[ian807]

Oh, and I just couldn't resist pointing this out for shorty.

It's called the oil price feedback effect.

See, when oil prices get really expensive, eventually so does everything else including the price of finding, refining and distributing liquid fuels.

As any other recursive function, changes become very severe, very quickly.

This starts out ever so slowly as it did in 2008. We just got a taste of it then. Had the economy maintained for a little while longer, we'd have suddenly started to notice that oil exploration itself had gotten prohibitively expensive, due to high oil costs and its ripple effects throughout the greater economy.

This won't go smoothly of course. We'll chart a nice little jagged price increase trend as oil prices shoot way up, exploration, production and distribution come back up, only to die on the vine as oil prices go down or stabilize again, and then go up again, and then down again.

No sane investor will go for that. It's all about the money.

[Ludi]

$this->bbcode_second_pass_quote('ian807', '
')No sane investor will go for that. It's all about the money.

[Keith_McClary]

$this->bbcode_second_pass_quote('common_sense', 'E')ven in this insane scenario we completely run out in twenty years, there is still the fact we can drill in the oceans.

Oh, right, you forgot about the oceans.

[shortonsense]

$this->bbcode_second_pass_quote('Keith_McClary', '
')We could start drilling on Iceland into nice fresh oceanic lithosphere. (Smilies seem to be broken)

[Ayame]

$this->bbcode_second_pass_quote('shortonsense', '')$this->bbcode_second_pass_quote('Ayame', '
')
No we didn't forget the oceans. We are however firm believers in EROEI, which it appears you have forgotten.

[SeaGypsy]

http://www.oliverwyman.com/ow/pdf_files ... erwood.pdf

A friend of mine who works for Transocean (the world's biggest deepwater exploration company) is here in the Philippines fixing up a rig built in 1965.
He says there is no serious production of new drilling and test rigs anywhere in the world currently, he also says the estimated budget for a new build is over $1 billion.

There are few investment opps where the start price is $1 billion, lead time to build could be 5 years, built to paydirt could be any amount of time.
Of course to take this risk once would be nutty, bets need to be spread so multimply that billion by whatever number takes your fancy and wait at least 6 or 7 years for a return. Whether the entire investment would ever be profitable is doubtfull, given that during these years, companies like Transocean are using every kind of high tech modern seismic and 20 to 40 year old rigs now, pegging leases so fast it's likely in 5 years exploration will be over; period.
From that point, multiply the cost of extraction by cost of purchase of leases, new players can forget about it.

[shortonsense]

$this->bbcode_second_pass_quote('Ayame', '
')I am confident enough to use we as many intelligent people on peakoil.com understand the concept of EROEI, diminishing returns and the low hanging fruit.

[shortonsense]

$this->bbcode_second_pass_quote('pstarr', 'S')hort, you have challenged nothing. You do a little childish mocking mostly, and an occasional cute turn of phrase. Little of consequence.

[ian807]

$this->bbcode_second_pass_quote('shortonsense', 'F')ound that EROEI example yet cupcake?

[Maddog78]

A link to a blog referencing a book with a lot of "if these figures are accurate" and "this could" disclaimers.

Very convincing.

[ian807]

$this->bbcode_second_pass_quote('Maddog78', 'A') link to a blog referencing a book with a lot of "if these figures are accurate" and "this could" disclaimers.

Very convincing.

[Maddog78]

I have made this post many times so I'm only going to repeat myself one more time.

I'm sure EROEI is a fine concept and makes sense in theory.
It probably is easy to calculate for nuclear or ethanol or even tar sands but it is nearly impossible to calculate with any accuracy for conventional onshore or offshore oil wells so therefore it is not taken into account when planning a project.

I have 30 years experience in the oil industry and have been involved in many domestic and international projects.
The term EROEI has never come up, not one single time in any relation whatsoever with any project.

If the project theoretically can make a ROI, it goes ahead.

Now it could well be that a bad EROEI is also a bad ROI project. I won't dispute that but EROEI is not used in the oil industry in planning or executing projects.
The only thing that matters is, can it make money, period.

What is your experience in planning oil field projects?
Can you show me a single project where an oil company has used EROEI?

I already know the answer to this since short has asked the question multiple times on this board and no one has ever produced a single example.

Last post from me on this issue.

[dinopello]

A cheetah chases the gazelle because she is hungry and wants to catch it and eat it. The cheetah doesn't calculate the EROEI, it just feels its hunger. Over time though, if the cheetah hasn't figured out how to catch the gazelle using less energy than it gets from eating it, the cheetah will perish.

[shortonsense]

$this->bbcode_second_pass_quote('pstarr', 'K')enneth S. Deffeyes (Beyond Oil: The View from Hubbert's Peak.)

I suggest you read it. You might learn something. I won.

Easy as One.

[shortonsense]

$this->bbcode_second_pass_quote('ian807', '')$this->bbcode_second_pass_quote('shortonsense', 'F')ound that EROEI example yet cupcake?

[shortonsense]

$this->bbcode_second_pass_quote('Maddog78', '
')I have 30 years experience in the oil industry and have been involved in many domestic and international projects.
The term EROEI has never come up, not one single time in any relation whatsoever with any project.