Ultra-Deepwater Gulf of Mexico Oil and Gas: Energy Return on Financial Investment and a Preliminary Assessment of Energy Return on Energy Investment

The purpose of this paper is to calculate the energy return on financial investment (EROFI) of oil and gas production in the ultra-deepwater Gulf of Mexico (GoM) in 2009 and for the estimated oil reserves of the Macondo Prospect (Mississippi Canyon Block 252). We also calculated a preliminary Energy Return on Investment (EROI) based on published energy intensity ratios including a sensitivity analysis using a range of energy intensity ratios (7 MJ/, 12 MJ/, and 18 MJ/). The EROFI for ultra-deepwater oil and gas at the well-head, ranged from 0. 019 to 0. 022 barrels (BOE), or roughly 0. 85 gallons, per dollar. Our estimates of EROI for 2009 ultra-deepwater oil and natural gas at the well-head ranged from 7–22: 1. The independently-derived EROFI of the Macondo Prospect oil reserves ranged from 0. 012 to 0. 0071 barrels per dollar (i. e. , 84 to 140 to produce a barrel) and EROI ranged from 4–16: 1, related to the energy intensity ratio used to quantify costs. We believe that the lower end of these EROI ranges (i. e. , 4 to 7: 1) is more accurate since these values were derived using energy intensities averaged across the entire domestic oil and gas industry. Time series of the financial and preliminary EROI estimates found in this study suggest that the extraction costs of ultra-deepwater energy reserves in the GoM come at increasing energetic and economic cost to society.