Oil Shale's Energy Return on Energy Investment
Findings show oil shale is, at best, a marginal energy source
ôSo long as oil is used as a source of energy, when the energy cost of recovering a barrel of oil becomes greater than the energy content of the oil, production will cease no matter what the monetary price may be."
-- M. King Hubbert
(as Referenced by Ivanhoe, 1982).
Energy Return on Investment, or EROI, underpins any analysis of the value of an energy source. Just as with any financial investment, if an investment of energy doesn't produce a "profit" of additional energy, the wisdom of the initial outlay can be called into question and the market incentive to continue investing resources is lost.
In simple terms, EROI is a commonly-used calculation of how much energy is needed to locate, extract, and refine an output of energy - in this case, oil from shale. In more technical terms, EROI is the ratio of the energy delivered by a process to the energy used directly and indirectly for that process. An EROI of 1:1 means no energy energy is gained from producing the energy resource.
WRA released a report written by Dr. Cutler Cleveland, a Professor of Geography and Environment at Boston University, evaluating the studies conducted to date on the energy value of oil shale. What Cleveland’s analysis shows is that oil shale is, at best, a marginal energy source.
How does the EROI of oil shale compare to conventional oil?
Figure 1. A comparison of estimates of the energy return on investment (EROI) at the wellhead for conventional crude oil, or for crude product prior to refining for oil shale.
The EROI for oil shale is considerably less than the EROI of conventional crude oil, both at the wellhead and at the refined fuel stages of processing. Even under marginal conditions, such as smaller and deeper well fields, loss of artesian pressure, etc., conventional crude oil still generates a significantly larger energy surplus than oil shale – approximately 20:1. We cannot yet say with certainty that the EROI for oil shale is unequivocally greater than 1.
Figure 2. A comparison of estimates of the energy return on investment (EROI) for refined fuel produced from conventional crude oil and from oil shale.
The oil shale resources in Colorado, Utah and Wyoming are being promoted as a fuel source of the future. What the EROI for oil shale shows is that should oil shale ever be commercially developed, it would be a poor energy source.
This nation must clearly understand the trade-offs it will be making if oil shale becomes a significant transportation fuel source. In exchange for a fuel that may not produce more energy that it consumes, the costs of consumed water, impaired water and air quality, negative climate impacts, and destruction of public lands must also be considered.
Before expending public or private dollars to support any future commercial development projects, we must evaluate, among other considerations, the EROI for oil shale. The picture it paints raises serious concerns.
When compared to other things that can be burned as fuel, oil shale ranks very low on the list for energy content by weight, contributing to its low energy return.