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hhieslmair on March 16, 2006 - 6:06pm Permalink | Subthread | Comments top
As we tap more oil supplies with lower and lower EROEI, won't the price of energy become highly volitile as the price of energy required becomes a greater fraction of the cost of making energy. I'm not sure I can even follow what I just said, but I hope you get my drift. I guess it occured to me in discussion ethanhol. Suppose an EROEI of 1.5. That says to me that the price of energy (oil, nat gas, whatever) will be a major cost component in manufacturing ethanol and thus the price of ethanol. Seems like a positive feedback which will amplify volitility.
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jgregg on March 16, 2006 - 9:05pm Permalink | Subthread | Parent | Comments top
It struck me recently that another odd factor in play with fuel sources like ethanol is that they can act as a store of value in a perverse way. Inputs to ethanol (fertilizer, diesel fuel) can be purchased up to a year before the ethanol comes out of the plant. Part of the perceived value of ethanol may just be the fact that the inputs were that much cheaper when they were purchased.
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123 comments on New Open thread

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