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EROEI never made any sense to me. It seems to conflate two fundamentally different notions: fuels as energy sources and fuels as energy storage mediums. Who c

EROEI never made any sense to me. It seems to conflate two fundamentally different notions: fuels as energy sources and fuels as energy storage mediums. Who cares that petroleum EROEI might fall to less than one? Petroleum in that scenario would still useful for vehicles. Even if you need two joules to extract one joule of fossil fuel, this process might be economically viable if your two joules are immovable (e.g., drawn from a nuclear-powered grid) and your one joule is movable (e.g., in an airliner). There's no special significance to EROEI.

kodfodrasz 10y ago
What you say is true for refined fuels (think of batteries as such also). But for prime energy sources EROEI must be greater than one to be viable on the long run. If coal mining had an EROEI under 1 no industrial revolution would have happened, because the manual labour for extracting the energy source would have been better spent at other tasks. Now that we have some energy sources with very high EROEI in the energy mix we use we can think about some sources as you say, for some very specific tasks.
nshepperd 10y ago
Who's conflating energy sources with storage mediums? EROEI is about the viability of fuels as energy sources. I've never heard otherwise. Obviously, charged battery storage has an EROEI < 1, and that's fine because it's a portable storage medium, not an energy source.
js8 10y ago
> EROEI never made any sense to me Did monetary ROI ever made sense to you? EROEI is the same thing, except in units used by nature.
- beefield 10y ago
  I admit also belonging to the group not understanding the point of EROEI (beyond whether it is grater or smaller than one). Let's take two hypothetical means to produce electricity, A and B. A is, from EROEI point of view, almost a perpetual machine, with EROEI of 1,000,000. Unfortunately it is really expensive, investment costs are one million dollars per watt generated. B then, has really bad EROEI, 1.0001. However, getting that electricity costs only 0.0001 USD/MWh. I do not understand in which circumstances it would be relevant or interesting to use EROEI as a metric to compare these power sources. Note also that in absence of subsidies, ROI contains all the information EROEI gives.
  - js8 10y ago
    The same example can be made with monetary ROI, too. You can have an exclusive small business that has excellent ROI, however, cannot scale. How do you compare that to a large business/market with ROI close to one? > Note also that in absence of subsidies, ROI contains all the information EROEI gives. That's not a bug but a feature. The main advantage of using EROEI over ROI is that it's in nature's units. You cannot use any accounting tricks (such as subsidies) to fake it.
    - beefield 10y ago
      > The same example can be made with monetary ROI, too. You can have an exclusive small business that has excellent ROI, however, cannot scale. How do you compare that to a large business/market with ROI close to one? Sorry, I do not see the similarity. In your example you are limiting how much you can invest to one opportunity. And (risk adjusted) ROI is perfectly valid way to compare both of your companies, I just invest as much as I can to the higher yielding asset. > You cannot use any accounting tricks (such as subsidies) to fake it. It may be more difficult to fake, but it does not answer the question what use the measure has. (Note that ROI may be fakeable in the short term, but in the long term that is much more difficult. Either you get your money back or you do not.)
      - js8 10y ago
        > Sorry, I do not see the similarity. OK, let me try to explain better. In your example, the only thing that prevents me to invest in the source A (with the ridiculously high EROEI) is how much other resources than energy I currently have. For example, say source A requires diamonds, which are expensive, and I can only afford a handful. But source A is much better investment than the source B, and I absolutely want to invest into A first (at the very least, I can sell the energy with much higher profit margin). In my example, the only thing that prevents me to invest into higher-yielding asset (and we agree it's a good idea) is some additional limitation of reality (availability of resources), for example the size of the market. So in both examples, there has to be an additional resource constraint, which prevents putting all investment into the higher-yielding enterprise. In the first example this limiting resource is money, in the 2nd example it cannot be money, but it can be something else. So if ROI is a good way to compare investment opportunities, EROEI is a good way to compare energy sources. > It may be more difficult to fake, but it does not answer the question what use the measure has. An well-known example where ROI was faked is subsidies for ethanol as energy source. EROEI is less than 1, but because of the subsidies, ROI became larger than 1. The EROEI would be an ultimate measure of where to put your effort (energy) if you were alone in the world and there were no other people. Then you wouldn't need money and could price everything in energy required to obtain it. Or equivalently, the world where people would collectively want to minimize the amount of effort they want to spend. Which is not quite the real world with money (the wealthy people for example can afford less effort than others), but it's useful as an approximation of it (and if you assume free market, then they are very close).
pjc50 10y ago
http://euanmearns.com/eroei-for-beginners/ http://euanmearns.com/eroei-for-beginners/ The issue is not so much about the EROEI of an particular process in the small, as about the headline overall availability of energy from all sources to civilisation as a whole. That article discusses the "EROEI cliff" possibility, where as it declines more and more human effort must be put in to replace it, resulting in a civilisational collapse.
VLM 10y ago
pjc50 gets the large scale answer correct. On the individual scale a company in a >1 ratio line of business sells energy, which incidentally happens to be in the form of Jet-A or 93 octane but what really matters is they sell energy that runs the other economic sectors. Whereas a company in the <1 ratio line of business sells fascinating petrochemical feedstocks, which incidentally happen to be flammable and could be used as expensive fuels and they compete for needed energy with the rest of the economy. The ethanol debacle shows how important that is. Certainly aged 12 year crown royal is not energetically feasible as engine fuel and that doesn't matter as long as its affordable for drinking. The distillery produces human fuel, but not energy, in fact its a net sink of energy. Likewise you can build a plant to produce ethanol, and it will produce fuel, and as long as you don't worry about energy or CO2 that's OK. Inevitably after its built someone will point out that rather than importing 30 million barrels of crude oil energy per day, if you want to run cars on ethanol we'll have to import and burn 60 million barrels of crude oil energy per day and there will be freakouts. Part of the confusion is in the old days it was only possible to simultaneously produce both energy and fuel whereas we've burned the cheap oil such that now we're going to be deciding to make industrial plants and processes that produce energy OR fuel but often not both at the same time. In the old days it was impossible for a refinery not to produce and sell both fuel and energy at the same time...
- pjc50 10y ago
  Thanks. Yes, the US ethanol situation is a mess. It seems to have worked out better in Brazil. There's been talk of using solar energy to help with oil sands extraction ( https://www.google.com/patents/US9039893 https://www.google.com/patents/US9039893 ), because oil sands have such low EROEI that the cost of fuel for melting them is a considerable part of the cost (as is finding the other chemical feedstock for diluent to produce "dilbit"). In some ways this is great - replacing a fossil source with a renewable - in others it's terrible, as it increases the transfer of carbon from the ground to the atmosphere.
- quotemstr 10y ago
  Global EROEI decline doesn't seem a serius danger to me --- solar and nuclear power are both abundant and available at modest cost. That 60 million barrels of energy for input doesn't strike me as something that ought to lead to freakouts. (Coal is available as well; of course, using it incurs significant external costs.)

kodfodrasz 10y ago

What you say is true for refined fuels (think of batteries as such also). But for prime energy sources EROEI must be greater than one to be viable on the long run. If coal mining had an EROEI under 1 no industrial revolution would have happened, because the manual labour for extracting the energy source would have been better spent at other tasks. Now that we have some energy sources with very high EROEI in the energy mix we use we can think about some sources as you say, for some very specific tasks.

nshepperd 10y ago

Who's conflating energy sources with storage mediums? EROEI is about the viability of fuels as energy sources. I've never heard otherwise. Obviously, charged battery storage has an EROEI < 1, and that's fine because it's a portable storage medium, not an energy source.

js8 10y ago

> EROEI never made any sense to me Did monetary ROI ever made sense to you? EROEI is the same thing, except in units used by nature.

beefield 10y ago
I admit also belonging to the group not understanding the point of EROEI (beyond whether it is grater or smaller than one). Let's take two hypothetical means to produce electricity, A and B. A is, from EROEI point of view, almost a perpetual machine, with EROEI of 1,000,000. Unfortunately it is really expensive, investment costs are one million dollars per watt generated. B then, has really bad EROEI, 1.0001. However, getting that electricity costs only 0.0001 USD/MWh. I do not understand in which circumstances it would be relevant or interesting to use EROEI as a metric to compare these power sources. Note also that in absence of subsidies, ROI contains all the information EROEI gives.
- js8 10y ago
  The same example can be made with monetary ROI, too. You can have an exclusive small business that has excellent ROI, however, cannot scale. How do you compare that to a large business/market with ROI close to one? > Note also that in absence of subsidies, ROI contains all the information EROEI gives. That's not a bug but a feature. The main advantage of using EROEI over ROI is that it's in nature's units. You cannot use any accounting tricks (such as subsidies) to fake it.
  - beefield 10y ago
    > The same example can be made with monetary ROI, too. You can have an exclusive small business that has excellent ROI, however, cannot scale. How do you compare that to a large business/market with ROI close to one? Sorry, I do not see the similarity. In your example you are limiting how much you can invest to one opportunity. And (risk adjusted) ROI is perfectly valid way to compare both of your companies, I just invest as much as I can to the higher yielding asset. > You cannot use any accounting tricks (such as subsidies) to fake it. It may be more difficult to fake, but it does not answer the question what use the measure has. (Note that ROI may be fakeable in the short term, but in the long term that is much more difficult. Either you get your money back or you do not.)
    - js8 10y ago
      > Sorry, I do not see the similarity. OK, let me try to explain better. In your example, the only thing that prevents me to invest in the source A (with the ridiculously high EROEI) is how much other resources than energy I currently have. For example, say source A requires diamonds, which are expensive, and I can only afford a handful. But source A is much better investment than the source B, and I absolutely want to invest into A first (at the very least, I can sell the energy with much higher profit margin). In my example, the only thing that prevents me to invest into higher-yielding asset (and we agree it's a good idea) is some additional limitation of reality (availability of resources), for example the size of the market. So in both examples, there has to be an additional resource constraint, which prevents putting all investment into the higher-yielding enterprise. In the first example this limiting resource is money, in the 2nd example it cannot be money, but it can be something else. So if ROI is a good way to compare investment opportunities, EROEI is a good way to compare energy sources. > It may be more difficult to fake, but it does not answer the question what use the measure has. An well-known example where ROI was faked is subsidies for ethanol as energy source. EROEI is less than 1, but because of the subsidies, ROI became larger than 1. The EROEI would be an ultimate measure of where to put your effort (energy) if you were alone in the world and there were no other people. Then you wouldn't need money and could price everything in energy required to obtain it. Or equivalently, the world where people would collectively want to minimize the amount of effort they want to spend. Which is not quite the real world with money (the wealthy people for example can afford less effort than others), but it's useful as an approximation of it (and if you assume free market, then they are very close).

pjc50 10y ago

http://euanmearns.com/eroei-for-beginners/ http://euanmearns.com/eroei-for-beginners/ The issue is not so much about the EROEI of an particular process in the small, as about the headline overall availability of energy from all sources to civilisation as a whole. That article discusses the "EROEI cliff" possibility, where as it declines more and more human effort must be put in to replace it, resulting in a civilisational collapse.

VLM 10y ago

pjc50 gets the large scale answer correct. On the individual scale a company in a >1 ratio line of business sells energy, which incidentally happens to be in the form of Jet-A or 93 octane but what really matters is they sell energy that runs the other economic sectors. Whereas a company in the <1 ratio line of business sells fascinating petrochemical feedstocks, which incidentally happen to be flammable and could be used as expensive fuels and they compete for needed energy with the rest of the economy. The ethanol debacle shows how important that is. Certainly aged 12 year crown royal is not energetically feasible as engine fuel and that doesn't matter as long as its affordable for drinking. The distillery produces human fuel, but not energy, in fact its a net sink of energy. Likewise you can build a plant to produce ethanol, and it will produce fuel, and as long as you don't worry about energy or CO2 that's OK. Inevitably after its built someone will point out that rather than importing 30 million barrels of crude oil energy per day, if you want to run cars on ethanol we'll have to import and burn 60 million barrels of crude oil energy per day and there will be freakouts. Part of the confusion is in the old days it was only possible to simultaneously produce both energy and fuel whereas we've burned the cheap oil such that now we're going to be deciding to make industrial plants and processes that produce energy OR fuel but often not both at the same time. In the old days it was impossible for a refinery not to produce and sell both fuel and energy at the same time...

pjc50 10y ago
Thanks. Yes, the US ethanol situation is a mess. It seems to have worked out better in Brazil. There's been talk of using solar energy to help with oil sands extraction ( https://www.google.com/patents/US9039893 https://www.google.com/patents/US9039893 ), because oil sands have such low EROEI that the cost of fuel for melting them is a considerable part of the cost (as is finding the other chemical feedstock for diluent to produce "dilbit"). In some ways this is great - replacing a fossil source with a renewable - in others it's terrible, as it increases the transfer of carbon from the ground to the atmosphere.
quotemstr 10y ago
Global EROEI decline doesn't seem a serius danger to me --- solar and nuclear power are both abundant and available at modest cost. That 60 million barrels of energy for input doesn't strike me as something that ought to lead to freakouts. (Coal is available as well; of course, using it incurs significant external costs.)