Shortly after the publication of Life After Growth, I undertook to produce a Brief Guide to surplus energy economics. In this article, I discuss some of the findings of the data system that I’ve built to track and predict energy returns, energy costs and economic performance on a worldwide basis.
Called “SEEDS” (which stands for ‘Surplus Energy Economics Data System’), this has been a big undertaking.Here are some of the findings of the SEEDS model. First, overall EROEI has been declining since the 1960s, and has fallen from 55.7:1 in 1980, and 37.2:1 in 1990, to 24.3:1 in 2000 and 13.6:1 in 2013. Reflecting this, the trend in the Energy Cost Of Energy (ECOE) has risen to 6.8% in 2013, from 1.8% in 1980, 2.6% in 1990 and 3.9% in 2000. Looking ahead, the model projects EROEIs of 10:1 in 2020 and 7.9:1 in 2025, equivalent, respectively, to ECOEs of 9.1% and 11.2%. Globally, and expressed in constant (2012) dollars, this means that the real economy will decline pretty gradually, falling by 2.9% between 2013 and 2020, and by a further 5.9% between 2020 and 2025, leaving the real economy some 8.5% smaller in 2025 than it was in 2013. Unfortunately, it’s going to feel rather worse than that, for two main reasons. First, of course, we’ve long become accustomed to growth. Second, the financial economy already exceeds the real one, because we are continuing to create “excess claims” at the rate of close to US$5 trillion annually. The global real economy of 2020 is projected to be almost 9% smaller than last year’s financial economy – and that’s going to hurt.