Gas Cooled Small Nuclear Reactors -- The Slayer of EROEI, The Death of Peak Oil

DOE ORNL Small Modular Reactors PDF
In an earlier article, we detailed several incredible energy breakthroughs which would be made possible by abundant, cheap, high temperature process heat from nuclear reactors. We demonstrated how the concept of EROEI would be made obsolete and how peak oil could be turned into a distant sour memory.

Industry is doing its part to develop scalable generators of heat and power (PDF via Brian Wang), at increasingly affordable prices. It is the US government -- in particular Obama's NRC under Jaczko -- which is gumming up the works. By delaying the licensing of safe, advanced, world-changing nuclear technologies, the Obama administration is adding to its damnable record of overall energy starvation.

Short List of SMRs from World-Nuclear
It is impossible to overstate the importance of cheap and abundant process heat for the transition to a more abundant society -- in terms of energy, fuels, food, chemicals, materials, and more.

With plentiful process heat provided at temperatures between 700 C and 950 C, a person could kill peak oil and have plenty of energy left to power industry and a broad spectrum of industrial processes.   Specifically, one could:

1. Unlock the trillions of barrels oil equivalent in oil sands (PDF)
2. Unlock the trillions of barrels oil equivalent in coal to liquids and gas to liquids (PDF)
3. Unlock the trillions of barrels oil equivalent in shale oil kerogens 
4. Provide abundant industrial process heat for production of fertilisers, refining fuels, making plastics, etc 
5. Split CO2 into CO to use as a hydrogen carrier 
6. Overturn conventional fears of EROEI and Peak Oil 

Those things, and many more, will be accomplished by next generation gas-cooled high temperature nuclear reactors. Helium gas coolant will run gas turbine generators at high temperatures, which provides electrical power at higher efficiencies than older steam cycle generation systems. And as mentioned above, the higher temperature process heat will find a wide range of practical uses in industrial processes and energy production. _Source

With combined heat and power, versatile, portable gas-cooled SMRs can go to where the resource is in a timely fashion. Instead of requiring ten years to build and implement -- like conventional nuclear reactors -- the smaller, cheaper, safer, and more versatile SMRs can be built and installed in under 2 years.

With all of these advantages, one has to wonder why any benevolent government would stonewall the development of this technology.

The Nonsense of EROEI: Opiate for the Masses?

Peak oil doomers wallow in the confusion of EROEI as if it were an addictive drug. The simplistic concept feeds into a new generation of doom predictions, despite the abysmal failure of peak oil predictions over the last 150 + years. When will they learn?

The quote below looks at EROEI calculations in regard to the growing of wheat, demonstrating that EROEI in food production has never been of particular concern. The author extends the argument to the relative irrelevance of EROEI for other, less important concerns.

...the reason that ERoEI doesn’t mean very much is that we’re not, an any kind of human scale, limited by the availbility of energy. The Sun simply pumps in so much energy that total energy availability simply isn’t a binding constraint upon us. What we’re interested in is usable energy and we’re quite happy to waste total energy in order to get usable. As in the growing wheat example, there’s 35 times more energy going into the system than energy we get out of it and yet we’re all just entirely delighted with said system. _Forbes

What most EROEI enthusiasts fail to comprehend is that unless the government prevents entrepreneurs from seizing opportunities, in a market economy the pricing (and potential pricing) of technologies and resources dictates where the action will go.

The reason that so many peak oil predictions of the past have gone so badly wrong, is that doomsayers (and lawyers & bureaucrats) focus on the negative at the expense of the potential positive. Entrepreneurs in the private sector tend to do the opposite, for reasons of opportunistic greed and ambition -- or merely for the sake of wanting to support a family in comfortable and secure style. If the balance of power within a nation shifts to the legal and bureaucratic sectors -- typically government regulators and private & public litigators -- opportunities for entrepreneurs tend to dry up. Public sector growth tends to choke off private sector activity -- despite the fact that a prospering private sector grows government revenues far beyond what a choked off private sector could do.

This antagonism between the negativity and limited vision of the public sector, environmental sector, litigation sector, political activism sector, tenured academic sector, labour union sector, doomer sector etc. VS. the imaginative entrepreneurial private sector, defines the future of any given society. If negativism and limited imagination wins the day, the economy contracts and opportunity disappears.

This is what happened in the Soviet Union, North Korea, Mao's China, Pol Pot's Cambodia, Chavez' Venezuela, Ortega's Nicaragua, etc etc.

The problem with EROEI addicts is that doom is powerfully salient to the human brain. When doom is entrenched, it is almost impossible for any other idea to gain traction. And yet, the history of doomsday predictions should still give pause to doomers and would-be doomers.

Here is where Al Fin energy analysts show their doomer side: Peak manpower within the developed world is a far greater problem looming on the horizon than EROEI, peak oil doom, carbon hysteria doom, overpopulation doom, resource scarcity doom, pollution doom, or any other form of doom which is able to make it into print these days. Peak manpower is a reflection of the demographic contraction within the populations of the world that have the potential to raise and educate persons who can plan, build, and maintain the new technologies which will be necessary to move from a combustion energy economy to the post-combustion economy.

It is not the shortage of materials, equipment, energy, water, phosphates, or any other mere material that is the threat. It is instead the shortage of human capital, human ingenuity, human optimism combined with human competence. Because without that human capital, we could be floating in oil and still be mired in an energy crisis, in real terms.

But addicted people tend not to think constructively, in realistic terms. And EROEI is nothing if not an addiction for doomers.

A Casual Walk Down EROEI Lane

Wikipedia EROEI
EROEI -- or energy return on energy investment -- is an interesting concept. A simple equation for calculating EROEI is provided by Wikipedia:
EROEI = Usable Acquired Energy / Energy Expended

But beware of the false simplicity of equations and charts. The denominator for the equation above: "Energy Expended," can be devilishly difficult to quantify in simple terms.

EROEI is never quite well-defined because you don't know how "deeply" you should go in your energy audit. If Joe Sixpack works for a hydroelectric power plant, should you include the energy expenses that his grandfather had to make to get laid with his grandmother? What about the projector in the cinema in 1934 before they had the first intercourse? :-) These things were needed for the power plant to work. My example is meant to be amusing but the essence is very serious. _Lubos

When it comes to EROEI, only a range of values is acceptable. If you are given a point estimate of EROEI without error bars or a range -- as in the Wiki chart above -- you are being lied to.

Robert Rapier is going to delve into the treacherous topic of EROEI in a talk at the ASPO-USA Conference. Robert discusses various ways in which an investment with a low EROEI can be superior to one with a higher EROEI. For example:

... it is possible for a lower EROEI process to be more attractive than a higher EROEI process if the former returns the energy over a shorter time interval. Think of it in terms of interest. Consider an investment that returns 3% on a daily basis versus one that returns 50% on an annual basis. If you invested $1 in each, the 3% daily return will earn you more than $47,000 at the end of one year (assuming you reinvest the returns) while the 50% annual return will earn you 50 cents. But EROEI would simply say that one return is 1.03 to 1 and the other is 1.5 to 1. So, if someone says that a process has an EROEI of 1.5, the first question needs to be “Over what time interval?” _RobertRapier

In fact there are many situations where other factors will trump the narrow EROEI consideration. Environmentalists, for example, may disqualify hydroelectric, coal, nuclear, oil sands, and oil shale, simply on environmental concerns -- regardless of EROEI. Utility manager may wish to disqualify wind and solar, based upon their intermittency, expense, requirement for expensive backup facilities, and the fascist way that green governments are forcing such unreliable forms of power production down their throats.

EROEI and Cents per kilowatt-hour

Energy mechanism	EROEI	Cents/kWh
Hydro	11:1 to 267:1	1
Coal	50:1	2 to 4
Oil (Ghawar supergiant field)	100:1
Oil (global average)	19:1
Natural gas	10:1	4 to 7
Wind	18:1	4.5 to 10
Wave	15:1	12
Solar Photovoltaic	3.75:1 to 10:1	21 to 83
Geothermal	2:1 to 13:1	10
Tidal	~ 6:1	10
Tar sands	5.2:1 to 5.8:1
Oil shale	1.5:1 to 4:1
Nuclear	1.1:1 to 15:1	2 to 9
Biodiesel	1.9:1 to 9:1
Solar thermal	1.6:1	6 to 15
Ethanol	0.5:1 to 8:1

Table Source
Imagine you are driving through downtown Santa Fe, running low on fuel, and you see two gasoline stations on opposite sides of the street. One sells fuel for $3.85 a gallon, and the other for $10.99 a gallon. The higher priced fuel boasts an EROEI of 10:1, whereas the lower priced fuel can only claim an EROEI of 3:1. Which fuel will you buy, and on what basis?

In fact, we base our energy decisions on price, not EROEI. The fact that prices can change erratically, while EROEI may stay the same, is not a black mark against economics. It is rather a commentary on how simplistic the concept of EROEI is compared to the complexity of life. Pricing in markets reflects far more dimensions of reality than the deceptively simple calculation of EROEI.

Biodiesel- 3:1
Coal- 1:1 to 10:1
Ethanol- 1.2:1
Natural Gas- 1:1 to 10:1
Hydropower- 10:1
Hydrogen- 0.5:1
Nuclear- 4:1
Oil- 1:1 to 100:1
Oil Sands- 2:1
Solar PV (2) - 1:1 to 10:1
Wind (2) - 3:1 to 20:1 _Energy Bulletin

If you can produce and sell power reliably and profitably over a long period of time using a relatively low cost method of production -- but the EROEI was only 1.5 to 1 -- would you do it? It depends on a lot of things, the EROEI being one of the least important.

EROEI can be important in some contexts, irrelevant in others, and downright misleading in most. I have included three different charts or tables comparing EROEI for various forms of energy production or energy source. Notice that the range of estimates for EROEI is quite wide -- where ranges are provided. These ranges are more honest than a simple point estimate, but even such wide ranges can be made obsolete.

As technologies change, EROEIs necessarily change as well. What was once not economically viable suddenly becomes viable, with the introduction of new technologies. 20 year old EROEIs given for deep sea oil, oil sands, shale oil & gas, methane clathrates are less than meaningless today, and will be even less worth considering in 20 years time.

The EROEIs given for wind energy are particularly misleading, given that wind is not dispatchable, has a capacity factor between 20% and 30% at best, and produces most of its power at non-peak demand times. Wind is not present in sufficient quantities for large areas of the globe. Throw away the EROEI for wind, or fool yourself, as you please.

Other forms of energy suffer from the same problem of EROEI irrelevancy. Solar, for example, is also intermittent, non-dispatchable, not suitable for most parts of the world due to issues of weather and latitude. Despite what solar advocates may say, solar energy is not a good match to peak loads most of the year, for most of the planet. Throw away EROEI for solar.

EROEI is a broad and deceptively simplistic measure of energy efficiency, is perhaps best thought of in connection with the broader concept of entropy in a closed system. In open systems, such as those which humans deal in, EROEI has only limited utility, and is most frequently misused and abused when used.

Process Heat from Gas Cooled Nuclear Reactors Changes Everything

With plentiful process heat provided at temperatures between 700 C and 950 C, a person could kill peak oil and have plenty of energy left to power industry and a broad spectrum of industrial processes.   Specifically, one could:

1. Unlock the trillions of barrels oil equivalent in oil sands (PDF)
2. Unlock the trillions of barrels oil equivalent in coal to liquids and gas to liquids (PDF)
3. Unlock the trillions of barrels oil equivalent in shale oil kerogens 
4. Provide abundant industrial process heat for production of fertilisers, refining fuels, making plastics, etc 
5. Split CO2 into CO to use as a hydrogen carrier 
6. Overturn conventional fears of EROEI and Peak Oil 

Those things, and many more, will be accomplished by next generation gas-cooled high temperature nuclear reactors. Helium gas coolant will run gas turbine generators at high temperatures, which provides electrical power at higher efficiencies than older steam cycle generation systems. And as mentioned above, the higher temperature process heat will find a wide range of practical uses in industrial processes and energy production.

Conventional fears about EROEI and peak oil will be overturned since the energy used to produce hydrocarbon fuels, fertilisers, plastics, and other products of industry and energy, will come from the high temperature heat effluent of nuclear reactions -- of which there is no conceivable near term shortage.

These promising prospects are all vulnerable to political misbehaviour, stupidity, and incompetence. The forces of faux environmentalist lefty-Luddism are strong in governments of the developed world. Energy starvation and carbon hysteria are powerful influences among governmental and inter-governmental policymakers. If industry and commerce are starved of energy -- whether by political design or by political incompetence -- continued economic decline is likely.

Choose wisely at the ballot box.

Adapted from an earlier article on Al Fin, The Next Level, and cross-posted to Al Fin

Alta and Blackstone Aim to Turn EROEI On Its Head

The conventional wisdom among peak oil doomers and religionists says that the EROEI -- energy returned on energy invested -- is too low to allow most unconventional substitutes for crude oil to become economical.

But Blackstone Group and Alta Resources are teaming up -- investing US$ 1 billion -- to prove that unconventionals can indeed substitute for crude oil and other conventional fuels.

Blackstone Group LP (BX), the world’s biggest private-equity firm, agreed to form a joint venture with natural-gas explorer Alta Resources LLC to invest $1 billion in North American gas fields.

The entity will be called Alta Energy Partners, the companies said today in a joint statement. The new company will focus on acquiring leases and drilling wells in so-called unconventional fields, or geologic formations previously regarded as too hard to penetrate. _Bloomberg

More:

Blackstone Group (BX.N) is investing in the lucrative area of shale, following rivals such as Kohlberg Kravis Roberts & Co (KKR.N).

North American shale fields are drawing billions of dollars from companies that are eager to learn the techniques to tap into the difficult geological formations.

...Unconventional assets include shale rock fields that may hold vast quantities of oil and gas but are more expensive to tap than traditional energy reservoirs. _Reuters

Devoted believers in EROEI as a sort of "barrier wall" preventing the economic use of difficult fossil fuel resources, have been unable to wrap their minds around the concept of dynamic technology -- on many levels. At one time, the EROEI for conventional crude oils in Texas or Saudi Arabia were much too low for profitable production at any scale. At one time, the EROEI for coal in most coal mines of England was far too miniscule to allow Englishmen to substitute coal for wood as a common fuel. And so it goes.

EROEI is not a static ratio. It changes over time, as society's needs drive both technology and the broad range of economic and political considerations.

Alta and Blackstone are attempting to push EROEI to its limits in regard to various forms of unconventional fossil fuels. They are putting significant resources behind the attempt. By doing so, they are likely to push ahead of some significantly better financed -- but less bold -- multi-national oil giants.

Current artificially inflated oil prices will tend to drive investments into alternative fuels acroass the entire wide spectrum of possibilities. Until the speculative bubble of political peak oil pops, of course. Then the cyclic process begins again -- but on a somewhat higher cost level, reflecting the ongoing phenomenon of political peak oil (designed energy starvation) and the ongoing intentional debasing of fiat currencies by central banks.