The Oil Drum: Europe

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.

This is a repost from Cutler Cleveland on the underlying principles of net energy. We previously highlighted Dr. Clevelands work on the Energy Return from Wind. This post is Professor Clevelands latest installment on net energy analysis at the Encyclopedia of Earth, which I have reformatted to theoildrum. The Encyclopedia of Earth, where Prof. Cleveland is an editor/director, is a great academic/content based web clearinghouse for information on earth and our environment. I encourage everyone to follow some of the hyperlinks in the below story and peruse that site.

Outside of taxes and profits, we are a society used to thinking in gross terms. But the net is what we get to use. Net energy analysis, (and its subset EROI) get alot of airtime in peak oil discussions, but not yet in public. If the world is running on a certain total energy surplus, what are the implications for a decline in this surplus? Will the market, via dollars, treat gross production the same and forget to factor in increased costs? There seems to be much disagreement as to how best to use EROI and net energy principles, if at all, in planning for the looming energy crisis.

This is a guest post from Cutler Cleveland. It provides an excellent big picture overview of what variables we need to consider as we transition away from fossil fuels. Professor Cleveland previously wrote "Energy From Wind - A Discussion of the EROI Research", and "Ten Fundamental Principles of Net Energy" posted on theoildrum.com. Cutler Cleveland is a Professor at Boston University and has been researching and writing on energy issues for over 20 years. He is Editor-in-Chief of the Encyclopedia of Earth, Editor-in-Chief of the Encyclopedia of Energy, the Dictionary of Energy and the Journal of Ecological Economics.

Prometheus chained to Mount Caucasus. Source: Pieter Paul Rubens: ''Prometheus Bound,'' 1611-1612, Oil on canvas, 95 7/8" x 82 1/2". (Philadelphia Museum of Art: The W.P. Wilstach Collection) Click to Enlarge

(New readers, click "there's more" below for the whole article...)

Global Total Liquids production and oil price, January 2002 to present. Production data from the IEA, data files supplied by Rembrandt Koppelaar. Monthly average WTI oil prices from Economagic.

With oil reaching $135 / barrel, Oil Drum readership exceeding 30,000 unique visitors per day and many wild stories circulating in the MSM as to why oil prices are so high this post strives to explain why oil prices are rising exponentially:

• Supply and demand
• Decline of older fields
• Declining net energy and energy density
• New mega-projects
• OPEC spare capacity
• Peak exports

This is a repost of Professor Cutler Cleveland's paper on energy transitions. It provides an excellent big picture overview of what issues need to be considered in a successful transition away from fossil fuels. Professor Cleveland previously wrote "Energy From Wind - A Discussion of the EROI Research", and "Ten Fundamental Principles of Net Energy" posted on theoildrum.com. Cutler Cleveland is a Professor at Boston University and has been researching and writing on energy issues for over 20 years. He is Editor-in-Chief of the Encyclopedia of Earth, Editor-in-Chief of the Encyclopedia of Energy, the Dictionary of Energy and the Journal of Ecological Economics

Composition of U.S. energy use. (Source: Cutler Cleveland) Click to Enlarge

This is a guest post by oil and energy economist Douglas Reynolds. Dr. Reynolds is Graduate Director of Economics at the University of Alaska Fairbanks, and author of "Scarcity and Growth Considering Oil and Energy", and "Alaska and North Slope Natural Gas". Doug has a prior guest post on theoildrum on The Energy Utilization Chain. This post offers a different but related perspective on energy comparisons and transitions than last weeks post on Energy Transitions by Professor Cutler Cleveland.

1. Weight Grade

The weight grade determines how much energy there is per pound of energy resource. For example, coal has about 12.7 thousand BTU/lb, natural gas about 10 thousand BTU/lb, oil about 19.3 thousand BTU/lb, and an electric battery typically has 100 BTU/lb. Electric batteries then are very heavy compared to their energy output which is why electric cars do not have very good driving ranges.

Professor Reynolds' paper is below the fold.

This is a guest post from Cutler Cleveland. It provides an excellent big picture overview of what variables we need to consider as we transition away from fossil fuels. Professor Cleveland previously wrote "Energy From Wind - A Discussion of the EROI Research", and "Ten Fundamental Principles of Net Energy" posted on theoildrum.com. Cutler Cleveland is a Professor at Boston University and has been researching and writing on energy issues for over 20 years. He is Editor-in-Chief of the Encyclopedia of Earth, Editor-in-Chief of the Encyclopedia of Energy, the Dictionary of Energy and the Journal of Ecological Economics

Prometheus chained to Mount Caucasus. Source: Pieter Paul Rubens: ''Prometheus Bound,'' 1611-1612, Oil on canvas, 95 7/8" x 82 1/2". (Philadelphia Museum of Art: The W.P. Wilstach Collection) Click to Enlarge