# A Preliminary Forecast of the Production Status of China’s Daqing Oil field from the Perspective of EROI

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## Abstract

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^{12}MJ to 1.25 × 10

^{12}MJ. If China’s energy intensity does not decline as planned in the next ten years, then the EROI of Daqing will be even lower than our estimates. Additionally, relating the EROI to the monetary return on investment (MROI) in a low production and high intensity scenario, Daqing’s EROI will decline to 2.9 and its MROI will decline to 1.8 by 2025. If the “law of minimum EROI” and the assumed “minimum MROI” are taken into account, then we estimate that both energy pressure and economic pressure will restrict Daqing’s production by 2025.

## 1. Introduction

## 2. EROI and Net Energy of the Daqing Oilfield

#### 2.1. Formulas for EROI and Net Energy

_{stnd}, as used in Hu et al.’s research [19]. EROI

_{stnd}accounts for both direct and indirect energy inputs from the extraction boundary but does not account for labor or environmental costs.

^{O}is the total joules of all energy outputs expressed in the same units; M

_{Inp}expresses the monetary costs, including the direct and indirect inputs; and ${E}_{ins}$ indicates China’s energy intensity per monetary unit.

#### 2.2. Forecasting Energy Outputs

#### 2.2.1. Annual oil Production

_{0}, called ${Q}_{0}$Q

_{0}, we obtain the following after integrating Equation (6):

#### 2.2.2. Annual Gas Production

#### 2.3. Forecasting Energy Inputs

_{Inp}consists of operating costs, depreciation and depletion, and expenses, which are recorded in the Daqing Statistical Yearbook; E

_{Ins}represents energy intensities and reflects the relationship of energy consumption and the economy. As the sectors for extracting petroleum and natural gas are simply categorized as “industry”, we use the data for actual GDP and energy use to derive a time series of E

_{Ins}for all industries.

#### 2.3.1. Operating Costs

_{t}is the cumulative production from 2001 to time t. The monetary units are one hundred million yuan, and the units for the production and reserve amounts are million tons. The fitting equation passed the p-value test, and the R

^{2}reached 95.2% (see Figure 3).

**Figure 3.**History and forecast results of Daqing unit operating costs. The blue line represents historical data; the red line represents predictions based on the best fit of the trend.

#### 2.3.2. Depreciation and Depletion

**Figure 4.**History and forecast of depreciation and depletion in the Daqing oilfield. The blue line represents historical data; the red line is an extrapolation of the depreciation and depletion, as it is assumed to continue rising with investment development.

#### 2.3.3. Expenses

**Figure 5.**History and forecasts of expenses for the Daqing oilfield. The blue line represents the historical data; the red line is extrapolated based on the best linear fit of the trend.

#### 2.3.4. Energy Intensity

**Figure 6.**History and forecast of energy intensity of the Daqing oilfield. The blue line represents historical data; the red line represents the predicted trend with a planned annual decline of 3.4%.

## 3. Forecast Results of Daqing’s EROI and Net Energy

**Table 1.**Forecast results of EROIs and net energy of the Daqing oilfield from 2013–2025 as the Base Scenario.

2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|

Production (10^{12} MJ) | 1.77 | 1.75 | 1.74 | 1.73 | 1.72 | 1.72 | 1.73 | 1.75 | 1.71 | 1.68 | 1.65 | 1.62 | 1.59 |

EROI | 7.3 | 7.0 | 6.7 | 6.4 | 6.2 | 6.0 | 5.9 | 5.8 | 5.5 | 5.3 | 5.1 | 4.9 | 4.7 |

Net energy (10^{12} MJ) | 1.53 | 1.50 | 1.48 | 1.46 | 1.45 | 1.44 | 1.44 | 1.44 | 1.40 | 1.36 | 1.32 | 1.29 | 1.25 |

## 4. Relating EROI and MROI Analyses

#### 4.1. Implications of Daqing’s EROI and MROI

_{ins}in the Base Scenario from 2010 to 2025 into three groups based on the average arithmetic progression of E

_{ins}:

- Group 1 with E
_{ins}=3.5 MJ/yuan and EROI = 7.3 for 2010–2014; - Group 2 with E
_{ins}=3.0 MJ/yuan and EROI = 6.4 for 2015–2018; - Group 3 with E
_{ins}=2.5 MJ/yuan and EROI = 5.3 for 2019–2025.

#### 4.2. Forecasting Daqing’s MROI

_{ins}will decline by a rate of approximately 4% per year from 2011 to 2025, so we can construct the formula as:

_{ins}are MJ/yuan. Substituting Equation (14) into Equation (13), we obtain Equation (15):

## 5. Discussion

#### 5.1. Forecast of the Production Status by EROI and MROI

#### 5.2. Comparison with Previous Estimates for the Daqing Oil Field

**Figure 11.**Comparison of our EROI estimates with a previous study [16].

#### 5.3. The Sensitivity of Daqing’s EROI and MROI

High Oil Price | Low Oil Price | |
---|---|---|

High Production–High Intensity Scenario | EROI = 3.5; MROI = 2.1 | EROI = 3.5; MROI = 1.8 |

High Production–Low Intensity Scenario | EROI = 5.7; MROI = 2.1 | EROI = 5.7; MROI = 1.8 |

Low Production–High Intensity Scenario | EROI = 2.9; MROI = 2.1 | EROI = 2.9; MROI = 1.8 |

Low Production–Low Intensity Scenario | EROI = 4.7; MROI = 2.1 | EROI = 4.7; MROI = 1.8 |

## 6. Conclusions

^{12}MJ to 1.25 × 10

^{12}MJ. A large decline in the energy intensity contributes to a declining rate in the monetary investment per embodied energy unit (measured in joules); thus, the EROI performance improves.

## Acknowledgments

## Author Contributions

## Conflicts of Interest

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**MDPI and ACS Style**

Xu, B.; Feng, L.; Wei, W.X.; Hu, Y.; Wang, J.
A Preliminary Forecast of the Production Status of China’s Daqing Oil field from the Perspective of EROI. *Sustainability* **2014**, *6*, 8262-8282.
https://doi.org/10.3390/su6118262

**AMA Style**

Xu B, Feng L, Wei WX, Hu Y, Wang J.
A Preliminary Forecast of the Production Status of China’s Daqing Oil field from the Perspective of EROI. *Sustainability*. 2014; 6(11):8262-8282.
https://doi.org/10.3390/su6118262

**Chicago/Turabian Style**

Xu, Bo, Lianyong Feng, William X. Wei, Yan Hu, and Jianliang Wang.
2014. "A Preliminary Forecast of the Production Status of China’s Daqing Oil field from the Perspective of EROI" *Sustainability* 6, no. 11: 8262-8282.
https://doi.org/10.3390/su6118262