The second word of paragraph six -- "no" -- should be left in; the rest is surplus.

--- G.R.L. Cowan, H2 energy fan 'til ~1996

thx for a good post, vernon. One area of EROEI that has me scratching my head is when to include the energy in the fuel used up in the production of fuel. e.g. if oil is used to generate liquid fuel (e.g. bioethanol) then clearly it needs to be an input wheras a renewable such as wind or solar presumably wouldn't. But what about nat gas used to produce oil from tar sands? Or if the ng were substituted for nuclear? Is there a factor that can be used sensibly to allow for the degree of renewableness of the inputted energy or is it better to consider ALL nonrenewable inputs on the debit side of the energy invested balance sheet?

rgds
tw

Interesting post. Of course many of the system boundaries issues are also discussed in Life Cycle Analysis methods and remain problematic. In the original ROI theoretically the same issue arises (which investments to count and which not); as far as I know, generally the indirect investments are left out (unless they comprise a large portion of the investment).

Point 3: location should certainly be included in the EROEI assessment, as the geography of energy often determines which sources are used; e.g. hauling brown coal is not worth the energy

Also, as far as I see, your second conclusion does not follow from the text.

Very useful set of thoughts.
Policy makers need to do much better.
Financial criteria have hitherto trumped EROEI as in biofuels debacle.

A useful worked example on wind turbines is at
http://www.isa.org.usyd.edu.au/education/documents/ISA_Wind_turbine_LCA_....
Embodied fossil fuel energy in wind turbines compared with energy return over a lifetime is relatively very low, but there can be an 8 fold difference between the same turbine made in Germany (dominated by coal-based electricity ) and then located in less favourable wind sites, and the version of the same turbine made in Brazil (dominantly hydro electricity, with re-cycled steel) and located in better wind sites.
EROEI ratios urgently need much serious attention. Lifetimes are a factor. I rather like Dave Rutledge's suggestion that desert solar should be treated as infrastructure, like bridges, with lifetimes of a century or more. However, I am not sure whether UK's Victorian housing segment (or sewers) should be regarded as assets or liability. It seems technically feasible to retrofit our housing to, on average, become 50% more heat efficient at very low energy cost, so maybe we should make best of a bad job?
Phil

This holistic view has an analogy in transportation:
Someone has calculated that often driving a car is much slower than cycling or even walking. This turns out if you do not only compare the vehicle's maximum speed or travelling time but if you also include the time needed to make the money to buy the vehicle, gasoline etc. It may take a few minutes less to drive, but it may have taken months of work to buy the car.

Heres a thought experiment (i.e. I would do a full blown analysis if I had data, but I don't)

Suppose that the modus operandi currently and of the previous decades is to maximize profits as quickly as possible (a fair assumption)

Society uses energy to do economic work. High energy gain sources, multiplied by their scale, provide the dry powder for increased global economic activity. Less energy gain (as we have read here over the years) means someone has to do with less - and unless this lower energy gain is offset by efficiency or conservation, the economy shrinks.

Suppose that the marginal barrel to deliver to the market in 1999 (when oil was $10), had an EROEI of 20:1. Suppose that due to: deeper, harder to refine (more sulfur, lower API), more infrastructure, more security needed, more energy intensive technology, etc. that the EROEI declined to 3:1 in 2007. (Note, there probably exist some 200:1+ fields out there right now - but here I am discussing the average of the world aggregate)

In 2000, there were 28.3 billion barrels of oil produced (77.7 mbpd). In 2007 there were 30.8 billion barrels produced (84.5 mbpd). Moderate growth -economists delight!.... But under the above assumptions in 2000 then there was 28.3 bbl at 20:1 required 28.3/20=1.4 energy input, for a net 26.9 billion barrels of energy gain . In 2007, even though there were more barrels produced, the total energy gain to society was much less (30.8 at 3:1 required 30.8/3=10.26 input for a net gain of 20.5). The difference - 6.4 billion barrels of BTU 'gain' lost. The 20.5 billion gain is still a thermodynamic fortune, but a much smaller one than in years past. Said differently, a scenario like this will potentially be an order of magnitude worse than squabbling over 1-2mbpd new highs or debating a bumpy plateau

Once aggregate energy gain started to decline (and to be complete we would have to add coal, nat gas, wind, etc. on top of this), there was a smaller 'energy multiplier' in the world economy. Much of this drop of 420 billion barrels of energy gain would have been masked - e.g. national oil companies were selling off oil reserves that cost them pennies, receiving high notional dollar payment and continuing to replace reserves (slower) but at significantly higher costs. In this scenario, the world economy would see 2 things: 1)oil producing countries making huge sums of money selling their previously discovered assets (and putting these profits back into financial markets) and 2)the 1000%+ increase in oil prices, effectively re-allocating oil away from marginal activities (i.e. third world countries, poor people, bad business models, frivolous vacations, etc). The drop in energy gain would have made seemingly slam dunk investment ideas (of every sort) suddenly seem more difficult. Wall streeters - the most aggressive, creative and hungry of our kind, would have invented ways of replicating this energy gain in order to grow the aggregate profit pie(of course without knowing why they had to do this), by increasing leverage on various products until worldwide derivatives (credit) topped $650 trillion.

In sum, this scenario would suggest that prior cheap reserves masked a decline in total aggregate energy gain despite recent new highs in gross production. Soon after the energy decline occured, there was a simultaneous credit explosion (heretofore ALL power pursuit on the planet could be influenced by dollars, and all commodities could be transformed into dollars). Now the credit expansion is over, and we are heading for a credit contraction. If we also have declining net energy (which I believe to be the case), we are in dire straits indeed.

The scariest thing about this scenario is that we need a high energy gain from gas and oil AS A PREREQUISITE for scaling out renewable infrastructure (e.g. wind, solar, tidal) to levels consistent with social democracies...i.e. once this is all recognized there will be HIGHER demand for liquids, not lower....

This hypothesis would be supported if we had evidence of:

a)internal nat gas usage within oil exporters growing faster than oil production, and at an accelerated rate

b)an exponential increase in the price of oil, as the last of the legacy oil reserves would be pumped and sold and new oil would cost producers more and more - meaning E&P companies producing low EROEI oil would be on faster and faster treadmills.

c)oil prices going up more than oil stocks

d)dramatic increases in finding and developing costs since 2000, not only for publicly traded companies, but for a statistically significant share of global production (i.e. probably including Russia and KSA...we can't even get reserves data how are we going to get costs????)

e)employment in 'marginal' sectors will decline as less energy gain primarily flows towards industries involved in basic necessities (unless there are huge D/E returns (dopamine/energy)

I realize that we don't use a great deal of crude oil to procure crude oil - nat gas is well over half of the energy input into petroleum extraction. And I also realize my numbers of 20:1 and 3:1 may be off. The only hard analysis we have is that US EROI declined from 100:1, to 30:1, to 10-17:1 from 1930 to 2000. (100:1 was Cleveland 2005, 30:1 Cleveland et al. 1984 and 10-17:1 was Cleveland 2005 - concept developed in Hall Cleveland & Kauffman 1986) But I wonder how far from reality this example is when Goldman (and others) say the global marginal barrel costs over $100 with oil at $115.....This is how we could sleepwalk over a declining net energy cliff - the mingling of old oil and new masks the sharp decline in energy profit.

The special sauce here is that most financial observers will acknowledge the same trend that I do. But they will indicate 'inflation in energy costs...etc.' and fall back on various econometric models, not understanding that energy cannot be printed, and entropy not stopped but only slowed by technology. E.g. a steep EROEI cliff is likely terminal to finance as we know it.

Please point out where this hypothetical scenario could be wrong, or send me suggestions on how to quantify it - I will try and put more flesh on this and create an analysis/post out of it, though I'm still finishing my Maximum Power post which would be an important part of this puzzle.

I think the EROEI is one of the concepts that seems to cause problems when technology is applied to energy problems. In some cases i.e catalysts its a tremendous boon and technology wins the day. But on the other side of the coin technology implies specialists to create the technology and a surprising withdrawal from the net energy account. The technologists don't realize that when technology is applied to the energy extraction/upgrading phase that the pyramid of specialists and manufacturing supporting them must now become a debt to society not a plus.

Only if the technology can overcome this negative is it a plus. Given the large pyramid of support behind technology this movement in accounting can result in large drops in overall EROEI.

Next as energy itself gets more expensive it generally become more profitable to invest in. On the economic front we are seeing the same effect investments of capitol in maintaining our current energy structure are very competitive with other investments thus capitol flows into the energy production part of the economy at the expense of the rest of the sectors.

And finally our energy industry is a mature one with most of the profits concentrated at the top so energy consumers tend to short circuit the flow of money with it rapidly concentrating at the top of the financial pyramid. This flow of cash into the wealthiest is rarely spent optimizing the general economy. In most cases it simply results in gold rush style inflation in the energy producing region. This also removes large amounts of cash from the other sectors of the economy as the wealthiest are inefficient at reinvestment of the energy windfall back into the economy. This alteration of the flow of capitol in a sense can be converted into a sort of negative EROI concept. As capitol that has accumulated in the current energy system is not spent to underwrite alternatives that permanently reduce demand and thus the price of the current sources of energy.
Also of course the ability of energy consumers to maintain debt payments is undermined because of increasing defaults so individuals and industries outside of the energy industry becomes rapidly poor loan risks esp vs
energy.

Overall it seems like these secondary effects although difficult or impossible to measure may change the real EROEI by several orders of magnitude. This probably why for any reasonably complex system the real breakeven point of a direct EROEI measurement is probably closer to 1:6 not 1:1 as secondary monetary and technical flows serve to amplify the net energy loss.

As and example one could consider the similar military/industrial complex where little real value is produced and net output is actually negative. Looking farther back in time you could even look at Sparta and its military based society or any ones after that and see that theses societies eventually fail. As the energy industry begins to become more similar to the military/industrial complex it too should fail.

And of course on that note the massive military forces developed during the 20th century and the large pyramid of industries to support them are based on the availability of ample excess of fossil fuel. As energy for the base economy contracts the ability to maintain these cold war relic militaries becomes impossible. Effectively we now have two huge industries that have no net gain the energy industry and the military.

Expanding beyond this you have general government services which overall are highly inefficient and also effectively only possible with cheap energy.

The point is that in a complex system with a number of large complexes that offer little real value developed of the excess of the society as the net energy production declines the impact of the secondary energy drains grows exponentially since the first thing to be lost is excessive tax money as the regular economy becomes focused more on staying alive then generating excessive wealth.

So EROEI and EROI declines initially eliminate the excess but this same excess is whats been used to develop the massive government and military infrastructure that "runs" our societies.

A simple example is in times of old when the crops failed the farmers hid the grain and did not pay taxes. Or own tax systems are experiencing the same effect. The regular economy ability to generate tax revenue shrinks rapidly. Also of course over the short term the energy industry because of its wealth will be able to sidestep shouldering the tax burden formerly held by energy consumers.

So it seems that the concepts of EROEI and EROI can be fairly easily extended to include other non-productive complexity developed under cheap energy regimes and it points out the real underlying cause of collapse will probably be falling tax revenues coupled with inability to reallocate taxes to the new inflows of wealth to the top.

Its amazing how self destructive the system seems once energy/finance/goverment/military are considered as a unified whole. It seems that splitting the world into this group and everyone else is sufficient to figure out the broad scale reasons for collapse.

Mr Vernon wrote:

When does an energy cost become an indirect overhead? Perhaps, a portion of the energy needed to build and run the foundry and its equipment; and maybe also a portion of the energy needed to train, feed, entertain and motivate the foundry workers? The calculation would rapidly become very time-consuming and prone to error. Ultimately, a slice of the entirety of the remainder of society’s activities could notionally be apportioned to each energy gathering activity, giving all energy sources an EROEI of 1:110. Clearly an EROEI which included all indirect costs, however tenuous their association to the energy system, would not be a helpful tool for assessing how best to meet society’s “energy needs”...

...So, if all the most tenuous, indirect energy costs of our global energy system were to be included in an EROEI analysis, the global energy system would have an EROEI of 1:1. Does this point to a more fundamental impact of EROEI on the nature of a society?

Actually I would argue the first point is covered by the second point and shows the pointlessness of EROEI arguments. How?

All the energy we use is the energy we use. Yes, a tautology, but one with meaning. If ALL energy production systems (oil, nuke, etc.) disappeared and we had to make due with a pre-industrial energy diet, we would experience a lot of misery, but we would have to use all the energy we use - it would just be a tiny fraction of what we use today. Energy production is a social practice, and arrives from a social circumstance. Sure: you could run a nuke plant without Moe's, or the QuikEmart, or the comic book shop, but: that's the whole point of the power station - to permit the existence of Moe's (so power station workers like Homer can go have a pint of suds), or the QuickEmart (so Apu can provide slushies to Bart), and the comic book shop (so a fat geek has somewhere to go 8 hours a day).

Moe's is critical to the operation of the plant, as it is a social focal point for Homer, and without Homer the whole thing would go critical and melt down and kill everyone. OK, maybe Homer is disposable, but you get my point. The powerstation provides the power so the society can function, and the society functions so people will work at soul deadening jobs like the powerstation.

Imagine if our society had NO use for petroleum. If we chased the bison herds for a living and scratched some plants out of the soil. Would we use petroleum? No. What would EROEI matter? nothing at all. People either starve or not. Energy production is a product of social practice and cannot be separated out from society, as society itself is an energetic and entropic process, of which energy production is part and parcel.

Hence, EROEI is ALWAYS 1:1. Forever. The question, in my opinion, is one that devolves on labour. The common wisdom is that 2% of society in our petroleum based system makes the food for themselves and the other 98% of the society, who are thusly freed up from food production to engage themselves in such eminently worthwhile professions like croupier, online porn actress, advanced debt instrument designer, public relations account assistant, fingernail artist, market speculator, gangster, right wing think tank administrative assistant, cold call telephone sales associate, closet organisation assistant, dog walker, and whatever the job title it is of the guy who stands in the middle of the street holding the sign that says "slow - construction" when the street is clearly ripped apart an covered with orange cones.

There is a much more accurate way to determine the energy content of a society: how many people are engaged in subsistence agriculture, or food production in general? When the number of farm workers expands and the nail salons disappear, then you know your energy production systems are not generating the quantities it once did. When the gangsters are put to work digging ditches because the backhoe went idle, then you know things are getting slim.

You don't need elaborate abstract calculations of input and output - you just need to keep an eye on how many people it takes to feed society. That ratio will tell you how you're doing. If the EROEI is really high, then it will supply energy for something other than itself and more of the Fine Careers I listed above can be supported. If the EROEI blows chunks, then we will see more people growing food, as the quantity of energy left over from Energy PRoduction will necessarily be reduced and reduce the number of people working in such fields of endeavour.

Pretty straight-forward from my perspective.

Should EROEI be the most important criterion our society uses to decide how it meets its energy needs?

No, but it is very important and must be considered. One of my thesis components is 'The Limitations of Net Energy Analysis for Energy Policy" which expands on several of the points the author raises.

No single criterion on how to meet our energy needs will be satisfactory until we re-assess our end goals - that needs to be done first otherwise we are a donkey running after a carrot, and periodically stopping to graze before we start chasing it again.

Good job Adam!

I think EROEI is very important for two main reasons:

1. The economists claim that problems like peak oil will solve themselves because as the price of oil rises, high cost alternatives will become more attractive. EROEI explains that actually what will happen is the economy will contract and energy is consumed in production. Transition will not be easier, it will be harder. Low cost energy sources allow economic growth. High cost energy sources restrict it.

2. The rate of change in the economy (rate of growth or rate of transition from one type of energy source to another) depends on the net energy after wide boundary analysis. (Say for oil, the net after you subtract energy cost of oil production, refining, road building, car construction, etc. That net is the energy left over available to move people and goods around the society.

That net is also the amount left over to reinvest in new energy sources. Which is going to be much less than the total energy produced. As the average EROEI drops, the amount that can be invested will keep falling and the maximum rate of change will keep shrinking. The US WWII economy might have turned on a dime with 80:1 EROEI energy, but todays economy will have a much harder time.

Societies that wait for high energy prices to try to transition will have a much more difficult time (or possibly not have enough energy surplus to achieve a transition). The time to transition is when fossil energy sources are cheap!!! Nate makes this point in his post. We need high EROEI fossil sources to make the transition!

Neoclassical economics gives us exactly the wrong advice for energy sources. Thus the bind we are in over peak oil.

I think the EROEIs that really matter are primary high grade energy sources like electricity and liquid fuels. I'm not even sure that energy byproducts like district heating and distillers grains matter that much. I suggest we need high primary EROEI to create a diverse and vibrant economy. For example you might think that stockbrokers are parasites who will be forced into Amish lifestyles after the big powerdown. However I think the world would be more boring without the stock market.

Suppose the economy's 'spare fat' is (E-1)/E where E is the return for high grade energy. Then 'fat' is 98% for an E of 50 declining to zero when E is 1. The graph is the mirror image of Euan Mearns' energy descent curve for which he suggest the cliff starts around an E of 10. Others think society can function with an E of 1.5. Last time that happened I think was in the Neolithic era when people bred with their close relatives, ate weeds and their bellies carried giant tapeworms.

I'm saying that a world without high primary EROEI will be a miserable place.

Adam1,
As far as peak oil is concerned the only relevant criteria is oil returned from oil used to produce that oil. Its a big issue where more and more oil is being used to recover each new barrel of oil. You may be able to extend this to include both oil and gas, but not to energy in general unless it can be demonstrated that the world is approaching peak energy. Thus the electrical energy used to pump oil and gas should not be as critical as the diesel used for drilling or shipping.
Since wind, nuclear and solar energy have a relatively high EROEI but more importantly the inputs for creating more wind, nuclear and solar infrastructure are not high users of oil or natural gas, its difficult to see why European or N American countries cannot continue to expand total energy use, provided they can replace most oil and gas used in transport with other energy sources, especially non FF sources. We have working EV's now, and we have had very workable coal fired steam powered vehicles and trains in the past. A switch away from oil based transportation doesn't require any more infrastructure than is being created by vehicle replacement. The developed economies have massive electricity production and distribution infrastructure, much more than is really required for a very high standard of living. Part of the reason is that electricity is use has several orders of magnitude of "value". Thus the first 100watts per household to power a TV or refrigerator is "worth" much more than the next 1000watts that powers lights and most appliances, while the next 1-2 Kwatts is used for much lower value uses such as heating , cooling, outside lighting, pool pumps.

Enthusiasts for wind and solar electricity usually cite high EROEIs yet I believe unbacked systems may never be able to run conventional economies. Further confusion arises when wind and solar calculations talk of embodied energy, plant lifetime and capacity factors. Yet these variables are not mentioned when discussing the EROEI of corn ethanol for example.

We need a 'one size fits all' approach to working out the EROEI of wind or solar when backed up by say combined cycle gas plant. For example when a new 200 MW nameplate windfarm with 25% capacity factor is balanced by a pre-existing 500 MW gas plant with an earlier planned decommissioning date. We also need to know the embodied energy of the gas plant and the net energy of the gas, which of course will decline over time. That should also enable a calculation of the paypack period for the hybrid system.

Without doing the cumbersome calculations the backed-up system EREOI should work out as a weighted average of the two. Thus the system average could be nearer say 8 than 20 for wind alone. I also think if new or upgraded transmission line is required that should be included in the energy debt that needs to be recovered. This is why I agree with Kunstler and others that renewables won't get there medium term.

I would add sustainability to the list of criterion for selecting practicality of energy systems.
And not just sustainability in the short term. Few hundred years at best when considering fossil fuels.
I mean in the long term as in thousands of years. And when you think of energy systems with this in mind the ones we are currently using are just not viable.
Coal. Oil. Nuclear fission. Natural Gas. All fail this test.
Even the basic economic imperative for eternal growth fails this test.

We live in interesting times.
Interesting times as in the old Chinese curse.

I would just like to take a moment to say that from Adam Dadeby forward this has been a damn good string of posts!

I have had my issues with the way in which EROEI has been calculated by some in the past (mainly centering around the issue of sunk costs and sunken energy, i.e. money and energy already contained in existing infrastructure)and in the way in which carbon is counted (does an energy system that releases huge amounts of carbon both in the creation of the original capital machinery AND in the production of energy day to day get counted in the same way as the renewables which do indeed release carbon in the creation of the original capital machinery but then produce energy without expelling carbon on a day to day basis?).

But many of these issues were well touched upon in the string of post or covered or at least acknowledged in the original post by Adam as well as later posts in the string by Nate Hagens in particular. I would say more, but there is still a lot of ideas to review in the posts above...damn good string of posts! :-)

Adam,
Good stuff!

Can I ask how the EROEI of home insulation fits in. It would seem to me that insulating the UK housing stock has a very good EROEI.

What for example is the overall EROEI of one of the superinsulated houses at CAT powered by wind compared to a 'normal leaky' British house powered by a gas infrastructure chasing after declining gas reserves?

Also we need to consider each 'energy service' separately. The EROEI for lighting has declined dramatically over the centuries, so we can easily live in a well lit society without expending a lot of energy. See 'Seven Centuries of Energy Services: The Price and
Use of Light in the United Kingdom (1300-2000):

http://www.pressestelle.tu-berlin.de/fileadmin/a70100710/Medieninformati...

Roger Fouquet's new (expensive!) book Heat, Power and Light

http://www.nhbs.com/title.php?bkfno=172071&ad_id=359

deals with these energy quantities in society over the period 1300-2000 expressed in terms of 'real price' (i.e related to the cost of other things).

It would be very useful to rework this data (somehow!) into EROEI terms. Then it would be possible to compare the energy sustainability of various pre-oil societies in the past in both EROEI and monetary terms. The subsistance economy of the 14th century, the better years of Queen Elizabeth 1 in the 16th century and the early industrial years of the late 18th century might be good things to focus on.

What I want to know is - if we will be back to the Stone Age by 2030, will we be going back through the 19th Century first? Might we be stopping off for a little Shakespeare en route? (I'll be taking my wind-up LED torch with me).

BobE

Hi Adam,

Good post. Your list of factors to consider when appraising energy sources looks very similar to mine! A couple of refinements I would consider adding though:

'Waste' products - what are the by-products of the process. This could come under your environmental impacts category, but the by-products could theoretically be terribly useful and the environmental impacts positive.

Technical understanding - This would include things like having experienced operators for the energy production devices. It is debatable whether this is a physical factor, but examples like energy from controlled nuclear fusion or free energy devices seem to come out fairly well on your listed criteria. The only problem being that we can't do them! This could be considered a factor relating to a few of your categories, but is worth a mention somewhere I'd say, especially considering how many people sniff at peak oil on the basis that fusion will render it all irrelevant.

"You can’t solve today’s energy problems with tomorrow’s new technologies" – Jeddah Conference attendee

Cheers,
Shaun

To answer the title question, while very important, no, EROEI is not the most important criteria.

I believe the sustainability of a energy source is the most important criteria, else coal might be the 'winner' of the EROEI question. While reducing our energy demand should be an equally important main thrust, we need energy sources that will not force us to revisit peaking scenarios. Note that impacts on scarce water resources does not enter into the EROEI equation, and would be factors for tar sands, oil shale, biofuels, nuclear (cooling), hydro, and others.

I would also split the "Environmental" criteria into;

1. Air pollution (health, agriculture impacts)
2. Water pollution (to also include thermal gradients from cooling water)
3. Climate disruption
4. Land degradation (mountaintop removal, mine discharge, clearcutting, etc)

Should EROEI be the most important criterion our society uses to decide how it meets its energy needs?

Adam, short answer is yes. The problem we have with society, economics and science today is that the vast number of actors do not realise or understand this. It never (seemed) to matter in the past so why should it suddenly matter now?

The answer is in this chart that I've posted many times before. I sometimes think of net energy in terms of the number of people in society engaged in energy production. If eroei = 1 then everyone is onvolved in energy production and society collapses. If the eroei is 100, then 1 person is involved in energy production and 99 are doing other stuff - farming, manufacturing, sick, retired, teaching, blogging etc.

Now it makes insignificant difference to society if we have 2 energy workers and 98 folks doing other stuff (eroei = 50) and similarly 4 folks getting energy and 96 doing other stuff (eroei = 25). 8 getting energy and 92 doing other stuff (eroei = 12.5) and we're beginning to struggle to find enough folks who are trained at getting energy and to build the tools for them to work (deep water drill ships). By the time we get to 16 getting energy and 84 doing other stuff (eroei = 6.25) we are on the skids since the 84 are not enough to provide for the 16, especially if you remove 50% of their number which may be children, old folks, disabled. You're left with 16 energy workers, and 42 others providing everything else - its on the border of viability.

One reason I believe we will see a massive cull of elderly, sick and young at some point. Society can only carry them with all the free energy provided by high eroei energy sources.

Back to your question - the answer is yes. Energy will become the new global currency. eroei greater than 20 = Swiss Franks and eroei less than 3 = Zimbabwian dollars.

To turn to Nate's question:

I think one way to approach this problem is to model energy amortisation. To model global energy at any point we need to be able to compare free energy with that which we are still paying for.

Back in the 1980s the UK had 32 producing fields - but at that time some of these fields were still paying for their construction energy costs. Now we have more like 200 fields- and the energy costs on most have been paid. The aggregation of free energy with time I think is an important concept - made more complicated by the energy maintenance costs - which need to be deducted.

It is vitally important at this time that a sufficient amount of this free energy is prioritised for construction of new high eroei energy sources - instaed of flying folks to Spain to catch skin cancer and subsidising farmers to grow maize to blast off in a traffic jam.

I used to be optimistic about the solutions to this crisis but am growing increasingly pessimistic about Man's ability to grasp the opportunities.

Is yeast smarter than Man? At least yeast gets the pleasure of drowning in a sea of alcohol. If I was yeast I would move my family to Bordeaux.

Hi Folks,

We may be in deep trouble.

This thesis has two very significant points which may be inescapable.

A)Empire demise has the following mainfactors.

1--Resource depletion;
2--Climate change;
3--Hostile neighbours;
4--Friendly neighbours.

B)As population densities and specialization increase, the energy systems that sustain them have to deliver more net energy. In doing so, they allow the population to grow further, hence a still greater percentage of the population (have to) become “non-productive” specialists.

At this point in history the US is well down on the main resource depletion. The Climate certainly appears to be changing. In the Global Village the US has about 2 Billion hostile neighbours wishing them ill. NAFTA nearly gave them friendly neighbours until they abused the system.

I would say that the US has more lobyists, advisors and politicians than production workers. I suspect that the "non-productive workers" advising on how to be more productive is growing on the square of the decline of production.

If we Black-Box the current US it has enormous inputs coming in, lots of gerbils running on the treadmill and very little coming out.

Sadly the UK is probably worse and the EU putting more gerbils on the treadmill every day as their production drops.

Graham

Thank you. All.

This discussion about EROEI sounds very much like Olduvai theory.
Declining net energy vs. declining energy per capita.

As some have already said, it is (next to) impossible to plot EROEI in a graph like one would plot oilproduction from a certain field.
Still it is an easy to understand concept.

I always recommend reading this:
http://www.eoearth.org/article/Ten_fundamental_principles_of_net_energy

Not at all.

There are dozens of limiting factors to various types of energy technology, and you need to make sure that NONE of them are prohibitive towards your plan. Any of them can potentially overrule the others.

A platinum-based photovoltaic array is going nowhere because of expense & total natural abundance.

Using runaway nuclear fission chain reactions (explosions) to generate power is certainly theoretically possible, has been explored, and is likely viable from an EROEI viewpoint - that doesn't mean anyone will allow the radioactive consequences.

Damming up every river in the world works just fine from an EROEI perspective, but the environmental and human problems associated with it are prohibitively difficult to smooth over.

Using underground coal fires and dense "geothermic" plumbing would be a dirt cheap way of harvesting coal seams - but being nearly impossible to control and environmentally devastating, noone's actively pursuing this.

You can explain away the above by assigning energy-prices to every consequence and factoring them in, but that's ultimately a semantic argument, and there are elements (say, the value of a working ecosystem) that will always be arbitrarily decided. An energy theory of value isn't quite the reality of our world, though no doubt we're moving closer. Is EROIE a necessary factor in energy development? Yes. Is it an important factor? Yes. Is it the important factor? That all depends.

I don't know why we have to decide if EROEI is the most important criterion, if it's a useful criterion, which I think it is. I'm responding primarily to the idea that money costs are an adequate surrogate for energy efficiency calculations. I was an energy industry executive and deeply involved in the last oil shale boom that ended in 1982 and am following the current boomlet as a casual observer.

I'm not at all sure that money costs are an adequate surrogate for energy efficiency, and if I were making energy investment decisions today I would like to know how the EROEI varies from project to project. One of the problems we had in financing an oil shale project was showing a large enough ROI. Typically, we had very solid capex and opex estimates as of a certain date, but the product price was a bit too low to get the project over the hurdle. Then global crude prices would rise and off we'd go--only to find out that our costs had risen by much more than we had expected, making the ROI marginal again. In retrospect, I have suspected that a large part of the cost increases was due to energy inputs embedded in the costs. If we had had the EROEI data and if they had been unfavorable, that would--or at least should--have suggested caution about the ROI analysis.

I suspect a similar thing is going on with Shell's oil shale process in Colorado. Shell uses resistance heating to retort the oil shale in situ. How efficient is that? Is this a complex way to convert Powder River coal into electricity and then into liquids? If so, how does the process compare with other coal-to-liquids processes, and if the comparison is unfavorable, would it be prudent for Shell to proceed with oil shale?

The potential energy in ethanol from corn contains, according to my reading, 75-80% fossil fuel inputs with only 20-25% being renewable solar inputs. This seems very inefficient--and undeserving of public subsidies--if the goal is to reduce fossil fuel consumption.

Final point: Not all forms of energy are equally valuable/useful. That's why, for example, there are persistent long-term differentials between the prices of oil, gas, and coal. So, putting aside greenhouse gas issues, there is value to be derived from converting coal to transportation fuels. This is also a reason why a simple EROEI analysis is not all one would want to know.

I think this is an excellent concept, and should be followed up in the context of different large economies. To offer an example, in an economy like China's, the vast majority of the population still lives a close-to-subsistence lifestyle, and therefore has few economic expectations. Many are quite accustomed to living in a relatively marginal EROEI situation. At the same time, China's alternative energy (fossil and bio) industries are ramping up considerably. China has the benefit of cash-on-hand and little existing infrastructure (in relative terms). It also has the benefit of an efficiency-focused mode of development in alternative energy. Recent plans for coal-to-liquid fuel facilities (search for a presentation in August 2007 by Yuzhou Zhang at Shenhua), suggest high use of by products, co-products and waste heat that could result in relatively high EROEI for that kind of energy system (with the recognition that coal is also limited, and that CCS is still an unproven technology).

From a waste-to-energy perspective, China doesn't have any shortage of low-cost people who are perfectly willing to manually sort and process all the gross things that we in the West would only let fresh immigrants do.

Curiously, I think China is in a relatively good position: most people are satified with a marginal quality of life, people are generally open to suggestion from government on how they should live their lives (I know this is seen as immoral by many, but at the same time it may indeed be a boon to energy efficiency, sorry to force you into the grey ethical area), technology is evolving to a state where China could in the near future supply a good portion of its own energy domestically.

Curiously, I think China will begin providing renewable energy solutions globally in the near future, both from an innovation standpoint and from a production standpoint. Let's hope the West isn't too proud too cooperate, and let's hope China will continue to accept the West's bankrupt currency...

How's that for some optimism? Now excuse me while I run out to buy my remote farmland...

if all the most tenuous, indirect energy costs of our global energy system were to be included in an EROEI analysis, the global energy system would have an EROEI of 1:1.

There's a difference between energy consumption and energy cost. If a given btu of energy is not necessary for creating more energy, then it cannot reasonably be counted as a cost; accordingly, the world energy system will have an EROEI of much better than 1:1.

An example: an oil rig worker enjoys both ballet and food, and spends energy to attain both of them. If the energy were not available to provide him with ballet, he would still get his work done, so energy spent on ballet is not part of the cost of the energy he produces. He would not be able to get his work done without food, though, so (some fraction of) the energy spent on food is a cost of the energy he produces.

A key distinction, though, is that 100% of his salary does count as a monetary cost, as the oil company has no say over how he spends it. That means an energy source can potentially have poor EROEI but great ROI (high energy but low labour inputs) or vice versa. For that reason, among others, ROI rather than EROEI will continue to be the key factor in deciding on energy projects for the forseeable future.

As an aside, it might be more useful to look at exergy rather than simply raw energy. Spending 3btu of coal to get 1btu of electricity is widely seen as a good trade, but spending 3btu of electricity to get 1btu of coal would be terrible. Some measure of energy quality needs to be taken into account.

And the winners will (probably?) be the early adapters who are also early adopters

By "adapter" I mean psychologically adapting to the likely reality that BAU is doomed and who also quickly adopt necessary appropriate technology. The adapter could be a community but is more likely to an individual/family.

My guess is that these people will not even care if the EROEI is negative so long as the technology fulfills a necessary need. Consider Richard Rainwater: Does anyone believe he wouldn't install, say a PV system, just because it had a negative EROEI? I know I sure didn't care when I put in my PV system. I needed a reliable electric power supply both for domestic water and to keep the freezers going if the grid went down (which it does frequently in winter).

And, now, we're into the Ayn Randian trap of Atlas Shrugged. Should people forgo taking action because it may eventually harm other people or society or because not everyone can take similar action?

Should governments ban the production of energy producing items that do not meet a certain positive EROEI? But then what about the products that consume energy and are inherently EROEI negative?

Todd

Edit spelling

A little metal and a little glass, ...probably less than a couple of skyscrapers in one corner of Dubai.. 1900 horsepower per acre...

http://www.nevadasolarone.net/newsroom/gallery

Anyone want to do an EROEI count? :=)

RC

Here's something that is equally as important as EROEI in certain circumstances.
A few weeks back I raised a concept which we could call EROHI- energy return on human input. The point is that supposing (as wacko example for sake of argument) one could extract lots of energy by shelling peanuts and then sorting the rough shells from the smooth ones by hand. Or some other means that involves not a huge amount of energy input but a huge amount of human effort.

Certainly, different energy productions have widely differing EROHI. Travelling to some remote area and then carrying out extensive searching tech is a lot more human effort than just sinking a primitive wellpipe in a Texas backyard.

ERORI has a crucial importance in that once it reaches unity the production is pointless.
Yet I suggest that there could also come a time when human effort is at a premium and cannot afford to be wasted on daunting efforts to extract fuel even at passable ERORI.

Also I think the terminology/concept of EROEI is most unfortunate, as indicated by so many people confused into imagining negative EROEI. A better concept would be energy gain on energy invested -- EGOEI. This is a more natural concept of what you get for your investment.

The point at which the job becomes worthless is when the EGOEI becomes zero. Sufficiently stupid technologies would of course give negative EGOEIs, indeed probably already do, some biofuel for instance.

I strongly recommend that people dump the EROEI asap and start using the more natural less confusing EGOEI instead. But they won't because people insist on sticking in the mud!!!!

this was a great post Veron, thx.
And yes, I see the understanding of EROEI being the most important issue concerning the prospects for future energies, e.g renewables. The crust/soil will be robbed for fossil/uranium at a maximum pace, and there is nothing we can do about that, with climate or without climate challenges.

I wonder if any of the prez. candidates have any clues ,whatsoever, as to what this is all about.
McBrain has no clue, that's a no-brainer ..... but what about Obama Bi(nla)den ? /snark