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Peakoil.com :: View topic - I do not understand EROEI and how it is relevant
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I do not understand EROEI and how it is relevant
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CalgaryEng
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PostPosted: Sat May 07, 2005 10:48 am    Post subject: I do not understand EROEI and how it is relevant Add User to Ignore List Reply with quote

I have an M.Sc. in mechanical engineering. Nowhere in my education did I ever come across the concept of EROEI.

I have googled EROEI and found nothing that even comes close to satisfying my desire for a precise definition of this concept.

Apparently EROEI means Energy Returned On Energy Invested. Since the word "On" means "divided by" we obtain

EROEI = (Energy Returned) divided by (Energy Invested)

I have seen this equation on a number of sites.

(I did find a site that claims the EROEI means energy returned minus energy invested. Such a definition means that EROEI has units of energy. I have never seen EROEI expressed with specific units of energy. Not even on the site in question. I can only conclude that they are technically and mathematically illiterate. Reading their discussion and examples only tends to confirm this conclusion.)

Apparently both the numerator and denominator are measured in energy units so EROEI is unitless.

In these forums I have read many times about negative EROEI. I have taught university level calculus. I have yet to encounter a negative number coming from the quotient of two positive numbers. I realize that there are many contexts in which energy is negative. For example, in physics it is normal to define the potential energy between two masses as being zero when the distance between them is infinite. Consequently, the potential energy is negative at finite distances and approaches negative infinity as the distance approaches zero. However, within the context of systems and processes used to generate energy for human use I fail to understand how either Energy Returned or Energy Invested can turn out to have a negative value.

Would one of those people who refer to negative EROEI please outline for me how such a calculation might occur. I simply do not understand.

For the sake of trying to clarify definitions and issues please consider the following hypothetical situation:

I build a device that costs me $1000 in parts and sixty hours of my labor.

This device will convert convert 1000 KJ of energy into 1 KJ of energy.

Suppose I can buy the 1000 KJ of input energy (energy invested?) for $1.00 and can sell the 1 KJ of output energy (energy returned?) for $2.00.

Suppose that my machine has a capacity to convert at a rate yielding an output of 100 KJ per hour.

Assume that I run my machine for eight hours per day. Assume that it requires maintenance that costs $50 per day.

During a seven day period my machine will consume

100 * 1000 * 8 * 7 = 5,600,000 KJ of energy, which will cost me $5,600.

It will produce

100 * 1 * 8 * 7 = 5,600 KJ of energy, which I can sell for $11,200.

Maintenance would be $350 for the week.

So, each week I will put $11,200 - $5,600 - $350 = $5250 into my pocket.

A return of $5250 per week for an initial investment of $1000 and sixty hours of my time seems very good to me. I would do it in a heartbeat.

Who wouldn't? Is there a single person out there who would say that this is a bad way to invest time and money? If there is such a person out there, please explain why.

Now let us consider EROEI as I understand it. According to my understanding I put in 1000 KJ and get out 1 KJ. Therefore, we have a really really bad EROEI of 0.001. (At least it is not negative!) This is like using 1000 barrels of oil to find 1 barrel of oil. BAD. BAD. BAD. Yet, as I stated previously, if I could create such machine, I would do it in a heartbeat. A net profit of $5250 each week for a miniscule investment would be great.

Please, explain to me where my thinking is wrong. I just do not get EROEI and why it is useful. How can it ever be negative? Why is low EROEI necessarily bad?

Allow me to anticipate one objection. Some may object to the notion of buying 1000 KJ for $1.00 and selling 1 KJ for $2.00. Well, do some thinking. The cost of 1000 KJ of sunshine is zero. Suppose I turn this free sunshine into jet fuel. (Trees turn free sunshine into salable wood.)

The fact of the matter is that engineers regularly convert larger quantities of energy into smaller quantities. They do so whenever the price of the smaller quantity sufficiently outweighs the cost of the larger quantity. From my experience this is how engineers and business people make decisions in the real world. As far as I can tell EROEI is just a crackpot concept. Convince me that I am wrong. Show me the error in my understanding and arguments. Thank you.
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clv101
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PostPosted: Sat May 07, 2005 11:14 am    Post subject: Re: I do not understand EROEI and how it is relevant Add User to Ignore List Reply with quote

CalgaryEng wrote:
As far as I can tell EROEI is just a crackpot concept. Convince me that I am wrong. Show me the error in my understanding and arguments. Thank you.


There are two completely separate things going on - the energy budget and the economic budget. You need to think about a process in energy terms alone, leaving out the economic points. It can be economically viable to operate a less than unity EROEI process... the manufacture of Duracell batteries for example.

The world runs on net energy. If a process is going to contribute to the worlds net energy it must have a EROEI greater than one. We can't run the world on Duracell batteries.

To work out the EROEI you don't have to consider the economic costs - just divide the output energy by the input energy. The only tricky bit comes in specifying the boundaries on the input energy side. Do you include the fuel the worker at the solar panel factory used driving to work? Do you include the energy use in making this same workers shoes?
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Jack
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PostPosted: Sat May 07, 2005 11:18 am    Post subject: Add User to Ignore List Reply with quote

The person to ask is MonteQuest.

That being said, let us look at a simple example.

Suppose it costs two barrels of oil to extract one barrel of oil. The EROEI is 0.5 - i.e., you get one barrel's worth of energy for two invested. It isn't very worthwhile to spend one's energy that way.

Central to the analysis is the use of energy, not money.
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CalgaryEng
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PostPosted: Sat May 07, 2005 12:08 pm    Post subject: Add User to Ignore List Reply with quote

You guys do not seem to understand.

Suppose it take two barrels of oil equivalent energy to produce one barrel of oil equivalent energy. What is necessarily wrong with this?

If the two barrels of oil equivalent energy come from a cheap natural gas source and the one barrel of oil equivalent output energy is expensive jet fuel, then this seems like something that one might do for good reason.

Neither of you has responded to my questions.

I expect better.
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some_guy282
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PostPosted: Sat May 07, 2005 12:14 pm    Post subject: Add User to Ignore List Reply with quote

Huh? Wha? I thought EROEI was a relatively simple concept to understand. I think you are over complicating it, and confusing economic profit with energy profit as clv101 stated. I agree with what the above posters have said, but I'd also like to add my 2 cents.

Just think of it using a business analogy (but don't confuse $$$ profit with energy profit!).

In business, Income - Expenditures = Profit, correct?

So if you invest $10,000 buying a product wholesale to resell at profit, but only make $9,000 selling them, your Income is $9,000, and your expenditures are $10,000. Quick! What's your profit? Hint: It's a negative number.

Same thing with energy. You use 2 barrels of oil for oil extraction. Expenditures. You only get 1 barrel of oil in return. Income.

Negative number, no?
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PostPosted: Sat May 07, 2005 12:15 pm    Post subject: Add User to Ignore List Reply with quote

You are in the desert. You dig like hell to get some water. You sweat and breath out more water then you retrieve from the ground. You stop digging and enjoy your last minutes. You have done a casual calculation.

You make oil rigs from steel, plastic and copper, in short, from machines and resources produced by and from oil. Well when you get less oil from the ground then is needed to build the rigs then you stop building the rigs. Why make more rigs with the oil when you need the last for medicine.

I think that EROEI refers to market, social, and infrastucture decisions, not the energy calculus.

am I missing something Crying or Very sad

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CalgaryEng
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PostPosted: Sat May 07, 2005 12:27 pm    Post subject: Add User to Ignore List Reply with quote

Quote:
I think that EROEI refers to market, social, and infrastucture decisions, not the energy calculus.

am I missing something


Yes, you are missing the definition of EROEI. What does EROEI mean? Tell me how to calculate it and, having done the calculation, use the number in a useful way.

Quote:
Just think of it using a business analogy


I do not want an analogy. I want a DEFINITION. If it is so simple to understand, then why can you not define it and respond to the questions in my original post.
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PostPosted: Sat May 07, 2005 12:29 pm    Post subject: Add User to Ignore List Reply with quote

Assuming that EPR (energy payback ratio, sometimes referred to as EROEI) is > 1, I still have not read a thorough explanation of how EROEI is meaningful when applied to renewables. My contention is that in the case of renewables, EROEI is effectively binary. It could be <= 1 (less than or equal to one), in which case the technology in question is at best an energy storage unit. Or it could be > 1, in which case EPR is not a major concern. In the case in which EPR is > 1, other specifications are more important than EPR/EROEI.

See this discussion of EROEI for more detail on objections that people have to the measurement.

http://www.peakoil.com/fortopic5992.html

Are there any physicists in the building? If so, can you please provide your thoughts on EROEI and on the objections that have been raised to it? People familiar with Howard Odum's concept of emergy are welcome to provide their thoughts as well.
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PostPosted: Sat May 07, 2005 12:33 pm    Post subject: Add User to Ignore List Reply with quote

CalgaryEng wrote:
I do not want an analogy. I want a DEFINITION. If it is so simple to understand, then why can you not define it and respond to the questions in my original post.


My understanding is that EROEI is equivalent to Energy Payback Ratio (EPR). That is, it's Energy derived from a particular source (barrel of oil, solar panel, windmill, nuclear plant) divided by energy used to obtain or manufacture that source.
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PostPosted: Sat May 07, 2005 12:41 pm    Post subject: Re: I do not understand EROEI and how it is relevant Add User to Ignore List Reply with quote

CalgaryEng wrote:

Now let us consider EROEI as I understand it. According to my understanding I put in 1000 KJ and get out 1 KJ. Therefore, we have a really really bad EROEI of 0.001. (At least it is not negative!) This is like using 1000 barrels of oil to find 1 barrel of oil. BAD. BAD. BAD. Yet, as I stated previously, if I could create such machine, I would do it in a heartbeat. A net profit of $5250 each week for a miniscule investment would be great.


Sure, you could do it, assuming you could get your hands on such a machine. The problem is, if *all* energy sources have EPRs below 1, nobody will bother to manufacture the devices used to obtain the energy. Why? Because the plants won't be self-sustaining. The solar panel factory would need to use all of its solar panels (or the equivalent indirectly through the utility) to manufacture solar panels. The solar to jet fuel converter plant would use more energy manufacturing converters than would ever be extracted in jet fuel.

In our high EPR, petroleum-based society, we have the luxury of trying out low EPR solutions. But we can't rebuild society on them.
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linlithgowoil
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PostPosted: Sat May 07, 2005 12:57 pm    Post subject: Add User to Ignore List Reply with quote

im not convinced that EROEI is the be all and end all either. i mean, if you invest, say, 2 barrels of low quality energy (coal), to process and produce 1 barrel of high quality energy (oil), then what is wrong with that - so long as you have lots of the low quality energy around?

if you have a ton of cheap energy lying around and can convert it into high grade energy, but lose total overall energy in the process, who cares?

would you rather have 1 barrel of oil equivalent energy in coal form or 1 barrel of oil?

isnt it better just to ditch EROEI and actually concentrate on oil production statistics and see if it does peak in the next year or two? we all know there isnt any other alternative around that is as energy dense as convenient as oil - i really dont see the need to get overly technical and talk about EROEI. also - EROEI can be different things to different people. do you include the energy that the person operating the machinery uses? etc. etc. etc.
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PostPosted: Sat May 07, 2005 12:58 pm    Post subject: Add User to Ignore List Reply with quote

It is so poorly defined as to be a source of manipulation if not outright lying..

AFAIUI you can not have a negative value..


BUT negative is often used for values less than 1 for calculations made the way you describe

it is also prone to manipulation by virtue of what you include in or out of a comparison of two values so in this respect it can be hogwash.

comparative values must be based on the same relative criteria.

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clv101
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PostPosted: Sat May 07, 2005 1:00 pm    Post subject: Add User to Ignore List Reply with quote

I am having difficulty understanding your problem. Which bit of Energy Return on Energy Invested don't you understand? That's you're definition right there. It's the ratio of the energy used to the energy produced by a process. Clear?

For every process that has a below 1 EROEI there must be another process with an above 1 EROEI. The process of making Duracell batteries is below one, far less energy is stored in the battery than went into it's manufacture. The only reason we can operate this process is that there's another process with above 1 EROEI (like mining and burning coal).

One of the problems of peak oil is that the EROEI for oil is falling, it used to be over 100, 1 unit of energy invested produced 100 units of energy, allowing the net 99 units to be used for doing work. These days discovering and producing oil is more energy intensive and the EROEI has fallen to between 10 and 30. Still lots of net energy but less. As oil supply falls, the shortfall needs to be met through a different process to discovering and producing oil - the problem is that these process have a lower EROEI so supply less net energy for us to use.
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CalgaryEng
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PostPosted: Sat May 07, 2005 1:02 pm    Post subject: Add User to Ignore List Reply with quote

Quote:
Sure, you could do it, assuming you could get your hands on such a machine. The problem is, if *all* energy sources have EPRs below 1, nobody will bother to manufacture the devices used to obtain the energy. Why? Because the plants won't be self-sustaining. The solar panel factory would need to use all of its solar panels (or the equivalent indirectly through the utility) to manufacture solar panels


Consider a tree. Huge amounts of energy in the form of sunshine fall on it. The tree takes a tiny fraction of this energy and turns it into wood. Considering the amount of energy you get from burning the wood compared to the amount of energy needed to produce the wood the EPR is way less than one. So what. Sunshine is free. As far as I can tell, without the Sun, the earth is not self sustaining and never will be. That does not stop trees from growing.

I understand very well the fact that humans have been exploiting an enormous resource (fossil fuels) for which they did not have to pay. When that resource starts to run out, it is going to be exceedingly difficult to replace it with something equivalent. However, I do not need EPR or EROEI or other useless measures to make that evaluation. If it costs $20 to make a solar panel and the total energy it produces can only be sold for $15, it does not take any more than that to convince me that it is not worth making the solar panel.
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mididoctors
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PostPosted: Sat May 07, 2005 1:07 pm    Post subject: Re: I do not understand EROEI and how it is relevant Add User to Ignore List Reply with quote

CalgaryEng wrote:


The fact of the matter is that engineers regularly convert larger quantities of energy into smaller quantities. They do so whenever the price of the smaller quantity sufficiently outweighs the cost of the larger quantity. From my experience this is how engineers and business people make decisions in the real world. As far as I can tell EROEI is just a crackpot concept. Convince me that I am wrong. Show me the error in my understanding and arguments. Thank you.


because the system of converting larger to lesser amounts with-in one system is myopic compared with a system of global proportions where THE RATES OF DELIVERY of energy needs to be maintained at the point of END USE

total end use demand[

total required energy input to achieve the above will be modified from present production patterns by substitution of sources with a pooer EROEI thus a comparison of possible substitution sources is helped by EROEI

it may be more helpful to think about global civilisations' POWER output that needs to MAINTAINED.


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