Indeed, the US has "proven reserves" of roughly 22 Bbl. Since 1992, when the US was already a very mature producer, reservers have declined about 10%. But in that time, the US has pumped an average of roughly 3 Bby. So in 1992, there were about 25 Bbl. Since then, we've extracted about 40 Bbl. And there's still 22 Bbl left.

The numbers don't add up, and that's because of "reserve growth", which includes technology (a small share), new field discoveries (less than 10%), and revisions based on increased total recovery rates and higher prices.

[quote = "mididoctor"]there is no indication that massive extra production in the order required is possible if the L48 is quoted as the example? the other wells uneconomic because of foreign production will produce more per well as they become viable?[/quote]

I made the distinction in an early post: L48 production is a model in that, even at low costs, we should expect Ghawar to eventually look like East Texas and provide lots of oil from stripper wells. Also note that nobody sets out to drill a stripper well - its the well that's left, still producing oil, decades after the field has declined.

When prices fell in 1998, a hundred thousand stripper wells were cemented shut in the US because the cost to keep them running were too high relative to the two or three barrels a day they produced. Maintainence, infrastructure, etc... In 1999, such a well might have produced $50/day of crude. But today it would be producing $150 a day. So actually, prices DO affect the production.

That's why DOE has a "Marginal Stripper Well Improvement" program - to ensure that productive wells aren't cemented shut (and thus destroyed for good - you'll never get enough back to jsutify re-drilling) in the future jsut because of a short-term price dip.

But since L48 production immediately post-peak, when depletion rates were highest, and also over the last 20 years, is not a good model because prices were flat and did not respond to changes in oil production in the US - the responded to changes in global production. As the US has declined, prices have not had to rise in response. When the whole world goes into decline, oil prices must go up.



Actually, the path to a sustainable future requires that the present pay for the future: that we use the energy endowment of oil to pay for the energy costs of wind and solar generators that will not deplete.

And that's happening today, as solar and wind power are gradually scaled up. I'd like to see it go faster, if only to reduce GW emissions, but it is happening.

As for resource stress, "stress" is scarcity. When goods are scarce, prices rise. Markets respond to prices. As long as the transition is not abrupt (3-5 years like the PO Doomers think) the market can respond. It only takes 9 years to replace half the vehicle fleet. Less than that to build mass transit and conserve.

????

So peak oil is in 20 years time and we better do something about it?

this argument is virtually a non event

Boris
london

Let's go back to my argument and see where I became unclear...



A-ha! I see the problem. I argued that 20 years to peak is a long time. That 20 year time-fram depends on an expansive definition of "oil", such that NCO is included in it and is beng used. As I noted previously, you are correct that, therefore, oil and shale would not be something we could "switch" to because they would be part of what we would be switching from.

My original point was that one reason that PO Doomers think the peak will be soon and terrible is that they don't think that sand and shale could be a significant source of energy before the liquids peak hits. But if in fact the liquids peak is farther out, then there is more time for sand and shale to extend that peak.

Further, as I have noted several times, an oil peak does NOT imply an energy peak. There's gas and coal, nuclear, and renewables. As the oil peak recedes (it will never go away, though) there is more time for transitions to other fossils, and away from fossil fuels entirely. Peak oil may be 20+ years away. But that certainly doesn't mean that peak energy must follow soon on its heels. So no, there's no reason to do anything special about PO today(other than keep demanding for better reserve data). GW, yes - but not PO.

SilentE,

Since Lynch won't answer these questions, maybe you can. These questions are in earnest, as I seriously would like to be able to assess an optimist scenario. As you know, other than the IEA, there are no real optimist scenarios out there, and it would be helpful to have some so that people can try to evaluate a more optimistic position.


(1) How much oil will the world use in 2020?
(2) How much oil will the following countries have to produce in 2020 to meet estimated world demand for oil (Saudi Arabia, Russia, Canada, Iraq, Iran, Venezuela, Algeria, Nigeria, Libya); Please break down the amount that each country would have to produce in the year 2020;
(3) How much of the oil will come from unconventionals, specifically, please try to break this down also. For example, how much from Canadian Tar Sands, how much from Venezuela, how much from American oil shale;
(4) What price, in today's dollars, would cause the world to shift to alternative fuels other than conventional and unconventional oil?
(5) How much would it cost to shift to other energy alternatives?
(6) Will the shift to other alternative energies be done by the market without government intervention or will it require the intervention/lead of the government?
(7) What will the the energy source to replace oils (including conventional and unconventional) as a fuel source for transportation?
(8) When do you see the shift from oil as a primary energy source for transportation occuring?

then we are back to a judgement call on what we both agree is imperfect data...

and has been pointed out it seems as perhaps we should have done something about climate change 20yrs ago rather than now?



and with that i feel we have reached an impasse.

What i take out of this good exchange is an insight of how MACRO problems are hard too identify a positive viewpoint to or formulate a response as they are effected by other reactions

Boris
london

I've done a little research into the refinery issue, since its an issue that most "optimist" seem to overlook, but is continually brought up as an issue by Boone Pickens and the Saudis. Let's assume CERA and the optimist are right, there's a bunch of oil out there. The question is, do we have the refinery capacity to use it? If not, we have a seriously problem only made worse by these recent hurricanes.

Regarding the refinery issue, here's what one group of analyst has to say. I'm copying a post a made on another thread.

One of the issues facing the world is a lack of refinery capacity. Boone Pickens often says the world has a maximum refinery capacity of about 84mbpd. With the hurricane damage, I've delved a little more into this issue. A quick search on the net found a report by ICF Consulting.

ICF says the following in a report on refinery capacity issues:

(1) "over the next roughly 5-year period, that the ability to meet forecast demands for oil will be driven by refinery capacity issues, not crude availability"
(2) This refinery "capacity crunch will change the istorical playing field for internation crude and product supply and trade, and create strong and sustained margins for refiners, higher prices and potentially supply shortfalls for consumers"
(3) "ICF Consulting has examined recent global demand forecast date from the (IEA) from 2000 through 2020 and compared it to the current and estimated growth in refining capacity . . . The IEA estimates that the global oil demand in 2010 will be about 90 million barrels per day, an increase of nearly 8 million barrels per day over the 2004 number. This increase is about 30-40 world scale refineries, and the net impact on the marketplace, even if that much refinery capacity could be made operational by 2010, would simply be maintaining today's high margins and volatility . . . for the refining capaity to keep pace with this increase . . . it would need an additional 13.9 million barrels per day capacity to be built between now and 2010. This would be 50-70 refineries of world scale size."

****side note - keep in mind ICF just projected a need for an additional 13.9 mbpd in refinery capacity but as of 2005, only an additional 250K is in the pipeline for development****

"Since that publication, there have been some noteworthy announcements . . . however, even with these announcements, it is clear that the number of new refineries needed, or major expansions, is significant, and, more critically, these additions should right now, already be in the engineering phase to be operational by 2010 . . . the need for timely investment in capacity to sustain the demand outlook is compelling."

*** side note, so much for the optimistic CERA report of an oil glut by 2010, without addtional refinery capacity being added by 2010, any extra oil projected by Cera is of no use ****

"As capacity growth lags demand, small events can have a grossly magnified effect. This leads to increased upward pressure on prices, refining margins, and volatility"

****This was published before the Katrina and Rita Hurricanes. But the truth of this prediction that "small events have a grossly magnified effect" is evident from the U.S. refineries knocked off line, even temporarily.


"With IEA predicting another 17.6 million barrels per day demand by 2020, the refinery capacity need will grow even more"
****Whose budgeting for this?*****

"The magnitude of the need for additional capcity over the next 5 years is, however in stark contrast to the relatively few significant projects currently underway to expand global refining capacity. In cases where industry is evaluating or has announced capacity increases since the Oil and Gas Journal survey was released, the location of those projects are planned for China and the Middle East, and none are in the engineering stage"

***side note, so much for refinery capacity meeting the demand needs by 2010, maybe ole Boone Pickens is right***

"Moreover, the tighter product specifications in the United States versus the emerging Far East region will make it more cost effective for refiners with export capability in the Middle East, or even Europe, to manufacture and ship product to China or India. Where the product goes will depend on who is willing to ante-up and pay for the volume, and the ramnifications for both the 'winner' and the 'loser' in that battle are significant"

****note - this sounds like the beginning of a bad movie. In fact, it is the same thing Michael Klare has been saying concerning "resource wars." ***

"Conclusions:

Barring a radical and immediate innitiation of major refinery projects, there will be a competition for available supply as the decade draws to a close. The 'winning' bidders will pay a premium for products which could make today's prices look very reasonable; the 'losers' may be required to slow down economic growth. The overall effect of both may be that global economies will suffer until refinery capacity gets back in alignment with demand . . . The overall refining capacity crunch looks like it will be difficult to reverse given the long lead times necessary for construction . . . All these factors lead ICF Consulting to believe that the global oil product market will remain tight in the near future . . .it is more important than ever to look at the fundamentals and determine a long-term strategy to reduce or slow down the growth of petroleum demand, and to prepare for the future . . .

**note - how can any of us add to that last statement***

So, for the optimist, how will we overcome this refinery issue? Specifically, how does this report err that there is not enough new refinery capacity coming online meet projected demand by 2010?

I'll state right out front that my information comes from the web. I'm not an oil insider or geologist, and I'm not a university economist. Most of what I've got is out there already, usually from the EIA, USGS, or from presentations and articles by PO authors (and some skeptics). So if you've spent much time looking for information on the subject, you've probably seen everything that I have. Whether you give as much credence as I to the views of the various authors or the validity of their models, guesstimates, and stats is probably the source of the disagreement.

But, at the same time, I think that there are quite a few important considerations or arguments from each side that the other prefers to ignore. And I think resolving those arguments is conceptually important.

Beats me. How close do I have to be?

I'll include oil from all sources. Globally, EIA's Sept 2005 Short Term Energy Outlook says we use 85 mbd, or 31 Bby. I think high prices will create a slight drag effect on global GDP growth, but they will also spur incremental improvements in energy intensity. But given that there are other sources of energy right now, the effects will be small and even short-term substitutions will be important. As such, I'd expect energy efficiency improvement to rise to 1.7% (from 1.6% per year) by 2015, perhaps to 2% by 2025. I should note that in the late 1970s, efficiency grew at more than 2% per year in response to the oil shocks. I'd expect global GDP to continue growing at about 3.5-4% per year. That means that total energy supplies need to grow at 2-2.5% per year to keep pace.

But what percent of that will be met by oil growth? If oil prices rise faster than other energy prices (which is indeed happening) then oil use should grow more slowly than total energy usage. I'd say oil use will rise by 1-1.5%, but that's a large range. That implies that oil production will be 94-98.5 mbd in 2015, and 104-115 mbd in 2025. Note that USGS's estimate for oil production growth of 1% per year puts the peak out around 2060.

I project oil to stay within 50% of $40 (inflation adjusted) for the next decade at least, but beyond that I can't even speculate. It might double again in 2015, or it might not double (to the $80 +/- 50% range, i.e. $60-$120) until 2020 or 2025. So we might see $100 oil in 12-15 years. Or not.



I have no idea. The probabilities of any specific set of country forecasts are always far lower than for a global forecast. The most obvious problems: I can't predict stabilty for any of those countries (except Canada) in 10 or 20 years' time. I can't predict the relative costs of heavy oil vs. tar sands/shale. I can't predict hurricanes or other regional problems. There are certianly a few decent discoveries out there unfound as yet, but who knows where?



As I said, I've got no idea which type will drop in cost faster. Over the last 10 or 20 years, we've found that Heavy Oil and Canadian Sands are economical, but US shales are not yet. Perhaps there are scalability issues that will allow Heavy Oil to be extracted and processed in volumes far larger and faster than sands and shales. Or perhaps Chavez and his successor will starve the Venezuelan National Oil Company of capital for the next seven years by taking all the windfall oil proceeds and spending them on social programs and patronage, ensuring that Canada and the US take a large and early lead in NCO production.



Oil is predominately used for transportation. And transportation is highly personal, the result of millions of end-user's decisions. Any "shift" will not be a single event or decision - it will be a continuous process in response to prices, and it's already happening.

Consumers are buying hybrids - that reduces total oil consumption. Some may switch to CNG vehicles they fuel at home from the natural gas line to their furnace and stove. Some will switch to all-electric or hybrid-electric vehicles that draw grid power from coal, nuclear, or renewable sources.

Certainly the 3% of US oil-fired electrical generating capacity will be replaced with other sources - wind is growing at 30-40% per year right now, although from a small base, and solar is ramping up with large Stirling plants in the Southwest. Many municipalities, universities, and governments are shifting to LNG or electric buses and vehicles, and that will continue.

In large cities around the world, mass transit will expand or be built. That's happening with light rail in the US, and buses and rail are popular in all developing regions. As the cost of car ownership rises, people in developing nations will delay car purchases and prefer mass transit for more trips. That will reduce overall consumption or slow its growth, and will also shift energy usage onto electrical grid systems - which will be largely oil-free, and increasingly renewable.



Does it matter? Since the market is handling the change, there won't be a single bill that comes due to a government or company. To the extent that prices rise fast enough to force the pre-mature abandonment of oil-based technologies, that is a serious cost. But if the transition involves people replacing older oil-based technology with more efficient oil-based or non-oil based technology, then the costs will be minor and largely invisible.

Arguably, every dollar rise in long-term oil prices is a "cost" associated with peak oil because prices only rise as a result of scarcity, which is only an issue because of the diminishing marginal returns of oil extraction. But since the "shift" involves people dropping oil for lower-cost alternatives, the on-going costs of the shift will rise more slowly than the price of oil. Still, under these assumptions, efficiency gains mean that the size of the energy sector as a % of GDP will decline, because efficiency will improve faster than EROEI declines. Thus, per capita energy expenditures as a percent of GDP must also decline.

Summary: energy prices will rise. But we will get richer faster than those prices rise.



Both. An unfettered market with substantial information would shift of its own - the signals from price (and hence scarcity) would be sufficient. But energy in general, and oil in particular, is not such a market. Governments already intervene heavily in oil markets. It is certainly possible for governments to hinder or delay the widespread adoption of the potential replacements for oil through subsidy or red tape. I think that the transition will happen even so, but I would prefer that (in the US at least) the government stop subsidizing oil companies and road construction at such rates as to unfairly distort the market in favor of oil, gas, and coal consumption. (Nuclear too, but at least the installed capacity does not emit additional GW gasses)



I don't know. Maybe hydrogen, although it's a poor energy carrier and there's no infrastructure, so probably not. I suspect electricity, bio-diesel, something bizarre and novel, or nothing at all. Rail is/will be run on electricity, so that's a big chunk of it. Plug-in electric cars are a strong possibility because the infrastructure is in place and the technology is developing. PLus, they are long-term renewable and sustainable. Bio-diesel, because the transition costs would be very low. CNG is already used for city buses and such.

But really, since oil is such a great trasnsport fuel, I suspect we will keep using it, for a LONG time. Hybrids and plugin-hybrids will continue to improve in efficiency, and cars will become lighter and lighter as gas prices rise. I also expect mass transit and carpooling usage to increase, so that automobile single-passenger trips will decline as a share of all travel. The fuel efficiency of those trips will rise, so that total oil consumption for travel will increase only gradually. But oil will be essential for transit for a long time.



Oil will be A major source for transportation for a very long time. 50-100 years at least, barring a technological revolution we cannot foresee. That's because oil is the perfect choice for vehicle fuel: a high-energy-density liquid.

*THE* primary source? Well, according to my scnenario above, oil will continue to gradually lose market share to CNG, electric, and biodiesel. But to get to the point where less than 50% of transit energy is from oil? I have no idea. Part of the problem is hybrids: they use oil, but they use so much less. If every new vehicle were required to have a fuel economy of 50mpg by 2015, that would double the fleet fuel efficiency for the US. So it would reduce oil for transit by half. If world oil usage were cut by half, that could persist for a VERY long time after the peak. Without real breakthroughs in battery technology, that seems very likely.

SilentE

Thanks for taking time to address the questions. Here's where I see the problems:

(1) refinery issues pointed out in the ICF analysis. So, even if there's oil there, if it can't be refined, its of no use. Further, the fact that the world is not developing the capacity, even though the prices and market demands it, makes me have little faith in either the market, government, or both to address the growing need for more energy as to any issue, be it refinery issues or development of other alternatives;

(2) estimating world production in certain years is key to determining whether the world can meet that estimated production in any given year. Most optimist rely heavily on unconventional oils to replace conventional oils. Assuming it is efficient to do so, the Canadians, for example, only estimate producing about 5 mbp in tar sands by the year 2015, which, in their own statements, offsets the depletion of their conventional oil production. I have yet to find a good source that can confirm the reliance on unconventional oil production, basically, Canada, can make of for not only depletion, but also increased production. In fact, I can't find it now, but I read an article in Oil and Gas Journal on Canadian production, from a Canadian source, that Canadian tar sands weren't the answer to meeting projected demand for oil by 2020;

(3) After we estimate what increase in oil production the world needs to grow (economically), then we know there are only a few countries out there that can meet that need. So, to be realistic, we need to know what those countries can produce or be expected to produce by the year 2020 for example. That's why, whenever optimist are asked specific questions like what will SA be capable of producing in 2020, they can never give an answer. This is what Simmons is saying, can we simply assume they can produce? The answer is no. This summer, OPEC stated they could meet IEA projections for oil production beyond the next 10-15 years. Apparently, people aren't listening to them. Even Saudi Arabia has stated, albeit through Husseini in Oil and Gas Journal, that sustained production of 15 mbpd could not last for long, yet no one listens.

So, when any one issue is focused on, I don't see any good optimist factual support. The optimist position is always based on assumptions that things will work out. Boil it down to assumptions not based in fact.

Again, though, this refinery problem seems to me to be a real real problem and it is with us now, and only being worsened with these hurricanes. So, let's assume Lynch is right, that its not geology, its economics/politics, then we, under that definition, are staring peak oil in the face right now.

I had to think about your argument. It may still be that I don't get it, but the example you gave me seems like a perpetual motion energy resource. Something that can't expand would have a roof of units it can produce... and in the end, I don't see how it relates to the problem of dropping EROEI of a decreasing commodity like oil.
In the end, decreasing EROEI means you need to spend more and more energy to get the same amount of extra energy back, no? So yes, acording to economics we can spend more energy to get more energy, but with shrinking EROEI of a resource, it'll just mean that you can spend more and more energy if you want, but you'll only get a constant amount back. If you stop spending more and more energy... well, that's the problem, no?
Physics seems to win out when the dust settles...

you've attempted to distract a discussion you probably know nothing about with information you definately know nothing about.

Sub tropical atlantic ocean heating may be an expression of North Atlantic conveyor disruption. In another words, a failure of the heat transport mechanism of the gulf stream could be expressed by warmer gulf waters. I suggest you start with the movie "The Day After Tomorrow" and then graduate to some science.

pete

Not a perpetual motion engine... but it does mean you can theoretically keep energy production at high levels up until the resource is completely depleted. I.e. invest as much energy as you need to get as much energy as you want, as long as EROEI is over 1. Imagine, in 2030, half of the world population dedicated to the oil industry to keep production levels going up, despite massive depletion... oil wells at every street corner, even in New York... but then when EROEI goes down to 1 you suddenly hit a brick wall, for investing even an infinite amount of energy on energy production won't gain you any net energy any more.

Based on SilentE's ideas I also proposed that the global oil peak may be pushed back further than the midpoint of depletion, because of something like this mechanism. The question is for how far? And is it a good thing? (most probably not)

I think ICF has a point that there are not enough new refinery projects being planned to offset the refining losses from Hurricanes Ivan 2004, Katrina, and now Rita. Refining needed to expand to keep up with crude production and demand, and it needed to continue the transition to heavy-sour crudes. The US hurricanes meant that US refiners lost the capacity for several months, and that they also had to postpone their expansion/transition plans.

Globally, total refining capacity has been growing slowly for the last five years (about .5% - 1.2% per year), but until this year it has not been a problem because spare capacity was being brought online. That allowed refinery production to keep pace with crude production. I think the exhaustion of spare capacity this year caught the refining industry off guard. That, plus the hurricanes, will keep suuplies tight and prices for refined products high for the next few years but there are lots of plans now for new facilities and expansions. The market will respond, but it will take a few years to catch up.

It's a problem, assuming that the economy keeps growing at a good clip. If we have a recession or slowdown in 2006-2007, it won't matter because demand will drop. The refining crunch may make such a recession more likely, but there are other factors that are equally important, if not more so. Like the exploding US budget deficit, global real estate markets, European labor and fiscal reform, the weakening dollar and the US trade deficit, Japanese recovery, etc... The current economic cycle is already five years old and has a weak foundation - I'd be surprised if it lasted three more years.



2 & 3 cover similar ground: can country X produce N mbd in 20 years?

EIA's 2005 International Energy Outlook (download at [url="http://www.eia.doe.gov/oiaf/forecasting.html"]EIA Forecasts[/url]) includes a high price projection for production (page 158), based on prices staying at around $40 - that's a 35% drop from the current price. It has world production growing to 115 mbd by 2025, of which only 11 mbd is from SA. OPEC total is 40 mbd, while non-OPEC is 75. That includes 11 mbd from the US (?!), 6.4 mbd from Canada, 5 mbd from the North Sea countries and 8 mbd from all Central/Southern America. It projects FSU to be 20 mbd. Although the numbers in some cases appear optimistic, I'd refer you to the text of the report covering Non-Opec Production on pages 31-33 (I'd cut'n'paste, but I'm sure the report has been debated elsewhere on the forums, and it's quite long).

Suffice it to say that this is a projection for $40 oil. Right now, we're at $60 oil - and that means that the 2005IEO forecasts should be easily met.

It's also worth mentioning a CSIS report by Cordesman and Al-Rodhan (August 2005 - try Google) on the 2005 IEO which includes a discussion of "Major Uncertainties" in the report at pages 8-9. Importantly, the first two:

So although the EIA report uses lower production numbers for the "high price" case because oil demand would decline, there's no real analysis of the incentives that high prices would create to shift away from oil usage. For example, despite the major focus on renewable sources from governments and energy companies, EIA's model projects a net DECREASE in renewable use as a percentage of total global energy supply over the next 20 years! It thus appears that EIA's model for 'demand elasticity' only reflects demand destruction, and NOT demand substitution. As such, I'd regard the model as [i]pessimistic[/]!

First, I think specificity is a distraction. As I noted, the more specific the scenario, the less likely it is to occur. If you're looking 20 years out, don't get hung up on specific countries. Stick to the big picture: price.

Second, economics is based on assumptions that work very well. When prices rise, demand falls and supply increases. We're not facing a shortage of oil. We're facing a shortage of $20 oil. Those are VERY different things.

Third, the pessimist geologists have not been very successful so far. The optimistic economists, on the other hand... I think the track records are important - not controlling, but certainly persuasive. I don't consider the inductive fallacy a sufficient basis for rejecting an argument. If I did, I'd live in perpetual fear of the sun not rising tomorrow. I've got better things to do than stockpile candles.

See above: refining is a short-term problem only. There's no limit to the number of refineries we build; "peak refining" makes no sense. The crunch will be resolved within a few years. Oil production will continue to grow. Worst case: recession in 2006-07 slows demand growth, giving the industry time to catch up for the next economic cycle.

Your understanding is correct, but only to the extent that EROEI continues to decline at a meaningful rate. As long as energy efficiency improves faster than EROEI declines, you get more GDP for every gross Btu of energy every year. Moreover, because of renewables like solar and wind there's a limit to how bad EROEI would get: instead of extracting difficult oil, we'd just build more solar and wind instead.

Is that perpetual? Well, there are limits. Is solar perpetual? If solar had an EROEI of 5, we could continue to expand until the Sahara was covered with generators. And then we'd cover the Empty Quarter, the Great Sandy, the Gobi, the Kalahari and US Southwest... So eventually we'd run out of land for productive generators. So maybe it wouldn't be perpetual... but it would last centuries or more. And even then, all we'd face is a decline in the EROEI of new solar sites. Total global energy production wouldn't have to decline until the sun dimmed.



It relates to oil for a couple of reasons:

first, it illustrates that even if the marginal EROEI of oil drops by half, that's still a LOT of energy for the global economy.

second, it illustrates that EROEI for world energy depends on more than just oil - it depends on the relative EROEI of other sources like gas, nuclear, solar, wind, and coal. Even if marginal EROEI falls, aggregate EROEI will remain high for quite a long time because of the "legacy" capacity.



Only sort of.

Declining EROEI does NOT mean that you can never increase your energy production. It just means that it is more difficult to increase energy production than it would have been if EROEI had not declined. Recall my examples: total energy production increased! It does not stay constant.

Moreover, there's a difference between EROEI of renewable and non-renewable resources. If I have a solar plant with EROEI of 5, that includes all the cost of building the plant, since the operating expenses are so low. So in that location, my EROEI is 5. When the plant reaches the end of it's lifecycle and wears out after 30 years, I just rebuild it again because the EROEI is still 5! With a renewable resource, I just keep rebuilding the plant because the EROEI stays at 5 forever! In fact, technology may gradually improve my efficiency, and thus gradually increase my EROEI!

I think we both agree on the basics of EROEI - but where we disagree is the rate and scope of decline. How fast do you think EROEI will drop? Where will it stop (or level out)? If total EROEI declines by 50% every year and never stops, then you're right: we're hosed. We could not even hope to maintain our current levels of energy production. But that level of decline is impossible. I think even a 25% annual decline in marginal EROEI is absurdly implausible.

I think that marginal EROEI will decline quite slowly, and futher the rate of decline will decelerate as fossil fuels are replaced by renewables. I'd be very surprised if it ever declined by more than 2% per year. As technology improves the productivity of wind and solar, their EROEI will rise. So we face a decline in fossil EROEI but rise in renewable EROEI. I'd expect them to converge somewhere around 5, if not higher.

So who is investing in new refineries in the US?