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EROI < 1:5 => collaps of modern civilisation!

Discuss research and forecasts regarding hydrocarbon depletion.

Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby onlooker » Mon 02 Jul 2018, 06:39:17

Here is an example of the trends I speak of:
http://news.goldseek.com/GoldSeek/1530455556.php
THE ENERGY CLIFF APPROACHES: World Oil and Gas Discoveries Continue To Decline
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby onlooker » Mon 02 Jul 2018, 09:40:04

Taken from the Hills Group site "Like the battery, the internal irreversibilities due to entropy production, of the world's crude oil production system are increasing. Higher viscosity, increasing well depth, and increasing water cut have the same effect as increasing resistance does in the battery. " Signs of decreasing EROEI
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby tita » Mon 02 Jul 2018, 10:40:15

@onlooker

And I somehow agree with you. One example that comes to my mind is the oil from East Africa. There is very recent discoveries there, as it was overlooked in the past. Just a few days ago, Ethiopia just began producing oil for the first time in its history. Uganda, Kenya, Tanzania, Mozambique... All for the development of their oil&gas industry. So, good thing? A whole area unexplored containing large amounts of this precious ressource in conventional reservoirs? Peak Oil once again rebuted?

Well, we are not talking about a new Middle East and several Mb/d. The area has no infrastructure, everything has to be build (pipelines, refineries, storage). And the discoveries are not that huge (10 billions bbls of oil, . The reserves are significant for these countries, but not for the world. Political turmoil of the area added also a risk. But it became interesting for the very same reason LTO or tar sands attracted investors... The price of crude skyrocketing, lack of other opportunities and the use of some recent techniques (like seismic studies) that makes the exploration less energy intensive.

IMHO, it is almost impossible to get an accurate EROEI. Also, decreasing EROEI imply that the effort to get the oil is bigger, increasing the money spent... So money flows more, which increase GDP, which increase demand for oil.

And I really think that we shouldn't listen to short or this Hills Group. He launch ideas that appear right, but are fundamentally flawed because of the obsession of ONE parameter. He doesn't take account of the efficiency (or energy intensivity), which decrease the EROEI. This is a dynamic system, push one parameter and a zillions of little things change.

Yes, I think that at some point the system will fail, and that the industrial oil era will end. I think it will happen when we really won't be able to replace our production rate. I also think that this may take several "peaks" until we realize that the system is broken. But I don't know when this will happen, and I may be totally wrong.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby ROCKMAN » Mon 02 Jul 2018, 11:07:46

tita - "Peak Oil once again rebuted?" I'll assume you're being sarcastic. For the benefit of the less informed the discovery of new oil reserves HAS NO IMPLICATION on the reality of GPO...Global Peak Oil. It's all about the global rate of oil production. New oil discoveries competing against the decline of existing reserves will ultimately determine the date of GPO. Given the huge volume of existing producing oil reserves and the declining volume of newly discovered oil reserves it's not too difficult to imagine the date of GPO isn't far away. Particularly as we observe the ever increasing consumption of oil.

But, as pointed out many times before, the actual date of GPO will not be very significant with respect to the global economies. There are others factors of the POD (Peak Oil Dynamic) that will have much greater impact in the future. In fact, those aspects of the POD have already had huge impacts (good and bad) on those economies in the past long before discussions about GPO began.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby ROCKMAN » Mon 02 Jul 2018, 11:32:49

Looker – “Higher viscosity, increasing well depth, and increasing water cut have the same effect as increasing resistance does in the battery. " Signs of decreasing EROEI.” True…to some degree. But let’s not forget that the price of oil has a much greater impact on the EROEI of new exploration projects. In that regard Shorty's analogy is full of sh*t. LOL. As explained many times: the big decrease in oil prices several years ago resulted in a significant INCREASE IN EROEI of new reserves. Perhaps as much as 2X to 3X as when prices were at their lowest. Of course, price effect is a double-edged sword: increased oil prices would result in needing fewer new bbls to be discovered to meet economic requirements and thus decreasing the EROEI of newer drilling projects. Which would explain why EROEI became a popular discussion subject during the oil price boom that began more then 10 years. It was not primarily due to the factors you pointed out.

And this dynamic would still dominate EROEI long after global peak oil is reached.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby onlooker » Mon 02 Jul 2018, 12:01:50

In that regard Shorty's analogy is full of sh*t. LOL.
In retospect, perhaps the main failing of the entire Etp analysis is to fully integrate economic factors and changes into the model. I do concede that in the real world, economic cues are the primary ones that channel real world decisions and trends, like the oil price for instance
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby ROCKMAN » Mon 02 Jul 2018, 12:22:36

looker – “While comparing the EROEI of recent conventional oil with the new LTO does not yield that much difference, when compared with older exploited reserves and their documented EROEI…”. Excellent point. But once more I must point out a FACT: there is no such thing as “unconventional oil”. That was a term made up by folks with no understanding of reservoir engineering. There are conventional and unconventional RESERVOIRS…not OILS. There have been hundreds of conventional reservoirs in the US alone that have produced oil identical to the types of oil currently being produced from the shales that many here would call “unconventional oil”. As explained before the Rockman’s company originally focused on developing deep reservoirs in south Louisiana. Reservoirs that everyone here were CONVENTIONAL if I were to take the times to describe. And that oil (actually classified as condensate by the industry) is a light or lighter then any of the oil currently being produced from any shale reservoir. I can give you a sample of 50 API oil and you (any lab you choose) could not tell me if it came from a frac'd shale well or a CONVENTIONAL well. IOW 50 API oil is OIL regardless of the nature of the well that produced it.

But, to follow up on your point, there were conventional reservoirs (producing “conventional oil”) developed almost 40 years that had very low EROEI’s compared to many of the shale plays being developed today. The Rockman knows because he drilled some of them. It was during a period of high oil prices…adjusted for inflation, of course. The industry was running more than 4,500 rigs at that time. And drilling a lot of CRAP. Don’t believe me? Look at the insignificant increase in US oil production at that time. And all because of those high oil prices. High oil prices that seduced companies into drilling projects with very low EROEI’s just as was done at the beginning of the recent shale boom. Low EROEI’s because the high oil prices produced THEORETICALLY acceptable return on investments. ROR’s often never realized because so many of those 4,500+ rigs were drilling CRAP.

As I explained in the post above the price of oil has had a huge, and so far in history, complete control over the EROEI of oil development.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby ROCKMAN » Mon 02 Jul 2018, 12:30:57

looker - "...perhaps the main failing of the entire Etp analysis is to fully integrate economic factors and changes into the model." But what I've seen of all the discussions about the model is its focus on the max price (projected to be VERY LOW) consumers will be able to afford. IOW it sounds like whatever economics factors that were integrated were full of sh*t. LOL.

I'll give Shorty credit for one thing: he went all in...he didn't hedge his bets. He was going to look like a genius or a complete idiot.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby onlooker » Mon 02 Jul 2018, 12:56:45

Thanks for pointing that out about the oil as opposed to the reservoirs. I think I finally got that through my thick skull. You have needed much patience with us laypersons Rock haha
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby ROCKMAN » Mon 02 Jul 2018, 15:33:55

looker - Not ignorance. You hear a term 100's of times and it gets set deep in one's mind. I avoid making a terminology issue out of it until it starts confusing what "oil" really is.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby ralfy » Mon 02 Jul 2018, 20:31:44

tita wrote:This sentence looks like some cornerstone for some people in this peak oil debate. It is written in marble for them, so they just dismiss any argument about the nature of oil developped after 2005. If it increased after, then it is by this definition unconventional with poor EROEI.

IMHO, these artifical bounds limit the understanding of peak oil. This lead to the ETP model, and hanging on the belief that peak oil is behind us...

I think the history of oil is still written, making its way through boom and bust cycles that affects global economy. Shale or tar sands have not huge difference on EROEI than old kind of oil reservoirs. Not like biofuels, which really have a shitty EROEI. I don't know when we will hit peak oil, but I know that it will be at the height of a boom cycle.


One can probably consider production per capita, which is more logical as oil is used by a growing population, and a certain amount of it is needed to fulfill particular lifestyles dependent on energy and material resources.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby tita » Fri 06 Jul 2018, 03:57:07

ralfy wrote:One can probably consider production per capita, which is more logical as oil is used by a growing population, and a certain amount of it is needed to fulfill particular lifestyles dependent on energy and material resources.

Yes, I know this graphic. I anyway think that the parameters are too limited to get the full picture. If I use the number of cars/trucks in circulation per capita, the number doubled since 1980. This seems to contradict this graphic that show there isn't twice as much oil produced per capita since 1980. The reason is a mix of better efficiency, use of other energy sources for some applications where a substitute for oil is possible, and change of some lifestyles.

For my part, I stay on the GDP/oil consumption that, so far, seems correlated. Or was before 1980. Since, GDP increased faster than oil production. The GDP/oil consumption ratio in 2017 is twice what it was in 1980. But it was the same between 1965 and 1980.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby marmico » Fri 06 Jul 2018, 10:52:22

2018 US per capita energy consumption is the same as it was in 1968, 50 years ago.
https://www.eia.gov/totalenergy/data/mo ... ec1_17.pdf

Any takers for a long run wager? In 2050 US energy consumption per capita will be equal to or lower than in 1950 and real per capita income will be 4 times* higher.

The EROI guys have never heard of oil energy intensity. A unit of oil can grease almost 3 times as many units of GDP at EROI 15 in 2018 than it could at EROI 30 in 1970.
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*1.4% annual exponent
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby ralfy » Sun 08 Jul 2018, 01:36:58

tita wrote:Yes, I know this graphic. I anyway think that the parameters are too limited to get the full picture. If I use the number of cars/trucks in circulation per capita, the number doubled since 1980. This seems to contradict this graphic that show there isn't twice as much oil produced per capita since 1980. The reason is a mix of better efficiency, use of other energy sources for some applications where a substitute for oil is possible, and change of some lifestyles.

For my part, I stay on the GDP/oil consumption that, so far, seems correlated. Or was before 1980. Since, GDP increased faster than oil production. The GDP/oil consumption ratio in 2017 is twice what it was in 1980. But it was the same between 1965 and 1980.


The closest I know that considers many parameters is the limits to growth model. That is, resources in general are needed for economic output but increases in production rates are threatened by diminishing returns (e.g., increasing amounts of energy needed to obtain more copper because it's much deeper and of lower quality). Thus, at some point economic output should drop. Meanwhile, the need for increasing economic output should go up because of (a) increasing human population and (b) increasing resource demand per capita because of a growing global middle class, and so should environmental damage.

What about efficiency, other energy resources, and lifestyle change? The catch is that in capitalist systems better efficiency leads to more production and consumption rather than conservation because for-profit businesses tend to see a glass as half-empty rather than half-full (especially given competition). Other energy sources use material resources that are affected in the same way as oil, as shown above. Finally, lifestyle changes may veer towards increasing consumption because that's what profit-making businesses want.

As for GDP increasing faster than oil production, one source shows a correlation between the two, at least from 1986 to 2005. Another problem to consider is that GDP uses money, which is part of a credit system that's ironically many times larger than global GDP itself.

That means the most logical thing to do is to focus on economic measurements that look at availability of resources, or something like an ecological footprint, rather than money. One way of doing that is to look at oil production output per capita, and then do the same for other resources needed for various energy sources. That means looking at copper, uranium, etc., and not only for components needed to generate or transmit energy but also for various manufactured goods, including cars and trucks.

Finally, one can also look at the number of cars and trucks per capita but how they are distributed. For example, the U.S. has more than 250 million cars and light trucks registered out of probably more than a billion available worldwide. It also has a population of more than 320 million out of a global population of more than 7.5 billion. That means it has only around 5 pct of the world's population but almost a quarter of cars and trucks.

Of course, one can argue that the rest of the world cannot have what the minority has, but unfortunately that's not how a capitalist global economy works. In such an economy, the minority earns through businesses that sell cars and trucks (among many other things) to the rest, and the only way they can earn even more (which is what they want, for reasons given above) it so sell more of the same to the rest. Thus, if the minority wants to maintain (not likely) or increase what it has (more likely), then it can only do so by selling to the rest the same lifestyle.

Otherwise, the whole system falls apart. Of course, that assumes that there are more than enough resources available, including oil. How much of these resources will be needed to maintain that system? The same U.S. needs almost 20 Mbd of oil, or around 20 pct of global consumption.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby onlooker » Sun 08 Jul 2018, 06:25:07

Which highlights that we are hitting the brick wall for modern Capitalism. Given how Ralfy has exposed how growth is intrinsically a necessary part of modern Capitalism, the limits to growth are acute and diverse now. Resource shortages, EROEI, wage stagnation, inflation, automation, pollution, ecosystem degradation, per capita to resources unbalance, Debt saturation among others. But what is worse is the natural resource depletion and population are fast going in opposite directions auguring a huge die off
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby aspera » Sun 08 Jul 2018, 11:26:59

Why, years after the banking crisis, is the global economy still mired in recession and burdened by enormous debts? Why have the tried-and-tested economic policies of the past failed us this time? In Life After Growth, leading City analyst Tim Morgan sets out a ground-breaking analysis of how the economy really works. Economists are mistaken, he argues, when they limit their interpretation of the economy to matters of money. Ultimately, the economy is an energy system, not a monetary one. From this, it follows that we need to think in terms of two economies, not one - a 'real' economy of work, energy, resources, goods and services, and a parallel, 'financial' economy of money and debt. These two economies have parted company, allowing the financial economy to pile up promises that the real economy cannot meet. Starting with the discovery of agriculture, Tim Morgan traces the rise of the economy in terms of work, energy and resources. The driving factor, he explains, has been cheap and abundant energy. As energy has become increasingly costly to obtain, the potential for prosperity has diminished, to the point where growth in the real economy has ceased. An immediate problem is that our commitments - including debt, investments and welfare promises - cannot be honored, which means that we can expect the financial system to be wracked by value destruction. At the same time, we need to adapt to a future in which prosperity can no longer be taken for granted.

About the Author -- Described in the press as "Dr Gloom" and "Terrifying Tim", Tim Morgan has never avoided controversy, whether he is pointing out the crippling weaknesses of the British economy, calling for greater justice for a younger generation robbed by its elders, or explaining the link between inner-city riots and thwarted materialism. He developed the Essentials Index, which provides invaluable insights into the real cost of living. Educated at Cambridge, Tim has always been fascinated by economic, political and military issues. His fascination with maritime warfare has taken him from commando exercises to the flight-deck of an aircraft carrier. As head of research at leading finance house Tullett Prebon from 2009 to 2013, Dr Tim Morgan gained a reputation for supplying radical answers to pressing economic and political issues, and garnered significant media coverage for leading-edge reports including his Project Armageddon study of the British economy. Life After Growth is the product of extensive research into how the economy really works, and presents radical explanations for the economic problems of today and tomorrow.

https://smile.amazon.com/gp/product/085 ... UTF8&psc=1

Just started reading. Has anyone else read this book?
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby kublikhan » Sun 08 Jul 2018, 14:22:03

I think Richard Koo got it right. IE, it wasn't a normal recession, it was a balance sheet recession. AKA: Japan in the 90s, US in the great depression, etc.

Richard Koo - A "Balance Sheet Recession"

Richard Koo Simplyfies The Economic Crises
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Re: EROI < 1:5 => collapse of modern civilisation!

Unread postby aspera » Thu 12 Jul 2018, 00:46:35

Searched for and found one of the earliest academic publications on the energy input (subsidy) for food energy output.

John S. Steinhart and Carol E. Steinhart (1974) Energy Use in the U.S. Food System. Science. 184(4134): 307-316.

The paper is at https://drive.google.com/file/d/1UxYjZ-c8s370z09lUFD8tCR5hKbR3mk1/view

It has two figures that I remember seeing decades ago but never knew the source:
Image 4 = https://photos.google.com/photo/AF1QipM ... 2ocWlKiNtG
Image 5 = https://photos.google.com/photo/AF1QipO ... 3HHL_qbzzB
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Re: EROI < 1:5 => collapse of modern civilisation

Unread postby aspera » Thu 12 Jul 2018, 13:08:10

Image
Image

Source: John S. Steinhart and Carol E. Steinhart (1974) Energy Use in the U.S. Food System. Science. 184(4134): 307-316. (Download at: https://drive.google.com/file/d/1UxYjZ-c8s370z09lUFD8tCR5hKbR3mk1/view)
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby aspera » Wed 01 Aug 2018, 13:06:43

Interpreting the postgrowth economy
Tim Morgan

A Surplus Energy Economics Analysis
Part One – review

This report uses Surplus Energy Economics (SEE) to explore the outlook for the world
economy. Part One sets out an overview, and some of the methods used are discussed
in more detail in Part Two. Data is sourced from SEEDS (the Surplus Energy Economics
Data System).

It concludes that, worldwide, the long years of growing prosperity are over, a change
which invalidates many things that government, business and the public have always
taken for granted.

The reason why growth in prosperity is over is that we no longer have access to
abundant cheap energy. Where geographical expansion and economies of scale once
drove down the cost of accessing energy, the driving factor now is depletion, which is
pushing costs upwards, and is doing so exponentially. The relevant cost here is the
amount of energy consumed in the process of accessing any given quantity of energy.
This cost is known as the Energy Cost of Energy (ECoE).

Though no abrupt plunge in global prosperity is on the cards, there is scant comfort in
that. Prosperity in most Western developed economies has already passed its peak.
Economic and financial systems are extremely vulnerable to shocks, because they are
predicated on perpetual growth.

Thus far, and in spite of all the accumulating evidence, we have failed to recognize that
growth in prosperity is over. Rather, we’ve tried to delude ourselves, by using debt – and,
latterly, ultra-cheap money as well - to pretend that perpetual growth remains alive and
well. In themselves, these expedients are harmful in ways that can be managed.
Efficiency is being undermined by keeping sub-viable entities afloat, and a major crash in
asset values has become an inevitably.

Neither of these problems is existential in itself. But changes are happening, too, in ways
that are fundamental. A system dependent on ever-growing consumption and ever increasing
profitability is becoming invalidated. The very concept of debt is becoming
untenable, because the process depends on growth in borrowers’ prosperity, something
which is no longer happening...

SOURCE: https://surplusenergyeconomics.files.wo ... onomy2.pdf
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