[TheDude]

$this->bbcode_second_pass_quote('ROCKMAN', 'I')f I may let me interject another perspective. I work in the oil patch and have tried to do a full cycle EROEI for drilling a simple unconventional NG well. Just like with the wind farms it gets cumbersome very fast trying to amortize various elements. On the other, no one who drills oil/NG gas wells gives a crap about EROEI. And they never will. You’re certainly free to argue the logic of that attitude but it doesn’t matter. Wells will be drilled on the basis of $’s in vs. $’s out with adjustments for risks.

[ROCKMAN]

kub,

As far as coal being cheaper this is where I would support the gov't doing something to more level the playing field for wind. I'll never be big on paying out subsidies but giving a big tax break on wind would be fine by me. Getting away from additional CO2 has a societal value that doesn't show up on the investor's economic analysis. A tax free return for X number of years would.

[ROCKMAN]

Exactly Dude. It is something of a self proving prophecy: if such a high EROEI project were commercially viable then you see it being duplicated a thousand times. As far as a gov't sub the question is how you distinguish projects that could eventually stand on their own after a little gov't help vs. ones that can never sustain them selves financially. Look at the shine that’s quickly wearing off of corn ethanol.

I’m also suspect of a lot of the new projects based on my experience back in the oil boom of the 70’s. So much “stupid” capital was flooding the market that many known crappy projects were drill just so the promoter could make a buck. I worked in one JV were the promoter drilled 18 wells for us. And that was 18 dry holes. And his senior guys all retired millionaires. And my company eventually went belly up....go figure. There has to be a bunch of similar AE projects just like that floating out there. Just like PT said: “There’s one born every minute”. Combine that with a strong sense of self righteous and a healthy dose of greed and you’ve got the perfect AE investor.

[kublikhan]

$this->bbcode_second_pass_quote('ROCKMAN', 'E')xactly Dude. It is something of a self proving prophecy: if such a high EROEI project were commercially viable then you see it being duplicated a thousand times. As far as a gov't sub the question is how you distinguish projects that could eventually stand on their own after a little gov't help vs. ones that can never sustain them selves financially. Look at the shine that’s quickly wearing off of corn ethanol.

[yesplease]

$this->bbcode_second_pass_quote('kublikhan', 'I') agree with you here, but there is also a problem of getting adequate AE infrastructure in place, before peak oil hits.

[vtsnowedin]

$this->bbcode_second_pass_quote('yesplease', '')$this->bbcode_second_pass_quote('kublikhan', 'I') agree with you here, but there is also a problem of getting adequate AE infrastructure in place, before peak oil hits.

[Starvid]

$this->bbcode_second_pass_quote('vtsnowedin', ' ')1, We are already past peak and bouncing on the plateau.

[vtsnowedin]

$this->bbcode_second_pass_quote('Starvid', '')$this->bbcode_second_pass_quote('vtsnowedin', ' ')1, We are already past peak and bouncing on the plateau.

[VMarcHart]

$this->bbcode_second_pass_quote('ROCKMAN', 'E')ROEI is a valid concept and worth of academic discussion ... IMHO.

[VMarcHart]

$this->bbcode_second_pass_quote('vtsnowedin', '')$this->bbcode_second_pass_quote('Starvid', '')$this->bbcode_second_pass_quote('vtsnowedin', ' ')1, We are already past peak and bouncing on the plateau.

[vtsnowedin]

Looking at the numbers:
1992 68 million bl/day
2005 74
2007 72
Looks pretty flat to me sort of like a plateau.
If we drill drill drill we may get another bump like the North Sea or maybe not.
How much would it be worth to not have to support the towel heads??

[kublikhan]

$this->bbcode_second_pass_quote('VMarcHart', 'M')y first project, I drove 450 miles every week for 2 1/2 years. The second's ribbon cutting ceremony alone, I had 100 people coming from places as far as Europe. How much energy was used in those activities and so many others?

[VMarcHart]

$this->bbcode_second_pass_quote('kublikhan', 'I')f you just want to wrap your head around how long it will take for the windmill to recoup the energy...

[yesplease]

$this->bbcode_second_pass_quote('vtsnowedin', 'T')rue we will not be totally out but at some point in the future we will have a shorfall of supply vs. demand that will get rapidly worse. The learning curve of a new AE infrastructure is unknown. Better to get that out of the way now and just have to scale up somthing we know works when supplies get tight. Procrastination never works well for me. Dose it for you?

[yesplease]

$this->bbcode_second_pass_quote('VMarcHart', 'A')greed. We're going to be have to be 10-15-20 years past PO to point to a past date when PO happened.

[vtsnowedin]

Until we have fully explored the outer continental shelf of both north and south America we are just quessing about total world recoverable resources. Thats why the peak we appear to have reached in 05 may be an false one impossed by congress. But with a ten year lead time if thats to be believed we may discover this new oil just in time to extend the plateau a few years to a really steep cliff.

[ROCKMAN]

vt,

I would say a 10 year time frame for a significant amount of drilling to begin is reasonable. Seismic acquisition. environmental audits and lease schedule will take up the biggest chunk of time. But that's just the start of the process. Let's say there are a significant number of fields to be found in these new areas...whatever "significant" means. Just a wild guess on my part after watching exploration, development and production operations for the last 33 years: it would likely take 10 to 15 years to get just the first 50% of the fields going. Individual fields might only take 3 or 4 years to get online but it won't be anything close to a simultaneous start.

I'm all for drilling. But the net gain, whether big or small, will be stretched over a couple of decades at least IMO. Thus, even if we find much more than the most optimistic numbers I don't think it will a great impact on PO. We'll certainly need whatever we find more domestic sources but I suspect it won't change the other dynamics significantly.

[VMarcHart]

$this->bbcode_second_pass_quote('yesplease', '')$this->bbcode_second_pass_quote('VMarcHart', 'A')greed. We're going to be have to be 10-15-20 years past PO to point to a past date when PO happened.

[drgoodword]

Regarding earlier discussion in this thread about the recent 30% drop in the price of oil, I think three factors reasonably account for it:

1) While there isn't enough proof yet to fully validate those who believe we have already reached the summit of Hubbert's Peak, I think it is safe to say that the concept of peak oil and a sense that we are either on the summit or very, very close to it has, just this year, substantially influenced the oil trading community. In other words, 2008 saw the first wide-spread trading done in the context of a peak oil mindset. And I suspect there was, understandbly, an over-reaction. Part of the oil price runup was driven not by speculation, but by panic. When other factors came into play (see the two points below), a large part of the panic margin dissipated.

2) The U.S. dollar staged a partial recovery this summer. Over the past two years, the greenback has been on a slow steady downward slide. What few people recognized was that the economies of other countries, particularly those of the EU, were in even worse shape than the U.S. (at least for now). Just as a certain part of the oil price runup was related to the weakening of the U.S. dollar, the strengthening dollar had the opposite effect.

3) No one expected demand destruction from the global recession to appear so quickly. But it did. Witness the remarkable drop in American automobile driving. The easing of demand pressures played its role, especially in negating the previous "panic" element of the oil price runup.

Personally, my energy layman's point of view is that we have started our brief (5 years?) ride on the undulating peak of peak oil. Just this seismic energy paradigm shift alone is enough to cause unprecedentedly wild swings in the price of oil.