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Energy - General

 

EROI Video

Watch our Illustrated EROI Video


Purely and simply, our civilization is built on cheap and abundant energy. Without huge amounts of very cheap energy, we would be unable to maintain our society, our economy or our food production.

  • Energy became progressively cheaper from the 1700s when coal began to be used widely
  • By the 1960s, the even cheaper and more flexible oil had come into universal use
  • In the 1980s and 1990s, energy began to become more expensive as the richest and most productive oil fields began to reach the end of their best years

Now in 2016, humans are scouring the planet for energy and are exploiting increasingly marginal sources. The oil sands and fracked oil both require a great deal of machinery and energy to extract the end product which used to gush so willingly from Middle Eastern and Texas oil fields.

To illustrate the decline in the productivity of the world’s energy sources consider the measurement called Energy Return on Energy Investment (EROI for short). This measurement relates the energy input required to generate an energy output. In the early days of the Middle East and West Texas oil development, one barrel of oil (energy equivalent) used to find, drill for and pump oil would result in the output of 100 barrels of oil for an EROI of 100:1.

It simply takes much more energy to mine sticky sand and melt the oil out of it than it does to put a pipe into a large pool of oil and start pumping.

  • In 2016, the EROI of the Alberta oil sands and tight oil is close to 5:1.
  • Fracked oil and deep water oil fall into the same range with an EROI around 5:1
  • The worldwide EROI of oil is currently around 17:1
  • The EROI of wind generators is 14:1
  • Solar PV arrays have an EROI of close to 8:1

Human society will have to adapt to much more expensive energy going forward. Transitioning to a conserver sustainable society makes adaptation possible while pursuing our current growth-forever path will result in massive and repeated shocks to our economy and society.

Energy - Advanced

 Energy in its many forms underwrites the very existence of our society. It is important to understand how energy is obtained and used. How rich a society’s energy resources are determines the level to which that society can develop.

Heirarchy of Energetic Needs


Eventually all of our energy will be renewable because the non-renewables (fossil fuels) will have been mined to the point where more energy will be required to extract what remains than the output provides. How abruptly this transition takes place is the key issue. How quickly can we change and how much non-renewable energy is available at a cost which our societies can bear? Climate change has entered the picture as a factor demanding rapid reduction in the use of fossil fuels but here we deal primarily with supply and the effort needed to access that supply. No matter what the reference point, the terms “conservation” and “reduction” should be central to any energy strategy going forward.

Drawing2-graph


Efficiency Trends - Transportation – energy efficiency is increasing generally.

  • Agriculture – energy efficiency is increasing slightly in the developed world and falling in the developing world as more advanced methods using more fertilizer, more water and more machinery are introduced.
  • Manufacturing – energy efficiency is increasing in the factories but so too is the use of more transport to supply material to distant plants and from those plants to their final markets.
  • Energy production – energy efficiency is declining as the Energy Return on Energy Investment (EROI) of the huge, rich oil fields declines and lower productivity, more dispersed fields are brought on line.
  • Mining – energy efficiency is declining as the ore grades drop. More rock must be mined and processed to yield a given amount of mineral.
  • Human infrastructure – offices, factories and homes are becoming more efficient but we are building more of them and in many cases, the new ones are much larger than those they replace.
  • Global warming and more severe weather events will reduce energy efficiency in almost every sector.

Energy history in the first half of the past century was the almost continuous discovery of ever larger and ever more productive (cheaper) reserves of oil and natural gas. The graph below shows the energy consumption history of the USA. Canada’s pattern would be similar but with a higher proportion of hydroelectric.

History of Energy Consumption

Energy production going forward will be working with smaller deposits of lower density resources until at some point the cost of pulling the fossil fuel out of the ground and scrubbing the carbon emissions from the process will exceed the cost of developing renewable energy sources.

 Declining productivity of resources

(Canadian Conventional oil and with Oil Sands Added EROI)

EROI Values for Oil and Gas

Depletion Rates

The world as we know it has been built on large energy reserves which were easy to exploit and which depleted slowly. The much discussed tight oil and shale gas accessed by various methods of horizontal drilling are very different animals. They are difficult to access and they deplete rapidly. In order to maintain output, a large number of wells must be drilled on an ongoing basis until the resources is depleted. Here we show depletion rates for conventional and unconventional oil.


Historical Average Well ProfileClaymore-6

Output per well 

As we move down the food chain from large, easily accessible energy fields to smaller and lower quality fields, the output per well declines and the depletion rate increases.

 GasProductionVSWellsBC-GasProduction

Energy Cost of Carbon Capture

Canada has promised to reduce its carbon emissions through the process of capturing carbon at various points in the energy production and use chain and pumping it into underground storage. This strategy has drawn considerable criticism from around the globe as other countries have rejected the process as impractical and ineffective. Norway has recently abandoned its experimental plant and all cost figures for the Canadian plant in Weyburn, Saskatchewan have been classified as non-public.

It is estimated that creating “clean coal” through CCS will add 35% - 75 % to electricity costs putting it into the realm of renewables.

Variable Field Grade

We are developing richest resource first. Humans pick the lowest hanging fruit and most of the figures on the richness of various fields come from the first wells which are located on the sweetest spot on the resource body. The images below of the Barnett Shale in Texas and the oil sands in Alberta illustrate the variability of the resource grade.

The areas of unconventional oil and gas may be large but they feature a much lower density of energy than conventional fields and are also highly variable from sector to sector.

texas-ogipAlberta-Reserves

In Canada’s case, the oil sands are generally believed to have accessible reserves of 170 billion barrels of oil (the figure used in all of our graphs and estimates) but only an area with 26 billion barrels has been fully surveyed. According to some researchers, this is the area with the richest deposits and the remaining area possesses deposits are poorer which will result in lower EROIs.

Energy Independent USA

The concept of an energy independent or energy exporting USA, is completely baseless. Given the size of the reserves in all of the unconventional fields, even if they could all be accessed at the same time for maximum output, any “surplus” would only last a handful of years after which the US would slide back into even greater import dependence. It might be possible for a company to export oil or gas but, on a national basis, net exports are simply not possible. The concept is a stock brokers’ promotion.

Base-case-ProductionForcast

Energy Return on Energy Investment should include not only the energy ratio of the energy required to extract a certain amount of energy but also the energy required to render it carbon and environmentally neutral. We aren’t there yet but carbon reduction programs will push us in that direction. An EROI of 70:1 produces a net output of 69 units of energy. An EROI of 4.5:1 produces a net output of 3.5 units. Net output is the bottom line.

Below is a chart which clearly illustrates how good the good old days (1920s to 1980s) really were when we were living on 50+:1 EROI energy. It also clearly indicates the quality of energy and relative cost of the energy sources we must adjust to living on going forward.

Net Energy Cliff

Where once in the early years of the oil age it took a very little energy to produce a great deal of energy for end uses, as we exhaust the richest reserves, it takes increasingly large amounts of energy to produce increasingly smaller amounts of energy for end uses. Conservation, reduction and rapid conversion to renewables is clearly the path which will produce the least social disruption.

If you would like to get a grip on the energy issues which face us, reading the work of the researchers below would serve as an excellent base. They provide easy to follow and ground-breaking analysis.

James MacKay – Author of the book – “Sustainable Energy without the hot air” boils the flows of energy through our societies down in great but straight forward detail. He works out the options for renewables and begins to illuminate what an energy sustainable society might look like. Reference reading for everyone from 8 to 80 and novice to PhD.

Charles A. Hall – Mr. EROI – numerous studies and Editor of Energy and the Wealth of Nations. In Energy and the Wealth of Nations, Hall and Klitgaard explore the relation between energy and the wealth explosion of the 20th century, the failure of markets to recognize or efficiently allocate diminishing resources, the economic consequences of peak oil, the EROI for finding and exploiting new oil fields, and whether alternative energy technologies such as wind and solar power meet the minimum EROI requirements needed to run our society as we know it.
 

Energy - Reference

Subject MatterSource

Written by the late David Mackay, This book, free to download, is simply the best energy reference produced to date and provides both great detail and a broad overview of how a modern society consumes energy. Anyone interested in the subject at whatever level will find it extremely interesting and useful.

Download Book - Part 2
David MacKay

Here we first give an estimate of EROI for Canadian oil, gas and tar sands combined, using official data on energy production and energy use in the oil and gas extraction industry

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Alexandre Poisson

A comprehensive, integrated study of the reserve and production potential of the Barnett Shale integrates engineering, geology, and economics into a numerical model
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Oil & Gas Journal

Presentation to British MPs

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Charles Hall

Studies of energy supplies and consumption levels

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Assoc. for Study of Peak Oil and Gas

German Army Peak Oil Study

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German Army

Data through 2012 by country, region, and commercial group (OECD, OPEC) for 217 countries including total and crude oil production, oil consumption, natural gas production and consumption

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EIA

Liquid Natural gas research for Canada and BC
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David Hughes

test

test

Combined heat and power (CHP) technologies provide industries, commercial businesses, institutions, and communities with ways to reduce energy costs and emissions

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Environmental and Energy Institute

The production of shale gas and oil in the United States is overhyped and the costs are underestimated.

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David Huges

Historical Oil Consumption Graphs

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Index Mundi

Cutler Cleveland of Boston University has reported that the EROI of oil and gas extraction in the U.S. has decreased from 100:1 in the 1930?s to 30:1 in the 1970?s to roughly 11:1 as of 2000

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The Oil Drum

In Energy and the Wealth of Nations, concepts such as energy return on investment (EROI) provide powerful insights into the real balance sheets that drive our “petroleum economy

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Charles Hall

Hypothesis:    Declining Non-renewable Natural Resource Input  >>  Declining Economic Output (GDP) >> Declining Societal Material Well Being  (Material Living Standards)

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Charles Hall

From Forests to Fossil Fuels: U.S. Energy Consumption Since 1776

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Time

Accordingly, a fiscal break‐even price is the oil price that contributes to balancing the budget

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Middle East Economic Review

The Imminent Crash Of Oil Supply: Be Afraid

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CounterCurrents

How much does it cost to produce crude oil and natural gas?

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EIA

You are Here: The Oil Journey

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Peter Coyote

Our Peak Oil Premium
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Thomas Homer-Dixon

Is peak coal coming?

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Globe

A focus of this report is energy return on investment (EROI) and some important characteristics of our major energy sources over time. We find the EROI for each major fossil fuel resource (except coal) has declined substantially from the middle of the last century.

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Charles Hall et al

Last year two military planning organizations went public with studies predicting that serious consequences from oil depletion will befall us shortly.
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Tom Whipple

Is oil production from shale formations just a temporary bubble or is it an event capable of significantly altering the U.S.—and possibly global—energy outlook?

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David Hughes

This paper explores details behind the phenomenal increase in global crude oil production over the last century and a half and the implications if that trend should be reversed.
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James D. Hamilton

Is oil production from shale formations just a temporary bubble or is it an event capable of significantly altering the U.S.—and possibly global—energy outlook?

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John F. Kennedy School of Government, Harvard University

A local diet can reduce energy use somewhat, but there are even more effective ways to tackle the problem.

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The Oil Drum

Solarcarandtractor.com is about exploring the promise and limitations of a solar electric future for supplying two huge energy requirements, transportation and agriculture

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Solar Tractor

A breakdown of the unconvnetional oil fields in terms of flow and productivity
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J. David Hughes

A new study seeks to shake up the assumption that use of coal, the most carbon-intensive fossil fuel, is bound to continue its inexorable rise.

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Decline of the Empire

In Energy and the Wealth of Nations, Hall and Klitgaard explore the relation between energy and the wealth explosion of the 20th century

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State University

After The Gold Rush: A Perspective on Future U.S. Natural Gas Supply and Price

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The Oil Drum

The peak of world oil production, followed by an irreversible decline, will be a watershed in human history. The goal of this paper is to predict the world peak

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Minnesota

Canadian Oil Sands Supply Costs and Development Projects (2011 - 2045)

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Canadian Energy Research Institute

How can the world meet its energy needs for human development in a way that is compatible with sustainability?

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Energy Community

Written by the late David Mackay, This book, free to download, is simply the best energy reference produced to date and provides both great detail and a broad overview of how a modern society consumes energy. Anyone interested in the subject at whatever level will find it extremely interesting and useful.

Download Book - Part 1
David MacKay

Interview with Arthur Berman

Read More
Delaware River Keeper
Interactive Graph: Canadian Conventional Oil per Capita
Motion Graph: Total Energy Use
Impact Index

Energy

Oil Impact

41%
Sources of Current Energy Supply in Canada
  • Oil 41%
  • Natural Gas 36%
  • Coal 9%
  • Hydro 8%
  • Biomass 4%
  • Nuclear 2%
  • Solar/ Wind <1%

Canadian sources of energy are slowly changing with coal being replaced by natural gas and renewable energy. Increased efficiency in the transportation and domestic heating sectors will also shift the demand pattern for different types of energy.

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