[AdTheNad]

$this->bbcode_second_pass_quote('Pops', 'E')ROEI is the perfect example. Investors don't give a rip about Energy ROI because they don't invest energy and it doesn't buy yachts, money does. So if a particular endeavor nets 0 energy but makes bucket loads of money, who cares?

For example, the same people who bellow that ethanol is a net energy loser swear up and down that a positive EROEI is the ironclad rule of energy production. How can that be?

[Pops]

EROEI is an important concept in the macro sense I think.

Tossing it out at every turn, without evidence, makes it less important, just another buzzword. Just as bad as saying oil is going to $1,000 tomorrow or the republicans are fascists or the dollar is going to be worthless on Monday.

But whatever.

[dolanbaker]

There is a discussion on TOD about EROEI right now. http://www.theoildrum.com/node/8625#more

[vtsnowedin]

I think there is some confusion here. EROEI is important when you are in the business of producing energy for sale. Gas to a gas station, oil to a furnace's tank, wood to the wood shed etc. It matters not at all to end consumers of energy other then it effects the price they pay for the energy they are consuming. A cruse boat consumes a lot of energy and no one expects to get any energy in return, just sunburned ,wallet tapped out passengers.
If your drilling an oil well off shore you will use large amounts of energy to drill the well and provide and run all the support ships and aircraft needed to support the platform. The total cost of all that goes into bringing in that well, plus all the cost of any dry holes you drilled while finding it, becomes the total of the energy/money invested in that well. Hopefully the well will produce enough oil that sells at a high enough price to pay all the bills plus a profit. If it doesn't then that wells EROEI is less then 1. Bring in a few like that and you will have a tough time getting backing for your next well.

[MD]

EROEI is most important when considering the changing ratio between traditional production volumes and unconventional production volumes world wide.

Other than that it's usually misunderstood or misapplied.

[AgentR11]

EROEI is a useful metric for determining how far down the hole we are.

It doesn't tell you beans about whether any particular project is a good idea or a bad idea for a company to develop.

The ethanol thing is a perfect example. Even if you accept that EROEI is negative, producing ethanol reduces the amount of grain surplus on the market, and can be turn up or turned off at will; eating up huge surpluses when they exist, and leaving stocks untouched when supply is tight. In additional, ethanol's energy inputs are mostly non-liquid, and its output is all liquid. This is an extreme increase in value, even if the total energy is less than the sum of its inputs. So it acts as both price support / permission to grow surplus, and functions as a relatively efficient solid/gas -> liquid conversion method.

So even if its EROEI negative, it is still awesome for all the companies involved.

[vtsnowedin]

$this->bbcode_second_pass_quote('AgentR11', 'E')ROEI is a useful metric for determining how far down the hole we are.

It doesn't tell you beans about whether any particular project is a good idea or a bad idea for a company to develop.

The ethanol thing is a perfect example. Even if you accept that EROEI is negative, producing ethanol reduces the amount of grain surplus on the market, and can be turn up or turned off at will; eating up huge surpluses when they exist, and leaving stocks untouched when supply is tight. In additional, ethanol's energy inputs are mostly non-liquid, and its output is all liquid. This is an extreme increase in value, even if the total energy is less than the sum of its inputs. So it acts as both price support / permission to grow surplus, and functions as a relatively efficient solid/gas -> liquid conversion method.

So even if its EROEI negative, it is still awesome for all the companies involved.

[AgentR11]

If you think those tractors eat anywhere near the amount of oil, that the corn would convert into Ethanol, you need some chemistry lessons.

[MD]

$this->bbcode_second_pass_quote('AgentR11', 'E')ROEI is a useful metric for determining how far down the hole we are.

It doesn't tell you beans about whether any particular project is a good idea or a bad idea for a company to develop.

The ethanol thing is a perfect example. Even if you accept that EROEI is negative, producing ethanol reduces the amount of grain surplus on the market, and can be turn up or turned off at will; eating up huge surpluses when they exist, and leaving stocks untouched when supply is tight. In additional, ethanol's energy inputs are mostly non-liquid, and its output is all liquid. This is an extreme increase in value, even if the total energy is less than the sum of its inputs. So it acts as both price support / permission to grow surplus, and functions as a relatively efficient solid/gas -> liquid conversion method.

So even if its EROEI negative, it is still awesome for all the companies involved.

[radon]

In fact, any process in the universe is EROEI negative (meaning EROEI<1) - this follows from the law of non-diminishing entropy. Before humans were able to access oil, sun spent millions of years compressing energy into the substance, and this process was EROEI negative for the sun and the universe as a whole.

A process may become EROEI positive depending on the starting point in time from which you begin measuring ER against EI - and this point is always subjective by definition.

The definition of the "closed system" is also important, but less relevant in the context.

[MD]

well said.

[vtsnowedin]

$this->bbcode_second_pass_quote('AgentR11', 'I')f you think those tractors eat anywhere near the amount of oil, that the corn would convert into Ethanol, you need some chemistry lessons.

[MD]

$this->bbcode_second_pass_quote('vtsnowedin', '.')..the ER is low and may well not be worth the cost of the substitute food that must be found to feed the people that otherwise could have just eaten the corn or the chickens that were fed the corn.
...

[vtsnowedin]

$this->bbcode_second_pass_quote('MD', '')$this->bbcode_second_pass_quote('vtsnowedin', '.')..the ER is low and may well not be worth the cost of the substitute food that must be found to feed the people that otherwise could have just eaten the corn or the chickens that were fed the corn.
...

[Cloud9]

The one thing that seems to be left out of all these conversations over corn based ethanol is what happens to the sour mash after the alcohol is boiled off of it. My grandpa made a good bit of moonshine back in the twenties. He fed his sour mash to his pigs.

[dorlomin]

From a corperate perspective, in terms of investment, rate of return is very important. As much so or perhaps even more so than total lifetime return. Companies that sink large amounts of money into large projects do want to have a cash flow from those projects relatively quickly. Money sunk into projects that will take 10-15 years to generate cash are not going to be popular options.

[Cloud9]

I understand the need for a quick turn around on an investment, but when looking at a collapse of agriculture and food transport that is a different matter. Henry Ford envisioned that farmers would be able to run their model T’s on home grown ethanol. John D. Rockefeller understood that every gallon of ethanol burned cut into his sales. That is why he put a million dollars behind the prohibition movement. It just so happened that hard economics jived with his hard shell Baptist belief system. It was a win win for him.
We don’t drive tractors and farm trucks the way soccer moms drive their SUV’s. The good news is that unlike horses and mules, they don’t have to be fed when we are not using them.

[Pops]

$this->bbcode_second_pass_quote('Cloud9', 'T')he one thing that seems to be left out of all these conversations over corn based ethanol is what happens to the sour mash after the alcohol is boiled off of it. My grandpa made a good bit of moonshine back in the twenties. He fed his sour mash to his pigs.