Systems Energy Assessment - SEA  "reality math"
- System Energy Assessment (SEA), Defining a Standard Measure of EROI for Energy Businesses as Whole Systems .  How it works out in simpler examples, like for the Maldives islands' "Carbon Neutral" energy plan

Published in Sustainability (MDPI) within the Special Issue New Studies in EROI (Energy Return on Investment edited by Charlie Hall.  Some resources for understanding and using the new method are below.   Pre-publication copies of the paper are deposited in the Cornell physics archive arXiv:1104.3570v1 and available locally on Synapse9  as System Energy Assessment (SEA) 5/20/11 7/21 10/21  P. F. Henshaw

What difference it makes:  

  1. The total energy cost to the economy for operating businesses is really on the scale of five times what was previously thought.  What was overlooked are the large untraceable energy demands of the support services needed to obtain and operate technology and deliver products.  They don't record or report their energy needs so businesses haven't been accounting for them. 

  2. Per $ of business, the total liability for both visible and hidden energy use impacts, like for CO2 pollution, energy resource depletion, and for employing the energy obtained for altering the earth, are then also on the scale of five times what was previously realized.  

  3. The "reality math" is that, lacking information, "average impact per $" is far more accurate than "0". It corrects our largest piece of misinformation about the real accumulative environmental impacts of using money, (and... embarrass those claiming their lack of information is proof of having no impacts!)
     

  4. The error was picked up because the individual business energy use totals were adding up to be way below the world average energy use per $ of GDP.

  5. The accounting mistake was to count only the reported energy uses, counting the energy for necessary but unreported energy uses as "0".   Because all spending ends up as personal incomes and consumption in the end, it's accurate to first estimate any energy demand per/$ as the global average.    

  6. Especially environmentalists, green policy advocates and sustainable designers have been tricked into believing more efficient technology reduces total energy use, as if only a business's visible energy uses were the problem.  The real problem is the far larger hidden ones. 

  7. Complex theories are not needed to confirm this, just the oldest rule of science: "For complex subjects, find the unusually simple questions you can answer with high confidence".

 

Basic findings

The standard measures of business energy use, like LCA, count energy uses paid for as costs of employing technology in business operations, but do not count the energy needs of the self-managing services businesses need to employ too.  A business's self-managing services don't record or report their energy use, so a choice to count only reported energy use is a decision to omit the great majority that go unreported.   Those include the energy uses paid for as a cost of employing labor, management, design, advertising, maintenance, Insurance, finance, rent and taxes, etc, all of which generate "consumption for production" costs as necessities of operating a business.   A method of combining the reported and unreported energy demands is needed to get an accurate total.

The systems physics needed may be the more important finding in the end.   To decide what "unreported" energy uses to count it relies on identifying the natural physical boundary of a whole working unit of the economic environment. It may be the first attempt to objectively fit a scientific measure to the natural physical boundary of a whole distributed net-energy system, a natural unit of environmental organization that grows and behaves as one.  Identifying "a business" as a working unit of organization in nature, (as a self-defining object) departs from treating it as a theory of equations representing recorded data . 

That creates a whole new subject for physics, as well as for economics.   Environmental systems become physically accountable net-energy systems, as having a natural boundary and subject to traditional thermodynamic analysis.  So it allows them to be studied in their organic form, rather than as theoretical models missing unknown amounts of the energy information needed to close the equations.

 

  • The world standard method for counting the energy use of businesses, following the ISO governmental standards, as applies in LCA and GHG measurements of environmental impacts, count the fuels purchased for production goods but not the fuels purchased for production services.
  • This is the difference it makes, a change of ~500% in the scale attributable business energy costs and environmental impacts.

(from the SEA study of a typical industrial business, a wind farm in Texas)
Slide 2

 

The difference is whether households and businesses work independently or as combined units (see slide 3 below

describing environmental impacts of business using standard business financial accounting categories, and so identifying only the plant and equipment, and their consumption for production

describing environmental impacts of business according to the naturally defined working unit, composed of all the parts that physically work together, and their consumption for production

 

Related links
  • Why Focus on Energy Demand,  slides below [PPTX]  [PDF]

  • Blog post explanation for the slides pending
   

Small Examples maldivesGDPchart.jpg

"Reality Math" small examples -

  1. The Estimate method shortcuts & examples
  1. Maldives islands "Carbon Neutral" energy plan, promoted as "Maldives first country to go carbon neutral" with real CO2 footprint growing at ~15% per year using a global import/export economy.  
  • Gross Domestic Product, Maldives
    $1.48 Billion US 2010 dollars
    Source: World Bank, World Development Indicators

    Carbon Footprint: At the world economy's average CO2 footprint per dollar of .47kg/$ Maldives CO2 footprint was 1.5 billion times that in 2010, growing faster than China's, at ~15%/yr

   

 

Posts, Notes & Comments

Good models for explaining it in a short letter:

1) To ClimateCoLab - 5/23/11 idea of quantifying local effects and impacts  and Original Thread with this comment

The one I'd recommend, for how individuals can understand their own energy and CO2 footprints, would also help you clearly understand what is and is not meant by "zero carbon" or "zero net-energy" claims. That's my new resource page (still in development), for just that. www.synapse9.com/pub/SEA

A new method of doing global energy accounting simplifying things a lot, actually, from having to correct a very major omission in the standard accounting method for environmental energy accounting. Businesses now count up all the fuel purchases they make, and add the fuel purchases of their *producer product* businesses in their supply chain. They have NOT been counting the energy uses they pay for as a cost of business for the businesses offering *producer services* in their supply chain, only those for producer products.

So... that results in under-counting the total energy demand by nominally ~80%. How that simplifies things is that, ironically, producer services don't even record their energy uses. So you can only estimate them by the amount of money they are paid, and absent other information need to consider their energy impact to be "about average". That hugely simplifies everything, but takes a while to understand, starting with how the global average energy/$ is a very stable ratio, and can be known fairly precisely.

The Systems Energy Assessment (SEA) research paper shows that when you go to a great deal of effort to combine both ways of measuring, the exact accounting of the standard method is off by 500% and the quick method, using 8000btu/$, is only off by 15%. That using average spending habits rather than searching for records of energy uses FAR more accurate.

For example, a business will count the economic benefit of expanding the community that gives them development credits, causing the increased housing, commerce, infrastructure and services that the income to the community generates. Those large energy and other environmental impacts are all counted as business development benefits, but not counted for government environmental monitoring, using standards like the GHG protocol or the common measurement method LCA. I'd be interested in what anyone thinks.

2) To the UN Global Compact organization and appropriate staff - 6/13/11 http://www.unglobalcompact.org/AboutTheGC/contact_us.html

Deputy Director Power,

I’m a research scientist who has spent 30 years developing methods for describing and predicting the physical behavior of complex environmental systems.   I’ve made some good progress too, but it is not being well utilized.  The proofs are not so hard, just the unexpected questions that disregard popular myths, that then become quite simple for anyone to answer.   

 Because of what old myths fall away it’s kind of unpopular.    Because we live in a natural world, though, it will have both technical and legal implications, that people will try to avoid , but eventually won’t be able to.     I’d be delighted to follow up with your research staff.   It could be quite important.

 One of my recent findings concerns a flaw in our method for business energy and resource use accounting.   Simply said, the standard method counts the traceable energy uses businesses pay for, often ~20% of the costs of running businesses.   However, 100% of the costs of running businesses are ultimately traceable to the end user consumption of people at the ends of every supply chain, being paid for their services as a cost of operations.   Most of those energy and other resource uses, then, are not counted by the ISO14000 and LCA application standard.    For common types of businesses it causes an ~80% undercount of resource use.

 I developed a sound method for correcting the problem, to be published in a pending special issue on resource accounting in Sustainability (MDPI).   The paper is called,  System Energy Assessment (SEA) and you can find my copy and a collection of supporting  Slides & notes on my website.   A pre-publication version is also in the Cornell physics archive  arXiv:1104.3570v1 .   It’s been a couple years since I figured out the problem.   Everyone that looks at it has always agreed the method is valid too.   The various professions it applies to are avoiding all effort to use of the new terms of discussion implied, however.    It seems only if I was politically powerful would academics feel a need to change their work to reflect a better view of reality.   Mother isn’t like that, of course, as everyone not being self-interested knows without hesitation.

 How it effects the “precautionary principle” is that the error makes it possible to claim one thing and do the opposite regarding business resource demand.    So much of the outsourced energy and resource uses of business are not counted that just outsourcing more appears to be a reduction when it is the reverse.

 Thanks for all you and your organization’s work.   We need the earth to work, not just our theories.

HDS consulting

 

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