When we talk about resource allocation our usual perception is, that we allocate resources according to projections in profits. But what if the allocation of resources instead depended on the sustainable nature of there allocation, meaning that if you allocated too many resources towards your production you would run out, and your flow of resources would remain stagnant until the resources reached an equilibrium between inflow and outflow. This would create an entirely new form of commerce, one in which businesses would concentrate on their footprint along with profits as their bottom line. This is known as a triple-bottom line, one where businesses include, the economy, the environment, and the social equity of their business practices. Before we continue let’s define some key terms that are expressed in the resource allocation sector.
Net Energy- Is the difference between the energy expended to harvest an energy source and the amount of energy gained from that harvest.
Entropy- Is the measure of the quality of energy available, it is a physical measure of the degree of randomization of the structure or capacity of matter or energy to be useful to us.
Ricardian Land- Land as an extension, surface area, and substrate for holding things (i.e., the “indestructible” characteristics of land, excluding its fertility or underground minerals).
Recoverable Reserves- A term used in natural resource industries to describe the amount of resources identified in a reserve that is technologically or economically feasible to extract. A new reserve can be discovered, but if the resource cannot be extracted by any known technological methods, then it would not be considered part of recoverable reserves. Recoverable reserves is also often called proved reserves.
Abiotic Resource- A nonliving resource that cannot reproduce: fossil fuels, minerals, water, land, and solar energy.
Alright, now that we have established some definitions for key terms used when describing resource allocation we can begin to understand how our current system of resource allocation is flawed in every aspect, environmentally, economically, and equitably. Also how we may fix these flaws by restructuring our practices on how to allocate resources to institute a triple-bottom line in every business no matter what size.
In the oil industry every person knows that fossil fuels are a finite resource, meaning that the stock of this resource will be exhausted eventually as the outflow continues to be utilized. Experts continue to report studies that oil will run out in the next 50 years or so, this statement is somewhat accurate, only the wording of these statements is incorrect. What really is happening is, as fossil fuels and oil reserves slowly deplete the world over and demand for the once cheap resource remains high, the industry leaders will see a possibility to make as much profit as possible off the dwindling remains by increasing the price substantially. As the industry leaders extract the last ounces of oil out of the ground they will stock-pile the resource and only provide it to the highest bidder, now this scenario seems bleak but it has happened before in human history, and will happen again, unless the global population refuses to associate with oil as the largest source of energy for everything we consume in our daily lives. Once we have disassociated ourselves from oil and fossil fuels the global population may begin to innovate and create new energy technology that includes renewable energy sources and new sources only known to very few people in today’s society. So the consensus is, as the demand for oil increases and the supply of oil decreases, so along with it will price increase until it becomes economically unfeasible to extract or consume the resource, which will lead us into a new energy reality.
Along with the oil industry diminishing, ethanol (E85) fuel is being produced from corn as an alternative energy source to run our vehicles on. Unfortunately this alternative fuel has led to many externalities and negative implications that were not researched enough before the system was adopted in the U.S. First, the cost of corn and other produce has risen considerably in U.S. supermarkets since farmers have begun to divert a percentage of there annual crop towards the production of ethanol. This leads to inflated foods prices compared to the average U.S. citizens annual income putting more strain on the standard of living for the U.S. population. Next, the fuel economy of E85 is only 0.5% better than gasoline, and on a long-distance trip approx. 667 miles or more, E85 costs on average $30 more and uses 15 or more gallons of extra fuel. Overall I would estimate the entropic levels of the production and consumption of E85 ethanol by, considering the costs of food production and the necessary subsidies administered to the farmers for diverting a large percentage of their annual crop yield towards the production of E85 ethanol, then estimating the overall economic gains from purchasing E85 consistently for your vehicle and the average mpg recorded and the average carbon footprint compared to a highly efficient gasoline engine. Conclusion, the amount of energy transferred and transformed in the production, conversion, and consumption of E85 ethanol is far greater than the extraction, conversion, and consumption of an equal amount of fossil fuel oil. In all we must shift our focus from both of these energy sources and invest our precious energy in an alternative that is truly less entropic than our current resource.
Thank you for your interest, please comment and subscribe!
Onward,
Hayden van Andel
*All information regarding the efficiency and cost of E85 ethanol is sourced below.
Edmunds, Dan. (05/21/2007). Running on Alcohol Fumes. E85 vs. Gasoline Comparison Test.
http://www.edmunds.com/fuel-economy/e85-vs-gasoline-comparison-test.html
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