Oil production and consumption is higher than ever and projected to keep increasing to 2030 (though I do not personally believe this).
The demand growth is driven by the transportation sector, particularly in the developing countries.
Despite the recent successes of electrical cars, auto fuel consumption is still rising, and the absolute growth in conventional auto sales is, incredibly, almost one hundred* times larger than growth in electric car sales (an extra 3.1 million conventional cars were sold worldwide in 2016 cf 2015).
And even though you could argue that we can see the beginning of the end for petrol powered cars, industries such as construction, mining and agriculture - not to mention air travel - are much harder to convert to electricity.
Sooo... I expect we will be reliant on oil for a while to come yet.
*edit: sorry that is probably wrong, according to some sources the electric vehicle market grew by almost 300,000 vehicles per year... although that depends just what is counted as "electric". In any case, electric cars have a huge gap to close just to arrest the climb in conventional vehicle sales.
Locally-generated solar electric power to charge the batteries is also easier in a farm environment, and makes direct financial sense.
The same dismounted tractor batteries, when not in heavy use, e.g. during winter, can work as a "power wall" to supplement the solar power during dusk when days are shorter.
Doesn't that run into the same problem as biofuels? In a farm, most places where you could put a solar panel are also places where you could be growing more food.
Alternative feedstocks like Miscanthus don't have this issue, and neither does solar. It can use marginal land that is not otherwise profitable to farm.
But not before that.
It's still 1/300th of all cars sold, so it's not mainstream, but the tremendous growth is there (see the graph on the first article). It's actually the U.S. that's lagging behind.
Hope that will be true soon.
Ahem: that's because of "political issues". You should remain very worried (and vigilant) about the direction of energy policy under the incoming administration.
You don't need paying customers to be profitable, just a friendly government.
Here in the uk we subsidise fossil fuels far more heavily than renewables and there are no plans to change that picture - actually, oil and gas subsidies are increasing, to "help maintain profitability for an important British values industry".
Never underestimate the power of wealth transfer. Volkswagen, thyssen krupps, Hugo boss, ford - none would exist today without vast piles of state gifts - and that's the tiny readily visible tip of the iceberg.
No, oil is here to stay for as long as is convenient. Renewables will continue to be kicked into the long grass because policymakers will be rich and dead by the time it gets truly awful. Oil makes them rich today.
And it's cheaper than ever for the government to do.
As long as we never try to pay it back.
The wise investor knows that what government giveth, government can take away after the next election, and when is that election due? Before or after the break-even date for the investment?
Here's a recently announced coal plant closure:
the local job options could be pretty limited in far-western Montrose County once two of its major employers close their doors, eliminating what are currently 55 jobs at the plant and 28 at the mine.
According to the EIA, the Nucla plant generated 416,150 MWh in 2015 for an average annual power of 47.5 megawatts: http://www.eia.gov/electricity/data/browser/#/plant/527 That's an abysmal productivity per employee (or a fabulous job source, depending on your perspective): 0.86 real annualized megawatts per employee at the plant ; 0.57 megawatts per employee if you include the mining jobs.
A well-sited utility scale solar farm like Desert Sunlight can produce an average annualized power of 147 megawatts with just 15 full time employees, for a ratio of 9.8 megawatts per plant employee.
Replacing old coal plant generation with equal MWh from favorably sited solar requires only ~9% of the number of permanent employees, if Nucla is a typical case for an older coal plant. That's a nightmare number if you're relying on the coal industry for your livelihood, or a great opportunity if you're looking for cost reductions in a competitive electricity market. The fixed O&M costs for solar are already the lowest of any utility scale electricity source; once the capital costs get low enough it has winning costs across the board in any reasonably sunny area. That's for instantaneous cost of generation, anyway, which still has plenty of competitive opportunities in most regions before storage has to be considered.
Every industry loves to brag about "creating jobs" when beseeching governments but that's another way of admitting to "creating costs" (that are then passed on to buyers). The explosion in solar and wind jobs is a temporary effect of rapid expansion; most of that employment is in installation rather than running installed plants, manufacturing equipment from raw materials, or mining the raw materials. There's a lot less work in operating a solar plant than building it and the operational phase is a lot longer. If the American solar industry had already reached steady state (just enough construction to keep new capacity matched with retirements), I believe that the full life cycle labor intensity per MWh would be significantly lower than that of a steady state coal electricity system. And the labor intensity is declining further because a few major trends in PV tech (higher module efficiency, longer module life, longer inverter life), though not explicitly about reducing labor inputs, imply significant further labor reductions.
I can't imagine anywhere people would accept going back into living inside a smog, dying earlier due to respiratory problems, and forgetting that the sky is blue.
The only trend around is on the other direction: people pressing their governments into cleaning coal plants on the less developed countries.
Having said that, I believe there are several billion dollar funds looking to invest in solar and their main problem is a lack of projects to invest in, so solar is doing okay from an ROI perspective at the moment.
You can't make plastic from coal. More and more items are being manufactured from plastic, which comes from oil. There is more to this narrative than what you put in your gas tank.
(The methanol could come from renewable electricity and CO2 extracted from seawater, instead of coal, if renewables get cheap enough. Or you can make methanol from waste wood, corn stover, all kinds of biomass.)
As a solar panel owner, I want to know, is this a response to the tax credit going away or is there something else of which I am not aware? If solar is able to stand on its own, the tax credit would seem to have served its purpose. The discontinuity in the level of feasibility when it goes away will not be fun, but I thought that people expected that to happen when it eventually does go away.
What kind of/magnitude of subsidies does oil and gas enjoy?
$3.2bn / year for fossil fuels, about half of what went to renewables
In particular, the $3.2bn/year is a tax write-off sort of 'subsidy', not a grant sort of subsidy, which I believe solar has received recently (section 1603).
Without doing more digging, I can't tell whether what those oil and gas write-offs are for. Exploration? Research?
The Wikipedia article cites another article that has the breakdown (over a period of years):
1. Foreign tax credit ($15.3 billion)
2. Credit for production of non-conventional fuels ($14.1 billion)
3. Oil and Gas exploration and development expensing ($7.1 billion)
Similarly, the study counts funds used to support carbon capture and storage programs1 as a fossil fuel subsidy, despite their potential to reduce the emissions associated with burning coal.
If that's counted against oil and gas 'subsidies', that doesn't seem right.
Foreign Tax Credit ($15,300) - IRC Section 901. This is a generally applicable credit that is intended to enable taxpayers earning income or profits abroad to avoid double taxation.
Wait - so a good 40% of the total is actually a non-subsidy that is the consequence of the US having a tax treaty with a foreign country? Not being able to double-tax oil and gas companies is considered a 'subsidy'? The US has a tax treaty with just about every civilized country in the world that has provisions to avoid double-taxation because to do otherwise would be pathological. Counting that is 40% of the 'subsidy'?
If Exxon has to pay a royalty of $1/barrel to Nigeria for access to their oil fields, rather than account for the royalty 'properly', they structure the deal to pay a $1/barrel tax to Nigeria. Then they can claim that they paid taxes instead of royalties and get the offset from the foreign tax credit.
It has a different effect on the entity being taxed. A tax write-off increases the rewards for an already profitable proposition, but tax write-off don't normally incentivise someone to do something that is a loss (unless the write-off is transferrable to other profits, but that's a separate question). Subsidies, however, can make a loss into a profit, incentivising people to do it. That's exactly the point of the original solar subsidies.
Now that the solar industry appears to be relatively well bootstrapped, it's not unreasonable to remove the straight subsidies. I think solar still enjoys many if not all of the same tax write-offs as other energy sources.
When that $x in taxes is paying for the infrastructure used, then the gas producers/users are actually getting $y+x from the government. The $x, being a service charge, cancels out, and the only thing left is $y. $y is the difference between the world we live in vs. a world where the government paid no special attention to the industry. It's the most important number.
But $x is not a service charge. It bares no relation to the amount of anything used. They can't opt out of the road part of the service charge and build their own roads. The tax is not hypothecated. Whatever the rhetoric of politicians, it doesn't bare any resemblance to a service charge.
That's exactly what I was arguing, yes. That $y is important and $x is irrelevant.
> They can't opt out of the road part of the service charge and build their own roads.
That has no real bearing on the economics of the situation. Paying $x to the government for roads and paying $x to a private contractor for roads work the same way. That's why the net subsidy is $y.
If there is a tax that's applied specifically to gas companies that isn't directly paying for infrastructure they use, then that tax can be subtracted from the subsidies. But the gas tax doesn't fit that bill; if anything it undercharges.
The gas tax is only one of many taxes that these companies pay - you have to sum all their subsidies and subtract all their taxes. That's the point. If you're not doing that, comparisons with subsidies to other industries are going to meaningless.
How can it be a fair representation of their situation to only say they receive $1bn/yr in subsidy?
You're right to say that it's not fair to only list the $1bn. It should be put in context of the $100bn of normal taxes. But reducing it to "$99bn" is not a fair representation either. It doesn't tell you if they otherwise would have paid 100 or 200.
Fossil fuels are causing incredible economic damage - but in a way that isn't captured by traditional economic models. It's going to have huge costs to future generations - if we taxed it, not only would we get off fossil fuels faster, we might then have extra cash around to soften the blow when it inevitably comes.
But the OP wants to know of the coal subsidies even Elon musk calls so huge that solar subsidies are "cents on the dollar".
How about providing actual subsidies for coal, also the difference between taxes for coal and solar. Of course they should be compared per Kwhr (which in my opinion Elon musk didn't do).
Has a group other than greenpeace done the accounting on the 'cost' to the nation?
Are you not intrigued by the enormous error-bars on that figure ($22-$237)? Maybe this is a complete wank?
How does the nation benefit from having inexpensive coal power available? What's the value per ton generated?
Also, error bars generally make me more confident in a number. Coal can be burned in old or new plants with different levels of scrubbing for example.
I'd also point out that this conversation started with you "just asking questions" about subsidies, and you've attacked every answer you've received.
In brief, #1 means: "I don't like it, and things I don't like should be taxed more, and until they taxed more, I will call this gift of non-taxation 'a subsidy'"
As for #2, the negative-externality objectionators make a very fair point!
As a reference point the UK has about the lowest consumer energy taxes in the EU, and the highest consumer prices.
No it doesn't, not even close...
Unless I misunderstand what you mean by consumer prices?
Unfortunately it's too late to edit my comment for clarification.
It seems very misleading to say "taxpayer support" for a tax preference, especially when tax revenue for north sea oil is going to be well over that 6bn.
This is part of why Norway can make around £400 Billion more money than the UK from a similar amount of oil, extracted from basically the same place:
See also "Hollywood Accounting".
The article itself says the rest is partly because of lower taxes on the oil industry, but mostly because
1. The peaks of oil production in the UK's and Norway's fields were at different times when the market price of oil was different.
2. Norway has fewer fields but more reserves which made extraction more efficient.
It's also worth pointing out that the £6bn/year figure in the Independent article seems to be a bit of a wank too.
But we also are pretty much number one when it comes to being environmental friendly nation and no swede would deny climate change.
For the record, gas prices in Germany are similar to Sweden, maybe a couple of cents lower (currently around 1.35€ per litre—around 2.35 times the US average)
A sales tax is a tax on the consumer of the product, not the producer of the product. The producer is the one getting the subsidies.
One downside of cheap solar might be a drop in crude prices, resulting in its more frivolous use. I'd hate to see improvements in shipping meant to conserve fuel, and thereby lower carbon emissions, be set aside once fuel becomes cheap again. We need to watch for this and, perhaps, get regs in place to ensure it is burnt as sparingly as possible.
As more light vehicles move over to electric vehicles, we're going to need more clean energy. We should build every kWh of solar and wind generation we can.
> One downside of cheap solar might be a drop in crude prices, resulting in its more frivolous use. I'd hate to see improvements in shipping meant to conserve fuel, and thereby lower carbon emissions, be set aside once fuel become cheap again. We need to watch for this and, perhaps, get regs in place to ensure it is burnt as sparingly as possible.
Well, I mean, that's kinda the whole point of Tesla Motors, you see? Its an electric car, for sure. But its not a Leaf, its not a Bolt, its not an EV1. Its the best damn car you can get. Someone called Katy Perry's stage "The Tesla of tour stages" . That's how you win against oil. We didn't run out of rocks when we left the stone age behind. We found something better.
 https://twitter.com/katyperry/status/444228348319784960 "Omg someone just called my stage the TESLA of tour stages... It was like, the coolest modern compliment ever."
In my world, my parent's new retirement castle is powered by an off-grid solar/diesel system. Solar isn't putting up much of a fight (Canada+winter+mountains = maybe 2hours of direct sunlight on panels).
(For the battery: a tesla powerwall 2 if you can get one, or sort of build your own from LifePo4 batteries & an http://electrodacus.com/ controller)
Have a look at electrodacus. He lives in Canada. Powered 100% by solar. He even plans to heat with solar, but that requires a specially built house.
EDIT: We have far more coal and natural gas fired generation to displace than off grid petroleum generation.
I'd argue this logic is backwards. Only way solar can cause a drop in oil prices is by reducing it's demand. And if it is reducing the demand of oil, then the total demand of oil can't increase.
Further, only sustainable way to keep oil unused in ground is to get the market price of oil so low that nobody bothers to dig it up. I mean, if the oil price is $500 per barrel, there is simply no international agreement that will stop people and countries drilling oil from every possible site from north to south pole.
There is R&D with deploying wind power to help reduce fuel costs on cargo vessels.
In some ways it makes a lot of sense: You have no loss in converting mechanical energy into electric charge, then back into mechanical energy, and also losses in transmission (as is the case with traditional wind - and there's a big difference in efficiency when you crunch the numbers). On vessels, it's just straight mechanical energy->mechanical energy, and energy density is also very high. It's a crude solution, but also elegant and clean solution.
Business needs incentives to move on these kinds of renewable technology opportunities that exist but are not exploited because the fruit hangs too high for the free-market alone to justify the cost for the charity of the environment. My own biased opinion is that one good solution might be a carbon tax, which could align private business incentives with optimal public outcomes.
The point is transportation is a tricky application for renewables, and the amount of storage needed to make it work is mind-boggling huge, even assuming decades of compounding growth.
According to LLNL , the US consumption of energy in transportation is 27.7 quads. A quads is a measure of a lot of kWh. Specifically, 27.7 quads is 8,118,068,643 MWh.
Tesla's gigafactory is slated to produce 35 GWh worth of battery storage production per year at full capacity (slated for 2018) .
So, our annual energy consumption in transportation alone is 8,120,000 GWh, and our largest factory will, in two years, produce about 35 GWh per year worth of capacity.
Lets assume some compounding magic and imagine the gigafactory will be only the first of many self-replicating automated tesla factories. Say we grow our capacity at 5% every year... after two decades, in 2038, that puts annual capacity at 92 GWh, with a cumulative installed capacity of 1,250 GWh.
We're trying to hit 8,120,000 GWh. That's not gonna work.
Okay, lets assume instead of 5% growth, we somehow get 50% growth (we need more gigafactories, but lets say we also get better at building batteries, something closer to moore's law). Now after two decades of 50% growth, in 2038 our new annual storage production is 116,000 GWh, with something like 350,000 GWh of cumulative installed capacity.
Still short of 8,120,000 GWh.
(But this exponential growth is only starting to hockey-stick upwards at this 50% growth... we WOULD hit our goal within the third decade)
So, even assuming very optimistic conditions where the storage capacity production is exponentially growing, consumption stays flat, and capacity does not degrade once installed, electric cars still will barely make a dent in petroleum usage in transportation after two decades.
I hope I made some error on my metaphorical napkin here (like a battery can be recharged... if you have 365 Wh of annual consumption, that can technically be serviced by a 1 Wh battery being used every day, right? So we don't quite need to match the 8,120,000 number exactly, right? Maybe like 1/10 or 1/100th of that?) Because if I didn't, that means we need an Apollo-level effort sustained for a few decades to have a meaningful path off fossil fuels.
So at 5% YoY growth, we hit it at about 2031.
Ok, so that's only a decade and a half of non-stop growth. Now we're talking something plausible. 5% YoY for 15 years means someone will be making a lot of money if that comes anywhere to be.
a) The LLNL flow charts are for primary energy, not energy services; an electric vehicle can travel further on a megajoule of electricity than an internal combustion vehicle can travel on a megajoule of diesel fuel.
b) Long distance shipping, airlines, and (probably) long distance trucking are not going to replace liquid fuels with batteries. Either there's going to be residual use of fossils for those smaller applications or electricity will be used to make synthetic liquids; either way those segments aren't going to contribute to battery requirements.
What lead me down this path is some solar thermal plants store heat as a large vat of molten salt. The supposed advantage is they can produce power at night. However PV has solar thermal significantly beat in price. Meaning it would be cheaper to just generate electricity using PV and convert it to heat for later. Bonus, unlike molten salt, solid media (AKA rock) can run much hotter and thus higher eff.
I did try a calculation for the amount of rock needed for thermal storage. Using your numbers, assume you need 2.5 X 22,500 GWH that's aprox 56,250 GWH of thermal storage.
Turns out 'rock' has a heat coeefecient of about 2000 J/(DegC Kg).
So amount of rock needed.
56,250 X 10^9 * 3600 sec/hr) / (2000 * 800) degC -> 1.26 X 10^11 kg.
Common rock is about 2500 kg/m3 so the volume would be
1.26X10^11/2500 -> 5.06 X 10^7 m3.
That is about 20 times the size of the great pyramid.
If coal mining had an EROEI under 1 no industrial revolution would have happened, because the manual labour for extracting the energy source would have been better spent at other tasks. Now that we have some energy sources with very high EROEI in the energy mix we use we can think about some sources as you say, for some very specific tasks.
Obviously, charged battery storage has an EROEI < 1, and that's fine because it's a portable storage medium, not an energy source.
On the individual scale a company in a >1 ratio line of business sells energy, which incidentally happens to be in the form of Jet-A or 93 octane but what really matters is they sell energy that runs the other economic sectors. Whereas a company in the <1 ratio line of business sells fascinating petrochemical feedstocks, which incidentally happen to be flammable and could be used as expensive fuels and they compete for needed energy with the rest of the economy.
The ethanol debacle shows how important that is. Certainly aged 12 year crown royal is not energetically feasible as engine fuel and that doesn't matter as long as its affordable for drinking. The distillery produces human fuel, but not energy, in fact its a net sink of energy. Likewise you can build a plant to produce ethanol, and it will produce fuel, and as long as you don't worry about energy or CO2 that's OK. Inevitably after its built someone will point out that rather than importing 30 million barrels of crude oil energy per day, if you want to run cars on ethanol we'll have to import and burn 60 million barrels of crude oil energy per day and there will be freakouts.
Part of the confusion is in the old days it was only possible to simultaneously produce both energy and fuel whereas we've burned the cheap oil such that now we're going to be deciding to make industrial plants and processes that produce energy OR fuel but often not both at the same time. In the old days it was impossible for a refinery not to produce and sell both fuel and energy at the same time...
There's been talk of using solar energy to help with oil sands extraction ( https://www.google.com/patents/US9039893 ), because oil sands have such low EROEI that the cost of fuel for melting them is a considerable part of the cost (as is finding the other chemical feedstock for diluent to produce "dilbit"). In some ways this is great - replacing a fossil source with a renewable - in others it's terrible, as it increases the transfer of carbon from the ground to the atmosphere.
Did monetary ROI ever made sense to you? EROEI is the same thing, except in units used by nature.
Let's take two hypothetical means to produce electricity, A and B.
A is, from EROEI point of view, almost a perpetual machine, with EROEI of 1,000,000. Unfortunately it is really expensive, investment costs are one million dollars per watt generated.
B then, has really bad EROEI, 1.0001. However, getting that electricity costs only 0.0001 USD/MWh.
I do not understand in which circumstances it would be relevant or interesting to use EROEI as a metric to compare these power sources.
Note also that in absence of subsidies, ROI contains all the information EROEI gives.
> Note also that in absence of subsidies, ROI contains all the information EROEI gives.
That's not a bug but a feature. The main advantage of using EROEI over ROI is that it's in nature's units. You cannot use any accounting tricks (such as subsidies) to fake it.
Sorry, I do not see the similarity. In your example you are limiting how much you can invest to one opportunity. And (risk adjusted) ROI is perfectly valid way to compare both of your companies, I just invest as much as I can to the higher yielding asset.
> You cannot use any accounting tricks (such as subsidies) to fake it.
It may be more difficult to fake, but it does not answer the question what use the measure has. (Note that ROI may be fakeable in the short term, but in the long term that is much more difficult. Either you get your money back or you do not.)
OK, let me try to explain better.
In your example, the only thing that prevents me to invest in the source A (with the ridiculously high EROEI) is how much other resources than energy I currently have. For example, say source A requires diamonds, which are expensive, and I can only afford a handful. But source A is much better investment than the source B, and I absolutely want to invest into A first (at the very least, I can sell the energy with much higher profit margin).
In my example, the only thing that prevents me to invest into higher-yielding asset (and we agree it's a good idea) is some additional limitation of reality (availability of resources), for example the size of the market.
So in both examples, there has to be an additional resource constraint, which prevents putting all investment into the higher-yielding enterprise. In the first example this limiting resource is money, in the 2nd example it cannot be money, but it can be something else.
So if ROI is a good way to compare investment opportunities, EROEI is a good way to compare energy sources.
> It may be more difficult to fake, but it does not answer the question what use the measure has.
An well-known example where ROI was faked is subsidies for ethanol as energy source. EROEI is less than 1, but because of the subsidies, ROI became larger than 1.
The EROEI would be an ultimate measure of where to put your effort (energy) if you were alone in the world and there were no other people. Then you wouldn't need money and could price everything in energy required to obtain it. Or equivalently, the world where people would collectively want to minimize the amount of effort they want to spend. Which is not quite the real world with money (the wealthy people for example can afford less effort than others), but it's useful as an approximation of it (and if you assume free market, then they are very close).
You misunderstood me. Quote:
"investment costs are one million dollars per watt generated."
It will cost you a million dollars to get one watt of output It is much worse investment than B.
> The EROEI would be an ultimate measure of where to put your effort (energy) if you were alone in the world and there were no other people.
There are other factors of production than energy. Land use and time would be completely ignored even in the single person autarky model.
I think you are in contradiction, then. What is the cost of energy in your example world?
> It will cost you a million dollars to get one watt of output It is much worse investment than B.
I don't think you can reconcile this claim with the EROEIs you used in your example.
> There are other factors of production than energy. Land use and time would be completely ignored even in the single person autarky model.
Yes, other factors that are possibly scarce are missing from that model. But that is the same deal for ROI calculations, too, as I already explained. The point is, just like money you have is the most important factor limiting investment, (thermodynamic free) energy is the most important factor limiting production.
Let me explain a bit better where is the contradiction. The high cost of source A from your example indicates that this source requires some expensive fuel. If there is an unlimited (in practice) amount of this fuel, in other words, it's not scarce, then this high price indicates that it's very hard to obtain (takes a lot of effort). This contradicts to the claim that source A has high EROEI, because if it has high EROEI, then it means that the fuel for it can be obtained very easily (with very little energy investment). (You could see the contradiction the best if you were to actually set the cost of energy in your world.)
The only way out of this contradiction is to assume that this "expensive fuel" is a very scarce (finite) resource, which cannot be readily produced from other things. For example, say it's platinum, and we would like to keep platinum to make other things out of it rather than burn it to make energy (and that's why it's expensive - people want to keep it). So that was my original interpretation of your example. In that case, source A is a better way to make energy than B, it's just you don't have enough fuel you would like to use for it, and so you can only use it in small volume. Just like with ROI - there can be excellent investments with very limited volume, and just ROI will not tell you anything about the volume.
As a side note - I really recommend to stop thinking about economics in terms of money and start thinking in terms of means of production (which is where EROEI comes in). And only then, when you see the full economic picture on the process level (how things get transformed in the economy), introduce the actual monetary accounting. This way, you can avoid some pitfalls (such as simultaneously claiming that price of energy is both very low and very high).
No. It indicates that there are other factors of production than input energy that causes the high price, and that EROEI is incapable to take those into account.
To put this into more concrete (while still absurdly unrealistic to illustrate the point) numbers, assume we have a weird nuclear reactor, that is going to produce 1 kW of electricity for one million hours (somewhat more than 100 years). To create this generator, you need precicely two things. One kWh of energy, and because this is a bit unsafe reactor, you need to buy land worth one billion dollars to create a safe zone around the reactor.
Now, this reactor has pretty much exactly the numbers of my original example A, this has EROEI of one million with investment costs of one million per Watt.
So, a project with good ROI on properly priced (not subsidized) factors of production must have a decent EROEI. But there is no guarantee the other way round, a project with decent EROEI can have completely unfeasible ROI, so I still not understand why I should care about EROEI. It just produces zero value over ROI (with the usual disclaimer of correct prices)
> I really recommend to stop thinking about economics in terms of money and start thinking in terms of means of production (which is where EROEI comes in)
But if you want to think in terms of all means of production, not just some arbitrarily chosen ones, you end up with ROI.
EROEI is capable of it, but you must be willing to do it. Why don't you figure out, in your example world, what makes the land for the reactor so expensive? Eventually, there is going to be an energy cost to having so much land dedicated for it (either that or there is only a finite amount of land that you're willing to use - which is akin to infinite cost, as I already explained in my previous comments); and you omit that from your EROEI calculation.
(Also technically speaking, in your example, I could build more reactors next to each other, so I would need less land, it's only a fixed cost, but that's not so important here.)
> But there is no guarantee the other way round, a project with decent EROEI can have completely unfeasible ROI, so I still not understand why I should care about EROEI. It just produces zero value over ROI (with the usual disclaimer of correct prices)
I disagree, the same is true vice versa (if you exchange EROEI and ROI), if you correctly calculate the energy cost needed. EROEI is just ROI in different units, and all the same advantages and disadvantages apply (that's why I predicated my post on you accepting ROI). So whatever disadvantage you see in EROEI I can find analogue of (and I did in fact) in ROI.
But the point of using EROEI is, nature cannot be fooled - if a process has a given EROEI, then nobody can cheat that number. But with ROI, individual investors can still cheat other people (society at large), if they have reason to use incorrectly priced ROI (it is incorrectly priced from society's perspective, but from their perspective it's correct), for example when subsidies are involved.
> But if you want to think in terms of all means of production, not just some arbitrarily chosen ones, you end up with ROI.
You are not doing it correctly for EROEI - you're not assigning price in energy for those additional means of production (as pjc50 already noted).
I thought EROEI was supposed to be fudge-free? If you really calculate EROEI as the nature wants it, you are never reaching EROEI of one unless you are breaking thermodynamic laws.
> - you're not assigning price in energy for those additional means of production
There are non-energy factors of production. If you disagree with that, there is no point continuing this discussion. If you agree, don't you see that your argumentation is flawed, because I was specifically arguing about non-energy production factors and now you claim that I do not assign correctly the energy cost of a production factor that does not have energy cost?
This is actually true for ROI too, if you price everything correctly (so that all the participants would agree), there could hardly be any income from investment alone.
> There are non-energy factors of production.
If you assume something is in large enough supply, then it's always, from physics, a matter (pun intended) of having enough energy to obtain it.
But OK, let's say there are non-energy factors. It's really not that different from the claim of some economists (which I agree with) that there are things that you cannot put monetary price on, such as human life. So I say again that ROI suffers from the same problem, if you have investment that for example kills people, you cannot calculate its monetary ROI in a meaningful way.
Really think about it, EROEI and ROI is a similar concept, with similar flaws, just different units.
e.g. "A has EROEI of 1,000,000 but requires one billion megawatt/hours to build. It will then return 1,000,000,000,000,000 MWh over its design life. B returns 1.0001J for every joule invested."
With those options society would pretty much have to stick to B while accumulating the necessary construction of A.
Note that EROEI analysis doesn't consider depletion or renewability either. Or even necessarily a timescale.
Obviously solving for the former is simplifying issues like diminishing returns, external costs, available energy reserves, means of extraction, and methods of accounting for ERoI, but he does raise a point which is "as long as we're in the black, doesn't J/$ matter more than of J/J?"
When solving for "which method is most efficient" then you could argue yes. When solving for "which method provides the best long-term spirce of energy" it becomes a different question.
The EROEI argument includes the observation that "in the black" for an industrial society is well above 1:1 and believed to be somewhere above 5:1. Going below that on average is expected to result in collapse.
In the short term, fossil fuels provide a high EROEI - but only until depletion (locally or globally). The overall fossil EROEI falls over time. This implies that it's necessary to install non-depleting or less-depleting sources before we reach critical depletion. But we're not clear on when that is; peak oil may only appear in the rear view mirror.
Essentially EROEI is an ecologist's view on the subject. "$" is not a resource that exists in nature and they would prefer a view from sufficiently high that it drops out of the analysis.
( http://www.theoildrum.com/ was a fantastic resource on this subject, and still is although no longer updated. For example, http://www.theoildrum.com/node/6871 : input of fossil calories allows one person to provide the food-caloric needs of 100 people. How can this continue past peak/unburnable oil?)
Now, to answer your question, if you decide to start a big research program to increase the availability of energy, you should almost certainly focus on the high EROEI source, not the cheap one. If you decide to create an energy company to sell something right now, you'll go the other way around.
You probably did not mean it this way, but that would mean that almost certainly no-one should have researched solar power until maybe 10-20 years ago.
To me, if you are talking about research, EROEI should be part of the feasibility ROI calculations (obviously), but nothing more.
But it would mean that studying solar some 30-40 year ago was a bad idea. Fossil fuels were too good, and solar didn't look any well by that time. But solar had some other characteristics that made it unparalleled at some niches (like satellites), and guess what, that's exactly what people were interesting on researching by that time.
The issue is not so much about the EROEI of an particular process in the small, as about the headline overall availability of energy from all sources to civilisation as a whole. That article discusses the "EROEI cliff" possibility, where as it declines more and more human effort must be put in to replace it, resulting in a civilisational collapse.
Those things are on my mind as I contemplate a switch from heating oil to natural gas at my home. It does not seem to make financial sense, but it makes more sense when I consider those things. That said, until technology that allows solar to be economically used for everything is available (e.g. amazingly cheap, high density, long lasting batteries), we are going to need natural gas to replace other fossil fuels in places where solar cannot be used.
"Billions of cubic meters of natural gas is flared annually at oil production sites around the globe. Flaring gas wastes a valuable energy resource that could be used to support economic growth and progress. It also contributes to climate change by releasing millions of tons of CO2 to the atmosphere."
Burning natural gas produces only half as much carbon dioxide as burning coal.
Can be produced from forestry waste:
It would not be wrong to call it solar power. :)
Another interesting factor to consider is the residency time of the different gases. Methane breaks down fairly quickly, while CO2 needs to be sequestered, which is currently done quite slowly via biological processes. Methane is extremely bad in the short term, but measured over a long period (100 years) does in fact trap less heat.
However, we're not on a timeline where we can worry about 100 year effects. Our current warming trajectory will almost entirely destroy coral reefs in about 30 years, and estimates vary on the threshold for runaway effects (Methane calthrates, reduced primary production due to ocean acidification, etc) but the large majority of them are well below the 100 year threshold.
Tl;DR: Natural gas might cause less warming over a long period, but it causes more in the near term, and we're screwed if we don't fix things in the near term.
I bring up hydraulic fracking because it's the primary driver behind the renewed push for natural gas. The United States has suddenly become one of the most competitive producers of natural gas, so strong domestic forces are now lobbying for it.
The one application where natural gas does have a decent advantage is base-load grid energy generation. Renewables like wind and solar are variable, and we need controlled inputs with rapid responses to help integrate them into the grid. Gas turbines are the most responsive fossil fuel systems by a wide margin, so they serve a decent purpose there. This should only be viewed as a stop-gap until we develop grid-scale storage through EV networks and such though.
That being said, you can think natural gas is great without thinking about CO2 at all. Switching to natural gas would eliminate dependence on oil from the Middle East, which ought to be a good thing.
His full slides are linked at . His second lecture in the series  suggests upstream emissions
from a well are about 1.3%. That's not enough to justify significant investment in capture for production increases, but it's enough to do enormous damage to the environment. The first set of slides explains that damage reasonably well, but the TL;DR is that Methane screws us far more in the short term, and all the timelines that matter at this point are short term.
I don't have any information on biofuel production. I think it's an open question whether it's useful for grid-scale energy production -- again, gas turbines are wonderful base load generators -- but I'd be extremely hesitant to support it's use in transportation.
Oversea shipping is a challenging problem that may be served well by gas as a stop-gap, but long term it should move to compact nuclear reactors which use non-weaponizable fuel elements or new energy dense storage methods like lithium air batteries.
For ground transportation, it's really hard to justify anything other than direct electric vehicles at this point. The energy density of natural gas isn't that great relative to current Li-Ion packs when you consider tank weight, and any pure ICE vehicle has to deal with large braking losses, which EVs can recover trivially. The various flavors of hybrids are a decent solution, but I'm a huge proponent of the pure EV model with parked EVs doubling as a grid-scale storage solution.
I consider eliminating demand for oil to reduce funding of terrorist attacks to be a higher priority than eliminating carbon based transportation. If you do not, then there is always production of natural gas from biomass, which makes natural gas carbon neutral:
For what it is worth, natural gas has a higher energy density per unit mass than gasoline, diesel and kerosene. Switching to it in transportation actually reduces energy requirements such that reductions in carbon dioxide output would be higher than the theoretical numbers:
It might be worthwhile to check the assumption that halting warming will be possible while maintaining all of the transportation infrastructure we've grown accustomed to over the last 102 years. What sounds better to you, a working ecosystem or cheap airfare?
You can see your goals achieved with natural gas thanks to biomass conversion methods, but do not expect everyone to be as enthusiastic about eliminating CO2 emissions as you are. The most you will get is willingness to make things renewable for security or financial reasons.
Natural gas can both reduce the cost of air travel, which definitely can get people on-board and improve security by cutting demand for oil, which ought to matter to my fellow New Yorkers.
Let's hope technology pulls of a miracle before this flavor of myopic insanity destroys the planet. You do realize you just said that you'd rather be able to affordably fly than have a working biosphere, right? What were you planning on eating for the mid-flight snack? An arm rest?
The projections that claim temperature rises do not consider the inevitability of renewable energy. Renewable prices will drop over time while fossil fuel prices will increase over time. Eventually, fossil fuels will be more expensive and renewables will take over.
Even if the most severe predictions on the internet are true, there is no need to eliminate he use of carbon based fuels. Speeding up the transition to renewable carbon based fuel production would be more than sufficient.
There might be some projections that don't take this into account (though I'm not aware of any). However, many consider "commitment", or the long term effects of what has already been done (for example, the CO₂ that's already been produced). I found the following article "What would happen to the climate if we stopped emitting greenhouse gases today?" from 2014 useful in describing the situation with links to additional resources:
For two examples of projections taking the effects of differences in CO₂ emissions (which serve as an effective proxy for fossil fuel usage), here are two from resources linked from that article:
Charts showing different projections of relative CO₂ concentrations based on varying changes in CO₂ emissions
Two global coupled climate models show that even if the concentrations of greenhouse gases in the atmosphere had been stabilized in the year 2000, we are already committed to further global warming of about another half degree and an additional 320% sea level rise caused by thermal expansion by the end of the 21st century.
Speeding up the transition to renewable carbon based fuel production would be more than sufficient.
Do you have references which support this claim? I'd be interested in reading about them if you do. Statements like this seem to sometimes be based on the assumption that market forces will be able to fix climate change issues, though I don't know whether you hold this position. The relationship between market forces and effects on climate change are not tightly coupled. The rate at which renewable energy sources replace fossil fuels is not directly proportional (inversely or otherwise) to atmospheric CO₂ concentration or global albedo or temperature or sea level.
From what we understand of human psychology, we don't intuitively grasp concepts on such a grossly non-human scale (both in time and space) such as climate change, just as quantum mechanics or relativistic physics can throw us for a loop. I should think it's much more difficult for the market as a whole to be efficient in reacting to effects on this scale as they are so much further removed from human intuition.
Natural gas is not a sustainable energy source. Fracking, which is what makes it cheaper, has tons of environmental problems. Sure, it's better than worse fuels, so go ahead and upgrade. But please don't hijack threads about a sustainable planet.
Aviation, shipping and even low end automobiles will need it.
That is a misleading mischaracterization. The article refers exclusively to biogas, not fracked natural gas which is the basis of your claim of "cheaper, more plentiful and cleaner than gasoline".
And it's not even sustainable if we were to purposefully scale its production (it still emits CO2), which is why the article prefers the lesser term "renewable".
Land isn't going to be a constraint in most countries. Solar resources, while distributed unevenly, are significantly more evenly distributed than fossil or nuclear fuels, or even wind resources. See for example this map of insolation in the US: http://www.nrel.gov/gis/images/solar/national_photovoltaic_2...
In the continental US the very best solar resources are maybe ~7 kWh/m^2/day and there's hardly anything below 3.5. Or to put it in terms of cities, Seattle gets 58% as much annual insolation as sun-drenched Phoenix: http://www.i4at.org/lib2/solarrad.htm
So it took many historical performance:price doublings before unsubsidized solar electricity got within shouting distance of fossil electricity in even the sunniest places in the US, and then just one more to reach that threshold across most of the country.
The technical and economic performance of wind/PV has already improved enough, and has enough assured near-future improvements already in the pipeline, that I'd say it would be destined to "eat the world" for electricity if storage were a solved problem. But storage isn't a solved problem.
Most discoveries that get hyped as "battery breakthrough" by university press offices aren't really breakthroughs, but there's so much research that there's an abundance of riches even after you throw away the ~95% that looks bad on slightly closer examination. Common problems with battery "breakthroughs" that justify quick rejection: dependence on rare elements (lithium is reasonably abundant; I mean things like tellurium, germanium, rhenium...), low cycle life, effects demonstrated only at interfaces or in nanostructures without any obvious path to bulk scaling. Among the remaining ~5% that looks interesting, assuming the publications aren't fraudulent, I have little idea which ones will end up industrially significant. Chemistry is a lot easier to model than market success. There are also partial substitutions for electricity storage that could displace and/or complement it: supergrids, demand response, thermal buffering...
But if the price of solar panels keep plummeting like this, it seems sensible to first cover all roofs with them and see how far we can get.
The tech is simple. Dig a hole in your backyard, put a large steel tank in it with an air compressor and a small turbine generator.
Putting the tank underground vastly improves the safety of the system and hides it. You can also derive heat from this process.
I don't know who's going to win. All of the above approaches are technically viable. The winners and losers are going to be shaped by things other than simple technical viability: business plan execution, manufacturing scalability, path dependency... I say that storage is not "solved" because there's no default good-enough solution proven yet. We have to wait for some years after plans leave PowerPoint and inhabit the real world to see what works well in practice.
Btw, their vessels are carbon fiber, not steel. And deriving heat is a problem not a benefit. Every bit of heat that leaves the system is lost efficiency.
Storing air underground absorbs heat, or at least results in less heat loss than storing it above ground.
You can make a very efficient turbine jet that runs at one pressure and one power output at very high expense and ongoing maintenance of moving parts. But it won't run or only run as dismal efficiency at half pressure or quarter pressure.
Meanwhile you can very efficiently move electrical watts around in various formats, cheaply, and scalably, and no moving parts.
As an example of what I'm talking about, liquid fuel has insane amounts of energy stored in it and only recently can we make turbines efficient enough to keep spinning while having fuel poured into them, only at certain constrained power outputs. Meanwhile its very easy with modern technology to run an electric motor from 0.1% to 100% speed using electronic speed control VFDs. You might have trouble cooling it but you won't have trouble making it spin.
I love your idea of using solar to build a store of energy, but you could refine the idea a bit and really do something fun. Having a large quantity of oxygen(liquify it!) could be a boon to the backyard rocket engine enthusiasts :)
Is there sufficient market pressure to drive demand for grid-scale storage? Batteries have been mostly driven by weight constraints (mobile tech, cars) and not by the need for large-scale stationary deployments.
I think that when renewables reach higher levels of grid penetration they will increase the demand for storage with different tradeoffs.
And then in the winter, it's very cold, so the energy cost of heating is very high.
By 2040 natural gas will meet 25 percent of energy demand.
By 2040 nuclear and renewables will grow 50 percent
approaching 25 percent of energy demand.
Oil will remain the world’s primary energy source,
fulfilling 1/3 of all demand.
You should really step out of your "all corporations are inherently evil" box. It's juvenile.
Oil's greatest investment potential is how volatile it actually is. Look at the charts for brent crude day-to-day, or jump back a step and look at the crude ETFs(sco/uco/and-friends). There is a lot of money to be made with that much volatility.
Back to the original question, does anyone here actually invest(as in hold long positions) in oil OR solar? If so, I am curious why you chose those particular investment vehicles, since they are technically(as in looking at the company's technical breakdown) bad long investments.
Other emerging energy sources all ding the price of solar stocks. Eg...if tomorrow a press release for "huge natural gas power plant opens in California!" breaks, you get a (sometimes large) dip in all your solar positions, despite no value being lost at all. I would sum it up as "solar equity prices are affected by too many things other than their performance".
Power to gas is just more of the same "hydrogen" economy. correct?
I read a book about the hydrogen economy back in 2000. Thought it was a great idea.
Then lithium ion batteries kicked hydrogen's butt.
The drop in Oil demand would mean the end of the OPEC bloc.
You might not have noticed, but OPEC is dead.
A combination of shale oil in the US, Saudi and US desire to the disrupt the Russian oil-economy and Iran/Saudi rivalries mean OPEC can't set prices anymore. The best they can do is try to restrict supply enough to stop them going bust.
Even that isn't a sure thing anymore - no one can be sure that even that small agreement will stick.
An Exxon/Russia agreement under the Trump presidency will bury OPEC. (Not sure Exxon/Russia will be better than OPEC, but OPEC won't be able to do anything about it.)
Are you sure? OPEC's November 30th deal moved world oil prices drastically in every direction. For a dead entity, they sure seem to exert change upon the living.
PS: I'd love for OPEC to die also, but I think they are very much alive, albeit less relevant than 20 years ago.
On top of that, we now have a wide range of viable plug-in cars. If oil were to get up to $100/barrel again, lots of people would switch to a car that can cover 90%+ of their driving on electricity. $4/gallon gas really hurt our SUV market, but now we can make it a 20 kWh hybrid and avoid the pain at the pump.
OPEC is still alive and well, and even speculating about their deal's success is pushing prices wildly.
This is not the OPEC who could move prices by 50% or credibly threaten to cut off supply.
What I am afraid is that the nuclear renaissance may be further delayed in the west, which is what we badly need now to reduce carbon footprints, provide stable energy production and to fill te gap until fusion gets there. (Which despite the recent great news is still 30 years far, as ever since the 1970s)
As a European as much as I hope that the OPEC shall fall, I am also afraid of the turmoil it may cause as its core states are rumored to be closely linked with the funding of terrorism in the middle east for their political purposes, which recently has reached Europe as well.
Of course we need storage and backup generators for renewables. It will be mostly pumped water with gas and oil. Nuclear does not fit as a backup.
In the future, the pricing must include renewables PLUS their backup plan (e.g. a gas generator on standby) to achieve level pricing and availability.
Having a large grid and moving to more flexible consumers in order to distribute and smoothen out supply and demand will also be a huge factor.
In the end I'm positive that it can be done.
3 billion / 5500 = 545454
545454 * 14 KwH ~= 7.6 GwH.
try at google ((3 billion / 5500) * 14kwh) in Gwh
That is the current state of the Nuclear power construction world.
What sane investor is ever going to invest in power generation that is online 12 years after the decision to go?
Sellafield: 2005 estimate: $59 billion. 2015 estimate: $155 billion.
German utilities set aside $45 billion but an additional $26 billion may be needed
The EU estimated recently that funds set aside to cover the cost of decommissioning 16 nuclear plants would fall short by $137 billion.
How much should it cost in some abstract sense? How much should it cost to be safe? Who knows. But one thing is certain based on historical observation, it'll cost exactly and precisely every penny that is available, and not a penny more or less. There's a lot of profit to be made off spending each penny, and each penny will be spent.
That mindset doesn't mesh well in an industry that has competitors like coal plants or natgas peaking plants or solar plants. What does "spend every penny you can" mean at a coal plant? Or what does "a penny not spent is a penny lost" mean at a solar plant?
Meanwhile you're comparing a product that's been shipping for half a century, admittedly at various levels of technical and economic success, with vaporware under so far successful development. You can't compare the price of a commodity gallon of standard cow milk in 2016 to the price of a shipping in 2028 Intel CPU in a useful way.
In the end cleaning snow, while a pain in the ass, is not a real challenge. Much like desert sand cleaning, this is automatable (and small snow removing robots exist already) and would be worth the investment in northern (or extreme) southern climates.
We are basically talking about plant equivalence. You need 3x nameplate capacity and about 12 hours of battery storage for equivalency between a solar and a nuclear solution. Assuming night load is equal to day load. That assumption does not hold for a grid, night load is normally half the day load. So a system must only survive the evening peak plus the normal night load.
The quip about battery storage price basically showed that if you throw as much money at it as a single nuclear power plant then yes it is a solved problem today.
It makes the most sense for base load, as well as night time load (which is mostly the same as base load).
I love solar though, and yes, storage dependency is there, but then, we have done no research on it. the main problem is the will to do research.
I'll give you an analogy, for pumping water to x height, we use an electric water pump. As you might be aware trees are the best water pumps available, with 0 noise they pump water all the way upto their top, some trees are just crazily huge, so if we are to harness the tech in trees to figure out how the heck are they able to move water from roots to the top, we'll have a revolution on our hands, but in the words of Henry Ford, "If I asked what people wanted they'd have said faster horses" :-)
I want to see the entire world powered by solar with microscopic solar panels which are stuck to things like walls and stuff sending electricity wirelessly (invented by Tesla) to the home/office/car etc
I hear this argument a lot, but it's not usually connected with concern for birds in any other context. No concern for habitat depletion from oil sands extraction, nor from acid rain, nor domestic cats, nor windows (which kill a much larger number of birds), nor global warming itself.
The effect of tidal turbines on marine life seems to be basically .. unknown. Probably dwarfed by the known impacts from fisheries and pollution. The continued existence of fish depends on putting fishermen out of business, which is politically fraught.
> harness the tech in trees to figure out how the heck are they able to move water from roots to the top
Evaporation. You can demo this on your desk with a piece of rolled up paper in a glass of water. It takes energy from the sun and air and you can't use it to pump water into a reservoir.
> microscopic solar panels
.. produce microscopic amounts of energy, although you can run a calculator or watch from that.
From what I understand, far less birds are killed by windmills than by flying into windows and power lines, yet nobody is arguing to ban those.
According to , windows are even worse than cats.
(I still prefer solar, though. It just feels like free energy that we're wasting by not making use of it.)
During the day, energy is used also to pump water behind a dam. At night, when the solar output is null, the water is released and produces power via normal hydro turbines.
For example in Romania, which produces exces power  almost all the time, there is a plan to build a huge reservoir in mountains to use this power to pump water from the major rivers into it, thus building a reserve energy store.
I guess the problem is not one of replication (see ) but of throughput. A pump that replicates the tree transpiration process would be too slow for any real energy application.
The main thing environmentalists (among others) seem to forget is that you can't make plastic out of sunlight. Or air. Or by pedaling a bicycle.
Oil (and natural gas, especially in the US where petrochemical refineries use it for ethane) will continue to be in demand if for no other reason than to be used as a feedstock for plastics and a litany of other chems that make modern life possible.
If switching to solar from oil would eliminate 96% of our use of fossil fuels, I'm pretty sure those "environmentalists" you refer to would still be happy.
But honestly whenever somebody brings up plastics in a discussion about sustainable energy or climate change I always assume they just like being contrarian.
Petrochemicals that are not burned are not contributing to co2 emissions. Also, there are other sources of those long carbon chains besides pumping them out of the ground. And at such a tiny percentage of oil use, they are not a big concern.
Alkanes, aromatics, alkenes... it's all accessible starting from methanol. China's already making plastic feedstocks from methanol on an industrial scale though the methanol comes from coal rather than CO2 and clean electricity.
Having established this fact, the importante of solar, - and all other renewable energy sources as well, - grows even more instead of diminishing. We need to start using solar et all right away, not until after fosil fuels have gotten depleted; so that we can treat oil as an strategic reserve that is used for those applications that do not have any other alternative. Petrochemicals, - at least some of them, - being one example.
Oh, I'd almost forgotten about that. Thanks for the laugh!
(Honestly, I have no idea what I'm talking about, I just thought it was funny the one green diamond was lower than the other thingies.)
There is really no association between the price of oil & the price of solar.
Oil is an expensive form of energy because it is portable & used for transportation. It competes with the price of lithium ion batteries.
Solar is for generating electricity. It competes with coal, gas, geo, hydro, wind.
And don't come back at this with some pathetic reasoning that on some islands or remote places idiots use generators. I say idiots because generators are loud, smell, need maintenance and these days are probably quite a bit more expensive than a solar + battery system.
Where is oil used? Cars. Trucks. Planes.
Will a solar panel on the top of a car ever power a car? No. You need batteries.
It's the price of batteries vs. price of oil that we should be discussing.
I hear this thing about return of energy, etc. But this is nothing new, right? Check out the oil sands project in Canada. Do you think the market cares about how much energy is used to create something? No.. just the $.
In any case solar & oil are not related.
Ok, please stop and listen.
Economics, Government, the Public... they are all wrong. They got used to not care about EROEI because at the begining of the Industrial Revolution it literally didn't matter. I don't know the numbers for coal, but back when the first oil wells were being digged, the EROEI of oil was ~100:1. It did not matter how much it did cost to extract the stuff, just that you had access to it and how fast you could come up with ways to turn that energy surplus into value added (ergo, $$$).
Now, according to the article we are approaching the 10:1 barrier. That's still pretty good, and you can still run an industrial civilization on top of it, but it has become far from irrelevant. The problem is that all the economic models in use today got created back when the stuff as much more abundant and easier to produce.
If is as if there was a perverse Law of Moore that would cut transistor density in half every 18 months. Everybody started with virtualization and scripting languages and garbage collection, then C and C++ just sneaked under everybody's radar. And now, you are here, bashing assembly hackers because everybody knows that what's more important is programmer's time, not code efficiency.
On the money side of things, EVs are more expensive than ICE cars because of market externalities due to various kinds of pollution. They're on a rapid price decline due to some government action around the world helping to kick start production, but a carbon tax and a pollution tax based on health impact of particulates would probably reveal them to be a better investment even today.