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EROEI: A Useful Measure Or A Distraction?

Alternative Energy

EROEI = Usable Acquired Energy / Energy Expended

It seems so simple. If the amount of energy produced relative to the amount of energy utilized in producing that energy tends to decline, at some point as the ratio approaches 1.0 (or perhaps even becomes a fraction less than 1.0) there is little if any return on the energy invested and society will collapse. But is this concept really workable and useful?

There are many issues related to how this ratio (sometimes abbreviated as EROI) is calculated. This affects both the numerator and the denominator of the ratio. The first problem is that this equation is usually interpreted as being the useful acquired energy divided by the useful energy expended.

Energy expended is usually limited to something you would miss if it became unavailable. This means you do not count the energy from the sun that is used to make energy since sunshine is not a scarce resource. Thus solar insolation in the creation of biofuels via photosynthesis is not included. In some cases the decision to include or not include may be controversial. If you utilize natural gas that would otherwise be flared or not even extracted, should that energy be included in this calculation? This becomes very important when evaluating Canadian Tar Sands.

Similarly in the numerator, what constitutes “useful energy”? Is it useful if it is not at the location where it is to be used? Is it useful if it is produced at a time when it is unable to be utilized? Waste energy produced, e.g. heat, is not included even though it is available to be utilized as either economics or natural evolution of engineering progresses. A good example of this is the progress towards using flare gas as an energy source for oil and gas operations.

This is one of the reasons that for every source of energy, there are many different calculations of the EROEI.

Energy Quality

In some cases, EROEI calculations ignore factors that determine the quality of an energy source and in other cases elaborate steps are taken to convert to units of equivalent quality. Converting all energy inputs to common energy units using only heat equivalents assumes implicitly that a joule of oil is of the same quality as a joule of coal or a joule of electricity. Since this is clearly not the case, some estimates of EROEI account for differences of energy quality within EROI analysis when this is possible. This means adjusting the thermal equivalents to economic value taking into account attributes unique to each fuel such as scarcity, capacity to do useful work, energy density, distance to place of intended use, amenability to storage, safety, flexibility of use, negative impacts on the environment and so on. One of the most important of these is the preference for liquid fuels and the flexibility of electricity when the quantity able to be provided is responsive to levels of demand. So without a quality adjustment, two sources with the same EROEI might appear to be equally attractive or the one with the higher EROEI might be considered more attractive than one with a lower EROEI but one might result in a liquid fuel such as gasoline and the other in something else such as intermittent electricity. The quality adjustment is intended to convert apples and oranges into something comparable but involves adjustments that might be considered subjective.

System Boundaries

Both energy produced and energy required to produce the output present challenges with respect to how far in the value added chain one looks. The more obvious problem relates to the energy in the denominator but there are similar issues that apply to the numerator. This can be thought of as a number of different levels in the value added chain such as:

  1. Direct inputs at the source of where the energy is produced
  2. Inputs at various stages of upgrading the energy utilized into a form that is usable which is similar to the energy quality issue that applies to the numerator.
  3. Energy inputs required to produce the equipment used in the production of the energy at the source and everywhere along the way in improving the quality of the output including the distribution network.
  4. Energy required to maintain the labor force from transportation costs to housing and food.

All of these tend to reduce the EROEI. The adjustments to the numerator can be considered the quality adjustments. Obviously no two researchers are going to come up with the same estimates of the EROEI.

Here is one approach suggested by Murphy et al in their article “Order from Chaos: A preliminary Protocol for Determining the EROI of Fuels” which may be one of the most accepted if not the most accepted resource for those who find merit in this approach.

Table 1. Two-dimensional framework for EROI analysis. The system boundaries, which determine the energy produced from a process (i.e., the numerator of an EROI calculation) are across the top, while the boundaries that determine the energy inputs (i.e., the denominator of an EROI calculation) are listed down the left. The shaded cells represent those with boundaries that favor economic input-output analysis while the other cells favor process-based analysis.

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The subscripts are really simply a reference to the cell identification. Notice the author recommends calculations include direct and indirect energy and material inputs but be limited to extraction (Cell Row 2 Column 1 with the abbreviation stnd for standard). I certainly do not agree with this choice as I think it is too limited a boundary, but if any such choice were adopted it would make the comparison of EROEI estimates a lot more comparable. To some considerable extent I believe it is commonly used but not always. So one has to be careful to understand how EROEI calculations have been made.

Present Value

EROEI is problematical if it does not take into account the time sequence of inputs versus outputs. Many energy inputs occur prior to production and during the reclamation phase. The energy outputs in many cases follow a decline curve but not always as a coal mine works differently than an oil or gas well. To convert to present value one has to decide on a discount rate. That is always challenging and would likely make estimates from different sources incompatible.

Factor Prices

In many cases, there is some leeway in substituting energy sources in the denominator and these substitutions are based on many considerations one of which is the relative price of the alternative energy sources. But prices and relative prices vary over time. So this can lead to a lack of stability of EROEI calculations.

Relationship to Net Energy Gain

EROEI and Net Energy Gain are two formulas that look at the math in a slightly different way. Net energy gain describes the amounts, while EROEI measures the ratio of the amounts. You can convert from one to the other by considering that:

Net Energy Gain = Energy Produced – Energy Used.

EROEI = Net Energy Gain/ Energy Used + 1

For example given a process with energy produced being 10 units, expending 2 units of energy yields a net energy gain of 8 units with an EROEI of 5. Although equivalent to EROEI, it seems that EROEI has more appeal and appears more often in the literature.

Typical current EROEI values

The following table comes from two sources as indicated. It is illustrative of the differences and sometimes similarities in the values of EROEI calculated by various authors. Although it is not always shown in this table, in some cases you can see trends over time.

Here is another set of estimates from the open source document “EROI of different fuels and the implications for society” Charles A.S. Hall, Jessica G. Lambert, Stephen B. Balogh some of which are reflected in the above table since those who work using EROEI or EROI are a small somewhat close-knit group.

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EROEI Trends

Even if the absolute value of EROEI is difficult to calculate in a non-controversial way the trend in the values over time as certain energy sources deplete and others experience improved ratios due to innovation may indeed be very useful. The following are also taken from EROI of different fuels and the implications for societyCharles A.S. Hall, Jessica G. Lambert, Stephen B. Balogh

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Time series analyses of oil and gas production within the US including several relevant “oil related” historical events. Each analysis demonstrates a pattern of general increase then decline in EROI with an additional impact of increased exploration/drilling.

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Gagnon et al. (2009) estimated the EROI for global publicly traded oil and gas. Their analysis found that EROI had declined by nearly 50% in the last decade and a half. New technology and production methods (deep water and horizontal drilling) are maintaining production but appear insufficient to counter the decline in EROI of conventional oil and gas.

Canada oil and gas and oil, gas and tar sand values by Freise (2011) and Poisson and Hall (in press).

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Time series data on EROI for oil and gas for Norway, Mexico and the Daqing oil field in China based on several papers published in the 2011 special issue of the journal Sustainability and works in progress.

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Two independent estimates of EROI for Canadian petroleum production: oil and gas (blue line, from Freise, 2011) and oil, gas and tar sands combined (red line, from Poisson and Hall, in press).

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Two published studies on the EROI of dry (not associated with oil) natural gas: Sell et al. (2011) examined tight natural gas deposits in western Pennsylvania in the US, and Freise (2011) analyzed all convention natural gas wells in western Canada.

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EROI for US and Chinese coal production derived from Cleveland (1992), Balogh et al. (unpublished data) and Hu et al. (2013).

EROEI Compared to Traditional Economic Analysis

Profit has traditionally been the standard for assessing technologies. If you can make a profit producing an energy source, it has a place in the market. Some feel that EROEI is only a partial measure of potential profitability and is redundant to traditional methods. In many ways the adjustments that are or can be made to the EROEI in its calculation are attempts at including the factors that would be included in a standard analysis of the competitiveness of a given energy source.

So one is then inclined to come to the conclusion that EROEI has its most utility in terms of:

  1. Screening energy sources
  2. Monitoring energy sources over time.

The case of corn ethanol illustrates the above. On an EROEI basis, corn ethanol would appear to be a losing proposition as essentially all the EROEI estimates of ethanol production from corn in the U.S. cluster around 1.0. From an energy production perspective it is a wash.

One can identify many negatives. It uses land that could be used to produce food and it uses water often from non-renewable sources such as aquifers with limited recharge.

There are some pluses. The oxygenation argument for ethanol seems to have been debunked but there may be some merit to the argument that ethanol allows refineries to produce gasoline with an octane rating of 87 (which appears to be the minimum allowed for regular grade gasoline at most altitudes) more economically by producing 83 octane gasoline and blending it up to 87 with ethanol. But I am not sure if this is based on refinery economics or tax credits for use of ethanol. Ethanol has created a thriving farming sector and corn processing sector during a period of time when job creation has been difficult.

So it seems that the EROEI has played no role in the decision to expand corn ethanol production and continue to produce it at high levels. At one time there may have been a national security issue as corn ethanol reduced imports of crude oil from unstable sources but that argument is declining in significance as shale oil and gas and Canadian production of hydrocarbon products has increased. It is now difficult to reduce corn ethanol production without causing a lot of economic disruption.

At the other extreme, coal has the highest EROEI. In theory the environmental negatives of coal could be incorporated into the EROEI calculation. But that does not seem to be what has happened. So decisions on attempting to switch away from coal have also been totally unrelated to its high calculated EROEI.

Renewables especially those associated with solar tend to have low values of EROEI and suffer from the reality that the infrastructure required to produce solar energy utilizes higher EROEI energy sources.

I am forced to conclude that EROEI is not at this point in time a very useful measure for either an entrepreneur or public policy. However, EROEI may have more merit than Club of Rome and other NeoMalthusian approaches since it is based on the change in practical availability of energy resources rather than a concept that finiteness means that per capita availability must decline as population increases.

Relationship to GDP

Extracting from Hall et al. the ratio of energy costs to GDP tend to vary within a range of 5% to 10% with the lower end correlated with economic expansion and the higher end related to deficiencies in aggregate demand due to diversion of purchasing power into energy and with rapid increases in this ratio creating shocks to the system. I have not verified that relationship but it makes sense intuitively but that still does not provide a link from either EROEI to GDP or EROEI trends to GDP growth.

I may simply not have come across a study on this or such a study may not exist. And yet that is the key question. To what extent does the EROEI values or the trend help us predict economic growth, standard of living, or other economic measures?

Intuitively one would expect that low or declining EROEI is negative for the economy. But what is intuitively obvious may not turn out to be confirmed by the data. We know that the ratio of GDP growth to energy use has been declining for various reasons including improved energy efficiency but probably more importantly the growth of service sectors where energy intensity tends to be low.

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So it could well be that the declining contribution of energy to GDP may be occurring more rapidly than the rate of decline of EROEI. Again I do not know if that relationship has been studied and reported. I have as yet not found such a study but I have not made an exhaustive search. So at this point I see this question as remaining at least for me unanswered. That would appear to be a key question to be answered if we are to place a lot of value on EROEI current values and trend.

I suspect that EROEI is less useful than the proponents believe but it is not something to be ignored. I am not an energy expert but I have a background in hard rock mining and this reminds me of the issue of declining ore grades and increasing stripping ratios. In theory those two factors should lead to a real rise in metal prices but they have not. Technology for extracting copper as an example has advanced more rapidly than copper resource quality has declined plus the miniaturization of electronic devices has reduced the amount of copper required per unit of GDP.

We may have the same situation with respect to energy resources.



22 Comments on "EROEI: A Useful Measure Or A Distraction?"

  1. CAM on Wed, 7th Mar 2018 7:35 am 

    So, we see both sides of the coin. It is now a race between technology and the decline of easy to get resources. This is not just a sideshow. It is a race for the survival of our civilization. You would think people would pay more attention!

  2. Duncan Idaho on Wed, 7th Mar 2018 9:03 am 

    You can discount it under capitalism, as physical reality is a subset.
    However, that will disappear as the real world creeps into our existence —-

  3. MASTERMIND on Wed, 7th Mar 2018 9:15 am 

    Declining conventional oil will be the final nail in the coffin. Because they won’t able to do anything about it..

  4. kanon on Wed, 7th Mar 2018 9:17 am 

    To me, the problem with the EROEI concept is that measurement is highly inaccurate and our consumer society is so wasteful that we learn very little that is useful. Take “energy intensity” for example. The money used to measure GDP is constantly inflated, but energy units remain constant. The statement: “We know that the ratio of GDP growth to energy use has been declining for various reasons . . .” could be explained by inflation alone, but that is not mentioned as a factor. With the low EROEI of fracking and tar sands, it would seem that the U.S. economy should become more energy intensive.

    Our society is organized around money and the banking cartel. Saving money is much more important than saving energy because saving money is rewarded with status, while saving energy is a step down in terms of status. If we truly had the goal of maximum EROEI, things would be done much differently. So, IMHO, EROEI is intuitively valuable, but since it does not mesh with the money system it is of little value on a practical basis.

  5. bobinget on Wed, 7th Mar 2018 1:28 pm 

    Ponder this;

  6. bobinget on Wed, 7th Mar 2018 1:55 pm

    US crude oil exports increased sharply to 1.1 MILLION b/d in 2017, or 527,000 b/d (89%) more than exports in 2016. This is the largest single year-over-year increase of a petroleum (crude oil and petroleum products) export since 1920.

    “petroleum products” are going to Mexico and former Venezuelan clients.

    BTW, at the same time we are headed for a deficit over 200 MB by EOY



  7. bobinget on Wed, 7th Mar 2018 1:57 pm 

    (nothing said about Europe)
    USA, Europe’s largest trading partners.

  8. bobinget on Wed, 7th Mar 2018 2:14 pm 

    Where on Earth are we exporting oil?

    #1 Canada 29%
    #2 China 20% (of US total)

    At present, all China need do is set (cheaper) oil imports at 1 M B p/d for USA. There-by eliminate
    balance of payments. The only reason China doesn’t today, supply shortage.
    The GOM is quickly running out for lack of investments.
    Were it not for suckers buying into story shale stocks…..
    There would be no exports.
    Global consumption is now set for 100 M B p/d
    Global production;

  9. rockman on Wed, 7th Mar 2018 3:38 pm 

    “If the amount of energy produced relative to the amount of energy utilized in producing that energy tends to decline, at some point as the ratio approaches 1.0 (or perhaps even becomes a fraction less than 1.0) there is little if any return on the energy invested and society will collapse.”

    And once again we hear from someone who doesn’t have a f*cking clue how the petroleum industry functions. With respect to developing/drilling society will “collapse” long before the ratio approaches 1. Same old story: development of of oil/NG resources have never and will never be based upon the amount of energy “returned” for the energy “invested”. The deterministic metric is $’s returned for the $’s invested. Long before the ratio reaches 1 oil development will stop. Somewhere around 5 or 6 IMO. The cost of the direct energy input (primarily diesel) is a relatively small % of the total drilling cost. Less then 15% and often less then 10%. The monies paid to the service companies that d the actual drilling and completion greatly exceed the energy costs. IOW those are the much larger investments (larger than the energy cost) that have to be recovered for a well to be profitable.

    Since the writer immediately shows his ignorance of petroleum economic I only bothered to just skim the charts. Another obvious knowledge gap is not understanding the impact of changes in the price of oil/NG on the EROEI of those investments. The EROEI (however calculated) DOES NOT continually decline. Let’s use the recent collapse of oil prices to explain. Same model as presented many time before: Well A, with oil at $90/bbl needs to produce 300,000 bo to return an acceptable l. But at $50/bbl it needs to produce 500,000 bo to deliver the same targeted ROR. IOW when oil prices collapsed only wells targeting larger recoveries could be justified drilling. IOW higher recoveries + same energy inputs = higher EROEI.

    And the converse is true: booming oil prices allowed smaller oil recoveries to be drilled while maintaining an acceptable ROR. Smaller oil recoveries + higher oil prices = acceptable profit margins. And smaller recoveries + same energy inputs = lower EROEI. Such as the increase in oil prices that led to the shale boom.

  10. Antius on Wed, 7th Mar 2018 3:40 pm 

    Energy economics lines up well with EROI when it is adjusted to provide the amount of energy returned in the first 20 years of life.

    What EROI misses is the fact that (1) Not all the outputs considered are the same. Oil has a different utility value to baesload electricity, which is in turn, superior to intermittent electricity. (2) The energy return occurs over different timescales. The EROI of hydro is returned over a century; A nuclear reactor = 40 years; Wind turbines and solar panels, some 20 years. The return period is all important to the economics. The economics of nuclear is impacted strongly by build time. If it takes 10 years to build a reactor instead of 3, the EROI for the first 20 years will be roughly halved. The price of power will double as well.

  11. bobinget on Wed, 7th Mar 2018 6:36 pm 

    This year or next, parts of America goes on the equivalent of dialysis. IOW’s some of us will need to recycle our domestic water.
    Thirsty folks don’t bargain hard.

    Oil dependency drives a tougher bargain.
    Liquids, burned as fuel, unlike water has no

    I guess the point I’m trying to make; no matter how much energy it takes to make that liquid fuel,
    those with something of value to exchange for
    products, who really need oil to survive, will
    find resources.

    Up to recently, everyone bitches about so called glut. In times of over production, it’s easier to talk EROI.

    EV’s might come to the rescue. Then, we can return to EROI of electricity transmission, batteries, generation, final use.

  12. twocats on Wed, 7th Mar 2018 7:22 pm 

    EROEI at a well-head or an oil field is about as stupid as it sounds and rockman is right. EROEI as a society is vastly different and much more important. If surplus energy, value is not being created by activities its very hard to develop an industrial society – take nomadic tribes or hunter/gatherers – their spare/surplus capital build is so so so slow it would take eons to say – build a modern bridge. they couldn’t do it.

    modern industrial civilization has energy inputs built-and-baked-in all over the place and is living off that legacy and continues to have sufficient surplus from oil, gas, coal, renewables, to maintain most of that system and even build out new systems.

    but we’ve reached the point, many years back in fact, where access to that surplus energy is not as easy as it was. the infrastructure in the US is degrading in many places quite quickly, while infrastructure in China is developing. EROEI is already hitting home and has already mangled the global financial system and turned it into a mutated monster (zero bound interest rates for a decade, etc).

    so the cost of oil and gas might be “cheap”, but if you add in materials, wages, the fees associated with the cost of living (phones, phone bills, cars, sky-high rents and housing costs, and on and on), “GETTIN’ ‘ER DONE” is gettin’ a lot harder and will soon be gettin’ impossible. Look at that there puerto rico and tell me oil is cheap. With enough oil you can do anything – grow anything, build anything, ship anything anywhere. but we can’t do it any more – at least not for every body – not when the legacy falls. and why is that?

  13. Boat on Wed, 7th Mar 2018 7:31 pm 


    We are watching, tech is winning.

  14. Boat on Wed, 7th Mar 2018 7:42 pm 

    Eroei of drilling is just part of the story. Since fracking Nat gas became cheap. Along with CHIP tech all the sudden Houston could import oil and process petroleum products at a profit.

  15. Kat C on Wed, 7th Mar 2018 7:44 pm 

    If you run a business is net income a useful measure or a distraction?

  16. Boat on Wed, 7th Mar 2018 7:47 pm 

    If you want to know the value of eroei just look at the dates used in the charts. Lol MM spawned out of date dribble.

  17. MASTERMIND on Wed, 7th Mar 2018 7:49 pm 


    Oil discoveries in 2017 hit all-time low –Houston Chronicle

    Is that up to date enough for you cocksucker? Now go back to fucking your sister/wife..Do what all Texans do best! Imbread!

  18. MASTERMIND on Wed, 7th Mar 2018 7:50 pm 

    Read this for current EROEI studies

    Inside the new economic science of capitalism’s slow-burn energy collapse (Ahmed, 2017)

  19. Anonymouse1 on Wed, 7th Mar 2018 8:54 pm 

    Boatietrad is a barely literate, innumerate, creationist retard. Lol, Boatritard spawns out of this world dribble.

  20. deadly on Thu, 8th Mar 2018 5:02 am 

    Back in 1865 all refiners were selling was the kerosene. Everything else was waste.

    3.5 gallons of kerosene per barrel. 58 cents per gallon. Five barrels per day from a still to refine oil then, 16.5 gallons of kerosene, 58 cents times 16.5 is $9.27 per day. After a hundred days and 500 barrels of oil later, you’ll have $957.

    Doesn’t sound like much money, but in 1900 a double eagle was twenty dollars.


    47.85 double eagles at 1300 dollars each is going to be worth 62,205 dollars in 2018 dollars.

    So in ten days in 1865, you could have income of 6220.50 USD in 2018 dollars using 50 barrels of oil, oil from Pennsylvania.

    At 62 dollars per barrel, times 50, you’ll have an investment of 3,100 dollars to obtain 6220.50 USD with 165 gallons of kerosene. Kerosene was THE market in 1865.

    You’ll have 3120.50 USD after you distribute the 165 gallons of kerosene.

    Better be the good stuff and not burn the house down.

    The other 1925 gallons of oil was discarded.

    Standard Oil Company started it all. Made good kerosene that burned bright and not too hot. That’s why they called it the Standard Oil Company, they made sure the kerosene was properly refined. Created the standard.

    Ushered in the oil age… by throwing it away in copious amounts. Henry Ford fixed it all by using the leftover gasoline to power the four cylinder engine that would run on solvents, anything with hydrocarbons, ethanol, doesn’t matter, it will run.

    A really low energy returned on energy invested, but it still paid. As long as it can pay, it is ok.

    Vindicating Capitalism

    The energy returned from a barrel of oil in 2018 is exponentially greater than the energy returned on a barrel of oil in 1865.

    All they wanted was the light the kerosene could generate, the waste heat produced was secondary, Kerosene was one-eighth the cost of whale oil.

    It was an easy sell.

  21. rockman on Thu, 8th Mar 2018 6:18 pm 

    kanon – The problem people have is trying to extend EROEI from “cradle to grave” with respect to the petroleum industry. For instance some try to incorporate the energy used to build a drill rig into the EROEI estimate of drilling an oil well. Even worse some then try to work the EROEI of the refining process into the analysis.

    Of course the goal is to find the EROEI limit at which the entire system craters. That ratio does not exist. The system will fail when any one critical component fails. Let’s take the energy used to build a rig that will drill my oil wells. The Btu’s used to build a rig ARE NEVER RETURNED by the rig. Yes, I use that rig to drill my wells but it’s not relevant to my well whether it took 500 million Btu to drill it or 10X that 500 million Btu. And for the simple fact that my decision to drill a well does not incorporate that energy consumption. What does is the $’s it cost to use that rig to drill my well. And that day rate has no relationship to the amount of energy used to build a rig. I once saw 3 huge onshore drill rigs built right towards the end of the late 70’s boom. And the never left the construction yard…never drilled a single well. Eventually sold for scrap.

    OTOH I’ve seen individual rigs drill 100+ wells in their lifetime. But same situation: drilling decisions for those wells were not based upon the energy used to build those rigs.

    Now, totally ridiculous approach: the EROEI of the refining industry. From a practical view almost every Btu of the oil going into a refinery comes out in the form of a product. Refining essentially just separates the different hydrocarbon molecules contained in the oil. But it uses a significant amount of energy to do that distillation: primarily NG and a lesser amount of electricity. IOW less energy comes out of a refinery (those individual products) then enters the refinery(oil + NG + electricity). Yes: the EROEI of the refinery industry is less the 1. Always has been and always will be. Does it make sense to incorporate the EROEI of refining into the entire dynamic?

    And one more time: since so little energy is DIRECTLY used in the drilling of a well the total cost of drilling will prevent an acceptable ROR with an EROEI below a 5 or 6 IMHO.

    So the folly: trying to combine the EROEI of the infrastructure construction (which has no impact on drilling decisions) + drilling(5/6 to much higher during low oil price periods) plus the refining industry (always less then 1).

    Would such an EROEI be anything meaningful?

  22. Kat C on Fri, 9th Mar 2018 4:55 am 

    Rockman, for some purposes the ERoEI of everything that goes into obtaining oil is not important, but to a society it is vitally important. Any energy expended to get oil is energy we cannot expend elsewhere. If we build a rig we didn’t use we didn’t use that energy to build more tractors and harvesters. If you have a billion dollars what you do with one is irrelevant, if you have only 10 dollars what you do with each dollar has a huge impact. With plenty of oil of high ERoEI we had so much excess that we could build the huge infrastructure of the US and waste that energy in all the endless ways first worlders find to waste it. As we go down the cliff it will become ever more important exactly how much energy it takes to drill a producing well. That includes the energy you pay your workers represented by money. Producers will lower wages and workers won’t be able to drive as much, heat as big a home, buy as much food etc. The energy (and raw materials) to build a rig as well as the energy to extract those raw materials and the energy paid to all the workers all along the line will matter. Just can’t see it now. How do you calculate it. I suppose the way accountants account for net income for businesses captures it best. A business accounts for every cost including paper clips, long term costs via depreciation, etc. Into their cost of paper clips is also included therefore the cost to the paper clip company to make them, the cost to mine the iron, the transportation, and the salaries of everyone involved.
    If in fact the fracking industry is kept alive by investment and is not making money as some report, well then I would say its ERoEI is zero or very close to it. Wages of course can be variable so perhaps if they cut wages they could do better.
    The workers in Brazil who cut 10 tons of sugar cane a day for just enough to keep their family alive increase the ERoEI of cane ethanol and the profit to the company. To get the ERoEI of corn ethanol you should include not only the fuel for the tractor but also the energy used by the farmer’s family. Thus the higher energy returns they get in the form of dollars reduces the true ERoEI of corn ethanol compared to cane ethanol. No need to be confused, it will soon become clear as the excess stuff in our lives is wiped out. ERoEI to be meaningful has to include the whole ball of wax even if we can’t see it clearly now.

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