Why EROI Matters

Society usually makes its economic decisions, at least those not predicated by personal greed at the expense of others or strictly political considerations, on economic analysis and most explicitly via either non government market decisions or governmentally-administered cost-benefit analysis. Probably most decisions are made by people in the financial markets who seek to gain the best economic return on their economic investment. Probably most of these people believe that their own best judgments, while of course subject to the vagaries of the market, are the best way that we can prepare for the future. There is an implicit assumption, probably believed by most market analysts, that if they (collectively) make good financial decisions, based on market information, market projections and good hunches, then we collectively (i.e. society) will make the best investments possible. Although there are certainly good rationales that such analyses make considerable sense, in many cases it is not so clear to me that they are an effective guide to the future of energy supplies.


This is because 1) few understand the degree to which most technologies today are principally a means of subsidizing whatever it is we do with still-cheap petroleum 2) today