http://www.theoildrum.com/node/7786#more
Dear Curious,
It seems to me that
(1) A slow decline assumes that the only issue is geological decline in oil supply, and the economy and everything else can go on as usual. Technological advances and switches to alternatives might also be expected to help keep supply up.
(2) A fast decline can be expected if one or more adverse factors make oil supply decline faster than geological factors would suggest. These might include:
(a) Liebig's Law of the Minimum - some necessary element for production, such as political stability, or adequate food for the population, or adequate financial stability, is missing or
(b) Declining Energy Return on Energy Invested (EROEI) interferes with the functioning of society, so the society generates too little net energy, and economic problems ensue, or
(c) Oil becomes so high priced that there is little demand for it. This would quite likely be related to declining EROEI.
My view is that some version of the faster decline scenario is likely, because we will hit limits that interfere with oil production or oil demand.
Let me explain my reasoning.
Declining EROEI
EROEI means Energy Returned on Energy Invested. It can be defined as 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. Wikipedia says,
When the EROEI of a resource is equal to or lower than 1, that energy source becomes an "energy sink", and can no longer be used as a primary source of energy.
The situation is really worse than Wikipedia suggests. An economy needs a certain level of energy just to keep its infrastructure (roads, bridges, schools, medical system, etc.) repaired and working, and citizens educated. So energy resources, to really be useful, need an EROEI significantly higher than 1 to maintain the system at its current level of functioning.
How much higher than 1.0 the EROEI needs to be on average will depend on the economy. An economy such as that of China, with relatively fewer paved roads and less expensive schools and healthcare system can probably get along with a much average lower EROEI (perhaps 4.0?) than an economy like the United States (perhaps 8.0), because of lesser infrastructure demands.
If the average EROEI available to society is falling because oil is becoming more and more difficult to extract, an economy with a high standard of living such as the US would seem likely to be affected before an economy with a lower standard of living, such as China or India or Bangladesh, because of the higher EROEI needs of the more extensive infrastructure. Ultimately, though, the world is one economy, so problems in one country are likely to affect the economies of other countries as well.
There a couple of issues related to declining EROEI:
1. High cost to extract. Sources of oil or natural gas or coal that are difficult (high cost) to extract tend to be lower in EROEI than sources that are low cost to extract. So high cost of extraction tends to be a marker for low EROEI. We are increasingly running into this issue, for both oil and natural gas.
2. Declining Net Energy. EROEI is closely related to "Net Energy," which is the amount of usable energy that is left after deducting the energy that it takes to make energy. When net energy decreases, we have less energy to run society, making it difficult to do things like maintain bridges and roads, and fund schools.
So high cost of oil extraction, low net energy, and low EROEI are all very closely related.
(continued with lots of cool charts at link)
I have come to realize that men are not born to be free. Liberty is a need felt by a small class of people whom nature has endowed with nobler minds than the mass of men. -Napoleon
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