Understanding EROEI

The first concept we need to understand to weed through the conflicting information we hear about the world’s oil supply is a simple formula, EROEI. It stands for “Energy Returned over Energy Invested.” Energy returned is the sum of all useful work that can be performed as the result of the process, including work that can be used to produce additional energy. Energy invested is the sum of all energy that would otherwise be available for human use. It does not include the “raw” energy of sunlight, wind energy, or crude oil.

If I can invest one unit of energy (could be calories, kilowatts, or joules; it doesn’t matter which unit) and get back 100, that’s a good trade. On the other hand, if I get back only two units for every one I invest, I begin to wonder whether I want to invest the effort. If I get back only one for each unit I invest, I’m just pushing energy around for no good reason. And if get back less than one unit for each unit I invest, well that’s just dumb.

In the first days of oil extraction in the U.S., it was not uncommon to get back 50 barrels of oil for every barrel consumed. And that’s still the case with the aging fields like Ghawar in the Middle East. Now, because all the “gushers” are tapped out, it’s more typical to get rates of 3:1 or even less from new wells. The average EROEI for U.S. domestic oil extraction today is a shade under 10:1 and dropping.

And when someone tells you how much conventional oil there is remaining in the world, remember that the easy oil is gone or going. What is left will be oil that is in deeper waters, in less hospitable climates, harder to find, and in smaller deposits. All that difficulty translates to more and more unappealing rates of EROEI.

So the oil will still be there, there will still be lots of it, and we will still be able to get at it. But when it takes more energy to get it than we get back, continuing to extract it would be, well, dumb.

It’s worth noting that the concept of EROEI is incomplete in one important sense: it makes no attempt to include depletion as “energy invested.” So in EROEI terms, an extraction process that consumed all quantities of an available resource within one year might seem equivalent to or superior to one that carefully nursed that same resource to last 15-20 years.