Modeling the falling EROEI of petroleum

coyote

Gazzatrone

Seems it maybe to simple to work out Coyote. As bemoaned in my post about simplicity het Peak has buried itself in statistics.

OR!

There are those out there busy working it all out.

for the record I preusme 12.5 years till the preverbial really hits the fan

dub_scratch

There is an inherent problem that would have to be factored in. In an economic environment of energy shortage, particularly oil, higher energy prices-- multiplied by the higher energy costs-- will burden low EROEI operations. And as EROEI drops, these costs will eat away at some of the financial profits, negating the market signal to satisfy demand. This factor means that oil production will stop somewhere before EROEI of oil hits 1:1. At some point it does not become worth the time & effort to take a high proportion of expensive fuel product (or products made from energy such as steel) and invest them with little return. To scale up a low-EROEI source to be a big energy producer will take up too much financial resources.

This is one of the common factors economists don't consider when they express hope & belief that low-EROEI (or as the put it 'expensive energy') will fill the demand gap. For example, many will argue that gasoline has to go up to say $6 per gal in order for alternative energy "X" to become affordable. That is wrong because expensive energy will make alternative energy less affordable, not more. And as scarcity grows there will be less of an economic incentive to produce low-EROEI energy.

The only way that low-EROEI oil will be economic in a high price environment will be ifthe energy input is something readily availible in that particular location but is not easily transported to market. Canadian tar sands that use stranded gas is an example of this. (BTW, curently energy is cheap which is the only reason why the operation is growing there.)

dbuckley

The problem with the simplistic view of EROEI particularly as applied to oil is the assumption that the energy invested is in the same form as the energy returned. This poor assumption leads to the theory that when EROEI hits unity we're just going to stop pumping oil.

Oil recovery and refining needs energy, but that energy need not come from oil, it could come from any source.

pup55 · Expert Joined: May 26, 2004 Posts: 3568

Imageshack is working slowly tonight so I will have to wait until tomorrow to post the graphs.....

....but there is a guinea pig for this calculation: the middle east countries have no real industry except oil production, so if you make the assumption that the internal oil usage for the middle east is devoted to the extraction of oil, you can guesstimate the EROEI of middle east oil by computing the ratio of production to internal consumption.

If you do this, using the BP review data, what you find out is that this number has been fairly contant at about 20% for the last 20 years or so. In other words, for every five barrels pumped in the middle east, one is consumed internally. The increase in internal usage is just about the same as the annual increase in overall production, so this must be a pretty good estimate.

So as long as the supply of mideast oil is pre-peak, which it is, as long as the growth rate of overall extraction is greater than the growth rate of internal consumption, they will go pumping along like normal.

However, as soon as extraction goes into decline, or if the growth rate of internal usage exceeds the growth rate in overall extraction, they you can estimate the year that EROEI will reach 1.0.

Here are some little tables with various assumptions. For example, in the first case this assumes that the decline rate of mideast oil is zero percent, that is, they are able to maintain current production indefinitely, and the increase in internal consumption is 0, 2%, 4%, etc. In this case, at constant production, but 4% usage growth, for example, the mideast oil will reach EROEI in the year 2044.

pup55 · Expert Joined: May 26, 2004 Posts: 3568

Production and consumption for mideast oil:

Ratio of production and consumption:

here is the little table of what year EROEI will be 1.0 given various assumptions about decline and internal usage rate:

this is the scenario where decline is 3% and increase in consumption is 5%. The crossover point is where EROEI is 1.0.

Note to EE: Face it: Khebab is the champion graph poster. I am still too cheap to have a website, since I did not win the contest.

EnviroEngr

Pup,

When you get a chance, can you take a whack at fitting the charts and graphs to the boxes they're in?
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| Whose reality is this anyway!? |
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(-------< Temet Nosce >-------)
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Sparaxis

The main problem I see here is that Saudi internal oil consumption is primary for petrochemicals (SABIC is one of the largest integrated petrochemical companies), for transportation, and other typical end uses. Oil is not a major input into oil production itself. So modeling Saudi domestic consumption with oil production doesn't really tell you much and certainly doesn't tell you what the energy used in producing Saudi oil is.

In the US, for example (based on the 1997 manufacturer and mining census), oil is only about 5% of total energy inputs into oil and gas extraction. Electricty and natural gas are the largest sources of energy.

In China (based on the 2002 manufacturers energy use survey), oil accounted for about 35% of energy used in oil and gas production (and about 15% of that in the form of crude oil used in the field for energy); natural gas about 42%, and 20% electricity.

In other words, the concept that oil production will cease when the EROEI = 1 is false. If that were so, there would be about 393,463 stripper wells (IPAA 2004 data) that would be shut down instantly. A study done 13 years ago demonstrated they consumed more energy than contained in the oil they produced, but virtually no oil is used to run these wells. As long as there is electricity and other energy around, we'll keep producing oil far after the EROEI is less than 1 since it's just too flexible, valuable, dense and highly demanded not to. Society will just subsidize it with other energy, as we do now and have been doing for decades.

EnviroEngr

EnergySpin · Fission Joined: Jun 25, 2005 Posts: 2381

Dan1195 · Heavy Crude Joined: Mar 19, 2005 Posts: 245

Thats a key point as it relates to falling EROEI, while not much oil itself is being used to keep the wells running, other energy is. That real problem is that as EROEI declines. we may get into a situation where less net energy is available for things other than energy production. As long at net enegy increases, it may be more expensive but "road to the de-industrialization" will never actually happen.

If a combination of declining oil production and declining EROEI means that less net energy is available either for society as a whole of even just a certain sector (e.g transportation) where other forms or energy cannot be easily replaced, then there will be serious problems as shortages and high prices disrupt the flow of goods, raw materials, etc.

This is the Trillion dollar question, when oil peaks, will net energy continue to grow immediately, will is fall for short period of time while society re-adjusts. Will there be a major energy adjustment, while the core of industrial society remains intact, or does a full collapse happen (the doomer scenario).

Unfortunately, modeling this is very difficult, because new technological discoveries are constantly occurring, and the reaction by society is almost impossible to judge.

Poordogabone · Tar Sands Joined: May 13, 2005 Posts: 44

Did I hear that M.E states uses oil only to produce oil ?
Oh yeah, I forgot, they only ride camels.
Another form of depletion as far as the west in concern is
the producing nations increasing domestic apetite for oil.inside-iran-city-life

XOVERX · Heavy Crude Joined: Apr 18, 2006 Posts: 175

Hmmm. So what I think I'm reading is that when oil production reaches an EROEI > 1, then, because of oil's intrinsic versatility, society will "subsidize" oil production up to, I suppose, the point of geological unrecoverability? Seems reasonable.

Then there's Dan's point that this "subsidization" will have to come from electricity produced by what have you . . . nuclear, solar, wind, other developed or future sources. And thus, the electrical "pie" available to society as a whole will necessarily shrink since the oilfields have to keep pumping.

The implication being that electrical brownouts and blackouts may occur, because electricity is diverted to oil production, unless the USA gets serious about implementing as much additional electrical infrastructure today as is possible. Kinda like the guy who's about to get a divorce better figure out how to pay those bills when the child support kicks in.

The dumb thing is that there's so many incentives the government could put in place to encourage residential electrical production, but the politicians act like the don't have a clue. At least not yet.

pup55 · Expert Joined: May 26, 2004 Posts: 3568

Doly · Expert Joined: Dec 03, 2004 Posts: 4031