EROI: definition, history EROI: definition, history and future implicationsand future implications

Charles A. S. Hall Charles A. S. Hall State University of New York State University of New York

College of Environmental Science and Forestry College of Environmental Science and Forestry Syracuse, N.Y. Syracuse, N.Y.

Cutler J. Cleveland Cutler J. Cleveland Director, Center for Energy and the Environment Director, Center for Energy and the Environment

Boston University Boston University Boston, Mass. Boston, Mass.

Presented at ASPO -US conference Presented at ASPO -US conference Denver November 10, 2005 Denver November 10, 2005

I. DEFINITION of EROI I. DEFINITION of EROI (Sometimes EROEI)(Sometimes EROEI)

Energy return on investment for an activity:Energy return on investment for an activity: Energy delivered to society Energy delivered to society EROI = __________________________EROI = __________________________ Energy put into that activityEnergy put into that activity

Usually consider energy invested Usually consider energy invested from societyfrom society

We believe EROI will be one of the most We believe EROI will be one of the most important defining issues of the future important defining issues of the future

Its importance has been submerged by the Its importance has been submerged by the (inappropriate in our view) increasing (inappropriate in our view) increasing dominance of economic cost-benefit dominance of economic cost-benefit analysis analysis

II. SOME HISTORYII. SOME HISTORY

I am an ecologist, fascinated by energy I am an ecologist, fascinated by energy and natural selection and natural selection

A predator, such as a trout or cheetah, A predator, such as a trout or cheetah, cannot expend more energy in chasing cannot expend more energy in chasing prey than it gets from that prey……prey than it gets from that prey……

(And it must also pay for its own repair, (And it must also pay for its own repair, depreciation, replacement and R&D)depreciation, replacement and R&D)

To my knowledge EROI idea was first To my knowledge EROI idea was first formally put forth in my PhD dissertation… formally put forth in my PhD dissertation… for fish migrationfor fish migration

Idea was implicit in writings of Kenneth Idea was implicit in writings of Kenneth Boulding, H.T. Odum, others Boulding, H.T. Odum, others

We used Yield per Effort concepts from fisheries…..

For the past three years the expenditures to look for For the past three years the expenditures to look for

oil have been greater than the dollar returns!oil have been greater than the dollar returns!

Hall & Cleveland 1981 Science

NY Times Oct 10, 04

US Oil Field SizeUS Oil Field Size

0

20

40

60

80

1900 1920 1940 1960 1980

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We and our students/colleagues undertook other such EROI analysesWe and our students/colleagues undertook other such EROI analyses

THE ECONOMISTS’ ARGUMENTTHE ECONOMISTS’ ARGUMENT

Technology will overcome depletion Technology will overcome depletion

Depletion is real and will overwhelm Depletion is real and will overwhelm technology technology

Who is right??Who is right??

THE GEOLOGISTS’ ARGUMENTTHE GEOLOGISTS’ ARGUMENT

For oil it is clearly depletion:For oil it is clearly depletion:

In 1930 U.S. got 100 barrels of oil back for each In 1930 U.S. got 100 barrels of oil back for each barrel invested in seeking it barrel invested in seeking it

(EROI = 100:1) (EROI = 100:1)

In 1970 about 25 for 1 In 1970 about 25 for 1

In 1990s about 11 to 18 for one In 1990s about 11 to 18 for one

Much less for finding new oil (EROI = 3:1??) Much less for finding new oil (EROI = 3:1??)

• Humans use high quality, low cost resources before low quality, high cost resources

• Best-to-worst ordering of resource exploitation

WHY? WHY?

““Best First” Best First” PrinciplePrinciple

The energy The energy cost of cost of getting getting the next the next barrel is barrel is going going way up way up

III. MEASURING EROI:III. MEASURING EROI: SOME IMPORTANT ISSUES SOME IMPORTANT ISSUES

Data quantity and quality Data quantity and quality (Can you help us?) (Can you help us?) Energy QualityEnergy Quality

Boundaries Boundaries

Support Support

1) 1) DataData: U.S. Bureau of Commerce, : U.S. Bureau of Commerce, Wood Mackenzie, John S. HeroldWood Mackenzie, John S. Herold 2) 2) QualityQuality of energy in or out: of energy in or out: Putting in one unit of electricity toPutting in one unit of electricity to generate three units of heat doesgenerate three units of heat does not make sense not make sense

3) 3) BoundariesBoundaries: key issue. How far do: key issue. How far do we extend boundaries of analysis?we extend boundaries of analysis?

Are there “correct” boundaries? (no) Are there “correct” boundaries? (no)

??

How much of Katrina’s cost was due to How much of Katrina’s cost was due to oil exploitation in S. Louisiana? oil exploitation in S. Louisiana?

Support : Support :

Here are the greatest names in Energy Here are the greatest names in Energy Research in my opinion: Research in my opinion:

Cutler ClevelandCutler Cleveland Robert KaufmannRobert Kaufmann Robert Herendeen Robert Herendeen Robert Ayres Robert Ayres Colin CampbellColin Campbell Jean Leherrere Jean Leherrere

The total they received for undertaking The total they received for undertaking their “energy cost” research from their “energy cost” research from governmental, industry or private sources? governmental, industry or private sources?

Until last week $800.00 Until last week $800.00

EROI will strongly influence: EROI will strongly influence:

Net economic growth Net economic growth

Cost of government: i.e. school bus fuel Cost of government: i.e. school bus fuel

Ability to pay back international debts Ability to pay back international debts

Ability of conventional economic models to work Ability of conventional economic models to work

Value of pensions Value of pensions

EROI of US will be affected EROI of US will be affected strongly by: strongly by:

Prices of imported fuels vs exported Prices of imported fuels vs exported grains, Boeing planes, Hollywood stuff…grains, Boeing planes, Hollywood stuff…

Need for liquid fuels Need for liquid fuels

Need for backup/storage of e.g. solar Need for backup/storage of e.g. solar

Technology: role is not clear Technology: role is not clear

We are setting up new institutes and a We are setting up new institutes and a consortium at ESF and Boston University consortium at ESF and Boston University (etc) to study EROI and other aspects of (etc) to study EROI and other aspects of energy futures. energy futures.

THE END

Thanks to the Santa Barbara Family Foundation