Net Energy

One of the key concepts of the "peak oil" theory is that the energy return on energy invested (E.R.O.I., or net energy) has been declining over time. In the 1930s, with the discovery of giant oil fields, the return was over 100%; with biofuels, today, the return may be less than 1%. If, over time, it takes more energy to make energy, the result cannot fail to have adverse implications for economic growth and the standard of living. How to estimate net energy for any given sector necessarily involves a range of assumptions that may prove false; the estimates are inherently uncertain. But it is necessary to give it a try. One such effort is reproduced below, from Richard Heinburg's recent lecture on the end of growth: