Stories tagged with "eroi"
Have We Reached an Inflection Point in Economics History?: “Indeflation” and Energy
Posted by Prof. Goose on June 26, 2009 - 10:15am
Topic: Economics/Finance
Tags: commodities, compartflation, deflation, dollar, economics, energy, eroi, federal reserve, indeflation, inflation, net energy, oil prices, speculators [list all tags]
A fierce debate now rages among economists, investors, pundits and the puppetmasters of fiscal policy: What’s next, inflation or deflation?
Has the most massive money-printing spree in history successfully stimulated the global economy and put it back on an upward course with rising inflation? Or are we still in a global downturn, temporarily masked by the stimulus, with prices, wages and employment still falling?
A comforting 30% gain in the major stock market indexes since the March lows has given renewed confidence to the “green shoots” trumpeters who dominate the airwaves and the press.
But grayer and wiser heads in the investing community—like Dave Rosenberg, John Mauldin, Nouriel Roubini, Gary Shilling, Peter Schiff, and Dave Cohen—have a more bearish view. The financial sector must now deleverage, they argue, which means liquidating assets, repaying debt, saving instead of borrowing, and contracting in general. In their view, the process will take years, not months, and what we have seen since March is a classic bear market rally.
The Net Hubbert Curve: What Does It Mean?
Posted by David Murphy on June 22, 2009 - 10:30am in The Oil Drum: Net Energy
Topic: Supply/Production
Tags: cutler cleveland, david murphy, eroi, gross energy, m. king hubbert, net energy, net hubbert, original, peak oil, positive feedback [list all tags]
Cutler Cleveland of Boston University has reported that the EROI of oil and gas extraction in the U.S. has decreased from 100:1 in the 1930’s to 30:1 in the 1970’s to roughly 11:1 as of 2000 (Figure 1). But beyond the fact that society receives currently around 11 barrels of oil for every 1 barrel that it spends getting that oil, What does this mean?

Figure 1. Plot of three estimations of EROI for U.S. oil and gas.
Some Cautionary Thoughts about Wind
Posted by Gail the Actuary on June 1, 2009 - 9:57am
Topic: Alternative energy
Tags: electricity, eroi, wind, wind generated electricity [list all tags]
This story has been edited to make it clearer that the analysis relates to US wind rather than European wind and to clarify the problem with excess generation at night. I also added an Item 10.
I think we think we know more about wind-power than we do. These are a few things that I have recently discovered about wind that make me think that plunging headlong into electricity is not necessarily a good idea. At this point, we don't seem to have a plan that does much more than address wind turbines themselves.
I should make it clear that this discussion relates to US wind power, not European wind power. Many of the issues directly or indirectly relate to the fact the US is facing a multi-faceted problem--lack of wind turbines, needed grid upgrades, and lack of electrical storage. In a time of financial problems, the price of such a big change makes it difficult to tackle all these problems on the necessary scale at once. If we only add wind turbines, and make minimal upgrades in storage and transmission, the change is still likely to still be expensive and will likely leave us with the need for large subsidies. Without extensive grid upgrades and electrical storage changes, wind generated electricity will continue to play only a supporting role, acting mostly as a fuel substitute.
Europe has been dealing with this issue longer and has better addressed the wind transmission and storage issue, so it is in better shape in this regard. Jerome Guillet has prepared a write-up focusing more on the European perspective.
A Net Energy Parable Revisited
Posted by Nate Hagens on May 28, 2009 - 10:03am in The Oil Drum: Net Energy
Topic: Alternative energy
Tags: eroi, net energy [list all tags]
Besides water, energy is the most important substance for life on the planet. For most organisms energy is embodied in the food they eat, be it bugs, nuts or gazelles. The excess of energy consumed to energy expended (net energy) has been integral in the evolution of the structure and form of present day organisms.
EROI Update: Preliminary Results using Toe-to-Heel Air Injection
Posted by David Murphy on March 18, 2009 - 9:27am in The Oil Drum: Net Energy
Topic: Supply/Production
Tags: alberta, bitumen, daveinmarinca, eroi, horizontal wells, net energy, original, petrobank, sagd, tar sands, thai, toe-to-heel [list all tags]
In August 2007, a post titled Extracting Heavy Oil: Using Toe to Heel Air Injection (THAI) introduced readers of The Oil Drum to a technology for producing an upgraded extra-heavy oil from Alberta Tar Sands without the environmentally messy and energy-intensive surface mining procedures that currently dominate extraction. The post provided a first-look at producing and partially upgrading Alberta bitumen in situ. In this post we make preliminary estimates of the Energy Return on Investment (EROI) of the THAI process.
The Alberta Tar Sands continued to garner interest through the first half of 2008 because of declining conventional oil production in Canada, the apparent success of the Steam Assisted Gravity Drainage (SAGD) process and the increasing price of crude oil. Today they are still of interest as the countries of North America (and around the world) desire cheap, abundant crude oil from politically stable regions (See Unconventional Oil: Tar Sands and Shale Oil - EROI on the Web, Part 3 of 6). However the subsequent financial collapse during the second half of 2008 has caused many tar sand projects to be deferred. In fact, Canada's oil-sands industry has hit the skids, spreading a deepening gloom over Alberta's economy, and to some degree, across the country. Some expansion projects that were under way in the Fort McMurray region have been put on the shelf, as oil companies slash their budgets to reflect the new economic environment in which they operate – that is – a world of lower oil demand and, at least compared to the summer of 2008, low oil prices.
The Effect of Natural Gradients on the Net Energy Profits from Corn Ethanol
Posted by David Murphy on January 13, 2009 - 12:09pm in The Oil Drum: Net Energy
Topic: Alternative energy
Tags: biofuel, corn, energy profits, eroi, eroi guy, ethanol, gradients, net energy, original [list all tags]
Scaling biofuels from the level of the laboratory or pilot-plants to commercial production is the Achilles’ Heel of almost all biofuels. One major problem is that biofuels use feedstocks that are invariably less energy dense than their fossil fuel counterparts. For example, there are approximately 45 MJ per kilogram contained in both the finished product of gasoline and crude oil, while ethanol has an energy density of about 26 MJ per kilogram and corn has only 16 MJ per kilogram. In general, this means that large amounts of corn must be grown and harvested to equal even a small portion of our gasoline consumption on an energy equivalent level, which will undoubtedly expand the land area that is impacted by the production process of corn-based ethanol.

Figure 1. Map of the optimal gradient space for the production of corn-based ethanol within the United States. Colors correspond to EROI numbers listed in the figure caption. The grey areas represent locations without a significant amount of corn-production.
Implications of Energy Return on Investment, Peak Oil and the Concept of “Best First”
Posted by David Murphy on January 2, 2009 - 11:23am in The Oil Drum: Net Energy
Topic: Miscellaneous
Tags: best first, charles hall, david ricardo, depletion, eroei, eroi, eroi guy, natural gas, peak oil [list all tags]
The following is a post by both Dr. Charles Hall and EROI Guy. Most of the material comes from a recently published book chapter titled “Peak oil, EROI, investments and the economy in an uncertain future.” The book can be found here. Dr. Charles Hall is a professor of Systems Ecology at the College of Environmental Science and Forestry in Syracuse, New York, and has written about energy issues many times on The Oil Drum, found here.
Welcome to The Oil Drum: EROI
Posted by David Murphy on December 28, 2008 - 6:17pm in The Oil Drum: Net Energy
Topic: Site news
Tags: charles hall, eroi, eroi guy, introduction, net energy [list all tags]
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.
The IEA WEO 2008 from the Perspective of Biophysical Economics
Posted by David Murphy on November 14, 2008 - 10:26am in The Oil Drum: Net Energy
Topic: Economics/Finance
Tags: biophysical economics, charles hall, charlie maxwell, energy intensity, eroi, iea, neoclassical economics, ponzi scheme, upstream costs, weo 2008, world energy outlook [list all tags]
Editor's note: the following post is by Dr. Charles Hall and his Phd student David Murphy (EROI Guy), and is part of our on-going series reviewing the World Energy Outlook 2008, recently published by the IEA. It is also the first post of a new 'channel' on The Oil Drum: TOD:EROI, where we will be posting essays, papers, and analysis on the biophysical aspects of energy. Our intent is to be a real time central clearinghouse for biophysical/net energy research and ideas. We have debated on calling it EROEI - Energy Return on Energy Invested, but have decided to keep it consistent with the acronym from the energy literature. The post below critiques the neoclassical economic assumptions underpinning the IEA report and proposes future 'energy watchdog' reports utilize an alternative approach grounded in biophysical concepts.
The Marginal BTU - The Return of the Red Queen?
Posted by Nate Hagens on September 27, 2008 - 10:33am
Topic: Supply/Production
Tags: aubrey mcclendon, chesapeake, energy surplus, eroi, natural gas [list all tags]
Note: This is an updated version of a post from earlier this week. Some more recent quotes have been added at the end of this post.
Despite recent optimistic news on new shale gas reserves, the totality of North American natural gas production remains on a treadmill, as the EROI reaper has relentlessly raised the marginal cost of producing- to currently above the price of natural gas futures. While shutting in production is not easy to do once wells are drilled, low prices with rising cost structures can put the crimp on future expansion. Chesapeake (CHK), the largest US natural gas producer and operator of land rigs, announced last evening they will be curtailing production, cutting their rig count and reducing capital expenditures. (Of course, it is possible that this is the first example of an energy production casualty due to the credit crisis if the reason for this capex drop is lack of easy funds...)
In recent years, each time Chesapeake Chairman Aubrey McClendon announces some production or capex decreases, it has marked a bottom in the commodity (see graphic below fold). As this will surely be followed with similar announcements by other E&Ps in the near future (I expect Sanridge Energy and Petrohawk Energy soon), there will soon be a drop in monthly gas production--perhaps as much as 5%.


k Nation (Jim Kunstler)




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