I have just picked this up off the Good Food site (I am posting it here so that I don't lose it) - question and answer:
I want to eliminate dairy from my diet but I still want to bake cakes. Is there any one rule for substituting butter for olive oil?
Did you know that vegans love olive oil because the trees are wind-pollinated and do not require bees? I was speaking to Rita Bikins from Red Rock Olives in Pomonal in Victoria. She has done a lot of experimentation and has perfected just about every cake recipe substituting extra virgin olive oil for butter. "I can do everything except scones," she says. Rita suggests beating the eggs until they become creamy and drizzling in the olive oil as if one were making mayonnaise. Then add the sugar, beat until dissolved, then add the other ingredients. From her experience Rita recommends using three-quarters the volume or weight of oil to the amount of butter the recipe calls for. Because butter is around 15 per cent water you may need to add a splash of extra liquid to help hydrate the flour.