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107 comments on EROEI Short #3: Price-Estimated EROEI

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PaulS on August 31, 2007 - 11:22am Permalink | Subthread | Parent | Comments top

...some tweaks are needed as a minimum...

Perhaps a start would be to examine the possibility that resource constraints (i.e. a non-'empty' planet) introduce significant correlations between some variables currently treated as uncorrelated in statistical and/or econometric models... ?

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memmel on August 31, 2007 - 12:15pm Permalink | Subthread | Parent | Comments top

YES !!!!!!!

And correlations lead to positive feedback loops.
Thats the problem once you start looking at a finite system driven by a decreasing critical resource you get correlation and thence positive feedback.

Think of the microphone feedback case right before they go into exponential feedback their is a correlation event where the inputs and outputs become shared then boom you go positive feedback. So increasing amounts of correlation implies positive feedback. So if your concerned about correlation your really talking about positive feedback loops forming.

This is why strained complex systems tend to crash too many routes exist for positive feedback as the system becomes highly correlated.

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TheTransition on August 31, 2007 - 9:50pm Permalink | Subthread | Parent | Comments top

Perhaps a start would be to examine the possibility that resource constraints (i.e. a non-'empty' planet) introduce significant correlations between some variables currently treated as uncorrelated in statistical and/or econometric models... ?

Yes. I totally agree with this but I don't know how to do it. I think the classic example are economists who think the long term price for oil will tend to around $40 per barrel because that was the cost of CTL produced Oil when Oil cost $20 per barrel.

As memmel says above, there are almost certainly feedback effects that cause the general price of all inputs to rise so that $40 CTL Oil in a world where Oil from from the ground costs $20 is unrealistic where Oil from the ground costs $100.

The escalating costs of the Oil Sands projects are another.

Another is here in Australia where we are benefiting from a mining boom which is inducing massive investment in projects all over the place. However the costs of the these projects keep rising because they're driven by the rising costs of the commodities that is inducing the investment in the first place... etc.

How does one go about scaling input costs to projects that will increase supply to meet the demand for the commodities?

I dunno. Seems like a good Ph.D. project to me.

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