The Energy Factor, Part V

The Energy Half Way Point

Petroleum has been extracted in significant quantity commercially since 1860. Every barrel has "on average" required more energy to extract than the barrel that came before it. This is quarantined to have happened by the Second Law. The increasing production energy requirement resulted in deeper wells, higher water cut, and changing viscosity. Over time it has taken more, and more energy to extract petroleum.

The energy content (exergy) of a barrel of oil is fixed by its molecular structure. This is demonstrated by Graph# 20, the Exergy vs API graph. EIA data tells us that the viscosity of the average barrel over the last decade has been an API of 35.7. This results in an energy content (exergy) of 140,000 BTU/gallon, or 5.88 million BTU/barrel.

The ETP Model produces a result that gives the Total Production Energy used for producing a unit of oil. That is the total energy to extract, processes, and distribute one unit. As time progresses that number must increase, and at some point it will require one half of the energy content of the oil to extract it, and produce its products. The ETP Model indicates that the half way point (70,000 BTU/gal) was reached in 2012.
Substantiating the Model's determination is accomplished by evaluating petroleum usage in the US for 2012.

To extract petroleum requires an input of goods, and services. To produce those goods, and services requires energy. That energy must be extracted from, and subtracted from the petroleum energy stream as long as petroleum is used as an energy source. This conversion of energy into work (goods and services) always results in loses. This is discussed in the Energy Factor, Part I. The ETP Model calculates this value through numerical analysis which produces a conversion efficiency of 20.45 %. This is equivalent to a source temperature of 214 F, and a sink temperature at STP of 77 F.This is very close to the thermal operating efficiency of an internal combustion engine; they constitutes 83% of petroleum usage.

US data for 2012: 
GDP; $16.1632 trillion *1
The price of WTI; $94.05/ barrel
Petroleum consumption; 18,490,213.6 barrels/day = 6.7489 Gb/ year *2
% energy consumption from petroleum, EIA; 35.1% *3
Total US crude cost = $634.73 billion (consumption x price)
Method 1 
Converting $634.73 billion of crude consumed into goods and services required: $634.73/0.2045 = $3.104 trillion.
35.1% x GDP = $5.6733 trillion
Percent of total petroleum dollars used to extract, process, and distribute it:
$3.104 trillion/ $5.673 trillion = 54.7%
Method 2 
An alternative evalution method uses the thermal conversion efficiency (0.2045), and the BTU/$ conversion from Graph# 12: BTU/$.
Total US BTU from petroleum = 6.7489 Gb/ year x 5.88 million BTU/barrel
= 3.9684 x 10^16 BTU
Using the 2012 BTU/$ conversion of 6380 BTU/$:
Total US BTU/ 6380 = $6.220 x 10^12: the $ value of petroleum to the economy
Total cost of goods and services to produce petroleum:
$634.74 x 10^9/ 0.2045 = $3.1039 x 10^12
Graph# 12
Percent of total petroleum dollars used to extract, process, and distribute it:
Total goods and services/ US $ value of petroleum
= $3.1039 x 10^12/$6.220 x 10^12
= 0.4990 = 49.90%
Method 2 gives a result that is closer to the ETP Model's result than Method 1. This probably is the result of the EIA energy consumption from petroleum estimate of 35.1%.
The energy half way point is a critical junction for petroleum production. From that point forward production can no longer be increased utilizing only its own energy content. Increased production beyond that point has to be powered by energy delivered from a secondary source. Thus, any increase in production beyond the half way point would become an energy sink. Its economic value would be limited to acting as a feedstock material for the production of other products, and It would have no capacity to power the NEGs (non energy goods sector) of the economy. The maximum production point where petroleum could act as an energy source was reached when that capacity had fallen to where one barrel had the capacity to produce two. That occurred in 2012. Production above the 2012 time frame must have a negative overall impact on the economy. Whereas, production increases before 2012 added to overall economic activity, production increases after 2012 reduce it. That reduction is now equal to $219/ barrel when production is above the 2012 level.

A more detailed analysis for the derivation of ETP Model can be found here: Order Report