[John_A]

See previous comment on why EROEI isn't relevant. At least not until someone turn off the local nuclear furnace anyway.

Irrelevant when discussing long term stored energy.

Okay...EROEI is generally irrelevant..and irrelevant when discussing long term stored energy as well. Better?

Explain how solar energy can replace stored hydrocarbon energy at efficiencies required to sustain current economic systems, given current technology.

No such constraints are applicable. The very beauty of technological advance is that it negates all of these artificial mechanisms, in this case designed to reinforce the same short sighted ideas that never say the rotary table coming. Or directional drilling. Or offshore drilling. Or seismic applications to geological structures not evidenced on the surface.

The local solar furnace supplies far more energy to the earth's surface than people use. This is changing. It will continue to change.

Fortunately, we gave used perhaps 1/6 of what is available to manufacture liquid fuels from current economic systems, with current technology, so we have plenty of time for exponential growth to do to solar powered that it did...a long time ago...to crude oil.

This is good!

None exist.

Once upon a time computers didn't exist. Yet here we are......

A fascinating way to try and stop what economists actually build right into their models....here is a good example, and it even relates to oil and gas production. Why is it such applications, known and used by the economists and modelers at the EIA, are excluded in your construct?

http://www.eia.gov/oiaf/emdworkshop/pdf/technology.pdf

Effects on overall performance, effect on production profiles, effects on economics or resource....all of these changes with respect to time are known, and quantified.

Why in the world would ANYONE who knows these things exclude them? One idea...they can only win the debate against a strawman...because as we have already seen, reality has discredited more than a few of the ideas involved in declaring peak oil. Multiple times, in many cases.

EROEI remains the most crucial economic relationship as we move forward, and your nearly hysterical and repeated attempts to dismiss it prove without a doubt that you are either paid to squelch any efforts in that direction or you are a total imbecile.

I see no reason to believe the latter over the former.

EROEI is ridiculous in the context of human metrics, and there is a thread discussing why. That Charlie Hall has already been discredited on his version of the idea more than a decade ago....yet recycled it without a critical eye cast upon it during the 2005 peak oil fear meme....is far more telling than any assumptions on who is paid to do what. For the record, Charlie IS paid to pull this rinse and repeat stunt...unlike those of us who just think about it, examine his track record, and can think for ourselves.

[Strummer]

Why in the world would ANYONE who knows these things exclude them?

Where do you get the idea that people are excluding technological progress from their models and predictions?

[John_A]

Why in the world would ANYONE who knows these things exclude them?

Where do you get the idea that people are excluding technological progress from their models and predictions?

Explain how solar energy can replace stored hydrocarbon energy at efficiencies required to sustain current economic systems, given current technology.

None exist.

I wasn't referring to people. I was referring to the strawman MD was setting up, specifically excluding technological progress.

Obviously the folks who only forecast time series data exclude technological progress, but it is more implicit in their method, rather than the explicit exclusion MD was trying to employ.

[yellowcanoe]

The amount of knowledge we have doubles every 2-3 years so we have vastly more knowledge than we did during the oil embargoes of the 70's. If all this knowledge and technology still cannot provide us with an affordable, high energy density, non-polluting alternative to oil I seriously doubt that such a thing exists.

We have kept the world economy going despite a steady movement down the resource pyramid only because we had lots of cheap energy, especially in the form of oil derived products like diesel fuel. For example, copper prices stayed relatively steady over many decades even as lower and lower grade ore was processed. Copper mines simply switched to using larger and larger machines to more efficiently extract and transport the vast amount of ore that needed to be processed. It was a solution that worked fine just as long as there was an unlimited supply of cheap diesel fuel. Fossil fuel was the enabler that allowed vast amounts of material to be supplied to the world economy even as we moved down the resource pyramid.

When cheap oil itself becomes scarce it isn't simply a matter of moving down the resource pyramid and exploiting more difficult deposits such as the tar sands. The higher cost for energy has an adverse effect on the cost of producing just about any commodity and indeed it would be hard to find a segment of the economy that isn't adversely affected by the higher cost of oil. That's why the world economy has essentially been stuck in neutral since the financial crisis of 2008. As the supply of cheap, easy to access oil continues to shrink it will be harder and harder to maintain the world economy at its present size, let alone grown it.

EROEI is a critical measure of our ability to produce energy to do useful work. People in the oil business like Rockman will tell you that decisions are made on the basis of the expected financial return on the investment but obviously if the EROEI is low for a proposed project it isn't likely the financial numbers are going to be any good either. I think the EROEI concept really illustrates the problem we face more clearly because if it takes a large amount of energy to produce energy that means less energy available to do all the things that need to be done to keep our society running.

[ROCKMAN]

yellowcanoe - "if the EROEI is low for a proposed project it isn't likely the financial numbers are going to be any good either. I think the EROEI concept really illustrates the problem we face more clearly”. Not that you don’t make a valid point but I would phrase it differently: if the financial numbers are low it isn’t likely the EROEI is going to be good either. And what would that “good EROEI number” be? My guess is somewhere around 5 or 6. I’ve made some rough estimates on the amortization of imbedded energy as well as direct energy usage (mostly diesel) and once the ROR gets so low a project becomes unattractive there’s still a positive EROEI that some might feel is acceptable. In reality it doesn’t take a great deal of new energy to replace what’s spent on drilling. But there is a huge non-energy cost in drilling that has to be recovered for a project to pass financial muster. And that point still allows what some might consider a low but acceptable EROEI. I agree the EROEI concept is valid but any well becomes undrillable if the value of the energy produced isn’t at least several times the value of the energy consumed in the process. Even some wells when drilled at a loss will still have a positive EROEI.

In fact I’ve completed a number of wells that I knew would be a net money loser: initial drilling cost = $6 million; value of reserves = $4 million; completion cost = $2 million. So overall the well loses $2 million but I make a 2:1 return on my decision to complete. Even more lopsided from an energy standpoint: A well typically uses much more energy to drill than to complete. Thus the overall EROEI of the project might be low or even close to zero. But the EROEI based upon the completion and energy return might be very positive.

[John_A]

I agree the EROEI concept is valid but any well becomes undrillable if the value of the energy produced isn’t at least several times the value of the energy consumed in the process. Even some wells when drilled at a loss will still have a positive EROEI.

Interesting. Can you provide us with either the reference showing all of the ENERGY quantified going into the drilling of a well? Sounds like you have that number at your fingertips, to be able to say this. Heck, ...how much energy to make the steel in the rig, how many wells a rig can drill, the aggregate of energy production from all those wells. And here I thought folks hadn't even made this calculation, but you've got it figured already!

This isn't proprietary company info is it?

A well typically uses much more energy to drill than to complete. Thus the overall EROEI of the project might be low or even close to zero. But the EROEI based upon the completion and energy return might be very positive.

This is good stuff. Can you point us to those calculations? Charlie Hall never had this level of detail in his poor estimates, maybe if you already know this stuff, if he could get that data, he could do better next time.

[ROCKMAN]

John - The direct fuel use is easy for me to document: I approve all the invoices of every expense incurred in drilling our wells. I pay for all the diesel the rig burns. A real life example: spent $6.4 million to drill a well and burned up $450k in diesel. This doesn't include the fuel burned by the truck transport to get the rig and materials to the location. But that's relatively small. The tricky part is amortizing the embedded energy in all the infrastructure including the rig and steel casing. But even trickier philosophy: all that sunk energy was spent whether I drilled my well or not. If the rig just sat in the yard instead of drilling my well the same amount of energy would have been invested. One could consider my drilling a well (assuming I find some grease) as improving the original EROEI of the infrastructure development. Take it to the extreme: no more wells are ever drilled: thus the EROEI of the infrastructure is frozen with no chance of any additional energy return

On the completion side of the equation the diesel use per day is greatly reduced: drilling burns up much more energy compared to running casing in the hole. The big energy component in this phase is the energy embedded in the steel casing. Not quite as strong a case as with the rest of the infrastructure: the mills only make runs in anticipation of wells being drilled.

So to put some numbers to it: that $450k of diesel represents about 3,000 bbls. Even assuming a 25% yield that represents about 12,000 bbls of cracked oil. And, of course, they don't throw the other products away. If the well produces that 12k bbls I would net me less than 8k bbls taking into account of royalty and production taxes. So 8k at $100/bbl I make $800,000 compared to the $6.4 million I invested. So at an EROEI of one I lost my ass. And how much would I have to produce a breakeven investment? Easy: $6.4 million/$800k = 8. Now this EROEI doesn't take into account the embedded energy which is why I estimate an EROEI of 5 or 6 as the minimum a company can accept. Of course if I drill a dry hole the energy returned is ZERO. Some folks would consider the EROEI to be negative. And the last time I looked all negative numbers are less than Zero.

[John_A]

eROI < 1 means you are below break even in the energy department.

EROEI<1 means the 2nd Law of Thermodynamics is working just fine, and you have honestly accounted for all the energy inputs into a given system.

EROEI>=1 implies that you never took a thermodynamics course in your life, and are looking for a way to choose only SOME of the energy inputs. And then in a peak oil context predict something silly, like net energy will stop all drilling in the United States by the year 2000.

[John_A]

John - The direct fuel use is easy for me to document: I approve all the invoices of every expense incurred in drilling our wells.

But of course you do. And I used just this example in the EROEI thread because it is absolutely wonderful, and irrefutable in the context of energy, versus power.

However, what is the energy embodied in the trucks bringing that fuel to you? That counts as well.One truck, used on X number of wells, containing Y amount of energy, means to properly account for EROEI on drilling your well you also need to include Y/X.

How much energy went into manufacturing that one gallon of diesel? Certainly, in our world where the 2nd Law of Therm does apply, more energy went into making that gallon than is embodied in it...and that is something you did NOT sign an invoice for, but which must be accounted for, if you are really doing EROEI.

The tricky part is amortizing the embedded energy in all the infrastructure including the rig and steel casing.

And thus my question, since your previous statement would seem to indicate you have made this calculation. So I am simply asking, how much of this embodied energy, for all those OTHER things, did you include in your calculation?

Of course if I drill a dry hole the energy returned is ZERO. Some folks would consider the EROEI to be negative. And the last time I looked all negative numbers are less than Zero.

EROEI cannot be negative by its construction. You can dump into a system 1.21 gigawatts and return only 0, you can never return <0. EROEI is asymptotically bounded on the low end, you cannot create negative energy, you can only have a total bust, and get none returned to you. Like drilling a dry hole.

Obviously, for your industry to have the raging reserve replacement success it has had over your career, they have done quite a bit better than just drilling dry holes everywhere.

[John_A]

EROEI>=1 implies that you never took a Thermodynamics course in your life, and are looking for a way to choose only SOME of the energy inputs [rather than accounting for all butterfly wings flapping in the Universe].

LOL
Which Thermo course did you take which sought to account for all Qin and Qout in the entire Universe?

Fortunately, humans don't live in the entire universe.

As many peak oilers point out regularly, once this particular closed system reaches its limits, we are done!!

Pointing out that we already have our mineral and resource prospectors on other planets, and them being solar and nuclear powered rather than fossil fueled, just adds to the irony of that myopic view of human capabilities.

When we speak of eReOI here, of course we mean that we are trying to model a localized system whose operations are to be repeated over say 50 years, not 10 Billion years, for the sake of understanding how sustainable that modeled system is.

All models are wrong. Some are useful. Perhaps we should build useful ones, rather than the ones involving EROEI?

[dsula]

EROEI cannot be negative by its construction.

Yes it can.

You can dump into a system 1.21 gigawatts and return only 0.

And this after you lecture everybody about thermodynamics?
I have the company Christmas party coming up. Can I hire you as a comedian? You are good.

[ROCKMAN]

Embedded energy: let's use a drill rig as and example. I won't try to guess what that value is so we'll use X Btu for the moment. Onshore drill rigs have a life of at least 20 years. Of course, there is energy used to maintain them but that would be rather small compared to the construction input. Another tricky part is the average # of wells drilled per year. Assuming a fairly active drilling cycle we'll use 8 per year. So the rig will drill at least 160 wells during its life. So my well is one of those 160 wells and thus the embedded energy utilized by my well is 0.6% of that X Btu used to build the rig. IOW the amount of embedded energy is extremely small compared to the total energy input. The amortized energy of all the other infrastructure is even smaller. Consider the next biggest components: big trucks. During their life time they carry thousands of loads. Their amortized energy component for my well is much small than 0.6%. Bottom line IMHO the embedded energy in the drilling infrastructure amortized for any one well is so small compared to the direct energy utilized that it can be relegated to a rather insignificant level.

But again I'll go back to the philosophical side of the situation: no drilling rig was every built to specifically drill my well. I'll be spudding a well in La. in a month or so. The energy used to build the drill rig has been spent. If I don't drill my well that energy has still been spent. So in one sense my drilling a well improves the EROEI of the rig compared to the rig just sitting in the yard rusting. Which I have seen happen first hand big time: during the boom in the early 80's I watched three huge drill rigs being built in a yard in Victoria, Texas. They never left the yard: the bust came and drilling activity dropped. I was one of the few still drilling in the area...in fact drilling lot...about 30 wells. So for years I passed by that yard. Eventually they cannibalized the pumps/motors, etc., cut up the derrick and sent the steel to be recycled. Those three rigs never contributed even 1 Btu to the system. In fact, salvaging them took more energy.

So EROEI can't be negative? Those rigs took a huge amount of energy to build and produced exactly ZERO Btu's. I drill a dry hole high that never produces even 1 Btu. I'm not sure how other folks view such matters but if I return less money and energy than I spent I consider that a loss. So what is a negative EROEI? My definition is recovering less energy than I spent in the process to find energy. Someone has a different definition I would be interested in hearing it.

[Strummer]

EROEI can't get "negative" in the sense of being represented by a negative number. That's because a "zero" EROEI (in the sense of not producing any more energy than it consumed) is actually EROEI = 1. Therefore "negative" EROEI is expressed as a number between 0 and 1. Examples:

A process that consumes one unit of energy while producing 10 units has a EROEI of 10 (calculated as 10/1)
A process that consumes 10 units of energy while producing 10 has a EROEI of 1.
A process that consumes 20 units of energy while producing only 10 has a EROEI of 0.5 (calculated as 10/20).

A process that produces zero energy while consuming any amount of energy has a EROEI of 0.

[John_A]

EROEI cannot be negative by its construction.

Yes it can.

I would be fascinated to see how.

Return/Investment where return has a minimum of zero does not lead to an answer of <0 in any circumstance I am aware of. Unless you are also somehow creating a negative investment.

Would you care to show, and/or explain how either of these negative energy states come about? Not even aware of the definition of that one.

You can dump into a system 1.21 gigawatts and return only 0.

And this after you lecture everybody about thermodynamics?

Absolutely. The above calculation returns an EROEI of 0. Not negative.

You do have first grade level math in the school system you attended (hopefully), right?

[John_A]

All models are wrong. Some are useful.
Perhaps we should build useful ones, rather than the ones involving EROEI?

So you're taking it as an axiomatic given that the EROEI model is totally useless?

Absolutely not. To date, in the peak oil context, it has just been horribly misused. In that context (peak oil) it has been used primarily to lend a veneer of scientific/engineering certainty to the conclusions of those who would rather not admit that their idea is actually mostly faith based.

I can see all sorts of ways that a proper EROEI model would be interesting.

And you're taking it as a Gospel truth the $RO$I model is "useful" even though many here understand that the dollar thing is a measure of fiat fantasy pulled out from the thin air by the Fed Reserve and pawned off as something that measures a "reality" within the Universe?

I have no objection to $RO$I because that is the metric used to make decisions in the human economic system. It makes perfect sense, and has been explained by Rockman many times. The problem being that folks want to equate the two, without accepting that all BTUs are not created equal. Right there, their train comes off the rails.

[John_A]

So EROEI can't be negative? Those rigs took a huge amount of energy to build and produced exactly ZERO Btu's. I drill a dry hole high that never produces even 1 Btu.

Do the math on your words Rock.

Energy Return (0) / Energy Invested (BIG NUMBER) = 0

[dolanbaker]

You cannot have a ratio when one side of it is "0", simple as.
No energy out simply means that ALL the energy in was wasted.

[John_A]

You cannot have a ratio when one side of it is "0", simple as.
No energy out simply means that ALL the energy in was wasted.

Yes. But some are confused by mathematical equations containing a numerator and denominator, and what it means when the numerator is 0.

[Quinny]

2nd law great, but your interpretation is as usual nonsensical. When dealing with highly dense fossil fuel sources the energy required to produce them was invested (pre)historically and so in practical terms current EROEI can be effectively > 1. The idea that we compare energy inputs due to geological processes with current costs of extraction is quite clearly not how the concept of EROEI is meant to be applied.

John - The direct fuel use is easy for me to document: I approve all the invoices of every expense incurred in drilling our wells.

But of course you do. And I used just this example in the EROEI thread because it is absolutely wonderful, and irrefutable in the context of energy, versus power.

However, what is the energy embodied in the trucks bringing that fuel to you? That counts as well.One truck, used on X number of wells, containing Y amount of energy, means to properly account for EROEI on drilling your well you also need to include Y/X.

How much energy went into manufacturing that one gallon of diesel? Certainly, in our world where the 2nd Law of Therm does apply, more energy went into making that gallon than is embodied in it...and that is something you did NOT sign an invoice for, but which must be accounted for, if you are really doing EROEI.

The tricky part is amortizing the embedded energy in all the infrastructure including the rig and steel casing.

And thus my question, since your previous statement would seem to indicate you have made this calculation. So I am simply asking, how much of this embodied energy, for all those OTHER things, did you include in your calculation?

Of course if I drill a dry hole the energy returned is ZERO. Some folks would consider the EROEI to be negative. And the last time I looked all negative numbers are less than Zero.

EROEI cannot be negative by its construction. You can dump into a system 1.21 gigawatts and return only 0, you can never return <0. EROEI is asymptotically bounded on the low end, you cannot create negative energy, you can only have a total bust, and get none returned to you. Like drilling a dry hole.

Obviously, for your industry to have the raging reserve replacement success it has had over your career, they have done quite a bit better than just drilling dry holes everywhere.