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Tag: EROEI

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Earlier this year, I offered two posts [here & here] on Perfect Storm – Energy, Finance and the End of Growth, a well-reasoned 2013 report continue reading…

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Richard Heinberg and Chris Martenson, two of the most respected and thoughtful advocates publicly urging greater awareness of peak oil, recently teamed up for a broad and informative discussion about energy supply. [Unless otherwise noted all quotes here are taken from their conversation.] continue reading…

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This is a follow-up to Monday’s post, in which I discussed some of the conclusions offered in a 2013 report issued by Tullet Prebon, a British financial services firm, and authored by Dr. Tim Morgan, Global Head of Research: PERFECT STORM – ENERGY, FINANCE, AND THE END OF GROWTH. [Unless otherwise noted, quotes are taken from that PDF report.]

As I previously noted, the report pays special attention to the concept of Energy Return on Energy Invested [EROEI] and its significance in discussions about peak oil and our future energy supply.

The critical issue with peak oil does not hinge around remaining reserves. Rather, the critical issues are energy returns on energy invested (EROEI) and deliverability….
We may have used up much less than half of the world’s originally-recoverable reserves of oil, but we have, necessarily, resorted first to those reserves which are most readily and cheaply recovered. The reserves that remain are certain to be more difficult and costlier to extract.
Production may not ‘peak’ just yet, but a new concept (which we term ‘resource constraint’) may soon kick in, implying that an economic model based on abundant and ever-increasing hydrocarbon inputs might be running out of road.

The reality about current oil production efforts—most notably those involving hydraulic fracturing and horizontal drilling [“fracking”] to which must of our recent surges in oil production is attributed—is that the process is much more expensive, carries many (and wide-ranging) adverse environmental consequences, and delivers a product not nearly as energy dense/efficient as conventional crude oil has for more than a century.

We’re resorting to shale formations as our go-to energy fields because the conventional crude “good” stuff is no longer as plentiful or accessible. Relying on ever-greater quantities of a finite resource for the ever-expanding needs of an ever-expanding global population runs headfirst into basic math: keep removing X from the finite supply pile leaves less X left in that pile. So now we’re moving down the line into the not-as-good-stuff.

And among the problems clearly associated with the not-as-good-stuff is that it takes more effort and money to get it from there to here . That means even less of the energy we all need is left over after the additional energy inputs required to produce tight oil from shale formations: [EROEI – the energy return on energy invested]. Not good math. Those wells deplete much more rapidly than do the wells from conventional crude reserves, so even more effort and energy and money is needed because more wells must be drilled just to keep up. Also not good math.

Certainly the development of hydraulic fracturing has produced an impressive increase in oil production over the last few years. But those limitations mentioned above aren’t helpful for those counting on more of that Business As Usual for many more years to come. The technology is impressive, but impressive technology employed against finite resources carrying their own set of daunting challenges will only take us so far.

[E]xpecting a technological solution to occur would be extremely unwise, because technology uses energy – it does not create it. To expect technology to provide an answer would be equivalent to locking the finest scientific minds in a bank-vault, providing them with enormous computing power and vast amounts of money, and expecting them to create a ham sandwich.
In the absence of such a breakthrough, really promising energy sources (such as concentrated solar power) need to be pursued together, above all, with social, political and cultural adaptation to ‘life after growth’.

That’s not good news for any of us. The sooner all of us recognize that, the sooner we can begin to address with the requisite levels of seriousness, expertise, and cooperation mandated to deal with adaptation.

Our other option isn’t all that appealing. But perhaps it’s just me:

If EROEI falls materially, our consumerist way of life is over.
There are two really nasty stings in the tail of a declining EROEI. First, net energy availability may fall below the amount required for essential purposes including healthcare, government and law. It is hardly too much to say that a declining EROEI could bomb societies back into the pre-industrial age.
Indeed, a decrease in net energy below subsistence levels is an implicit consequence of EROEI decline beyond a certain point – one which is difficult to estimate, but is likely to occur within the next decade – which means that this is when the nastiest results of all start happening.
Second, of course, a decline in net energy availability could (indeed, almost certainly will) result in conflict driven by competition for access to diminishing surplus energy resources.

Opportunity beckons….
 
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Peak Oil Matters is dedicated to informing others about the significance and impact of Peak Oil—while adding observations about politics, ideology, transportation, and smart growth.

 

 

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I recently came across PERFECT STORM – ENERGY, FINANCE, AND THE END OF GROWTH. It’s a well-written and thoroughly-researched 2013 report issued by Tullet Prebon, a British financial services firm (in the wholesale financial and energy sectors), authored by Dr. Tim Morgan, Global Head of Research. continue reading…

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An observation worth noting … and pondering, from Robert J. Brecha: continue reading…

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One of the key deficiencies of ‘unconventional’ fuels is their low energy return on investment relative to conventional fuels. continue reading…

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‘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]  continue reading…

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For parallelism with the language of finance, net energy should refer to energy produced minus energy invested, whereas EROI should refer to energy produced divided by energy invested…. continue reading…

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An observation worth noting … and pondering, from Kevin Carson:

Peak Oil has nothing to do with the total size of oil reserves underground, or how many years of America’s present energy needs they could supply. What Peak Oil is about is the rate at which those reserves can be extracted, the cost in money and energy of extracting it, and the diminishing size of the net energy returns when the energy cost of extraction is accounted for. The Energy Return on Energy Invested (EROEI) of the predominant sources of fossil fuel energy has been declining steadily since they first started distilling petroleum into gasoline. continue reading…

 

 

 

 

 

An observation worth noting … and pondering, from Richard Heinberg:

Still, there are a few observations that no serious energy analyst can dispute. Oil exploration and production costs are skyrocketing (Bernstein Research estimates that this year the industry needs prices in the range of $100 a barrel to justify new projects). The super-giant oilfields that still account for 60 percent of world crude production are aging, and so the more modest contribution of unconventionals, which are expected to be both expensive and slow to come on line, must push against a tide of depletion and decline. It’s only a question of when the overall global production decline begins, not if. Meanwhile, some of the fuels (ethanol, natural gas liquids) counted by IEA and EIA in the ‘all liquids’ category have significantly lower energy content per unit of volume than regular crude oil; thus an increase in barrels-per-day of ‘all liquids’ does not necessarily mean an increase in the amount of energy delivered to society.
Further, all the unconventional liquid fuels (including biofuels, tar sands, and ‘tight’ oil) offer a low energy return on the energy invested in producing them. Therefore, even if the number of barrels of liquid fuels delivered to market is still gradually increasing, the amount of useful net energy being made available by the petroleum and biofuels industries, when energy costs are accounted for, is probably already declining. And this is almost certainly true in the US—the poster child for unconventional oil production. Finally, available global crude exports are declining rapidly as producing nations use more of their oil domestically. [1]

Facts, as I have noted frequently, can be damned annoying … all the more so when they intrude on cozy optimisms where unpleasant realities only spoil all the fun.

There’s been a lot more happy talk of late touting even more Magic Technology (fracking, etc., etc.) which will now, once and for all, at last put the “theory” of Peak Oil to bed. But as Richard Heinberg clearly explains, there are some damned facts we need to keep in mind and factor in to the planning—the planning which so far is not getting much traction among the powers that be. That’s going to cause a fair amount of problems for us down the road, because whatever it is we’ll need to do to address those problems aren’t going to lend themselves to overnight, easy, inexpensive solutions.

To think that the few million barrels of unconventional oil to be produced each day are the answer to our problems is more delusional that optimistic. They’ll help, of course, just not nearly enough—not even close. But as long as we’re not too concerned with reality or the future, then I guess optimism is as good an option as any.

* My Photo: Atlantis – The Bahamas, February 2008

[1] http://www.postcarbon.org/blog-post/985668-peak-denial; Peak Denial by Richard Heinberg – 07.02.12