[hermit]

The barrels of oil behind us packed a greater energy lunch than the barrels of oil ahead of us. Thus, it seems somehow dishonest to measure oil purely in terms of the "barrel".

Is there a Unit of measurement that takes into account both the energy contained in a barrel of oil, as well as the energy required to obtain that barrel, giving a barrel a rating based on it's net energy-positivity?

[AirlinePilot]

I dont believe so, but you've nailed squarely the exact problem we face and so many folks who come in contact with Peak Oil do not get it.

The farther along we go, the harder and more costly it becomes to produce those remaining barrels. EROEI, it's stone cold bitch. Only folks who are in denial or dont understand the scale and scope of the problem misunderstand it.

[Homesteader]

Shortonoil has done a lot of work in this area. 2017 sticks in my mind as the year that his work shows that eroi for oil extraction hits a wall.

Someone more adept on this site than me can find a link to the thread discussing his work and his graphs.

[ROCKMAN]

hermit,

Not that the concept isn't worth discussing but as the AP points out it's a bitch to quantify. But, not to discount shortoil's efforts, decisions on developing oil/NG reserves have never been, nor will ever IMHO, based upon EROIE. Or, at least, directly. Such investments are measured by $'s in vs. $'s out. This is linked to a degree to the net energy gain but only in so far as the price of oil reflects this measure. The heat content of oil, as well as its refined products, is reflected in its market price. But as we've just seen that price can vary greatly over short periods of time. The EROIE of a drilling project delineated 3 months ago hasn't changed. But its viability has altered significantly from the days of $147 oil to the current price below $60. Even though this project may have had a reasonable EROIE it won’t be drilled if the current low prices make it an unattractive investment.

[galacticsurfer]

BTU/barrel of oil = 5.8 million BTU
5.8 million BTU/60 USD = 96,666,67 BTU/USD
5.8 million BTU/147 USD = 39,455,78 BTU/USD

So the BTUs / USD is much higher now than in summer.

http://www.eia.doe.gov/neic/infosheets/ ... ction.html

Reservoir characteristics (such as pressure) and physical characteristics of the crude oil are important factors that affect the cost of producing oil. Because these characteristics vary substantially among different geographic locations, the cost of producing oil also varies substantially. In 2006, average production costs (or “lifting” costs, the cost to bring a barrel of oil to the surface) ranged from about $4 per barrel (excluding taxes) in Africa to about $8.30 per barrel in Canada; the average for the U.S. was $6.83/barrel (an increase of 23% over the $5.56/barrel cost in 2005). Besides the direct costs associated with removing the oil from the ground, substantial costs are incurred to explore for and develop oil fields (called “finding” costs), and these also vary substantially by region. Averaged over 2004, 2005 and 2006, finding costs ranged from about $5.26/barrel in the Middle East1 to $63.71/barrel for U.S. offshore. While technological advances in finding and producing oil have made it possible to bring oil to the surface from more and more remote reservoirs at ever increasing depths, such as in the deepwater Gulf of Mexico, the total finding and lifting costs have increased sharply in recent years.

However fixed lifting/exploration cost are the same basically (though energy costs and credit costs made them explode, so they depend also on energy.) so their % of total cost per BTU goes up as price goes down for a barrel of crude, eventually to 100% as in offshore US exploration costs now.

So if you subtract say local lifting costs from local sales costs for a barrel of say Omani crude

http://www.upstreamonline.com/market_da ... kets_crude

Currently 45,91 USD/barrel plus say 5USD/barrel lifting costs = 50,91 USD/barrel.

5.8 million BTU/50,91 USD = 113,926 BTU/USD

Lifing costs are not much differnet regardless of where you are at between USD5-USD 8. But when it comes to new discoveries only very high prices justify many new discoveries.

Verious oil grades however can have much different net BTU or resulting profit margin:

http://robertrapier.wordpress.com/2007/ ... say-essay/

Let’s compare two hypothetical refineries. Refinery A has no coker, and thus is restricted to either buying light crude, or buying heavy crude and selling a lot of low-value asphalt and roofing tar. So let’s say that Refinery A pays $55 a barrel for West Texas Intermediate. They will turn that barrel into 0.909 barrels of liquid fuel product (per the light assay above, 4.4% ends up as gas and 4.7% ends up as resid), which let’s say has a value of $80/bbl. They therefore grossed $80*0.909 - $55, or $17.72 a barrel before we consider the value of the asphalt and the gases. Historically, the value of asphalt has been very low – less than $0.10/lb. Given that our barrel of crude weighed around 300 lbs, and we got a 4.7% asphalt yield, the barrel yielded 300*0.047 = 14.1 lbs of asphalt worth $1.40. Let’s value our gases at the value of propane (about $0.14/lb on the spot market), and we get a value of 300*.044*$0.14 = $1.85 for the propane. Our gross profit (before operating costs, taxes, etc. are considered) is then $17.72 + $1.40 + $1.85, or $20.97 per barrel for the light crude.

Now consider Refinery B. Instead of buying WTI at $55/bbl, it buys a heavy Canadian crude for $38/bbl (this is an actual current price). Again, their barrel of oil weighs some 300 lbs, and as we can see from the assay above their resid yield may be in the range of 28%. So, of the 300 lbs, 84 lbs ends up as resid. But with our coker, we turn 80% of that into high-value products, and only 20% (16.8 lbs) ends up as low-value coke (a coal substitute). Therefore, the overall yield from the heavy crude amounts to the sum of the cuts up to resid (71.6%), plus the resid that was turned into products (80% of 28%, or 22.4%) minus the gas cut (3.4%) for a total of 90.6%. The overall liquid yield is almost the same as for the light crude, and yet we paid much less for the crude. So, our economics look like this: For the liquid fuels, we grossed $80*0.906 - $38 = $34.48 a barrel. This is almost double what we profited from with the light crude. We have slightly less propane yield than in our previous example. The value of propane is $1.43. Finally, we end up with 16.8 lbs of coke, which is worth only $0.015/lb (about $0.25 total). Our total gross profit then is $34.48 + $1.43 + $0.25 = $36.16.

This explains why so many refiners are rushing to install cokers. This is also why I don’t get too excited when someone comments that the build in crude inventories could be a build in “undesirable” heavy sour. Refiners don’t buy what they don’t need, so if heavy sour inventories are increasing then this is primarily coming from refiners that can process heavy sour.

As light sweet supplies continue to deplete, refiners will increasingly turn to heavy sour crude. But not enough refiners yet have a demand for heavy sour, so it trades at a significant discount to light sweet. This will of course change as more cokers are installed. There will be a higher demand for heavy crudes, and the asphalt market will become more lucrative as the asphalt supply gets rerouted to cokers.

I guess coking at refineries is energy intensive using natgas and such so depending on what the coking costs this could be expensive and change RR's calculations above.

[yesplease]

The EROEI of oil is already close to one, but that doesn't matter much w/o including emergy and efficacy, or at all if we compare dissimilar uses. For instance the EROEI of oil back in it's heyday may have been much higher, but it really didn't confer much in terms of an advantage if all we're using it for is kerosene for lamps. In order to accurately compare EROEI we need to accurately compare use, not the apples and oranges stuff used by the local fruitcakes. Hell, gasoline production didn't replace kerosene as oil's primary refined product until ~1920. Anyway, when looking at EROEI we need to look at similar processes.

Then there's the matter of emergy, which is related to [url=-http://en.wikipedia.org/wiki/Exergy]exergy[/url]. For example we get more useful mechanical work out of a kWh of electricity than we get out of a kWh of gasoline because the gasoline has lower exergy, Otoh, if we're just using the energy for heat, they are more or less the same. Exergy accounts for the increase in entropy during a process, and emergy is the change in exergy until some time.

And lastly, we have efficacy. For all practical purposes, it doesn't matter how high the EROEI and emergy are if I'm commuting to work in a 6000lb pickup truck getting 8mpg compared to some other person commuting to work in a Honda Insight getting 80mpg or a guy on an electric bicycle getting 800mpg equivalent. We can be as wasteful as we want, but worrying about oil prices when we're wasting oil like this is like hitting ourselves in the head w/ a hammer. The pain goes away when we stop.