Guest Post: Why Energy May Be Abundant But Not Cheap

Tyler Durden's picture

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

It doesn’t matter how abundant liquid fossil fuels might be; it’s their cost that impacts the economy.

Many people think “peak oil” is about the world is “running out of oil."

Actually, “peak oil” is about the world running out of cheap, easy-to-get oil. That means fossil fuels might be abundant (supply exceeds demand) for a time but still remain expensive.

The abundance or scarcity of energy is only one factor in its price. As the cost of extraction, transport, refining, and taxes rise, so does the “cost basis” or the total cost of production from the field to the pump. Anyone selling oil below its cost basis will lose money and go out of business.

We are trained to expect that anything that is abundant will be cheap, but energy is a special case: it can be abundant but costly, because it’s become costly to produce.

EROEI (energy returned on energy invested) helps illuminate this point. In the good old days, one barrel of oil invested might yield 100 barrels of oil extracted and refined for delivery. Now it takes one barrel of oil to extract and refine 5 barrels of oil, or perhaps as little as 3 barrels of unconventional or deep sea oil.

In the old days, oil would shoot out of the ground once a hole was drilled down to the deposit. All the easy-to-find, easy-to-get oil has been consumed; now even Saudi Arabia must pump millions of gallons of water into its wells to push the oil up out of the ground. Recent discoveries of oil are in costly locales deep offshore or in extreme conditions. It takes billions of dollars to erect the platforms and wells to reach the oil, so the cost basis of this new oil is high.

It doesn’t matter how abundant liquid fossil fuels might be; it’s their cost that impacts the economy. High energy costs mean households must spend more of their income on energy, leaving less for savings and consumption. High energy costs act as a hidden “tax” on the economy, raising the price of everything that uses energy.

As household incomes drop and vehicles become more efficient, demand for gasoline declines. Normally, we would expect lower demand to lead to lower prices. But since the production costs of oil have risen, there is a “floor” for the price of gasoline. As EROEI drops, the price floor rises, regardless of demand.

This decrease in real incomes and ratcheting-higher energy costs could lead to a situation where energy is abundant but few can afford to buy much of it.

The relative abundance of fracked natural gas and low-energy density fossil fuels like tar sands and shale has led to a media frenzy that confuses abundance with low cost. This article (via correspondent Steve K.) illustrates the tone and breezy selection of data to back up the "no worries, Mate" forecast of abundant cheap liquid fuels: An economy awash in oil. (MacLeans)

Not so fast, reports Rex Weyler of the Deep Green Blog. Here is Rex's response to the above article.


Fair point about the volume of unconventional – deepwater, shale gas & oil, tar sands, etc. – hydrocarbons. These reserves may even produce peakies and/or sustain the plateau longer than some observers believe. However, biophysical restraints remain real; peak oil remains real; peak net energy appears imminent, and the impact on economies is already being felt globally. Points to consider:

The dregs: In spite of huge shale & tar reserve discoveries, peak discoveries remain well behind us, in the 1960s. My father, a petroleum geologist his entire life (and still, in Houston, Kazakstan...), knew about shale and tar deposits when I was a teenager in the 1960s. He called them "the dregs." These deposits are not really news within the oil industry. And they are the dregs because of high cost, low EROI and rapid depletion.


EROI: The volume of these low-net-energy reserves could extend peak oil production for decades, but at fast-declining net energy returned to society. We high-graded Earth’s hydrocarbons, just as we high-graded the forests, fish, copper, tin, water, and so forth. We’ve taken the best, highest EROI hydrocarbons, the 100:1 free-flowing wells of the 1930s and 40s. We’re now into the 3:1 and 2:1 tar sands.


For example: damming rivers in Northern BC, to send electricity to the fracking fields, to send shale gas to Alberta, to cook the boreal substrate, and mix the black sludge with gas condensate shipped in from California and by pipeline from Kitimat to Fort McMurray, to mix with the bitumen, to pipe to Vancouver Harbour, to ship to China, to burn in a power plant, to supply electricity to their manufacturing empire.


By the time any of this energy gets used to actually make something useful to someone in society, and by the time that user puts that usefulness to work to feed, clothe, house, or heal anyone, there is no net-energy left.


Our food in North America is already negative net energy by1:10 at best, up to 1:17 or worse for much of the crap we eat. This matters. EROI at well-head, EROI at the consumer pump, and EROI at the point of society’s actual service all matter.


Well-head EROI, counting all public subsidies, is now in the 5:1 to 1:1 range for all these “non-conventional” (meaning the dregs) hydrocarbon deposits. Money can be made. Some energy can be delivered to Society, but this is already way below the well-head EROI that could likely run the current complexity of the human society, much less “grow” economies.


The degrading reserves take us down along the EROI curve, in which Net Energy returned to society falls off a cliff around 6:1, and is in freefall by 3:1. Net-energy alone kills the idea of much economic growth from a booming hydrocarbon bonanza (other than some great stock plays along the way). Furthermore, depletion renders the idea ever more unlikely:


Depletion: Depletion rates on these gas fields have arrived quickly and appear drastic by historic industry standards. The fracking fields peak early and decline swiftly. In the Bakken shale field – one of the great North American saviour fields – the average well has produced ~ 85k barrels in its first year and then declined at about 40% per year. The newer average wells peak earlier and decline faster, so the overall trend is down.


The depletion moves the production process along a function that approaches zero net energy... Down we go along the EROI curve... 5:1 .. 4:1 .. 3 .. 2 ... and then really complex society breaks down. An Amish farmer gets 10:1.


The Bakken break-even oil price is $85, so there is no profit in any of this right now, but of course there will be if global depletion exceeds demand from crashing economies.


Depletion – both in volume and quality – and depletion for all industrial materials and energy stores, EROI, and economic stagnation all work as feedback loops. No one knows the bifurcation points in this complex system. We try to predict those, but miss by a longshot sometimes. Complex societies crash in this manner, declining returns on investments in complexity, from Babylon to London and Washington. See J. Tainter, H. Odum, N. Georgescu-Roegen, Hall, Cleveland, et al.


Here are some depletion data on The Oil Drum: Is Shale Oil Production from Bakken Headed for a Run with “The Red Queen”?.

See A Review of the Past and Current State of EROI Data (PDF) by Hall, Cleveland, et al. (source:

There is a lot of EROI data here: Obstacles Facing US Wind Energy. (The Oil Drum)


Below is the EROI curve, only the “We are here” point at 10:1 is the modern average, and from a few years ago. The new conventional stuff is coming in lower and and the enhanced recovery, shale and tar fields are already over the falls at 6 or 5:1 for the better stuff (best dregs), and 3:1 to 1:1 for the dregs of the dregs, the deeper shale and tar sands.



So yes, our friends are correct about the great volume of tar, shale, deep, heavy hydrocarbons, but increasing production of world liquid hydrocarbons much beyond the current 85mb/d is not likely, and increasing net production is even less likely. As you may know, net production per capita peaked in 1979. Actual net production is peaking now. This is the figure that counts: Actual current Net Production Delivered to Society.


Growing this figure is technically possible, and may happen with some massive production bonanzas, i.e. we may see actual production push above 90mb/day, or higher, and may even see net production increase, but a major glut of hydrocarbons? No. Not remotely.


When settlers first came to North America, they found copper nuggets the size of horses exposed in river beds. China just bought the best known, last, huge, moderate-to-low-grade, strip-minable, high-cost copper field in the world, in Afghanistan, for $billions over the western bids. There will be others, but rest assured: They will be lower grade, higher cost, and the competition will be more intense. When was the last time you bought a “copper” fitting at the hardware store. They’re crap. The alloys are crap. Because the ore quality is in decline and the costs of extraction are rising. Same with oil, trees, tin, coal....


Make no mistake: The war for the dwindling materials and energy flow is well underway.

Thank you, Rex, for this commentary on EROI and the quality and cost of hydrocarbon resources. Complex systems like economies are nonlinear, and so history does not necessarily track linear extrapolations of present trends. With that caveat in mind, the preponderance of evidence supports the notion that fossil fuel energy may remain abundant in the sense that supply meets or exceeds demand in a global recession, but the price of liquid fuels may remain high enough to create a drag on growth, employment, tax revenues and all the other economic metrics impacted by high energy costs.


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LawsofPhysics's picture

Infinite growth in the population of any one organism in a finite world (where energy is also required to turn biological cycles in order to maintain the environment for said organism)?  Good fucking luck with that Dr. Krugman.

I believe that the late George Carlin said it best, "The planet will be just fine, it's the people that are fucked."

Bloody sheep.

kliguy38's picture

But but watta bout my Caddy.....can I still get to the buffet at KFC on Tuesday nite..........buuurp

iDealMeat's picture

Que the "udder world" shit head in 3..  2...


Encroaching Darkness's picture

Not buying it, Charles.

"All the easy-to-find, easy-to-get oil has been consumed". Really? You have omniscient, omnipresent knowledge of this? When large areas of Burma, Indonesia, etc. have never even been explored, let alone drilled for oil?

It may also escape you that when I was in college (the first time) oil from tar sands, shale, etc. was "unusable", "unrecoverable", and so forth. Now it's not only recoverable but usable, and headed down pipelines.

No one wants to over-sell future progress.....but it shouldn't be ignored, either. Or is this a propaganda play for the sheeple to invest in Exxon Mobil instead of smaller players like Cheniere?



Citxmech's picture

The only reason all that tar sand and shale shit is "recoverable" now is because the price per barrel is so high - which is exactly what the EROEI chart tells us.  Unless Burma and Indonesia have oceans of light sweet crude bigger than Gwahar and Cantarell, it won't matter - consumption is increasing as supply is diminshing - and we need to do more than make up for field depletion - we would need to increase supply beyond that to accomodate growth.  It ain't gonna happen.

Encroaching Darkness's picture

"The only reason all that tar sand and shale shit is "recoverable" now is because the price per barrel is so high." NO, it's because a ton of talented engineers and scientists devised METHODS that work, that allow tightly-held natural gas and oil in tar sands and oil shales to be recovered. ALL THE MONEY IN THE WORLD won't turn hydrogen into uranium - the process just doesn't exist. But in my lifetime, the processes to extract, recover and refine these tightly-held hydrocarbons were invented.

Burma and Indonesia are just two examples of the unexplored surfaces of the earth - what's in Antarctica? Oh, yeah, we don't know - no one's looked, for political reasons, like ANWR. There are other examples - but keep denying it, your desired doomsday will get here - maybe not tomorrow, nor next week, but EVENTUALLY there will be no more hydrocarbon fuels ANYWHERE. Right?

I am not blind to the depletion of existing resources - but are you blind to the possibility (likelihood) of undiscovered resources? Which is what I was getting at in the first place.

Another point - Ghawar and Cantarell are declining. Ghawar, probably due to real depletion. Cantarell, more likely due to PEMEX being used as a cash cow and under-invested in maintenance and exploration for several successive Mexican administrations. How many more places (like maybe Venezuela, Argentina, Libya...) are declining because politics makes for bad oil operations? Might some of these fields be reworked for higher production if someone who actually understood oil operations was in charge?

And finally, "oceans of light sweet crude" are not mandatory - Kern Crude (Bakersfield, CA) is heavy, sour and rather asphalty (napthenic in nature), but we made gasoline out of it routinely - just have to have the right catalysts, hydrotreaters and so forth. We have improved the art since Titusville, and even more improvements might be possible.

Or we could sit in our sackcloth and ashes, wailing "Woe is me..."

malikai's picture

You are aware that Cantarell is already under a massive gas injection scheme right now? And you're saying they're not investing enough?

Encroaching Darkness's picture

Whether or not Cantarell is gas-injected or not might be due to the way it was run some years back - if properly managed, the gas injection might have been delayed, or totally unnecessary. Investment due to incompetence or malpractice is different from investment necessary under competent operation - and usually, orders of magnitude greater, so today's costs are directly related to yesterday's practices.

If you blow down the gas cap on an oilfield, you have to start pumping. If you fail to keep the wells worked-over and maintained, production declines. Are you saying that PEMEX, long the home of political toadies and similar, has the best technology, best practices and sufficient maintenance and operating funds to keep their fields at the peak of performance?

Waste time, waste resources, waste money - PEMEX in a nutshell.

malikai's picture

Well, it's possibly true that going the injection route in 2000 was a mistake. I don't know, I wasn't there. Either way, that oil has been used. Now Pemex(and many others) is stuck in the world of diminishing returns for greater capex. Which, ironically, is the entire premise of the article here. The premise of diminished returns via the lens of EROEI.

Flakmeister's picture

Admit it, you really don't have a clue what actually happened with Cantarell, do you?

Also, you seem to think that Mexico should pump whatever they can, as fast as they can, for your benefit, which may not align with Mexico's best long term interests...

Encroaching Darkness's picture

"Admit it, you really don't have a clue what actually happened with Cantarell, do you?"

I spent some years in oil refining, and had a direct interest in where our crude supplies came from, and how sustainable they were - if you know a field is declining, you don't adjust the linear program to account for increasing volumes of Cantarell crude in future years. What involvement do you have with oil production, field management or anything else oil-related?

"Also, you seem to think that Mexico should pump whatever they can, as fast as they can, for your benefit, which may not align with Mexico's best long term interests..."

Mexico must determine Mexico's long-term interests, but their politicians seem to keep getting in the way. Also, our politicians....

But please enlighten me. What do you see as Mexico's long-term interests? Sustaining oil production at the highest practical rate to maximize returns before the peso devalues further, or......?

Flakmeister's picture

Don';t change the subject or try to set up a strawman...

You accuse PEMEX of being incompetent wrt Cantarell without having a clue about what actually happened...

Hint; they never blew down the gas cap....

Cantarell was sucked dry and production fell off a cliff, despite the worlds largest N2 plant providing injectable gas...

Encroaching Darkness's picture

If it was "sucked dry", then why did they start the N2 injection to begin with? Thanks for proving my point, that PEMEX is incompetent. But that's not the story I got at the time, which had to do with failure to maintain wells, invest in the infrastructure and generally keep the knowledgeable personnel in positions of authority.

How did I change the subject? Isn't that what you just tried to do? From the incompetence of PEMEX to my own experience? Flakmeister, all right...

Flakmeister's picture

You are hopeless... the N2 dramatically increased production for a few years then it collapsed.... 

PEMEX put all their eggs (foolishly) in the Cantarell basket, the #2 field in the world in its day...

Why don;t you look at Mexican net export revenues and get back to us...

Tommy Gunner's picture

I call your BULLSHIT

I have lived in indonesia for 5 years - there have been oilmen in this country for decades.   What the christ do you think it's the moon????   They have crawled all over this place looking for oil...

You are making yourself look stupid so best to just stop typing

Tango in the Blight's picture

There has been oil exploration in Indonesia since 1890 when Royal Dutch Petroleum started drilling there.

Citxmech's picture

"NO, it's because a ton of talented engineers and scientists devised METHODS that work, that allow tightly-held natural gas and oil in tar sands and oil shales to be recovered."

Are you suggesting that these methods require no additional energetic inputs?  That's what EROEI is all about - NET energy.  If you're using more energy to get lower grade product, your efficiency and net return is going down on two fronts.  Applied technology like these oil-sand extraction operations are expensive both in terms of materials and processing costs and, therefore, their net energy return is much lower than the wells Jed Clampett and Co. were sinking back in the day.

Regarding sitting around in sackcloth wining - Hardly.  I'm taking proactive steps toward personal and local resiliency as we hurtle toward a lower-power future not predicated on "eternal exponential growth."

Encroaching Darkness's picture

No, I'm suggesting that these methods DIDN'T EXIST back thirty years ago. They do require energy to implement - but better, less energetic methods might be discovered in the near future, just as these were. If NET energy is all that's important, we need to build lots of nuclear reactors right now, before wasting money (and energy) building solar panels. The argument must be more involved than JUST EROEI - and even granted EROEI is RISING for PRESENT methods and applications, it only takes one discovery, method improvement or source improvement to change the chart.

That, to me, is what this is really all about - let's draw charts based on current, state-of-the-art conditions, and extrapolate. Therefore, barring any new changes or improvements, we will run out of economically - extractable energy from fossil fuel sources in the year XXXX. But those two assumptions, "barring any new changes or improvements..." are unsupportable, too. Just like those Victorians could calculate "By the year 2020, the streets of New York City will be eight feet deep in horse excrement..."

By the way, I'm not sitting around in sackcloth either - or buying stocks based on exponential growth. But, I do own some shale drillers, some junior gold miners, and the downstairs closet has some food in it ... just in case.

Flakmeister's picture

This says all we need to know about your insight:

That, to me, is what this is really all about - let's draw charts based on current, state-of-the-art conditions, and extrapolate. Therefore, barring any new changes or improvements, we will run out of economically - extractable energy from fossil fuel sources in the year XXXX

That is not how oil production works, 40 years of reserves at current consumption is in reality a lot more like 160 years of production at an average of 1/4/ the rate...

Encroaching Darkness's picture

"That is not how oil production works, 40 years of reserves at current consumption is in reality a lot more like 160 years of production at an average of 1/4/ the rate..."

Possibly, AS LONG AS NOTHING CHANGES. Which is sort of where I started.....

Flakmeister's picture

Oil fields are always changing.... out with the old, in with the new, except the new ain;t what they used to be...

Tommy Gunner's picture

Question for you:

If we discovered a planet the size of earth that was covered in a 10km deep ocean of high grade oil - would be be saved?

Think about that

Thinkor's picture

We need safer and cheaper nuclear reactors that use thorium not uranium.  It is amazing how little has been accomplished under Bush 2 and Obama.


xoddam's picture


Alas, Encroaching, your assertion doesn't match history.  The techniques which enable profitable exploitation of oil and methane within shale source rock are significantly older than 30 years.

Directional drilling has been practiced since the early 1930s.

Deep fracturing has been practiced in the oil industry since the 1860s with explosive charges, and using hydraulic techniques since 1949.

No-one would say that these techniques have not improved since they came into widespread use during the shale oil boom, but equally there is no question that it is the high crude oil price since 2005 which has enabled said boom.  Improvements in directional drilling and fracturing have been incremental and evolutionary over many decades.  Any accelerated development in the last 7 years is entirely due to high prices.


Altavoz-de-Verdad's picture

Indonesia has been thoroughly explored and produced.  It used to be a member of OPEC.  It is past peak and is a NET IMPORTER OF CRUDE OIL.



Tommy Gunner's picture

Thanks for that post.... this guy is a donkey with his Indonesia bs.


And as for Burma if there were big oil reserves there Burma would receive the iraq treatment

MeBizarro's picture

Complete garbage.  Most of the tar sand oil isn't economically return for a positive ROI below $60/barrel and oil shale isn't at below $80/barrel.  The days of $20-$30/barrel for West Texas crude spot prices are over because the ability to bring on new supplies of light, sweet crude fast enough to offset declines in existing production are over. 

Urban Redneck's picture

Priced in 2012 USD, priced in pre-1971 USD, priced in pre-1964 US coinage, or priced in Gold?

Consumption isn't increasing anywhere near as fast as the US money supply.



malikai's picture

You figuring we're going to find another two Ghawars or so in Burma or Indonesia? lol..

By the way, Indonesia used to be an OPEC member, back when they actually exported oil. Something tells me that if there was anything substantial left there, it would have been found.

LawsofPhysics's picture

The "productivity" of oil wells and oil fields look identical to the charts above.  Natural gas wells are even worse and all this information is publically available (  Do some digging/research and wake the fuck up.  Lots of fossil resources on the planet still (good news), accessing them is another thing altogether (not so good news).


NotApplicable's picture

Why don't you just wear a big sign that says...

I don't understand what EROI is.

Encroaching Darkness's picture

For the same reason you're NOT wearing a big sign that says,

"I know where every oil deposit worldwide is, how much recoverable oil is in it at a given price, and which technologies will or will not be invented historically for the next hundred years".

HINT: It's not because the sign would be too big to wear!

epwpixieq-1's picture

It is always terrible idea to argue with people who do not understand technology. Fundamentally Technology ( it is not magic, although it may look to be for the people who do not understand it ) is based on the physical laws, and they for our luck can not be broken ( at least easily ), so I am sure that we will have "Encroaching Darkness" in our life time, and we will not progress as civilization, UNLESS we use/harness the real natural electrical forces that are all around us ( hint read and UNDERSTAND Tesla, he was the first but definitely not the last to realize the magnitude of these forces, and the good they can bring when harnessed ).

Regrettably, due to the innate inability these forces to be CONTROLLED ( extracted in a restricted region, think location and control on energy resources ), they will be developed only after we pass thought the "Darkness", and (maybe) exit on the other side as a species with changed thinking toward nature and growth. So in any way say "Astalavista" to the current civilization, and welcome the morphing times ahead.

Uncle Remus's picture

Any sufficiently advanced technology is indistinguishable from magic. - Arthur C. Clarke


Voodoo on the other hand...

Tommy Gunner's picture

You get the dunce cap of the day.

Yes we are discovering more oil - but it's EXPENSIVE to extract.  What don't you get?

Do you think this is going to reverse and suddenly we are going to find oceans of oil pooling in some land that time forgot?

Of course not - the easy stuff has been found and mostly used.  Even with improving technology the remaining stuff will get increasingly expensive.

And then guess what ......  it will take one barrel of oil to extract one barrel - and at that point we will be fucked.

Can you please tell me you understand the logic behind that?

Encroaching Darkness's picture

In what way? Or are you just into baseless character assassination generally?

I gave examples - unexplored surfaces of the Earth, better technologies invented in my lifetime, EROEI being not the only deterministic factor - what do you have, aside from insinuation without example?

I will give you a chance to redeem yourself, whether or not you deserve it.

michael_engineer's picture

A variant of this :


A second highly effective technique (which you can see in operation all the time at is 'consensus cracking.' To develop a consensus crack, the following technique is used. Under the guise of a fake account a posting is made which looks legitimate and is towards the truth is made - but the critical point is that it has a VERY WEAK PREMISE without substantive proof to back the posting. Once this is done then under alternative fake accounts a very strong position in your favour is slowly introduced over the life of the posting. It is IMPERATIVE that both sides are initially presented, so the uninformed reader cannot determine which side is the truth. As postings and replies are made the stronger 'evidence' or disinformation in your favour is slowly 'seeded in.' Thus the uninformed reader will most like develop the same position as you, and if their position is against you their opposition to your posting will be most likely dropped. However in some cases where the forum members are highly educated and can counter your disinformation with real facts and linked postings, you can then 'abort' the consensus cracking by initiating a 'forum slide.'

Encroaching Darkness's picture

A) ZH is not about "consensus", at least as far as I was aware. It is about TRUTH. Now, do you have the truth in regard to EROEI and energy production? Do you in fact know, that  EROEI is the limiting factor on energy production and you already know where all the oil is, what it will cost to develop it, and which technologies will / won't be present to develop it, as I premised above?

B) Consensus among whom? ZH posters? World energy authorities? Oil production companies themselves? I think you will find that these all do not agree.

C) Fake account? I have been commenting here for over a year. And you?

D) Weak premise? Which ZH poster is omniscient, you?

E) There obviously was no "consensus" here to begin with; it is a discussion, so that new facts are continually introduced. Other posters on ZH have disagreed with CHSmith's columns in the past, I am no different. You seem to believe that I am dishonest, as though no one could possibly disagree with CHSmith's column's ideas as presented. I beg to differ; I have some background in the oil industry, so I am not uninformed. I can still be WRONG, but it is on my doubters to prove it, not just cast aspersions.

You seem to be honest, so I will admit your objection. But, I am not using - "Technique #2" - since there was no consensus to begin with. From the green arrows, some others agree with my point of view. Try again, if you have better.

RichardP's picture

Michael - either his argument has merit or it does not.  If argument has merit, trying too hard will not damage it.  If argument has no merit, trying too hard will not help it.  It doesn't matter if he is trying too hard.

Encroaching - a small point here:  EROI is not a limiting factor.  You have stated several times in this thread that it is.  It is the inputs that go into the formula for calculating EROI that are or are not a limiting factor.  The EROI just reflects those inputs.  You probably already know this, but your language on this issue is confusing.

Encroaching Darkness's picture

"It is the inputs that go into the formula for calculating EROI that are or are not a limiting factor.  The EROI just reflects those inputs. "

Fair enough - EROEI is sort of a restatement of thermodynamics - "you can't usefully extract energy from a source that requires more energy to produce than the product provides" - is that a fair restatement? Tough to argue that - except -

Another poster down below mentions problems with the EROEI calculation, among them "boundaries" and so forth - you can read it below. The point he makes is that the calculation is kind of "fuzzy" - where do you draw the line between the energy invested and that gained? How do you decide what the inputs are?

As to trying too hard - perhaps. I try not to argue for just the sake of argument, even if it seems that way to another. I will stop here - mainly because I have an early flight to catch tomorrow, and may not have decent Internet access for a few days. This thread will die by then, so if someone else wants to claim "victory" by default, you're welcome.

Cheers and best wishes to all, and to all a good night.

Tommy Gunner's picture

I love it when you get angry. 


Uncle Remus's picture

It's called "betting on the come".

Tommy Gunner's picture

Can you do this for me - click this link  Take the test then come back and post your result

swmnguy's picture

I have no more knowledge of this than what I read in magazines.  But it seems to me that for at least 40 years, I've heard about oil shale, oil sands, etc.  All that time I heard it would never be commercially viable unless oil was over $80 a barrel, or some (at the time) unthinkably astronomical price.  Now oil has reached those levels, and as you say, smart people have figured out how to extract it, at a higher cost in energy and capital than had ever been considered feasible before oil broke past $80 a barrel.  I'm sure those smart people, such as yourself, will continue to come up with ingenious ways to extract energy.  But will you be able to get more energy out than you have to expend to get it, and will it be possible to sell it at a price people can afford?  I think that's more Mr. Smith's point, and I think it's a valid question.

Encroaching Darkness's picture

"But will you be able to get more energy out than you have to expend to get it, and will it be possible to sell it at a price people can afford?  I think that's more Mr. Smith's point, and I think it's a valid question."

Will scientific progress reduce EROEI of fossil fuels, right now? Probably not; I remain open to the possibility in the future, perhaps even the near future.

Pricing? That's another question, full of politics, supply and demand, and other things I cannot begin to predict. But consider ....

When Washington was President, aluminum was "electrum", very expensive, and made in laboratories, hence the capstone of the Washington Monument. When the cryolite - electricity process was commercialized, the cost came way down and aluminum became an everyday material.

Why is it so hard to consider something similar happening for shale oil, tar sands, or any other energy source? There are thermodynamic limits, of course, but the best solar cells were 18% efficient when I was in junior high; nowadays, the best run about 38%, and graphene-based solar cells appear to offer even better results. And multi-layer solar cells, using more of the solar spectrum than single layer cells, even better yet.....

Scientific progress will not guarantee we will suffer no effects from our own stupidity, but I refuse to put any credence in politicians, bankers or any other source.

Thanks for a civil question, I hope I answered at least part of it.

Tommy Gunner's picture

IF, what, but, shit, piss, fuck, whatever...

Ya and maybe we will find The Precious and it will provide an unlimited stream of free energy...  Or maybe the Dallas Cowboy Cheerleaders are going to knock on my door and ask about the orgy.

Face the facts Jack.  Extraction costs are INCREASING.  There is nothing that would lead anyone to believe they are going to decrease. 

The reality is we live on a finite planet - we have spread into every single corner of this finite planet trying to find energy - christ we are even in the mountains of afghanistan mining these days - you can't get more remote than that.

So pray fucking tell how extraction costs for oil are going to get cheaper when the oil is harder to get at?

Tommy Gunner's picture

Indonesia?  In case you weren't aware big oil has been in indonesia for decades.  I live in Indonesia.  It ain't the moon buddy.

And if Burma has oil rest assured we would have long ago done an Iraq on them.

You simply haven't got a clue mate

Dr. Sandi's picture

It's starting to come down to triage. Which energy will we burn to get the petroleum we need for the mobile machine applications that are essential to our way of life. We haven't come up with a viable electric monster mining truck, for example. But it IS an electric truck if it runs on tar sands from Canada that were primarily extracted with BC Hydro power.

The ghost of Rube Goldberg is alive and smirking.