Part II: Understanding EROEI Ratio as The Determinant of Surplus of Energy

 

Energy Surplus Value of Each Source of Energy (The More Right, The More Inefficient) 

Source: euanmearns.com

After understanding what energy surplus is, now we get to know profoundly about the EROEI Ratio, this ratio determines how high the energy surplus is. In order to have a broader perspective, we assume that the EROEI Ratio equals to Energy Surplus Ratio and also equals to Energy Surplus.

So far, economists have only been busy discussing about economic growth, total GDP, total debt, balance of trade deficit, inflation, stimulus and the remaining oil reserves.

In fact, our big concern problem of the economy is the difference between the amount of energy produced and the energy consumed to produce energy.

This is what is meant by the EROEI (Energy Return on Energy Invested) Ratio. This ratio is  the main key to our economic development and the creation of economic wealth.

Let's see a more comprehensive explanation of how this ratio works. The EROEI ratio is also known as net energy. If the ratio value is 100: 1, it means that if we send one unit of energy as an input, we will get one hundred units of energy as output. One hundred units is called the energy surplus that is used to drive the economy. 

The higher the EROEI Ratio, the higher the energy surplus, and it means the more prosperous the economy will be.

In the early 20th century, the EROEI Ratio was relatively high, so that at that time the world economy was very rapidly flourishing, and also dubbed as Heyday in the first half of the 20th century.

Would probably the value of this ratio remain high into the next generation?