Cutler Cleveland of Boston University has reported that the EROI of oil and gas extraction in the U.S. has decreased from 100:1 in the 1930’s to 30:1 in the 1970’s to roughly 11:1 as of 2000 (Figure 1). But beyond the fact that society receives currently around 11 barrels of oil for every 1 barrel that it spends getting that oil, What does this mean?

Figure 1. Plot of three estimations of EROI for U.S. oil and gas.

The Environmental Kuznets Curve (henceforth EKC) was developed from a paper written by Simon Kuznets in 1955 titled Economic Growth and Income Inequality. His theory explained that the relationship between economic growth and income inequality forms an inverted U-shape graph with income inequality on the y-axis and economic growth (e.g. GDP/capita) on the x-axis. EKCs extend Kuznets’ original theory by stating that pollution increases as economies grow from agrarian to industrial, but as the population becomes wealthier a turning point is passed after which the amount of pollution decreases as income grows, forming an inverted U-shape (Figure 1). As such, EKC theory has been cited as a justification to prioritize economic development over environmental stewardship (Beckerman, 1992), and just last week the science reporter for the New York Times, John Tierney, wrote an article claiming exactly the same thing: “The richer everyone gets, the greener the planet will be in the long run.”

In August 2007, a post titled Extracting Heavy Oil: Using Toe to Heel Air Injection (THAI) introduced readers of The Oil Drum to a technology for producing an upgraded extra-heavy oil from Alberta Tar Sands without the environmentally messy and energy-intensive surface mining procedures that currently dominate extraction. The post provided a first-look at producing and partially upgrading Alberta bitumen in situ. In this post we make preliminary estimates of the Energy Return on Investment (EROI) of the THAI process.

The Alberta Tar Sands continued to garner interest through the first half of 2008 because of declining conventional oil production in Canada, the apparent success of the Steam Assisted Gravity Drainage (SAGD) process and the increasing price of crude oil. Today they are still of interest as the countries of North America (and around the world) desire cheap, abundant crude oil from politically stable regions (See Unconventional Oil: Tar Sands and Shale Oil - EROI on the Web, Part 3 of 6). However the subsequent financial collapse during the second half of 2008 has caused many tar sand projects to be deferred. In fact, Canada's oil-sands industry has hit the skids, spreading a deepening gloom over Alberta's economy, and to some degree, across the country. Some expansion projects that were under way in the Fort McMurray region have been put on the shelf, as oil companies slash their budgets to reflect the new economic environment in which they operate – that is – a world of lower oil demand and, at least compared to the summer of 2008, low oil prices.

Scaling biofuels from the level of the laboratory or pilot-plants to commercial production is the Achilles’ Heel of almost all biofuels. One major problem is that biofuels use feedstocks that are invariably less energy dense than their fossil fuel counterparts. For example, there are approximately 45 MJ per kilogram contained in both the finished product of gasoline and crude oil, while ethanol has an energy density of about 26 MJ per kilogram and corn has only 16 MJ per kilogram. In general, this means that large amounts of corn must be grown and harvested to equal even a small portion of our gasoline consumption on an energy equivalent level, which will undoubtedly expand the land area that is impacted by the production process of corn-based ethanol.

Figure 1. Map of the optimal gradient space for the production of corn-based ethanol within the United States. Colors correspond to EROI numbers listed in the figure caption. The grey areas represent locations without a significant amount of corn-production.