Petroleum’s primary contribution to the economy is that it is an essential element in the overall energy production process. Energy is as necessary to an economy as capital and labor, and petroleum has an exclusive position in that hierarchy; it is used to power the majority of the world's transportation equipment. The value of a hydrocarbon can be determined by the quantity of energy it is capable of supplying. The energy content (exergy) of a unit (barrel, gallon, etc) of a liquid hydrocarbon can be determined from its API gravity (see Study Graph# 20, Exergy vs API). A barrel of 35.7° API crude has an energy content of 5.88 million BTU, but not all of that energy is available for use by the general economy. A substantial portion of that energy is needed to extract the crude, and produce its finished products.

The extraction phase of petroleum requires an input of work in the form of goods, and services. The energy that comes from the well head in the form of crude must be converted into the components needed in the extraction process. These include not only the actual drilling of the well, and drilling equipment, but a huge number of tools, services, and direct energy inputs. To provide these the energy that comes from the well head in the form of crude must be used in the production of these needed goods and services. This conversion of energy into goods and services takes place in the Petroleum Processing System. Other energy forms, such as electricity and natural gas used in the process are not adding energy, they are merely exchanging energy with the petroleum they are helping to extract and process (see section 3 of Study for details). Because petroleum must act as an energy source to have value, it must be capable of supplying at least enough energy to support its own production. The total energy used in the extraction and processing of petroleum must be less than, or equal to the energy content of the petroleum. If it were greater the energy production from petroleum would stop.

Over the forty six year period that the process was evaluated, on average, it required 4.9 BTU (see section 5 of Study for details) taken from the extracted crude to provide 1 BTU of work in the form of goods and services, which then could to be put back into the well head. This is an efficiency of 20.05%, which is about equal to the efficiency seen in most internal combustion engines. After petroleum is extracted about 4 out of every 10 BTU of its total energy content is used in the processing, and distribution of its finished products. The production of petroleum, and its products is a very energy intensive industry.

When petroleum can no longer provide energy to the general economy it will have little, or no value. Its only possible use would then be as an energy carrier; this assumes that some other energy source could replace petroleum's immense energy supply. As the energy to extract a unit of petroleum increases by 1 BTU the energy delivered to the economy declines by almost 5. Increasing well depth, increasing viscosity, and increasing water cut have a 5 to 1 effect on petroleum's depletion state. Declining production volume is only one possible effect of the petroleum depletion event, and undoubtedly the lesser of them.
The Energy Factor, Part I