Net Energy Analysis: An Economic Assessment

Proposition on Energy Analysis and Economic Efficiency

“…Net energy analysis, therefore, provides a check on market operation that helps to identify impacts that may be obscured through market imperfections or myopic expectations. In addition, net energy or material balance analysis forces the analyst to account for the energy-material *For example, Huettner (1976);Berry, Salamon, and Heal (1978). **This is explored in detail by Hertzmark (1978).…”

A General Mathematical Framework for Calculating Systems-Scale Efficiency of Energy Extraction and Conversion: Energy Return on Investment (EROI) and Other Energy Return Ratios

“…This problem is profound for electricity, which has a per-MJ cost (and value) significantly higher than the primary fuels used to generate it (such as coal). Huettner argued that net energy analysis will achieve similar results to economic analysis when fuels are valued solely by their energy content (such assumptions are the basis of so-called "energy theories of value") [2]. Since energy carriers are also valued by other characteristics (such as thermodynamic order, convenience, and cleanliness), energy theories of value are lacking as complete frameworks of analysis.…”

“…Other prominent factors include time, space, information, and organized (low-entropy) matter [30]. This causes economically-oriented critics to argue that NEA is only able to capture a subset of the information contained in an economic analysis [2,31]. Of course, other metrics for understanding energy systems (like conversion efficiencies) suffer from similar limitations.…”

“…Net energy analysis rose and then fell from favor in the energy analysis community, with high interest occurring from ≈1975-1985 and again in recent years [1]. One factor in the declining interest in NEA in the 1980s were concerns that an ERR provides no additional information beyond economic analyses [2]. Also, NEA faced methodological difficulties without clear solutions.…”

Aggregate Energy, Efficiency, and Productivity Measurement

“…Jevons' melancholy "Limits to Growth" book, first published in 1865, contained a number of statistical tables but was largely an effort to convince the suspicious British public that disastrous economic, social, intellectual and moral decay would occur within Britain since her finite coal supplies were being exhausted at an alarming rate. 49 To the best of my knowledge, the first extensive empirical study of average energy productivity in the United States is that of Tryon (1). Tryon introduced energy productivity analysis by stating simply that "Anything as important in industrial life as power deserves more attention than it has yet received from economists.…”