Answer to Question #41935 in Economics of Enterprise for Ali

Net energy cliff - is a turning point, after which the ratio of energyoutput to energy input gets down to about 6, then you fall off this cliff, and it’s just not worth doing. In the early days of oil production, that ratio was about 100 to 1. Globally, right now, it’s approaching 11 to 1. And it’s even lower for some newer sources. The return on investment for heavy oil from the
Kern River field in California is about 4 to 1. The point is that the net energy available to society has been declining
radically. Researchers have done a number of papers on this. If you want to run a society, your net energy for oil production has to be at least 5.
“Seneca Cliff” is the tendency of some systems to collapse after having peaked. This collapse could be smooth or an uneven process that we could define as “punctuated.” The Roman Empire as a good example showing that it did decline
much faster than it grew. But the decline was surely far from smooth.