Friday, February 6, 2015

Some Costs Matter More than Others

In any in depth discussion about energy invariably costs get brought up at some point.  Cost are very important, but I would argue that some costs matter than others though.  

Costs of raw material and production costs are the most important because these cost can give you some idea of the EROEI.  The cost of raw materials give you some idea of the energy needed in order to gather and refine them.  The cost of production gives you an idea of how much energy is needed in order to assemble the raw materials. 

Labour costs are much less important because people have to work doing something anyway.  Also, the amount of labour needed matters more than the  the dollar amount because it can give you some idea of how much labour will be available for other pursuits if the energy source in question became more prevalent. 

Costs imposed by governments are also much less important, because they often correlate mostly to labour costs, and because they can be changed at some future date. 

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