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Peak oil is tied to the cost of oil. The more expensive it is, the more money is spent to extract it. The more money spent, the more advanced tools are availabl

Peak oil is tied to the cost of oil. The more expensive it is, the more money is spent to extract it. The more money spent, the more advanced tools are available. That makes the effective reserve size greater. It is an interesting effect of the markets that the price of oil dropping makes the effective reserves smaller. The problem with the argument here is that EROEI is proportional to the monetary cost of extraction. They largely measure the same thing. More energy means more money. That is why solar is not worth it yet, unless it is concentrated or heat based. The cost is evidence that you shouldn't buy solar - but also evidence of the amount of energy spent on making cells. New solar cells can sometimes take greater than the life of the product to recoup the energy spent on creating them. If you live in, say, Massachusetts, or don't clean your panels well, you'll probably never net an energy savings.

RyanMcGreal 17y ago
Peak oil is tied to the rate of extraction in addition to EROEI. The world demands something like 85 million barrels of oil per day. There could be a trillion barrels in the ground, but if the oil industry can't get it to market fast enough, the price will become volatile. Similarly, there could be a trillion barrels in the ground, but if it takes more than a barrel of oil equivalent to extract a barrel of oil, it's useless as an energy source (but obviously not as a feedstock for oil-based goods production). What happens after an oil source passes its peak is that a) the rate of extraction starts to go down, and b) the EROEI starts to go down. EROEI is proportional to the cost but they're not equivalent. As we saw over 2008, the cost is also a function of the balance between supply and demand. When demand tries to grow against a flat supply, the price goes up. If the price goes up high enough, the economy starts to go into jeopardy. That's why the rate of extraction matters, and it's not a subject the peak oil deniers really address, except to wave their hands and claim that 'new technology' will deal with it. So far, the experience with 'new technology' has not supported this optimism. Most new technologies either a) accelerate depletion of conventional sources without increasing total recoverable reserves; or b) enable access to non-conventional sources at a very low rate of extraction and a very low EROEI. Peak oil theorists have been warning us about exactly the kind of oil price volatility (long run-up followed by an economic crash and a collapse in the oil price) that we're observing today. As long as our economy still runs on an ever-increasing rate of oil production, we will continue to suffer from volatility. Remember, the market has two methods of bringing supply and demand into balance: it can spur the creation of new supply (through the price incentive to increase production), and it can spur the destruction of demand by pricing some consumers out of the market. Given the geological constraints facing the feasible rate of oil production, we can expect that most of the balance will come from destruction on the demand side.
- ivankirigin 17y ago
  There are huge logistical constraints on the demand side too. Think of all the cars on the road, all the gas stations, etc.
  - abalashov 17y ago
    Indeed, the very fundamental underpinnings of the overwhelming preponderance of the US economy, as well as that of other First World countries. Just about everything requires oil, and just about any growth requires more oil.
    - Retric 17y ago
      uses != requires Oil is used for peak power generation that can quickly adapt to chaning demand, however, hydroelectric energy storage is used to do the exact same thing.
      - abalashov 17y ago
        Uses = requires right now. Uses also = requires in very massive quantities in order to produce and deploy whatever is going to (partially) replace it. Do you really think wind turbines, solar panels, hydroelectric dams, and nuclear power plants don't require oil to build, construct and, to a nontrivial extent, operate?
        Retric 17y ago
        We use Oil for a huge number of things when there are direct substitutes, because it's incredibly plentiful and cheep. EX: Roads. Even in cases when you need Oil due to its chemistry, it's just long chain hydro carbons. And, you can make long chain hydro carbons from many things including Coal and water which are indistinguishable from Oil. The only real question is how fast the price of oil increases, and how long it takes to switch to other substitutes or synthesize it. PS: Even the worst case estimates say the supply will gradually decline over decades so there is going to be a long time to find substitutes. (Less than 25% decline in supply per decade is slow.) What happens to Oil’s price is a separate issue, but that’s far less important than you might think.
jsrn 17y ago
> New solar cells can sometimes take greater than the life of the product to recoup the energy spent on creating them. If you live in, say, Massachusetts [...] you'll probably never net an energy savings. "False. The energy yield ratio (the ratio of energy delivered by a system over its lifetime, to the energy required to make it) of a roof-mounted, grid-connected solar system in Central Northern Europe is 4, for a system with a lifetime of 20 years (Richards and Watt, 2007); and more than 7 in a sunnier spot such as Australia. (An energy yield ratio bigger than one means that a system is A Good Thing, energy-wise.) Wind turbines with a lifetime of 20 years have an energy yield ratio of 80." source: http://www.inference.phy.cam.ac.uk/withouthotair/c6/page_41.shtml http://www.inference.phy.cam.ac.uk/withouthotair/c6/page_41.... (I assumed that the sun in Central Northern Europe shines with an intensity similar to the intensity in Massachusetts.)
- ivankirigin 17y ago
  Thanks for the info.
- randallsquared 17y ago
  Wait, your data imply that wind turbines pay for themselves in ~3 months. This is definitely not the case for the vast majority of turbines and locations, so 80 seems far too high.
  - jsrn 17y ago
    > your data imply that wind turbines pay for themselves in ~3 months. No, it doesn't imply that - the data just imply that the energy needed to build the wind turbine is recouped after 3 months. Energy cost to build something != Cost to build something. In the case of the wind turbine, consider: R&D costs, material costs, marketing costs, etc.
    - ars 17y ago
      Not correct. Energy is exactly equal to the cost. Material costs: why does stuff cost? Because it takes energy to make it, and to transport it. R&D, marketing: You have pay someone. Why does he need money? Because he spends it on things that cost energy to make. Follow it all the way down and energy is exactly equal to cost. (Note that energy is not equal to environmental harm, which also needs to take into account pollution, which is not reflected in the cost.)
easp 17y ago
EROI on commercial solar panels is generally less than a year in sunny climates. Even in somewhere like Seattle, which isn't generally regarded as sunny the EROI is two years. The cost of energy costs are important when considering the economics of energy sources, but they are not the only costs to consider, if only because it is not yet practical to simply substitute more energy for another input.

RyanMcGreal 17y ago

Peak oil is tied to the rate of extraction in addition to EROEI. The world demands something like 85 million barrels of oil per day. There could be a trillion barrels in the ground, but if the oil industry can't get it to market fast enough, the price will become volatile. Similarly, there could be a trillion barrels in the ground, but if it takes more than a barrel of oil equivalent to extract a barrel of oil, it's useless as an energy source (but obviously not as a feedstock for oil-based goods production). What happens after an oil source passes its peak is that a) the rate of extraction starts to go down, and b) the EROEI starts to go down. EROEI is proportional to the cost but they're not equivalent. As we saw over 2008, the cost is also a function of the balance between supply and demand. When demand tries to grow against a flat supply, the price goes up. If the price goes up high enough, the economy starts to go into jeopardy. That's why the rate of extraction matters, and it's not a subject the peak oil deniers really address, except to wave their hands and claim that 'new technology' will deal with it. So far, the experience with 'new technology' has not supported this optimism. Most new technologies either a) accelerate depletion of conventional sources without increasing total recoverable reserves; or b) enable access to non-conventional sources at a very low rate of extraction and a very low EROEI. Peak oil theorists have been warning us about exactly the kind of oil price volatility (long run-up followed by an economic crash and a collapse in the oil price) that we're observing today. As long as our economy still runs on an ever-increasing rate of oil production, we will continue to suffer from volatility. Remember, the market has two methods of bringing supply and demand into balance: it can spur the creation of new supply (through the price incentive to increase production), and it can spur the destruction of demand by pricing some consumers out of the market. Given the geological constraints facing the feasible rate of oil production, we can expect that most of the balance will come from destruction on the demand side.

ivankirigin 17y ago
There are huge logistical constraints on the demand side too. Think of all the cars on the road, all the gas stations, etc.
- abalashov 17y ago
  Indeed, the very fundamental underpinnings of the overwhelming preponderance of the US economy, as well as that of other First World countries. Just about everything requires oil, and just about any growth requires more oil.
  - Retric 17y ago
    uses != requires Oil is used for peak power generation that can quickly adapt to chaning demand, however, hydroelectric energy storage is used to do the exact same thing.
    - abalashov 17y ago
      Uses = requires right now. Uses also = requires in very massive quantities in order to produce and deploy whatever is going to (partially) replace it. Do you really think wind turbines, solar panels, hydroelectric dams, and nuclear power plants don't require oil to build, construct and, to a nontrivial extent, operate?
      - Retric 17y ago
        We use Oil for a huge number of things when there are direct substitutes, because it's incredibly plentiful and cheep. EX: Roads. Even in cases when you need Oil due to its chemistry, it's just long chain hydro carbons. And, you can make long chain hydro carbons from many things including Coal and water which are indistinguishable from Oil. The only real question is how fast the price of oil increases, and how long it takes to switch to other substitutes or synthesize it. PS: Even the worst case estimates say the supply will gradually decline over decades so there is going to be a long time to find substitutes. (Less than 25% decline in supply per decade is slow.) What happens to Oil’s price is a separate issue, but that’s far less important than you might think.

jsrn 17y ago

> New solar cells can sometimes take greater than the life of the product to recoup the energy spent on creating them. If you live in, say, Massachusetts [...] you'll probably never net an energy savings. "False. The energy yield ratio (the ratio of energy delivered by a system over its lifetime, to the energy required to make it) of a roof-mounted, grid-connected solar system in Central Northern Europe is 4, for a system with a lifetime of 20 years (Richards and Watt, 2007); and more than 7 in a sunnier spot such as Australia. (An energy yield ratio bigger than one means that a system is A Good Thing, energy-wise.) Wind turbines with a lifetime of 20 years have an energy yield ratio of 80." source: http://www.inference.phy.cam.ac.uk/withouthotair/c6/page_41.shtml http://www.inference.phy.cam.ac.uk/withouthotair/c6/page_41.... (I assumed that the sun in Central Northern Europe shines with an intensity similar to the intensity in Massachusetts.)

ivankirigin 17y ago
Thanks for the info.
randallsquared 17y ago
Wait, your data imply that wind turbines pay for themselves in ~3 months. This is definitely not the case for the vast majority of turbines and locations, so 80 seems far too high.
- jsrn 17y ago
  > your data imply that wind turbines pay for themselves in ~3 months. No, it doesn't imply that - the data just imply that the energy needed to build the wind turbine is recouped after 3 months. Energy cost to build something != Cost to build something. In the case of the wind turbine, consider: R&D costs, material costs, marketing costs, etc.
  - ars 17y ago
    Not correct. Energy is exactly equal to the cost. Material costs: why does stuff cost? Because it takes energy to make it, and to transport it. R&D, marketing: You have pay someone. Why does he need money? Because he spends it on things that cost energy to make. Follow it all the way down and energy is exactly equal to cost. (Note that energy is not equal to environmental harm, which also needs to take into account pollution, which is not reflected in the cost.)

easp 17y ago

EROI on commercial solar panels is generally less than a year in sunny climates. Even in somewhere like Seattle, which isn't generally regarded as sunny the EROI is two years. The cost of energy costs are important when considering the economics of energy sources, but they are not the only costs to consider, if only because it is not yet practical to simply substitute more energy for another input.