[Gazzatrone]

Y=20*(exp(-x-25)/10+2)+1);
the best fit for a curve from Cleveland & Kaufmans calculations of US oil’s ERoEI from 1954 to 1997 plus the generally accepted point of 100:1 for 1930. The .47% number is the slope of the straight line that best fits this equation from 2000 to 2030, extrapolated to world production, by comparison of points on its corresponding Logistics Curve.

I think most people on here know my stance on EROEI. I more than convinced that EROEI will be the sting in the tail that no one (present company excluded) saw coming.

[DantesPeak]

Y=20*(exp(-x-25)/10+2)+1);
the best fit for a curve from Cleveland & Kaufmans calculations of US oil’s ERoEI from 1954 to 1997 plus the generally accepted point of 100:1 for 1930. The .47% number is the slope of the straight line that best fits this equation from 2000 to 2030, extrapolated to world production, by comparison of points on its corresponding Logistics Curve.

Thanks, this is just about where I thought the US stood last year on EROEI, and I suppose the US is representative of energy use - since we use 25% of all oil consumed.

My WAG is that in 2007, EROEI is falling a little faster, but not much.

Probably it's holding up fairly well because most refineries haven't yet had to make major adjustments, and light sweet crude production while slipping, is falling slowly.

But as Gazzatrone says, after another year or two of falling EROEI, it's going to really sting.

[Valdemar]

I think most people on here know my stance on EROEI. I more than convinced that EROEI will be the sting in the tail that no one (present company excluded) saw coming.

Quite possibly. The way I see things, traders and general folk see a barrel of oil as a barrel of oil. The grade, and therefore, energy content you get out as net energy is a whole additional dimension. One can still have abundant oil supplies but not get any net gain in energy from their extraction, and some people don't see how that works, as illustrated by those investing in horribly energy intensive heavy oil works.

[shortonoil]

DantesPeak said:

My WAG is that in 2007, EROEI is falling a little faster, but not much.

The constant “1” on the back of the above equation represents oil with a constant energy density; we know that this is not the case! I have developed an expression to take into consideration declining energy density, but I have not been able to attain the information needed to employ it. The EIA had a thread that gave the BTU content of various crudes, but now it is unavailable, at least I can’t get into it. This information must be somewhere else on the net, but I can’t find it. If anyone else can locate it somewhere, I sure would appreciate it. Thanks.

[dinopello]

I was struck by this new (very short) article Link

World oil production may peak in in the coming years, but it will be because of a decline in demand for petroleum not a lack of supply, a BP economist said on Wednesday

"I believe there is a realistic possibility that world oil production will peak within the next generation as a result of peaking demand," Peter Davies, BP's Special Economic Advisor, told a meeting at parliament of a group of lawmakers formed to study peak oil.

This guy, Yergin and the rest are all going to make up reasons why they weren't wrong about peak in order save their sorry ass reputations.

This is worse than the "above ground factors" excuse - as in we can't get enough oil above ground fast enough...

[deeciduous]

Supply always equals demand..
.
The OPECS have said for years that the reason their production is down is that "no one wanted to buy any more"

Just an cover excuse.

When oil "demand" decreases about ten percent, many other "demands" will drop also, like the demand for a government, power lines, transportation, and food because the demand for people will drop also.

[joe1347]

BP gets some positive PR from doing a bit of solar development, but they don't actually need to do very much to get that PR.

If BP was earning a reasonable return doing solar, they'd be doing as much of it as possible. Unfortunately, at a time of falling oil prices, it becomes harder and harder for alternative energies like solar to be competitive and to earn a competitive ROI.

But don't oil prices have little to do with Solar? Solar Cells (photovoltaics) are used to generate electricity and very little oil is used to generate electricity. Hence, other than public perception linking the two energy technologies, they have little to do with each other. Instead Solar competes directly with coal, natural gas, and nuclear "conventional" power plants. Depending on the location, photovoltaic (solar) power is still at least twice the cost of these conventional power sources - assuming no carbon sequestration. Hence, Government subsidies are required to make photovoltaic tech competitive with the conventional power sources and for now, Germany is the only major energy market that aggressively subsidizes solar - which has translated to a boom in the solar cell business. Or more simply, no subsidies - no solar business. So as mentioned above, does BP know something that the rest of us don't and are the German subsidies going to be phased out? It just seems like there's more to the halting of the BP Solar plant expansion than is in the article. Another thought not listed above is whether BP Solar is trying to squeeze some tax breaks out of the local or state Government. Is there a behind the scenes deal being negociated where BP Solar will agree to continue with the expansion in exchange for some serious tax breaks?

[Plantagenet]

BP gets some positive PR from doing a bit of solar development, but they don't actually need to do very much to get that PR.

If BP was earning a reasonable return doing solar, they'd be doing as much of it as possible. Unfortunately, at a time of falling oil prices, it becomes harder and harder for alternative energies like solar to be competitive and to earn a competitive ROI.

But don't oil prices have little to do with Solar? Solar Cells (photovoltaics) are used to generate electricity and very little oil is used to generate electricity. Hence, other than public perception linking the two energy technologies, they have little to do with each other. Instead Solar competes directly with coal, natural gas, and nuclear "conventional" power plants. Depending on the location, photovoltaic (solar) power is still at least twice the cost of these conventional power sources - assuming no carbon sequestration. Hence, Government subsidies are required to make photovoltaic tech competitive with the conventional power sources and for now, Germany is the only major energy market that aggressively subsidizes solar - which has translated to a boom in the solar cell business. Or more simply, no subsidies - no solar business. So as mentioned above, does BP know something that the rest of us don't and are the German subsidies going to be phased out? It just seems like there's more to the halting of the BP Solar plant expansion than is in the article. Another thought not listed above is whether BP Solar is trying to squeeze some tax breaks out of the local or state Government. Is there a behind the scenes deal being negociated where BP Solar will agree to continue with the expansion in exchange for some serious tax breaks?

In the USA the subsidies for solar and other alternative energies are based in part on a law called PURPA. This law requires utilities to pay solar power generators a rate equivalent to the highest conventional electrical generating cost....in practice this is set by estimating the equivalent cost of oil going through a diesel-fired electrical power plant.

As the price of oil goes down, the price that the utilities are required to pay the solar power generators goes down. Thats why alternative energy efforts expand in the US when the price oil goes up, and then die away when the price of oil goes down again.

[cephalotus]

2. BP knows something that the rest of us don't. German subsidies are certainly driving demand for photovoltaics. Has BP heard through it's sources that Germany will start scaling back the subsidies? Hence, photovoltaic demand will fall in the not too distant future.

"Subsidies" in Spain (probably the biggest PV market in 2008) have been cut significantly, but the Germany EEG has been renewed for another four years (with PV feed in tarifes decreasing around -9% per year of installation)

[joe1347]

2. BP knows something that the rest of us don't. German subsidies are certainly driving demand for photovoltaics. Has BP heard through it's sources that Germany will start scaling back the subsidies? Hence, photovoltaic demand will fall in the not too distant future.

"Subsidies" in Spain (probably the biggest PV market in 2008) have been cut significantly, but the Germany EEG has been renewed for another four years (with PV feed in tarifes decreasing around -9% per year of installation)

Thanks. Here's a breakdown by country for 2007. Couldn't find a similar chart for 2008.



From two articles, it looks like Spains annual demand will drop by 700 MW from 1200 MW to 500MW in 2009.

That would keep Germany as the world leader but implies growth of just 150 megawatts, or not nearly enough to offset an expected drop of 700 megawatts in Spanish demand.

The government in Spain said in 2009 will make smaller cuts on subsidies for new photovoltaic solar developments than originally planned, Energy Secretary Pedro Marin said Tuesday.
A proposal to reign in subsidies for next year will put a cap of 500 megawatts for photovoltaic solar energy projects that are entitled to subsidies, and not a cap of 300 MW as the government had planned earlier, he said.

Continuing on in the article, it's suggested that the business dropoff from Spain will be compenstated by grow in other Markets.

"That sort of growth you could almost say it's compensating entirely for the slowdown in sales into Spain," said Steve Chan, chief strategy officer at Suntech Power Holdings, a Chinese manufacturer of solar panels.

Hence, Spain cutting back on their subsidies doesn't seem to be a reason why BP Solar would cancel their expansion plans. Other articles also project fairly high growth in the near future for PV.

As for the earlier observation regarding USA subsidies and the influence of the price of oil (on PV sales). Given the USA's small percentage of worldwide annual PV sales, it's difficult to believe that the USA can have much of an impact.

[Plantagenet]

Given the USA's small percentage of worldwide annual PV sales, it's difficult to believe that the USA can have much of an impact.

Its a mistake to assume that current PV sales can be used to extrapolate future sales.

The entire solar market is based on subsidies. PV sales are high in Germany only because of large government subsidies.

If a new Obama administration passes a law mandating large government PV subsidies in the US, then PV sales in the US will expand dramatically.

[burtonridr]

Perhaps they're re-thinking it as oil goes below the $100 support level. They'll probably re-re-think it when oil hits $200.

It's all a matter of price.

True, but if they were serious about making money at it, and they are serious about making a sound investment. Then they would be continuing expansion, especially if oil prices are down.

Oil price goes down = cheaper to manufacturer

maybe a credit problem? seems to be a problem with every company right now

[Graeme]

Oil could remain low for over a year-BP economist

World oil prices are likely to remain low for another 12-18 months if the global economic crisis continues to cut demand for oil, the group chief economist at BP said on Tuesday.

'We should expect oil price volatility and low oil prices for 12-18 months until economic recovery helps prices to rise,' said BP's Christof Ruhl at the Oil & Money conference in London.

forbes

[Pops]

What a great opportunity for those seeking to be more independent from the current paradigm!

[AirlinePilot]

I doubt we have that long to wait. Your going to get a price rise in just about any circumstance besides Global Thermonuclear war or Apostos hitting the planet early.

[Starvid]

"Could".

Yeah. I agree. And I could become richer than Warren Buffet before the end of the year. Not very likely... But I *could*.

[seldom_seen]

"Could".

Yeah...he really went out on a limb with that bold statement. That's why we love economists though.

[idiom]

So now would be the time to seriously increase national SPR's?

[ROCKMAN]

Good point idiom. I haven't heard anything about the SPR since purchases were halted.

Any updates out there?