Thanks I think its important to understand that this effect seems to apply anytime you hit a critical resource constraint. If its wages or labor for example you get a traditional wage price spiral. This classic spiral works for example to limit investment in production expansion as wages increases and prices increase to compensate. Eventually assuming that resources remain constant the system collapses in some manner.

Recessions for various reasons can be seen as when one of a myriad of critical economic conditions change such that they are relatively negative. Negative EROEI is simply a case where the system is permanently negative and classical economic changes cannot alter the condition. Bottom line once the system is fundamentally negative in a critical resource no economic game on earth can change the situation its physically constrained. This does not mean that the dwindling remaining wealth cannot flow in various directions but the overall system is in contraction and in general it will do its best to minimize the contraction rate. Attempts to alter this simply cause collapse to occur somewhere in the system.

Thus its 100% certain that if the oil industry actually tried to expand significantly under the conditions of negative EROEI regardless of the price of oil it will simply cause the economy to collapse elsewhere to pay for the expansion. The direct link may be difficult to ascertain because the real link is via a shared financial network and thus shared economic structure. Exactly how the system modifies itself is not clear this is simply because the repeated conversions of real wealth into money and debt serve to cloud and transfer the effects throughout the economy.

However since this is fundamental you can ignore money its simply not relevant.

Consider the case of the chicken farmer and the feed seller. The exchange is pure barter x chickens for x amount of feed.

Lets say at first the chicken farm can trade 5 chickens for enough feed for 10.
He then grows ten and trades for enough feed for 15 and so on.

Eventually lets say the feed provides actually produces less feed.
Then the table turns the first trade lets say the feed seller demands 25 chickens for feed for 20.

Next trade he has less feed so he demands 15 chickens for enough feed for 10.

Its obvious how the balance works and its obvious that although the feed seller made more chickens for less feed the overall system declines.

The feed seller could demanded as many chickens as he wished if we add in the ability of the chicken farmer to borrow chickens in trade then you can play the game a bit longer. But it should be obvious it does not matter. Bottom line if you have less feed you have less chickens its a fundamental physical fact and its impossible to game the trade to change the situation in any meaningful way. People that only take the view point of the feed seller or the chicken seller completely miss the overall situation I assert your forced to look at the overall balance to correctly determine the economic condition if one of the critical resources is in decline any other viewpoint is simply ignoring the real problem.

Finally as and addition you can see that if the feed farmer needs 20 chickens to produce feed for 15 it simply ain't gonna happen thats what people claim will happen when prices increase. Sure the feed seller can do what ever he wishes he could require 50 chickens in exchange for feed for one and then produce feed for 20 but demand 100 chickens all possible ways to game the system simply are that games.