## EROEI Short #1: Boundaries & Calculations

This is the first in a series of short articles that strive to continue the ongoing discussion here on the concept of Energy Return on Energy Invested.

Energy Return on Energy Invested (EROEI)* is a problematic concept. As Cutler J. Cleveland has noted, “It is impossible to precisely identify and quantify all those factors [that contribute to the energy input to energy production], or to unequivocally categorize them as either physical or economic factors.” [1] Despite this difficulty in calculation, the importance of the figure is clear: it is axiomatic that if EROEI is less than 1—that is, if it takes more energy input than the produced energy output—then substantial reliance on that form of energy is not a valid foundation for modern civilization.

* I have chosen the term “Energy Return on Energy Invested” over its analogs “Energy Return on Investment” (EROI) and “Net Energy” (which is equal to EROEI – 1). The terms are interchangeable (with the noted adjustment for “Net Energy”). My rationale is that EROEI explicitly spells out what it stands for better than the other two terms—EROI risks confusion with financial return on investment, and Net Energy is similarly not self-explanatory. That said, the intent of this disclaimer is this: the terms are essentially interchangeable, so use whichever you prefer, I don’t claim that one (let a lone the one that I have chosen) is the only correct term . . . let’s avoid arguing over terminology and discuss the concept.

The principle difficulty in calculating EROEI is the desire to define a boundary of energy inputs that will be included in calculations. At one extreme, only the direct energy inputs to energy production may be considered—e.g., the energy required to lift oil from its reservoir to the surface. This approach has the clear advantage that the considered energy inputs are finite and readily quantifiable. The downside is an EROEI figure that fails to accurately represent the actual energy surplus or deficit of process. On the other extreme, the string of energy inputs can be regressed infinitely: e.g., the energy to grind the rice to feed the farmer to raise the chickens to feed the merchant captain who piloted the ship that transported the molybdenum used in the manufacture of the oil rig is a necessary prerequisite to producing the resulting oil! While this infinite regression approach (of which the above example is only a simple example) theoretically captures the true energy inputs for accurate EROEI calculation, it is also clearly impossible to quantify.

Howard Odum attempted to address this problem with his attempt to calculate “Emergy” (embodied energy), originally intended to address ecosystems, but also applicable to human society and economies. [2] While attempts to implement the emergy methodology to produce an empirical figure have met with some success in balancing the need to incorporate energy inputs with the need to limit those inputs within quantifiable boundaries, confusion continues in the specific methodology of emergy. [3] While at one point there was an effort to create an ISO standardized methodology for emergy accounting by the London Group on Environmental Accounting, this effort seems to have failed. [4] Despite the assertion that emergy provides a global, standardized means to account for energy inputs, and therefore to calculate an accurate value for EROEI, no such standard has emerged. [5] Ultimately, this failure of a methodology to practically AND accurately account for energy inputs is testament to the fundamental tension between the demands of infinite regression of energy inputs and the need to limit accounted energy inputs to within a practicable boundary.

A standardized, yet accurate and implementable method of calculating and comparing the EROEI of energy sources is critical to our energy future—understanding Peak Oil, evaluating alternatives to oil, and proposing viable policy measures all depend on at least some resolution of this issue. Where (if anywhere) can we draw the line, beyond which energy inputs don’t need to be counted? Can we effectively use proxies to model the totality of energy inputs without actually counting all of them individually? The next two installments in this series of short articles on EROEI will address those issues.

[1] http://www.eoearth.org/article/Energy_return_on_investment_(EROI
[2] http://en.wikipedia.org/wiki/Emergy
[3] Id.
[4] http://www.energybulletin.net/6224.html; search of the LGEA website and the broader internet failed to unearth an ISO standard for emergy accounting.
[5] http://en.wikipedia.org/wiki/Emergy#Emergy_accounting_and_emergy_.22anal... (“However because emergy involves the combination of heterogeneous energy forms, D.M.Scienceman now only refers to Emergy Synthesis, preferring to see the notion of "emergy analysis" as an oxymoron”)

I guess this puts engineering right up there with economics as an essentially dismal science!

"Truth" is a receding horizon, and in my "real world" there is a lot of play in the gear train -- power applied at one end has somewhat unpredictable results at the other.

Jeff,

Here are some thoughts and energy quality and EROEI:

The economic quality of energy production is always measured relative to the costs of some production resource that has to be expended in order to process energy into a usable form. With respect to a particular production resource (e.g. labor hours, cultivated land, irrigation water, etc) that unit of energy is best which requires the least resource expenditure to produce. The resource cost of producing one net unit of energy I call the resource intensity of net energy production.
Suppose that the gross energy output of an energy producing process is G. Since energy is used during the during the energy producing process, we must subtract this energy from the gross output energy in order to calculate net energy. Let us suppose that the energy consumed is f×G. If f<1 then the energy balance is positive. That is more energy is produced than is consumed. Finally let the amount of some non-energy resource expended to produce this output be given by R. Then the resource cost of producing one net unit of energy is given by:

Cn = R/(G-f×G)

This expression is the ratio of resource cost to energy profit. This resource cost or resource intensity of net energy production can be rewritten as follows:

Cn = (R/G)/(1-f) = Cg/µ

Cg (= R/G) is the resource cost of producing one gross unit of energy output. The quantity µ (=1-f), which I call the energy utilization rate, is the fraction of the gross output energy G which can be used for the production of goods and services other than energy. That is if we wish to run our energy producing process on an ongoing basis, a fraction f of our energy output must directed back into the energy producing process, thus leaving only a fraction 1-f available for the production of other economic goods and services. If multiple resources are involved in the energy production process then values of Cn can be calculated for each resource.
Both Cg and µ may play a role in determining the resource cost of net energy production. For example if we attempt to produce liquid hydrocarbon fuels from oil shale as conventional oil supplies decline, the energy utilization rate µ will drop because mining oil shale and thermally processing it to crack it into liquid hydrocarbons uses much more energy per unit of output than does pumping and refining conventional crude oil. In addition the resource costs (Cg) in terms of labor, fresh water, etc. of producing one unit of finished fuel will also increase. Note also that if the energy utilization rate approaches zero (energy output = energy input) then the resource cost of producing one net unit of energy will approach infinity.
The reciprocal of the resource intensity of net energy production, µ/Cg is also a useful parameter although I prefer to write it in a different form:

µ/Cg = µ/(R/G) = µ×(G/R) = µ×Pg

Pg is the unit productivity of the given resource with respect to gross energy production. That is, it is the amount gross output energy which results from the expenditure of one unit of resource. Naturally Pg has to be multiplied by the energy utilization rate µ in order to get the net energy production per unit of resource.
This quantity (µ/Cg or µ×Pg) is the ratio of energy profit to resource cost. In the terminology of economics this number is the efficiency of the resource in question with respect to the production of net energy. Both the energy utilization rate µ and the resource unit productivity Pg are likely to decrease as lower quality energy resources a exploited. If the energy utilization approaches zero the resource efficiency or productivity also approaches zero.
EROEI is defined as the ratio of energy output to energy input. At first glance this quantity appears to be the same kind of energy productivity that I have just described. It apparently describes the efficiency with which energy is turned into more energy. This conclusion is incorrect for two reasons. The numerator of EROEI is not the energy profit and the denominator is not the energy cost. These assertions can best be demonstrated by a concrete example.
Suppose a farmer produces biodiesel from some oil bearing crop. For simplicity we will assume that he manufactures the biodiesel on his own premises and sells it as a final product. We will further assume that the farm is run entirely off the energy of this biodiesel fuel. That is at the end of the production season the farmer holds back as much biodiesel as will be needed to run the farm during the coming year and the rest is sold to customers. We will assume that half the output has to be held back to run the farm in the coming year.
If we apply EROEI analysis to this production scheme we claim that the farmer’s total yearly output of biodiesel is his energy profit and the biodiesel used to run the farm is his energy cost which gives an EROEI of 2. While the farmer’s EROEI as defined is undoubtedly 2, the conclusions about profit and cost are clearly incorrect. The farmer’s profit is that part of his output which he sells to external customers, which is to say one half of his total output. His energy cost is zero. He does not purchase any energy. Of course the energy he uses to run the farm does detract from his total profits. Suppose he tries to improve his profit by maintaining his total yield but reducing his energy use. If he succeeds in cutting his energy use in half while maintaining his gross output then his EROEI will increase from 2 to 4, but his profit will only increase by from half of his total output to three quarters of his total output. In fact it is clear that his profit changes in proportion to the energy utilization rate µ which has increased from 0.5 to 0.75.
Suppose, on the other hand, the farm tries to improve his profit not by cutting his energy use, but by planting some new variety of crop which gives him increased twice the gross yield per hectare. Again his EROEI has increased from 2 to 4 and energy utilization rate has increased from 0.5 to 0.75. Energy utilization rate and EROEI have fixed relationship:

µ=(EROEI-1)/EROEI

In this case in addition to an increase in the energy utilization rate µ the resource unit productivity Pg has also increased; It has doubled from its previous value. If we use the size of the farmer’s original gross output as our measuring stick then his new profit is given 0.75×2 = 1.5. His energy profit has tripled. Again the productivity arithmetic I have outline above correctly describes the change in energy profit per hectare while EROEI does not.
I have artificially constructed this example so that it is clear that the energy costs are zero. However, the same conclusions apply even when external fuel purchases are made. Suppose that I purchase some fuel and use it to run an energy production process. If this process has a positive energy balance I will get back all of the energy I purchased plus some extra. For simplicity I will assume that all forms of energy are economically equivalent. Without this assumption simple energy balance calculations do not work, and one must inject energy quality factors into the analysis. If I make this simplifying assumption then I can take the energy which I have reproduced and sell it for the exact same price for which I purchased my original fuel. Therefore I have no energy cost. I only have an energy profit for the extra energy which I have produced.
Using energy to produce widgets and using energy to produce more energy are fundamentally different processes. If I spend energy to produce a widget, at the end of the process my energy is gone for good and in its place I have a widget. If I spend energy to produce more energy, then at the end of the process, all of the energy that I spent is returned to me plus some extra. The energy cost of producing energy is a meaningless concept.
EROEI defined as the ratio of energy output to energy input is not meaningless, but it does not have the significance of an economic efficiency. I am personally convinced that EROEI does not contain any information that is not contained the energy utilization rate µ in a more natural form.

Here's the seat of the pants/shoot from the hip calibration factor for EROEI:

When people do an activity ostensibly to produce energy and after a while, they either quit or go bankrupt, the EROEI is less than 1.

But that calculation is not prospective! It doesn't advance the science, although it might be valuable data and of historical interest.

You are wrong, the ROI is less than 1, there is no information about EROEI.

Remember that the biggest costs nowaday tend to be labor, capital and energy, on that order. If the net energy isn't enough for paying the labor and capital, the company goes bankrupt. And no, energy isn't the main factor determining those labor and capital costs, far from it.

Of course, the reciprocal is normaly true (out of irrational behaviour of the market and government subsides). If the EROEI is less than 1, the company will go banckrupt.

It could well be larger than one and even larger that that of the source against which it is competing. The failure may merely reflect the advantage that past subsidies have given the competing source. In energy, all sectors get some subsidy so following the money does not always lead to physics but rather to an address on K Street.

Roger,

It seems to me that you are trying to side-step the nitty-gritty issues. Clearly, energy went into the construction of the farmer's tractor and implements. It is also likely that fertilizers and peticides were used. The crops may have also been irrigated requiring an energy source, pumps and pipes. If biodiesel is being made, there are the tanks, heaters and chemicals. Then there is the issue of transporting the finished product to market.

All of these added inputs need energy for their construction and delivery to the farmer so where do you draw the line? Do you go back as far as the energy to make the equipment for the iron ore mine or what? This is the question.

I would argue that the list of energy inputs should go to the limit in order to have a complete picture. I realize that this sort of data gathering is almost impossible. But, most of it would only have to be done once. Further, I would discount those inputs of, say, less that 0.1% of the overall energy required in claculating the EROEI.

I used to run a synthetic rubber plant that, itself, has a bazillion energy inputs and that's just part of the overall energy picture. But it is possible to determine how much energy it took to make the synthetic rubber polymer and process it so I'd leave it go at that.

The other problem I see is the sort of conflating economics and energy. But I don't want to get into that.

Todd

Todd,

I was not trying to present a realistic calculation of energy balance. I was trying to conceptually illustrate the proper method of accounting for energy balance in determining the economic quality of energy. In a real world energy calculation of course embedded energy must be accounted for. Indirectly it counts as a fuel purchase such as I discussed above.

Your claim that I conflating energy and economics puzzles me. The underlying ideas expressed in my post are quite simple, though possibly I did not express them as clearly as I could. Energy provides services. Suppose you buy a tankful of gas and use it to travel 300 miles. The economic quality of that tankful depends on the amount of economic effort that was required to extract the oil, refine it, and transport it to the gas station. If for example it took 10 labor hours to produce a tankful of gas from conventional oil compared to 30 labor hours to produce a tankful of gas from oil shale, then clearly the gas produced from conventional oil is superior. This is common sense, not left field philosophical theorizing. The ideas expressed in my post are not any more complicated than this. Energy balance calculations just account for the excess resource costs due to the consumption energy during the production of fuel.

Roger,

Thx for responding. Ok, quoting you, "The economic quality of that tankful depends on the amount of economic effort that was required to extract the oil,...". Emphasis added. Economics has nothing to do with EROEI.

And, "If for example it took 10 labor hours to produce a tankful of gas from conventional oil compared to 30 labor hours to produce a tankful of gas from oil shale, then clearly the gas produced from conventional oil is superior." It may be superior (and, no, differential labor hours is not common sense) but that isn't what EROEI is about. It is how much energy is required to produce so many joules compared to how many joules you had to expend to get them. And, BTW, I've done energy balances for chemical plants so I am not unaware of how to do them.

Let's look at on-shore and ultra-deep water drilling. It may take more "labor hours" drilling on-shore but the infrastructure for deep water drilling is massive, e.g., it requires horrendous amounts of energy before drilling even begins! Yet, on a bpd basis, the off-shore field could look excellent on the basis of "labor hours" alone.

I am totally lost by your last statement, "Energy balance calculations just account for the excess resource costs due to the consumption energy during the production of fuel." Excuse me? So, drilling, et.al., don't count when it comes to EROEI, just the energy used by a refinery? Now, I may have misinterpreted this so maybe you want to clearify it.

Todd

As an aside, the Yahoo Energy Resources forum has beaten EROEI into the ground for several years but has yet to find common ground.

I used to run a synthetic rubber plant that, itself, has a bazillion energy inputs and that's just part of the overall energy picture.But it is possible to determine how much energy it took to make the synthetic rubber polymer and process it so I'd leave it go at that.

First of all, how do you calculate total energy use in complex manufacturing processes? If it's possible to do so, why can't that sort of energy accounting be used as a model for larger systems of production? Unless of course someone wants to include the total background energy radiating throughout the entire universe in the calculations. I don't mean to be facetious but if the usefulness of the ratio EROEI is inversely proportional to the number of inputs one defines into the ratio then it would make sense to keep the number of inputs as limited as possible which raises another question. For what is the ratio useful? Shouldn't the questions be defined more precisely first, for example, what is EROEI in converting shale to oil versus extracting oil from tar sands in terms of natural gas consumed for a given quantity of oil produced? I'm not trying to trivialize an issue being debated by far more capable minds than my own, but it seems analogous to debating the question,"How useful is a spoon?"

Define "useful."

Arlo,

I'm getting frustrated at this point so I'm going to shut up for a while after this post.

The question is, How to define Energy Returned on Energy Invested? That is, how many joules do you get after the conversion or process compared to how many joules it took to run the process including other inputs. It has nothing to do with whether the joules are useful. It has nothing to do with economics.

It is simply joules out versus joules in. Let it go at that without trying to add other considerations or dimensions that aren't germane.

Todd

BTW, a spoon isn't useful because you can "slurp." Nor is a fork since you can use your fingers or a stick. The only thing a knife might be "useful" for is to cut up game. Otherwise, you can knaw.

Todd
I apologize if I came off as a smart-ass. I honestly didn't mean to. The question concerning calculation of energy consumed at the rubber plant you supervised was sincere. If it can be done there, why not on a broader scale? I was looking for insight, not challenging you.

It just seems the debate, which from some of the comments I've read has tried the patience of alot of thinking people, revolves around trying to define the concept without having precisely defined the question.

For simplicity I will assume that all forms of energy are economically equivalent. Without this assumption simple energy balance calculations do not work, and one must inject energy quality factors into the analysis.

I agree that your proposed metric is valuable in some analysis... my concern is with the nature of the assumptions that tend to be made when considering energy issues. The boundary drawing issue discussed above is the crux of many assumption-problems.

A little parable:

An engineer, a physicist, and an economist are stuck on a desert island with only a can of beans to sustain them. The engineer considers finding a rock to break open the can. The physicist suggests placing it in the sun so that it heats up and bursts. The economist says "first, assume we have a can opener..."

That said, economists often get a bad reputation in this regard, as they tend to be less careful to hide their most fundamental assumptions...

Jeff,

I agree that the assumption that all forms of energy are economically equivalent is clearly false, although this issue is different that the boundary problem you discuss above. Real world calculations of energy quality would have to account for variations in the economic usefulness of differnt forms of energy as well as for energy embedded in production resources.

To tell you the truth, I am not overly enamored of net energy analysis. Consider the tremendous amount of acrimonious debate that has taken place over the energy balance of corn ethanol. All one has to do is look at the gross output per hectare and it is clear that this fuel source is an economic loser. In addition row cropping of corn leads to a topsoil loss rate greater than the replacement rate, so that this form of farming is inherently unsustainable. Independent of how much net energy is provided this form of agriculture should be brought to an end.

I developed these metrics not so much for practical calculations, but rather to provide my self with a conceptual tool for thinking about energy quality. I am doubtful that net energy calculation will play much role in determining the amount of fuel that will be extracted from the Canadian tar sands after they run out of stranded natural gas or of determining how much fuel will be extracted from American oil shale deposits. Practical engineering and cost calculations (and possible political consideration related to CO2 emissions) will rule the day.

the problem with EROEI as a metric is the EROEI is always less than 1.

boundary conditions are the problem

Boris
London

One of the issues I see with EROEI is the belief by some people that we have an essentially unlimited amount of coal (or natural gas). If they have this belief, then what they are looking for is an "oil-leverage" ratio to see how petroleum- intensive the process is. Thus, one sees analyses like the Berkley corn ethanol study. The summary report of the Berkeley study is here.

Don Brown reported that PNM has people working on the getting answers to

1 annual gallons of motor oil consumed
2 annual gallons of diesel oil consumed
3 annual gallons of gasoline consumed
4 megawatts of electricity produced

by PNM electric for years 1991 through 2006

Future shorages of diesel and gasoline may do bad things to coal mining.

I recently read on Internet that the US consumes 1.1 BILLION tons of coal per year mostly for electricity.

According to the Department of Energy, the United States mines more than 2.8 million tons of coal each day and if it did not, the nation would have double its natural gas production. Coal remains cheap and plentiful, with 250 years worth of reserves. It comprises 51 percent of the electricity generation.

energybizinsider August 20 2007

How would you pronounce EROEI?
ur-oh-ee-eye?
ee-row-eye?
ur-oy?
It is one of those acronyms that is a tongue twister if used in conversation. 'Net energy' or 'energy profit' are easy to pronounce and easy to understand by those outside the energy community. So easy even a troglydite can understand it.

His Boy E-Roy

For the farmer in the aformentioned example:
Old MacDonald had a farm, E-R-O-E-I.....

At some point in the infinite regression, there's the equivalent of the concept of "sunk costs". Eg, when deciding to drill for oil, the ship that hauls molybdenum already exists, so the energy cost for constructing it is sunk. If it doesn't haul molybdenum, it'll be used to haul something else. At worst, the decision to drill for oil affects shipping only at the margin: it causes an increase in total shipping capacity needed, so causes some small fraction of a ship to be built.

Many of these "distant" effects will be similar regardless of the energy resource chosen. Drilling for oil required that molybdenum be transported; putting up a wind turbine required that composite resins and polymers for the blades be transported; the differences are small, and if they are the ones controlling the decision, then the alternatives must by definition be close to each other in EROEI.

there's also a time and other useages variable that must be considered. If Old MacDonald is farming his corn with a brand new tractor that he bought for the corn to ethanol crop, then clearly his EROEI is going to be a lot less than if he converted a corn crop which he'd been raising on the same farm for animal feed with a tractor he bought and paid for 20 years before.

The same must be considered in offshore vs. onshore economics. An awful lot of offshore equipment is a one time use equipment, while much onshore equipment can be used until its worn out on several different wells. Your calculations always assume that the equipment is brand new one time use equipment and unsalvageable, and thats a huge distortion. If I have an onshore drilling rig thats used to drill 250 wells during its usefull life, then clearly the cost of the moly in the steel is negligable compared to building a platform to drill 50 directional oil wells in the water off Nigeria and can't be moved. Bob Ebersole

This touches an important point: even if we did an "infinite" backwards search for all the things that contributed, would we therefore get an infinite energy cost? I think not. While the corn from the farmer may be needed, that corn energy is used to so much else, and anyway it's cost is distributed over so many barrels of oil that we can safely ignore it.

Finding the cutoff point is important from a practical perspective, but if well chosen it shouldn't change the results very much.

It is one of those acronyms that is a tongue twister if used in conversation. 'Net energy' or 'energy profit' are easy to pronounce and easy to understand by those outside the energy community. So easy even a troglydite can understand it.

Along the lines of the economist assuming we have a can opener: Are we blindly assuming that most energy use is creating something that benefits us (or our children) in the future? In other words, what is the CROEI? (Creativity Returned On Energy Invested).
I submit that before we spend a lot of time assuming that the economy is going to continue to rule our use of energy, or that demand will continue to drive resource use (vs. rationing or collapse), that someone should be looking at the absolute minimum needs in general, and then build back up from there with sustainable sources of energy (or unsustainable ones used to achieve sustainability) invested into sustainable ergonomics of living arrangements (stop measuring quality of life by the amount of money spent).

In calculations over longer time periods, the resources to make the factory or the tractor become insignificant if they are built to last (unlike most manufacturing industries, with planned retooling and obsolete 'styles') and we can focus on the basics of EROEI of equipment operating use, but we need to start with basic REAL needs, not the current demand level, which is generally based upon fiat wants and creative marketing to lizard brains.
Most of our transportation economy is spent to move cars around, not people. Most of our entertainment is spent preventing people from learning to entertain themselves. Most of our houses are designed to look at and store stuff, not to live in them efficiently.
There's a lot of opportunity for change, and Cornucopian or Doomer (depends how I feel on a particular day), we might as well consider the basic needs first, rather than repainting the scratch on the Titanic, head for the lifeboat named Earth and Reality. Just because there is a huge demand, doesn't mean we need to feed it. Most people (and animals) are healthier on a low calorie diet; I'm sure the same applies to economies and energy. You enjoy ice cream a lot more if you aren't eating it every day.

Auntie, I'm having a bad day today (111* F in MS )so please excuse me if I sound a bit irritable. All this talk about EROEIOU, whatever, is totally irrelevant to anybody who is not part of the "Energy Illuminati". To use the common term, Joe/Jane Sixpacks' most pressing energy concern is whether he/she can recharge their Cellphone/Ipod/Crackberry everyday. You want to see a rebellion, just mess with that.

I don't think you sound irritable at all.

Joe/Jane Sixpack will just have to suck it up, I guess.

The farmers went through hard times in the '20's when everyone was spending their money on bogus stocks instead of food. During the Depression, other than the dust bowl areas, food prices were up, small farmers were actually doing quite well, buying tractors and machinery, raising lots of kids to get killed off in the Corporate Merger called WWII. Joe and Jane might just be a lot better off if they turn off those cellphones and AM radios of theirs and get out in the garden.

The relevance of EROEI comes into play just as it did back then. Farmers had to decide if keeping a horse fed was worth the hassle and acreage compared to using a tractor (and kerosene was almost free). Now that the price of fuel is getting higher, how do we put the horses (or people) back on land when there are so many more people to feed, made possible by cheap oil?

I'm old enough to remember my parents "ice" box (no fancy electric "refrigerator" then, and TV had yet to be invented ). Got my butt tanned one summer for swiping a handful of ice off the truck! So I agree with your estimation of the Sixpack's :) . As for your final question, I think we already know the answer to that. Some people won't eat. Possibly a lot of people. Parts of Africa and other places come to mind.

Subsistance/rainfall farming makes you old fast.

Best wishes to you and yours, from someplace in rural MS.

auntiegrav, It was a sad day here when the largest ranch in the area took their draft horses down to the river and shot them. I wonder if the next paradigm shift will be as brutal.

Don't mean to butt in, but did they at least use the carcasses? Hides, meat and so on? If not, then yes, it was not only sad, but wasteful. And in my experience paradigm shifts (real ones, not what consultants call paradigms ) are always brutal for someone.

Nature was happy. We still had many California Condors (Gymnogyps californianus) premier carrion eaters but not the local Grizzly Bear (Ursus tularensis Merriam) which had already been hunted to extinction.

I wonder if the next paradigm shift will be as brutal.

You mean like people in Nigeria getting shot for stealing gasoline?
Airplanes crashing into buildings (whoever may have been involved)?
Dogs and cats poisoned by "economically feasible additives"?
Flouride in our water because it 'proves' that it is a safe product of critical nuclear industry suppliers?
'democratic' governments selling weapons of mass destruction to despots?
Automobile companies selling cars that burst into flames because it's cheaper than fixing them?
40,000 deaths a year on highways?
Farmers pumping hormones and antibiotics into cows (and thus, children and the environment)?
People abandoned in flooded cities?
Property confiscated and people imprisoned for selling a joint while the government imports cocaine by the ton?
Americans are 'saddened' by people getting killed in Darfur, but OUTRAGED by their pet food being contaminated by companies they themselves enabled through "always low prices".
Military deployments planned based upon protecting oil fields that were previously redlined; instead of protecting people and their needs (in a country that never attacked ours..well, except for that one missile incident)?
Homeless people pushed out of taxicabs into the streets after emergency room treatment?
Kids killing kids because they don't find any connection to other human beings who care how they feel?
Economic hit men setting up millions of people to starve and die when their despotic leaders' debts can't be paid?
People killing each other over chrome plated wheels or a pair of tennis shoes?
Police beating someone's head to mush?
Mentally handicapped kids being recruited into the military?
People will spend 25 bucks for a bale of hay to feed their trophy horse, but complain when the price of milk goes up by a dollar to feed their kids.

Man, I don't know if I can take the brutality of NOT having a paradigm shift much longer. If I have to shoot a few horses, let me know. They stink anyway (but I hear they make a halfway decent steak).

"If you can't beat 'em; GET THE HELL OUTTA THERE, YOU IDIOT!" -leadership

Sorry, it's a gloomy kind of day: been raining for 2 weeks here.

The thing that scares me is that, in spite of all you say being true, it may still be better than any known alternative. Life expectancy and general well-being seems to be better for the largest number of people in industrial societies and the terrors that you describe seem to be inherent to those societies.

Catch 22

Industrial society spans the globe. There would have been no "middle class" in the First World without cheap imports made by cheap labor. Saying industrial societies are better than their contemporary alternatives is comparing a rat's snout to a rat's ass: you can't have one without the other.

This is the sort of calculation that the market does automatically for real products, in large part, namely that the profit/loss statement embodies all the costs of the product, including the energy costs.

The difficulty arises when you want to introduce a new product, whose presence is large enough to perturb the market significantly, and ask hypothetically if sales in the long run will be profitable. If your new source of energy is competitive with current sources in, for example, making electricity at so many cents per kilowatt hour, then you are in good shape. Otherwise life is more complicated.

Otherwise life is more complicated.

Can I quote you on that ?
:)

Re: Life is more complicated.

The true believers in the EROEI and net energy religions will never accept this. They know all the answers. Especially about ethanol. They speicalize in obfuscation and double standards. The most blaring of these is the criticism of the production of corn ethanol (with an EROEI of about 1.3) using natural gas while the production of electricity (with an EROEI of about .3) with natural gas is ignored even though electricity production is several orders of magnitude greater than ethanol production. Then comes the blather about electric rail as our salvation because it is so energy efficient. Am I the only one who sees a problem here?

Probably. But ask those electric-rail zealots whether they'd rather lick ethanol off a plate or lick a 9-volt battery and their tune soon changes, doesn't it. Yes. Yes. They're monsters.

--- G. R. L. Cowan, former hydrogen-energy fan
http://www.eagle.ca/~gcowan/Paper_for_11th_CHC.html :
oxygen expands around boron fire, car goes

I'm laughing at myself because I cannot find a clever way to respond to this subtle error in logic. But I'll try:

Making ethanol from crops is net positive but you are making liquid fuel from liquid fuel. We are willing to get .3 watts of electricity from 1 watt of oil (or coal or NG or Uranium) because electricity is very specially useful. Ethanol is no more useful than the fuel used to create it and it competes with the land needed to grow food.
We need a better return on invested energy than 1.3 to head off the problems of peak oil.

I hope that helps.

You answered it a lot nicer than I would have. Bravo on your self control.
I'll try another tack: The energy efficiency of electricity and electric rail has to be compared with the total energy and time consumption of automobiles running on petroleum or ethanol. If you get 30% of the energy from the coal's total potential, and you manage to use that 30% to move 300 people from point A to point B should be compared to getting 30% of the energy from burning the ethanol (internal combustion) to move 300 cars from point A to point B. You need a lot less if you only move the people on a train or electric bus. This is where the electric car idea comes in as the mediator between the two methods. SOMETIMES, people need freedom from the rails, but not every day, and not every person. Burn the ethanol in the power plant if you want to keep those ridiculous Iowa caucases happy.
From a productivity standpoint, you have to consider that people on a train can be using the time to relax, work out on stationary bikes (tied to the grid, of course...;-), or do their computing work. As they are busy driving cars for 2 hours a day, that's 600 manhours down the drain every single day. (well, 598 if one of them is the bus driver)

Practical;
I think you're confusing 'conversion efficiency' with a Total Energy Return. I don't know where the .3 figure comes from, but it sounds like the ".8" that is called gasoline's EROEI when it's compared to Ethanol by certain Ethanol enthusiasts.

The energy required to create a .3 Megawatts of NG-fired Electrical Generation is NOT one Megawatt of an existing fuel supply, it is the volume of Gas which contains a >Potential< of one Megawatt of power. To get an accurate reading of that electricity's EROEI, you have to credit the equation with the amount of energy that was expended in getting that gas out of the ground, not in the potential of the raw material. As with Oil, that is going to be a positive (or the business would have failed without unbelievable Subsidies (and then we're back to the Ethanol debate..)), and the .3 just chops into the big pie of finding energy-rich materials underground.

Electric Rail is blather? Because it would run on a lot of coal at present? From the calc's presented here, even then it is an improvement over Diesel Semi's.. and of course beyond that, there are clean sources of Electricity which are growing and already proven technologies.. what's your objection?

Bob

Hi practical,

Thanks for bringing this up.

re: "...double standards..."

“Natural gas is a very high value fuel and should be conserved for its highest value uses through substitution where possible in an environment of overall radically reduced demand.” David Hughes. http://www.aspo-usa.com/fall2006/presentations/pdf/Hughes_D_NatGas_Bosto...

Ethanol looks to be a costly detour on our search for the best possible mitigation paths for "peak".

re: "Then comes the blather about electric rail as our salvation because it is so energy efficient."

Well, let's put aside "blather" - (do you mean "extended discussion"?) - for a moment...

The point - (or, a main point, anyway) - of electric rail is that it can run on electricity, that is, without LTFs and with renewables as the generating source for the electricity. (In theory.)

To make a market function, you need energy. Assuming that that market will find the best solution is like assuming that your car will find it's own gasoline.

Hi six,

Nice.

re: "Assuming that that market will find the best solution is like assuming that your car will find it's own gasoline."

I just caught another car ad. (The non-TV person in a room where TV is on.) This one was even stranger than the little corn kernals falling off the back of the pick-up, landing on the ground and suddenly turning into very large vehicles.

This one showed what may have been meant to represent oil, a black liquid-like substance just sprouting up from the ground, (kind of flowing, yet forming mushroom-like growths as the intermediate stage), and then suddenly(!) turning into very large vehicles.

It seems vehicle manufactures have seized on the idea: The way around the dilemma of the fact that vehicles *require* fuel is to fool the mind into thinking that the fuel becomes the vehicle....

The vehicle somehow *being* it's own gasoline...

MadMen have their own definition of the KISS principle. It's "Keep It Simple 'for' Stupid". Meaning the target audience of course. Truth in advertising is something to be avoided at all costs. It doesn't make money, all it does is get you sued.

Huh. That sounds like religion to me.

"Let them not eat of the tree of Knowledge" etc..

It's all in the Marketing.

Did you know that marijuana was the biggest cash crop in America? (probably not since corn prices doubled) All without 5th Avenue. Maybe there's a lesson there someplace.

Maybe we could make cars that run on that. Oh wait...wasn't that a movie?

To make a market function, you need energy. Assuming that that market will find the best solution is like assuming that your car will find it's own gasoline.

They used to do that. They were called "horses". They could find water, too, if you were thirsty.

"Are you workin' on your machinery,
or is it workin' on you?" -Paranoid Larry and His Imaginary Band http://www.paranoidlarry.com

if you are so inclined...

Greetings,

Here in Australia the issue of EROEI is to become topical in the face of a new nuclear energy debate commenced by the conservative side of politics.

The nubb is while the World Nuclear Association provides EROEI of between 33 and 74, the Australian government says nuclear will not be economic for over 10 years.

This appears to give lie to kyops concept of "When people do an activity ostensibly to produce energy and after a while, they either quit or go bankrupt, the EROEI is less than 1."

Is it that the enrichment process has huge technical bills over and above the energy content...

Cheers,

Sololeum,
Sharing the road back to Olduvai

I thought EROEI was if you got more cash flow from oil than expenditures required to produce it, then you had income and were in business. Exxon got to be the #1 private oil company and usually carried only a small percentage of debt compared to equity on its balance sheet. Some of these highly leveraged companies might be weakened in a rising interest rate environment, especially as projects were brought in late and overbudget.

Repeat after me:

"EROEI has nothing to do with money".

Say that over and over again until you understand it.

The trouble with the EROEI concept and the statement
"it is axiomatic that if EROEI is less than 1—that is, if it takes more energy input than the produced energy output—then substantial reliance on that form of energy is not a valid foundation for modern civilization." is trying to distinguish between energy production processes using substantially the same kind of energy to drive the process as is the end product of the process and energy conversion processes where one form of energy is fed in and another form comes out and energy transmission or storage processes systems where energy is fed in and comes out at another place or time.

In a substantially pure energy production process using the same form of energy, say using oil to heat shale to produce oil or mining coal where the main energy input is coal generated electricity then very clearly if EROEI is less than one the process is pointless.

In pure energy conversion processes, such as burning coal to produce electricity, pure energy transmission processes such as using the mechanical energy of a air compressor to produce mechanical energy in air powered tools around a factory or pure energy storage processes such as a pumped storage system for electricity, EROEI is always less than one and nobody doubts that such processes can be useful.

The problem is that few processes fall into one of these pure categories. Usually there is a mixture of energy inputs, some of which is in the same form as the output and often there is, tied up in the process, some form of added value in producing the energy output in some way more convenient (place, time, quantity) than the energy input. In such mixed cases not only is it difficult to tot up the energy inputs, it is by no means clear that a EROEI value of less than one is fatal.

Nick,

"I simply meant that if we're going to define EROEI, shouldn't parameters be set based on the nature of the question we're trying to answer. What do we mean when we ask the question,"Is the production of ethanol from sugar more energy efficient than from corn?" Are we asking about the energy used from the point that the sugar or corn begins to be processed or are we asking a broader question about the total energy efficiency of the systems providing trasportation, labor, distribution, etc. My point was that it would seem to make sense to start with the more restricted question and build outward."

You make a distinction between energy production, energy conversion, and energy transmission and storage in relation to the economic value of these processes when you say:

In such mixed cases not only is it difficult to tot up the energy inputs, it is by no means clear that a EROEI value of less than one is fatal.

So it seems your raising two issues, the first is one for physics, chemistry and engineering, the second for economics.
1. What are the practical limits of calculating EROEI given that it becomes more difficult, possibly unmanageable, the more varied and numerous the inputs?
2. Given less than 100% efficiency in energy conversion, what processes are still economically viable and even necessary?

I agree with you that the concept of EROEI is problematic because setting the parameters for the inputs to get at the "real" energy costs of a production process turns on the framing of the question being asked. We should be asking,"The "real" energy cost with regard to what?" Having answered that question and then having calculated EROEI we can then answer the economic questions regarding the long term sustainability of certain processes or the more energy efficient fuel choices for certain processes.

Usually there is a mixture of energy inputs, some of which is in the same form as the output and often there is, tied up in the process, some form of added value in producing the energy output in some way more convenient (place, time, quantity) than the energy input.

Good point!
If we could agree on a minimum list of energy inputs for classes of processes, such as production, conversion, and transmission/storage, then build layers upon that list as the questions broaden, EROEI could be defined accordingly. We could then speak of "minimum EROEI for electrical generation using NG as a feedstock vs coal." From there, we could talk about "minimum EROEI for electrical generation plus feedstock transport energy costs for NG and coal." At some point set by the practical limits of calculation, we could get to an approximate maximum EROI for the category of processes in question.

Of course, someone may already being doing all of this in which case I'm blowing hot air at an EROEI <1.

This is my first comment, although I have been an observer of TOD off and on for about 8 months. I am semi-retired and my background is in Petroleum Engineering. I have viewed most of the comments I have read in this forum as constructive, and at least attempting to come to grips with the many emerging and potential problems resulting from our world's scary reliance on an ever increasing supply of cheap but depleting energy resources.

I have been musing and attempting to research the question of how to measure and monitor the energy content of all of the goods and services which go into the production of energy, without much success. This is perhaps because I haven't been looking in the right places. Also, being an engineer, I have been looking at this as a physical measurement problem.

I suspect however that a different approach may be required. Governments are remarkably efficient at capturing taxes, especially consumption taxes such as Value Added Tax, known here in Canada as the Goods and Services Tax. These types of taxes capture a portion of the economic value added at each stage of production. My understanding is that the entire burden of the tax is borne by the end user. Each intermediary collects the tax when it sells its product or service, and deducts the total VAT or GST that it paid, before remitting the balance to the government.

It occurs to me that an analogous type of energy consumption tax could be utilised to not only keep track of all energy consumed in the production of any product, but if set high enough, would also reward the most energy-efficient producers, and by being visible, it would allow all consumers of any product or service to know the amount of energy consumed in the production and distribution of it.

Taking this one step further, I can imagine that in applying an energy consumption tax on a revenue-neutral basis, governments could probably replace most if not all of the various income taxes, sales taxes, gasoline tax, excise taxes and import duties. Such a tax might be integrated with a carbon emission tax and/or with other consumption taxes.

I know that initially it would be virtually impossible to assess the amount of energy embedded in any product, but I believe that Governments could apply the tax initially only to the primary energy user based on the actual metered energy consumed for coal, electricity, liquid fuels and natural gas, (and based on estimates of consumption for hog fuel, wood and charcoal) Then allow the producer to allocate the energy taxes on each of its products, so that it could recover the total amount of taxes and pass them on to the next user(s).

Ultimately all taxes would be paid by the end user. There would be an incentive for the producer at each stage of production to measure and to allocate the amount of energy tax embedded in its products sold. Otherwise, it would not be able to recover the taxes it has paid.

For large capital projects it would not be possible for a producer to recover all of its energy tax paid on all of its current capital investments in the current time period, and it would be necessary to allocate the tax based on a unit of production over a period of many years, based on the useful life of the capital assets employed.

I believe that such an energy tax could be applied at diffent rates based on the quality of energy used, and that a carbon emissions tax could also be integrated with this.

I have heard arguments that Carbon Emissions Taxes are thought to be impossible to consider by governments because of the negative drag they would apply to the economies of most of the developed nations of the world.

I suspect that the impact of the energy tax I have proposed would be beneficial to the economies of all nations, if applied universally, BUT ONLY if it is done in concert with a reduction of most other taxes so that it is truly revenue neutral.

I realise this is not a well thought out concept but I would suggest this as a possible direction for this discussion.

Any takers?

Greg

red-dog,

Much of what you said makes sense, especially the carbon tax if we are truly interested in slowing the rate of increasing CO2. In an ideal world I believe rational people could come up with a common sense plan to conserve resources and save the planet as we know it, but then there is politics and the me first culture. Conservation, once enacted, would be a very positive force in freeing up money for important long term solutions to peak oil.

welcome to you red-dog. constructive work there.

you too, btu, but remember conservation<>consumption...

Greg,

I like your idea, but I'd work it from the other end. Goverments are good at establishing currencies. If you want to be sure of cutting down on carbon, ration it with a carbon currency. This makes decisions about carbon use very clear. Rationing energy, on the other hand, seems a little counter productive. Clean energy means a better life just as carbon energy used to before we caught on to the problems. In fact, carbon energy still does since the problems are not fully upon us yet.

Chris

Chris,

I wasn't really trying to address the issue of reducing carbon use, merely trying to point out that if our society wants to measure the energy content of all products which its economy produces, enterprises need to have an incentive to track their use of energy which is embedded in the products (goods and services) they sell, and that a refundable tax system would provide a system for doing this. Otherwise, they wouldn't be able to claim their tax refund.

Instead of an energy tax, you could probably substitute any other input, for example carbon emissions, total greenhouse gas emissions, fresh water consumed, etc. I believe that a refundable tax system could be applied in order to monitor any of these currently non-monetised costs of production, and more importantly, reward the producer with the lowest content of any of these inputs.

The important thing is to set the tax at the right level so as to minimise pollution and greenhouse gas emissions while maximising energy efficiency. I believe you can do this by phasing in the refundable (energy/carbon/pollution)consumption tax, while reducing other taxes such as income taxes, property taxes, sales taxes, payroll taxes, maybe even the sin taxes, so as to keep government revenues flat (or maybe lower than current levels), so as to keep our economies strong, whilst minimising the inevitable sectoral dislocations which would follow.

I believe that you can set the tax rate deliberately at a low level in order to see how it works. For example, if, in order to stabilise global atmospheric CO2 levels while allowing developing economies to "catch up", a reasonable estimate for the level that a refundable carbon tax must be is \$25 per tonne, then set the tax initially at \$5 or \$10 per tonne whilst simultaneously reducing all other taxes. Future carbon tax increases would be accompanied by matching decreases in other taxes. By gradual implementation, along with monitoring the economic impact, we can zero in on the appropriate tax level without having to worry about sudden and severe economic dislocation.

Similarily, applying a refundable energy tax at a modest initial level of say \$1.00 to \$2.00 per MMBtu would allow us to at least get a handle on the energy component of goods and services, while rewarding the energy efficient producers, who can reap higher profits due to lower embedded energy taxes in their products.

Can you point out any flaws in this argument?

A carbon tax (or BTU) tax applied across the board won't actually tell the consumer how much of the final price is due to the tax or to the other more traditional price calculations, using dollars, yen, euros or rubles. A direct allocation scheme would bring the point directly to the end user most immediately. Something like a gasoline rationing system, only for all carbon uses. The government already performs so-called input-output calculations that track the flow of materials thru the economy, so why not use that to track carbon (or BTU's)?

I think once it's obvious to all that we are at Peak Oil, rationing will be the only option (short of war, i.e., forced demand destruction for somebody else). Such a system would present the consumer with two prices for each item, the first in the traditional currency amount and the second representing the carbon (or BTU) content of the item. There would be no need for subsidies or tax rebates for the carbon (or BTU) side of things. And the consumer would know immediately whether to spend the ration on food, winter heating energy, electricity for the xbox and the Christmas lights, or fuel for the Hummers, power boats and overseas vacation air travel.

The computer accounting systems now widely in use could be simply doubled to handle the burden. Each individual past a certain age would be given a smart debit card, which would link to an account where the amount of available ration could be calculated. Periodically, the account would be credited with the next amount of the ration. Overdrafts could be directed to a white market, where those with extra rations at the end of the accounting period could trade their surplus in exchange for traditional cash payments.

E. Swanson

I also like the term white market, but I think of it more in terms of goods and services. Say you have a farmers market where an Amish organic grower brings in melons by buggy. There is no ration needed to get a melon because the farmer did not use any fossil fuels to produce it. Similarly, when Walmart puts solar on it's roof, and runs its trucks on biodiesel to sell you something produced in a US wind powered factory, you're only ration cost is getting to the store. These are the ration free markets that develop almost the way convenience stores spring up.

Making the rations tradable for cash is very important because this also encourages more creativity applied to conservation. Those who learn to use the white markets well end up with more money in the end.

I've been thinking about this for a couple of decades. The white market for trading rations would be an essential component of a permanent rationing system. I looked at the energy consumption vs. income and noticed that the folks at the low end of the income distribution still consume energy. The fraction of their income spend directly on energy is quite large. As income increases, the fraction spent on direct consumption declines while that spent on indirect consumption becomes larger. That is, the wealthy buy things made with energy consumed somewhere else used to produce the goods and services they desire. Any attempt to modify consumption by taxes results in increased prices in dollars, which presents the consumer with little indication of the source of the price increase. If the goal is to reduce the consumption of fossil fuels, increasing taxes alone will not provide the clear message to everyone that there is the need for basic changes in the way we live. How many house wives today understand that the price of milk and eggs is increasing because they bought an SUV or other gas guzzler a couple of years ago?

On the low end of the scale, an energy rationing system based on equal distribution of some fraction of the available energy would likely provide more energy to the user than he or she would otherwise use. Since there would still be the price mechanism at work, there would be a powerful incentive to both conserve and also return the unused rations to the white market. It might turn out that the direct payments to low income people as welfare could be cut, as the income from selling excess rations rises. On the other end of the scale, the wealthy would still have the energy they were used to burning, but would pay more for the privilege of so doing. Since the wealthy have the money and make most of the long term investments in the economy, one could expect to see rapid development of alternatives to fossil fuels.

Hopefully, this approach would not result in massive inflation, which would be expected to occur as a result of supply shortages after Peak Oil. While there are various alternative energy sources available, all tend to rise in cost as inflation makes everything more expensive. Thus, as the price of oil begins to climb after Peak Oil, there would be a similar increment in the cost of the alternatives, such that an upward spiral in the market price of all energy sources could be expected. It takes energy to make energy and the effort to build alternatives will result in a diversion of energy currently available to the consumer market toward the energy supply system. Thus the shortage at the level of the consumer would be magnified and this would add further upward pressure on the prices the consumer would pay. It is difficult to see where this upward spiral might end.

E. Swanson

I very much agree that rationing stabilizes prices. Adequate rationing in the US could drop the price of oil over a period of 10 years or so though once we are largely off of oil the price will be set by others. But, a major US conservation effort could drop the price down to \$20/barrel which would mean a lower cost transition. International cooperation might bring the price of oil down further, but even without that we can certainly apply rations to imports, boosting our own manufaturing and economic viability.

Chris

Greg,

I don't see much of a problem with your basic idea that you could impose a specific accounting that would be useful for understanding energy flows using a tax system.

I do see problems with using a tax to modify behavior in this case. Demand for fossil fuels is very stiff owing to our investment in big ticket items like cars, furnaces and and power plants. A tax that substantially reduced our fossil fuel use likely does so by impoverishing us. Tax shifting is something that Al Gore, for example, has discussed. Others have talked about using the tax revenue to help people transition but I just worry that a tax would have to be huge and things would break down.

Another issue is that a sin tax, which is what this would be, tends to make us dependent on the revenue from taxing the behaviour so we end up with a tolerance for the behavior that was not the original intention of the tax. Your gradualism going in might help in a lot of ways but you also need to come back out again once the behavior you want to eliminate is covered because you want that source of revenue to disapear. So, taxes have to shift back again. Beyond planning for the end of the tax, you don't really know what the actual response of demand to the tax will be so you need to be tweeking it if you are committed to a partucular reduction in fossil fuel use. Still, I'm on record supporting a carbon tax and opposing cap-and-trade.

Again, I would apply this to carbon rather than energy as a whole since it is not hydro power that is causing the pollution that is the big issue. One could also make the case for an oil only tax to attempt to keep ahead of depletion, but energy in general seems a little arbitriary. The most direct way to raise revenue would be to tax money, or rather it's exchange as with a Tobin Tax. Applying this to finacial transactions at a very low rate easily covers current government spending while moderating volatility in the markets.

Chris

I have an accountants understanding of EROI, ie not very deep. I understand the 1st and 2nd laws of thermodynamics and so I think I have a basic grasp of the concept.

It is sometimes held up as the ultimate gatekeeper and I accept this. Lately however an aspect to EROI has been worrying me. It is the monetary value of one form of energy vs. another. For instance it is currently profitable to use natural gas to turn tar into Syncrude in Alberta. What happens when the economics of natural gas no longer work?

I have seen arguments that maybe they will use nukes, or that nukes can unlock the US oil shales. I have seen EROI statements for the tar sand that vary between 0.75 and 3, however shale operations would probably be negative. If nukes could convert all that shale into oil; and the price was right, surely that would happen even if the EROI is negative?

In the longer term we will not be able to power the nukes, so EROI will eventually get us. But it might keep the US easy motoring utopia stuttering along for a few more years.

I am not an expert in this area, but have had some exposure to oilsands upgrading projects.

You are right, ultimately the oil sands development will have to switch from nat gas to coal or nuclear to produce the hydrogen required for desulphurization and for upgrading the bitumen to a light synthetic oil for refinery feedstock. The solid coke produced as a by-product of bitumen upgrading can be a source of fuel but it contains high amounts of sulphur, and so is undesirable. Also I believe that solid coke is probably not amenable to using clean burning techniques (ie, low CO2 emissions)

Already, some of the newer oil sands mining projects and most of the in-situ SAGD heavy oil projects in Alberta are only partially upgrading the raw bitumen to a heavy synthetic crude which is pipeline transportable by using condensate as diluent for viscosity reduction. This minimizes the hydrogen requirements (thus saving on natural gas costs) and also reduces the upfront capital costs. The offset to these cost savings is the lower price received for the heavy synthetic oil blend.

(Another problem is finding an adequate supply of diluent to transport the heavy oil and partially upgraded bitumen. One source is offshore, where apparently there is a surplus of condensate in the Asia-Pacific region, which is now finding its way to Alberta via tanker and pipeline. Some new oil pipeline projects are providing a condensate return loop, as the refiners in the mid-west U.S. can maximize their profits by separating the condensate from the heavy-oil blend, and shipping it back to Alberta, where it commands a premium price. Supply and Demand.)

Of course, this means that large regional upgraders, and refiners as far away as the US Gulf Coast will still need to generate the hydrogen needed to fully upgrade the heavy oil and to provide the full range of liquid fuel products from this heavy feedstock. And they will need to use natural gas or electricity to generate the hydrogen.

If natural gas supply becomes short, or is not price competitive with electricity, then coal or nuclear become the only options for hydrogen generation, using electricity.

Nuclear is for some reason being ruled out by the Alberta Government, probably because the existing electrical power infrastructure is fuelled by coal from the abundant local low-sulphur deposits.

However, in the short term, nuclear is probably the way to go. Only a few hundred km NE of Fort McMurray, Alberta, the heart of the oilsands, lie the largest high grade low-cost deposits of Uranium in the world. The three existing Cameco-operated mines in Northern Saskatchewan currently supply about 20% of the total world supply of Uranium.

I believe that ultimately most bitumen will be fully upgraded to light synthetic oil in large regional upgraders using hydrogen generated by electricity from nuclear power plants. These will be located close to the source of the bitumen and heavy oil, either in Edmonton or Fort McMurray.

This will minimise the natural gas and condensate requirements as these products become in shorter supply.

Also I am in the camp of those who believe that nuclear has several advantages over clean coal, the most important being that it is a proven technology. But I have not ruled out clean coal as a future replacement for Uranium once low cost Uranium deposits have been depleted.

...Greg

Using nuclear power to unlock tar sands or oil shales is perfectly feasible from a net energy perspective - but if the primary purpose is enabling propulsion of vehicular transport, it's an incredibly wasteful and inefficient way to do it. I would guess if it took 100 nukes to generate enough liquid fuel to power the entire US automobile (ICE) fleet, you could do the same with 10 if the automobile fleet was primarily electric. The latter would also have the advantage of not cooking the planet and drowning major population centres.
Mind you, the same must be true for using natural gas to extract oil from tarsands - has anyone compared this to simply using LNG directly in vehicles, including the (energy and economic) cost of converting the vehicles to run off such a fuel?

Of course, vehicles are often the "easiest" thing to replace. Where does a gallon of gasoline go furthest - in a car or a chainsaw?

cfm in Gray, ME

Surely if automobiles didn't need oil, there would be no need to bother with tarsands or shale - there'd be more than enough conventional oil. And once that finally runs dry, electric chainsaws.

You ever use an electric chainsaw? They really suck compared to a gas saw. They are way underpowered, slow, very limited in where and when they can be used, and more dangerous than a gas saw. You'd be better off using a handsaw or an ax. I've been using chainsaws for 40 years, and I've never seen a electric saw I'd give you a plug nickel for. Same goes for the POS battery operated circ saws and other battery operated powertools.

eMergy software:
http://sourceforge.net/projects/emsim/
Diagram (JGraph) driven simulator. Bondgraphs > nonlinear differantial system > plot: implemented for economics and ecology. Network analysis: emergy propagation implemented. Would also fit for electronics, mechanics, cost, GWP, footprint analysis.

Thx Jeff for picking up this glove..

I reckon focusing EROEI-issues and the scrutinizing of bio-fuels in particular, as Robert R is working on, to be the most important in getting a preventive understanding of where all this will go.

The earlier we (as a system … governments, UN) know “the numbers” involved in this, well the clearer we will be able to mitigate correspondingly.

I’m looking forward to your next entries on EROEI

EROEI is confusing because it has a political aspect, unlike ROI (return on investment.) ROI is very simple because someone invested X dollars and got Y dollars back. The return is Y-X.

The "energy return" in EROEI is just as simple - you can measure it in BTUs. But "energy invested" is not simple at all. It is highly subjective!

For me, the "energy investment" required to get a tank of gasoline for my car - from thinking about it until being done with it - is less than 50 calories of food energy?

From my point of view, this transaction has a tremendous EROEI!

On the other hand, if we include all the energy it took me to earn the money for the gasoline, and all the energy it took the oil company to produce and distribute the gasoline, the EROEI is smaller.

If we look back further still and include all the energy it took plankton to live and die, the gravitational energy it took to concentrate their dead bodies on the ocean floor, and the geologic energy it took to subsume them into the Earth's crust, and then "cook" them out as oil - the EROEI is tremendously bad!

EROEI is meaningful only if you also define the scope of the word "investment" very clearly.

Lets define it over the entire period of time when a resource is used.

I've been thinking about being truly addicted to oil. Like and addict. You'll go shake down the pusher if you are desperate. You'll steal from pension funds to pay the pusher, you'll do anything. Oil is the only thing you like.

So, not to give anyone any stupid ideas, but lets suppose we could get every last drop of oil out of the ground as fast as we want by exploding neutron bombs inside the oil fields. This cooks up the sluge and from the neutrons that are not absorbed into surounding metals to create sustained heat, you get some hydrogen to help upgrade in place.

It seems to me, that for the full-on oil addict, you'll use so many of those bombs that you'll have put more energy in than ever comes out. The thing that got you addicted, the easy energy, will, in the end, make you go for no energy out at all.

This is extreme, but if you replace oil with liquid fuels, it begins to sound like some of the desperate schemes we've been discussing above ground. But, now the boundry conditions have slipped again. Instead of all oil to ever be produced, we are looking at that plus all oil substitutes to ever be produced. Heroin plus methadone.

I think rather than this take on things it better to think of oil as pablum. We don't say we are addicted to food, but we do have a special diet for infancy. Liquid fuels are that diet which does not require any teeth but once we grow some teeth, by learning how to use renewable energy better than plants do, we'll be ready for a more substantial diet. The gerber food isn't what we need anymore, and while we might scowl a bit at first at the idea of changing to salad, meat and potatoes, we'll like it better in the end and think of the baby food as, well, for babies.

Chris

(about the "energy invested" in EROEI)

Lets define it over the entire period of time when a resource is used.

This is backward. The energy investment ends before energy is returned. Once I've already put gasoline in my car, I don't invest any more energy to get that particular gasoline. So we can't define energy investment that way.

According to the laws of thermodynamics, all processes have a negative EROEI, if the scope of "energy invested" is broad enough. If we include in oil's EROEI the solar energy invested in plankton, for example, oil has always had a negative EROEI.

Positive EROEI is political because it requires drawing a line between what is considered "energy investment" and what is not. It requires drawing a line between the profiteers and the victims.

Gasoline theft has a very high EROEI from the viewpoint of the thief, because she does not consider the victim's losses.

Conventional oil has a high EROEI because we consider only the energy investment by the oil company to discover, explore, and produce the oil - we consider only the part that the oil company pays for.

We don't consider the energy cost of environmental destruction, both directly caused by production and refinement, and indirectly caused by CO2 emissions.

This is not to say that EROEI is bad. But, it is not a math concept like ROI either. EROEI requires political judgments, and these are often unspoken.

I think we are in agreement on where energy is invested. Perhaps I should have made it clearer: Let's set the boundry conditions over the entire period of time, historic and future, over which a resource is used.

Pre-peak EROEI is greater than one, what of post peak? There is oil in the ground but it is harder to get. Under the addiction meme are we likely to erase all energy gains pre-peak by persuing resources that require more energy to extract than they provide? The answer is yes. That is why I suggest doing away with the addiction meme and reverting to the older idea that Bucky Fuller promoted which is to view fossil fuels as a means to construct a sustainable renewbles based energy system. The addiction meme is for short-term thinkers and is self-reenforcing since addiction is about the shortest term viewpoint that can be adopted. Those who adopt the meme can then be seen as crippling their ability to contribute to building the future.

EROEI is a ratio so it is either above one or below one. It is not negative. Also, we cannot consider solar on the energy invested side unless we specifically do the investing. It would be possible to the consider opportunity costs of using land surface area in various ways. We may consider solar on the energy return side. We invest nothing in making the Sun shine.

Chris

I bet hydrazine rocket fuel has an EROEI a lot less
than ethanol yet everybody can live with that. Windpower is said to have an EROEI of at least 20, yet some say it's not much good. A theory of energy return has to take into account relative contribution.

I haven't read the refs, but I don't see how "infinite regression" could be a problem in computing emergy. The starting point is defined as solar energy received at the earth's surface. Emergy is not easy or straightforward to calculate, but at least the baseline is clear.
- Bob Wise