The United States imports approximately one third of its energy sources, mostly in the form of petroleum. 1 Heightened interest in finding alternative fuels, and thus reducing the U.S. reliance on imported oil, was reflected in the 2005 Energy Policy Act.2 However, in some cases, the production of alternative fuels may itself require a substantial amount of energy—to the extent that more energy is required to make an alternative fuel than the alternative fuel yields. A relatively simple example of this is the derivation of hydrogen fuel by electrolysis of water (though hydrogen can also be produced from other sources). Because the hydrogen is converted back into water (typically, water vapor), basic thermodynamics dictates that the overall result of this cycle—that is, the conversion of water to water vapor—is to consume energy, not produce it. The net energy produced—or “energy balance”— is negative; if, for example, fossil fuels were used to conduct the electrolysis, production of hydrogen in this manner would actually increase, rather than decrease, the demand for fossil fuels.

But negative energy balances should not necessarily disqualify a technology. In the above example, solar power could conceivably be used to conduct the electrolysis. Although the amount of energy in the hydrogen would still be less than the amount of solar energy required to make the hydrogen, the overall effect would be to reduce petroleum fuel demand. However, the real alternative source of energy in this system would be the solar power, not the hydrogen. Clearly, when considering alternative fuel options, policy-makers would like to know the energy balances associated with those options to better understand the degree to which options are truly alternative sources of energy, or simply alternative fuels that result in more energy demand (even if that energy can be produced from nonpetroleum sources). Unfortunately, calculations of energy balances are often more complex than in the hydrogen-fromwater example, and there can be large disagreements with regard to what the correct energy balance is. The purpose of this article is to identify key questions that are pertinent to resolving energy balance disagreements between different analysts, but are also pertinent to analyses of costs, environmental impacts, and other factors.

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