Continuous Resources Vs Traditional Resources: EROEI

Continuous Resources Vs Traditional Resources: Energy returned on energy invested

1. Continuous Resources Vs Traditional Resources: Geology

2. Continuous Resources Vs Traditional Resources: Technology Changes

3. Continuous Resources Vs Traditional Resources: Energy Return on Energy Invested

4. What Continuous Resources Mean for North America. (not written yet)

In this section, we will attempt to explain the energy return on energy invested for oil and gas plays like the Bakken and other continuous geologic reservoirs.

First, we need to address the misconception that energy return on energy invested is low. A lot of people toss around numbers from 5 to 7 for the ratio. From what I can tell members of the oildrum were largely responsible for many of the calculations floating around the internet. Their numbers may have been accurate a few years ago, but significant improvements have been made.

Before we go on, readers of this post need to understand that calculating a real EROEI number for any kind of operation is masters level work so the best average individuals can do is use estimates that are provided in books, which are inherently out of date.

Consider the above statement a disclaimer of sorts.

On with the calculating. For consistency and ease I am going to use the same methodology as members of the oildrum in 2008.

Assumptions:

1 bbl crude oil = 6.10E+09 Joules Equivalent (Click to see source)

In 2005 oil and gas industry had an energy intensity of $1 = 20E+6j which is about double normal industrial applications. This number was used by oildrum (They source “Charles Hall’s Natural Gas Paper” I was unable to find the source paper myself, but it does seem legitimate. Charles Hall is sort of the father of EROI studies.) Other calculations done by the same individual on oildrum are legitimate so hopefully he was on his game the day he grabbed that number.

QEP Resources – Q2 2011 Bakken Operations Report (I could have used just about any operator in the Bakken and got similar numbers. QEP is low to average in terms of EUR)

– Average completed well costs range from $6.5 million to $9 million per well.

– Estimated Ultimate Recovery (EUR) per well range from 350,000 to 750,000 per well.

Calculation:

B1 = Energy/$ 2.00E+07

B2 = Energy/Per Barrel 6.10E+09

(100000*$B$2)/(5000000*$B$1) = 6.10 Oildrum (Just checking method numbers based on 2008 EUR)

(350000*$B$2)/(9000000*$B$1) = 11.86 Worst Case EROI Bakken Well

(750000*$B$2)/(6500000*$B$1) = 35.19 Best Case EROI Bakken Well

Conclusions:

Estimated Ultimate Recovery in drilled continuous resources is rapidly improving with limited additional monetary investment. Many companies are reporting EUR values between 700,000 and 1.5 million barrels (Continental, EOG, Brigam). The take-away message from this post is that EROEI for continuous resources in low cases meets the recent domestic industry average, and in high cases approach the EROEI seen domestically in the 1970s. (good thing)