You can sit around throwing adhoms out or you can actually look up the data and see who is right. First, let's establish roughly how much energy the oil and gas industries use per dollar they spend:Now what has better ERORI, the hard bucket oil, where a man might spend some energy making a bucket, but then has to forage around for weeks mopping up swamps and filtering the swamp water for 1 bucketful of oil, or the man who spends more initial energy forging an axe, whacks the axe into a rock and sits back while a million barrels worth spurt out to form a new oil lake?
The same thing could be going on by analogy with todays advances in tech.
Whose to say?...
( by the way, this basic concept, typically learnt by engineer students in their foundation year, is out the reach of 98% of doomers. If you understand and apply it to your outlook on energy , then you're head and shoulders above the rest of 'em )
...
Certainly not the peak_oil_is_now hype gang.
The IEA WEO 2008 from the Perspective of Biophysical EconomicsRecent work in our lab suggests that when you divide the energy produced by the energy used by oil and gas industries that these industries use about 17 MegaJoules (MJ) per dollar spent in 2006. This is the energy intensity per dollar spent for seeking and producing oil. This compares to about 14 MJ per dollar for heavy construction and about 8-9 MJ per dollar as a societal average, so it seems to be in the right ballpark. If we assume 5 percent inflation since 2006 we might expect there to be used about 16 MJ per dollar spent by the oil and gas industries in 2008.
So in 2008 dollars, the oil and gas industries uses about 16 MJ per dollar spent. Now lets look at how much these industries have to spent to pull oil out of the ground:
Cheap Oil Isn't Coming BackA major problem with most new oil fields is that extraction costs are much higher than they are in fields like Ghawar. Even cheap, easily accessible oil in other places is quite a bit more expensive to get out of the ground than Saudi oil. The more the world relies on unconventional oil extraction, the less likely it is to ever see cheap oil again.
Cheap, easy oil is gone, but demand isn't going to go away. Alternative energy could become increasingly important, but it hasn't reached the point of fueling our transport system yet. Promising new oil fields are the best bet for the medium term and could offer substantial gains as production ramps up while the price of oil continues to appreciate. A number of major new oil projects have been in the Western Hemisphere, and many offer the promise of greater expansion.
So we have 1950s era super giants producing at around $5 a barrel. And deepwater drilling at over $50 a barrel. At 16 MJ per dollar, that comes out to an energy cost of about 80 MJ per barrel for Ghawar and 800 MJ for deep water drilling. A barrel of oil has around 6100 MJ. That gives Ghawar an EROEI of 76:1 and deepwater drilling of less than 8:1 EROEI. Now these are not the exact numbers, but it is pretty clear that the EROEI of unconventional source like tar sands, oil shale, and deepwater drilling is much less than the EROEI of those old super giants like Ghawar. Thus I don't find your pick axe analogy particularly applicable here.
I would hardly call going from 76:1 to 8:1 EROEI "insignificant". Also, low EROEI oil is expensive oil. Our economic engine runs on cheap oil. When that oil gets expensive our economy starts to sputter. You end up with recessions, high unemployment, inflation, stagflation, etc. You are not going to see 280 men pulling a car up a hill when oil prices climb. You are going to see that former car driver sitting at home unemployed because the economy is stuck in recession(demand destruction).2ndly, the ERORI for oil is still so extremely high, that _IF_ the ERORI is currently going down, it's at an insignifcant rate and amount. When it becomes cheaper to pay to pull your 1 ton car with 44 horses, or 280 men than to use a 33kW combustion engine and some petrol, you'll know the ERORI of oil is losing its economic edge. Currently, oil is so astronomically excellent for ERORI, any comparison with muscle power (or wind power) is a joke.
Recession risk unless oil prices fall furtherIf history is any guide, another oil-induced recession may be just around the corner, at least for the United States and some of the other developed economies. Every time that the cost of oil relative to global economic output has hit current levels -- and that's even after sharp falls in spot prices this month -- it has heralded a slump.
And while economists and analysts say a serious slowdown can still be avoided, many add that unless oil and energy prices fall much further and -- most important -- stay down, the world economy could be in serious trouble. "We are in a danger area for the world economy," said Christophe Barret, global oil analyst at Credit Agricole.
The warning signal flashing is what economists call the "oil expense indicator": the share of oil expenses as a proportion of worldwide gross domestic product (GDP) (oil prices times oil consumption divided by world GDP). Since 1965, this has averaged roughly 3 percent of GDP, and it has only exceeded 4.5 percent during three periods: in 1974, between 1979 and 1985 and in 2008. Each period has seen severe global recessions.
Analysts differ on exactly how high oil prices need to be and how long they need to stay up before they slow growth. But most economists argue there is a level at which fuel input costs become incompatible with continuing economic growth.
