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Thursday, April 13, 2006

EROEI reloaded

TheLastSasquatch (associated with this organization) sent me an update to the graphic in the last post.

Somebody on the PeakOil.com message board asked why would we reinvest everything we extract? Apart from the fact that, yes, indeed no oil company would reinvest their entire stock, this analysis gives the upper bound on what the industry can potentially do. The more you reinvest, the more you can possibly get as payout. So the carrot in front of the horse remains human greed -- pure and simple.

Let's say you found a broken slot machine in Reno. You put in $1.00 and out pops $10.00. It happens three times in a row. Would you keep putting in the coin until someone stopped you? Or would you walk away with only $30.00?

The answer to that question, albeit on a much larger scale, tells you the size of the dice that the energy industry plays with.


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