In business there’s a concept called return on investment (ROI), and it’s pretty simple. When ROI is a positive number you can make a profit, when it’s negative, you lose money.

If you invest $10, say in marketing, to sell a $1,000 product, your ROI on the marketing program is 100 fold, which is nice, thank you very much. But it’s never that simple of course—you can have a positive ROI on a marketing program and still lose money overall. All the costs of running a business, including raw materials, investments in plant and materials, people, energy, and other things go into a profit calculation and the ultimate results are very often much less.

We can and must do the same kind of accounting for energy, especially when trying to figure out what will propel our civilization later in this century. Generally, when harvesting or creating energy you want to have a large positive number for energy ROI better known by the term energy returned on energy invested (eROeI). Oil and gas wells, as well as coalmines, are great for eROeI and oil wells are often the best examples of getting large returns.

A lot of alternative energy schemes have eROeIs that are far lower, often providing single-digit returns or even going negative. When calculating eROeI we need to take into account all the energy needed to bring an energy product to market. Ethanol is an example of a borderline energy source. We can make ethanol from almost any fermentable substance from potatoes to wheat, corn, rye, sugar cane, or even fruit. We already do this and the shelves of your local bar are full of examples. But that won’t work for your car.

In the spirits industry, eROeI isn’t really important. Some external energy sources are used to ferment, distill, and transport raw materials and finished products. Diesel fuel powers tractors and trucks on farms for instance, and brings products to markets on trucks or trains. Fossil fuels are required for making cheap fertilizer, too. Natural gas or any other fuel can run a distillery. You get the idea. Each of those inputs has a cost and there are costs associated with paying all of the people in the production chain, as well. Those costs are added up and built into the cost of the finished products to which a profit margin is then added so that the ROI remains safely positive and the business healthy.

But strictly speaking, from an energy perspective, making those spirits is a losing proposition; more energy goes into making them than the value of the energy that comes out of the warehouse as a finished good. In spirits production this is acceptable, but in producing motor fuel like pure ethanol to be mixed with gasoline, it’s not. If you have to add energy to a process and a product that is supposed to supply energy, there’s no point in the exercise. You need to get more out than you put in.

If we tried to convert our cars to burning 100 percent ethanol we would fail. Farmland dedicated to growing food stuffs would have to be dedicated to producing something we could ferment, such as corn, and if we use corn for fuel production, it won’t be available for food. Worse, we’d still need an energy source for the industrial production process, for transportation and everything else that would go into bringing the ethanol to market. So mandating ethanol to be part of our gasoline, making it in limited quantities, is great because it creates a market for farm products but the idea doesn’t scale.

eROeI is an easy way to identify if an outside energy source is required in an industrial process aimed at producing energy. Many of the finalists in the Virgin Earth Challenge (VEC) have solutions that look good on paper (like biochar), that either reduces carbon dioxide released into the atmosphere or produces a fuel, but they require an outside energy source to produce them and they consume more energy than they provide. It’s very hard to find an energy-producing process that delivers more than it consumes. In fact, it’s impossible. Even fossil fuels derived from dead plants required more solar energy to produce than they yield. But we don’t care because green plants did all the work millions of years ago and we’re the lucky recipients of the resulting products.

The reason is summarized in the Second Law of Thermodynamics often just called entropy. Lest you’re about to roll your eyes because you think we’re embarking on a freshman chemistry course, I have good news for you. We’ve already gone over all you need to know—it takes energy to make it or more properly to produce a form of energy that’s useful to our civilization. For our discussion that’s what eROeI is all about.

But wait a minute you might say, what about green plants? They capture energy, they remove carbon from the atmosphere, and they make food, which our bodies use for energy. What about them? To which I say, exactly. Green plants access the greatest energy source in our local neighborhood, the Sun—a nuclear fusion reactor 93 million miles away always shining and raining free energy down on our heads. The reason there’s life on this planet is that we have liquid water, sources of carbon, and abundant free energy from the sun. Green plants figured out billions of years ago how to capture that energy, store it in chemical bonds, and use the resulting materials to build their bodies and store excess energy for later–what we call food and fuel today.

The remnants of those plants are what we call fossil fuels. Even the term fossil fuel states the obvious point that these organic materials were once living trees and other terrestrial plants or microscopic phytoplankton in oceans. Those plants died and were preserved by geological processes in the earth or under oceans and over millions of years of mild heat and compression in earth’s crust, they turned into the fuels we burn.

Ultimately the sun is the source of all of the energy used on planet Earth, even fossil energy. It warms the surface keeping water liquid, a very valuable service in its own right, and it powers green plants. Lately we’ve also used solar panels to capture energy in a crude way imitating what the chlorophyll in green plants does better. The sun also disproportionately warms Earth’s surface creating winds that turn windmills. Our future on this planet relies, at least in part, on optimizing how we utilize the free energy from the sun.

More good news, the sun isn’t our only once and future energy source. There’s also a much smaller nuclear (fission) reactor at the center of the earth. Radioactive decay keeps the center of the earth so hot that it has remained liquid for all of Earth’s 4.5 billion-year lifetime. Earth’s diameter is about 8,000 miles so don’t worry about all that liquid rock getting too close to you. Volcanoes like Mona Loa in Hawaii, the 30 or so volcanoes on Iceland, and even Mt. Vesuvius near Pompeii, Italy, are well understood and studied and they didn’t just happen, so the odds of a volcano sprouting in your backyard are remote unless you happen to live near one that already exists.

Heat from Earth’s core flows like a fluid right through rock, eventually adding to the warming that keeps earth’s surface tolerable to life. If you drill down into Earth’s crust just a few kilometers, temperatures are hot enough to serve as an energy source. We’ll take up this topic when we discuss geothermal energy. For now it’s only important to know that any energy development scheme has to offer a positive eROeI.