to many frantic phone calls. As these events, show, any early failure of major grid components caused by the GMD or EMP environment will impede implementation of subsequent operational procedures.
  1. EMP and GMD will affect the communication systems necessary for coordination of operational procedures. Long-line internet and telecommunications networks will experience large overvoltages from GMD and EMP E1/E3 environments, likely causing their debilitation. GMD and EMP also impede signal propagation of HF/VHF/UHF radio systems and GPS systems. Thus grid communication and control systems necessary to execute operational procedures cannot be relied on – just when they will be needed the most.
  1. It is not possible to anticipate all grid failure point combinations and time sequences during GMD/EMP events in order to adequately plan, exercise, and test GMD/EMP operational procedures. Normal grid failures are not indicative of GMD/EMP failures. Operators are familiar with commonly occurring single equipment failures but when multiple points fail near simultaneously under GMD/EMP stress, and the failures interact and cascade, operators will have difficulty understanding and responding to prevent further damage. In most complex human-machine systems, the interactions literally cannot be seen. Prof. Charles Perrow of Yale defines ‘normal accidents’ in complex infrastructure systems as involving system interactions that are not only unexpected, but are incomprehensible for some critical period of time. For example, it took an expert NERC investigation team three months to determine the exact combination and sequence of system failures that led to the 2003 Northeast blackout.
  1. In the Eastern Interconnection, Regional Transmission Organizations (RTOs) and Independent System Operators (ISO’s) don’t have cross-jurisdictional authority to enforce shutdown of neighboring grids, sometimes required to avoid large scale blackouts, as in the August 2003 Northeast Blackout. There is no overall supervisor for the Eastern Interconnection. During the 2003 Northeast blackout, First Energy was asked to shed load by its neighboring grid operators but First Energy declined. According to the NERC afteraction report, load shedding would have prevented the ensuing Northeast blackout.
  1. Draft NERC GMD operational procedures recently approved by FERC (Order No. 797, June 2014) are not comprehensive and not specific. The plans generator operators and load balancing authorities from mitigation responsibilities. The NERC operational procedures also exempt portions of the grid operating below 200kV. In the August 2003 blackout, failure of 125 kV lines played a major role in the collapse of the Northeast grid.

The GMD operational procedures and solar storm benchmark event approved by FERC are ineffective and allow the electric power industry to continue with no significant upgrades to their physical assets, leaving the grid vulnerable to 100 year solar superstorms and EMP. It is worth noting that while GMD fields are more intense at northern latitudes, E3 fields increase at more southerly latitudes relative to the locus of a high altitude EMP event. Utilities that require no protection against GMD because of their southerly latitude under the newly operative standard would be experience higher E3 fields in the event of an EMP event than their northerly counterparts. The bifurcated “stove-pipe” threat approach being pursued to protect the electric power grid is cost- and outcome-ineffective. We need to develop a unified, all-threat approach to this challenge which leads to the third and final impediment to progress:



Posted in Blackouts, EMP Electromagnetic Pulse, Nuclear spent fuel fire | Tagged , , , , | 1 Comment

The Devil’s Scenario – near miss at Fukushima is a warning for U.S.

[ The most likely event to trigger a loss of power long enough to cause a spent fuel pool zirconium fire meltdown and release of radioactive particles into the atmosphere is a nuclear or natural geomagnetic storm electromagnetic pulse (see Dr. Pry’s testimony at the U.S. House of Representatives on May 13, 2015 at a hearing titled “The EMP Threat:  the state of preparedness against the threat of an electromagnetic pulse (EMP) event”.  The EMP Commission estimates a nationwide blackout lasting one year could kill up to 9 of 10 Americans through starvation, disease, and societal collapse.

Dr. Pry states that “Seven days after the commencement of blackout, emergency generators at nuclear reactors would run out of fuel. The reactors and nuclear fuel rods in cooling ponds would meltdown and catch fire, as happened in the nuclear disaster at Fukushima, Japan. The 104 U.S. nuclear reactors, located mostly among the populous eastern half of the United States, could cover vast swaths of the nation with dangerous plumes of radioactivity“.

Alice Friedemann  author of “When Trucks Stop Running: Energy and the Future of Transportation, 2015, Springer]

Stone, R. May 27, 2016. Near miss at Fukushima is a warning for U.S. Science  Vol. 352, Issue 6289, pp. 1039-1040 

Japan’s chief cabinet secretary called it “the devil’s scenario.” Two weeks after the 11 March 2011 earthquake and tsunami devastated the Fukushima Daiichi Nuclear Power Plant, causing three nuclear reactors to melt down and release radioactive plumes, officials were bracing for even worse. They feared that spent fuel stored in pools in the reactor halls would catch fire and send radioactive smoke across a much wider swath of eastern Japan, including Tokyo.

Thanks to a lucky break detailed in a report released last week by the U.S. National Academies of Sciences, Engineering, and Medicine, Japan dodged that bullet. But the report warns that spent fuel accumulating at U.S. nuclear plants is also vulnerable. The near calamity “should serve as a wake-up call for the industry,” says Joseph Shepherd, a mechanical engineer at the California Institute of Technology in Pasadena who chaired the academies committee that produced the report.

A major spent fuel fire at a U.S. nuclear plant “could dwarf the horrific consequences of the Fukushima accident,” says Edwin Lyman, a physicist at the Union of Concerned Scientists, a nonprofit in Washington, D.C., who was not on the panel. Unpublished modeling from one panel member presents chilling scenarios for a hypothetical spent fuel fire at the Peach Bottom nuclear power plant in Pennsylvania. “We’re talking about trillion-dollar consequences,” says Frank von Hippel, a nuclear security expert at Princeton University, who led the modeling.

After spent fuel is removed from a reactor core, the radioactive fission products continue to decay, generating heat. All nuclear power plants store the fuel in deep pools for at least 4 years while it cools. To keep it safe, the academies panel recommends that the U.S. Nuclear Regulatory Commission (NRC) and plant operators beef up systems for monitoring the pools and topping up water in case a facility is damaged. The panel also says plants should be ready to tighten security after a disaster. “Disruptions create opportunities for malevolent acts,” Shepherd says.

At Fukushima, the earthquake and tsunami cut power to pumps that circulated coolant through the reactors and cooled the water in the spent fuel pools. The pump failures led to the meltdowns; in the pools, located in all six of Fukushima’s reactor halls, they allowed water temperatures to rise dangerously. Of preeminent concern were the pools in reactor units 1 through 4: Explosions had heavily damaged three of those buildings in the days after the tsunami.

The “devil’s scenario” nearly played out in Unit 4, where the reactor was shut down for maintenance. The entire reactor core—all 548 fuel assemblies—was resting in the Unit 4 pool along with another 783 assemblies, shedding vast amounts of heat. When an explosion blew off Unit 4’s roof on 15 March, operators assumed the cause was hydrogen—and they feared it had come from fuel in the pool that had been exposed to air.

Confirmation was impossible because the power loss on 11 March had disabled the pool’s water level indicators. (Analysts now concur that the hydrogen had come not from exposed spent fuel, but from the melted reactor core in the adjacent Unit 3.) Concerns abated after a helicopter overflight on 16 March captured video of sunlight glinting off water in the pool. But the crisis was actually worsening: The water was evaporating away because of the hot fuel. As the level fell perilously close to the top of the fuel assemblies, something “fortuitous” happened, Shepherd says. As part of routine maintenance, workers had flooded Unit 4’s reactor well, where the core normally sits. Separating the well and the spent fuel pool is a gate through which fuel assemblies are transferred. The gate leaked, allowing water from the well to partly refill the pool.

Without that leakage, the panel’s modeling predicts that the tops of the fuel assemblies would have been exposed by early April 2011, and the odds of the assemblies’ zirconium cladding catching fire would have skyrocketed. Only good fortune and makeshift measures to pump water into all the spent fuel pools averted that disaster, the academies panel notes.

A similar scenario could play out at a U.S. nuclear plant if a pool lost water via evaporation or leakage. At most plants, spent fuel is densely packed in pools, heightening the fire risk. NRC has estimated that a major fire at the Peach Bottom nuclear plant’s pool would displace 3.46 million people from 31,000 square kilometers of contaminated land, an area larger than New Jersey. But Von Hippel and others think that NRC has grossly underestimated the scale and societal costs of such a fire.

nightmare scenario pennsylvania contamination cs-137

Figure 1 nightmare scenarios.  Models of a hypothetical spent fuel fire at a pennsylvania nuclear plant.  Depending on weather the Cs-137 plume displaces up to 41 million people (1 July) and contaminates up to 274,000 square kilometers (1 October)

NRC used a program called MACCS2 for modeling the dispersal and deposition of radioactivity from a Peach Bottom fire. Princeton’s Michael Schoeppner and Von Hippel instead used HYSPLIT, a program able to craft more sophisticated scenarios based on historical weather data for the whole region.

In their simulations, the Princeton duo focused on Cs-137, a radioisotope with a 30-year half-life that has made large tracts around Chernobyl and Fukushima uninhabitable. They assumed a release of 1600 petabecquerels, which is the average amount of Cs-137 that NRC estimates would be released from a fire at a densely packed pool, and approximately 100 times the Cs-137 spewed at Fukushima. They simulated such a release on the first day of each month in 2015.

The contamination from such a fire on U.S. soil “would be an unprecedented peacetime catastrophe,” the Princeton researchers conclude in a paper to be submitted to the journal Science & Global Security. For a fire on 1 January 2015, with the winds blowing due east, the radioactive plume would sweep over Philadelphia, Pennsylvania, and nearby cities (Figure 1 nightmare scenarios). For a fire on 1 July 2015, shifting winds would deposit Cs-137 over much of the mid-Atlantic. Averaged over 12 monthly calculations, the area of heavy contamination—exceeding 1 megabecquerel per square meter, the level that would trigger a relocation—is 101,000 square kilometers. That’s more than three times NRC’s estimate and would force the relocation of 18.1 million people on average, about five times NRC’s estimates.

NRC’s first look at the academies report “did not identify any safety or security issues that would require immediate action,” says spokesperson Scott Burnell in Washington, D.C. The agency has long mulled whether to compel the nuclear industry to move most of the cooled spent fuel in densely packed pools to concrete containers called dry casks, which would reduce the consequences and likelihood of a spent fuel fire. As recently as 2013, NRC concluded that the projected benefits do not justify the roughly $4 billion cost of a wholesale transfer. But the benefits of expedited transfer to dry casks are fivefold greater than NRC has calculated, the academies found. “NRC’s policies have underplayed the risk of a spent fuel fire,” Lyman says.

The academies panel recommends that NRC “assess the risks and potential benefits of expedited transfer.” Burnell says that NRC’s technical staff “will take an in-depth look” at the issue and report to NRC commissioners later this year.

Posted in EMP Electromagnetic Pulse, Nuclear, Nuclear Power, Nuclear spent fuel fire, Scientists Warnings to Humanity | Tagged , , , , , | 1 Comment

After a collapse will people grow their own food or plunder others?

[ In this post Ugo Bardi looks at what will happen if society collapses and we have to suddenly go back to pre-industrial agriculture conditions.  A back to the land movement where people grow their own food may not happen. More likely, nomadic groups will plunder the countryside — that’s what happened when Rome fell. 

I associate Ugo Bardi with the concept of Seneca Effect, but he did not write this and I can’t figure out who did.

Alice Friedemann  author of “When Trucks Stop Running: Energy and the Future of Transportation, 2015, Springer]

Author unknown. March 3, 2016. The Neopaleolithic: Hunter-Gatherers of the 21st century.

The Seneca Effect: Decline is faster than growth.

There’s a common perception that as our society reaches a peak to the degree of complexity it can sustain, we will gradually return to a lower level of complexity that preceded it.  However, for us to be able to return to a lower level of complexity typically requires us to have maintained the technologies that enabled the previous level of complexity, as well as relevant knowledge of the skills we utilized to sustain the previous level of complexity.

Population.  One major problem we face is that most people simply don’t live in places where food is grown to feed them. Saudi Arabia imports 80% of its food, Kuwait 91%, Qatar 97%. Japan’s caloric self-sufficiency is estimated at 39%. It’s simply not possible, without mass migration across continents, for people to live in those places where their food is produced and participate in food production. This would require mass migration to Australia, New Zealand, Canada and Russia.

Urbanization.  An estimated 49% of people lived in cities in 2005, up from 13% in 1900. This figure continues to rise. It’s questionable whether people are better off in cities or outside of them. It might seem self-evident that the countryside would be preferable, but it’s likely that critical infrastructure in cities can be sustained longer than it can be in more rural places.
Economic decline so far seems to lead to a rise in urbanization, rather than the opposite, as rural places become increasingly expensive to inhabit. What causes urbanization is a reduction in dependence on physical labor in agriculture. So far there seems to be no reversal in this trend.

The Dutch Method: Greenhouses

The Dutch method of food production is characterized by its complete unsustainability. The Netherlands produces 17% of its own need for grains, but a massive 241% of its own need for vegetables. Incredibly, this country produces 290% of its own need for tomatoes, a tropical crop native to central America, where it grows as a perennial. The vast majority of this (80+%) is exported to other countries

How is all of this achieved? Through the use of greenhouses. In the Netherlands yield per hectare of greenhouses lies almost ten times higher than in similar greenhouses in Spain, allowing this country to be a world-leading food producer, despite its lack of farmland.

Various unsustainable technological methods are used in this process.

Rest-heat and captured CO2 from fossil fuel based power plants is routed to the greenhouses, to keep tropical crops like the tomato at the temperature needed for optimal growth. At least 90% of greenhouses are artificially heated.  Other greenhouses burn their own fuel, raising temperatures and creating an environment of elevated carbon dioxide in the greenhouse, typically of 1000 parts per million, to further stimulate growth beyond what heat alone can accomplish. An estimated 7% of natural gas use in the Netherlands is used directly by greenhouses to deliver carbon and heat to plants. A fuel crisis, whether through logistical problems or fossil fuel depletion, thus inevitably also means a food crisis.

Other nations are heavily dependent on greenhouses too, though few of these greenhouses are as completely dependent on modern technology as the Dutch ones. Globally, 473,466 hectares of greenhouses are used, out of which slightly more than 10,000 hectare is found in the Netherlands. A stagnation in greenhouse production is visible in the Netherlands, whereas on a global scale growth continues very rapidly.

Even the windows of the greenhouses are dependent on petroleum. An estimated 90% of greenhouses in the Mediterranean don’t use glass but transparent plastic instead that allows the desired wavelengths to pass through the greenhouse.

Pesticide dependence.  Individual studies tend to find a relatively small decrease in yield for farmers who don’t use pesticides. These estimates can’t be reliably extrapolated however, as such farmers inevitably benefit indirectly from other farmers who do use pesticides on their crops, thereby never allowing pests to gain a foothold in the first place.  Because of the international scale of modern agriculture and our industrial food system as well as a drastic reduction in biodiversity in our plants, a variety of plant pathogens have managed to spread to different species and continents. This has necessitated a growing cocktail of a wide variety of different pesticides, the health effects of which are largely unknown.  Growing plants in greenhouses in particular is nearly impossible without pesticides, due to a variety of factors. Ultraviolet light, which is blocked by glass, harms certain pathogens, but also causes plants to produce compounds that reduce their sensitivity to pathogens. The reduced day-night temperature variation and relatively high humidity also makes greenhouse plants more vulnerable to a variety of pathogens than traditional food production systems.

Irrigation.  Places like Israel depend on desalination for water, which is only accomplished by use of high amounts of energy. Israel also depends on water that is relatively high in salt, so to avoid salt building up in the soil, sprinkler installations are used that require very little water to effectively treat the plants.  Using pre-industrial methods instead, like building irrigation canals, would cause salt to build up in the soil due to evaporation, whereas a lack of irrigation would drastically reduce yields and require a switch to completely different crops.

Nitrogen and Phosphorus.  The two main nutrients we use as fertilizer are nitrogen and phosphorus. Nitrogen is removed from the atmosphere through the Habers-Bosch process, which consists for 80% of nitrogen. This requires the use of natural gas, an estimated 3-5% of global natural gas production is used for this purpose alone. Nearly 80% of nitrogen found in our body originates from this process.

Phosphate is mined from phosphate rock. Because the world’s grasslands are losing phosphorus through various processes, it’s estimated that phosphate application on grassland will have to quadruple between 2005 and 2050, to increase production by the 80% expected to be necessary over that time period.

In total, it’s thought that phosphorus production will have to more than double by 2050 compared to 2005, just to keep up with demand. It’s not clear how much further phosphate rock production can grow. Some estimates are that phosphate rock production will peak by 2027, even as depletion of our soils will merely get worse.

Because rising CO2 concentrations increase the growth rate of plants, places that are currently in phosphorus balance may become gradually depleted as a result and ultimately dependent on phosphorus application by humans. This happens to peripheral regions, where the fertility of land is extracted as the land is valued less than in regions that are highly populated and seen as economically valuable.

While many regions witness phosphorus depletion, places like the Netherlands are victim to over nourishment. Crops are shipped from marginal lands in places like Brazil to factory farm animals in the Netherlands, where animals defecate and the phosphorus is released in excessive amounts into our soils and waters. This is enabled by industrial agriculture’s international orientation, without which minerals like phosphorus would be recycled in a local ecosystem in a more sustainable fashion.

Peak farmland

Today we have less fertile land around the world, due to factors like those outlined above. Some places that used to be farmed have become burdened by too many heavy metals and other pollutants to still be capable of reliably producing food. In China, 19.4% of arable land is estimated to be contaminated with heavy metals. This share will continue to rise in the coming years, as well as the degree of contamination.

It is estimated that the world lost a third of its arable land between 1975 and 2015. Factors that are important here are not just chemical contamination, but also erosion of fertile soils by wind and water, as well as the covering of fertile farmland with human infrastructure. Climate change also contributes to making soils more vulnerable to erosion.  Thus today we find ourselves having to feed more people, with less arable land. What proved possible for our ancestors won’t be possible for us, simply because you can’t go back to farming arable land that no longer exists.

Soil compaction is a harmful process that damages the fertility of our soils. Depending on the depth at which the compaction takes place, the compaction is often practically irreversible.  Unfortunately, governments have a tendency to use poor metrics to estimate soil compaction. It’s estimated for example, that individual humans lead to greater soil compaction than large machinery, simply because the weight of such machinery can be spread out further across the soil through use of big wide tires.

The difference here however, is that topsoil compaction is far less harmless than subsoil compaction. The impact of humans and other animals takes place mostly at the topsoil, because humans and other animals put high pressure at small locations.

Heavy machinery like tractors on the other hand, execute far higher pressure when measured over a broader area. The average tractor has increased in weight from 2 tons in 1950 to 7 tons today, which is more than the largest elephants. The broad tires of the machinery might lead to less harm to the topsoil, but causes greater harm to the subsoil.
The topsoil is quite rapidly restored by earthworms, moles and other lifeforms, who dig through the ground and loosen the soil, allowing roots to penetrate the soil again. The subsoil on the other hand takes much longer to recover when compacted, because the subsoil is home to comparatively few lifeforms.

This prohibits roots from growing into the subsoil and redistributing scarce nutrients up into the higher soils, as well as preventing the subsoil from retaining water, often creating puddles of water above the soil that end up damaging the plants.

In the short term (up to around six years), yields are greatly reduced by subsoil compaction, but there are also smaller more persistent effects that linger for decades. One study estimated a permanent reduction in yield for wheat of 1.5% and 6% for two different fields respectively, as a result of the use of heavy machinery.

Effects are likely to be worse today, due to the even heavier machinery now in use. In addition, plants that naturally root deeper than wheat, like many edible nut species, would have even worse effectively permanent reductions in yield than wheat. Subsoil compaction represents a long-term reduction in the diversity of life that a plot of land could harbor otherwise.

Irreversible transitions.  The problems seen above are a consequence of the general rule of thumb with most technologies that it’s easier to adapt to them than to let go of them again. Our innovations in agriculture are no exception, they’re schoolbook examples.  This transition to modern technology in agriculture produces long-term consequences, that can be concealed in the short-term through use of more new technologies. For example, rising CO2 concentrations make plants more vulnerable to pathogens, but farmers who happily spray pesticides probably don’t realize this until they suddenly have to return to growing crops without pesticides.

Land consolidation.  The number of farms in existence today has decreased drastically, as many people have quit the farming business due to scale advantages that effectively allowed just a few farm business to survive. Whereas formerly people would have guarded the crops growing in their backyard, today farmland is often in the hands of nameless corporations. In the event of a food shortage, the theft of food crops will thus be increasingly difficult to prohibit.

A scenario for the future: Marauding 21st century Hunter-Gatherers

Ownership and control over food producing resources will probably prove difficult to enforce in many places. Even people who own small plots of land will have difficulty growing crops and keeping the harvest for themselves if they do not live on the land.

A scenario where people grow their own food appears to be far less likely than a scenario where nomadic groups of people begin to plunder the countryside. This is what effectively seems to have happened in the Roman empire, where nomadic tribes invaded and local bands of Roman citizens known as Bagaudae began pillaging the countryside.

Eventually, as food that can be plundered from homes and fields begins to run out, people would be forced to depend solely on whatever grows in the countryside. Our changing climate means that this may prove to be a more viable strategy than we might expect.

In Europe, some Middle Eastern refugees already appear to be adapting to a migratory lifestyle, incorporating wild foods into their diet. A spike in mushroom poisoning cases has been seen in Germany as a consequence of refugees eating wild mushrooms.

It seems to me that we should expect to see a lot more of this in the years ahead. Our food production system has evolved in a fashion that is difficult to roll back even when it becomes necessary. It appears more likely to cease working altogether than to become less complex.

Posted in Agriculture, Peak Food, Phosphorus, Scientists, Soil, Ugo Bardi | Tagged , , | 6 Comments

Toxic Loans Around the World Weigh on Global Growth

[ Since 2008 people have been struggling to pay back increasing amounts of debt. China is the worst of all, with $5 to $6.6 trillion dollars of bad debt and $30 trillion overall debt, up from $9 trillion just 7 years ago, a staggering amount of money, unprecedented in world history. Europe has bad loans of over $1 trillion. China banks have pulled back on lending – if China slows down, so does the rest of the world (see Why China rattles the world). If only it were just China — Europe, the U.S. and other nations that printed up trillions of dollars has left an even larger debt. With oil prices so low, shale oil companies are having a hard time paying the hundreds of billions of dollars they’ve borrowed.  As so many articles at energyskeptic point out, there has been no real reform, oil peaked in production in 2005 and that means the end of growth and being able to grow enough to pay back debt and the end of our financial system as we know it. 

Yes, this was published a year ago, but it is still as relevant today as it was then.  Good articles like this so rarely come out that it’s worth preserving them for later when things fall apart to understand what happened.

Related article: February 5, 2016 The Chart of Doom: When Private Credit Stops Expanding

Alice Friedemann  author of “When Trucks Stop Running: Energy and the Future of Transportation, 2015, Springer]

Eavis, P. February 3, 2016. Toxic Loans Around the World Weigh on Global Growth. New York Times.

Beneath the surface of the global financial system lurks a multi-trillion-dollar problem that could sap the strength of large economies for years to come.

The problem is the giant, stagnant pool of loans that companies and people around the world are struggling to pay back. Bad debts have been a drag on economic activity ever since the financial crisis of 2008, but in recent months, the threat posed by an overhang of bad loans appears to be rising.

China is the biggest source of worry. Some analysts estimate that China’s troubled credit could exceed $5 trillion, a staggering number that is equivalent to half the size of the country’s annual economic output.

Official figures show that Chinese banks pulled back on their lending in December. If such trends persist, China’s economy, the second-largest in the world behind the United States’, may then slow even more than it has, further harming the many countries that have for years relied on China for their growth.

But it’s not just China. Wherever governments and central banks unleashed aggressive stimulus policies in recent years, a toxic debt hangover has followed. In the United States, it took many months for mortgage defaults to fall after the most recent housing bust — and energy companies are struggling to pay off the cheap money that they borrowed to pile into the shale boom.

In Europe, analysts say bad loans total more than $1 trillion. Many large European banks are still burdened with defaulted loans, complicating policy makers’ efforts to revive the Continent’s economy. Italy, for instance, announced a plan last week to clean out bad loans from its plodding banking industry.

Elsewhere, bad loans are on the rise at Brazil’s biggest banks, as the country grapples with the effects of an enormous credit binge.

“If you have a boom and then a bust, you create economic losses,” said Alberto Gallo, head of global macro credit research at the Royal Bank of Scotland in London. “You can hope the losses one day turn into profits, but if they don’t, they are a drag on the economy.”

In good times, companies and people take on new loans, often at low interest rates, to buy goods and services. When economies slow, these debts become difficult to pay for many borrowers. And the bigger the boom, the more soured debt that is left behind for bankers and policy makers to deal with.

In theory, it makes sense for banks to swiftly recognize the losses embedded in bad loans — and then make up for those losses by raising fresh capital. The cleaned-up banks are more likely to start lending again — and thus play their part in fueling the recovery.

But in reality, this approach can be difficult to carry out. Recognizing losses on bad loans can mean pushing corporate borrowers into bankruptcy and households into foreclosure. Such disruption can send a chill through the economy, require unpopular taxpayer bailouts and have painful social consequences. And in some cases, the banks might find it extremely difficult to raise fresh capital in the markets.

Even so, the drawback of delaying the cleanup is that the banks remain wounded and reluctant to lend, damping any recovery that takes place. Japan, economists say, waited far too long after its credit boom of the 1980s to force its banks to recognize huge losses — and the economy suffered for years after as a result.

Now many banking experts are beginning to worry about China’s bad loans.

Fears that the country’s economy is slowing have weighed heavily on global markets in recent months because a weak China can drag down growth globally.

Many of these concerns focus on China’s banking industry. In recent years, banks and other financial companies in China issued a tidal wave of new loans and other credit products, many of which will not be paid back in full.

China’s financial sector will have loans and other financial assets of $30 trillion at the end of this year, up from $9 trillion seven years ago, said Charlene Chu, an analyst in Hong Kong for Autonomous Research.

“The world has never seen credit growth of this magnitude over a such short time,” she said in an email. “We believe it has directly or indirectly impacted nearly every asset price in the world, which is why the market is so jittery about the idea that credit problems in China could unravel.

Headline figures for bad loans in China most likely do not capture the size of the problem, analysts say. In her analysis, Ms. Chu estimates that at the end of 2016, as much as 22 percent of the Chinese financial system’s loans and assets will be “nonperforming,” a banking industry term used to describe when a borrower has fallen behind on payments or is stressed in ways that make full repayment unlikely. In dollar terms, that works out to $6.6 trillion of troubled loans and assets.

“This estimate really isn’t that unreasonable,” Ms. Chu said in the email. “We’ve seen similar ratios in other countries. What’s different is the scale, which reflects the massive size of China’s credit boom.” She estimates that the bad loans could lead to $4.4 trillion of actual losses.

Although there is not enough official data to come up with a precise figure for bad loans, other analysts have come up with estimates of around $5 trillion.

Given the murkiness of the Chinese financial industry, other analysts arrive at estimates for a “baseline” figure for bad loans. Christopher Balding, an associate professor at the HSBC School of Business at Peking University, said that an analysis of corporations’ interest payments to Chinese banks suggested that 8 percent of loans to companies might be troubled. But Mr. Balding said it was possible that the bad loan number for China’s overall financial system could be higher.

The looming question for the global economy, however, is how China might deal with a vast pool of bad debts.  After a previous credit boom in the 1990s, the Chinese government provided financial support to help clean up the country’s banks. But the cost of similar interventions today could be dauntingly high given the size of the latest credit boom. And more immediately, rising bad debts could crimp lending to strong companies, undermining economic growth in the process.

“My sense is that the Chinese policy makers seem like a deer in the headlights,” Mr. Balding said. “They really don’t know what to do.

In Europe, for instance, some countries have taken years to come to grips with their banks’ bad loans.

In some cases, the delay arose from a reluctance, at least in part, to force people out of their homes. Even though Ireland’s biggest banks suffered huge losses after the financial crisis, they held back from forcing many borrowers who had defaulted out of their homes. In recent years, the Irish government has pursued a widespread plan that aims to reduce the debt load of financially stressed homeowners. Such forbearance appears not to have weakened the Irish economy, which has recovered at a faster rate than those of other European countries.

Still, the perils of waiting too long are evident in Italy, which in January announced a proposal to help banks sell their bad loans. Some critics of the plan say it resembles a government bailout of the banks, while other skeptics say the banks might not use it because it appears to be too expensive.

“The big problem in the Italian system is that they acted very late,” said Silvia Merler, an affiliate fellow at Bruegel, a European research firm that focuses on economic issues. “They could have done something smarter — and they could have done it earlier.”

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