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By Root 1108 0

to both find and produce energy, we’re going to look at the returns delivered from energy exploration and production activities in terms of the ratio between what is invested and what is returned. Imagine that the total energy it took to find and drill an oil well were one barrel of oil, and that one hundred barrels came to market as a result. We’d say that our net energy return was “one hundred barrels to one,” or 100:1. In this example, our mandatory expenditure was 1 out of 100, or 1 percent. Another phrase for this that you’re likely to encounter in the literature is Energy Returned on Energy Invested, which goes by the acronym EROEI.

I find this easier to visualize in graphical form:

In Figure 15.2, we’re comparing the relationship between energy out and energy in. The black part (above) is the amount of energy we put in (“invested”), and the gray part (below) is how much energy we got out (“returned”), representing the net energy that’s available for us to use for whatever purposes we desire. All the way to the left of the chart, the energy out divided by energy in yields a value of 50, meaning that 1 unit of energy was used to find and produce 50 units of energy. In other words, 2 percent was used to find and produce energy, leaving us a net 98 percent in the gray part to use however we see fit. This represents the surplus energy available to society; it’s the stuff that we use to create the order and complexity that we see all around us. As we scan across the chart, we can observe that the surplus energy available to society remains quite high all the way down to a net energy ratio of about 10, where it suddenly falls off a cliff. We might also note that this is yet another nonlinear chart in our lives.

Figure 15.2 The Energy Cliff

This figure expresses the relationship between energy invested and energy returned. Note that together the invested and returned energy always sum to 100 percent and the lines hit zero percent at a reading of “1” where it takes one unit to find one unit for a zero percent return.

Now I want to draw your attention to what happens on part of the chart between the readings of 10 and 5. The net energy available to society begins to drop off quite steeply and nonlinearly. Below a reading of 5, the chart really heads down in earnest, hitting zero when it gets to a reading of 1, which is where it takes one unit of energy to get a unit of energy. At that boundary, there’s zero surplus energy available and there’s really no point in going through the trouble of getting it.

Given that energy is the master resource, and no economic activity is possible without energy, we all care very deeply how much energy is available. What Figure 15.2 allows us to begin to appreciate is that it’s not “energy” we really care about, but net energy, the light gray part below, because that’s the area that literally makes possible almost everything that you care about. It allows the lights to come on, food to appear on your plate, warmth to fill your home, and the big brown truck of mail-order happiness to pull into your driveway.

To further explore why this is an enormously important chart, let’s take a look at our experience with net energy with respect to oil (Figure 15.3).

Figure 15.3 The Energy Cliff (2) and Oil

The energy returns of oil production over time have been declining.

Source: C.J. Cleveland, “Net Energy from Oil and Gas Extraction in the United States.”

In 1930, for every barrel of oil used to find oil, it’s estimated that 100 were produced, giving us a reading of 100:1, which would be way off to the left in Figure 15.3. By 1970, fields were a lot smaller and the oil was often deeper or otherwise trickier to extract, so, unsurprisingly, the net energy gain fell to a value of around 25:1—still a very good return with lots of light gray beneath it. By the 1990s, this trend continued, with oil finds returning somewhere between 18:1 and 10:1.7

It’s estimated that new oil resources found after the year 2010 will return a much lower net energy, perhaps as low as 3:1,