The boardroom smells of strong coffee and quiet desperation. Around the mahogany table, executives argue about oil prices, carbon taxes, and solar subsidies.
Charts fill the wall with projections of technological breakthroughs and market corrections. Everyone agrees something fundamental has changed, but nobody names the elephant in the room.
Energy doesn’t come for free anymore.
But here’s the thing.
Modern civilisation runs on energy surplus, not energy access. The difference between the two determines whether societies flourish or collapse.
The Physics of Prosperity
Energy Return on Investment or EROI, sometimes EROEI, is the ratio of the amount of usable energy delivered from a particular energy resource to the amount of energy used to obtain that resource. Energy in to get energy out.
When oil fields were young and shallow, the ratio was 100 to 1. Drill a hole, strike liquid gold, power a century of growth. Coal offered a similar bounty. Energy was so abundant it felt infinite.
Those days are finished.
Today’s unconventional oil requires massive infrastructure, complex chemistry, and constant maintenance. Offshore drilling in miles-deep water. Fracking, that fractures rock formations with industrial precision. Oil sands require more energy to process than many sources provide. The EROI has fallen from 100 to 1 down to 10 to 1, sometimes lower.
The threshold matters more than most people realise.
Complex societies require energy surpluses above 12 to 1 just to maintain basic functions. Below that, the energy cost of running hospitals, schools, and transport networks begins to consume the energy budget that once funded growth, research, and adaptation.
Counterpoint
The standard narrative promises salvation through innovation. Solar panels get cheaper every year. Wind turbines grow more efficient. Electric vehicles multiply on the roads. And electricity is hugely efficient at the point of use. The story goes that human ingenuity will replace fossil fuels with clean alternatives, maintaining prosperity while healing the planet.
It is a seductive story because it preserves our fundamental assumptions about progress and growth. But it ignores inconvenient arithmetic.
Renewable energy sources come with their own EROI challenges.
Solar photovoltaics deliver ratios around 6 to 1 when accounting for manufacturing, installation, and intermittency costs.
Wind performs better at roughly 16 to 1, but requires backup systems that drag down the overall return. Both depend on fossil fuel inputs for mining, transport, and construction.
The mathematics get worse when we account for energy storage, grid upgrades, and the industrial base required to manufacture renewable infrastructure at scale. Every wind turbine needs rare earth minerals, each battery requires lithium extraction, and every solar farm demands steel and concrete.
The EROI of the entire system, not just individual components, determines what civilisation can sustain.
Meanwhile, policies focus on deployment targets, investment flows, and carbon pricing while ignoring the fundamental energetic constraints. Governments subsidise technologies that feel progressive without asking whether they generate sufficient energy surplus to power complex societies.
The truth is uncomfortable but unavoidable… we are trying to replace high-EROI fossil fuels with lower-EROI alternatives during a period when total energy demand continues rising.
And the bottom line?
Technology will not save us from thermodynamics.
Thought Challenge
Calculate the true cost... Consider one of the three major energy shifts from history such as wood to coal, coal to oil, the current shift to renewables. Research the EROI ratios for each transition and map them against indicators of societal complexity during those periods. Which transitions enabled complexity to increase, and which required simplification? Ask if it was even a transition.
Ask the sacrifice question. Examine current energy policies in your region. Identify which proposals would genuinely improve EROI versus those that treat energy as infinitely substitutable. Then ask the hard question… What policies designed to raise EROI actually require a sacrifice? Economic growth? Population stability? Industrial complexity? Write down the answers.
Both exercises force confrontation with physical limits that economic and political thinking routinely ignores. Instead of accepting reassuring stories about technological solutions, the exercises reveal the energetic foundations that determine what remains possible.
The Discipline of Limits
Being a mindful sceptic about energy means accepting that physics constrains politics, not the other way around, no matter what the politicians try to tell you.
The energy surplus available to society sets hard boundaries on complexity, growth, and adaptation options. Policies that ignore these boundaries create systemic fragility, regardless of their moral appeal or political popularity.
EROI is not everything, but it is the foundation that supports everything else.
Evidence Support
Hall, C. A. S., Lambert, J. G., & Balogh, S. B. (2014). EROI of different fuels and the implications for society. Energy Policy, 64, 141–152.
TL;DR… This paper reviews the available estimates for EROI of major fuel types and shows a historic decline in the EROI of petroleum, coal, and natural gas, warning that lower ratios undermine the energy surplus required for modern civilisation. The authors connect falling EROI to rising costs, less available energy for societal functions, and potential stress on global economies.
Relevance to insight… energy surplus is a foundational precondition for complexity and warns that energy transitions relying on lower-EROI sources bring real systemic risks.
Murphy, D. J., & Hall, C. A. S. (2010). Year in review—EROI or energy return on (energy) invested. Annals of the New York Academy of Sciences, 1185(1), 102–118.
TL;DR… how EROI determines the amount of surplus energy available to support non-extractive sectors of society, demonstrating with historical examples that declining EROI forces societies to devote more energy and resources to the energy sector itself. The review also explores how failing to account for EROI in policy and planning leads to unintended negative consequences.
Relevance to insight… direct framing of EROI as not just a technical metric but a boundary condition for policy, technology, and societal structure.
Sgouridis, S., Bardi, U., & Csala, D. (2016). The sower’s way: quantifying the narrowing net-energy pathways to a global energy transition. Environmental Research Letters, 11(9), 094009.
TL;DR… net-energy constraints facing a global transition to renewables and demonstrate that the EROI of renewables is currently lower than fossil fuels, creating a systemic squeeze during transition. They argue that energetic limits will determine the pace and scale of transition options.
Relevance to insight… substantiates the claim that ignoring EROI in the rush to renewables risks large-scale underperformance or failure of energy systems .
King, C. W., & Hall, C. A. S. (2011). Relating financial and energy return on investment. Sustainability, 3(10), 1810–1832.
TL;DR… financial ROI and EROI, establishing that economic measures alone mask underlying energetic constraints . The authors demonstrate that declining EROI correlates with increased economic vulnerability and recessive pressures.
Relevance to insight… financial innovation or policy tweaks cannot circumvent thermodynamic realities, directly echoing and supporting the insight’s contrarian stance .
Lambert, J. G., Hall, C. A. S., Balogh, S. B., Gupta, A., & Arnold, M. (2014). Energy, EROI and quality of life. Energy Policy, 64, 153–167.
TL;DR… correlates national EROI with social indicators including health, education, and economic stability, finding that countries with higher EROI consistently achieve greater societal health and complexity . The drop in energetic surplus leads to measurable declines in quality of life.
Relevance to insight… makes explicit the connection between energy surplus and social outcomes, showing that complexity and prosperity rest on real energetic foundations, not economic or political abstractions .
Each of these studies robustly supports the thesis that declining EROI constrains societal options more than financial, political, or technological solutions can offset. Their findings are foundational for anyone seeking to understand civilisation’s critical dependencies on surplus energy. Note that they were all published a decade or more ago.