Oil's True Energy Balance

Following Dr. Pimentel’s detailed calculations in finding the ERoEI of ethanol, I would like to suggest a similarly rigorous analysis of the ERoEI of oil. As oil becomes scarcer, both the direct cost of extraction and the indirect cost of defending and securing the geographical areas that are oil abundant increases.  Here I will argue that the current calculation of oil’s ERoEI grossly overestimates its true net energy balance.  

Dr. Pimentel estimates the current ERoEI of corn-ethanol as 0.8.  In comparison, current calculations of the ERoEI of oil reveal an impressive ratio of 3:1.  Of course, this number is miniscule in comparison to the 1940’s when only 1 barrel of oil was required to extract 50 – 100 barrels of oil.   The reason for the gradual decrease in oil’s ERoEI has been the increasing amount of energy needed to be used to extract an increasingly scarce natural resource.  However these calculations only take into account the technology and manpower directly required to discover, mine, process, and transport oil.   They do not take into account the costs incurred in securing and defending access to oil fields that are becoming more and more highly contested.  

Though this is controversial, today much of the US’s foreign policy initiative is directed towards securing our oil interests in the Middle East. The government expenses on just the Iraq war have exceeded over 400 billion dollars. In addition, Linda Bilmes of Harvard University, states that if the war continues for another 5 years the total cost will amount to 1.4 trillion dollars. Though it is debatable how much of this money is directly used to secure oil interests, should we include this entire amount in the calculations of the ERoEI of oil? Should we include the 82 billion dollars spent on the first gulf war defending the oil fields in Kuwait?   In addition, China is emerging as a major oil consumer and military superpower.  Could the future bring us a major direct or indirect conflict with China over oil?  Should we take the costs of such a conflict into account when discussing energy alternatives?

Dr. Pimentel has provided us with a very in depth analysis of the energy balance associated with the production and transport of ethanol.   Estimation of the true cost of oil may benefit from a similarly in depth analysis that takes into account the political and military costs of our addiction.   

 

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  • 8/7/2006 4:11 PM thelastsasquatch wrote:
    Accurate ERoEI comparisons require that the boundaries are commensurate between the energy technology one compares. If you assume that the political and military energy required to produce the worlds oil is included as an energy input, then we are far past peak, and the 'net energy' available to non-energy producing society is declining somewhat sharply.

    This story explains why net energy is important to society.
    http://www.theoildrum.com/story/2006/8/2/114144/2387#comments

    Also, if one uses these wide boundaries for oil (and this under-reports domestic oil but might accurately reflect Iraqi oil), then the ERoEI of ethanol and other energy sources will also decline, if they require oil as an input.
    Reply to this
    1. 9/19/2007 7:47 PM Sitting bull ish wrote:
      Pimentels' study is wrong for other (stronger) reasons as well. He uses outdated data in his findings. 1. His ethanol conversion factor is from the early nineties, prior to much engineering work to improve the conversion process, and his crop yield data, including fertilizer amounts is also dated by nearly twenty years. Seed technology has increased yield while decreasing fertilizer inputs. His study has not passed peer review. Please read the study and see the date of his data for yourself.

      I am inclined to also include the cost of military/political intervention to keep oil flowing in the energy balance of oil. Pimentel used as broad an input frame as possible, including the energy to produce the eggs the farmer eats for breakfast. If taking this broad approach, oil will not be delivered at anywhere near current prices if the US had not been proping up the Saudi royal family for decades, and numerous wars and political trade-offs all in order to keep oil flowing. The Department of Defense published in 1995 that [our primary interest in the middle east is to ensure a stable flow of oil to the US], and the Carter Doctrine which (roughly) stated that any country that interferes with the oil supply to the US is viewed as attacking the US security.

      Those sound like pretty solid reasons that those costs should be included.

      There are plenty of oil companies (upstream) investing in biofuels as well. I work for a private upstream company, and we have a hell of a time finding more oil. If we can produce fuel from renewable resources, we have decided to support it, and we are not alone here in Houston. I have noticed much more resistance to biofuels from the downstream guys. Production is production in our minds. Some refiners are looking into alternative biofuels to ethanol like bio-butanol and mixed alcohol, both with more stability and energy than ethanol, they are also getting into the game.

      Other factors to include supporting ethanol. High corn prices have saved the taxpayers' money from paying subsidies for corn. Jobs at home increase income and sales taxes for local and federal collections. Reduced trade deficit, as the US' largest single import is oil.
      Reply to this
  • 1/24/2008 11:31 AM Geoff wrote:
    You are quite right that the EROEI for crude oil will continue to decline, as we have to go to greater lengths to find it and extract it from deepwater deposits, oil sands or shale. Your figure of 3:1 is on the low end of estimates for the current state of this indicator; 4:1 or 5:1 would be more typical, reflecting the 0.8 efficiency figure used by Argonne Labs in their well-to-wheels studies.

    There's also hope that as ethanol facilities improve--or when cellulosic ethanol finally becomes possible on a commercial scale--the EROEI of ethanol will increase from 1.3:1 toward 2:1 or beyond. The energy advantage of oil over ethanol will thus gradually erode.

    The real issue, however, isn't whether ethanol might not be as much worse than oil as it looks, but that we really need an energy source with a higher EROEI to create the large energy surplus required to run our economy, without devoting a huge portion of it to this activity and crowding out the valuable uses of energy downstream.

    I think the present engineering calculations on both sides are adequate to highlight that concern, without dragging in the geopolitical costs of oil (which aren't really expressed in energy, unless you want to start tallying the fuel burned in the tanks, ships and planes involved in the wars you cite) or the escalating food-competition costs of biofuels, which are affecting large numbers of low-income people, globally.
    Reply to this
  • 1/25/2008 10:23 AM JJ wrote:
    The problem with this counter-argument has two main areas, I think

    1. The first one is fuzzy because it involves politics and motive. This is the cost of military action in the midddle east and its relationship to oil. The argument that we invaded Iraq for the oil fails the reality check; the easiest solution would have been to warmly embrace Saddam as a secular dictator who opposes extremists (much as we have done with Musharaff), in the same way we warmly embraced him in the 1980's as a secular dictator who opposed Iran. A PR campaign rehabilitates his image, he apologizes and compensates Kuwait, and we get preferential oil deals. The average voter, I've discovered, has absolutely no idea that Saddam was considered a Reagan ally in the 80's and a supervillian in the 2000's. It is fairly easy to position a dictator as a friend or a threat depending on the storyline being fed to the press. So the short answer is I think we must assume the cost of military operations in the mideast has very little that can be attributed to oil production or consumption.

    2. The second one should be easier to calculate. In calculating the 'oil cost of oil', we can't use just the dollar$ spend on oil production, but the oil component of the $ spend on oil production. This line of reasoning suggests that those workers who are building humvees or making drilling equipment or whatever would still be alive and consuming resources and working somewhere if not involved in the oil or military business. It should only be the oil component of the production of oil that factors in to oil efficiency.

    Granted, the 'cost per barrel' definitely should include the economic non-oil cost of drilling equipment and possibly the cost of military support, but that is an economic issue and not an oil's-cost-of-oil issue.
    Reply to this
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