Oil Depletion and the Energy Efficiency of Oil Production: The Case of California

Abstract: This study explores the impact of oil depletion on the energetic efficiency of oil extraction and refining in California. These changes are measured using energy return ratios (such as the energy return on investment, or EROI). I construct a time-varying first-order process model of energy inputs and outputs of oil extraction. The model includes factors such as oil quality, reservoir depth, enhanced recovery techniques, and water cut. This model is populated with historical data for 306 California oil fields over a 50 year period. The model focuses on the effects of resource quality decline, while technical efficiencies are modeled simply. Results indicate that the energy intensity of oil extraction in California increased significantly from 1955 to 2005. This resulted in a decline in the life-cycle EROI from 6.5 to 3.5 (measured as megajoules (MJ) delivered to final consumers per MJ primary energy invested in energy extraction, transport, and refining). Most of this decline in energy returns is due to increasing need for steam-based thermal enhanced oil recovery, with secondary effects due to conventional resource depletion (e.g., increased water cut).