Jacks Random Reflections
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Oil consumption vs. Energy consumption

Permanent Linkby Jack on Mon Oct 26, 2009 7:17 pm

We get an ongoing flow of oil consumption numbers. Isn't it interesting that despite substantial drops in global economic activity - including transportation and shipping - that the amount of oil hasn't declined much? If we in the U.S. face unemployment of 9.8% and U6 unemployment around 17%, then it seems odd that the oil used remains about the same.

Are we, perhaps, applying the wrong metric? Should we, instead, consider the energy we consume? Now if we examine our oil consumption through that lens, then the use of net energy has declined from previous levels. How so? Simply this. Old fields have produced oil with a low energy cost (a high EROEI). Often, new sources have a high energy cost (a low EROEI). So even though we're consuming as many barrels of crude as before, our actual consumption of energy has declined.

Suppose this notion is valid. What does it imply? If (if, not when) a recovery occurs, then the demand for energy must increase. But the available net energy per barrel will continue to decline. This implies that demand for barrels of crude will increase rapidly - and hence, the price will accelerate upward at a rapid rate. In turn, this suggests that any nascent recovery will last only a brief period before being crushed by substantially higher costs.

And all those new initiatives for renewable energy? They will create a demand for more net energy, thus exacerbating the problem. Still worse, the modest net energy from the new ventures will produce a flow of fuel, but with minimal (or negative) net available energy. Our civilization will starve for lack of energy, even as it gorges on liquid fuels.

True? Not true? Without extensive data, the above notion remains merely an idea. Nonetheless, it is presented for your consideration.

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