Embedded Energy Subtleties

Each manufactured good we possess contains embedded energy: the energy consumed to design, manufacture, ship, market, and install.  This subtle cost is overlooked as opposed to the amount of energy we consume when we go to the grocery store.  Each tank of gasoline reminds us of energy consumption.  However, other goods consumed are less obvious and only the market price of such items give us an indication of the embedded energy.

Over the last 100 years, our economy has been based on cheap and unlimited energy.  Our decisions and frame of reference have followed this paradigm.  Unless you lived abroad, you have no idea of expensive, scarce energy.  We borrow money today based on  tomorrow’s expected income growth and sustainability.  As a country, we do the same but the ramifications are much greater.  The leaders assume expansion to be the norm.  Wood, coal, and oil provided sufficient energy for expansion on a historical basis.

Oil depletion is contained within the “energy flow rate”.  Generally, an oil well’s best flow rate occurs early in the life of the well.  There is a finite reserve of oil that the well can flow from.  Based on known flow rates, engineers can estimate the reserves of the well but that does not guarantee that the well will be able to sustain a flow to remove all of the calculated reserve.  Depletion is determined to be 2-3% per year on a global basis.  Newly discovered oil is not sufficiently offsetting depletion and global economic growth rates.

As the price of oil moves up, the cost of all manufactured goods will reflect this price increase.  This increase will reduce demand and economic contraction will occur.  We must move toward conservation efforts rather than just focus on expansion.  In my previous blogs, I have suggested simplification which in turn moves the individual to less energy consumption.  On a national basis, the transition would be painful but not as severe as a crisis that will occur if we choose to continue down the current paradigm.  America needs to go on an economic diet while it still can.

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