Net energy yield from production of conventional oil

Historic profitability of bringing oil to market was profound, but most easy oil has been developed. Higher cost resources, such as tar sands and deep off-shore, are considered the best prospects for the future. Economic modelling is currently used to explore future price scenarios commensurate with delivering fuel to market. Energy policy requires modelling scenarios capturing the complexity of resource and extraction aspects as well as the economic profitability of different resources. Energy-return-on-investment (EROI) expresses the profitability of bringing energy products to the market. Net energy yield (NEY) is related to the EROI. NEY is the amount of energy less expenditures necessary to deliver a fuel to the market. This paper proposes a pattern for EROI of oil production, based on historic oil development trends. Methodology and data for EROI is not agreed upon. The proposed EROI function is explored in relation to the available data and used to attenuate the International Energy Agency (IEA) world oil production scenarios to understand the implications of future declining EROI on net energy yield. The results suggest that strategies for management and mitigation of deleterious effects of a peak in oil production are more urgent than might be suggested by analyses focussing only on gross production. (C) 2011 Elsevier Ltd. All rights reserved.