EROEI

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In physics and energy economics, EROEI (energy returned on energy invested), ERoEI, or EROI (energy returned on invested), is the ratio between the amount of energy expended to obtain a resource, compared with the amount of energy obtained from that resource. When the EROEI of a resource becomes equal to or lower than 1, that energy source becomes an energy sink and can no longer be used as a primary source of energy.

The natural or original sources of energy are not usually included in the calculation of energy invested, only the human-applied sources. For example in the case of biofuels the solar insolation driving photosynthesis is not included, and the energy used in the stellar synthesis of fissile elements is not included for nuclear fission. The energy returned includes any usable energy and not wasted heat for example.

1 Relationship to net energy gain
2 The economic influence of EROEI
3 Criticism of EROEI
4 See also
5 References
6 External links

[edit] Relationship to net energy gain

EROEI and Net energy (gain) measure the same quality of an energy source or sink in numerically different ways. Net energy describes the amounts, while EROEI measures the ratio or efficiency of the process. They are related simply by

Net Energy / Energy expended = E R O E I - 1

For example given a process with an EROEI of 5, expending 1 unit of energy yields 5 units, for a net energy gain of 4 units. The break-even point happens with an EROEI of 1 or a net energy gain of 0.

[edit] The economic influence of EROEI

High per-capita energy use is considered desirable as it is associated with a high standard of living based on energy-intensive machines. A society will generally exploit the highest available EROEI energy sources first, as these provide the most energy for the least effort. With non-renewable sources, progressively lower EROEI sources are then used as the higher-quality ones are exhausted.

For example, when oil was originally discovered, it took on average one barrel of oil to find, extract, and process about 100 barrels of oil. That ratio has declined steadily over the last century to about three barrels gained for one barrel used up in the U.S. (and about ten for one in Saudi Arabia). Currently (2006) the EROEI of wind energy in North America and Europe is about 20:1 ^[1] which has driven its adoption.

Although many qualities of an energy source matter (for example oil is energy-dense and transportable, while wind is intermittent), when the EROEI of the main sources of energy for a economy fall energy becomes more difficult to obtain and its value rises relative to other resources and goods. Therefore the EROEI gains importance when comparing energy alternatives. Since expenditure of energy to obtain energy requires productive effort, as the EROEI falls an increasing proportion of the economy has to be devoted to obtaining the same amount of net energy.

Since the discovery of fire, humans have increasingly used exogenous sources of energy to multiply human muscle-power and improve living standards. Some historians have attributed our improved quality of life since then largely to more easily exploited (i.e. higher EROEI) energy sources, which is related to the concept of energy slaves. Falling EROEI due to depletion of non-renewable resources poses a difficult challenge for industrial economies.

[edit] Criticism of EROEI

Measuring the EROEI of a single physical process is unambiguous, but there is no agreed standard on which activites should be included in measuring the EROEI of an economic process. In addition, the form of energy of the input can be completely different from the output. For example, energy in the form of coal could be used in the production of ethanol. This might have an ERoEI of less than one, but could still be desirable due to the benefits of liquid fuels.

How deep should the probing in the supply chain of the tools being used to generate energy go? For eg. If steel is being used to drill for oil or construct a nuclear power plant, should the energy input of the steel be taken into account, should the energy input into building the factory being used to construct the steel be taken into account and amortized? Should the energy input of the roads which are used to ferry the goods be taken into account? These are complex questions evading simple answers. A full accounting would require considerations of opportunity costs and comparing total energy expenditures in the presence and absense of this economic activity.

However, when comparing two energy sources a standard practice for the supply chain energy input can be adopted. For eg. consider the steel, but don't consider the energy invested in factories deeper than the first level in the supply chain.

Energy return on Energy invested does not take into account the factor of time. Energy invested in creating a solar panel may have consumed energy from a high power source like coal, but the return happens very slowly, i.e. over many years. If energy is increasing in relative value this should favour delayed returns. Some believe this means the EROEI measure should be refined further.

Conventional economic analysis has no formal accounting rules for the consideration of waste products that are created in the production of the ultimate output. For example, differing economic and energy values placed on the waste products generated in the production of ethanol makes the calculation of this fuel's true EROEI extremely difficult.

[edit] See also

Net energy gain
Embodied energy
Emergy
Energy balance
Heinberg, Richard (2003). The party's over: oil, war and the fate of industrial societies. Gabriola, BC: New Society Publishers. ISBN 0-86571-482-7.