The Only EROEI that Matters is Energy Return on Human Labor Invested

Published at Peak Oil News on February 24, 2016.

There still needs to be consumers who can afford the output. Even if there is massive consolidation, the basic problem of workers who could not afford the output would not be fixed, because it is related to the fact that the cheap energy sources have already been taken. Even if direct extraction costs are low, governments are still very dependent on high tax revenue.

What would happen in normal circumstances is collapse. Collapse happens when wages of non-elite workers fall too low, so that they cannot afford the output of the system. This happens when (goods and services produced)/population stops rising. More and more of the goods and services produced needs to go into overhead for the system (government, manager higher pay, debt service, cost of dividends and higher stock prices). There is too little output for the non-elite worker to get an adequate share.

There is a lot of talk about EROEI. In my view, the only EROEI that matters is Energy Return on Human Labor invested. When it falls too low, there is a big problem. It falls too low, when there is too little fossil fuels and other energy leveraging human labor, and too much of the system’s output pulled off the top for overhead. This is similar to a fish being forced to migrate for food, but not getting enough food energy from the process to cover its own energy costs. The result has to be die-off of the population. – Gail Tverberg

Very low energy return on human labor invested