This article gives an overview of the thermodynamic principles demonstrating that the maximum efficiency theoretically possible with a hydrocarbon fueled internal combustion engine is one hundred percent. From this basis the focus turns to articulating irreversibilities that naturally occur within the processes of converting the chemical energy in the fuel into shaft work. These losses are classified as losses that cannot be eliminated when using the current embodiment of internal combustion engines, and losses that in principle could be reduced through application of advanced technologies. Because power is obtained from the engine via unrestrained chemical reaction, i.e. combustion, we must accept a loss of work potential of between 20 and 25 percent of the fuel’s energy. Other losses, such as friction, heat loss and exhaust energy account for the balance of the useable energy that is not converted directly into shaft work. The interplay between combustion temperature, the ratio of specific heats of the combustion chamber gases, heat transfer and exhaust availability is presented as support for a postulate that the maximum pragmatic efficiency is most readily achieved through efforts to keep combustion temperatures low, which in turn maximizes the direct conversion of the fuel’s chemical energy into shaft work while minimizing the available energy lost to heat transfer and exhaust flow.