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Is EROEI Important Pt. 5

General discussions of the systemic, societal and civilisational effects of depletion.

Re: Is EROEI Important Pt. 5

Unread postby Yoshua » Mon 18 Mar 2019, 11:05:30

The falling EROEI of coal and natural gas is of course just going to make everything so much worse.
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Re: Is EROEI Important Pt. 5

Unread postby marmico » Mon 18 Mar 2019, 11:17:42

Your EROI graph is bull shit, ETP Bozo. EROI was not 80 in 1960 nor is it 10 in 2020.The only energy starvation is those morons who need to express net energy supply in EROI terms.

A decline in net energy supply from EROI 40 to EROI 20 is the equivalent of a percentage decline from 92.5% to 90%. That is not even noticeable in the grand scheme.

AFAIK there is not a single EROI academic that can empirically demonstrate that the EROI of oil from the well head to the gasoline tank has declined between 1968 and 2018. If there is, produce the paper.
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Re: Is EROEI Important Pt. 5

Unread postby shortonoil » Mon 18 Mar 2019, 11:24:50

The falling EROEI of coal and natural gas is of course just going to make everything so much worse.


An economy that will continue to deteriorate is a forgone conclusion. Once that becomes widely appreciated the monetary/ financial system will go into paralyzes.
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Re: Is EROEI Important Pt. 5

Unread postby shortonoil » Mon 18 Mar 2019, 15:42:31

ERoEI closely mapped the price of oil until reaching the 2012 energy half way point. After 2012 the correlation between petroleum production and world GDP began breaking down. It appears that the energy delivery of petroleum has now fallen too low for it to act as a control on the value of the dollar. Without the necessary control factor the value of the dollar is now undefined. It is at the mercy of the political expediencies of the central banks, and is no longer acting as a reliable, and independent mechanism for true price discovery.
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Re: Is EROEI Important Pt. 5

Unread postby Yoshua » Tue 19 Mar 2019, 09:06:55

OPEC is worried about rising inventories in the U.S and Europe. But there are reports of a massive petroleum products glut in China. Officially everything is of course humming along nicely in Communist China. But with lot of numbers tanking by 20 percent in a Chinese hard landing...the glut is probably massive.
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Re: Is EROEI Important Pt. 5

Unread postby shortonoil » Tue 19 Mar 2019, 13:58:14

But with lot of numbers tanking by 20 percent in a Chinese hard landing...the glut is probably massive.


A 1% decline in world GDP would reduce consumption by 275 mb/ yr (750 k/day). The price would collapse, and the Middle East would blow up in a year. A 2% decline in world GDP would put a significant portion of the industry out of business from the price fall. A barrel of oil no longer delivers enough energy to the economy to power growth. It no longer even delivers enough energy to power the economy that is presently functioning. We have reached Peak as the result of that energy deficiency, and it is falling at a rate of 2.2% a year.

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Re: Is EROEI Important Pt. 5

Unread postby Yoshua » Wed 20 Mar 2019, 09:14:01

World trade in goods peaked in 2014.

https://data.worldbank.org/indicator/BX ... view=chart
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Re: Is EROEI Important Pt. 5

Unread postby asg70 » Wed 20 Mar 2019, 10:33:43

Short, if you're going to spam this board with that stupid pic of yours can you at least learn to trim the bottom off so we don't have a ton of useless whitespace to scroll through?

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Re: Is EROEI Important Pt. 5

Unread postby shortonoil » Wed 20 Mar 2019, 14:20:23

World trade in goods peaked in 2014.

https://data.worldbank.org/indicator/BX ... view=chart


Since 2008 the data has become very erratic, much like this data set started bouncing around in 2012. The upcoming melt down has been in progress for quit a few years; it has only been CB manipulation that has been disguising it. They are now caught in a liquidity trap with no place to go. The White Knight has turned out to be some shrimp hiding behind the curtain.

"Signature characteristics of a liquidity trap are short-term interest rates that are near zero and fluctuations in the monetary base that fail to translate into fluctuations in general price levels.”

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Re: Is EROEI Important Pt. 5

Unread postby EdwinSm » Thu 21 Mar 2019, 01:46:35

Short, this is a comment about your last graph about the GDP disconnecting from oil production.

Could there be a factor in causing the disconnect that represents the unexpectedly (by major forecasters) fast rise of renewable energy? I know that the starting base-% is low so that in early years this could be ignored, but at some stage as the energy mix transforms linking GDP to just one source of energy is bound to bring distortions.

So looking that the chart you are saying there is disaster in store, whereas I can look at it as wonder if the transformation from oil is working :-D (and showing up in the charts 8O ).
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Re: Is EROEI Important Pt. 5

Unread postby shortonoil » Thu 21 Mar 2019, 10:28:05

Short, this is a comment about your last graph about the GDP disconnecting from oil production.

Could there be a factor in causing the disconnect that represents the unexpectedly (by major forecasters) fast rise of renewable energy? I know that the starting base-% is low so that in early years this could be ignored, but at some stage as the energy mix transforms linking GDP to just one source of energy is bound to bring distortions.

So looking that the chart you are saying there is disaster in store, whereas I can look at it as wonder if the transformation from oil is working (and showing up in the charts)


HI Ed, thanks for your comment.

According to the EIA in 2015 12% of world marketable energy production came from renewables; that has been a 6 fold increase since 1960. World renewable energy production has grown from 2% of total consumption to 12% in 66 years. During that same 66 year period total extractable petroleum reserves have fallen from 80% of URR to 15%. If renewable are going to replace petroleum before it reaches 0% of URR, they will have to grow much, much faster than they have historically.

The question then: "I can look at it as wonder if the transformation from oil is working" is implying that perhaps renewables are replacing oil production? If that were the case it would require fewer barrels to produce the same GDP. The points on the graph of chart 139a would be moving to the left of the curve; instead they are moving to the right (2012 to 2016 anomaly). It seems more likely that the monetary base has changed, or that it is requiring more oil to generate the same GDP.

The major change in our relationship with oil has come from technological advances. The computer revolution that began in the 60' has changed how much we travel, to where, and why. Petroleum is still what powers the vast majority of the world's transportation fleet, but computer technology now allows us to accomplish digitally what once required travel. It has also made what travel that is necessary more efficient; the modern vehicle has now become a computer with a steering wheel attached. TCMs, ECMs and half a dozen other computer systems in modern vehicles produce high efficiencies for operations and maintenance, but most of all they allow the burning of the ever lower quality fuels coming to the market. Those fuels are made in a refinery that is run, and could only be run by a very advanced computer system.

Other technologies have had a significant impact on our relationship with petroleum. Material science advances have revolutionized architecture, transportation, communications, and health care to name just a few. We can hope that ongoing advances can take some of the bite out of the 2030 "dead state" event. But hope is a piss poor strategy to base an entire civilization upon.

Like Siamese twins modern civilization is still bound head, and shoulders to oil.

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Re: Is EROEI Important Pt. 5

Unread postby dissident » Thu 21 Mar 2019, 18:00:32

The claim that GDP is decoupling from oil is patent BS. The correlation between the GDP and CO2 emissions remains within the same tight bounds. If the claim was correct, then the GDP growth and CO2 emissions growth would be decoupling. I notice that a lot of so-called economists do not really understand inflation adjustment. The enormous debt growth over the last 30 years and more has created the delusion that GDP can grow through consumer wishes and company advertisements without any other inputs. Then we have the shenanigans with oil price manipulation by the so-called free market. Because, everyone knows, that US gasoline stock levels represent the physical global oil supply potential and demand for crude oil.

So non adjusted by real inflation GDP numbers pumped up by debt generation and oil price undervaluations are thrown around to "prove" this GDP detached from physical reality BS. Alternatives are a drop in the bucket as of the present time. They cannot account for the alleged "decoupling".
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Re: Is EROEI Important Pt. 5

Unread postby EdwinSm » Fri 22 Mar 2019, 01:24:11

[crawling back into a dark corner with a :oops: ] It looks like I misread the chart with it bending the wrong way! Short, thanks for taking the time for a good reply.
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Re: Is EROEI Important Pt. 5

Unread postby shortonoil » Fri 22 Mar 2019, 08:26:48

[crawling back into a dark corner with a ] It looks like I misread the chart with it bending the wrong way! Short, thanks for taking the time for a good reply.


It's certainly an easy mistake to make; I do it all the time. It is like supply and demand, and the chicken and the egg. Which comes first? Economics is so riddled with the problem it is no surprise that the world is going broke. Economists keep using their other left that they thought was right. Then they blame the mistake on the weather!
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Re: Is EROEI Important Pt. 5

Unread postby onlooker » Fri 22 Mar 2019, 16:31:48

dissident wrote:The claim that GDP is decoupling from oil is patent BS. The correlation between the GDP and CO2 emissions remains within the same tight bounds. If the claim was correct, then the GDP growth and CO2 emissions growth would be decoupling. I notice that a lot of so-called economists do not really understand inflation adjustment. The enormous debt growth over the last 30 years and more has created the delusion that GDP can grow through consumer wishes and company advertisements without any other inputs. Then we have the shenanigans with oil price manipulation by the so-called free market. Because, everyone knows, that US gasoline stock levels represent the physical global oil supply potential and demand for crude oil.

So non adjusted by real inflation GDP numbers pumped up by debt generation and oil price undervaluations are thrown around to "prove" this GDP detached from physical reality BS. Alternatives are a drop in the bucket as of the present time. They cannot account for the alleged "decoupling".

Yes, that is true. But Short is also correct as his graphs attest. The decoupling is precisely because energy per say is no longer driving economic activity but instead the frenzied lending. And so GDP as measured in dollars is a mirage that fails to account for the diminishing energy but instead coaxes economic activity in the present by depriving posterity of economic well being . Basically leaving the Economy and society with a tremendous debt load even as net energy dwindles.
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Re: Is EROEI Important Pt. 5

Unread postby dissident » Sat 23 Mar 2019, 10:16:30

onlooker wrote:
dissident wrote:The claim that GDP is decoupling from oil is patent BS. The correlation between the GDP and CO2 emissions remains within the same tight bounds. If the claim was correct, then the GDP growth and CO2 emissions growth would be decoupling. I notice that a lot of so-called economists do not really understand inflation adjustment. The enormous debt growth over the last 30 years and more has created the delusion that GDP can grow through consumer wishes and company advertisements without any other inputs. Then we have the shenanigans with oil price manipulation by the so-called free market. Because, everyone knows, that US gasoline stock levels represent the physical global oil supply potential and demand for crude oil.

So non adjusted by real inflation GDP numbers pumped up by debt generation and oil price undervaluations are thrown around to "prove" this GDP detached from physical reality BS. Alternatives are a drop in the bucket as of the present time. They cannot account for the alleged "decoupling".

Yes, that is true. But Short is also correct as his graphs attest. The decoupling is precisely because energy per say is no longer driving economic activity but instead the frenzied lending. And so GDP as measured in dollars is a mirage that fails to account for the diminishing energy but instead coaxes economic activity in the present by depriving posterity of economic well being . Basically leaving the Economy and society with a tremendous debt load even as net energy dwindles.


Clearly I am not discounting that point and am in fact making it. Debt generation and real inflation combined with the lack of proper accounting for inflation and bubbles is creating the illusion in some minds of an abstract economy existing detached from energy constraints. My point is that CO2 emissions are an actual measure of GDP growth that remove spurious accounting fluff. At the end of the day the economy is a physical entity and not an abstract entity. Of course, human brains affect how it evolves, but any claim that the economy exists independent of physical reality, especially the all-important energy constraints, is pure nonsense.
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Re: Is EROEI Important Pt. 5

Unread postby onlooker » Sat 23 Mar 2019, 10:58:25

Yes, totally agree D
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Re: Is EROEI Important Pt. 5

Unread postby shortonoil » Sat 23 Mar 2019, 11:24:42

Basically leaving the Economy and society with a tremendous debt load even as net energy dwindles.


As the net energy (available\ exergy) supplied to the economy declines the economy slows, and its ability to service its existing debt declines. When it reached the point (around 2012) where it could no longer cover those debt service costs with its organic growth the central banks stepped in, and created the additional currency. If they hadn't there would have been massive defaults. Depending upon whom you read that was at least $16 trillion, or 28% of all currency in circulation. Since the 28% of additional currency created wasn't in conjunction with the production of goods and services it deformed the system's true pricing mechanism.

Since consumption was inadequate to absorb the 28% of additional currency (the goods and services were never created to be consumed) the additional currency created poured into assets. Land, the stock/ bond market, and commodities absorbed the inflation created, and did it outside the CPI. It is hardly surprising to find that the points on the oil/ GDP curve are floating away from their historical correlation.

Because the net energy supplied to the economy from petroleum is not going to be improving (it will only continue to decline) the central banks will have to keep creating money from nothing for there to be enough currency in circulation for the existing debt to be serviced. True price discovery will be further eroded until the system no longer functions. The present currency expansion method selectively transfers the newly created funds which leaves the majority of the economy out of the process. The poor get poorer faster than the rich get richer, which subsequently results in a contracting economy. With no other options available to the central banks, QE4 and additional rate reductions are now baked into the process.

We are watching the failure of the monetary system as it attempts to compensate for fossil fuels decline. Because the monetary system operates on references relative to each other, an energy approach is the only way to project the outcome.
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Re: Is EROEI Important Pt. 5

Unread postby onlooker » Sat 23 Mar 2019, 11:39:21

Thank you once again Short for this superbly logical explanation and all your work. We are at a point whereby debating with the naysayers is comical as they do not concede or cannot understand at its most basic how all this has been transpiring as logical cause and effect.

The MAP obviously cannot project out oil price in this now chaotic monetary system without any point of reference. But the energy accounting that your group has devised is giving us an idea of the approaching inflection points.
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Re: Is EROEI Important Pt. 5

Unread postby dissident » Sat 23 Mar 2019, 14:49:17

I think that diminishing returns regime is not just for cheap fossil fuels. There is a general degradation associated with overpopulation and the accumulating toxic chemical pollution in the environment. Development is a zero sum game in the long run since the planet has finite resources and finite accommodation capacity for humans their precious economy, which mostly translates into rapid garbage production (and entropy maximization).
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