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But if we hoped to rely on such oil for over half of our transport fuel source, since it is an energy drain rather than an energy source, the presumption at the field level that the energy inputs would simply be available will have difficulty scaling up to attempting to use such fields to provide liquid fuel to run over half the transport in an industrial economy.

So no serious investor should consider making that investment unless they had worked out the analysis as to why they could be confident that the energy inputs required for those kinds of oil fields at the contemplated scale would be available.

That hypothetical EROI flags a risk exposure that conventional oil fields have never been exposed to, since to date conventional oil fields have all been substantial energy sources.

Now, in practice, such an oil field is unlikely to be as wildly profitable as you hypothesize without substantial cost shifting or hidden costs. Certainly corn ethanol at an EROI of 1.01 would not be profitable if the full economic cost of production were to be charged to its producers, even though it is, as you say, taking something (corn starch) that is not a very useful energy source in its original form and turning it into a much more useful liquid fuel.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Wed Jul 24th, 2013 at 04:55:52 PM EST
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