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Gold/Mining/Energy : Peak Oil - Not If but When
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From: veritas50112/5/2009 11:57:35 PM
of 129
 
Another way to view Net Energy of oil production (courtesy of The Oil Drum):

In this example, if the world oil and gas industry is averaging a 10:1 energy gain, that means 10% of the worlds oil and gas is needed to procure the rest. If the net energy drops to 5:1, then 20% of the worlds oil and gas is needed to procure the other 80%. If the net energy drops to 2:1, which it eventually will, 50% of the worlds oil and gas will be needed to get the other 50% used by society. So clearly 85 million barrels a day doesn't tell us the whole picture. Perhaps 50 million bpd at 20:1 net energy generates more 'wealth' for the world than 120mbpd of 5:1 oil - because an increasing part of the 'gross resource' will be required by oil companies before non-energy society ever sees it.

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The Net Energy of oil production in the USA is currently 10:1. It was 30:1 in 1970. However, the US economy is less energy intense today than it was 40 years ago. In other words, for every $100 of GDP, less energy is required. It has been pointed out this decrease in energy intensity is partially due to energy intense industries leaving the USA for low-wage countries. But, as I mentioned before, the important fact is the world's Net Energy is decreasing over time.
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