Reality Blind - Vol. 1

really crude oil at all by historical standards. To mask its decline, various folks in government and in the mining and financial industries have been expanding the definition of oil, by including all sorts of other flammable liquids. Since they all burn, they thought, doing so wouldn’t cause any problems. Thus, not only is the cost of finding and extracting crude oil going up, but a growing share of this expensive-to- produce “other liquids oil” is not even oil. It is liquid and can be burned as a fuel, but crude “oil” it most certainly is not. The new definition of “oil” now includes: ● Ethanol , which is made from corn, which in turn is largely made from fossil-carbon inputs utilized in industrial farming, ● Natural gas refinery liquids (NGPL) that condense out of natural gas during processing, ● Other biofuels , such as palm oil and biodiesel; and ● Various unconventional hydrocarbons such as “synthetic” oil from tar sands. All of the above provide far fewer benefits, at a higher cost, than the traditional “Texas tea”— the light sweet crude oil that powered the US, and quite a bit of the rest of the world, through most of the 20th century. Technically this different quality is referred to as the API specific gravity of the new oil: 42 for Bakken (ND shale oil) and 55 for Eagle Ford (TX shale oil). But the API specific gravity scale exaggerates the true energy content of the different sources, which is 3.5 and 10.7 percent respectively. 173 Fully a third of current oil production in the US is no longer oil but is these various other substances with less energy content. Liquids that condense from the output of gas wells, called natural gas plant liquids (NGPLs), account for about 3.5 million barrels per day (mmbpd). While NGPLs are counted as oil in the national accounting, they only have 60 percent of the energy content, by volume, of crude oil. 174 Doing the math means that the NGPLs are really only “replacing” two mmbpd of crude oil. One million barrels per day of ethanol manufactured from corn is also being counted as “oil production.” This so - called “oil” is the same stuff in whiskey, vodka, and beer: grain alcohol. From an energy standpoint, producing ethanol is an energy conversion , where we take soil, water, corn, diesel for the tractors and the combines, agricultural chemicals, electricity and natural gas for the conversion process, plus labor, and turn it all into ethanol at an ER/EI of barely over 1:1. Ethanol only has 68 percent


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