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Net energy yield from production of conventional oil

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  • Dale, Michael
  • Krumdieck, Susan
  • Bodger, Pat

Abstract

Historic profitability of bringing oil to market was profound, but most easy oil has been developed. Higher cost resources, such as tar sands and deep off-shore, are considered the best prospects for the future. Economic modelling is currently used to explore future price scenarios commensurate with delivering fuel to market. Energy policy requires modelling scenarios capturing the complexity of resource and extraction aspects as well as the economic profitability of different resources. Energy-return-on-investment (EROI) expresses the profitability of bringing energy products to the market. Net energy yield (NEY) is related to the EROI. NEY is the amount of energy less expenditures necessary to deliver a fuel to the market. This paper proposes a pattern for EROI of oil production, based on historic oil development trends. Methodology and data for EROI is not agreed upon. The proposed EROI function is explored in relation to the available data and used to attenuate the International Energy Agency (IEA) world oil production scenarios to understand the implications of future declining EROI on net energy yield. The results suggest that strategies for management and mitigation of deleterious effects of a peak in oil production are more urgent than might be suggested by analyses focussing only on gross production.

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  • Dale, Michael & Krumdieck, Susan & Bodger, Pat, 2011. "Net energy yield from production of conventional oil," Energy Policy, Elsevier, vol. 39(11), pages 7095-7102.
    • Handle: RePEc:eee:enepol:v:39:y:2011:i:11:p:7095-7102
    DOI: 10.1016/j.enpol.2011.08.021
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    2. Jingxuan Feng & Lianyong Feng & Jianliang Wang, 2018. "Analysis of Point-of-Use Energy Return on Investment and Net Energy Yields from China’s Conventional Fossil Fuels," Energies, MDPI, vol. 11(2), pages 1-21, February.
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    4. Delannoy, Louis & Longaretti, Pierre-Yves & Murphy, David J. & Prados, Emmanuel, 2021. "Peak oil and the low-carbon energy transition: A net-energy perspective," Applied Energy, Elsevier, vol. 304(C).
    5. Arvesen, Anders & Hertwich, Edgar G., 2015. "More caution is needed when using life cycle assessment to determine energy return on investment (EROI)," Energy Policy, Elsevier, vol. 76(C), pages 1-6.
    6. Jackson, Andrew & Jackson, Tim, 2021. "Modelling energy transition risk: The impact of declining energy return on investment (EROI)," Ecological Economics, Elsevier, vol. 185(C).
    7. Victor Court & Pierre-André Jouvet & Frédéric Lantz, 2015. "Endogenous economic growth, EROI, and transition towards renewable energy," Working Papers 1507, Chaire Economie du climat.
    8. Antal, Miklós, 2014. "Green goals and full employment: Are they compatible?," Ecological Economics, Elsevier, vol. 107(C), pages 276-286.
    9. Ramos Tercero, Elia Armandina & Sforza, Eleonora & Bertucco, Alberto, 2013. "Energy profitability analysis for microalgal biocrude production," Energy, Elsevier, vol. 60(C), pages 373-379.
    10. Brandt, Adam R. & Dale, Michael & Barnhart, Charles J., 2013. "Calculating systems-scale energy efficiency and net energy returns: A bottom-up matrix-based approach," Energy, Elsevier, vol. 62(C), pages 235-247.
    11. John Sherwood & Michael Carbajales-Dale & Becky Roselius Haney, 2020. "Putting the Biophysical (Back) in Economics: A Taxonomic Review of Modeling the Earth-Bound Economy," Biophysical Economics and Resource Quality, Springer, vol. 5(1), pages 1-20, March.
    12. Feng, Jingxuan & Feng, Lianyong & Wang, Jianliang & King, Carey W., 2018. "Modeling the point of use EROI and its implications for economic growth in China," Energy, Elsevier, vol. 144(C), pages 232-242.
    13. Xie, Minghua & Wei, Xiaonan & Chen, Chuanglian & Sun, Chuanwang, 2022. "China's natural gas production peak and energy return on investment (EROI): From the perspective of energy security," Energy Policy, Elsevier, vol. 164(C).
    14. Sgouris Sgouridis & Denes Csala, 2014. "A Framework for Defining Sustainable Energy Transitions: Principles, Dynamics, and Implications," Sustainability, MDPI, vol. 6(5), pages 1-22, May.
    15. Louis Delannoy & Pierre-Yves Longaretti & David. J. Murphy & Emmanuel Prados, 2021. "Assessing Global Long-Term EROI of Gas: A Net-Energy Perspective on the Energy Transition," Energies, MDPI, vol. 14(16), pages 1-16, August.
    16. Victor Court & Pierre-André Jouvet & Frédéric Lantz, 2018. "Long-term endogenous economic growth and energy transitions," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    17. Hongshuo Yan & Lianyong Feng & Jianliang Wang & Yuanying Chi & Yue Ma, 2021. "A Comprehensive Net Energy Analysis and Outlook of Energy System in China," Biophysical Economics and Resource Quality, Springer, vol. 6(4), pages 1-14, December.
    18. Victor Court & Florian Fizaine, 2015. "Estimations of very long-term time series of global energy return-on-investment (EROI) of coal, oil and gas productions," Working Papers 1510, Chaire Economie du climat.
    19. Bo Xu & Lianyong Feng & William X. Wei & Yan Hu & Jianliang Wang, 2014. "A Preliminary Forecast of the Production Status of China’s Daqing Oil field from the Perspective of EROI," Sustainability, MDPI, vol. 6(11), pages 1-21, November.
    20. David Grassian & Daniel Olsen, 2019. "Lifecycle Energy Accounting of Three Small Offshore Oil Fields," Energies, MDPI, vol. 12(14), pages 1-23, July.
    21. Lina I. Brand-Correa & Paul E. Brockway & Claire L. Copeland & Timothy J. Foxon & Anne Owen & Peter G. Taylor, 2017. "Developing an Input-Output Based Method to Estimate a National-Level Energy Return on Investment (EROI)," Energies, MDPI, vol. 10(4), pages 1-21, April.
    22. Adrien Fabre, 2018. "Evolution of EROIs of Electricity Until 2050: Estimation Using the Input-Output Model THEMIS," Policy Papers 2018.09, FAERE - French Association of Environmental and Resource Economists.

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    Keywords

    EROI; Peak oil; Energy quality;
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