EROI stands for Energy Return On Investment, and it typically refers to the net gain of an energy resource used by humans. There's a school of thought (Gail Tverberg is one of the names at that school) that proclaims that modern life starts to break down when we start to exceed a 1:5 ratio on EROI. So, for every five gallons of oil I take out of the ground, I have to spend one gallon to get it out of the ground and distribute it to the various productive activities around the world. For every increment over that one gallon I need to keep the energy resources moving, I have to sacrifice a portion of my production. At some point, I have to spend so much on energy extraction and transportation I have to give up my amusement parks, my drag car racing, my wars (unless it's to protect diminishing oil reserves), my health care, my manicured lawn, my big house, and other big house on the seashore.
So it goes.
But, when does this happen? According to some people, it's happening right now. We're feeling it a little bit in the U.S. in the form of high gas prices and a persistent current account deficit. Can we improve energy efficiency in existing buildings at a rate that keeps our standard of living on an upward trajectory? Can we frack a few more billions of oil out of the ground in the American Midwest?
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