The Oil Drum: Europe

Editor's note: the following post is by Dr. Charles Hall and his Phd student David Murphy (EROI Guy), and is part of our on-going series reviewing the World Energy Outlook 2008, recently published by the IEA. It is also the first post of a new 'channel' on The Oil Drum: TOD:EROI, where we will be posting essays, papers, and analysis on the biophysical aspects of energy. Our intent is to be a real time central clearinghouse for biophysical/net energy research and ideas. We have debated on calling it EROEI - Energy Return on Energy Invested, but have decided to keep it consistent with the acronym from the energy literature. The post below critiques the neoclassical economic assumptions underpinning the IEA report and proposes future 'energy watchdog' reports utilize an alternative approach grounded in biophysical concepts.

Below is an email sent by Professor Charles Hall from SUNY-Syracuse detailing his recent trip to an international Geology conference in Norway. Though written for his friends and colleagues, I thought the details and insights he shared from his trip to Norway would be worth sharing with the TOD readership, particularly the comments on peak oil and climate change. Charlie also tells me he has a new paper published next week on EROI economics which I will format and post here.

This is a guest post by Adam Dadeby (Adam1). Adam is currently studying towards an MSc in Renewable Energy and the Built Environment with the Centre for Alternative Technology in Wales, UK.

What is EROEI?

Energy returned on energy invested (EROEI or EROI) is a concept that mirrors the financial metric, return on investment (ROI). In order to make an energy gain or “profit”, energy or work must be consumed or exerted (Cleveland, C.J., 2001, p.1¹). The energy gain or profit often referred to as “net energy”. EROEI is usually expressed as a ratio, or occasionally as a percentage. EROEI can also be represented diagrammatically in simplified form (Fig. 1).

Figure 1: EROEI
(Charles Hall, Pradeep Tharakan, John Hallock, Wei Wu and Jae-Young Ko, Advances in Energy Studies Conference, Porto Venere, Italy, September 2002)²

The energy referred to in EROEI can be energy to run technology, such as liquid fuels for transport or electricity for lighting. It can however refer to energy in a form that can be taken in directly by living organisms: food.

_{Annual rates of total drilling for and production of oil and gas in the US, 1949-2005 (R² of the two = 0.005; source: U.S. EIA and N. D. Gagnon). Since drilling and other exploration activities are energy intensive, other things being equal EROI is lower when drilling rates are high.}

As oil prices increase and the presidential campaigns heat up there is a lot of discussion about increased drilling for oil. In economic theory higher prices will give market signals to increase exploration and exploitation of resources and hence deliver more to society, although at a higher price. Will this in fact occur with oil for the United States? Of course we will not know until we do it, but we can look to the past for hints. The enclosed figure represents the history of drilling and production for oil and gas in the United States. The answer seems inescapable: the rate of drilling for oil in the United States has been unrelated to finding or producing oil and gas, which is determined principally by geology. Mother nature, not market theory, determines resource availability, at least in this case and probably many more. (Source: Hall, Powers and Schoenberg (in press))

This is the final piece of a series on Energy Return on Investment from Professor Charles Hall's EROI Workshop at SUNY. Today's papers outline the energy technologies of wave and geothermal power, concluding a 5 part series that has looked at Why EROI Matters, Natural Gas and Imported Oil, Tar Sands and Shale Oil, Nuclear Power, and Passive Solar, Photovoltaic, Wind, and Hydro-electric. Previously, Professor Hall also wrote the thought provoking, At $100 Oil, What Can the Scientist Say to the Investor. Forget not about the simple 'balloon graph' below of EROI x Scale for fossil and renewable energy sources that this project is attempting to update with the help of theoildrum.com readership.

This is 4th in a continuing series of articles by Professor Charles Hall of the SUNY College of Environmental Science and Forestry and his students, describing the energy statistic, "EROI" for various fuels.

The concept of an energy theory of value has been around since (at least) the 1930s and net energy actually became part of law after Mark Hatfield petitioned Congress in 1970 regarding the importance of EROI. His efforts resulted in the passing of (now defunct) Public Law 93.577 which stipulated that all prospective energy supply technologies considered for commercial application must be assessed and evaluated in terms of their ‘potential for production of net energy”. However, insurmountable theoretical and practical difficulties arose when using the energy unit to understand, a) the conversion among disparate fuel types (energy quality), b) the contribution of the environment, and c) the boundaries of analysis. Despite these problems, energy analysis is grounded (largely) in physical principles, which gives it an important long term edge over financial analysis which may proximately be related to real things, but ultimately is related to the political will to print money.

Nuclear power is the logical step up in energy density from dung, wood, coal, oil..., but its scaling has been controversial and uncertain. Below is an overview of both the nuclear fuel cycle and its energy return. Please add your comments, links and expertise in a manner that Prof Goose is fond of saying, 'that would improve the silence'...;-)

This is third in a series of six guest posts by Professor Charles Hall of the SUNY College of Environmental Science and Forestry describing the energy statistic, "EROI" for various fuels. As has been discussed often on this site, net energy analysis is a vitally important concept - just as we primarily care about our take home pay which is our salary minus the taxes, we should care about our 'take home' energy, which is what is left after energy costs have been accounted for. As important as it is, this measure is not easy to quantify, as: a)data is almost always measured in $ as opposed to energy terms, b) parsing non-energy inputs (and outputs) into energy terms is difficult, and c) analysis boundaries (including environmental impacts) are very disparate. As such, there is not (has not yet been) a consistent formula for EROI applied to all energy studies that has led to policymakers and analysts speaking the same language in useful ways. The lead paper in this months Royal Academy of Sweden's journal AMBIO will be about such an EROI framework, and we will link to it when it comes online.

Professor Hall has been working in this area for over 30 years. Below are net energy analysis from Hall's group on the unconventional oil sources from tar sands and oil shaletwo resources that theoretically are enormous in energy scale, but practically are limited by flow rates, costs, and externalities. Just how limited is the subject of todays two-part informative post is below the fold. Remember, any specific numerical help via referenced literature, personal experience or knowledge to better inform Dr. Hall and his students would be appreciated.

This is the second of a six part series on net energy research resulting from Professor Charles Hall of the SUNY College of Environmental Science and Forestry and his students during last semesters "EROI Sweatshop". While it is still in draft form, it is hoped (with some help from TOD readers) to be refined and directed into the formal peer review literature. But Professor Hall (and I) believe this type of thinking also needs to be considered outside the academy, and increasing the level of energy discourse in our nation is one reason for him choosing to display his draft essays on theoildrum.com.

This installment highlights 3 individual sections of the larger compilation: 1) a provisional summary table of updated (or as updated as we have) EROI figures for various fuels, 2) an insightful (but counterintuitive - I had to read it twice) analysis on the EROI of imported oil from the perspective of the importing country (USA), and 3) an analysis on the EROI of natural gas. If you would like to 'improve on the silence' in the comment section to help Dr. Hall and his students advance the biophysical Rubik's cube that is EROEI analysis, please share your wisdom /expertise/ links, etc. Next Tuesday will be the Appendix on the EROI of Nuclear.

On Tuesday we ran Part 1 of a 6 part series of EROI posts by Professor Charles Hall and his energy students. Professor Hall (to my surprise) read through all theoildrum comments and sent me an email with his responses and some summary comments, which I have posted below.

This is the first of a six part series of guest posts by Professor Charles Hall of the SUNY College of Environmental Science and Forestry and his students and collaborative researchers. Professor Hall previously posted on TOD, "At $100 Oil, What Can the Scientist Say to the Investor?"Professor Hall has endeavored to update and improve the state of net energy analysis as he believes (as do I), that future energy policy decisions should at least be guided, if not directly steered using biophysical principles. The opinions on the importance of net energy analysis as a tool for addressing our looming energy crisis are quite disparate, but without some science grounded in physical principles, we are left to rely on the market. The unfolding international credit crisis highlights the dangers of relying on strictly fiat monetary measures for biophysical planning – credit and debt can be created with no underlying physical foundation.

This first post is composed of 2 pieces. First is an introduction and an explanation by Dr Hall why EROI analysis is important. The second part lays out a request to theoildrum.com readership for helping contribute to this net energy data effort. This post will be followed every Tuesday in April with Dr. Halls students preliminary analysis on four energy sectors: 1)conventional fossil fuels, 2) Nuclear fuels 3) solar fuels and 4)geologic sources. Please try and help Dr. Hall with this meta-analysis with suggestions, criticism, and sourced comments. This first post has no data, so there will be an opportunity for readers to discuss any theoretical issues regarding EROI and net energy analysis before starting into the actual numbers next week.