Do higher energy prices raise the costs of extracting fossil fuels?
It depends on the individual case. Coal has a high E-ROI. For instance from a recent survey by Heinberg ( from http://www.theoildrum.com/node/4061 ): “Consider the case of Massey Energy Company, the nation’s fourth-largest coal company, which annually produces 40 million tons of coal using about 40 million gallons of diesel fuel—about a gallon per ton” . That’s a very high E-ROI: a gallon of diesel is about 140K BTU’s, and a ton of coal is very roughly 20M (see http://www.uwsp.edu/CNR/wcee/keep/Mod1/Whatis/energyresourcetables.htm ), so that’s an E-ROI about 140:1! Now, diesel costs very roughly 10x as much per BTU (reflecting it’s scarcity premium), so the cost ratio isn’t quite as favorable, but it’s still well above 10:1. So, the price of diesel rises by $1 (roughly 25%), and the cost of coal rises by $1, or very, very roughly 2% – not a big deal. Also, we should note that coal mining (and transportation) is often electric even now (especially underground), and that it’s pretty amen
