Peak Oil: Using Energy To Get Energy # 3

‘Tight oil is an important contributor to the U.S. energy supply, but its long-term sustainability is questionable. It should be not be viewed as a panacea for business as usual in future U.S. energy security planning.’ [1]

Today, it takes about one barrel of conventional U.S. oil to produce the equivalent of nine barrels, or 378 gallons of gasoline.
Meanwhile, the EROI for nonconventional oil, that is, oil produced from shale and tar sands, stands even lower, at about four. For every barrel of oil used to drill, producers obtain only four barrels of nonconventional oil, or 168 gallons of gasoline [2]

FACTS SUCK

Lost in the Happy Talk about our imminent energy independence are some notable facts intentionally omitted from those discussions. Facts, as we know, suck. And when the telling of a story of abundance collides with the reality of not exactly, facts are the first casualty if self-interest is the primary motivation. Who cares if the little people don’t know, Right?

The energy input is always an important consideration when calculating production and supply. It’s not any different than calculating returns on your own financial investments. Weighing the risks and returns against what you choose to invest is a perfectly rational approach, whether it’s energy or cash.

THE GOOD OLD DAYS ARE GONE

Back in the early and heady of exploration and production, it’s generally agreed that for every barrel of oil invested, about 100 barrels were returned. That’s damn good! Not a lot of effort or expense for big returns is the prime motivator for any risk-taking.

But these days, as the quote above points out in painfully clear detail, the days of huge returns for small investments are now comfortably tucked away in the past. What’s important to note is that the decreasing returns we’re now obliged to accept from fossil fuel production is not an issue whose significance is limited to the industry’s accountants.

While some twist facts (such as those in the following observation) and turn them into the final nails in the coffin of concerns about energy supply—dismissing all talk about peak oil as well—it is instead a very accurate statement of a very big problem!

Our entire modern civilization was built by fossil fuels for fossil fuels. We have built an enormous fleet of coal and gas-fired power stations, more than a billion oil-driven cars and a very impressive collection of fossil fuel-driven industries – each category consuming roughly a third of global fossil fuels. In addition, we have built an enormous fossil energy extraction and distribution network of mines, wells, pipelines, supertankers, filling stations and transmission lines which continuously keeps our societal foundation of fossil energy humming along.
This enormous support base just screams the letters B, A and U, especially with persistent economic troubles still lingering from the great credit crisis of 2008 and showing no signs of going away. It is very important to understand that fossil fuels form the very foundation of our global civilization and that rebuilding this foundation without compromising the integrity of the structure as a whole will be enormously challenging. If such a fundamental remodelling is not done very slowly and carefully, our debt-based global economy with its enormous fiscal imbalances, unfunded welfare promises and social inequality (below) can implode with little prior warning. (links in original quote) [3]

What happens when it dawns on the cheerleaders that more energy invested (and more capital) to get less back is not a winning strategy? The “less energy back” part of that calculation isn’t restricted to the fossil fuel industry. They supply what all of civilization depends on, so when “less energy back” is the new normal, we all have a problem. That’s not rocket science!

What happens then? What should be all be doing now?

NOT A GOOD ANSWER

Declining EROI has a ‘nearly inconsequential’ effect on prices until it reaches about 18, then has an increasing effect until EROI falls below 10, when prices jump dramatically.
This finding meshes nicely with the “net energy cliff” model proposed by geologist Euan Mearns, which shows an exponential decline in the energy available to society as EROI falls below 10….
And this should send a chill up your spine, because the EROI of domestic U.S. oil production is now approaching 10, having fallen from around 100 in the early days of oil (Cleveland, 2005). Even in the few prospects where we can still drill a well that will produce over 100,000 barrels of oil per day, like the deepwater Gulf of Mexico, the EROI varies from 4 to 14 (Moerschbaecher, 2012).
[Charles] Hall and [David] Murphy have also found that a given fuel must have an EROI of at least 3 to deliver a net benefit to society because of the associated infrastructure needed to support and use the fuel, and that an overall EROI of at least 10 may be required to sustain a complex society. It takes a significant energy surplus to support things like higher education, entertainment, personal vehicles, a middle class with health care, outsized amounts of credit, and yes, subsidies for low-EROI fuels. (links and citations in original quote) [4]

Facts may indeed suck, and they surely screw up the happiest of Happy Talk stories about all is well in Energy Supply Land, but they matter … a lot.

Peak Oil Matters