Peak Oil is You
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Page added on March 12, 2014
Depletion is winning
“The decline in EROI among major fossil fuels suggests that in the race between technological advances and depletion, depletion is winning. Past attempts to rectify falling oil production i.e. the rapid increase of drilling after the 1970 peak in oil production and subsequent oil crises in the US only exacerbated the problem by lowering the net energy delivered from US oil production (Hall and Cleveland, 1981). Increasing prices, thought by most economists to negate depletion through increasing incentives for exploitation, cannot work as EROI approaches 1:1, and even now has made oil too expensive to support the high economic growth it once did.”
Cassandra’s legacy by Ugo Bardi
6 Comments on "Depletion is winning"
rollin on Thu, 13th Mar 2014 1:18 am
Nice paper on EROEI, but I am not satisfied with just a list and discussion.
It’s nice to know the EROEI at the well head or mine head, but how about the EROEI at the point of use.
Take natural gas for example, pipelines have to be built and pumped, holding and storage systems need to be built, operated and maintained. Beyond that the distribution centers and infrastructure to the consumer, as well as the furnace and other apparatus at the consumer end. If all that is taken into account, how much energy is actually used to get that energy out of the ground and into whatever is actually using it? That is the more important number.
Just think of all those energy employees that need to be supported by the gas or oil along the way. They use energy, in fact they are consumers themselves, tapping into the fuel to get to work and make sure we get the fuel. They and their families use energy and without them there would be no oil or gas. So why are they never included in the equation?
Musher on Thu, 13th Mar 2014 2:28 am
The bottom line must always be “NET GAIN!” It works in all economic pursuits. Regardless of what a given enterprise produces it cannot long survive if costs surpass profits. EROI is simply another way to calculate profits. There will always be more oil, gas and uranium remaining in the ground. However, when it takes more energy to get it out than the end product provides it will almost certainly remain in the ground.
rockman on Thu, 13th Mar 2014 11:49 am
“…when it takes more energy to get it out than the end product provides it will almost certainly remain in the ground.” And as discussed before the economics of oil/NG drilling will end the process long before EROEI approaches 1. My guess is on average it’s around 5 or 6.
And on to rollin’s excellent point. I wouldn’t try to guess the EROEI of the downstream end of the process…too far from my perch. But I suspect, just as in the case of oil/NG drilling, folks will tend to estimate too high an energy input into the process. But in the end it still boils down to $’s in/$’s out. In the case of NG there’s often a guarantee of profitability thanks to the rate structures of utility companies. So again just a WAG but I suspect the downstream process has a minimum EROEI closer to what limits us at the well head. So again long before the energy input kills the refining and distribution of fossil fuels the economic factors will limit the effort. IOW the EROEI of that downstream will never be able to approach 1. Which is the same effect of ending the party as describe but at a much higher ratio then theory would allow.
Davy, Hermann, MO on Thu, 13th Mar 2014 11:59 am
I would like to add I believe a negative eroi situation with oil is different from other fuels. If the global economic ship stays afloat I see oil being produced at a negative eroi eventually. I say this because of oil being a critical economic variable as a liquid fuel. I am not saying the level of production but I do believe at some point the effort by someone will be there to get uneconomic oil. For example the US military or government in a crisis situation.
shortonoil on Thu, 13th Mar 2014 2:49 pm
“The decline in EROI among major fossil fuels suggests that in the race between technological advances and depletion, depletion is winning.”
This statement is true, but is sort of a no brainier. The earth is a finite environment, and the production of fossil fuels on human time scales is so close to zero it is almost not measurable. Depletion is the inevitable consequence of resource extraction, and like the Laws of Physics states it can only go one way; it increases with time. Depletion will win out over technological advances. The only question is not “if”, but “when”?
As I’ve stated here before, ERoEI is an important number, but getting an accurate determination of it in most situations is a bear of a problem. We use ERoEI specifically for the energy returned on energy invested “at the well head”. In most situations determining the “energy invested” part of that two part equation is almost impossible; there is an almost infinite number of inputs.
To get around that problem it is sometime possible to cast a thermodynamic boundary around the area being investigated. That is what we have done in our Study to determine the ERoEI function for petroleum. If you go to our site and click on “study graphs”, and go to graph# 16, you will see ERoEI vs $/barrel. The ERoEI function is developed, in about five pages of the report, and uses the thermodynamic boundary method explained above. As a check we plot it against $/barrel because the historic price of crude is the only data-set available that we can be sure is almost 100% accurate. The ETP model predicts that they should correlate and they do, pretty darn well.
When economists attempt to use EROI they are often fairly derelict in evaluating the “energy invested” part of the equation. They essentially fling some numbers around as “best guesses”. Such a method is likely to produce error margins of 20 to 50%. They often also use a dollar/BTU costing approach, but usually fail to account for the time rate of change of BTU/$. We describe that relationship in graph#12 (World Energy Production/ World GDP vs Time) at the site. If the time frame is more than a couple of decades the error again is going to be quite large.
EROEI, or EROI are ratios. A negative ERoEI is impossible unless one assumes that there is negative energy. Cosmologists, and Star Wars folks are the only people who deal with much of that. Here on planet earth there probably isn’t much of it — we hope!
http://www.thehillsgroup.org/
Mike999 on Thu, 13th Mar 2014 4:56 pm
IF EROEI for Solar is 5 this year, it will be 10 in 5 years, with virtually no pollution. At that point there should be massive conversions to solar.
Possibly sooner as forward looking companies try to jump in before the MAD Rush.