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The views of Physics, Engineering, Economics etc. compared

Posted by: Ekkehard Augustin - Fri Oct 27, 2006 12:26 pm
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The views of Physics, Engineering, Economics etc. compared 
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Post    Posted on: Tue Jan 30, 2007 8:04 pm
Kinda off topic but, do you mind if i would to ask how you are able to write pretty good German?

I don't get the part of not understanding Ekkehard. I have no problem with it, or do you mean that his terms in which he explains certain economic-specific details are 'weird'?


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Post    Posted on: Wed Jan 31, 2007 10:03 am
Hello, James Summers,

I only can assist what Stefan says - the two german records you wrote in your post are nearly completely correct gramatically as well as regarding the words. My English is no way better than your German.

One difficulty I felt is to translate the terminology of Economics into the terminologies of natural science, engineering etc. as well as to translate it into the terminology of Engineering.

Yesterday I also reminded at least one additional reason why it is highly doubtful and speculative to consider Economics as a special case of Physics.



Hello, Stefan

Thank You Very Much for your positive answer to James Summers.



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Post    Posted on: Wed Jan 31, 2007 3:36 pm
Stefan Sigwarth wrote:
Kinda off topic but, do you mind if i would to ask how you are able to write pretty good German?

I don't get the part of not understanding Ekkehard. I have no problem with it, or do you mean that his terms in which he explains certain economic-specific details are 'weird'?


I have a degree in german from UTexas at Austin.

As for the "weird" part, I can "see" the thought as it is put together in german, because I can recognize the german language structure behind some of the written english, but the nuanced details don't make it through to english in a way that can be understood by most english speakers.

It is as if one is looking at a slightly blurry photograph. I can tell what the subject is, but picking out some of the smaller details is hard.

This is NOT a critisism of Augustin in any way, merely that I think some of the finer points of what he is saying isn't quite getting through. I still find it interesting, as I am a total economics nerd, as well as a space nerd too.

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Post    Posted on: Wed Jan 31, 2007 3:42 pm
Hello, James Summers,

which details would you like to ask for? Or better which questions do you have? I would like to explain or clarify.



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Post    Posted on: Wed Jan 31, 2007 4:46 pm
Along those lines I will offer some of my own thoughts on the matter of physics and energy.

Here is an interesting concept: Weighted average cost of energy.


When a company is raising capital for whatever reason, it can do so through equity (stocks) or debt (bonds/borrowing). Both sources involve costs to the company. Stockholders demand either growth in share prices, or eventually dividends, and holders of debt demand interest payments.

In finance the costs to the company is called "weighted average cost of capital" (WACC). Say you issue raise a total of 1800 dollars for a new project by :
$1,000 of stock that requires a 12% return, and $800 of debt at 8% interest.
Your WACC is represented as 0.12*(1000/(1800)+0.08*(800/1800)=10.22%

This economic concept can be translated into physics by way of energy.

Usable energy from any particular sort can be thought of as having a "return on investment" as well.
It takes, say, 1 barrel's worth of energy to get 31 oil barrels from middle eastern oil for example. This high rate of return means that the relative cost of the energy is pretty low, and this is reflected in the economics as "cost of production". (note that I ignored the energy/money costs of refining that oil into something useful)

By the same token, oil extracted from mid-ocean deep drilling or drilling in remote environmentally hostile places like the arctic offers a lower return on invested energy, say the investment of 1 barrel's worth of energy to get 16 barrels worth of oil.

The cost of an energy source will roughly correspond to it's return in terms of energy.

In an efficient market, (efficient in finance terms meaning that prices will reflect costs and available information) the total average cost of oil incorporates the wieghted average cost of every barrel of oil drilled.

By the same extension, one can simply measure the costs of a unit of energy produced by other forms of energy, photovoltaic, coal, natural gas, nuclear, etc, to get an overall worldwide price of energy.

This average price of this unit of energy currently depends heavily on the price of oil and coal, as that is where the majority of mankind's energy comes from.

Most "work" in terms of physics is done by either electricity (most electricity globally is generated by coal) or some type of fuel (generally from oil). We use electricity to run small applicances that perform some work, or

This means that as the cheapest and most widely used forms of energy get more expensive, so will the overall cost of energy be strongly correlated.

Relating this to some of what Augustin said in terms of looking at fuel for rockets:

We generally don't use oil coal to fuel rockets, but rather use the energy from oil or coal to create the fuels needed. Heat/cold for chemical reactions, or electricity for electrolysis and so forth.

The example he used were two types of fuel that provide similar thrusts to a rocket.

One form of fuel was many times more expensive than the other. This would mean that the overall energy involved in the process that makes/stores that fuel, is much higher or more complicated. Say the expensive fuel has a component that is a fairly rare element. This rare element requires more energy to acquire.

From my understanding of chemistry, the more energy in any given kilogram of material, the more energy required to make that material, and each marginal increment in stored energy requires more and more energy, much like the supply curves in economics (diminishing returns)

Similar things can be said for various forms of launch alternatives for rockets.

For example: the maglev idea's attractiveness is from the fact that the overall amount of energy required to put a given mass into orbit is less than conventional rocket's.

The one thing that this whole concept ingores in terms of cost is labor though. One form of energy may offer a high rate of return, but ultimately require labor intensive engineering/design/manufacturing that adds to the cost.

Not sure what use/value this is to anybody, but is (for me) an interesting bit floating around in my head.

Freely given. If anybody wants to do some happy-fun acedemic paper on it, please do so with my warmest regards.

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Last edited by James Summers on Wed Jan 31, 2007 5:32 pm, edited 1 time in total.



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Post    Posted on: Wed Jan 31, 2007 4:50 pm
Ekkehard Augustin wrote:
Hello, James Summers,

which details would you like to ask for? Or better which questions do you have? I would like to explain or clarify.

Dipl.-Volkswirt (bdvb) Augustin (Political Economist)


I am still reading it all, but will get back to you at some point, probably later today.

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Post    Posted on: Wed Jan 31, 2007 5:06 pm
Ekkehard Augustin wrote:

For those producing energy - let's say electric energy - the energy (electricity ehere) produced is a real revenue while for thos using that energy the energy used is real costs. The energy used is no [longer] economically available and thus consumed and gone.


True, but here is a further refinement:

Some of that energy isn't quite "gone" but is represented by something you manufacture:
Let's say you use energy to create something like an ingot of aluminum. Some of the energy is actually "sunk" into the aluminum, i.e. is reflected in the cost of that aluminum.

Ekkehard Augustin wrote:
If now a company consuming energy is a producer of energy than the energy consumed is real costs while the energy produced is real revenue - meaning that energy can be both costs and revenue without meaning that energy is wasted. And there is an example for that - nuclear reactors consume energy to meet safety requirements. From time to time the reactors need to be switched off the net and shut down for regular maintenance. The safety equipment needs to stay active and because the reactor is shut down batteries are used then. That energy economically is going nto the production process as real costs - of the production of energy as real revenue.

But these costs don't have to do with Dollars, Euros etc. to be paid for energy yet. I simply will go on later.

Dipl.-Volkswirt (bdvb) Augustin (Political Economist)


I would further point out about nuclear energy:
Think about the amount of energy that goes into getting the fuel. It takes tons of ore to get ounces of raw fuel, and lots of refining energy to get useful fuel from that raw fuel.
Further, one has to spend a lot of energy on the complex systems, and phsyical structures required for reactors, as well as spend energy storing and handling the waste, and security for every step of this process.

There has yet to be a profitable nuclear reactor built. All nuclear reactors in existance have required heavy government subsidies of one sort or another. This would suggest to me that the energy gotten from this form of power is probably less than what is put into it at this point.

Just my 2 cents.

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Post    Posted on: Wed Jan 31, 2007 5:11 pm
WannabeSpaceCadet wrote:
Re: Availability

"The Universe is big. Really big. Mind-bogglingly overwhelmingly big. No, bigger than you're thinking. Bigger than that, too." :lol:

All the things that people want, economically speaking, are available in quantities larger than the entire population of Earth could ever use in 100 billion years.

BUT the physics cost of accessing any of it, except the tiny bit on or near the surface of the Earth, is currently much higher than the value to be gained. The efficiency is negative.

Thus what economics refers to as availability or scarcity, is merely a short-sighted simplification of basic physics reallity.

Everything is physics, if you look hard enough or dig deep enough.


Bingo. You and Herr Ekkehart are on the same page.

I would be interested to see how much energy would have to be invested in space infrastructure before it is self-sustaining.

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Post    Posted on: Wed Jan 31, 2007 5:18 pm
Think about this:

For space industries to be self-sustaining, they will have to provide their own mass and energy.

It is a similar problem to a lot of strategic computer games that deal with resources, like warcraft, etc. One has to "invest" in units that extract those resources to get a resource flow.

I thnk it all boils again down to energy.

Build a small manufacturing facility that can create solar panels and scale itself up from there.

It should also be capable of creating robotic miners of some sort to grab free mass like asteroids, or moon/mars mass.

One would have to start small and scalable, and then use the process to build up to where you can start providing usable mass and energy to the earth.

This is pretty much what a lot of space-based societies are working for.

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Post    Posted on: Wed Jan 31, 2007 5:21 pm
Hello, James Summers,

in the post before the recent one you talk about a very concrete example that from my point of view indeed is connected to what I said in this thread to some degree. What I explained is highly abstract though.

I am not sure but there seems to be one crucial aspect I should mention. The average price you are talking about is got on one particular market and via the accounting system within one particular company or several particular companies doing business on that market. In so far this seems to me to be Enterprise Economics or business accounting of a company.

But I may be misunderstanding - I should check that.

What I am talking about during this thread up to now is a chain of markets or a web of markets which extends from the location where the fuel etc. is mined to the location where the fuel is going to be consumed. The chain of markets or web of markets can consist of thousands or even millions of markets. And as the fuel passes the chain or web each market adds to the price of the fuel necessaryly because between being bought on one market and offered on the next market additional energies are consumed which increases the price on the next market.

The additional energies consumed simply have to do with all the markets a fuel-company needs to by products and services at: PC-market, building- or bureau-market(s), telephone-market(s), paper-market(s) and much more.

My problem of translation was or is to translate prices buildings, bureaus, phones, paper etc. into energy or an image of energy without applying physical units.

At this point I should say what I avoided to to talk about earlier this day: In Economics all physical units like units of length, units of area, units of volume, units of weight, units of time, units of speed, units of acceleration etc. are avoided - meaning that amounts are expressed a very abstract way. This is done to keep the theories as generally valid as possible. At the market(s) of apples for example units of weight are used as well as the number of apples simply. The Theory of Markets must be kept valid for both cases which would be impossible if units of weight would be used by the theory. Avoiding physical units also keeps one and the same theory applicable for the market(s) for apples, the market(s) for fuel, the market(s) for cars and so on. But this also means that the theories cannot be based on Physics.

Sorry - I didn't want to turn back a more extreme abstract talk...



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Post    Posted on: Wed Jan 31, 2007 5:48 pm
That's ok.

Abstract talk is what economists do best. :)

One of the interesting things that economics does is look beyond simple physics when viewing processes.

It may take X amount of energy to dig up a ton of coal, for example, but as an accountant/economist one must also account the other costs of that coal, just as was mentioned for nuclear.

Coal burning produces mercury into the environment which must then be handled, and that uses energy, it also releases exhaust gasses which must be considered, and particulate matter that must be "scrubbed" and so forth.

I mention this specifically, as I heard on the radio that the german government was going to end the subsidies for the coal industry in germany, and I was thinking about the ultimate effects.

My guess is that ending this subsidy will make renewables and cheaper foreign coal that much more attractive. But that is off topic too, heh.

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Post    Posted on: Thu Feb 01, 2007 7:21 am
Hello, James Summers,

you obviously posted before I had ready my last post of yesterday.

As far as I have read your posts up to now you understand my posts od this thread correct by far.

That energy is represented by something manufactured is completely correct. Speaking about a concrete product thermal energy is used to produce steel. Then the stell to some degree represents the thermal energy consumed during the process of production - but the thermal energy itself is gone to elsewhere and starts to leave the economy.



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Post    Posted on: Fri Feb 09, 2007 6:30 pm
One of the other posters brought up something that really drives home the point that EVERYTHING is about the cost of energy.

He pointed out that gold can be found in seawater. If one had free energy, it would possible to economically extract that gold from seawater, completely re-making world commodity markets.

I really think the main thrust of space exploration, if you want it to really take off, will be energy, as energy gets more expensive in the coming decades.

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Post    Posted on: Mon Feb 19, 2007 1:12 pm
Hello, James Summers,

I thought about it after reading it and understand your post so that you suppose that the exploration of the solar system for energy will be the main factor behind space trips and missions in the future.

This seems to be a question of the Financial Barriers section merely and so I prefer to answer under a different aspect: The view of Physics might be that the solar system will be explored for energy - but I personally suppose that exploration is not considered by Physics as a science. In your post exploration seems to mean an activity of conscious and aware beings - it might be somethign considered by Engineering as a science, by Geology,, by Economics and a few more sciences.

On the other hand Economics are looking for sources of energies merely...

This is close to showing up that the sciences are working together interdisciplinary:

Quote:
- Physics can tell where to look for sources because Physics finds out where energy is to be found.
- Engineering and Physics together with other sciences similar to them can tell if a vehicle could approach the energy without destruction of the vehicle and without loss of the energy and if the vehicle could carry the energy to the conscious and aware beings.
- Economics can tell if that will be or is economically advantegous.




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Post    Posted on: Mon Oct 08, 2007 8:31 am
What I said in this thread about the enrgies consumed to get sources of energy and why this needs and must be taken into account and involved when looking at and calculting efficiencies in between is illustrated by the most recent post in the Lunar Soyuz-thread in the Financial Barriers section.

There it by an explained calculation turns out that LH2 produced an ssold on Earth at $ 0.56 costs more than $ 45 on the Moon when carried there. These $ 45 include the complete energy consumed - the sources of energy consumed precisely - required for transportation to the Moon, to return the tanker and to transport the LH2 into LEO.



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