Practical Applications of Net Energy Analysis of Upstream Oil and Gas Processes

Abstract

Net energy analysis (NEA) has traditionally been utilized by nonindustry actors, such as academics, economists, and regulators. It has not been widely accepted as a beneficial method within the oil and gas industry with regard to oil extraction systems. This research describes several NEA metrics, such at the energy return on energy investment (EROI), and the energy intensity ratio (EIR), and suggests several practical benefits to oil and gas owner/operators of applying them. The benefits are primarily realized by integrating NEA into economic analysis at the field level, facility level, and well level. The high level impact of energy on both capital and operational (OPEX and CAPEX) expenditures is explored. The case is made that NEA can be used to illuminate the drivers behind energy intensive oil and gas extraction processes, and thus can be used to reveal important economic risks and opportunities.