What do I think, What can I do?

Posts tagged ‘oil’

Even big oil companies detect risks from climate change.

Oil ExtractionMost important things usually involve contradictions, but this one is really incredible. This post explains with some examples the risks that big  oil companies are detecting for their business due to climate change, and they are clever to think in this way and forget all the propaganda that are helping to generate against climate change. But if they want to be really clever they could do better and research renewable energies shifting their current and profitable business. It would make sense economically, at least for all in the long-term.

The problem is that maybe they are more worried for their profits and the short-term. Climate change really needs a change of point of view regarding time perspective.


By the way, I have not read it anywhere but renewable energies could be quite vulnerable too due to climate change, for example hydro and wind energy. Solar could even improve in many locations. I think this deserves some attention with the long-term perspective.

EROEI, another strange word

I recently met twice this interesting concept, EROEI, I do not intend to give a better definition than wikipedia so I quote it:

energy returned on energy invested (EROEI or ERoEI); or energy return on investment (EROI), is the ratio of the amount of usable energy acquired from a particular energy resource to the amount of energy expended to obtain that energy resource

The easy and rough way: how much energy you need to get a unit of energy.

  • How much energy is neccessary to drill holes for getting oil, and then tranporting, refining,.. before final consumption in form of gas.
  • How much energy is needed to build a wind farm and the electricity net associated.

I like this concept because it is very physical and physicists love those things. Apart from that it is something that does not depend on economic circumstances or the influence of big companies in prices, or subsidies… The economy is more prone to account for short term interests and factors, so a more pure measurement system to compare different energy sources is welcomed. Of course it does not substitute the actual prices because nobody will accept it straightforward but it is another tool to takelong term decisions and understanding what’s going on. These 3 links go deeper in that concept, here, hear, and here. And finally this article in neofronteras that explains it very clearly in Spanish, as usual in that blog.

The calculated EROEI valujes range from 100 for oil almost in the surface to almost 1 or even less than one values for cases where the needed energy is more than the obtained.  It is considered that values below 10 are doubfully profitable and cases close to 1 should not be profitable at all but could be due to econonomical circunstances. Another factor is the time, that is not considered in this calcaulation and has led to other indexes as EIRR (last figure).

However, actual EROEI figures are not as pure as the concept and differ seiously from one source to other, you can check it in the figures below. Wind mills are ussually in the 20 values, quite good, there is also a coincidence about the lowering value of oil, but nuclear and coal prsent several different values. Photovoltaic is ussualy near the 10 limit. I do not know the cause of the divergence, I suppose it is not easy to calculate or maybe the same factors affecting energy economy are present here too, I will have to check it better.

At least, I agree with the idea that in the long term it is difficult to maintain a cheap low EROEI energy system, it would not be sustainable in any sense.

Another EROEI calculation, source, Searching for a miracle, but obtained from neofronteras.

Some EROEI calculations , source: Wikipedia

EIRR and EROEI from ococarbon.wordpress.org

EIRR and EROEI from ococarbon.wordpress.org

Argentina wants to recover the control of its fossil fuels, another energy war

Argentinian map in South America, from wikipedia

The news was specially important in Spain and Argentina. Argentinian president, Cristina Fernández de Kirchner , announced the expropiation of YPF, Argentinian oil company, the biggest company in the country, controlled up to this week by Spanish company Repsol. The diplomatic conflict is served, with several strong words from the presidents, company CEO, YPF former leaders firing in Hollywood style, etc…

I am not going to comment the economic, ethic, moral or juridical aspects of this issue. Surely there are many other better sources for it. I just want to emphasize the huge impact fossil fuels have had, and still have,  in our economy. Two data:

  • The finding of great oil resources in vaca muerta has been mentioned by all parts in this conflict, so the perspective of new oil reserves itself is enough to provoke huge impact.
  • Both Repsol and YPF are the greatest companies in their country.

Consequently, the problem is created, too much power and money is concentrated in a sole resource. And this has been present in the whole history of oil industry and XX century industrial society. How many oil wars have the world suffered in XXth century?

Nevertheless, energy in Argentina is a complex issue, as in most of the world. In spite of having this important resource Argentina is suffering in the last years a kind of energetic crisis, it needs more oil than it produces, it has difficulties to meet the raising electricity demand (1 GWh more per year) and both fuel and electricity prices have increased dramatically (yes, this is possible even without renewables). Whereas, as explained in the 30th page of this magazine, Argentinian renewable investment has been low, very far from the modest 8% electricity target, in spite of having very abundant resources of wind, rivers and sun too.

Growing prices of fuel and electricity have been one of the main arguments for the expropriation, considering YPF was not making enough effort to invest in new wells (A fresh opinion in this sense came from GreenPeace), not so different from USA drill-baby-drill. I think this is a wrong approach. Energy costs are increasing in different parts of the world because all possibilities are getting more expensive, fossil fuels, renewables and, of course, nuclear. Pretending there is a magic solution for that is not only unrealistic, it is counteracting, because it creates false expectations in public opinion. And, even more, the more we trust in fossil fuels the more get in trouble as a society, because climate change is starting to show consequences, and will show more of them and more expensive ones. So it does not seem cheap in the long-term.

Three final small thoughts:

  • Energy resources, companies,… are never fully private, there is always a government interacting with them. It is logical as this is a key service in any modern society, but it is frequently forgotten.  This case is a clear example. So public participation in climate change policies and subsidies is not so different to public participation in many other energy related issues.
  • Many Argentinian are saying that Argentinian oil should be owned by Argentinians. It is an interesting argument, going a little further we could ask if the oil should only belong to this generation Argentinians or should they remember the future inhabitants too? And leave some oil for them?
  • In the media discussion about the price os the stocks to be paid by the government to Repsol, Argentinian government argued that the environmental negative consequences should be accounted and taken out from the price. So they want to discount the externalities. Perfect, but why not do it regularly, next year, and next, and next? And include it in the electrical bill? Or in the cost comparison with renewables (in this case the relative costs would change clearly)? And the last, why now and not last year?