[Fresh Ink] EROEI - Energy Return on Energy Invested

Tue Feb 24 12:22:20 CST 2009

(from Bill Totten)

<http://www.eroei.com/articles/2007-articles/op%11ed-by-charles-hall-and-nate-gagnon/>

Energy Return on Investment

This Op-Ed was refused publication by the New York Times.

by Charles Hall and Nate Gagnon

EROEI.com (March 23 2007)

Op-Ed Editor, New York Times:

The recent front page article "Oil innovations pump new life into old wells" 
by Jad Mouawad (March 5 page 1) is dangerously misleading.  The author would 
have us believe that technological innovations will increase the proportion 
of oil recoverable from known fields sufficiently to compensate for the 
dearth of new discoveries.  It gives a false sense of security about our 
difficult oil situation based on a very selective interpretation of data. 
For example, the graph used to support the article undermines the author's 
main thesis.  It shows that steam injection is not new but has been used in 
the Kern River field since 1965 and also that oil production in this field 
peaked in 1984 and has been declining sharply since about 1997.  In fact 
most of the "oil innovations" mentioned in the article, including the 
injection of steam and various gases, are old technologies, first 
implemented in the 1920s. Innovations have always been occurring in the oil 
industry.  The important question is whether these technologies are 
increasing production more rapidly than depletion is decreasing it.

Considerable information indicates that depletion is a more important force 
in petroleum extraction than is technological development.  The increases in 
production from the Kern River and Duri fields that the article mentions, 
and indeed even from the much larger Alberta and Orinoco Tar sands deposits, 
are small relative to the far larger production declines from many of the 
world's most important oil fields, including the North Sea, Cantarell in 
Mexico (recently the world's second largest producer), America's largest 
fields including Prudhoe Bay, East Texas and Yates, Samotlor in Russia, 
Yibal in Oman, Rabi-Kounga in Gabon, probably Burgan in Kuwait and so on. 
All of these fields have been subject to the kind of technologies mentioned 
in the Mouawad article, sometimes for many decades, and all except possibly 
Burgan are clearly in steep decline or have virtually ceased production. The 
best oil field technology in the world has not stopped the US production 
from declining by fifty percent since its peak in 1970. Likewise clear peaks 
in oil production have occurred in such important producers as Argentina, 
China, Egypt, Indonesia (a founding member of OPEC), Mexico, Norway and the 
United Kingdom, even while prices were increasing. It is not clear yet 
whether modern technologies such as horizontal drilling will principally 
increase total yields or simply increase rates of extraction.

Furthermore, many of the technologies mentioned in the article tend to be 
extremely expensive.  This is so not only in dollars but also in energy. The 
importance of the increasing energy cost has been documented in reports, 
published in quality journals, that show that the energy return on 
investment (EROI) for US domestic oil production has dropped from greater 
than 100 Btu returned per Btu invested in the 1930s to about thirty to one 
in the 1970s to perhaps fifteen to one in 2000.  Our research indicates a 
similar declining trend for world oil.   Making steam and pumping it into 
the ground, or moving gases from their source points to dispersed oil-field 
sites, requires enormous investments of energy. Thus while increasing prices 
can indeed make more low-quality resources economically available they 
generally also mean that more energy is being expended relative to 
production returns. Eventually we may reach the energy break even point. 
Thus much of the oil cited as "probable" or "contingent" reserves is 
unlikely to be worth exploiting regardless of price.

The article's dismissive comments about peak oil theory and its advocates 
are ill informed and ignore the importance of the message coming from a 
sophisticated and growing community that includes many hundreds of 
geologists, other scientists, environmentalists, financiers and citizens who 
see a serious situation ahead of us for oil and, especially in North 
America, natural gas. Whether peak oil production (or as has been suggested 
an "undulating plateau") has occurred, is occurring now or will not occur 
for several years or possibly decades makes little difference from the 
perspective of the life times of our children. Hiding our heads in the sand 
and putting our faith in technological developments that so far have been 
unable to compensate for most depletion seems to us to be a very bad idea.

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