Woodpile,Woodland
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Fôret et Tas de bois .
Oil production can be best understood by comparison with something such as wood.
Imagine an island where there is one carpenter.
The R/P ratio basis of oil usage revolves around the assumption that oil production works like a woodpile in the carpenter's backyard.
Whenever he needs woods, he walks out to the pile and takes however much he requires.
If things get busy and he needs more wood, he simply takes more wood from the pile.
There is always enough to satisfy his needs until that fateful day when he removes the last plank and it is then all gone.
The only factor in its price is demand - if fewer people want wooden things, the carpenter lowers the price to stimulate demand.
If he has plenty of work on, he can increase the price and get the benefit.
Comparing this with oil, if the world has 1,050 Gb of oil remaining and we use 27 Gb a year, then dividing one by the other means that we will be able to use 27 Gb of the woodpile for another 39 years.
Then the yard will suddenly turn out to be empty.
But oil does not sit in one huge whole in the ground, constantly being pumped out.
Rather an oil field is a set of wells of different sizes, with new wells being set up as old ones dry out.
The R/P ratio takes the view that the oil has already been found and is sitting patiently in the backyard.
In reality, it is more like woodland than a woodpile.
If we imagine instead that our carpenter had to chop down a tree every time he needed to make something, the problems become more evident.
Trees vary in their size, proximity and quality. Initially our man would pick those that were large, good quality and nearby. As this was relatively easy, his prices could be kept low.
But, as time went on, he would have to cut more trees of smaller sizes, travel further to find them and use wood of a lower standard.
This extra work would take longer and naturally result in higher prices.
Eventually, unless the trees were managed and replaced, he would find himself unable to find enough wood to satisfy his customers.
But couldn't he cut the trees quicker to keep production up?
He certainly could employ someone to help him (which would be like drilling more wells) but that would result in depletion occurring more quickly, and the quicker you cut away the large and nearby trees, the quicker you have to resort to the small and distant ones.
New technology can only help so much;
no matter what circular saw or four-wheeled vehicle you have, there's always a certain minimum time needed to cut down and drag a tree to the workshop.
Production still falls, the best you can do is change the angle of the slope on the chart.
Any increase in production means a gentler initial decline and a steeper subsequent one.
Oil production works in a similar way with the important distinction that, unlike trees, we cannot replace the oil we use. It is as if every tree the carpenter cut down was gone forever.
Looking at it from an EROEI perspective: as consumption grows, the resource needed to feed it also grows.
Imagine Conventional Oil has an EROEI of 1 to 10, if in 2005 26 Gb where consumed, the equivalent to 2.6 Gb of past production was used to create the current rate of consumption.
If you want to produce 27 Gb the next year you'll have to spend 2.7 Gb of past production to achieve it.
Like Paul explains the problem is that the biggest and closer to home trees go down first (the low hanging fruit).
This tells you a very important thing: EROEI for an unevenly distributed finite resource is not static; it decreases with the amount of resource consumed.
And this is the drama, the fraction of the current harvest used to maintain and grow the future harvest starts increasing, eventually overwhelming the harvest - making it peak and decline.
Going back to the previous example if EROEI felt to 1 to 5, instead of neading 2.7 Gb to get 27 Gb the next year, you would need 5.4 Gb.
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