Welcome to The Oil Drum: EROI

We welcome all readers to the newest TOD sub-domain: "The Oil Drum: EROI" – or Energy Return on Investment. This sub-domain will be administered by Professor Charles Hall and his Ph.D. Student, David Murphy (EROI Guy) as well as by many of the other editors and contributors from TOD that write about net energy analysis and biophysical economic concepts.

We have at our school (SUNY – College of Environmental Science and Forestry) an “EROI Institute” (web site is operational, but still undergoing development) which is basically three offices, two relatively large, and a bunch of books and computers. There are roughly 8 graduate students at any one time and usually about half a dozen undergraduates hanging around. We all work on sweating out various analyses related to energy. We have only quite minimal funding and work on a shoestring although many students are supported by NSF fellowships, teaching assistantships or funding that we do have for tropical research. So with that introduction, let us turn our attention briefly to describing why we think EROI is important.

Net energy is sometimes called energy surplus, energy balance, or, as we prefer, energy return on investment (Hall 1972, Hall and Cleveland 1981, Cleveland et al. 1984, Cleveland and Kaufmann 1986). Its advocates, including us, believe that net energy analysis offers a very useful approach for looking at the advantages and disadvantages of a given fuel and offers the possibility of looking into the future in a way that markets seem unable to do. Its advocates also believe that in time real market prices must approximately reflect comprehensive EROIs, at least if corrections for quality are made and subsidies removed. Thus can we make market decisions based on biophysical, rather than market, economic analysis? At a minimum we believe that biophysical analysis can add a great deal of insight to traditional market analysis.

The current literature on net energy analysis, such as it is, tends to be mostly about whether a given project is or is not a net surplus, that is whether there is a gain or a loss in energy from, for example, making ethanol from corn (see June 23, 2006 issue of Science Magazine for a fairly thorough discussion of this issue). The general criteria used by much of the current debate is focused on the “energy break-even” issue, that is whether the energy returned as fuel is greater than the energy invested in growing or otherwise obtaining it. The general argument goes like this: if the energy returned is greater than the energy invested then the fuel or project “should be done”, and if not then it should not be done. Obviously this issue is clearest when one might be discussing whether the fuel requires more energy for its production than is delivered in the product, but we believe that EROI can be extended even further.

The applications of EROI are many-fold, and hopefully through TOD: EROI we will see how it is applied to many different aspects of the energy/economic world. So with that brief introduction to us and the importance of EROI, we ask that you please stay tuned for our next post, which deals with the interrelation of EROI, Peak Oil, and the concept of “best first”.

Cleveland, Cutler J., et al. "Energy and the U.S. Economy: A Biophysical Perspective." Science 225.4665 (1984): 890.

Hall, C. A. S., and C. J. Cleveland. "Petroleum Drilling and Production in the United States: Yield Per Effort and Net Energy Analysis." Science 211.4482 (1981): 576-9.

Hall, C. A. S., R. Kaufmann, and C. J. Cleveland. Energy and Resource Quality: The Ecology of the Economic Process. New York: John Wiley and Sons, Inc, 1986.

Hall, C. A. S. "Migration and Metabolism in a Temperature Stream Ecosystem." Ecology 53.4 (1972): 585-604.

Welcome David (and Charlie)!

I agree net energy analysis and biophysical economics are key anchors in approaching the problems we face. However, as I've written elsewhere (AMBIO, Mar 2008), I think EROI functions more like a 'blunt instrument' as opposed to something with laser-like precision. In an upcoming paper titled "The Limitations of EROI for Energy Policy", my co-authors and I point out 5 shortcomings of EROI (but also discuss how important the concept of (declining) energy surplus is for civilization):

1)The EROI definition can be misleading in situations when chaining is involved. E.g. Brazilian ethanol double counts the bagasse and therefore overestimates true EROI

2)EROI does not account for non-energy limiting inputs (water, soil, GHGs, etc.)

3)There is a major difference between fixed and marginal EROI - one that is right now of critical importance. If EROI for global oil is 16:1 (ish), but most of this is due to the bootstrapping of former built capital, then what we really care about is EROI of NEW oil (which in aggregate I would estimate is approaching energy break even - same goes for North American natural gas). So the timing of the energy inputs/outputs is also important.

4) EROI doesn't account for quality. (e.g. liquid fuels vs electricity vs animate coverters like horses)

5) EROI doesn't inherently account for scale. (E.g. potatoes have 30:1 EROI but we can't run society on potatoes). EROI x Flow Rate = Power ==> which is what we really are trying to measure.

The list of why biophysical perspective is essential is however, much longer than those exceptions above -one hopes that our new Secretary of Energy and other energy policymakers understand this. I look forward to yours and Charlies help in sussing out these and other issues on TOD:EROI.
I'm sure you would agree one of the most relevant questions is what is societies aggregate quality adjusted energy gain, and how much room does that leave us?

**P.s. I'm very glad EROI Guy is on board as now I will no longer have to edit tables and graphs in biophysical related posts...;-)

Nate that was just about the best comment I have read.
Well said and succinct.
Your knowledge on the subject is probably second to none.

I try to break EROEI down to the basic human level because that is easiest for me to come to grips with. IE What energy is a person required to expend to provide the basics of food, clothing, shelter and security, for him/herself and children.

Surplus energy then provides better quality basics and an ability to indulge in entertainment which of course includes self actualizing and the arts.

IMO our insatiable need for pleasure is the root cause of our energy waste.
Paying someone to mow the lawn, iron our clothes, clean the windows, wash the car, cook our meals and entertain us is the direct result of having energy to waste.

We see the waste in gigantic theme parks, pleasure ships and sporting venues to just name some.
As the energy return on investment declines we will see expenditure on entertainment and fine "things" decline. We will see a gradual return to ensuring our needs for the basics are met.

Things are still relative though. If we were to ask an average Zimbabwean or New Yorker to name their basic needs and calculate the energy needed to provide them, the difference would probably be obscene.

Our "leisure" time is going to decrease substantially as the economy contracts and as I have iterated previously, our biggest asset will be our ability to work hard and long and not be selective. The competition for jobs and work will increase monthly, along with a reevaluation of our expectations of what "quality" and entertainment actually means.


I am trying to understand here. If EROI for some New Oil is approaching energy break-even then how can you make money on its extraction other than with rising prices.

We are having problems with the image upload function here tonight. SuperG is on it.
I was going to point you out to this recent graph showing FUD costs for most of the world well above current prices. IOW, at these prices, you can't make money on new oil finds (in aggregate - clearly there is some new oil that is still very cheap)

Of course, if the rest of the economy were still functioning (which if the case of near term energy break even for oil is true would not be the case), you COULD still make money extracting sub-unity EROI oil if the energy inputs were of lower quality/lower price than the energy output (oil).

6) EROI has political elements. One example: in strip mining, how do you categorize tasks such as putting overburden back into the hole, compacting dirt, landscaping etc.? The energy inputs needed for such processes are not a physical requirement of mining the coal and harvesting its energy. They're a political requirement. They aren't strictly *necessary*, except within the context of certain political arrangements.
This is just one example of a broad phenomenon. It comes into high relief when you look at EROEI from a perspective of strict necessity. All kinds of interesting questions arise. Do the office staff of a drilling company actually *need* to drive to the office to produce the oil? Is the energy spent filing tax returns actually necessary to produce the oil? etc. etc. You really need to get a handle on the concept of "necessary". Otherwise, you're doing poli sci., not physics.

I agree with this. There is also the problem of social tastes impacting EROI (which is also a non-physical impact). For example, if we were all vegetarians, the EROI of corn ethanol would drop meaningfully towards 1:1, because the 'co-product credit' for the Dried Distiller Grains fed to cattle (intead of soybean meal or something else) would go away. No demand for meat, lower EROI for ethanol - there are numerous similar examples.

But again, the ultimate message of net energy is to determine what it is we have to spend. It should be clear (by Iceland and other places), that denominating things solely in dollars is a fools game. Energy is what we have to spend. Money is just who has the energy, for now.

"EROI of NEW oil (which in aggregate I would estimate is approaching energy break even - same goes for North American natural gas)"

This strikes me as a rather crucial comment. On what is your estimate based?

We in the PO community often point out that peak oil does not mean the oil is gone, but this statement would imply that net energy from new oil (or even from NG in No. Am.) is in fact gone.

I wonder on the terminology side of things if we should use "net energy" as an overarching term that could include issues of energy extraction as well as energy saved through insulation and other improved use? Then we could save EROI/EROEI (I prefer the latter in spite of its clumsiness) purely for production.

I do think it is important to be able to be clear when one is strictly talking about production. But it is even more important that we start trying to be clear about various means of energy conservation, starting with the most essential areas like insulation of houses (especially essential where I live in the frigid north).

Great idea to have a section devoted to these critical issues.

Yes, there are accounting problems in measuring EROEI. Even accounting as it is used today in business and finance is imprecise, but we still rely heavily upon it to see how well we did and to make decisions about the future. Problems in quantifying an underlying concept do not mean that we should abandon the concept, and certainly the concept exist as a law of nature whether we ignore it or do the best we can to make measurements.

Of course EROEI is useful in choosing where we should use precious resources that we currently posses; it just makes sense to look for a higher return, all things considered.

Equally useful is measuring the change in EROEI over time. The observed deterioration of EROEI for oil production is certainly useful information in estimating the future. Indeed, the deterioration of EROEI seems to be a fundamental principle of resource exploitation, a fact that we should well note.

The following is the response by Charlie Hall to Nate's first comment under this post.


Although I take issue with some of your criticisms because there is nothing in what we have said about EROI that precludes the issues you raise, I think it very good to have open criticism and discussion of any science.

I have no argument that EROI is a blunt instrument, at least until we get far better data and probably after that too since there are many e.g. social or environmental issues that should not be merged into ANY analysis, EROI, economic or whatever. We have said this for at least 40 years. But the differences among the choices are often so large that you can derive broad conclusions from straight forward EROI analyses anyway. One of our main and most consistent requests is to get better data routinely.

1) Why is double counting any more or less a problem with EROI as anything else? We have never advocated analyses that double count, and to our knowledge (with the exception of certain issues such as whether to include labor, where we discuss it explicitly) I believe that we do not do that ever. If someone else does that it is not the fault of EROI, but the investigator.

2) Our papers on EROI have indicated that it is for energy only, but that there are ways that you might include other resources less directly connected to energy via e.g. emergy analysis, which we have stated we like but have difficulty with some details. Certainly EROI analysis does not preclude listing other issues not in energy terms, as is obvious from our TOD posts last spring. If you get the same results with e.g. EROI and soil erosion analyses, as with corn-based ethanol, then there is no conflict. If the answers contradict one another then you have a problem that might be best left to the political process, as with any other analysis.

3) I think you make a good case for doing EROI for both average and marginal conditions! This, as some respondees indicate, has nothing to do with whether EROI is good or bad and in fact enhances its utility.

4) We most certainly deal explicitly with quality in essentially all of our publications on EROI. In fact we have emphasized it, as in the title of our 1986 book: Energy and resource quality: the ecology of the economic process".

5) Our best summary of EROI (in our opinion), the balloon graph , EXPLICITLY deals with scale.
THat is what the y axis is about and is half the reason for the graph.
Hence I do not believe that ANY of these is an exception although, as stated I always welcome criticism and the back and forth dialogue as we refine our science.

Finally a note on the many comments:

I still like the term EROI for reasons given on TOD earlier, but the reader is welcome to use what he or she wishes as long as it is defined explicitly in the first paragraph. Perhaps we could reach a concensus by all of us saying "The kind of net energy analysis that we prefer is EROI (or EROEI or ERoEI) which is defined as give formula, followed by boundaries or whatever".


A minor quibble...again!

I think that the folks posting on TOD are trying to speak to the more general public. The use of the abbreviation "EROI" would seem to be a source of confusion in our world dominated with disussions of finance and economics, since "ROI" refers to investment of $$$$, not energy. Please, won't you guys use "EROEI" to be crystal clear to the readers who might not already know what the hell you are writing about???

E. Swanson, MsME

It's not a minor quibble.

The use of the inherently-confusing acronym EROI is quite unfortunate. Why are we reluctant to take even a minor logical step away from an arbitrary academic convention?

This has been discussed at some length in the past by me and by others. I won't beat it to death here, as there is no logic to using EROI. But since Black Dog brings it up, I'll agree.

I appreciate the motivation of the posters and wish them well, but as a longterm activist and strategist it's painful to see so little apparent forethought paid to the subject's accessibility by the target audience. Feel free to search my past comments on this if you forget the arguments.

"Return on Investment" is a financial consideration, and that's how it will be perceived by default every single time by every single new person who is introduced to it.

Like Boof below, I too am starting to use net energy profit because I can say "it's like net profit is to money; if the energy profit gets too low, in some cases it isn't worth taking the energy out of the ground. Right now that's the case for shale and it could possibly always be that way."

And when I do use the full term I definitely include the extra "energy" as in "energy return on energy invested" to make sure people don't start including money in their thinking except to distinguish why money doesn't play a role in this concept.

As for accessibility, I agree that EROI or EROEI aren't very good -- acronyms should be avoided for general audiences.

But TOD seems to have always been wonkish and not afraid of equations and acronyms. So I suppose it comes down to who the audience of these articles is and that's for the people behind TOD to decide. My guess is that the first articles are going to be pretty involved.

I'm tending to the term 'net energy' because if you mention EROEI people think you are a wanker.

A salient comment by Boof, and in fact I personally use "net energy" as a conversational term for the same reasons; TOD:Net Energy would probably be a lot more intuitively accepted by new TOD readers.

Certainly here on TOD acronyms shouldn't be a problem per se among the cognoscenti. I know what the post is about. But it's rather the point that people who DON'T currently understand it not be hindered by unnecessarily poor terminology.

I'd say that the most important messages to get across here are that there are absolute thresholds beyond which energy carriers and mineral resources are not available even if they physically exist; and that the ER/EI ratio may be the one of the best quantitative determinants of the level of complexity which human societies can maintain. The words "invested" and "investment" should probably not be used at all due to the fiscal default connotation...

allright, that's it, I'm off to bed. g'nite gang.

Or maybe just TOD:Net

Nah, that sounds fishy as well as fiscal.

When it comes down to it, EROEI vs EROI is an add homonym argument. ER/EI would be a lot better, but it doesn't roll off the tongue well. "net energy" is probably the best compromise.

Other alternates might include words not currently in use, so one would be obliged to refer to the definition. Off the top of my head, I might suggest

monkey mischief factor
hagens (where a 5 hagen source corresponds to a 5/1 EROEI)

None of these are perfect, but none are as inherently confusing as is EROI. Just saying.

It IS a minor quibble.

I am fine with EROI. The first E is enough to get the concept across. The second E makes the acronym clumsy to say it out loud whether one uses just the acronym or say it in long form. Of course I am one of those participants that can be classified as in the "general public". I was pleased to see the acronym shortened and got its meaning right away.

"The first E is enough to get the concept across."

I disagree. The general public will and does interpret this as "How much energy can be extracted for how many dollars?" So the problem to them is one of financial investment: more money = more energy. This is of course dead wrong. There's a cartoon (probably many) that shows a man who looks like the rich guy from Monopoly running down the street with a hungry lion chasing him. He is hurling money behind him, wondering why it doesn't seem to be diminishing the lion's intent to eat him...

That said, I think "Net Energy" as suggested by others is the most broadly understandable to newcomers, but if we're using acronyms, we need the second E. EROEI.

Yes, the first E isn't nearly enough to get the concept across. Not only do I include the second E, I go out of my way to emphasize it as in "energy return on energy invested. This has nothing to do with money."

If we get people pointed in the right direction from the beginning, it's less work later. And in a group of 100 people, I promise that even with this emphasis some small minority will still think it has to do with money by the end of the discussion. At least it will be a smaller number than without the emphasis on "energy invested."

I've found speaking to the public that every opportunity should be taken to be precise and specific with language (thus, replace pronouns with nouns as often as possible, etc.); the conversation moves along better that way.

That said, I think "Net Energy" as suggested by others is the most broadly understandable to newcomers, but if we're using acronyms, we need the second E. EROEI.

That's the view I advocate.

I agree that if we're talking about Net Energy, then EROEI would be a much better acronym. I also agree that not using acronyms is better than that.

However, both of Nate's comments above, his first post and the comment in this thread, as well as other's comments should be reminders that the real issue is not EROEI, but rather EROI where I is not defined strictly financially. The Investment must include natural resources (Tar Sands -> water, land) as well as political imbalances (Nigeria -> MEND) in the overall costs. These will be hard to factor in, but I think it is obvious that we have to start trying.

The problem with this approach is that calculating these costs necessitates agree upon some moral standards. What JD points out elsewhere as a political costs is really a moral one. One needs a moral framework not based on any one religion that is difficult for anyone to disagree with.

Possible sources could be the Preamble to the UN Charter:

* to save succeeding generations from the scourge of war, which twice in our lifetime has brought untold sorrow to mankind, and
* to reaffirm faith in fundamental human rights, in the dignity and worth of the human person, in the equal rights of men and women and of nations large and small, and
* to establish conditions under which justice and respect for the obligations arising from treaties and other sources of international law can be maintained, and
* to promote social progress and better standards of life in larger freedom,

or the similar UUA Principles:

* The inherent worth and dignity of every person;
* Justice, equity and compassion in human relations;
* Acceptance of one another and encouragement to spiritual growth in our congregations;
* A free and responsible search for truth and meaning;
* The right of conscience and the use of the democratic process within our congregations and in society at large;
* The goal of world community with peace, liberty, and justice for all;
* Respect for the interdependent web of all existence of which we are a part.

Those were off the top of my head, there are probably other good examples that others may bring forward. I think the weakest part of each of these examples deals with the future consequences. That is valuing the rights of the future people and natural state as highly as the present. It is present, but not explicit and something stronger like the Seventh Generation Sustainability principle.

Morality has a tendency to bog down discussions, so I wouldn't let a lack of agreement get in the way of getting the ball rolling. It will be necessary to get it somewhat resolved at some point, though, so it might pay to begin starting such discussions now. It may turn out that some principles are too difficult to factor in while others are easy.

Wow, that went off much further than I expected. That's the nature of a forum. :)

My apologies if the definition has been broadened; I'm not following all the threads today as closely as I normally try to before writing.

What is the EROEI (I agree with Mr. Swanson) of Energy Efficient Investments ? How do you calculate this ?

Sample case: Switzerland is spending about a dozen billion Swiss francs on three tunnels (58, 20 & 10 km from memory) to create a flat, straight double track rail line from Zurich to Milan (underneath the Alps).

Perhaps 10 MW for each tunnel boring machine (5 working at once on the 58 km tunnel) for almost a decade, plus rock transfer, concrete, etc. etc.

That is the energy cost.

The energy saved is transferring many million tonnes of freight from trucks laboring over the Alps (in low gear) and passengers that would likely have otherwise flown to flat, straight electrified rail (much in tunnel, with increased aerodynamic friction). Perhaps 20 BTUs of diesel & aviation fuel will be traded for 1 BTU of hydroelectricity.

That is the energy "return"

The track and related infrastructure in tunnel is designed to last 100 years, and the tunnel bore should remain in service "indefinitely" (say 2,000 years or until the end of civilization, whichever comes first).

That is the payback period.

What is the EROEI ?

Best Hopes for expanding EROEI concepts,


EROI is the efficiency of procuring energy, (though using that term confuses things for many people). EROI times scale is how much energy we have to use. When we cross over to the consumption side (e.g. building tunnels), you are then talking about the efficiency of using energy, not procuring it.

An erg saved is an erg earned (apologies to B. Franklin).

I think limiting EROEI to just energy produced is wrong and limiting.

Should the USA invest in Coal to Liquids plants, Canadian tar sands and shale oil (see Hirsch Report) and ultradeep water drilling or in electrifying our railroads, insulating our homes, solar hot water heaters (do they produce energy ?), wind turbines, etc. ?

Narrowly defined EROEI can be used to compare wind turbines to CTL plants, but NOT Urban Rail to ultradeep water drilling.

Expanded EROEI could be used for evaluating much broader alternatives, and a wider concept EROEI is badly needed IMO !

That is my challenge !


PS: I know it is not easy, but it is needed !

No, it's not. They are two important but distinct questions (how much energy we have and how we use it).

As you know, I believe we do need to determine what and how we USE energy, before we invest in energy infrastructure - otherwise we'll just turn it into garbage.

But to be clear, the first law tells us there is no new energy creation. Second law says there is always a loss. We have energy to spend, not money. In order to have future energy to spend, we have to invest our current energy into energy infrastructure, which has a return, denominated in energy terms. What the payoff is defines our societal 'budget'. There are many situations I could imagine where 'tunnels' would be a great investment, but our 'budget' wouldn't allow them.

What you are taking about is using energy wisely and I agree that this is important - but an accounting of EROI X Scale comes before this. Horse before cart, etc. How could we ever compare apples to apples if we compared tar sands to tunnels (energy harvesting vs energy spending)?

So if you are "spending" energy to decrease energy usage (for example putting in insulation) and this is not ERO(E)I, then what is it called? You are increasing the net energy available to society, so it seems like a valuable thing to measure.

How could we ever compare apples to apples if we compared tar sands to tunnels (energy harvesting vs energy spending)?

I agree strongly with Alan and consumer. Tar sands should be compared to tunnels, and LNG should be compared with insulation, right from the beginning, not after an in-depth EROEI wonkathon which focuses strictly on the supply side, and is likely to never end.

There is no real difference between investing energy to harvest energy, vs. investing energy to save energy.

I would argue that you are the one putting the cart before the horse. There is nothing more important than increasing efficiency, and reducing energy demand. That is the very core of smoothly solving the peak oil issue. Identifying the best sources of energy (in terms of EROEI) should come after that. Your approach just perpetuates the obsession with the supply-side which mars the Hirsch report and peak oil thinking in general. Don't let pedanticism stand in the way of practicality.

You misunderstand. I completely agree the ultimate solution to resource depletion is reducing demand for energy. But net energy is our asset and tunnels, cars, what we spend it on etc is our liability. We have to have an accurate accounting (which is nigh impossible), before we say 'let's reduce our liabilities by 10-15% by using less and everything will be OK'.

Hydroelectric dams are a permanent (at least multi-century) asset.

Oil fields are a temporary asset.

Railroad tunnels (especially those running off of renewable electricity) are a permanent asset, NOT a liability.

I fail to see how the railroad tunnels dug by the Chinese 130+ years ago are a liability.

A fundamental error or difference of opinion between us.


The building of tunnels requires energy and has no energy payoff - therefore, from the perspective of energy, tunnels are on the liability side of the balance sheet. Once they are completed, and the resources and labor and time put into them is 'sunk cost', they become built capital.

Alan, your intentions are all well and good. EROI, as noted above, is not an answer to our problems, but when using it, lets use it for what it is for, not complicate it with the question of 'how we spend the energy once we have it'.

The building of tunnels requires energy and has no energy payoff

As long as we have a functioning economy and civilization, RR tunnels *DO* have an energy payoff ! A nice positive one :-)

Like an under development deep sea oil field, they have no energy payback until completed. That is the EI (energy invested).

Only when commerce ceases, will they not have an energy payback. But if the RRs are not running, then the oil fields are likely not pumping, wind turbines will be abandoned, etc.

Let me put it another way.

Barring a collapse of civilization (I define war as such), goods and people will travel between Italy and Germany (and from Switzerland in both directions).

There is a base load energy cost to do this. With the current infrastructure, that economic need is meet by truck and airplane. Oil is burned to do this. That is the base case.

The oil today comes from the Middle East. That oil will decline, and either others sources of oil will be developed OR alternative infrastructure will be developed.

One or the other, because the goods and people will flow (at some volume, barring collapse). Another tar sands plant will be developed in Canada OR tunnels will be bored. That is the practical, real world choice.


"Tunnels vs. Tar sands" does need to be measured and compared.

Do we invest in another 200,000 b/day tar sands project to power trucks over the Swiss Alps or do we invest in three tunnels (58, 20 & 10 km long) powered by hydroelectricity ?

That is very close to the real world choice. And it is a more important choice than where we get diesel from.

Deciding between tar sands, bio-diesel, Orinoco asphalt, CTL or CO2 injection as the "best" source of "new" diesel production is a nearly trivial question in comparison.

Best Hopes for Expanding the Concept of EROEI,


How could we ever compare apples to apples if we compared tar sands to tunnels (energy harvesting vs energy spending)?

Energy Saved (annual savings x expected lifetime, should a discount be applied for excessively long lived infrastructure ? #) divided by energy invested.

Each element of that equation is subject to analysis. Annual savings for additional residential insulation depend upon the interior temperature selected for example.

And the savings from the Swiss rail tunnels depend upon the future volume of freight and passengers using that route.


# I participated in an energy project with an EROEI > 1,000, the Karahnjukar hydroelectric dam in Iceland. A constant 540 MW for 400 years.

Should a discount be applied to EROEI for some of those 400 years ?

Here are my 2 cents on a sticky issue. I agree with you Nate, but not yet. I will agree with you completely once most energy is produced from renewable sources. The reason for this is that today we produce an enormous amount of energy, but because it's source is not renewable it's like energy won in a lottery, and we should decide how we're going to spend (invest) it. Suppose your salary barely covers food expenses, suddenly you win the lottery and you have enough to cover expenses for 10 years, how do you spend the extra cash (assuming interest rates are 0)? You can squander it, stick it in a savings account for a rainy day, invest it in getting a better job (in education for example), or invest it in infrastructure (for example an earthship, see http://www.earthship.net) which would raise your quality of life with out money. The third choice is like investing in energy production, the fourth like investing in infrastructure to increase exergy.

Because we produce so much energy now, we can accomplish projects that will be impossible in 100 years. It is quite possible that spending this bonus fossil fuel based energy on infrastructure (such as tunnels) will do more for the quality of life of future generations than investment in energy production.

They way you explain it, I agree. But my point is that EROI comes from ecology - optimal foraging theory. Once a trout, or a lion has evolved to its modern physical structure, the demand side is pretty much streamlined, so the differetial comes on the supply side. In humans we have culture, so we CAN change how we consume in addition to quantifying how much we have to consume...EROI is important. So is demand side retooling. But until we are at advanced stage of discussion, to mix the two will be a mistake, because we are very likely to way overspend our budget - already are and natural decline is going to eat into our margin considerably in next 5 years. (without new investment)

I think people are talking past each other here.

Correct me if I'm wrong, but EROEI gets to the question, "How much energy do we really have?" Alan's question is, "How much more can we squeeze out with efficiencies (of whatever sort)?"

If this is accurate, the other variable is time. When Nate says we have to do EROEI first, I don't think that prevents concurrent calculations of other kinds of ROEI. That is, these things are mutually exclusive in calculation, but not in application.

Am I missing something?


I'm not sure how you actually do the accounting here, or where you stop counting energy costs. Do you account for the energy cost of producing the railroad that hauls the coal to the power plant or the energy cost of power transmission infrastructure?

I really find these EROI arguments often useless distractions. Strait ROI is what defines competitiveness. Why is there such an obsession with energy return here?

I join the list of above posters on the string who absolutely think Alan's point concerning energy invested now to reduce consumption must have a place in any real calculation of how we invest (or should invest) resources.

The calculations could become very complex however. Let us take a large screen TV set or "home theatre" system. If the system causes me to stay home in the evenings and enjoy downloaded or recorded entertainment rather than go out, can we attribute energy savings to the system? If so, how many times would I have to stay home instead of going out before the energy saved would match the energy invested in buliding and installing the system? That of course would be impacted by how far I drove to go to a theatre movie or sporting event and even by what type of vehicle I drove (if it were a plug hybrid for instance the energy consumed in travel could be very small indeed). And what of the energy consumed in producing the movie I am watching at home (or at the theatre I drove to)? Doesn't that have to be factored in somehow?

This has always been the problem with EROI (and I prefer EROEI as much more accurate) in that you get into a problem of "infinite regression". At some point the equation could be impacted by how many children the worker who works at the factory has (if he has more, then he must be payed more on average to feed them, so he purchases more energy based food, therefore the energy imput attributed to the product he manufactures rises, etc, etc)

It is too often assumed the public is simply too ignorant to be able to understand the concept of EROI. I think the problem is the opposite: They understand it after some brief study, but also see that it can become something of "how many angels can dance on the head of a pin" type argument that can be used to create statistics attacking or supporting about anything. Look at the confusion involving ethanol, and that should have been one of the easiest calculations to make!

Back to Alan's discussion of the tunnels: We can take the third way out and say that if there were no train carried commerce and no one driving then the tunnels would not be needed anyway...so all we have to do is "de-evolve" back to a culture that only walks or uses horse or ox to move move only a very tiny amount of goods and people (aka world circa. 1200AD.) Some folks may dream of such a world, but it would be fought to the death by many others.

The concept of EROI is useful in it's place (it was revolutionary in my concept of energy when I first read it), but we should be upfront that it's place is very limited.


I tried to collect some figures regarding the total energy invested in this large project (http://www.alptransit.ch/pages/e/index.php) and what its future energy savings will/could be. Not easy, though, it will take me some more time (and that's what makes the application of the EROEI concept so clumsy - I will try it via an LCA)... rw

probably interesting: it will take almost half a century, from the first ideas to its inauguration, and it will cost approx. 20 billion Swiss francs. Financing was and still is a major issue and the Swiss had to vote several times on very complex and innovative financing mechanisms e.g. tax Diesel powered trucks to finance the entire project. It's also interesting that it took just a few weeks and no votes at all to bail out the largest Swiss bank UBS with more than 60 billion Swiss francs.

Hail and welcome to the most vital of all possible "sub-domains". I concur with the call to use EROEI. And further suggest that money or dollars never be introduced in these discussions. They are irrelevant. If a process consumes more energy than it produces, it is a sink and not a source. Period. Dollars make no difference and money does not matter.

Regarding AFBE's projects, it seems to me that EROEI is a tool of the supply side - how we extract or 'produce' energy. When we are talking about efficiency improvements in how we consume energy, that is on the demand side, and speaking of EROEI there confuses things unnecessarily.

I'm tending to the term 'net energy' because if you mention EROEI people think you are a wanker.

I think the big challenge in energy analysis will be where to draw the dotted line in time or space. The tough cases seem to involve natural gas;

- combined fuelburn and 'free' energy
the main example here is wind and solar backed by NG peaking plant. At what point is the backup requirement excessive? Do you discount for future fuel or replacement construction prices?

- mega sunk costs
my gut feeling is that people will prefer CNG retrofits over new PHEVs when oil marches back to $200. They will also want to continue gas heating and cooking not pricey electric. There are just too many billions already spent both on late model ICE cars and the NG reticulation network and appliances. This point is conveniently ignored by enthusiasts for wholesale change.

The challenge will be to present simplified analyses that make convincing conclusions. I think graphs of net energy time paths (say over a decade) will be the best way of presenting such analyses, not E..whatever-it-is.

I think the concept EROEI, also contains potential for misunderstandings. We will likley find some cases where despite EROEI of less than one, the value of the product (in the form of energy) exceeds the value of the inputs. An example would be using stranded wind/solar to lift low EROEI oil. If the cost of the wind/solar was cheap enough, and the oil valuable enough, then such an operation would make sense. So while EROEI is a very useful concept, it can be misused.

We will likley find some cases where despite EROEI of less than one, the value of the product (in the form of energy) exceeds the value of the inputs. An example would be using stranded wind/solar to lift low EROEI oil. If the cost of the wind/solar was cheap enough, and the oil valuable enough, then such an operation would make sense.

Hey Enemy of State,

My first question/clarification for you is: "What is stranded Wind/solar?"

I'm assuming you mean that it's a windmill generator or solar panel that is generating electricity that is not being used, and will thus be wasted. If this is the case then EROI or EROEI (Whatever we're calling it) probably wasn't evaluated properly to begin with. We're looking at an energy leak and using the wind/solar electricity to extract oil that has less energy value is merely a way to lessen the loss of energy that would otherwise be wasted. I agree that we can't let windmills and solar panels just sit out there and generate electricity without somehow harnessing it. And if the only available means is to sub-optimize and extract low energy oil then so be it. But a solid evaluation of EROI before these "stranded" wind/solar facilities are built should prevent the situation in the first place, Yes?

Please correct me if I'm not seeing something.


The way I read that was wind or solar put in an area for the purpose of oil extraction, when there wasn't another good use around. Like a windmill on top of an offshore rig, or a CSP array in the desert to power a drilling operation.

Oh I see how you're looking at it... I think...

Do you mean a PV or Wind generator that was initially used to pump high energy oil and over time the ERoEI of that system became less than one, but since it's still in place, why not?

Sounds very similar to the principle of the slippery slope where you go from trying to maximize your benefit to minimize your losses. I suppose that you'd have to look further into the setup and find out how long you expect it to take until the ERoEI approached 1 or less than one. So just because you've got a net energy gain on the first 1000 barrels of oil doesn't justify building a Windmill if this oil is extracted in 3 days and then the windmill spends it's remaining time minimizing it's losses.


A pretty good reading of what I meant. I'm thinking that in the waning years of the oil age, that oil will sell at a substantial premium to it's raw energy content. Using my fossil fuel derived energy to produce it, even at low EROEI may make perfect sense economically. Also, if we do succeed in producing a significant fraction of primary energy via time varying sources, such as wind and solar, there willbe periods where the energy supply is in surplus, either because the overall system is fully supplied, or because limited transmission capabilities mean there is a local surplus. In that case producing low EROEI oil, is similar to storing the energy for later use.

And there are some potential technologies, that might be highly variable, but cheap. CoolEarthSolar was claiming $.17 per peak watt, it could well make sense to build "stranded" capacity for intermittient local industrial usage.

enemy of state,

You are on to something that is very hard to model mathematically but I agree is of great importance, that being the use of renewable resources that are essentially stranded by the time factor. In the middle of the night most of the year around for example, electric power consumption is low. The windmill is needed to assist at periods of peak consumption, i.e., hot summer when air conditioning is running, cold winter when heat pumps are running, in the middle of the day to late afternoon. There would be some sizable gaps in consumption of electic power. At times like this, the windmill could provide power for low EROEI production of other types of energy. You mention low EROEI oil. Another possibility (and I know it is almost forbidden to talk about it on TOD) would be hydrogen production during low consumption periods to be used for other purposes, most probably for chemical uses or to be combined with captured carbon for methanol for transportation.

Again, the scale of this and attempting to model the imput/output scenarios are very hard now since we have no real models to work with yet (it can be done mathematically on a computer and I would love to see something the scale of Boone Pickens "wind corridor" project modeled to see how much excess hydrogen could be produced with the finished product in many cases within easy reach of the Mississippi River system barge network). Solar by way of large concentrating mirror systems in the southwest deserts could likewise provide some interesting "off peak" possibilities, plus some very high excess heat to be used in industrial applications.

The greatest refutation of EROEI as a major problem is still this illustration:

Humans on earth now possess enough knowledge. The whole EROEI issue is an engineering problem. Do I believe the energy is available to support every living thing on earth in relative comfort if we choose to use it? Yes. Do I believe that it is possible that mankind may simply be too ignorant to take advantage of it and that we may allow ourselves to wander into horrible catastrophe and suffering? Having seen what has happened over the last year, yes, I am afraid I do believe that is possible. Not likely, but absolutely possible.


Thatsit, you make many good points here and in most of your posts, but the illustration you linked raises more questions than it answers. In particular, what is counted on the solar side? The entire insolation for the planet? If so, this would seem to be rather misleading, since most of this solar energy is not readily available to human use for a variety of practical reasons, even with the most optimistic views about future PV and other solar energy developments. Can we (and should we), for example, spread solar arrays across the oceans of the world?

Without some consideration of such limits, the illustration becomes nearly meaningless, as far as I can see.

That aside, I particularly like your last paragraph. But of course we are using the energy we have to do the opposite of supporting "every living thing on earth." We had already initiated a major extinction event before effects of GW started kicking in. We are now on track to wipe out more species than have ever been wiped out in the history of life (as far as we know it) in a few decades.

This brings us back to the question of energy use. Are humans wise enough to use energy in ways that won't imperil the rest of life (and ultimately ourselves). By supplying our species with large quantities of energy from whatever source, are we essentially placing a live chainsaw in the hands of a four year old?

It seems to me that the main object of thoughtful humans should be to find humane ways to limit human capabilities, not to augment them.

But we (and I include myself, much of the time) are mired in the old framework that got us into this mess. It is as though we started our house on fire by playing with matches around puddles of oil, and now we are responding by looking for more matches and more oil. We need to be our own parents, and move away from playing with power sources that are so great, we only do damage to others and to ourselves with them.


You ask "In particular, what is counted on the solar side? The entire insolation for the planet?"

This particular illustration does not state it, but other similiar illustrations I have seen are clear in stating that the amount alloted to solar is the solar energy reaching the surface of the planet after passing through the atmosphere, so it would indeed include all that is hitting the surface of the oceans and other areas that are off limits to solar development for practical reasons (i.e. the Arctic, Antarctic and high mountain ranges.

Which brings us to a few points: (a)even if you were to remove those amounts of the solar energy from the illustration, you still get a great deal more solar available to us than fossil energy available to us if the technology exists to capture it, (b) for practical reasons we have to consider the efficiency of capture because we can assume that we will never get to 100% efficiency and (c)we know we can use electric power more efficiently than we do.

So we are engaging in much conjecture based on what will be "available" and usable solar energy in any near future. Estimating that brings in economics, political will and a host of other variables which make such a "guesstimate" very difficult. All we can say is that at the theoretical level we know it is pouring down on us every day and will continue to for the foreseeable future.

On ocean solar, I think it would be silly to assume that we can cover the seas with solar panels, but I do not dismiss the possibility of extracting solar energy from the seas, by way of thermal capture in some cases and by way of tidal and wave capture in others. Matthew Simmons has expressed interest in wave capture and is currently funding some research.

The Earth itself is also a giant solar collector. Ground coupled heat pumps have already proven that energy can be captured from just below the surface and there are other low tempeture geothermal capture developments that attempt to use the shallow surface of the planet to provide what is essentially captured solar energy.

You ask,
"Are humans wise enough to use energy in ways that won't imperil the rest of life (and ultimately ourselves)." That is still an open question, but I think we have to start thinking in terms of all life on Earth and not just human life. I once heard a naturalist say that even if we are greedy, we should protect them to protect ourselves because we can assume that in a mass die off of species we humans will probably not be the last to go!

Much danger to other species is caused by things that are not directly energy related however. If we cut our energy consumption by half would people stop killing elephants for ivory? (humans have done it since before the age of industrialism, energy just helps provide a worldwide trade in it) Much landspace is gobbled up by extremely poor planning and aesthetic wants of humans that may or may not change in a low energy consumption future, it is hard to know. In the 1970's the astrophysicist Carl Sagan once said that the mark of a truly advanced civilization may be that you cannot see any of their electric lights from orbit of the planet because they would have moved most of their activity underground, thus leaving the surface open for the existance of other species.

You say "It seems to me that the main object of thoughtful humans should be to find humane ways to limit human capabilities, not to augment them."

I must say that I find little reason to believe that will happen. Humans have looked for ways to "augment capabilities" since before the stone age, and it would defy almost everything in our very constitution to attempt to reduce our capabilities. This solution would seem to imply that if we could some how "retard" ourselves things would improve.

My problem with that is both aesthetic (I am an admitted lover of technology and technical toys, sorry, that's just me) and philosophical: I have never accepted that we are in the shape we are in because our technology is advanced. I believe we are in the shape we are in because our technology is very primitive and we flatter ourselves by thinking it is advanced. After all, for the most part we still use exactly the same technology to produce power and heat that the stone age human used: We burn stuff.

But it pays to burn stuff. And until it proves advantagous to us to do it any other way we will not do it any other way.

But the only gift captured in Pandora's box (hope) stays with me. We have learned things this last century if we choose to use them and use them wisely things may go better than some might expect.

In the 1970's there was a famous TV commercial showing a grandfather out on a desert with his grandchild. The grandfather was describing trees to the grandchild because they were gone fron the planet, and both the child and grandfather were wearing oxygen masks to provide breathable air. The time frame implied was obvious if you figure the age of the grandfather and child from the 1970's...about now. I was raised in a household and a world that believed in doom and gloom. The world is actually in better shape right now than I was taught as a child it would be by now. So Happy New Year, we have another year to get closer to where we need to be! :-)


Thanks for your long, thoughtful response, RC. I still think it is not a service to present total insolation next to other sources as if they are the same thing. Even if figuring how much solar is reasonably available, that would at least be closer to a realistic ball-park figure than total insolation.

"it would defy almost everything in our very constitution to attempt to reduce our capabilities"

Perhaps, but given the catastrophic effects we are having on the entire biosphere, I would humbly suggest that it is long past time for us as a species to deeply reflect on the elements of our "very constitution" and decide which elements to foster and which to carefully bring under control.

This is basic to maturity, knowing ones limits.

If a young child thinks he can do no harm and can pursue any whim without harming himself or others, he is likely to cause much havoc--trying to drive a car, wielding a live chainsaw...

This is essentially what we are--children who have come upon energy and tech that allows us much more power than we are mature enough to safely use. Note that this position is not strictly anti-technology. Just that there is a mismatch between some of our more powerful technology and access to huge pools of energy on one hand, and our understanding of our position in the world and the limits of both.

Sorry to hear about your doomerish upbringing. But frankly, I probably should have raised my daughter with a gas mask or other filter on--then maybe she wouldn't have asthma now. Many of the cataclysms predicted in the '70s are coming true, even if the timing may be off by a few years.

Best wishes to all for the new year. We will need it IMVHO.

I am not a fan of the Pickens Plan but it is certainly true that that he has introduced much of the world to peak oil. I joined early as I knew Boone in Amarillo. The quality of the discussions is limited. There has been little discussion of EROEI. Here is an note that one of the administrators sent me:
"Pat Jack said…

Let's take the EROI for Wind out of the picture completely WPA style. Wind is a winner, we all know this, it's worth the risk to nation and to business.

With impediments completely dismantled for some period of time, the small investor will come on in a big way, and many will remain suspicious and that's a great balance.

There is very little real capital left to harness for this effort. We must put it all on one square and load the dice, and pay the piano player well.

When the wind corridor is nearly complete, (along with the grid to transmit the power), all alternative energy solutions will be considered more seriously by the business community.

Thanks for your support and efforts.

Pat Jack
Pickens Plan Ambassador"
Rare posts include:



I would argue that EROI (EROEI/Net Energy) is an attempt to quantify the "usable" energy gained from a process. That said, I do not think that the figure you reference refutes the concept of EROEI at all, in fact it could be used to support it. How much of that solar energy is "usable" anyways? How far can someone drive there car on solar energy? My point is this - it is not enough to compare Solar terawatts with oil terawatts - since they are of completely different qualities. Oil terawatts can be used in cars, factories, etc., while solar cannot. A proper EROEI analysis of the figure you references would slice up the yellow circle indicating the percentage of solar energy that can be converted into electricity and used in the same fashion as the oil to which it is being compared.

In addition to stranded wind, we are definitely about to have more 'stranded' gas. Or at least gas that previously wasn't viewed as stranded but due to financial crisis and lack of pipelines might now be so. Receding horizons.

My first question/clarification for you is: "What is stranded Wind/solar?"

Stuff that's not hooked up to The Grid.

The following comment on the April 1, 2008 string Why EROI Matters was essentially dismissed. Perhaps it is too difficult to account for this massive amount of energy. Nicholas Georgescu-Roegen emphasized the energy required to concentrate minerals in various publications including The Entropy Law and the Economic Process. He attempted to formulate a Fourth Law of Thermodynamics specific to geothermally concentrated minerals. I also had the opportunity to discuss this briefly with some of the EROI experts at ASPO-USA Sacramento. I still believe that it is relevant to long term sustainability,
"robert wilson on April 2, 2008 - 8:10am
Circa 1973 there were several articles in the business and scientific press on the hydrogen economy. One was in Scientific American titled The Hydrogen Economy. I believe that it was the January issue. If memory serves a major theme was that hydrogen could be produced using nuclear or solar energy and used for transportation. There were of course major problems which were discussed. I was more interested in a minor theme, the epithermal concentration of minerals. As I recall it was postulated that the earth was heated primarily by gravitational collapse with an additional input from radioactive sources. As the earth cooled minerals were concentrated by epithermal deposition as they precipitated under various degrees of heat and pressure. The resulting concentration of copper, silver etc. was essentially an enormous gift of low entropy. How does one account for this gift?"



robert wilson,

I have reread your post about 8 times, and am still trying to figure out where you are going!

If I understand the question (never mind the answers, the question is tough enough to deal with) my understanding is one of the options following:
(a) there are more minerals available than we currently assume?
(b) the energy in concentrating the minerals can be somehow recaptured as energy for human use?
(c) the current theories of mineral formation during the early birth of planetary formation are incorrect or incomplete?
(d) current theories of thermodynamics are incomplete?

If you had to say that I was at least 50% correct in understanding what you are getting at in one or more of the options listed above, which would you say is most likely correct?

I have good reason to be fascinated by your discussion as I am currently attempting a study of energy locked in minerals or metals that are not often considered as energy carriers. One of the most fascinating is boron:


There is also the problem of abiotic oil and gas. I am not one who believes the planet is somehow "producing" oil or gas, but the issue of how much may be locked in the Earth at very deep level is still an open question. Whether or not it could ever be found and economically extracted is a completely seperate argument from whether or not it is there and why.

Human planetary exploration has demonstrated that there are outer moons and planets which seem to be very rich in methane. Titan, the moon of Saturn is the most often given example. We assume that there was never enough fossil or biological life on Titan to create those vast amounts of methane, so they must have been created/captured during the formation of the moon in it's birthing days. If this is true then the capture of vast amounts of methane deep in the Earth during the planets birth is not impossible to accept, even if it is at far too great a depth to ever be recaptured by humankind. After all, some geologists have speculated that the biggest diamond(s) on earth may be near and at it's center, but that does us no good now, does it?

Please let me/us here on TOD in on what your line of thinking is, and at least you cannot say I dismissed what your discussing. I have been amazed the more I study at how little has actually been discovered or is known about the formation of our own planet!

Some folks act as though we know everything about what is under the surface of our planet. The truth is we have barely scratched our way through the skin of an onion, and unless we assume the planet is hollow, we will be astounded by what lies deeper if we keep exploration and research going. Whether it will do us as much good as we hope or need is an open question, but for now, we are just beginning to know how little we know.


One problem is that I have not explained it well and may be incompetent to do so. It took much energy to heat the earth and concentrate materials. I believe that there is controversy as to whether this energy came from gravitational collapse or radioactivity. The Scientific American article stressed the former but is dated. It also takes energy to recycle materials. When minerals are dissipated in energy producing technologies there is no accounting for the energy originally required to concentrate minerals. Imagine the energy required to recycle minerals from seawater. During the 70's I became interested in the Georgescu-Roegen. Jay Hanson archived the following:
I suspect that your interest in Boron relates to a different problem. I recall that it was discussed on the USENET during the 90's by Cowan and others..

Energy from gravitational collapse? That's a new one on me. I believe that the heat inside the Earth is generated from a combination of radioactivity and tidal forces.

I, somewhat jokingly, answered this in a roundabout way in a TOD thread about the meaning of life. I think the point you are making is very valid but is outside current scientific understanding and thus is hard for science people to relate to. The concentration of resources you mention was not just a gift, it was essential for life to evolve to the current complexity where it can pontificate about the gift.

Just how do gravity and thermodynamics interact? I think I have a fairly typical general scientific background and yet here I've got nothing to go on besides the obvious that lots of mass creates heat. I'd be happy for someone to point out that I've simply missed something in my education.

I'm not a physicist, but I think I have a rough idea. Thermodynamics describes how the heat is created and how it is distributed, or how it flows. I suppose it might even describe how some of that heat gets captured by molecular bonds as the heat of pressure causes substances to react chemically. I don't think thermodynamics describes the heat radiated by the body, but I'm not sure. Exactly how the heat is generated, I'm not sure, either, but think it has something to do with the interactions (the repulsion between) electrons in molecules under pressure. Electrons forced briefly into higher states of excitement will spontaneously lose energy as photons, which will get absorbed by atomic nuclei, causing them to vibrate; or the excited electrons will go free, and the ionized molecules will then bond with one another.

A recent CERA report shows a graph with the following heading, "MTI Oil Price to Justify Investment in New Products" (15% IRR, current cost level in fiscal terms). The cost levels that are given are

Saudi Arabia $21 /barrel
China $28
Libya $42
Mexico $55
UK (North Sea shallow water) $60
Brazil $61
US deep water GOM $65
Angola $71
Nigeria $78
Canadian Oil Sands - Steam Assisted Gravity Drainage with upgrader $78
Canadian Oil Sands - MIning with Upgrader $87
Venezuela heavy oil - $114

If these numbers are correct (which is admittedly a big if), the countries with the low costs per barrel for additional drilling clearly (like Saudi Arabia) have higher EROEI than the countries with higher costs per barrel.

Can anyone provide an approximate translation regarding EROEI equivalent, if these calculations are correct?


Here is my attempt. Our best guess at Global EROI for Oil is 20 (ish) : 1. Some reports that I have read but can't find now have stated Tar Sands EROI at 3:1. So from those numbers it looks like on the low end, Venezuela has something less than 3:1 and Saudi Arabia has something around 60:1 (is that possible?). That is very coarse, and maybe bad, but there it is...

The reason I am asking is because if we need an average EROEI of 5:1 to maintain our lifestyle (as has been hypothesized), then it seems to me that a price high enough to encourage projects with an EROEI of 3:1 is not going to last for long. Perhaps at some point, society will have simplified itself enough that a price high enough to encourage investments at an EROEI of 3:1 will stick. Until then, we may be looking at price reactions, every time price starts going too much above what society can tolerate on an EROEI basis.

An excellent comment... and just the sort I hope this new section of TOD will focus on.

Greenish and Gail,

I am finishing a revised version of a paper today that we [Charlie, another student, and me] are submitting for publication that is tentatively titled "The Minimum EROI for a Sustainable Society". It looks like the minimum EROI is lower than 5:1, maybe like 2:1, but we it also seems that the EROI can be compensated, in some ways, by the relative size of the resource. Anyways, once published or accepted for publication I will post on TOD - maybe in like 3 posts since it is about 20 pages single spaced.

If you look at how the US uses energy now you can see how they come up with an EROI of 9.5 (10?). EROEI=Eoutput/Einv

US:~95quads of energy = Eoutput
US residences use 20q + private transport 18q = 38q
US industry non-energy 31.5q + US commercial 17q + 8.5q non private transport=57q
US ~10 q industry energy= Einvest

EROI= 95q/10q = 9.5:1

If we just reduce residential energy by half (with efficient homes, appliances and hybrid cars) to 19q we can raise
industry energy Einvest = 29q.

EROI = 95q/29q= 3.27:1

If also we reduce commercial use efficiency by half to 8.5q, then 29q + 8.5q = 37.5q

EROEI = 95q/37.5q = 2.53:1

There's nothing final about an EROI of 5.

In August 2007, Gail and Observer1 posted a story on The Oil Drum on an insitu process for producing/upgrading Athabasca Bitumen ( url http://www.theoildrum.com/node/2907#more ). Since that posting, the pilot has had another year + of operating experience. On Dec 17, 2008, an application was filed with the Alberta authorities for a 10,000BPD commercial THAI production facility with additional technical information enabling, I believe, calculation of the process EROI. Specifically, with the CAPEX number of $15,000 per flowing barrel, I believe the energy balance info published in the application provides a basis for calculation of the overall process EROI. The application info is available at https://www3.eub.gov.ab.ca/eub/dds/iar_query/FindApplications.aspx (Application number 1600065). Their energy balance calculation on the operating facility is 90.6%.

This insitu technology, when combined with a down-hole catalytic cracking technology (CAPRI) currently being piloted, produces an upgraded bitumen, a quasi-syncrude, in the reservoir at dramatically lower costs and environmental impacts than current technologies. I believe this is of significance because, with depletion, I believe we, in North America, need an economic, environmentally responsive oil production technology that enables us bridge to the GAP to renewable forms of energy and that is going to take an unknown period of time. THAI may provide that bridge.

With the Energy balance data and life expectancy of the facility, we should be able to establish a reasonably accurate EROI number. I've visited http://www.eroiinstitute.org looking for more technical info on EROI calculations. Is there a contact at SUNY I could work with to complete this calculation?


Yes, there is someone to contact -- me. Dr. Charles Hall and I are the leaders in EROI research at our College and are quite interested in all applications. Could you put together a more formal project proposal [short but with defined objectives] and email it to me - theoildrumeroi at gmail dot com?

Given the GHG gases/barrel from THAI, we can only hope for commercial failure of this technology.

Best Hopes for Less tar Sands,


Good grief.. I recently had an argument with an economist jockey who tried to insist that alternative/renewable/whatever energy would never ever catch on because it was far too expensive. In particular he argued hard that the cost of hydrogen and other alternative fuels were economically speaking, dead in the water.

Eventually I just got fed up with this numpty and asked him to tell me what these alternative energies/fuels etc were too expensive in comparison with..... Was it with oil and gas whose production was in terminal decline or was it with oil and gas that had priced itself out of the market or - well u get the picture.. Anyway that shut him up!!

What's the point? Tis obvious ... Determining EROI is one of those utterly pointless exercises when your comparitors don't exist anymore. Go away and try doing something more useful such as working out what will happen if we don't invest in new energy technologies.

Go away and try doing something more useful such as working out what will happen if we don't invest in new energy technologies.

but which renewable new energy technologies?

That's the point for EROI. And since we need practice calculating in this new field and have to transition from fossil fuels that we'll still be using for some time, it doesn't hurt to work up their numbers either.

Much debate and discussion on what is in or out, what terminology to use and what it means, and where it is all headed. This can only be a good thing!

Being a fairly simple person, I like simple terms and think I can cut to the chase with a lot of this. If I'm wrong or if my proposal is flawed, I know I'll be corrected.

ERO(e)I -- A calculation of the energy balance of a project which produces energy. For example, an oil production project might be worth undertaking if the energy expenditure to recover oil is less than the energy value of the oil recovered. Simply, energy out over energy in (Eo / Ei), or however you prefer to count it.

ROI (return on investment) -- A calculation of the profitability or value over a specific period of time of a project. Here is where a lot of the discussion has been focused -- what is the "value" of any undertaking? As has been mentioned by several (including myself on a thread some months ago), conversion of one form of energy into another more useful form can and often does make economic sense. A classic case is refining oil into gasoline and other products, where EROI must be less than 1 because of heat losses, but we do it anyway because we place higher value on gasoline than crude oil.

Both terms are very important. For the last 4,000 years we have focused on the ROI or the value we receive for our investments. In an energy-constrained future, people will likely wake up and realize that EROI is pretty darn important too. But only when the net energy balance matters, because right now I don't believe it does to most people. With ethanol, EROI indicates this is not a good transaction purely from an energy perspective, but we do it anyway because we place a tremendously high value on our happy motoring culture (at least here in the US).

I guess I'm just suggesting that for this domain, it is important to carefully define what the central thread is about, and also recognize that any model which ignores overall ROI will meet with resistance because ROI is what everyone naturally gravitates toward. EROI is a somewhat novel concept for many, although not too difficult to gasp.

Cheers -- Billy


I would be a little more infatic then you. It's more then just that "everyone naturally gravitates" towards ROI. It's the determining factor on whether a well gets drilled or a wind turbin is erected. ROI does more then just ignore EROI. It also ignores much of the future value of a project. Someone mentioned earlier a project which would have a 100 years life. All fiancial models used to calc ROI use a discounting factor to some degree (10 - 15%/year is common). In the case of the 100 year project essentially little value is accorded the output beyond year 8 or 9. Thus a project which might produce a net energy gain for 100 years would be valued no differently the one which would have a life of only 15 years. This is one area where gov't intervention might be useful. I'm not sure what approach would work best but perhaps a modification of the tax laws could help.

ROI is the measure of the value of a project in the short term. It's obvious to most that we need to start evaluating our energy infrastructure modification on a longer time line. How we get to this new approach is THE question IMO.


I agree completely with you that a longer term perspective is absolutely necessary. Based on past performance, it seems to me that business is not the correct group to adopt this perspective.

Not thinking about ROI on an industrial basis for a living, I can still easily imagine that the longest timeframe anyone would apply to a project is the point where a significant fraction of the original infrastructure will need to be replaced. If it can't be profitable by the time we have to do major maintenance or replace it, obviously it is not worth doing (to oversimplify) -- even the government uses these sorts of measures where applicable (at least to some degree).

How do we get to where we need to be? If I knew the answer, I'd be out front leading the charge. Talking about it is the first step, and leading by example is certainly in the mix someplace. I recall a lot of discussion about what to write to the Transition Team about, but I don't remember anyone suggesting simply promoting a long-term outlook.


Loosely in regards to various comments about EROI vs EROEI and such, I want to know if anyone has done any work to redefine money in terms of energy. Sadly, I don't have the education to pursue this myself. But I have some ideas and wonder if they have been considered before.

It occurred to me a few years ago that the valuation of currency as a function of GDP or other national measure of productivity, instead of as a measure of accrued material capital (i.e. gold or whatnot), was only the first step in trying to make money and its movement adhere to dynamic laws (in other words, to make it more amenable to analysis as part of a dynamic or complex system which is subject to Laws of function), as opposed to the final word. I suppose economic theory is pretty satisfied with it, but it seems there's more work to do.

To get right to the point, if money or currency is a function of productivity, then it can also be considered banked work: the representation of human effort. If you want to relate money to energy from other sources, in other words to fully link up economic theories with thermodynamics (which I think is the whole point), then you have to have some kind of theory which links external energy sources with human productivity. Since all economic work begins with human work, these other energy sources are then seen as additional, but dependent inputs (variables) to whatever function you define which converts human effort into wealth.

So this whole EROI or EROEI thing is still only part of the picture. It is certainly essential to take into account the systems which convert one form of energy into another. But we ultimately still need to consider everything in terms of human effort: the product of money invested, of labour expended. Because, again ultimately, the amount of energy in the whole system is infinite. Even the amount of energy trapped in Earth (and I'm not including the energy value of the nuclear bonds) is boundless compared to the limits of human potential energy.

What I'm trying to say is that money represents not only productivity, but energy, however with the caveat that external energy is only relevant insofar as human effort can release it and harness it to extend human effort. So all energy resources have to be evaluated based on their likelihood for being tapped now, with the existing technology and infrastructure available. There's no problem with saying that money can be used to make energy (any more than there's anything wrong with saying that energy can be used to make money). It's all augmented human labour, and it can all be converted back and forth (with different efficiencies, certainly). But if you leave out the core issue, which is that it all begins with human effort, you will get lost in a theoretical tangle that won't ever relate back to the real lives of real people.

I suppose another way of saying this is, as long as a project makes money for its investors, and they are bearing the true full costs of the enterprise, then it is a worthy investment. In which case, the fundamental purpose of ERO(E)I is to try show that the costs of various projects are actually higher than people realize. But you can only make that point successfully if you can demonstrate clearly that these hidden costs are real, that is, that some input that has been considered free (like NG used in tar sands production) could actually have been used in some other way to make more profit, the loss of which should have been measured as an expense. This is the core idea behind trying to put a monetary value or ecosystems.

However since we don't have the means to convert human effort, energy resources or money back into an ecosystem (short of just leaving it alone for a certain length of time and letting it re-build itself), I wonder if that has any bearing on EROI studies.

Will EROI theories have any serious impact on how governments and corporations evaluate the profitability of an energy project? I think, instead, what it suggests is that by being locked into a purely monetary evaluation of the worth of some enterprise, we have lost focus on what matters. Or perhaps it's just that it misses the point, which is that some things cannot have a price tag put on them, and it doesn't matter whether that price tag is in dollars, euros or barrel of oil equivalents. The ability to exploit a resource for profit now (regardless how you measure profit) is irrelevant if you know that, in the long term, exploiting that resource may put you in a position you can't get out of. But exactly how far out you're supposed to extend your outlook, I don't know. I suppose it comes down to how far into the future you think your models can be relied upon.

Personally I don't think that any theoretical framework will have any serious effect on what really matters: people's thinking. If people don't think it's prudent to protect ecosystems or leave the oil in the ground for emergencies or to not put CO2 into the atmosphere or pollutants into the groundwater, no amount of economic<->thermodynamic theorizing is going to change that. Some people are cautious and conservative, but most people in corporations are interested in taking risks and using whatever resources (energy, material and human) to make a profit now, prudence be damned. And the minority viewpoint will be ignored.

There was King Hubbert and the Technocrats dating from the 30's.


I read that when it came out; very good article. The technocrats had the problem of their theory of who should be in charge, though, which seems to have had negative impacts on their ideas.

However, I'm not actually advocating a system which would be able to model all energy and monetary flows in one big framework. It's not possible, because the theories and models can never express the complexity, so it isn't worth the trouble. My final point was that we are getting too lost in these theoretical analyses, and not having any real impact on how money or energy get invested.

There is no shortage of examples of misallocation of resources into systems or projects that won't provide a real return for society in the "long run". But interested persons, corporations and governments will make those investments regardless, because they offer near-term returns for them (everyone else be damned). The only way to get them to make better investments is to give them the right incentives. Egalitarian or other arguments aided by EROI theories probably won't do the trick.

But then, I've grown to be pessimistic about human behaviour. As much as I encourage energy efficiency and austerity, the only thing that's going to make humanity restrain itself is scarcity.

If you want to wean people off of fossil fuels, alternative energy sources have to be better and cheaper by an order of magnitude. Someone has to take real risks and invest in alternative technology not because of some EROI argument, but because they have the necessary virtues: courage, creativity, curiosity and the desire to explore and try things never before tried. We are dependent on inventors and they are dependent upon investments of capital. How does EROI help explain or encourage that?

Bored Astronaut

I would first point you to the work of Georgescu-Roegen (sp?) who tries to frame economics around the Laws of Thermodynamics, and hence more clearly integrated value with energy. There has been much work on "energy/dollars" to try and establish the energy efficiency of an economy over time - In fact my lab is performing an efficiency analysis for the whole world. Hopefully this TOD:EROI site will have many posts trying to integrate the ideas of the biophysical world with the economic world, kind of a biophysical economics...

sorry, double post

The way I understand EROEI calculations are performed, if you have a factory that produced 2000 wind turbines a month, you take the amount of energy invested in each turbine and divide it by the amount of energy it will produce during its lifetime. This RATE OF PRODUCTION in a facility that produces a product at high economies of scale, like the 2000 turbines per month in this manufacturing plant all rely on many infrastructure efficiency's built into the process to sustain this Rate of Production. For instance the wind turbine factory receives nuts and bolts, energy itself, copper wiring ect all from manufacturing plants who rely on high economies of scale or high rates of production to be able to let their operations operate at their own energy profit and add to the energy value chain. The nagging problem in my mind is that these mass production processes all rely on the higher energy densities of fossil fuels versus true renewable sources. If these fossil fuels dependent efficiency's are needed to sustain these high rates of production then without abundant fossil fuels to support these systems rates of production must fall accordingly. Whereas the wire plant, nut and bolt plant, composite material plant will not be able to produce at the high rates of production or possible any rate of production, to supply the wind turbine plant with the component FLOWS necessary to sustain their rate of turbine production. Accordingly, If the these efficiency's are lost because the total rate of turbine production is falling then shouldn't the total EROEI for the process decline, because less turbines are produced per month? I would say its completely obvious that renewable energy processes like building a wind turbine, solar power plant or geothermal plant are shadow subsidized by fossil fuel energy creeping in at every step of the process through built in efficiency processes. Fossil Fuels subsidize current renewable processes energy-wise to how great of an extent nobody knows, this seems to me to be a real BIG IMPORTANT question?

I guess i'm just saying it really bothers me that:

4) EROI doesn't account for quality. (e.g. liquid fuels vs electricity vs animate coverters like horses)

5) EROI doesn't inherently account for scale. (E.g. potatoes have 30:1 EROI but we can't run society on potatoes). EROI x Flow Rate = Power ==> which is what we really are trying to measure.

Because of 4 and 5, wouldn't that mean that a completely vertically integrated renewable energy process would be overstated by current EROEI calculations because, wind, geothermal and solar energies are not as high quality or dense as FF. Also they are arguably not a scalable as FF sources, therefore making current EROEI calculations (wildly?) optimistic? Couldn't some of these factors tip the EROEI of the renewables much much lower or even less than 1?

I was at a seminar on carbon credit trading at my University, and there was a a guy there who was head of a "renewable energy company" who used waste agricultural products to power nearby factories. He said that in the Dominican Republic people had been letting all these coconut shells just lie around on the ground and decay for hundreds of years, but (with a big smile), we came in and took all that waste and put it into our boilers at a nearby factory. I thought to myself, How stupid of those Haitians to just let these coconut shells just decay into the soil and replenish the nutrients when they could just burn these vital soil nutrients in a boiler. I mean Haitian soil doesn't need any nutrients, right?

It seems that in any calculation, model or simulation setting the system boundaries at some arbitrary point seems to never get you the whole picture.

SOD you have hit the nail on the head!

Currently I am looking forward to taking my sabbatical next Fall at SUNY-ESF with Charlie Hall and his students to study the use of EROI (ok EROEI, if some insist) in what I call the Energy Production Sustainability Criterion Model.

I've created a .gif image of the model to show the energy and material flows that need to be taken into account in order to determine whether or not a particular piece of energy conversion capital (say a solar PV array) is sustainable over the long haul. The image shows the distinction between raw energy input (solar) vs. usable energy supplied to various work processes (exergy or free energy in physics terms). In this interpretation only the exergy flow to energy users not engaged in producing energy or the components that go into producing energy counts as "net energy" for economic uses. A full accounting of energy units per unit of time produced divided by units required over the life of the conversion equipment is, I think, a better way to view EROI. But that is what I will be trying to discern.

What the model demonstrates is that there must be enough excess production of usable energy over that being consumed such that all of the work processes (including extraction of raw materials) that go into production of the energy capital equipment (including it's maintenance) are supplied, at least in principle, from the energy conversion. Of course the energy streams contributing lower in the diagram have to be properly amortized over the life of the conversion capital.

You have brought up the right question. In aggregate, all energy conversion capital equipment, maintenance, etc has to be able to sustain itself over the long term. Fossil fuel inputs (oil is a raw input and refining is part of the conversion capital) cannot meet this criteria because the fuel source is unsustainable. That is a given. So-called sustainable sources will need to meet the criterion on the basis of reproduction and maintenance efficiencies.

Another good point you raise has to do with the power requirements versus simple energy calculations. That is why time is an important factor in this model. It is the rate of production of high potential energy that feeds work processes. You have to take into account the power requirements of the prime movers/heaters in the energy user and capital manufacturing processes. Electric motors that require 220vac at 10,000 watts won't work very well with 9vdc at .5 watt. The energy used to convert solar PV or thermal into usable energy must also be counted.

I do think the EROI concept is essential to making good decisions about what forms of energy production (BTW: a reduction of energy requirements on the use side due to conservation or increased efficiency means an increase in availability on the supply side, meaning energy available to invest in new technology, improvements in energy infrastructure, etc.) we need to pursue on a path toward a long-term sustainable economy in balance with the rest of the Ecos.


I have discussed energy issues on my blog at:
Question Everything

SOD and George

Firstly, George, I was unaware that you are coming to our Lab, WELCOME!

Exergy is a wonderful concept that needs more exposition and empirical testing, and it is inherently related to EROI as it examines the "free" or "usable" energy created by a process.

Energy Quality can be accounted for - and should be accounted for. The big argument against EROI calculations is that "all joules are not created equal". However we can account for differences, for instance we found that electricity is something around 2.5 times more valuable than liquid fuels. Not the most accurate/precise, but an honest attempt.

I'll be there unless the state budget situation worsens to where they cancel sabbaticals! Charlie has made the arrangements. Meanwhile I hope to provide some preliminary working papers so you guys can take a look and see what might be interesting to work on.

Glad to see this domain. Maybe some useful critiques (like Nate's) will help shore up and sharpen the concept.


Someone needs to tell those Dominicans (Haitians?) that they need to claim ownership of their coconut shells. That guy was clearly stealing! What's the EROI on theft? Pretty high, if you can get away with it.

Don't forget to check out Charlie in the "What is EROI?" mini-documentary on How to Boil a Frog's peak oil web page at www.howtoboilafrog.com/peakoil.html. A good (and brief) explanation for non-peakies. Find David on the page and win a virtual cookie! Great to see you guys on TOD!

David, Charlie & Nate
In exploring the usefulness/limits of EROI etc., recommend you test it against the EROI of solar thermochemical hydrogen from concentrating solar power.
In this case the "net energy" of the hydrogen produced relative to solar and fossil energy input is ALWAYS less than the total energy input, primarily solar. Yet this will become one of the most sustainable, and energy and cost effective fuels possible.
E.g., see: Innovative Solar Thermochemical Water Splitting, Richard B. Diver, Nathan P. Siegel, Timothy A. Moss, James E. Miller, Lindsey Evans, Roy E. Hogan, Mark D. Allendorf, John N. Stuecker, Darryl L. James, SANDIA REPORT SAND2008-0878 February 2008

Recommend examining the issues of energy input from finite stored solar energy (fossil fuels) vs solar thermal input power input (limited by intercept to the Earth, (optionally to include power satellites.)

When we have a solar energy input, whether directly from the sun, from the wind, or through photosynthesis, we do NOT count the input from the sun in real time as part of EI. In the case of photosynthesis, we count any ancillary input to the plants from fertilizers, cultivation, pesticides, human effort, etc., but not the sun.

The example of CSP or nuke sourced hydrogen shows how we have to take energy analysis to another level. Electrolytic or thermal water splitting has negative net energy if we compare input energy to the heating value of the hydrogen produced. However that hydrogen could produce ammonia needed to prevent mass starvation or liquid synfuel to power aeroplanes for the tasks unsuited to surface transport. Thus we have to look at the net energy of a coupled system hydrogen-hydrogenated materials and compare it to alternatives. Those alternatives could be going without, using increasingly problematic fossil carbon or reducing food yield due to biofuel diversion or reduced nitrogen input.

So far energy analyses have tended to focus on a single sector not several sectors in combination. We also need to look at 10 to 20 year timeframes. Of course there is the problem that net energy for immature technologies such as thermal hydrogen may be guesswork.

Yup. The paper I linked in first comment is about the need for multicriteria analysis. Ultimately we would want to maximize the return on the limiting variable, which given our concern about peak oil, is likely to be liquid fuels. But it just as easily could be natural gas, or water, etc.

You are right - we need more than a single metric - but without energy, then we have little else.

Yes Nate, I agree that we need more than one metric, but unless I've been sleeping I haven't seen any consensus on what any one metric entails. Perhaps that is one of the intentions here.

In order for a metric to be useful, the methodology must be consistent, otherwise it is meaningless. With EREOI and others, the biggest problem IMO is defining limits and it may be intractable. Even if the edges are fuzzy, I think we still need to define them, perhaps a first step.

A bitumen site in northern Alberta has a lower EREOI than an identical bitumen site in the tropics due to the process, but also has higher energy requirements for the support system (maintenance, personnel etc.) I may be stating the obvious but it begs the question "Where does it stop?"

Whether it is energy saving or energy extraction, trying to coming up with a number could send us into an infinite loop of recursion and regression if we're not careful. Over simplification is just as dangerous.

I say this out of frustration with the present numbers I read, which are vague. I wish I could offer more than griping.

Energy Saved on Energy Invested

With some reluctance, I will coin that phrase, along with

Discounted Energy Saved on Energy Invested

to throw a time factor in. In can take 20+ years to develop an oil field (Kashagan as an example) and the energy used there could have been used elsewhere in those two decades. the same can be true for very long lived infrastructure.

One should look at the relative EROEIs and ESOEIs of differnt technologies when allocating tax credits.

How much for PV solar, how much for insulation, how much for solar hot water heaters, how much for tankless gas hot water heaters, how much for better windows ?

How much for wind farms ? How much for electrifying the railroads ? How much for geothermal ? How much for Urban Rail ? How much for bio-mass ? How much for bicycles ?

Effectively, the two figures should be interchangeable. I would prefer an expanded EROEI, but if it must be ....

The old concept of "payback" works well with ESOEI. The energy involved in producing, transporting and installing fiberglass insulation has an energy payback of less than 12 months (i.e. one heating and one cooling season), except in Southern California.

Best Hopes ??


I like payback period (in years) as a 'robust' figure where
payback = (embodied input)/(annual saving)
in compatible physical units of energy or fuel. Hopefully this metric remains stable even as dollar costs fluctuate wildly. Notice if you use dollar costs for water heating you could get
- a short payback converting electric to gas
- a long payback converting to solar
assuming NG prices remained stable. If you doubt that or you have lazy capital ($$$ in the bank) then it may be best to opt for the longer payback. So really all these decisions need not only net energy and payback but side conditions like CO2, capital constraints, 'regret' for missed alternatives, reliability, replacement cost and so on. Wind and solar are low regret but capital draining regardless of their payback period.

It is interesting to note that tankless gas water heaters have medium term paybacks, in between electric > gas (conventional) conversion and solar hot water heaters.

A tankless gas water heater w/o pilot light reduces natural gas consumption by 25% (actual savings vary little with water use, since the savings come from standby, but % savings do).

A solar water heater with electric back-up reduces the dollar cost of fuel by half (standard assumptions).


Half of the electricity comes from coal with low thermodynamic efficiency. 20% from NG, 20% nuke, 9% hydro, 1% other. Varies dramatically by utility.

In many cases, a tankless gas water heater may use less energy for the same function (domestic hot water) than a solar hot water heater with electric back-up ! And significantly cheaper to install as well.

It is interesting that solar water heaters "produce" energy and hence can have an EROEI, and gas tankless water heaters do not and cannot (per the rules).

Best Hopes for Better Tools,


Why couldn't you have a solar hot water heater with tankless gas backup?

Rinnai has just put out the first properly designed (IMHO) one, but just for the Aussie & Kiwi markets.

Several complex issues (preventing Legionaire's disease in cool storage tank after multiple cloudy & cool days is one). Gas tends to be less "tunable" than electric.


I applaud TOD for starting this critically important sub-domain.

Now, I beg of you ...... Please, please, please do not use ERO(E)I. The use of ROI has been repudiated in financial circles because it has certain biases that lead to poor decision making. Instead, the financial community relies upon a net present value (NPV) analysis. Or perhaps upon a more complicated (think monte carlo, or scenario analysis) financial model.

We should use a net present energy approach to analyze and compare various sources of energy.

Can you say more about why npv in an energy context is better than EROEI? (genuinely interested)

It appears that NPE implements exponential discounting of the future based on the same irrational assumption of unending growth that is currently destroying our society and planet.

The 'problem' with ROI is that it doesn't give the same stupid short-termist results as exponential discounting.

If you think your grandchildren's lives are worth less than 5% of yours, then by all means discount the future by 5% p.a. But count me out.

I would also like to understand the reasons why ROI is seen as an ineffective gauge, and then would like to be able to make a comparison with the related factors in EROEI. I have yet to hear any argument that suggests that EROEI would lead to poor decisionmaking.. understanding that while critical, it is still only one factor in judging an energy source.


Hi, a comment for whoever controls this sub forum:

I am seeing the [NEW] tag in the same color (blue) as the names of the poster in this forum. This makes it hard to scan through for new posts. In the Drumbeat and elsewhere the [NEW] tag is in a different color, making it easy to spot. Can this be fixed?


type ctrl f (find) and type in [new]

Then click on "next" and scroll though. Your browser may vary.

Beats scanning all to heck, regardless of colour.

Ask, and ye shall receive - in crimson now. Thanks!!!

I just want to add my support to those who dislike EROI up thread. EROEI has really been the convention on many other forums such as Yahoo Energy Resources for a long time.

I have few problems were Net Energy to be used. In fact, it might allow Alan's tunnels to demonstrate that the had a "net energy" effect.


PS I'd like to thank Super G for getting the number of new posts back on the main page. Also, sitemeter and some other outside links aren't crashing like they used to.

Currently, I am trying to convince Charles Hall, Tom Robertson, and the rest of the world that I have solved the problem of computing the ratio of energy returned to energy invested, i. e., ER/EI or EROEI or EROI, depending upon who is writing the term. My latest effort to state the solution concisely is posted at http://dematerialism.net/eroistar.htm, which has hyperlinks to longer discussions elsewhere. The notion of the autonomous alternative energy district (AAED) originated in a section of “Energy in a Mark II Economy” that was posted at http://dematerialism.net/remarks.htm. In “Energy in a Mark II Economy”, I computed EROI with five different compositions for the energy-invested term, each successive composition including more components. The last should be recognized as the composition of the energy-invested term for the EROI in the AAED that determines feasibility. Overwhelming sentiment dictates that I change EROI back to EROEI or ERoEI – regardless of the similarity of that term to EIEIO in the lyrics of Old MacDonald’s Farm.

Note. Actually, energy returned might be confused with net energy returned, denoted ER – EI in my papers; therefore, we should be referring to the energy produced. The correct ratio to determine feasibility would be EPoEI; but, please, let’s not get into that.

In a community that can subsidize a renewable energy technology with fossil fuel, it is especially important to use EROI^* as discussed at http://dematerialism.net/eroistar.htm because the lifestyles of the participants can be supported by fossil fuel. Thus, the alternative energy technology might be able to produce energy, but the total amount of fossil fuel used by the community would be increased rather than diminished. And, no one might ever know.

One last thing before I ask you to read the paper at http://dematerialism.net/eroistar.htm: One of the correspondents claimed that EROI does not account for quality or convenience. That is not true, provided that transformity is applied to the final product accounting for quality and for time and place of production to compute the emergy of the product in terms of a well-defined standard as I have done in my papers on emergy and EROI. It is essential to combine emergy analysis with the computation of EROI in determining the feasibility of the process under investigation. Emergy and transformity are defined and discussed at http://dematerialism.net/emergyunit.htm. I will transcribe the paper "EROI as a Measure of Feasibility" into my next comment.

EROI* as a Measure of Feasibility

If we wish to define an EROI that will indicate a feasible alternative energy technology if it is greater than 1.0, we must begin to think of society as a system the purpose of which is to keep high-grade energy flowing. Let us begin by defining consumption in terms of emergy with an M. For those who wish to know what I mean by emergy see http://dematerialism.net/emergyunit.htm. Thus, every citizen can be characterized by the community according to how much emergy he or she consumes strictly because he is employed, e. g., commuting costs, clothing costs, and meals away from home, and how much emergy he consumes otherwise. Suppose, for the sake of analysis, that these quantities can be replaced by the average values in a few discrete strata. Then, the system I used in Chapter 2 of On the Preservation of Species can be resurrected mutatis mutandis for our purposes. It will not be necessary to take advantage of the distinction between personal emergy budget and work-related emergy budget until we begin to furlough people whose work is unnecessary to the well-being of the community. At this point we may employ the notion of the Autonomous Alternative Energy District (AAED):

Let us suppose that a group of people representing all of the trades and professions wishes to support itself completely by relying on a single alternative, renewable energy technology for all of its energy needs. Let us suppose further that all of the natural resources necessary to do this are available within the AAED [and the repositories of such natural resources must be retained at steady state from the detritus of the AAED including superannuated installations of the technology]. Nothing is imported from outside the District whereas energy and only energy is exported. If a man needs a car to drive from his home (in the District) to his job (in the District), the car is built, maintained, and fuelled in the District. If his wife is sick the doctor in the District will treat her with medicine made in the District from chemicals produced there from raw materials mined there. The EROI of the new energy technology is the total energy produced, ER, divided by the quantity ER minus the quantity EX, where EX is the energy exported; i. e., EX = ER – EI. If the District is able to export any energy at all the EROI ratio exceeds one and the technology is feasible – at least. In the case of a single energy technology, the energy produced by each technology can be assigned a transformity of unity and the value of emergy is quantitatively the same as the Gibbs availability, which, at room temperature, is the Gibbs free energy. I prefer to report emergy values in units of emquads rather than quads, emjoules rather than joules, etc. Thus, the units of transformity are emquads per quad, for example.

The actual situation in a self-contained US economy would be virtually identical to that of the AAED if the economy were to run exclusively on the alternative, renewable energy technology under investigation and there were precisely as many physicians, for example, as are needed to supply the needs of those whose purpose in life is to provide energy. Thus, every ancillary and indirect expense of producing energy including the support of the workers and their dependents must be counted in computing energy invested if the EROI methodology is to be used to determine feasibility.

In the broader economy, the pro-rated share of each workers energy budget that should be charged to energy invested is easily determined from the pro-rated share of his working hours and the consumption stratum to which he belongs. If more than one technology is employed and the matching problem discussed in Chapter 2 of On the Preservation of Species has been solved, it is not necessary to convert one form of energy to another; therefore, a transformity of unity can be assigned to each form of energy produced. Since, in addition, the fraction of personal energy and work-related energy served by each technology is usually known, this methodology can be extended easily to the more general situation.

* Following Charles A. Hall, the name used in this note for the ratio of Energy Returned to Energy Invested is EROI rather than ERoEI.

Tom Wayburn
December 14, 2008
Houston, Texas

Since I have so much trouble getting people to understand the necessity of including personal energy budgets in the EI term, it is worthwhile adding one more comment. In a world where it was no longer possible to subsidize the lifestyles of the participants with fossil fuel, if the EROI were just greater than 1.0 when the personal energy budgets of the participants were left out, they would have to lower their standards of living, practice whatever conservation measures were necessary, deprive someone else, or perish.

Tom Wayburn, Houston, Texas

Note: In http://dematerialism.net/emergyunit.htm, I am using ER/EI = EROI-1, which determines feasibility when it is greater than zero. The EROI discussed in http://dematerialism.net/Mark-II-EROI.html and http://dematerialism.net/Mark-II-Balance.html is the same as the EROI in http://dematerialism.net/eroistar.htm and http://dematerialism.net/eroeistar.htm. There is a note to that effect in emergyunit.htm, but it is below the text of the article. So, be careful!

Tom Wayburn, Houston, Texas

I can't see my comment. Maybe technical problems.

My point is EROEI is a no brainer. Seriously do you even need to think about it when nuclear thorium reactors have a virtually unlimited supply of fuel and they are virtually non-polluting relatively speaking, and no proliferation risks, no meltdown risks, etc.

Nuclear energy, i.e. thorium, is the only source with the least impact on the environment that can easily support 12 billion people for millions of years and provide enough extra energy to recycle everything we produce and enough energy to produce anything we might need.

There is a lot of thorium but it's not unlimited: