Long-Term Estimates of the Energy-Return-on-Investment

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* Article / study: Long-Term Estimates of the Energy-Return-on-Investment (EROI) of Coal, Oil, and Gas Global Productions. By  Victor Court and Florian Fizaine. Ecological Economics, 2017

URL = http://www.sciencedirect.com/science/article/pii/S0921800915303815

Abstract

• Through a price-based approach we assess the global energy-return-on-investment (EROI) of coal, oil, and gas.

• This is done from their respective beginning of reported production (respectively 1800, 1860, and 1890) to 2012.

• We also present a new theoretical EROI dynamic model based on Dale et al. (2011).

• We find that maximum EROI of global oil and gas productions have both already been reached in the 1930s–40s, respectively around 50(± 15):1 and 150(± 20):1.

• We estimate that the maximum EROI of global coal production will most likely be around 95(± 15):1 around the 2030s.

"We use a price-based methodology to assess the global energy-return-on-investment (EROI) of coal, oil, and gas, from the beginning of their reported production (respectively 1800, 1860, and 1890) to 2012. It appears that the EROI of global oil and gas productions reached their maximum values in the 1930s–40s, respectively around 50:1 and 150:1, and have declined subsequently. Furthermore, we suggest that the EROI of global coal production has not yet reached its maximum value. Based on the original work of Dale et al. (2011), we then present a new theoretical dynamic expression of the EROI. Modifications of the original model were needed in order to perform calibrations on each of our price-based historical estimates of coal, oil, and gas global EROI. Theoretical models replicate the fact that maximum EROIs of global oil and gas productions have both already been reached while this is not the case for coal. In a prospective exercise, the models show the pace of the expected EROIs decrease for oil and gas in the coming century. Regarding coal, models are helpful to estimate the value and date of the EROI peak, which will most likely occur between 2025 and 2045, around a value of 95(± 15):1."


Discussion

Nafeez Ahmed:

"The study, ‘Long-Term Estimates of the Energy-Return-on-Investment (EROI) of Coal, Oil, and Gas Global Productions’, homes in on the concept of EROI, which measures the amount of energy supplied by an energy resource, compared to the quantity of energy consumed to gather that resource. In simple terms, if a single barrel of oil is used up to extract energy equivalent to 50 barrels of oil, that’s pretty good. But the less energy we’re able to extract using that single barrel, then the less efficient, and more expensive (in terms of energy and money), the whole process.

Recent studies suggest that the EROI of fossil fuels has steadily declined since the early 20th century, meaning that as we’re depleting our higher quality resources, we’re using more and more energy just to get new energy out. This means that the costs of energy production are increasing while the quality of the energy we’re producing is declining.

But unlike previous studies, the authors of the new paper — Victor Court, a macroeconomist at Paris Nanterre University, and Florian Fizaine of the University of Burgundy’s Dijon Laboratory of Economics (LEDi)—have removed any uncertainty that might have remained about the matter.

Court and Fizaine find that the EROI values of global oil and gas production reached their maximum peaks in the 1930s and 40s. Global oil production hit peak EROI at 50:1; while global gas production hit peak EROI at 150:1. Since then, the EROI values of oil and gas — the overall energy we’re able to extract from these resources for every unit of energy we put in — is inexorably declining." (https://medium.com/insurge-intelligence/the-new-economic-science-of-capitalisms-slow-burn-energy-collapse-d07344fab6be)

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