A Diesel Powered Civilization

Part 1: A gigantic Ponzi scheme

Photo by Rob Wingate on Unsplash

Without diesel fuel — the lifeblood of transportation, agriculture, mining and construction — civilization would grind to a halt. Despite knowing for decades that the source of this fuel — oil — is a finite resource, we still haven’t been able to find a scalable replacement. What we have found ourselves in, instead, is a massive Ponzi scheme: where we constantly need to add “newer and better” energy sources just to keep the system going… Thereby perpetuating the use of coal, oil and gas despite their grave impacts on the environment, and worsening returns on investment. In this two part series I’m going to address the quandary of energy extraction, and how civilization tries to adapt to the worsening consequences of the depletion of rich mineral and petroleum deposits. Note: my goal is not to ruin your day or give life-changing or investment advise, but to offer a solid understanding of our situation and to lay out a map of possibilities.

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Diesel fuel is already made at negative returns on energy invested. According to traditional Energy Return on Energy Invested (EROEI) calculations, oil is still in a positive territory when it comes to returning surplus energy to society. However, such calculations take all fuels distilled from crude oil and natural gas liquids into account. In real life, though, only a small portion of the black gold finds its way into the fuel tanks of the machines moving, feeding, mining and building the world… Oil wells, refineries, dams, solar panels and nuclear power plants included. 

Needless to say, without diesel fuel the world economy would immediately seize up, and manufacturing a “replacement” system would become impossible. No oil well was ever drilled using unleaded gasoline, nor was any uranium ore lifted out from a mining pit on jet fuel. And while these fuels are immensely important in moving billions of people around the globe, so is plastic in keeping food fresh, or lubricants greasing machines, together with the many other items made from oil. Despite their many benefits to society, however, fuels like gasoline or kerosene cannot keep oil, nor electricity flowing — long gone are the days when we burned oil in power plants. When it comes to continuing with civilization as usual gasoline and jet fuel (1) are nothing but an added bonus, ultimately contributing little to none to the energy extraction business.

‘But why can’t we make more diesel fuel, and ditch gasoline (which we won’t need anyway as everyone switches to electric cars)?’ Petroleum is a mix of hydrocarbons and only a certain fraction of it can be used to make diesel fuel, the so called middle distillates. In order to get these, petroleum needs to be heated up to its boiling point in a closed tank found in a refinery. As the vapor rises through pipes and the trays found in a distillation column, it cools down and condenses to form a liquid. The various liquid fractions are collected and passed to condensers for further cooling before they are transferred to storage tanks. Lighter (smaller, shorter) hydrocarbon molecules — condensed on the highest trays — are used to make plastics and motor gasoline, while the heaviest fractions are converted into lubricants, asphalt, wax, or find their way into a range of products from paint to detergents. And while some of these longer, heavier molecules can be broken down into middle and light distillates (at a cost of further energy investment), stitching shorter hydrocarbons together to form the components of diesel fuel comes at a much higher energy cost (2).

This is where the “magic” happens to oil. Photo by Paul Teysen on Unsplash

The issue is, that while there are lighter and heavier crude oils around the world, their mix on a global scale proved to be remarkably consistent. As per the Energy Institute’s Statistical Review of World Energy, out of the 100 million barrels of liquids produced worldwide on a daily basis in 2023, for example, 27.96 million barrels of diesel fuel and 7.36 million barrels of fuel oil were made. (The latter is used in ships and locomotives). Taken together, these two essential products thus represented a mere 35% of all liquids production, or 14.8 gallons of an average 42 gallon barrel of crude oil. As you can see from the process above, in order to make more diesel fuel, a range of other products must also be created. Thereby as we tried to increase diesel output in order to boost economic activity, we also (inevitably) ended up having to find uses for a growing amount of gasoline, jet fuel, plastic, asphalt etc... Hence gas guzzling SUVs, cheap flights and a sea of plastic all around us (and in the ocean); byproducts of our quest for middle distillate fuels needed to maintain civilization.

Translated into gigajoules (GJ) this 35% diesel and fuel oil yield has some sobering implications, though. According to an EROEI study I often cite here, a barrel of oil contains 5.9 GJ of energy in the form of liquid fuels derived from it. After running the math on the diesel and fuel oil fraction of that barrel (taking refinery and transportation losses as well as engine efficiency (3) into account), however, the amount of useful work which could be used to drill wells, mine minerals, growing crops or transporting goods across the land and sea, turns out to be a mere 0.58 GJ/barrel. Yes, a tenth of the figure cited in the publication linked above. Thus when such studies conclude that we used up 15% or 25% of the energy locked up in every barrel of oil to extract the next one (4), they do not take into account how much of that extracted energy can be reinvested into finding, drilling and pumping more petroleum. And not only that. Diesel and fuel oil — representing 10% of the energy in any given barrel of petroleum — must also be used to build, feed and maintain this civilization… So, an energy cost of oil extraction above a couple of percentage points — and certainly beyond 10% or an EROEI of 10:1 — means that a massive energy subsidy is needed from basically every other energy source on the planet just to keep the juices flowing and civilization going. (5)

If we only had oil — and could not extract surplus energy from coal, natural gas, nuclear, hydro etc. — we would have already gone energetically bankrupt. Without diesel fuel, on the other hand, we could no longer make the rest of the energy system working.

Drilling for oil nowadays is like receiving 90% of your salary in coupons, which you could only use to buy shoes, clothes, furniture and gasoline. On the other hand you would be allowed to spend only 10% of your income on buying food, even though you would need to devote 25% of your hard earned wage to get well fed. All this in an economy where food inflation (the energy cost of energy) runs rampant and wages stagnate. Given such a situation you would starve to death in a couple of months time sitting on your brand new coach in your brand new clothes… Unless you found a way to trade shoes for food. And this is exactly what we, as a civilization, did: we traded the various fuels and byproducts of oil extraction for electricity from all sources and heat from coal to support business as usual.

Bucket-wheel excavator. Photo by Albert Hyseni on Unsplash

There will never be, and never was such a thing as an “energy transition”. It’s but a convenient myth we tell ourselves to keep us in a comfortable state of denial about reality. We never transitioned away from coal for starters: among many other things, we still use it in massive quantities to make steel and cement. Curiously enough, both of these materials are in high demand, not only when it comes to oil wells, but also in the case of wind turbines. Think: drill pipes and well casings, or massive concrete foundations and steel towers. Both wind turbines and pumpjacks are thus mere ‘energy extraction machines’ built on mountains of coal, mined by electric excavators and transported by diesel engines. And while its true that the sun and the wind are practically inexhaustible sources of energy, the technologies required to build the machines (and panels) harvesting those cannot possibly be powered by intermittent and diffuse “renewable” energy at scale. Despite all the handwaving, high heat and carbon atoms remain essential in the many material transformations needed to make solar panels and wind turbines possible. Thus, instead of replacing each other, these energy technologies ended up being stacked up on one another in a massive Ponzi scheme, where every new energy source helps augmenting the use and extraction of the previous one. 

The chart below, tells it all.

What “energy transition”? Source: Our World in Data

With the depletion of rich oil fields — alongside with the exhaustion of rich metal deposits — energy return on investment will continue to deteriorate, though. As wells must be drilled deeper and more frequently to keep up with consumption, more and more energy will need to be used up in the process; together with an increase in the amount of steel pipe and cement made by burning tons of coal and delivered on site by diesel trucks, together with hundreds of truckloads of fracking fluid, sand etc. The same goes to mining: long gone are the days of hauling rocks with a 10% metal content. Now we are actively going after ores with a 0.1% grade. That puts precisely a hundred times higher burden on the shovel and truck fleet of said operations, just to return exactly the same amount of metal. (Not to mention the exponential increase in the amount of energy going into crushing and processing all that growing amount of rocks. Listen to this podcast if you are interested in the details.)

In this technological paradigm, where mining, smelting, manufacturing and transportation all remain hopelessly dependent on fossil fuels, solar panels and wind turbines simply cannot provide a replacement for oil, only a slight productivity boost to a massively complex, totally interdependent global energy system. Seen in this light, it doesn’t sound all that crazy to power oilfield activities with wind and solar after all… Hence the push for electrifying oil production — ostensibly to boost oil companies’ “green credentials” (sic!). However, this is nothing more than a thinly veiled attempt to keep drilling for oil possible and to scoop up more tax benefits… All at the expense of burning more resources — coal, iron, copper, silicon and yes, diesel — elsewhere. If this is not a textbook example for a ‘self-defeating proposition’, nothing is.

Oil rig. Photo by Brad Weaver on Unsplash

Yet shale (tight) oil producers are still hesitant to jump onboard: the costs and reduced mobility involved with electrifying this sinking Titanic is enormous. The best drilling spots, where returns on investment were the highest, have all but run dry anyway, leaving oil companies with ever poorer quality resources… So why bother? As a sign of things to come spending from oil majors in the shale oil business is falling already, pushing oil field service companies (doing all the drilling and fracking) to accept ever thinner margins… An issue further exacerbated by rising raw material costs. The irony is, that as the shale oil boom is coming to an end, depleting fields are becoming ever more gassier (producing more associated gas and less oil). This sudden increase in natural gas production, on the other hand, has driven prices to the ground — further exacerbating the woes of the shale gas industry. And gasification is not the only issue. As another sign of depletion shale plays are producing lighter and lighter oil: further aggravating refineries’ profitability problem and the diesel energy crisis described above.

Monuments to coal. Photo by Ira Bowman on Unsplash

You see, this is where it all comes to the head: we have built a civilization on fossil fuels, starting with coal, then adding oil, later nuclear and natural gas… And finally so called “renewables” like a cherry on top — all mined, delivered and built by burning diesel fuel. As the depletion of rich deposits (be it oil, or metal ores) accelerates, however, so does the energy cost of continuing business as usual increases — including the making of diesel fuel, as well as wind turbines and solar panels. With a worsening trend pointing towards an ever lower overall energy return on investment, however, we are inexorably inching towards a point where energy “in” will become equal to energy “out” for the entire energy production system. Beyond this fleeting moment of equilibrium it would become impossible to extract any surplus energy from the system, as all of its products would be used to maintain existing mining, equipment manufacturing and transportation activity. 

Well before this energetic “dead state” could arrive, however, and as a harbinger of things to come, economic growth in the productive sector will (and in some places already have) turned into a contraction. In areas not strictly necessary to extract energy — like manufacturing household equipment, furniture, cars, passenger planes etc. — a permanent state of decline has set in as a result. This in turn has started to reduce both overall energy and material demand, giving a slight relief to the energy system — allowing it to close down its worst performing assets — and thus pushing the inevitable arrival of its dead state to a somewhat later date. Expect to see see-sawing energy prices and waves of plant closures as a result. Mind you, this will happen entirely irrespective of economic policy, tariffs, taking on debts etc. (By the way, and for the record, Europe is already knee-deep in this pre-dead-state.)

Meanwhile global energy production and use will remain flat (or may even grow), but purely in nominal terms, in order to compensate for ever worsening energy returns on investment. At some point in the future, though, regardless how frugal we become during the process or how well the “transition” goes, more energy will be needed to maintain energy extraction activities than what could be obtained from all sources (coal, oil, gas, nuclear, hydro, “renewables” etc.) combined. We will not run out of energy per se, there will be still plenty more coal, oil, natural gas, sunlight, wind, uranium on Earth even then. What we will run out of is the economically available stuff, providing enough energy return on investment to continue with industrial civilization. How fast we get there, and most importantly what happens along the way, though, will be crucial. One thing is for sure: we will need all our ingenuity and wisdom to deal with this energy predicament, and to minimize the suffering of both humans and the more than human world as the situation unfolds. What are these possible pathways then? That will be the topic of the second installment of this essay.

Until then,

B

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Notes: 

(1) Less than one percent of global transportation is airfreight by tonne-kilometers, and 90% of trade is still seaborne (which in turn is almost exclusively powered by heavy fuel oil or “bunker” fuel). The rest is road transport (semis) and long distance rail, powered by fuel oil. The diesel fuel is also used to move highly productive agricultural machinery across vast farmlands as well as dumper trucks hauling ores from open pit mines.

(2) Natural gas goes through a similar process: as the extracted gas cools down to air temperature, heavier (but still light in crude oil terms) molecules condense, leaving methane behind which is then burned in a power plant or in homes and factories. These condensed products taken together are called NGLs or Natural Gas Liquids.

(3) According to the Bureau of Transport Statistics middle distillate fuel (diesel and fuel oil) contains 138,700 Btu/gallon (or 0.15 GJ) of energy. The 14.8 gallons of heavy duty fuels, distilled from a 42 gallon barrel of crude oil, thus provide 2.17 GJ-s of gross energy. Now, if you consider that refineries consume 7% of the energy contained in a barrel of oil, and transporting petroleum takes up another 5% this number is reduced to 1.92 GJ. Heavy duty diesel engines use this fuel at a 30% efficiency, and thus perform 0.58 GJ of useful work when it comes to drilling wells, shoveling coal, or transporting goods across the land and sea.

(4) EROEI is often expressed as a fraction like 10:1, which means 10 units of energy (barrels of oil, GJ, Btu etc.) were obtained at a cost of 1 unit reinvested into continuing energy production from said source. Expressed as percentages, 10:1 equals to 10%.

(5) For more on various calculation methods — including Societal EROI, or the overall EROI that might be derived for all of a nation’s or society’s fuels by summing all gains from fuels and all costs of obtaining them — read this study from Charles A.S. Hall, Jessica G. Lambert and Stephen B. Balogh, and listen to Nate Hagens explaining the perils of EROI.