Net Oil: Situation Worse than we thought.

Doly · Expert Joined: Dec 03, 2004 Posts: 4041

If we were to make the analogy with food, I think a more accurate description would be this:

Imagine a village that lives next to a lake full of fish. At the beginning, they didn't know how to fish. One day, they learned fishing. During the first hundred years, they fished as much as they needed to feed their population, and the population grew accordingly. But one day, they reached the point where they started fishing more than was getting replaced by new fish being born (oil in fact is a finite resource, so it's a bit different). They tried new methods of fishing to compensate for the decline, but that only depleted the fish stock faster. At a certain point, no matter what they did, they couldn't keep up the production of fish. Fishermen spent longer and longer hours on the lake for smaller and smaller returns of fish. Logically, fish became more and more expensive, and people turned to other foods. Things reach a point that the amount of effort it takes to catch a fish uses a significant part of the caloric intake of the fishermen. Theoretically, at some point the calories you spend trying to catch a fish are equal to the calories you get from eating the fish and fishing is a worthless exercise, but in practice, people would stop fishing before that.

What happens at the end depends mostly on whether the village can ramp up production of other foods at the required speed, and the caloric content of the other foods compared with the effort it takes to obtain them. If fish was particularly energy-rich and easy to catch originally, even if they can ramp up production of other foods to keep everybody fed, it also means that everybody will have to work longer hours to get the same amount of nutrition. (In oil terms, this means that even if we make the transition to renewables, if the EROEI of the alternative energies is lower, we will have to devote a bigger fraction of our resources simply to keep everything running).

Let's suppose the village won't have enough foodstuffs to keep everybody fed at the current levels (in oil terms, there isn't enough energy to keep things running at current levels). If the villagers were initially overfed, the average weight will drop and they will work longer hours, and they might become healthier than ever before. This is the happy ecological scenario, where waste is reduced, resources start getting used responsibly, and everybody may be happier all around. If you think this is unrealistic, you haven't looked at your bin lately. We are so incredibly wasteful that I wouldn't be surprised if reducing our energy usage by half does our society more good than harm.

But if things go horribly wrong, there will be hunger in the village. In a moderate case, nobody dies straight away from starvation, but they are weaker and malnourished and get sick more easily from any infection. (In oil terms, there are real shortages of essential stuff, not enough to cause a dieoff, but a significant reduction in quality of life and possibly an increase in mortality, mostly because expensive treatment of diseases becomes something for the rich. A WWII type of life.)

Finally, in the "all the hell breaks loose" scenario, many people die of starvation. (In oil terms, collapse of civilization and likely dieoff).

Pick your favorite scenario. Mine is the third.

AirlinePilot

This is an excellent thread. I think anyone who has been here (PO) for any length of time can see this is just another way to connect the dots about this gargantuan problem. I think personally I had this concept floating around for a while but didnt think it any different from the concept of a geologic peak. For me this all follows that. It makes a lot of sense and it's very intuitive that as we pass the peak (geologically) we are going to accelerate the amountof oil used to get it out of the ground due to the much larger difficulties (and expense) extracting what is left.

This is the foundation of my doomer attitude. I don't see how this can possibly be managed, even If your a true cornucopian. It reminds me of one of the last scenes in the Movie Return of the King. In the battle for Minas Tirith, the Rohirrim has swept the field of Orcs, faced the giant Elephant army and now comes the Nazgul winging its way towards Theoden as he stands frustrated, amazed, and terrified at the threat. His expression in that scene is a perfect allegory for how I feel about what is coming.

The shock, horror, and despair humanity will endure could be immense. I truly hope for something miraculous, but the reality is that we will likely fade away into another dark age. I fear for the future of my children and thiers. It certainly is not a bright one.

Novus · Light Sweet Crude Joined: Jun 21, 2005 Posts: 1741

I would like to add a corollary to the Net Oil Theory.

Net Oil 2.0: In a closed sytem the marginal decline rate is equal to one half its EROEI. [b]Net Decline = 1 - EROEI/2[b]

This means that any oil well that has less then 2 EROEI is unsustainable. The production of low EROEI oil is predicated on cheap energy else where in the world. So if an oil Co. owns a well the has 2 EROEI it is only worth it to produce from that well if it can get nearly free energy to power the well. If the well has to use its own self produced oil energy to power it then its production will decline.

Proof:

Given-
Well 'A' has EROEI of 1.9
Initial input 100 units of energy.

Cost and revenue for 4 iterations recycling energy:

1st iteration: 100 -> 'A' -> 190 units of energy
2nd iteration: 100 -> 'A' -> 190 -> 'A' -> 361
3rd iteration: 100 -> 'A' -> 190 -> 'A' -> 361 -> 'A' -> 686
4th iteration: 100 -> 'A' -> 190 -> 'A' -> 361 -> 'A' -> 686 -> 'A' -> 1303

Net energy return for each iteration:

1st iteration Net = Revenue(190) - Cost(100) = 90
2nd iteration Net = Revenue(361) - Cost(100 + 190) = 71
3rd iteration Net = Revenue(686) - Cost(100 + 190 + 361) = 35
4th iteration Net = Revenue(1303) - Cost(100 + 190 + 361 + 686) = -34

With each iteration the field gets less marginal return and turns negative after the forth iteration. The costs will in time overun the revenue on any energy source that has less than 2 EROEI. Even if you discounted the initial input as free energy the costs would still over run the revenue on the very next iteration. This is very bad news for the tar sands and America's older oil wells. These marginal sources of energy are only productive because their inputs have very high EROEI and they do not have to recycle their own low yeild energy back into themselves. The result of declining EROEI will be a progressive collapse of oil supplies that feeds on its own vicious cycle of ever greater declines.

turmoil

Do correct me if I'm wrong, but at 1.9 using your self-produced energy you gain 90 units each time.

1: 100 -> 'A' -> 190 = +90

2: 100 -> 'A' -> 190 = +180

3: 100 -> 'A' -> 190 = +270

4: 100 -> 'A' -> 190 = +360

I'm pretty sure the formula to see it over time would be (e = EROEI, x = iteration/time)

y = x(e - 1)

You take 1 from your output each time and the net sum grows. At 1.9 you add .9 to each iteration and because you have more than you started with, the cumulative net increases.

I think you were including your cumulative net in your input each time, which would give you negative results over time. Cumulative net energy is always increasing if EROEI > 1 but does decrease when EROEI <= 1.

But with such low EROEI it is hard to see how it is profitable unless your energy input costs and your labor costs are less than the value of your returned energy. In other words:

(100 energy + ~50 labor) -> 'A' -> 190 = ~+40

But add a few zeros and it doesn't look so bad, I guess.

(sorry for all the edits, just trying to make it coherent...usually I do drafts but I get lazy online.)
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Novus · Light Sweet Crude Joined: Jun 21, 2005 Posts: 1741

arocoun

Good job on collecting and presenting info on the so-named Net Oil phenomenon, Novus. It's definitely bad for a society that depends on oil, especially when accompanied by peak oil. You've shown quite effectively that oil will soon become an energy drain, and an energy carrier, rather than an energy source.

And, you've also shown that ANY energy source that has an EROEI of 2 or less will always require outside investments of energy to continue production; however, outside investments will still be profitable and somewhat desireable, unlike with energy sources with an EROEI of around 1 or less. Something tells me that an EROEI of 2 isn't too bad in a society where we're constantly told to invest in this or that. Still, an EROEI of 2 is still kinda bad.
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seahorse2 · Expert Joined: Oct 18, 2004 Posts: 1956

It seems this report has something to do with Net Oil.

Realtime News

Basically, as the price of oil goes up, the cost of extracting that oil is also going up making future development by OPEC uncertain.

bdmarti · Tar Sands Joined: Apr 12, 2006 Posts: 36

bdmarti · Tar Sands Joined: Apr 12, 2006 Posts: 36

arocoun

I just checked. bdmarti is right. Novus subtracts the investment from the energy returned, where he shouldn't. And EROEI of 1.9 doesn't mean that you invest (lose) 100, get 190 in return, but then lose 100 again, leading to only having 90. Rather, it means you invest (lose) 100 once, and get 190 back, plain and simple.

So, a new example to explain what I mean:

Start with 100 total, our starting energy.
Invest 100, we now have 0 total.
We get back 190. We have 190 total.

We don't subtract 100 again, since we've already lost that before, by investing it before.. Unless, of course, we wish to invest 100 more, in which case:

Start with 190, our current total.
Invest 100, we now have 90 total.
We get back another 190. We now have 280 total.

And thus, there is no need of outside investment, necessarily. Still, good job on the other stuff, Novus!
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--We are Greek.
--The barbarians are not Greek.
--Therefore, we must conquer, exploit, and kill the barbarians.

Terrapin

Good post Novus. It got a number of folks thinking, and the slide rules sliding. The concept is far from new here as it is usually cloaked as EROEI (energy returned on energy invested) which is actually a more accurate term, because, as several folks have mentioned; the “energy returned” is often in a different form than the “energy invested”.

One of the most glaring examples of this came to my attention a couple months ago in a paper presented in Science (abstract) which analyzed the efficiency of several corn>ethanol refineries in the Midwest. Although they were more or less a wash EROEI wise, since most of the energy was used in the refining process, and it came from coal/nuclear generated electricity., basically it is a scheme to turn coal/nuclear energy into ethanol/petroleum energy (with a little pork thrown in for the farm belt). Surprising little energy was used in the form of diesel in the harvesting/transport processes.

pstarr

Novus once again thanks for the orginal post. It is a very useful method. Smile

However your corollary is wrong. Try this

Iteration 1
1. you have 100 units of energy
2. you spend all 100 units to pump oil
3. you now have 190 units of energy

Iteration 2
1. you have 190 units of energy
2. you spend all 190 units to pump oil
3. you now have 361 units of energy

Iteration 3
lets stop why? notice no energy leaves the system. No energy for Mom and the Soccer Car and the Soccer Kids. Lets start again and leave some for the Soccer Family

Iteration 1
a. you have 100 units of energy
b. you spend (all-100 units) to pump oil
c. you now have 190 units of energy

Iteration 2
a. you have 190 units of energy
b. you spend (part-only 100 units) to pump oil
c1. you still have 90 units left over to sell to the Soccer Family. You make money.
d You have 190 units of energy

Iteration 3
a. you have 190 units of energy
b. you spend (part-only 100 units) to pump oil
c1. you still have 90 units left over to sell to the Soccer Family. You make money.
d You have 190 units of energy

Iteration 4
a. you have 190 units of energy
b. you spend (part-only 100 units) to pump oil
c1. you still have 90 units left over to sell to the Soccer Family. You make money.
d You have 190 units of energy

and so on
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Novus · Light Sweet Crude Joined: Jun 21, 2005 Posts: 1741

JustinFrankl · Intermediate Crude Joined: Aug 22, 2005 Posts: 657

We are all missing in a post-peak world that with each iteration EROEI will fall. You won't continue to get 90 barrels out at even the second iteration. What's more, there is no more growth in the oil extracted that goes to soccer moms, etc.
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emailking · Intermediate Crude Joined: Mar 11, 2006 Posts: 753

I still don't follow that Novus. For these purposes, you can call the surface earth the closed system, with the caveat that it gets to interact with the oil under the surface.

Suppose I have 100 units of energy available, say 100 MJ...perfectly reasonable. I extract, refine, transport the oil, etc. Now I have 190 MJ of energy available, as dictated by the EROEI of 1.9 = (190 MJ)/(100 MJ). Notice the the 100 MJ were already lying around somewhere (from oil already on the surface if you will...or from solar or something else if that makes you feel better). I didn't get the 100 MJ from the 190 MJ I just extracted today. Now I can use 100 MJ of my newly created 190 MJ to start the process over again. I can bank the 90 MJ left over. The process was worth it as this can continue. Even if I never extract another drop of oil for the rest of my life, it was worth it for me to scrounge up those 100 MJ of energy as I now have 190 MJ to live on for however long that will last me. This is independent of the earth being a closed system because the oil we extracted wasn't in the system before. Now it is.

Seriously, with all the books that have been written on these issues, I think someone would have mentioned by now that it cuts off at EROEI at 2 rather than 1.