EROEI is all that matters, peak oil or no peak oil

Awright, this post has nothing to do with India, but it’s something I thought I’d put down, for interest-sakes!

If you are not one of those peak-oil deniers you at least know one. But the point is, peak oil or no peak oil, there is no denying that the cost of getting oil out of the ground is increasing all the time. I remember reading that the EROEI of oil from oil fields in Kuwait and possibly Saudi used to be over 100:1 many decades back – it was almost like “you drill a hole and out comes the oil.” Life is not as easy any more for the sheiks – both the real sheiks and the corpo-sheiks at ExxonMobil, ConocoPhillips and Aramco. Read this (source):

“(Earlier) the energy required to get fuel out of the ground was small; the energy return on energy investment (EROI) was high. But as companies have moved to tougher environments, the EROI on oil and gas production has fallen – one estimate is from 33:1 in 1999 to 19:1 in 2005. This global trend mirrors what happened in the US, where oil is still produced in javascript:void(0)large quantities but much less efficiently than it was 75 years ago. From an estimated 100:1 in 1939, the EROI for American oil production dropped to 30:1 by 1970 and 11:1 in 2000.”

I do not have reliable numbers of EROEI of US oil right now, but it won’t be an awful estimate if I guessed it to be around 6-7. Now, that’s actually less than wind (which has around 8 EROEI). Heck, even biofuels have anywhere EROEI between 3-5. True, this is EROEI estimate I have given above is primarily for US oil reserves, but the numbers could be fast falling for the middle east as well. (Oh, by the way, the EROEI for non-conventional fossil fuels such as tar sands and oil shale are supposed to be quite terrible, and EROEI does not even begin to consider that stuff like tar sands can turn into environmental disasters, as Canadians are discovering now).

OK, so what am I trying to say? Oil production (or the rate of it) is not everything. The price at which we produce it is equally important. And at an inflection point, even the big oil companies with questionable morals might decide it is worth pumping money into renewable energy is worth it – for them money talks, and if renewable energy talks more money, they will be all for it.