Energy Return on Energy Invested - A New Standard for Comparing Energy Sources

Energy Return on Energy Invested - A New Standard for Comparing Energy Sources
Energy Return on Energy Invested - A New Standard for Comparing Energy Sources

James Quinn is a planning director at a Midwestern University and inveterate blogger who writes the Market Oracle. [www.] A Peak oil crusader, libertarian and Ron Paul enthusiast, he is hard to place on the political spectrum. Last month he drove his family all the way to New York to visit Zuccotti Park and found it brimming not with unwashed hippies or incoherent anarchists but with reasoned supporters for Ron Paul and his campaign for ending the Federal Reserve.  It’s all in the eye of the beholder.

This week RealClearEnergy posts Quinn’s Market Oracle entitled “U.S. Energy Dependence: The Big Lie.”  In it he draws on a concept called “Energy Return on (Energy) Invested” (EROI), first introduced in 2010 by David J. Murphy and Charles A.S. Hall, both of the Department of Environmental Science at Syracuse University. In an article in the Annals of the New York Academy of Sciences.  Murphy and Hall compare the rate of energy input/energy output for all the major energy sources. Although the above graph was not constructed for their original article, it has become the signature expression and now has its own page on Wikipedia.

Surprisingly, hydroelectricity far outdistances every other source, with a return rate of nearly 100 percent. Raw coal is also an outlier at above 80 percent. Below that the different sources fall into a nice, smooth exponential curve. Foreign oil ranks the highest, although wind sneaks in at an impressive 20 percent. Nuclear is at the midpoint of about 12 percent. Below that is all the recent “unconventional” oil discoveries and the “renewables.” Bitumen tar sands (the Canadian oil), biofuels and solar are at the bottom.

Quinn uses this graph to illustrate why commentators who argue that technology will overcome the inherent limitations of diminishing oil supplies are wrong.

“The concept of EROI is incomprehensible to the peak oil deniers. When Larry Kudlow or one of the other drill, drill, drill morons proclaims the vast amount of oil in North Dakota shale and in Alberta, Canada tar sands, they completely ignore the concept of EROI. Some estimates conclude there are 5 trillion barrels of oil left in the earth. But, only 1.4 trillion barrels are considered recoverable. This is because the other 3.6 trillion barrels would require the expenditure of more energy to retrieve than they can deliver. Therefore, it is not practical to extract. When oil was originally discovered, it took on average one barrel of oil to find, extract, and process about 100 barrels of oil. That ratio has declined steadily over the last century to about three barrels gained for one barrel used up in the U.S. and about ten for one in Saudi Arabia.

The chart [above] clearly shows the sources of energy which have the highest energy return for energy invested. I don’t think I’ve heard Obama or the Republican candidates calling for a national investment in hydro-power even though it is hugely efficient. The dreams of the green energy crowd are shattered by the fact that biodiesel, ethanol and solar require as much energy to create as they produce. Tar sands and shale oil aren’t much more energy efficient. It’s too bad Obama and his minions hate dirty coal, because has the best return on energy invested among all the practical sources.”

Economists such as Kudlow would argue, of course, that technology may change these numbers and that, in any case, all this will be reflected in the price, which will dictate which energy sources are developed.  But in an age when everything is being subsidized by the government and each energy source has its lobby in Washington clamoring that it is the path of the future and worthy of more subsidies, it is getting harder and harder to tell.  In any case, it's an extremely useful concept in evaluating energy technologies.

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