Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
Tanada wrote:Mike has a point, there have been periods when world demand slowed so much due to economic disruptions that production was cut even though capacity was still available. Most noticeable was the late 70's early 80's recession when world wide demand dropped so much that world production dropped to a lower level. Then as demand kicked back into gear starting around 1982 the production ramped up apace and by 1986 the world was producing and consuming more than ever before proving the 'peak' was an economically induced illusion.
The Etp price predictions did not pan out. But, does that mean that the theory underlying it was wrong?
Rockman wrote: Looker – “If indeed the EROEI is falling and thermodynamics is insuring that it cannot improve”. As explained in detail many times the EROEI of global oil development INCREASED significantly as a result of the dramatic decrease in oil prices several years ago. Of course, as oil prices have increased the EROEI has also increased. As long as folks continue to ignore the dominant effect the price of oil has on the EROEI they’ll never understand the true complexity of the dynamic.
Tanada wrote:Mike has a point, there have been periods when world demand slowed so much due to economic disruptions that production was cut even though capacity was still available. Most noticeable was the late 70's early 80's recession when world wide demand dropped so much that world production dropped to a lower level. Then as demand kicked back into gear starting around 1982 the production ramped up apace and by 1986 the world was producing and consuming more than ever before proving the 'peak' was an economically induced illusion.
Look at the rig count data. The number of rigs drilling for new oil fell sharply as the oil price plunged. That means less diesel(energy inputs) being poured into oil production. yet global oil production(energy output) has continued to increase.aspera wrote:I'm confused here Rockman. I've followed your Peak Oil Dynamics arguments for some time and find those insights useful. But I do not understand your own understanding of EROEI. EROEI is, by both intent and it's very formulation, a metric that removes price from the calculation. (Energy returned on dollar invested, an ROI formulation, would follow your logic, but that is not EROEI). Thus, isn't your argument confusing correlation with causation?
Worldwide Rig Counts - Current & Historical Datayear rigs global oil production(million barrels per day)
2018 2202 100.1
2017 2029 98.1
2016 1593 97.4
2015 2337 97.0
2014 3578 94.1
2013 3412 91.6
2012 3518 91.0
2011 3465 89.0
That is not what the data says onlooker. It says energy output increased(more oil) while energy input decreased(less rigs drilling). IE, EROEI increased, not decreased as shortonoil claimed.onlooker wrote:Aspera, the barrels do not tell you the energy balance between energy inputs and energy output. And notice that the rig count for new oil dropped. That is what Short has been saying, that new production is being neglected or in the parlance of the Oil Industry R&D Research and Development.
The Efficiency Of U.S. Shale Oil Drilling And ProductionIn my recent Oil Production Vital Statistics post, commenter rjsigmund posted a link to this EIA update on shale oil production efficiency, which in my opinion contains some astonishing data on how the industry has drilled better and better wells, year on year, for a decade. US production is heading higher.
Figure 4 shows how drilling and production efficiency has risen year on year for a decade. When the frackers first drilled, the Bakken wells produced 150 barrels per day initially. By 2017, that had grown to near 700 barrels per day. Following the 2014 oil price crash, the number of active rigs declined (Figure 5). The slowdown in drilling was compensated by this improved efficiency and did not produce the reversal in US oil production that many had expected.
Of course counting oil barrels alone is only half the story. The other half is counting inputs. And as the number of drilling rigs tells as, the energy inputs into the oil industry have fallen, not grown, as you and short are saying. If you want to look at another metric, you can look at the amount of diesel consumed in the oil industry. It mirrors the rig count data and tells us the energy inputs are falling.onlooker wrote:If indeed the EROEI is falling and thermodynamics is insuring that it cannot improve, then we have a situation whereby counting barrles or total world oil production might at this very moment not be telling the full story of what is going on. Because, if indeed the rest of the Economy is subsidizing or being cannibilized by the Oil indistry, this will allow production to continue roughly the same but it will instead be reflected in lower demand and economic disruptions.
Sales of Distillate Fuel Oil by End Useyear oil industry diesel consumption(thousand gallons)
2016 883
2015 1178
2014 2105
2013 1751
2012 1711
As aspera pointed out, EROEI values and monetary values are two different things. The FED cannot print oil. If you are talking about EROEI, stick with energy in and energy out.onlooker wrote:Is rampant lending to the Fracking Shale Industry of the US a sign that this cannibilization is indeed occurring already?
As aspera pointed out, EROEI values and monetary values are two different things. The FED cannot print oil. If you are talking about EROEI, stick with energy in and energy out.[/quote] what you said Kub.onlooker wrote:Is rampant lending to the Fracking Shale Industry of the US a sign that this cannibilization is indeed occurring already?
Sure, you can print money out of thin air and keep production ramped up, but you are NOT improving the EROEI one bit. They seem totally to not see or wish to see that the underlying Thermodynamics is the EROEI not the pendelum swings of supply/demand and price which can and are being affected by other outside forces and manipulations
EROEI is, by both intent and it's very formulation, a metric that removes price from the calculation. (Energy returned on dollar invested, an ROI formulation, would follow your logic, but that is not EROEI). Thus, isn't your argument confusing correlation with causation?
But, again you are not seeing how the monetary funding is allowing the Oil Industry to produce at current high levels and this in turn is proping up Demand as Oil allows for economic activity over a wide range of activities and incites this activity as higher supply ultimately translates to higher Demand see Jevons Paradox. But, ultimately this is putting balance sheets across the Economic spectrum ever more into the red and inflating unrealistically asset prices. Even as the net energy is declining. Setting up for a highly indedted Economy teetering under this onerous Debt levels with diminishing returns from its principal energy source ie. OIL.
So let me get this straight:onlooker wrote:Sure, you can print money out of thin air and keep production ramped up, but you are NOT improving the EROEI one bit. They seem totally to not see or wish to see that the underlying Thermodynamics is the EROEI not the pendelum swings of supply/demand and price which can and are being affected by other outside forces and manipulations
Aspera, is this what you believe as well? Should we exclude energy values when talking about EROEI and instead talk about debt levels as onlooker here suggests?onlooker wrote:So you see Kub, both Aspera and I are bemused by the interpretation you and Rockman are ascribing to what is happening in terms of the rampant lending across the Economy and especially within the Shale/Fracking industry. You both are failing to see how this is reflective of a lower EROEI. You say the Fed does not print Oil, but it does and is funding the production process of Oil.
WTF? Never did I say anything as stupid as "Since both oil production and demand are high, the EROEI must be good." Where did you pull that garbage from? Go look at the very first post I made in this thread onlooker. I was strictly talking about rig count(energy inputs) and oil production(energy outputs). Later I added a second metric talking about energy inputs(diesel consumption).onlooker wrote:So, both you and Rockman do not see a problem because Oil Production stays at high levels and Demand also. That is confirmation to you that the EROEI must be acceptable.
Rockdoc beat me to this one. Please see his answer.onlooker wrote:But, again you are not seeing how the monetary funding is allowing the Oil Industry to produce at current high levels and this in turn is proping up Demand as Oil allows for economic activity over a wide range of activities and incites this activity as higher supply ultimately translates to higher Demand see Jevons Paradox. But, ultimately this is putting balance sheets across the Economic spectrum ever more into the red and inflating unrealistically asset prices. Even as the net energy is declining. Setting up for a highly indedted Economy teetering under this onerous Debt levels with diminishing returns from its principal energy source ie. OIL.
No. My understanding of EROEI is that it is a thermodynamic metric with no relationship to money (in any of its forms). (But I imagine your question of me is not serious given what I've previously written.) My understanding of EROEI is that it is intended to be based on first principles. It is an attempt to help decision making with variables that cannot be manipulated as easily as, say, money.Kublikhan wrote: Aspera, is this what you believe as well? Should we exclude energy values when talking about EROEI ...
Yes. I do understand that. Mainly from your writing here and elsewhere. Yet, I still hope you'll try to understand my perspective as well. As I've written in reply to a previous posting of yours, while I respect your many contributions my concern is not focused on oil companies. Rather it is the larger social system, its decision-making process, and the changes likely to be made in that process as we approach limits-to-growth.Rockman wrote: As you probably know companies don’t make drilling decisions based on EROEI.
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