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Returns on Energy Investments – EROI and EIR

Dr. Carey King, a research associate at the Jackson School of Geosciences at The University of Texas at Austin and member of the Webber Energy Group, has spent the past couple of years studying a metric called Energy Return on Energy Invested (EROI). In his work, he strives to define what EROI includes and what it means – with the hope of allowing us to compare the efficiency of the different energy sources that we currently, or might soon, rely upon to power our lives.

In Dr. King’s November 10th publication in Environmental Research Letters he introduces discusses EROI in terms of another interesting dimension, called the Energy Intensity Ratio (EIR), that brings economics into the mix. As written by Dr. King…


Dr. Carey King

In this letter I compare two measures of energy quality, energy return on energy invested (EROI) and energy intensity ratio (EIR) for the fossil fuel consumption and production of the United States. All other characteristics being equal, a fuel or energy system with a higher EROI or EIR is of better quality because more energy is provided to society. I define and calculate the EIR for oil, natural gas, coal, and electricity as measures of the energy intensity (units of energy divided by money) of the energy resource relative to the energy intensity of the overall economy. EIR measures based upon various unit prices for energy (e.g.  $/Btu of a barrel of oil) as well as total expenditures on energy supplies (e.g. total dollars spent on petroleum) indicate net energy at different points in the supply chain of the overall energy system. The results indicate that EIR is an easily calculated and effective proxy for EROI for US oil, gas, coal, and electricity. The EIR correlates well with previous EROI calculations, but adds additional information on energy resource quality within the supply chain. Furthermore, the EIR and EROI of oil and gas as well as coal were all in decline for two time periods within the last 40 years, and both time periods preceded economic recessions.

Energy Return on Energy Invested (EROI)

The concept of Energy Return on Energy Invested (EROI) seems fairly clear – to get energy, we (generally) have to use energy. The EROI is a measurement of how much energy we use to get the energy we want.

For example: The gasoline that we use to power our vehicles (usually via a spark-ignition engine) is first pumped out of the ground as crude oil. This oil is then transported to refineries and then processed into gasoline (or diesel + a bunch of other refined petroleum products). This gasoline is then piped and trucked to gas stations, and then pumped into our cars. At every step, we use energy to get our gasoline a step closer to what we want – gasoline in our tank that can be used to take us where we want to go.

Calculating the energy return on energy invested (EROI) for the process above shows us that we get more energy out of our gasoline than we put into it to get it to our cars. This is one of the reasons that we like traditional gasoline – lots of power out for little amounts of energy in. It is also one of the arguments against corn-based ethanol, which requires a lot of energy in for arguably less energy out.

Energy Intensity Ratio (EIR)

The Energy Intensity Ratio (EIR) is the energy intensity of an energy resource, divided by the economic energy intensity (energy per unit of GDP) of a country. A low economic energy intensity means that a high amount of economic value can be realized for a very small amount of energy.

To learn more, you can check out Dr. King’s publication for free here.


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