With oil prices experiencing their first non-political spike serious conversations are finally being made about the sustainability of America and the world’s hydrocarbon-based future. Two of the elemental arguments go like this: Oil is approaching its peak, the Geological Pessimists contend, even as more people are going to be using more of it; drastic changes must be made. And: The price signal of expensive oil will drive more exploration, RD&D, and make more oil profitable from existing wells, counter the Ingenuity Optimists; human ingenuity will make oil more plentiful and cheap over time.
Energy Returned on Investment, or EROI, is how neither side wants to consider the problem. EROI essentially means taking the systems theory aspect of sustainability and applying it to energy. This makes the Ingenuity Optimists’ every-little-thing-is-gonna’-be-alright attitude sound like a pipe dream. There is natural pressure that allows oil to be extracted from wells, eventually this depletes and pressure has to be added to the well – usually be pumping water or natural gas into it – to force the oil out of the ground. Once unnatural pressure is necessary to extract the oil each new barrel from that well has a decreasing EROI.
The days of wildcatting, drilling randomly in a suspected oil field and hoping to find black gold, are long over. For years new wells have been more deep and distant from supply chains (the middle of the ocean, siberia, Alaska etc.) and have therefore owned worse EROIs. When the Ingenuity Optimists start clucking about billions and billions of barrels of Canadian shale oil just waiting to be pumped into your car they almost are certainly not considering the probability that it might well take two barrels of oil (once you consider processing; rocks, minerals and water must be cleaned from the oil) to produce every three barrels of usable shale oil.
Ah, but what if all of this pumping and processing is done by natural gas, coal, or nuclear power? Then you are just trading one energy source for the other. Perhaps these domestic sources are better (No Middle Eastern entanglements), but the mining and milling of coal, natural gas and uranium is dependent on… oil!
Forty dollars is about the price of gasoline that should be high enough to spark the incentives that the Ingenuity Optimists are counting on. That market signal has existed and only gotten stronger for over a year. The oil industry is not in wont of money, brainpower or political clout. If news of new technologies or new discoveries does not begin to materialize within a year, then it could well be that no ingenuity or creativity can stretch a finite resource infinitely.
EROI is also problematic for the Geological Pessimists who can taste the oil peak and fathom the post-petroleum future. I am a green energy stalwart, but I also recognize that each solar panel and windmill comes with an (probably mostly dirty) energy deficit that it must make up. Mining and processing silicon into a solar panel takes a lot of energy; solar energy is only clean once the panel has absorbed enough energy to equal that amount used to create it.
EROI is tougher on ethanol. As energy is transferred it becomes less organized. Currently, it takes more energy to turn corn into fuel then the ethanol the fuel provides. This would be a useful way to reduce Middle Eastern oil dependence, if farming weren’t already so reliant on oil.
This does not mean, however, that no solutions exist and that human ingenuity is worthless.
More to come.